UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                   FORM 10-KSB
          [X] ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
                              EXCHANGE ACT OF 1934
                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 2005

       [  ] TRANSITION REPORT UNDER SECTION 13 OR 15 (D) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

                        COMMISSION FILE NUMBER 000-30914

                             XTREME COMPANIES, INC.

             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)


             NEVADA                                        88-0394012
(State  or  Other  Jurisdiction  of                    (I.R.S.  Employer
Incorporation  or  Organization)                          Identification
                                                            Number)

                               300 WESTLINK DRIVE
                              WASHINGTON, MO  63090
             (Address a of principal executive offices and principal
                               place of business)
                                                -

                                 (636) 390-9000
                                 --------------
                           (Issuer's telephone number)

       SECURITIES REGISTERED UNDER SECTION 12(B) OF THE EXCHANGE ACT: NONE

SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: COMMON STOCK, $0.001
                              PAR VALUE PER SHARE.

Check  whether the issuer is not required to file reports pursuant to Section 13
or  15(d)  of  the  Exchange  Act.  [  ]

Check  whether  the Issuer (1) filed all reports required to be filed by Section
13  or  15(d)  of  the  Securities  Exchange Act of 1934 during the preceding 12
months  (or  for  such  shorter period that the Issuer was required to file such
reports),  and  (2) has been subject to such filing requirements for the past 90
days.  Yes  [x]  No  [  ]

Check  if there is no disclosure of delinquent filers in response to Item 405 of
Regulation  S-B  contained in this form, and no disclosure will be contained, to
the  best  of  Issuer's knowledge, in definitive proxy or information statements
incorporated  by  reference  in Part III of this Form 10-KSB or any amendment to
this  Form  10-KSB.  [  ]

The  Issuer  had  $1,783,626  in revenues for the fiscal year ended December 31,
2005.

As  of  March  31,  2005 the aggregate market value of the Issuer's common stock
held  by  non-affiliates was $1,642,860 (based on the closing price of $0.12 per
share  of  common  stock  on  March 31, 2005 as reported by the Over-the-Counter
Bulletin  Board).

The  Issuer  had  23,801,376  shares of common stock outstanding as of March 31,
2006.

Transitional  Small  Business  Disclosure  Format  (Check  one):  Yes [ ] No [X]

                             XTREME COMPANIES, INC.
                                  FORM 10-KSB

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TABLE  OF  CONTENTS

PART  I                                                                    PAGE  NO.

ITEM  1.     DESCRIPTION OF BUSINESS.                                          2
ITEM  2.     DESCRIPTION OF PROPERTY.                                          8
ITEM  3.     LEGAL PROCEEDINGS.                                                8
ITEM  4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.              8

PART  II

ITEM  5.     MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.         9
ITEM  6.     MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.       13
ITEM  7.     FINANCIAL STATEMENTS.                                            23
ITEM  8.     CHANGES  IN  AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING
             AND FINANCIAL DISCLOSURE.                                        37
ITEM  8A.    CONTROLS AND PROCEDURES.                                         37
ITEM  8B.    OTHER INFORMATION.                                               38

PART  III
ITEM  9.     DIRECTORS,  EXECUTIVE  OFFICERS,  PROMOTERS  AND  CONTROL  PERSONS;
             COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.               38
ITEM  10.    EXECUTIVE COMPENSATION.                                          40
ITEM  11.    SECURITY  OWNERSHIP  OF  CERTAIN  BENEFICIAL  OWNERS  AND
             MANAGEMENT AND RELATED STOCKHOLDER MATTERS.                      40
ITEM  12.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.                  41
ITEM  13.    EXHIBITS.                                                        44
ITEM  14.    PRINCIPAL ACCOUNTANT FEES AND SERVICES.                          45
</TABLE>

                                       1

<PAGE>

                                     PART I

ITEM  1.  DESCRIPTION  OF  BUSINESS.

OVERVIEW

We  design  and  manufacture  high-performance  commercial  boats  used by fire,
police,  and  military  personnel for fire, rescue and patrol. We are a complete
design-to-manufacturing  organization,  creating  or  licensing  designs,  and
creating  tooling, molds, and parts necessary to assemble our products in-house.
Our  products  combine  innovative  designs  with  power,  safety,  handling and
stability  to create boats designed to protect and save lives. We market our low
cost,  rapid  response  boats  directly  to  municipalities and other government
agencies such as fire departments, police departments, city port-authorities and
the  military.

At December 31, 2005, we were also the exclusive distributor of leisure, fishing
and  performance  boats  manufactured  and assembled by Marine Holdings, Inc., a
Missouri  corporation,  distributed and sold under the Challenger Offshore name.
The  Challenger  boats  range in size from 19 ft. to 97 ft., with prices ranging
from  $31,495 to $5.8 million.  Marine Holdings manufactures many of their boats
using hulls structurally designed by world-renowned naval architects, as well as
the  patented  D-DC  hulls.  We  distributed  the  Challenger  boats  through  a
nationwide  dealer  network.

On  February  28, 2006, we acquired one-hundred percent of the total outstanding
shares  of  Marine Holdings, Inc.,  In connection with this transaction, we paid
in  full  existing  loans  of  Marine  Holdings,  Inc. at Sun Security Bank.  We
generated  funding for payment of these loans through new loans in the amount of
$4,123,627.

We  are a publicly traded company, which trades on the Over-the-Counter bulletin
Board  of  the  National  Quotation  Service  under  the  ticker  symbol "XTME."

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.

                                       2
<PAGE>

HISTORY

We incorporated in the State of Nevada on August 14, 1994 as Shogun Advertising,
Inc.  On  May  10,  1998,  we  changed  our  name  to Xtreme Webworks. As Xtreme
Webworks,  we  offered  services  to  Internet companies that assisted in higher
recognition  placement with search engines. We also designed and hosted Internet
web  sites,  and designed and published online and printed newsletters. On April
24, 2002, we changed our name to Xtreme Companies, Inc. On November 30, 2002, we
determined that our internet hosting and marketing business was not strategic to
our ongoing objectives and discontinued capital and human resource investment in
the  business.

As  Xtreme  Companies,  Inc.,  our  business  was  to assist in the acquisition,
development  and  finance  of energy-related entities. To that end, on April 26,
2002,  we  executed an Acquisition Agreement with Waste Renewal Systems, Inc., a
Nevada  Corporation.  As a wholly-owned subsidiary, Waste Renewal Systems, Inc.,
provided  an  innovative and proprietary waste processing solution for municipal
solid  waste  disposal.  Further,  on  May  15, 2002, we executed an Acquisition
Agreement  with Nucon International, Inc. a Nevada Corporation who later changed
its  name  to  Nuclear  Reduction  Systems,  Inc.  As a wholly-owned subsidiary,
Nuclear Reductions Systems, Inc. provided cutting edge technology in the nuclear
waste  treatment  industry.

In  July  2003,  we discontinued the operation of our wholly-owned subsidiaries,
Waste  Renewal  Systems,  Inc.  and  Nuclear Reduction Systems, Inc., due to the
failure  to  negotiate  satisfactory  terms  for  the  extension  of the license
agreements  and  our  inability  to  commercialize  our  products.

On October 1, 2003, we entered into an Agreement and Plan of Reorganization with
Rockwell  Power  Systems,  Inc.  a  Delaware  corporation.  As  a  result of the
transaction,  Rockwell  Power  Systems, Inc. became our wholly-owned subsidiary.
Under  this  Agreement,  we. 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.

Rockwell  Power  Systems  was incorporated in Delaware on January 29, 2001 under
the name Rockwell Healthcare Systems, Inc. We changed its name on April 12, 2001
to  Rockwell  Power  Systems. We had no operations until October 1, 2003 when we
purchased  the  Fire  & Rescue and the Recreational Boat Division from Sonic Jet
Performance, Inc. Pursuant to the Bill of Sale Agreement, Rockwell was granted a
license  for  a  period  of  twenty years to the use the "Sonic Jet Performance"
name.  Additionally,  Rockwell was granted the authority to market and sell Fire
and  Rescue  and  Recreational  boats  everywhere in the world except the Middle
East,  including  Egypt,  Lebanon,  Turkey,  Syria,  Jordan, Iraq, Saudi Arabia,
Bahrain,  Oman,  Qatar,  the  UAE  and  Yemen.

From  October  1,  2003  until  February  28,  2005,  we  focused our efforts on
manufacturing,  marketing  and  selling  specialty  boats  designed for fire and
rescue  purposes.  On  March  1,  2005,  we signed an exclusive distribution and
marketing  agreement  with  Marine  Holdings, Inc., a Missouri corporation d/b/a
Challenger  Offshore,  and Ronald DiBartolo and Gailynn DiBartolo, owners of all
outstanding  shares  of  common  stock  of Marine Holdings, Inc. 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.

We  provided  our key personnel, resources and capital to Marine Holdings, Inc.,
to  facilitate  the sales of Marine's products through dealer networks, industry
trade  shows,  direct selling and other distributors. All purchase orders flowed
through  us  and  were  immediately  assigned  to Marine for fulfillment. Marine
procured  all inventory and assumed responsibility for the shipment and delivery
of all of its products ordered by the purchaser. We received a five percent cash
commission,  based  on  the  total sales price as represented on purchase orders
received  by  us  or  Marine  for  all  product  sales.

We  paid an additional five percent of the total outstanding shares of Xtreme on
the  closing date to Challenger for the right to market, sell and distribute its
products upon the terms and subject to the conditions set forth in the Marketing
and  Distribution  Agreement.  Furthermore,  Challenger offered us the option to
purchase one-hundred percent of the outstanding shares of the Challenger shares.

In  March  2005, we permanently relocated all our operations to Marine Holdings,
Inc.  headquarters  in  Washington,  Missouri.  We  did  not  pay rent to Marine
Holdings,  pursuant  to our Marketing and Distribution Agreement.  Effective May
31,  2005,  we entered into an agreement to terminate our lease for 3,000 square
feet  of  office  and  assembly space in Stanton, California.  Effective May 31,
2005,  we entered into an agreement to terminate our lease for 3,000 square feet
of  storage  space  in Riverside, California. On February 28, 2006, we finalized
the  acquisition  of  Marine  Holdings,  Inc.

INDUSTRY  BACKGROUND  -  PERFORMANCE  BOATS  AND  CABIN  CRUISERS

In  the  early  1980's,  Don  Aronow  created  the  first "go fast" boat and was
therefore  credited  as becoming the architect of the Performance Boat Industry.
The boat he manufactured was long, skinny, and white, and looked very similar to
a  cigarette,  which  was  the basis for the name he gave his boat manufacturing
company  - Cigarette.  From that point forward, the performance boating industry
has continued to grow.  There are many competitors and the demand for this style
of  boat  is  very  high.

                                       3
<PAGE>

The  cabin  cruiser  boats  have  been  around  for  many  more  years  than the
performance  boats.  Cabin  cruisers  are  family friendly boats which can carry
from five to 15 people, or more, depending on the size of the boat.  These boats
often  have decks and open bows which allow for more passengers, and also allows
for  more varied use of the boat.  These boats typically go at speeds much lower
than a performance boat, which allows for them to pull skiers, as well, which is
not  feasible  in  most  instances  with  a  performance  boat.

INDUSTRY  BACKGROUND  -  MISSION  SPECIFIC  BOATS

We  believe  the  best  opportunity in the mission specific boating industry for
business  expansion  is  providing  boats  for  Homeland  Security  fulfillment,
defense, surveillance, and emergency response to municipalities and governments.
After  the  terrorist  acts on September 11, the United States government took a
wide  range  of  urgent  steps  to protect the Nation's highest risk targets and
critical  infrastructure  systems  such  as  nuclear power plants, hydroelectric
dams,  telecommunication  nodes,  border crossings, chemical facilities, sea and
water  ports, water and sewer plants, electric power plants, gas pipelines, dams
and bridges. This includes protecting the open coastline, waterways, and private
industrial  sites  such  as  nuclear  power  plants  and  oil  refineries

In  addition to the increase in federal funding for homeland security, two other
important  programs  are  in  place that will benefit those fire departments and
private  organizations  looking  to  participate  and  take  advantage  of  the
additional  funding  being  provided  to  these  specific  areas. These programs
include:  The  2005  Assistance  to  Firefighters Grant Program presented by the
Office  of  Domestic  Preparedness,  or ODP, and Operation Safe Commerce, or OSC
funding.

The  ODP is currently offering $650 million in grants to fire departments across
the  United  States.  With Fireboats being elevated to a Priority One Status for
this year's grant program, we have aggressively pursued the more than 5,200 fire
departments  with  responsibilities  on the water by offering a grant assistance
program  for  any  fire department interested in purchasing one of our boats. So
far  the  program  has been well received with more than thirty fire departments
applying.  However, we cannot determine if the ODP will grant any awards to fire
departments  that  apply,  if  any.

By  specific order of the Transportation Security Administration, Operation Safe
Commerce,  which  concentrates  on  the  ports  of  New  York/New  Jersey,
Seattle/Tacoma, and Los Angeles/Long Beach, is a public-private partnership that
uses federal grants to test pilot programs in order to improve security at these
ports  and  others like them throughout the United States. The funding allocated
to  OSC  is  $58  million,  which  is the first step of a multi-faceted program.

The Coast Guard's port security mission has grown from approximately 1-2 percent
of  daily  operations  to  between  50-60  percent. Additional national security
missions are focused upon illegal immigration, drug interdiction, port security,
and  the  provision of enhanced defenses for critical high-risk vessels, coastal
facilities,  coastal  nuclear  power plants and oil refineries. The 2003 Federal
Budget  increased  funding  for these homeland security-related missions by $282
million,  to  an  overall  level  of $3.5 billion to enhance the capabilities of
America's  first  responders,  a  greater  than  10-fold  increase  in  Federal
resources,  allowing  state  and  local  agencies  to  purchase  a wide range of
equipment  needed  to  respond  effectively to a terrorist attack, including the
purchase  of  new  technology-based  patrol  and  surveillance  boats.

The  target  markets  for  our  boats  include municipalities, state and federal
agencies,  fire,  rescue,  police  and military units. The approximately 181,518
miles  of  waterways in the United States offer numerous opportunities for us to
sell  our  commercial boats, particularly those used for rescue, patrol and fire
fighting operations. We believe our products offer a cost effective solution for
our  target  customers.

PRODUCTS

Our  mission  specific  boats  combine  power, safety, handling and stability in
rough  water  along  with  high-speed  performance.  The  innovative patents and
patents-pending  that  we  license,  give  the  boats eye-catching visual market
retention, and a competitive advantage in the boating industry, home defense and
world  markets.

The unique convergence of design and technology give our boats the ability to be
highly  maneuverable  in  as  little  as ten inches of water, essential in areas
where  submerged  objects such as street signs, vehicles or rocks will interfere
with  other  craft. Even with a full crew and injured passengers, the boat stays
high  on  the  water,  affording  a  speedy,  safe  access  and  egress.

The  boats  are quick-response craft that can be easily transported to emergency
areas.  The  hulls  incorporate  patented "V" shaped hull designs, and are built
using  hand laid "S" glass which produces a fiberglass hull that is stronger yet
lighter than conventional fiberglass hulls, and provides extraordinary stability
and  handling  in  rough  waters,  and  at  high  speeds.

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                                  PRODUCT SPECIFICATIONS
                                  ----------------------
    Model     Load Capacity     Fuel Capacity     Towing Capacity     Passenger Capacity
    -----     -------------     -------------     ---------------     ------------------
   12 Foot      2,200 lbs.        32 gallons        7,000 lbs.                 5
   15 Foot      5,500 lbs.        58 gallons       10,000 lbs.                 7
</TABLE>
                                       4
<PAGE>

We currently offer two commercial boats which are similar in design but distinct
in  functions.  Each  model comes equipped with Mercury Marine Sport Jet 175 XR2
two  stroke  engines  that  generate  175 horse power, and Mercury Marine single
stage  axial  flow  jet pumps. We have also developed new models for California,
and  international  markets  that  no  longer  allow  2  stroke  motors. We have
redesigned  the  boat  to  accept  power systems which meet the strict emissions
standards in California and the year 2006 emissions requirements mandated by the
United  States  Environmental  Protection Agency. The boats come with a two-year
warranty  on  the  engine,  the  fuel  system,  and the electrical system, and a
five-year  warranty  on  the  hull.

PATROL  RESCUE  JET
The Patrol Rescue Jet is designed to provide security in inland waterways and in
harbors.  With  a  speed  of  up to 55 miles per hour, the Patrol Rescue Jet can
deliver law enforcement and emergency assistance to virtually any location on or
around the water. This boat is available in either a 12 foot design or a 15 foot
design.

FIRE  AND  RESCUE  JET
The  Fire  and  Rescue  Jet  is designed to fight fires on the water and in near
shore  areas. The Fire Rescue Jet comes equipped with a patented water pump that
can  supply  up  to  750 gallons of water per minute. The Fire and Rescue Jet is
uniquely  designed  so  one  person can control the boat and the fire apparatus.
This  boat  is  also  available  in either a 12 foot design or a 15 foot design.

CHALLENGER  OFFSHORE  BOATS

Challenger's  high  performance series is designed and manufactured using proven
technology  and  equipment,  including  the  patented D-DC hull. Our performance
series  consists  of nine cuddy and open bow models, ranging in size from 24 ft.
to  42  ft.  with  prices  ranging  from  $69,995  to  $279,995.

Challenger's  sport  cabin  cruiser  line,  the Z-Series, is built with the same
quality and attention to detail as our performance series. The Z-Series consists
of  a  variety of sport boats and family cruisers including deck boats, cuddies,
open bows and cabin cruisers with ten models to choose from ranging in size from
19  ft.  to  31  ft.  and  ranging  in  price  from  $31,495  to  $129,995.

Each of Challenger's Sport Fish luxury yachts have been structurally designed by
world-renowned  naval  architects,  and are built with the same craftsmanship as
our  performance and z-series. Each of our eight vessels has a unique structure,
ranging  in size from 35 ft. to 97 ft. Prices for luxury fishing yachts start at
$140,000  and  continue  on  up  to  $5.8  million.

SALES  AND  MARKETING

As  of  December  31, 2005, we used a direct sales team consisting of three team
members  which sell our products primarily in the United States. Furthermore, we
currently  work  with an independent sales agent to sell our products throughout
the  United  States.  Through  personal  presentation,  consultation  and
collaboration  with  government  agencies,  municipalities,  and  national
foundations, we plan to provide demonstrator products for law enforcement, fire,
rescue,  patrol,  and  military  departments  for  expositions, training, agency
certifications,  and  demonstrations.  In December 2005, we completed production
of  a 15 foot demonstrator boat, which we believe will greatly benefit our sales
efforts.  The  boat is located in our Washington, MO plant, and is scheduled for
shipment  to  Florida in March 2006, where it will be used by our sales team for
customer  demonstrations.

Our  marketing  efforts  include  participating  in industry trade shows, direct
assistance  to  fire  departments  and municipalities for grant applications and
communicating  through  our  corporate  website.

CUSTOMERS

Our  target  market  for  Xtreme  boats  is  primarily  fire  departments,  port
authorities,  and other governmental agencies. Thus, we have a limited potential
customer base.   The target market for Challenger Offshore boats is boat dealers
and  distributors  in  the  United  States,  along  with  marine patrol agencies
interested  in  a larger boat than the Xtreme patrol boat.  The customer base is
not  limited.  Typically, the end user is a second or third time boat owner, who
is experienced enough as a driver and as a consumer, to want a larger and higher
powered  boat.

Obtaining  government  contracts  may  involve long purchase and payment cycles,
competitive  bidding,  qualification requirements, delays or changes in funding,
budgetary  constraints,  political agendas, extensive specification development,
price  negotiations  and  milestone  requirements.  Each  government agency also
maintains  its own rules and regulations with which we must comply and which can
vary  significantly among agencies. Governmental agencies also often retain some
portion  of  fees  payable  upon completion of a project and collection of these
fees  may  be  delayed  for  several  months.

Our  sales  in  2005  include:

Crescent  City  Fire  Department
Crescent  City,  CA

Shuanyi  Industries  Company
Taiwan

                                       5
<PAGE>

City  of  Philadelphia  Police  Department
Philadelphia,  PA

Life  Line  Marine
Washington,  MO  63090
Accounted  for  $788,938  (44.2%)  of  FY05  Sales

Wayton  Marine  International
Southlake,  TX  76092
Accounted  for  $313,464  (17.6%)  of  FY05  Sales

STRATEGIC  RELATIONSHIPS

On  March  1,  2005, we signed an exclusive distribution and marketing agreement
with  Marine  Holdings,  Inc., a Missouri corporation d/b/a Challenger Offshore,
and  Ronald DiBartolo and Gailynn DiBartolo, owners of all outstanding shares of
common stock of Marine Holdings, Inc. 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.  We provided our key personnel,
resources  and  capital  to  Marine to facilitate the sales of Marine's products
through  dealer  networks,  industry  trade  shows,  direct  selling  and  other
distributors.  All  purchase  orders  flowed  through  us  and  were immediately
assigned  to  Marine  for fulfillment. Marine procured all inventory and assumed
responsibility  for  the shipment and delivery of all of its products ordered by
the  purchaser.  We  received a five percent cash commission, based on the total
sales  price  as represented on purchase orders received by us or Marine for all
product  sales.

We  paid an additional five percent of the total outstanding shares of Xtreme on
the  closing date to Challenger for the right to market, sell and distribute its
products upon the terms and subject to the conditions set forth in the Marketing
and  Distribution  Agreement. Furthermore, Challenger will offered us the option
to  purchase  one-hundred  percent  of  the outstanding shares of the Challenger
shares  upon  the terms and subject to the conditions set forth in the Marketing
and  Distribution  Agreement.

On  February  28,  2006,  we exercised our option to acquire all of the stock of
Marine  Holdings,  Inc. d/b/a Challenger.  In exchange for $4.3 million in cash,
we  received  the  challenger  business  and  assets  including  a  gross  order
backlog  of  $1.6  million,  boat  inventory,  boat  molds and real estate which
includes  Challenger's 65,000 square foot boat manufacturing facility located on
12  acres  in  Washington,  MO.

On  June 5, 2005, we entered into a Manufacturer Direct Program agreement with Z
Yachts,  Inc.,  located  in Alpharetta, Georgia, for an initial term of one year
and  renewable  on  a  yearly basis thereafter unless either party gives written
notice  of  non-renewal  no  later  than  90 days prior to the expiration of the
original term, or any renewal term of the agreement.  Either party may terminate
the  agreement  at  any time upon 90 days written notice to the other party, for
"Just  Cause."  Under  the  terms  of  the  agreement,  Z Yachts will market and
distribute the Xtreme and Challenger Offshore boats to their existing and future
clientele.

On  May  1,  2005,  we entered into a Manufacturer Direct Program agreement with
Wayton Marine International, located in Southlake, Texas, for an initial term of
one  year  and  renewable on a yearly basis thereafter unless either party gives
written  notice  of non-renewal no later than 90 days prior to the expiration of
the  original  term,  or  any  renewal  term of the agreement.  Either party may
terminate  the  agreement  at  any time upon 90 days written notice to the other
party,  for  "Just  Cause." Under the terms of the agreement, Wayton Marine will
market and distribute the Xtreme and Challenger Offshore boats to their existing
and  future  clientele  in  the  State  of  Texas.

COMPETITION

We  are  subject  to  significant competition that could harm our ability to win
business  and  increase  the  price  pressure  on  our  products. We face strong
competition  from  a  wide  variety  of  firms.  Most  of  our  competitors have
considerably  greater,  financial, marketing and technological resources than we
do  which  may  make it difficult to win new contracts and we may not be able to
compete  successfully.  Certain  competitors  operate fabrication facilities and
have  longer  operating  histories  and  presence  in  key markets, greater name
recognition,  larger  customer  bases and significantly greater financial, sales
and  marketing, manufacturing, distribution, technical and other resources, as a
result,  these  competitors may be able to adapt more quickly to new or emerging
technologies  and  changes  in  customer  requirements. They may also be able to
devote  greater  resources  to  the  promotion  and  sale  of  their  products.

We  believe  our  main  competitors  for  our  Xtreme  boats  include:

-    Boston  Whaler offers a wide range of commercial and recreational products.
     Their  fireboats  typically  exceed  twenty  feet  in  length.

-    Nichols  Bros  also  manufactures a large variety of commercial boats. They
     primarily  build  large boats at extravagant costs. To our knowledge, their
     newest  fireboat  is 105 feet in length and was delivered at a cost of $8.9
     Million.

-    Triad Marine offers commercial and recreational inflatable boats ranging in
     size  from  eight  to  thirty  feet  in  length.

-    Safe Boats  builds  inflatable rigid hull patrol boats ranging in size from
     nine  feet  to  thirty-nine  feet  in  length.

-    Nautica  International  manufactures  patrol  boats,  commercial  boats and
     recreational  boats.

-    Silver  Ships  and  Northwind  Marine manufactures a line of commercial and
     fire  boats  primarily  25-feet  in  length  and  above.

                                       6
<PAGE>

We  believe  our  main  competitors  for  our  Challenger  boats  include:

-    Fountain manufactures racing, sport boats and fishing boats from 27 feet to
     48  feet.

-    Formula  manufactures  performance vessels from 25 to 38 feet and a line of
     cabin  cruiser  ranging  in  size  from  29  to  34  feet.

-    Donzi manufactures  performance  vessels from 28 to 38 feet. The also own a
     subsidiary under the name of Proline, offering center console fishing boats
     from  28  to  34  feet.

-    Celebrity  is  a  large production manufacturer of sport boats, small cabin
     cruisers,  deck  boats  and bow riders. They utilize a large dealer network
     throughout  the  United  States  and  overseas.

-    Crownline is a large production manufacturer of sport boats ranging in size
     from  18  to  33  feet.

-    Sea Ray  is a large well-respected manufacturer with models ranging in size
     from  19 to 67 feet. The majority of their sales are for boats in the 19 to
     29  foot range. They also custom build flybridge models from 44 to 87 feet.

We  believe  our  products  offer  the  following  advantages  over  competitive
products:

-    Durability:  Our  hulls  are  constructed  using  hand laid "S" glass. This
     produces  a  fiberglass hull that is stronger yet lighter than conventional
     fiberglass  hulls.

-    High Performance and Stability: Most boats comparable in size to the Xtreme
     boats,  and  are  capable  of  exceeding  55 miles per hour, are inherently
     unstable  and virtually uncontrollable at those speeds. Management believes
     the  patented "V" shape hull design makes the boats safe and stable at high
     speeds, thereby eliminating this problem. The Challenger performance series
     also  utilizes a "V" shape hull design that creates a much more stable boat
     at  high  speeds,  as  well  as  improved  performance  in  the  water.

-    Best Cost:  The  prices  for  our commercial boats are competitive with the
     prices  offered  by  competitors.

OPERATIONS

The  hulls for our fire and rescue boats were manufactured in Nanning, China. We
currently  have  a surplus of hulls in our manufacturing facility in Washington,
Missouri.  If  and when our supply of hulls is depleted, we will use our current
facility  to  manufacture  the boats.   Decks and hulls for the Challenger boats
are  manufactured  in  the  Washington,  Missouri  manufacturing  facility.

Boat  prototyping  and  boat  assembly  is  performed  in  Washington, Missouri,
utilizing  the  Marine  Holdings,  Inc.,  manufacturing  facility and personnel.

SOURCES  AND  AVAILABILITY  OF  RAW  MATERIALS

We  purchase  key  materials,  components and equipment, including engines, fire
pumps  and  other  components  from third party suppliers. We obtain most of our
critical  raw  materials  and  components  from  a  single  or limited number of
suppliers.  When  possible, we also develop and maintain alternative sources for
essential  materials  and  components.  The  inability  to  obtain  sufficient
quantities  of  these  materials  or  components may result in delays, increased
costs,  and  reductions  in  our  product  shipments.

INTELLECTUAL  PROPERTY

Our intellectual property is important to our business. We rely on a combination
of license rights, trade secret laws, confidentiality procedures and contractual
provisions  to  protect  our  intellectual  property.  We  license  patents  and
patents-pending  which  relate  to  the  construction  and  design of the sleek,
progressive  "V"  and double pad-bottomed "V-hull" boat. The hull is designed so
that  as water hits the hull, it flows to the next convenient degree, creating a
lift  and  literally  raising  the  boat  to  the  top  of  the  water.

We operate under a licensing agreement with Albert Mardikian who owns a patented
progress v-hull design patent #6168481. Any patent or patents sub-licensed to us
relating  to  current  or  future  products  may  be challenged, invalidated, or
circumvented  or  the  rights  granted  thereunder  may  not  be  held  valid if
subsequently  challenged.

Pursuant  to the Business Asset Sale, License and Assignment of Rights Agreement
between  Sonic  Jet  Performance, Inc. and Rockwell Power Systems, Inc., we were
granted  a  license  for  a  period  of  twenty  years  to  use  the  "Sonic Jet
Performance" name and granted Rockwell the authority to market and sell Fire and
Rescue  and  Recreational  boasts everywhere in the world except the Middle East
including  Egypt,  Lebanon,  Turkey, Syria, Jordan, Iraq, Saudi Arabia, Bahrain,
Oman,  Qatar,  the  UAE  and  Yemen.

                                       7
<PAGE>

In  addition,  Rockwell  was  assigned the contractual right to use the Fire and
Rescue  Jet design as provided for under the 2001 License Agreement made between
Sonic Jet Performance, Inc. and Mardikian Marine Design et al dated December 21,
2001.  The term of agreement is from December 27, 2001 to December 31, 2006 with
an  option  for  renewal  of  one  5  year  term  until December 31, 2011 unless
terminated pursuant to the Agreement. Pursuant to the License Agreement, we have
agreed to pay to the Licensor a royalty equal to 2% of the gross sale's price of
our  12-foot  boats  and  4%  of  the  gross  sale's price of our 15-foot boats.

EMPLOYEES

We  presently  employ  three  employees  in  the  United  States,  including
administrative,  management  and  marketing  personnel.  We  also  utilize  one
contractor,  who  assists  us  in  our  sales  efforts.

REGULATORY  RESTRICTIONS  ON  OUR  BUSINESS

ENVIRONMENTAL  MATTERS
We  are  subject  to  federal,  state,  local  and foreign laws, and regulations
regarding  protection  of  the  environment, including air, water, and soil. Our
manufacturing  business involves the use, handling, storage, and contracting for
recycling  or  disposal  of,  hazardous or toxic substances or wastes, including
environmentally  sensitive  materials,  such as batteries, solvents, lubricants,
degreasing  agents, gasoline and resin. We must comply with certain requirements
for  the use, management, handling, and disposal of these materials. However, we
do  not  maintain  insurance  for pollutant cleanup and removal. If we are found
responsible  for  any hazardous contamination, any fines or penalties, we may be
required  to  pay,  or  any  clean  up we are required to perform, could be very
costly.  Even  if  we  are  charged,  and  later found not responsible, for such
contamination  or  clean up, the cost of defending the charges could be high. If
either  of  the  foregoing  occurs,  our  business,  results from operations and
financial  condition  could  be  materially  adversely  affected.

OTHER  REGULATORY  MATTERS
Our  operations  and  products  are  subject to extensive government regulation,
supervision,  and  licensing  under  various  federal,  state, local and foreign
statutes,  ordinances and regulations. Certain governmental agencies such as the
EPA  and the Occupational Safety and Health Administration, or OSHA, monitor our
compliance  with their regulations, require us to file periodic reports, inspect
our facilities and products, and may impose substantial penalties for violations
of  the regulations. For example, we are subject to federal regulation under the
Boat  Safety Act of 1971 that requires boat manufacturers to recall products for
replacement  of  parts  or  components  that have demonstrated defects affecting
safety.  Although  manufacturers  of  certain equipment we use in our boats have
instituted  recalls,  there has never been a recall resulting from our design or
manufacturing  process.

While  we believe that we maintain all requisite licenses and permits and are in
compliance  with  all  applicable federal, state, local and foreign regulations,
there  can  be  no  assurance  that  we  will  be able to maintain all requisite
licenses  and  permits.  The  failure  to  satisfy  those  and  other regulatory
requirements  could  have  a  material adverse effect on our business, financial
condition,  and  results  of  operations.

ITEM  2.  DESCRIPTION  OF  PROPERTY.

The address of our principal executive office is 300 Westlink Drive, Washington,
Missouri.  On  October  1,  2003,  we  entered  into a lease agreement with York
Industrial  Park  to  lease approximately 3,000 square feet of office space that
included  administrative  offices and assembly facilities. The term of the lease
was  month  to  month.  The  annual  rent  was $19,140 plus utilities, taxes and
maintenance.  Effective  May 31, 2005, we entered into an agreement to terminate
our  lease  at  this  facility.

Furthermore,  on  December  1,  2003,  we  entered  into  a lease agreement with
Marlborough  Equities  to lease approximately 3,000 square feet of storage space
in Riverside California. The annual rent for this space was $26,400. The term of
the lease for this space was month to month.  Effective May 31, 2005, we entered
into  an  agreement  to  terminate  our  lease  at  this  facility.

On  February  28,  2006, as part of the Challenger acquisition, we acquired real
estate  which  includes  Challenger's  65,000  square  foot  boat  manufacturing
facility  located  on  12  acres  in  Washington,  MO.

ITEM  3.  LEGAL  PROCEEDINGS.

We believe that there are no claims or litigation pending against the company or
our  officers  and  directors in their roles as such, the outcome of which could
have  a material adverse effect on our financial condition or operating results.

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

No  matters  were  submitted  to  a  vote  of security holders during the period
covered  by  this  report.

                                       8
<PAGE>

                                     PART II

ITEM  5.  MARKET  FOR  COMMON  EQUITY  AND  RELATED  STOCKHOLDER  MATTERS.

Our common stock trades on the OTC Bulletin Board on under the symbol "XTME.OB".
Bid  and  ask  quotations  for  our  common  shares  are  routinely submitted by
registered  broker  dealers  who  are  members  of  the  National Association of
Securities Dealers on the NASD Over-the-Counter Electronic Bulletin Board. These
quotations  reflect  inner-dealer  prices,  without  retail mark-up, markdown or
commission and may not represent actual transactions. The following table shows,
for  the  periods  indicated, the high and low closing sales prices per share of
our  common  stock.

<TABLE>
<CAPTION>
<S>                       <C>       <C>
                          HIGH       LOW
                          ----       ---
2004  FISCAL  YEAR
        First Quarter     $ .25     $ .11
        Second Quarter    $ .75     $ .13
        Third Quarter     $ .70     $ .38
        Fourth Quarter    $1.25     $ .52

2005  FISCAL  YEAR
        First Quarter     $ .48     $ .15
        Second Quarter    $ .43     $ .15
        Third Quarter     $ .27     $ .12
        Fourth Quarter    $ .22     $ .10
</TABLE>

We  declared  a  100-for-one  reverse  stock  split  of outstanding common stock
effective  September  26,  2003.  We  declared  a  10-for-1 reverse split of the
outstanding  common  stock  effective  January  30,  2004.

SHAREHOLDERS

As  of  March  31, 2006, there were approximately 1,002 holders of record of our
common  stock.

DIVIDEND  POLICY

We  have  never  declared  a  cash dividend on our common stock and our Board of
Directors does not anticipate that we will pay cash dividends in the foreseeable
future. Any future determination to pay cash dividends will be at the discretion
of  our  board  of  directors  and  will  depend  upon  our financial condition,
operating  results,  capital  requirements,  restrictions  contained  in  our
agreements  and  other  factors  which  our  board  of directors deems relevant.

RECENT  SALES  OF  UNREGISTERED  SECURITIES

CONVERTIBLE  DEBENTURES:

On  January  3,  2005,  we  entered  into a Convertible Debenture Agreement with
Dutchess  Private  Equities  Fund,  II,  L.P,  in  the  amount of $240,000, at a
discount  of  $40,000.  The  debenture  has  an  8% interest rate and is due and
payable  January  3,  2010.  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 of the
common  stock  during  the  fifteen trading days prior to the Conversion Date or
(ii)  100%  of  the  average  closing  bid  prices  for  the twenty trading days
immediately  preceding  the  Closing  Date  of  the  Transaction.

In  connection with the above financing, we issued a warrant to Dutchess Private
Equities Fund, LP to purchase 240,000 shares of common stock at $0.15 per share.
The  warrant  has  a  term  of  five  years.

On  March  8,  2005,  we  entered  into  a  Convertible Debenture Agreement with
Dutchess  Private Equities Fund, LP, in the amount of $120,000, at a discount of
$20,000.   The debenture has an 8% interest rate and is due and payable March 8,
2010.  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) 100% of the average closing bid prices
for  the  twenty  trading  days  immediately  preceding  the Closing Date of the
Transaction.

In  connection with the above financing, we issued a warrant to Dutchess Private
Equities Fund, LP to purchase 120,000 shares of common stock at $0.15 per share.
The  warrant  has  a  term  of  five  years.

                                       9
<PAGE>

On  March 10, 2005, we entered into a Convertible Debenture Agreement with eFund
Capital Partners, LLC, in the amount of $60,000, at a discount of $10,000.   The
debenture  has  an  8% interest rate and is due and payable March 10, 2010.  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)  fifteen  cents  per  share.

In  connection  with  the  above financing, we issued a warrant to eFund Capital
Partners,  LLC to purchase 60,000 shares of common stock at $0.15 per share. The
warrant  has  a  term  of  five  years.

On  March 18, 2005, we entered into a Convertible Debenture Agreement with eFund
Capital Partners, LLC, in the amount of $60,000, at a discount of $10,000.   The
debenture  has  an  8% interest rate and is due and payable March 10, 2010.  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)  100%  of the average closing bid prices for the
twenty  trading  days immediately preceding the Closing Date of the Transaction.

In  connection  with  the  above financing, we issued a warrant to eFund Capital
Partners,  LLC to purchase 60,000 shares of common stock at $0.15 per share. The
warrant  has  a  term  of  five  years.

On  April  18,  2005,  we  entered  into  a Convertible Debenture Agreement with
Dutchess  Private  Equities Fund, LP, in the amount of $84,000, at a discount of
$14,000.   The  debenture  has  an 8% interest rate and is due and payable April
18,  2010.  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) 100% of the average closing bid prices
for  the  twenty  trading  days  immediately  preceding  the Closing Date of the
Transaction.

In  connection with the above financing, we issued a warrant to Dutchess Private
Equities  Fund,  LP  to purchase 84,000 shares of common stock at .35 per share.
The  warrant  has  a  term  of  five  years.

On  May 5, 2005, we entered into a Convertible Debenture Agreement with Dutchess
Private  Equities Fund, LP, in the amount of $192,000, at a discount of $32,000.
The  debenture  has an 8% interest rate and is due and payable May 5, 2010.  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)  100%  of the average closing bid prices for the
twenty  trading  days immediately preceding the Closing Date of the Transaction.

In  connection with the above financing, we issued a warrant to Dutchess Private
Equities  Fund,  LP to purchase 192,000 shares of common stock at .22 per share.
The  warrant  has  a  term  of  five  years.

On May 13, 2005, we entered into a Convertible Debenture Agreement with Dutchess
Private  Equities  Fund,  II,  LP,  in  the amount of $228,000, at a discount of
$38,000.  The  debenture  has an 8% interest rate and is due and payable May 13,
2010.  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) 100% of the average closing bid prices
for  the  twenty  trading  days  immediately  preceding  the Closing Date of the
Transaction.

In  connection with the above financing, we issued a warrant to Dutchess Private
Equities  Fund,  LP to purchase 228,000 shares of common stock at .20 per share.
The  warrant  has  a  term  of  five  years.

On May 18, 2005, we entered into a Convertible Debenture Agreement with Dutchess
Private  Equities  Fund,  II,  LP,  in  the amount of $101,817, at a discount of
$26,817.  The  debenture  has an 8% interest rate and is due and payable May 18,
2010.  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) 100% of the average closing bid prices
for  the  twenty  trading  days  immediately  preceding  the Closing Date of the
Transaction.

In  connection with the above financing, we issued a warrant to Dutchess Private
Equities  Fund,  LP to purchase 101,817 shares of common stock at .20 per share.
The  warrant  has  a  term  of  five  years.

On  May  20,  2005, we entered into a Convertible Debenture Agreement with eFund
Capital  Partners, LLC, in the amount of $120,000, at a discount of $20,000. The
debenture  has  an  8%  interest  rate and is due and payable May 20, 2010.  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)  100%  of the average closing bid prices for the
twenty  trading  days immediately preceding the Closing Date of the Transaction.

In  connection  with  the  above financing, we issued a warrant to eFund Capital
Partners,  LLC  to purchase 120,000 shares of common stock at .20 per share. The
warrant  has  a  term  of  five  years.

On  June  16,  2005,  we  entered  into  a  Convertible Debenture Agreement with
Dutchess Private Equities Fund, II, LP, in the amount of $240,000, at a discount
of  $30,000.  The  debenture has an 8% interest rate and is due and payable June
16,  2010.  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)  fifteen  cents  per  share.

                                       10
<PAGE>

In  connection with the above financing, we issued a warrant to Dutchess Private
Equities  Fund,  II,  LP to purchase 240,000 shares of common stock at $0.16 per
share.  The  warrant  has  a  term  of  five  years.

On July 7, 2005, we entered into a Convertible Debenture Agreement with Dutchess
Private  Equities Fund, LP, in the amount of $228,000, at a discount of $28,000.
The  debenture has an 8% interest rate and is due and payable July 7, 2010.  The
purchaser  of  the convertible debentures is entitled to convert the face amount
of  the  debentures plus accrued interest into our common stock at the lesser of
(i) 75% of the lowest closing bid price during the fifteen trading days prior to
the  Conversion  Date  or  (ii)  fifteen  cents  ($.15)  per  share.

In  connection with the above financing, we issued a warrant to Dutchess Private
Equities  Fund,  LP to purchase 228,000 shares of common stock at .12 per share.
The  warrant  has  a  term  of  five  years.

On  July  7,  2005, we entered into a Convertible Debenture Agreement with eFund
Capital  Partners, LLC, in the amount of $72,000, at a discount of $12,000.  The
debenture  has  an  8%  interest  rate and is due and payable July 7, 2010.  The
purchaser  of  the convertible debentures is entitled to convert the face amount
of  the  debentures plus accrued interest into our common stock at the lesser of
(i) 75% of the lowest closing bid price during the fifteen trading days prior to
the  Conversion  Date  or  (ii)  fifteen  cents  ($.15)  per  share.

In connection with the above financing, we issued a warrant to eFund to purchase
72,000  shares  of common stock at .12 per share. The warrant has a term of five
years.

On  November  1,  2005, we entered into a twelve month consulting agreement with
Dutchess Advisors, LLC.  In connection with the consulting agreement, we entered
into  a  Convertible  Debenture  Agreement  with  Dutchess Advisors, LLC, in the
amount  of $500,000, at a discount of $497,000.  The debenture has a 5% interest
rate  and is due and payable November 1, 2010.  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 five trading days prior to the Conversion Date or (ii) 100%
of  the  average  closing  bid  prices  for  the  five  trading days immediately
preceding  the  Closing  Date  of  the  Transaction.

PROMISSORY  NOTES:

On  July  21, 2005, we 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 is due on December 21, 2005.  The
note  carries  a  discounted amount of $10,000.   During the year ended December
31, 2005, $0.00 of this Note was repaid, and the balance at December 31, 2005 is
$120,000.  The  Note was extended and is due and payable.  The Note was extended
and  is  due  and payable with thirty days notice from Dutchess Private Equities
Fund,  LP.

On  August 5, 2005, we 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 is due on January 5, 2006.  The note
carries  a  discounted  amount  of  $24,000.  During the year ended December 31,
2005,  $0.00  of  this  Note was repaid, and the balance at December 31, 2005 is
$144,000.  The  Note was extended and is due and payable with thirty days notice
from  Dutchess  Private  Equities  Fund,  LP.

On August 22, 2005, we 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 is due on August 22, 2006.  The note
carries  a  discounted  amount  of  $30,000.  During the year ended December 31,
2005,  $0.00  of  this  Note was repaid, and the balance at December 31, 2005 is
$180,000.

 On  September  1, 2005, we 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 is due on
September 1, 2006.  The note carries a discounted amount of $12,000.  During the
year  ended December 31, 2005, $0.00 of this Note was repaid, and the balance at
December  31,  2005  is  $72,000.

On  September  7,  2005, we issued a non-interest bearing Convertible Promissory
Note  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 is due on
September 7, 2006.  The note carries a discounted amount of $18,000.  During the
year  ended December 31, 2005, $0.00 of this Note was repaid, and the balance at
December  31,  2005  is  $108,000.

On  September  15, 2005, we 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 is due on September 15, 2006.  The
note carries a discounted amount of $33,500.  During the year ended December 31,
2005,  $0.00  of  this  Note was repaid, and the balance at December 31, 2005 is
$201,000.

On  September  22, 2005, we 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 is due on September 22, 2006.  The
note carries a discounted amount of $26,400.  During the year ended December 31,
2005,  $0.00  of  this  Note was repaid, and the balance at December 31, 2005 is
$158,400.

On  September  30, 2005, we 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 is due on September 30, 2006.  The
note carries a discounted amount of $39,400.  During the year ended December 31,
2005,  $0.00  of  this  Note was repaid, and the balance at December 31, 2005 is
$236,400.

                                       11
<PAGE>


On October 7, 2005, we 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 is due on October 7, 2006.  The note
carries  a  discounted  amount  of  $37,000.  During the year ended December 31,
2005,  $0.00  of  this  Note was repaid, and the balance at December 31, 2005 is
$222,000.

On  October  14,  2005,  we 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 is due on October 14, 2006.  The
note carries a discounted amount of $32,000.  During the year ended December 31,
2005,  $0.00  of  this  Note was repaid, and the balance at December 31, 2005 is
$192,000.

On  November  1,  2005,  we 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 is due on November 1, 2006.
The note carries a discounted amount of $26,000.  During the year ended December
31, 2005, $0.00 of this Note was repaid, and the balance at December 31, 2005 is
$156,000.

On  November  9,  2005,  we 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 November 9, 2006.
The note carries a discounted amount of $36,000.  During the year ended December
31, 2005, $0.00 of this Note was repaid, and the balance at December 31, 2005 is
$216,000.

On  November  22,  2005, we issued a non-interest bearing Convertible Promissory
Note  to  Dutchess  Private Equities Fund, II, LP in the amount of $60,000.  The
note  carries  an  interest rate of 0% per year and is due on November 22, 2006.
The note carries a discounted amount of $10,000.  During the year ended December
31,  2005, $17,234 of this Note was repaid, and the balance at December 31, 2005
is  $42,766.

On  December  6,  2005,  we 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.  During the year ended December
31, 2005, $0.00 of this Note was repaid, and the balance at December 31, 2005 is
$216,000.

SHARES  ISSUED  FOR  ACQUISITIONS

We  issued  557,275 shares of 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.

SHARES  ISSUED  FOR  CONSULTING  SERVICES

On  March 7, 2005, we issued 2,229,101 shares of common stock valued at $334,365
to  Dutchess  Advisors  LLC  for  consulting  services.


PRIVATE  PLACEMENTS:

During October 2005, we issued 500,000 shares of common stock in connection with
the  Equity  Line Agreement dated August 24, 2005 with Preston Capital Partners.
As  of  December  31, 2005, we had not received proceeds for 332,601 shares.  We
received  proceeds  for  these  shares  on  January  19,  2006.

In  the  year  ended  December  31,  2005, we raised $220,000 from the following
individual  investors  on  the date and in the amount described below. We issued
convertible promissory notes with a 20% rate and a conversion feature equal to a
30%  discount  to  market  at  the  time  of  conversion.

<TABLE>
<CAPTION>
<S>              <C>                <C>              <C>
                       NAME         AMOUNT RECEIVED  DEPOSIT  DATE
                       ----         ---------------  -------------
                 Patrick Connelly     $ 10,000.00     04/14/2005
                 ----------------     -----------     ----------
                  Ronald Feldman      $ 20,000.00     05/06/2005
                  --------------      -----------     ----------
                   Ronald Feldman     $  4,000.00     05/06/2005
                   --------------     -----------     ----------
                 Raymond Champagne    $ 10,000.00     05/06/2005
                 -----------------    -----------     ----------
                   Dennis Gerber      $ 20,000.00     05/23/2005
                   -------------      -----------     ----------
                   Sandra Walls       $ 10,000.00     06/08/2005
                   ------------       -----------     ----------
                  Mike Lochirco       $100,000.00     06/17/2005
                  -------------       -----------     ----------
                    John Layne        $ 20,000.00     07/20/2005
                    ----------        -----------     ----------
                  Gerald Treichel     $ 10,000.00     08/05/2005
                  ---------------     -----------     ----------
                    Thomas Lutz       $ 10,000.00     09/30/2005
                    -----------       -----------     ----------
                   Arnold Kramer      $  6,000.00     10/20/2005
                   -------------      -----------     ----------
</TABLE>

                                       12
<PAGE>

The  securities  issued in the foregoing transactions were made in reliance upon
Rule  506  of  Regulation D under the Securities Act of 1933, as amended, by the
fact  that:

-    the sale  was made to a sophisticated or accredited investor, as defined in
     Rule  502;

-    we gave  the purchaser the opportunity to ask questions and receive answers
     concerning  the  terms  and  conditions  of  the offering and to obtain any
     additional  information  which  we  possessed  or  could  acquire  without
     unreasonable  effort or expense that is necessary to verify the accuracy of
     information  furnished;

-    at a reasonable  time  prior  to  the  sale  of  securities, we advised the
     purchaser  of  the  limitations  on  resale in the manner contained in Rule
     502(d)2;

-    neither  we  nor any person acting on our behalf sold the securities by any
     form  of  general  solicitation  or  general  advertising;  and

-    we exercised reasonable care to assure that the purchaser of the securities
     is not an underwriter within the meaning of Section 2(11) of the Securities
     Act  of  1933  in  compliance  with  Rule  502(d).

ITEM  6.  MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OR  PLAN  OF  OPERATION.

You should read this section together with our consolidated financial statements
and  related  notes  thereto  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-KSB, 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.
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.

We  recognize  income  when  the  products  are shipped, and when the service is
provided.  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.  Xtreme
fire  rescue and patrol boats are sold 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.

                                       13
<PAGE>

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.
computers  (5  years),  software  (3 years), office equipment and furniture (3-7
years).

Leasehold  improvements  are amortized over the remaining lease term at the date
of installation. Expenditures for maintenance and repairs are charged to expense
as  incurred.

GOING  CONCERN  OPINION

Our  audited  financial  statements for the fiscal year ended December 31, 2005,
reflect  a  net  loss  of  $2,416,967  and  net cash flows used by operations of
$3,543,056.  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 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.

RESULTS  OF  OPERATIONS

YEAR  ENDED  DECEMBER  31,  2005  COMPARED  WITH  YEAR  ENDED  DECEMBER 31, 2004

NET  REVENUES

For the year ended December 31, 2005, we generated net revenues of $1,783,626 as
compared  to  net  revenues  of  $164,712  for the year ended December 31, 2004.
During  2005,  the  major  change  in  our business which impacted revenues that
beginning  March 1, 2005, we became the sole distributor for Challenger Offshore
boats  manufactured  by  Marine Holdings, Inc.  Revenue from Challenger Offshore
boats  was  $1,455,420  for the nine month period that the Distributor Agreement
was  in  place.

COST  OF  GOODS  SOLD

We  incurred  costs  of sales of $1,550,696 for the twelve months ended December
31, 2005, as compared to $129,211 for the twelve months ended December 31, 2004.
On  a  percentage  basis,  cost  of  goods sold increased from 78.4% to 86.9% of
revenues.  The  main factor that led to the increase was that beginning March 1,
2005,  we became the sole distributor for Challenger Offshore boats manufactured
by  Marine  Holdings, Inc. Cost of goods sold from Challenger Offshore boats was
$1,385,714.  Per  the  Distributor Agreement, we received a 5% commission on the
total  sales  price  to  the  customer.

OPERATING  EXPENSES

Operating  expenses increased to $1,670,498 for the year ended December 31, 2005
as  compared to $1,290,826 for the year ended December 31, 2004. The increase in
operating  expenses for the year ended December 31, 2005 occurred primarily as a
result  of:

---  On  March  7,  2005,  Consulting  Fees  of  $334,365  were recorded for the
issuance  of  2,229,101  shares  to  Dutchess  Advisors

---  During  2005,  Documentation  Fees  of $187,500 were recorded in connection
with  Dutchess  debentures and promissory notes, compared to $0 expense in 2004.

---  During  2005,  we  paid  $373,440  for  investor  relations  as compared to
$183,150  in  2004,  for  an  increase  of  $190,290.

---  Marketing  Fees  of  $83,591  were  recorded  on  March  7, 2005,  for the
issuance of 557,275 shares to Ron DiBartolo in connection with the Marketing and
Distribution  agreement  signed  with  Marine  Holdings.

INTEREST  EXPENSE

Interest expense increased from $210,207 to $979,399 from the prior year period,
reflecting  the  costs  of borrowing funds with promissory notes, as well as the
warrants issued in connection with debentures.  Each of our notes and debentures
are  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 in the event of
default,  which  are  included  in interest expense on the financial statements.

                                       14
<PAGE>

NET  LOSS

We  had a net loss of ($2,416,967) for the twelve months ended December 31, 2005
as compared to ($1,465,532) for the twelve months ended December 31, 2004.   Non
cash  charges  to income comprised $1,510,930 and $1,517,176 for the years ended
December  31,  2005  and  2004  are  summarized  as  follows:

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

                                                              Year Ended
                                                       -------------------------
                                                       12/31/2005     12/31/2004
                                                       ----------     ----------
Stock  issued  for  services                           $  415,727     $  330,272
Stock  issued  for  officer  compensation                  53,700        111,929
Stock issued for director compensation                          0        149,240
Depreciation  &  amortization                             245,880        207,246
Issuance  of  warrants                                    216,750          1,888
Debt  conversion  feature  expense                        329,771        185,200
Debt  inducement  expense                                 249,102        154,000
                                                       ----------     ----------
                                                        1,510,930      1,139,775
</TABLE>

LIQUIDITY  AND  CAPITAL  RESOURCES

As  of  December  31,  2005, we had Total Current Assets of $778,916 compared to
$118,142  as of December 31, 2004. This was due primarily to a $220,713 increase
in  cash  in  the bank and a $375,000 increase in inventory.  As of December 31,
2005,  we  had Total Current Liabilities of $3,203,805, compared to $807,890, as
of  December  31,  2004.  This  was  due  primarily  to a $2,014,708 increase in
Dutchess  Convertible  Promissory  Notes,  a  $181,718 increase in WIP inventory
loans,  and  a  $100,000  increase in outstanding Private Promissory Notes.  Our
Stockholders'  Equity  at  December  31,  2005  was  a  deficit of ($1,694,008).

During  2005,  we  issued  promissory  notes to related parties in the amount of
$2,014,708  as more fully described in the financing section below.  At December
31,  2005,  $55,134  of  these  notes were repaid.  We issued private promissory
notes  of  $220,000  in  2005 and carry a balance of $112,000 on notes placed in
2004.  None  of  these  notes  were  repaid  in  2005.

As  of  December  31,  2005,  we  had  debt of $4,846,100, including convertible
debentures  which  total  $1,642,295.  We accrue monthly interest expense on the
debt under our convertible debentures, which are due in 2009 and 2010.  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 at this time.  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.

FINANCING  ACTIVITIES

On  February  3,  2004,  we  entered  into  an investment agreement with Preston
Capital Partners, LLC for $28,000 whereby we issued a convertible debenture. The
debenture  is  convertible  into  our  common  stock at the lesser of 75% of the
lowest closing bid price of the common stock during the previous fifteen trading
days  or  100%  of the average of the five lowest bid prices of the common stock
for  the  thirty  trading  days  prior  to  closing.

On February 18, 2004, we entered into an investment agreement with eFund Capital
Partners,  LLC  for  $28,000  whereby  we  issued  a  convertible debenture. The
debenture  is  convertible  into  our  common  stock at the lesser of 75% of the
lowest closing bid price of the common stock during the previous fifteen trading
days  or  100%  of the average of the five lowest bid prices of the common stock
for  the  thirty  trading  days  prior  to  closing.

On  October  18,  2004,  we  entered  into an investment agreement with Dutchess
Private  Equity  Fund,  II,  L.P  for  $20,000  whereby  we issued a convertible
debenture.  The  debenture is convertible into our common stock at the lesser of
75%  of  the  lowest  closing  bid price of the common stock during the previous
fifteen trading days or 100% of the average of the five lowest bid prices of the
common  stock  for  the  thirty  trading  days  prior  to  closing.

On  October 18, 2004, we entered into an investment agreement with eFund Capital
Partners,  LLC  for  $18,000  whereby  we  issued  a  convertible debenture. The
debenture  is  convertible  into  our  common  stock at the lesser of 75% of the
lowest closing bid price of the common stock during the previous fifteen trading
days  or  100%  of the average of the five lowest bid prices of the common stock
for  the  thirty  trading  days  prior  to  closing.

On  December  23,  2004,  we  entered into an investment agreement with Dutchess
Private  Equity  Fund,  II,  L.P  for  $240,000  whereby we issued a convertible
debenture.  The  debenture is convertible into our common stock at the lesser of
75%  of  the  lowest  closing  bid price of the common stock during the previous
fifteen trading days or 100% of the average of the five lowest bid prices of the
common  stock  for  the  thirty  trading  days  prior  to  closing.

                                       15
<PAGE>

On  January  3,  2005,  we  entered  into a Convertible Debenture Agreement with
Dutchess  Private  Equities  Fund,  II,  L.P,  in  the  amount of $240,000, at a
discount  of  $40,000.  The  debenture  has  an  8% interest rate and is due and
payable  January  3,  2010.  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 of the
common  stock  during  the  fifteen trading days prior to the Conversion Date or
(ii)  100%  of  the  average  closing  bid  prices  for  the twenty trading days
immediately  preceding  the  Closing  Date  of  the  Transaction.

In  connection with the above financing, we issued a warrant to Dutchess Private
Equities Fund, LP to purchase 240,000 shares of common stock at $0.15 per share.
The  warrant  has  a  term  of  five  years.

On  March  8,  2005,  we  entered  into  a  Convertible Debenture Agreement with
Dutchess  Private Equities Fund, LP, in the amount of $120,000, at a discount of
$20,000.   The debenture has an 8% interest rate and is due and payable March 8,
2010.  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) 100% of the average closing bid prices
for  the  twenty  trading  days  immediately  preceding  the Closing Date of the
Transaction.

In  connection with the above financing, we issued a warrant to Dutchess Private
Equities Fund, LP to purchase 120,000 shares of common stock at $0.15 per share.
The  warrant  has  a  term  of  five  years.

On  March 10, 2005, we entered into a Convertible Debenture Agreement with eFund
Capital Partners, LLC, in the amount of $60,000, at a discount of $10,000.   The
debenture  has  an  8% interest rate and is due and payable March 10, 2010.  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)  fifteen  cents  per  share.

In  connection  with  the  above financing, we issued a warrant to eFund Capital
Partners,  LLC to purchase 60,000 shares of common stock at $0.15 per share. The
warrant  has  a  term  of  five  years.

On  March 18, 2005, we entered into a Convertible Debenture Agreement with eFund
Capital Partners, LLC, in the amount of $60,000, at a discount of $10,000.   The
debenture  has  an  8% interest rate and is due and payable March 10, 2010.  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)  100%  of the average closing bid prices for the
twenty  trading  days immediately preceding the Closing Date of the Transaction.

In  connection  with  the  above financing, we issued a warrant to eFund Capital
Partners,  LLC to purchase 60,000 shares of common stock at $0.15 per share. The
warrant  has  a  term  of  five  years.

On  April  18,  2005,  we  entered  into  a Convertible Debenture Agreement with
Dutchess  Private  Equities Fund, LP, in the amount of $84,000, at a discount of
$14,000.   The  debenture  has  an 8% interest rate and is due and payable April
18,  2010.  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) 100% of the average closing bid prices
for  the  twenty  trading  days  immediately  preceding  the Closing Date of the
Transaction.

In  connection with the above financing, we issued a warrant to Dutchess Private
Equities  Fund,  LP  to purchase 84,000 shares of common stock at .35 per share.
The  warrant  has  a  term  of  five  years.

On  May 5, 2005, we entered into a Convertible Debenture Agreement with Dutchess
Private  Equities Fund, LP, in the amount of $192,000, at a discount of $32,000.
The  debenture  has an 8% interest rate and is due and payable May 5, 2010.  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)  100%  of the average closing bid prices for the
twenty  trading  days immediately preceding the Closing Date of the Transaction.

In  connection with the above financing, we issued a warrant to Dutchess Private
Equities  Fund,  LP to purchase 192,000 shares of common stock at .22 per share.
The  warrant  has  a  term  of  five  years.

On May 13, 2005, we entered into a Convertible Debenture Agreement with Dutchess
Private  Equities  Fund,  II,  LP,  in  the amount of $228,000, at a discount of
$38,000.  The  debenture  has an 8% interest rate and is due and payable May 13,
2010.  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) 100% of the average closing bid prices
for  the  twenty  trading  days  immediately  preceding  the Closing Date of the
Transaction.

In  connection with the above financing, we issued a warrant to Dutchess Private
Equities  Fund,  LP to purchase 228,000 shares of common stock at .20 per share.
The  warrant  has  a  term  of  five  years.

                                       16
<PAGE>

On May 18, 2005, we entered into a Convertible Debenture Agreement with Dutchess
Private  Equities  Fund,  II,  LP,  in  the amount of $101,817, at a discount of
$26,817.  The  debenture  has an 8% interest rate and is due and payable May 18,
2010.  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) 100% of the average closing bid prices
for  the  twenty  trading  days  immediately  preceding  the Closing Date of the
Transaction.

In  connection with the above financing, we issued a warrant to Dutchess Private
Equities  Fund,  LP to purchase 101,817 shares of common stock at .20 per share.
The  warrant  has  a  term  of  five  years.

On  May  20,  2005, we entered into a Convertible Debenture Agreement with eFund
Capital  Partners, LLC, in the amount of $120,000, at a discount of $20,000. The
debenture  has  an  8%  interest  rate and is due and payable May 20, 2010.  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)  100%  of the average closing bid prices for the
twenty  trading  days immediately preceding the Closing Date of the Transaction.

In  connection  with  the  above financing, we issued a warrant to eFund Capital
Partners,  LLC  to purchase 120,000 shares of common stock at .20 per share. The
warrant  has  a  term  of  five  years.

On  June  16,  2005,  we  entered  into  a  Convertible Debenture Agreement with
Dutchess Private Equities Fund, II, LP, in the amount of $240,000, at a discount
of  $30,000.  The  debenture has an 8% interest rate and is due and payable June
16,  2010.  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)  fifteen  cents  per  share.

In  connection with the above financing, we issued a warrant to Dutchess Private
Equities  Fund,  II,  LP to purchase 240,000 shares of common stock at $0.16 per
share.  The  warrant  has  a  term  of  five  years.

On July 7, 2005, we entered into a Convertible Debenture Agreement with Dutchess
Private  Equities Fund, LP, in the amount of $228,000, at a discount of $28,000.
The  debenture has an 8% interest rate and is due and payable July 7, 2010.  The
purchaser  of  the convertible debentures is entitled to convert the face amount
of  the  debentures plus accrued interest into our common stock at the lesser of
(i) 75% of the lowest closing bid price during the fifteen trading days prior to
the  Conversion  Date  or  (ii)  fifteen  cents  ($.15)  per  share.

In  connection with the above financing, we issued a warrant to Dutchess Private
Equities  Fund,  LP to purchase 228,000 shares of common stock at .12 per share.
The  warrant  has  a  term  of  five  years.

On  July  7,  2005, we entered into a Convertible Debenture Agreement with eFund
Capital  Partners, LLC, in the amount of $72,000, at a discount of $12,000.  The
debenture  has  an  8%  interest  rate and is due and payable July 7, 2010.  The
purchaser  of  the convertible debentures is entitled to convert the face amount
of  the  debentures plus accrued interest into our common stock at the lesser of
(i) 75% of the lowest closing bid price during the fifteen trading days prior to
the  Conversion  Date  or  (ii)  fifteen  cents  ($.15)  per  share.

In connection with the above financing, we issued a warrant to eFund to purchase
72,000  shares  of common stock at .12 per share. The warrant has a term of five
years.

On  July  21, 2005, we 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 is due on December 21, 2005.  The
note  carries  a  discounted amount of $10,000.   During the year ended December
31, 2005, $0.00 of this Note was repaid, and the balance at December 31, 2005 is
$120,000.  The  Note was extended and is due and payable.  The Note was extended
and  is  due  and payable with thirty days notice from Dutchess Private Equities
Fund,  LP.

On  August 5, 2005, we 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 is due on January 5, 2006.  The note
carries  a  discounted  amount  of  $24,000.  During the year ended December 31,
2005,  $0.00  of  this  Note was repaid, and the balance at December 31, 2005 is
$144,000.  The  Note was extended and is due and payable with thirty days notice
from  Dutchess  Private  Equities  Fund,  LP.

On August 22, 2005, we 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 is due on August 22, 2006.  The note
carries  a  discounted  amount  of  $30,000.  During the year ended December 31,
2005,  $0.00  of  this  Note was repaid, and the balance at December 31, 2005 is
$180,000.

 On  September  1, 2005, we 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 is due on
September 1, 2006.  The note carries a discounted amount of $12,000.  During the
year  ended December 31, 2005, $0.00 of this Note was repaid, and the balance at
December  31,  2005  is  $72,000.

On  September  7,  2005, we issued a non-interest bearing Convertible Promissory
Note  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 is due on
September 7, 2006.  The note carries a discounted amount of $18,000.  During the
year  ended December 31, 2005, $0.00 of this Note was repaid, and the balance at
December  31,  2005  is  $108,000.

                                       17
<PAGE>

On  September  15, 2005, we 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 is due on September 15, 2006.  The
note carries a discounted amount of $33,500.  During the year ended December 31,
2005,  $0.00  of  this  Note was repaid, and the balance at December 31, 2005 is
$201,000.

On  September  22, 2005, we 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 is due on September 22, 2006.  The
note carries a discounted amount of $26,400.  During the year ended December 31,
2005,  $0.00  of  this  Note was repaid, and the balance at December 31, 2005 is
$158,400.

On  September  30, 2005, we 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 is due on September 30, 2006.  The
note carries a discounted amount of $39,400.  During the year ended December 31,
2005,  $0.00  of  this  Note was repaid, and the balance at December 31, 2005 is
$236,400.

On October 7, 2005, we 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 is due on October 7, 2006.  The note
carries  a  discounted  amount  of  $37,000.  During the year ended December 31,
2005,  $0.00  of  this  Note was repaid, and the balance at December 31, 2005 is
$222,000.

On  October  14,  2005,  we 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 is due on October 14, 2006.  The
note carries a discounted amount of $32,000.  During the year ended December 31,
2005,  $0.00  of  this  Note was repaid, and the balance at December 31, 2005 is
$192,000.

On  November  1,  2005, we entered into a twelve month consulting agreement with
Dutchess Advisors, LLC.  In connection with the consulting agreement, we entered
into  a  Convertible  Debenture  Agreement  with  Dutchess Advisors, LLC, in the
amount  of $500,000, at a discount of $497,000.  The debenture has a 5% interest
rate  and is due and payable November 1, 2010.  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 five trading days prior to the Conversion Date or (ii) 100%
of  the  average  closing  bid  prices  for  the  five  trading days immediately
preceding  the  Closing  Date  of  the  Transaction.

On  November  1,  2005,  we 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 is due on November 1, 2006.
The note carries a discounted amount of $26,000.  During the year ended December
31, 2005, $0.00 of this Note was repaid, and the balance at December 31, 2005 is
$156,000.

On  November  9,  2005,  we 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 November 9, 2006.
The note carries a discounted amount of $36,000.  During the year ended December
31, 2005, $0.00 of this Note was repaid, and the balance at December 31, 2005 is
$216,000.

On  November  22,  2005, we issued a non-interest bearing Convertible Promissory
Note  to  Dutchess  Private Equities Fund, II, LP in the amount of $60,000.  The
note  carries  an  interest rate of 0% per year and is due on November 22, 2006.
The note carries a discounted amount of $10,000.  During the year ended December
31,  2005, $17,234 of this Note was repaid, and the balance at December 31, 2005
is  $42,766.

On  December  6,  2005,  we 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.  During the year ended December
31, 2005, $0.00 of this Note was repaid, and the balance at December 31, 2005 is
$216,000.

In  the  year  ended  December  31,  2005, we raised $220,000 from the following
individual  investors  on  the date and in the amount described below. We issued
convertible  promissory  notes with a 20% interest rate and a conversion feature
equal  to  a  30%  discount  to  market  at  the  time  of  conversion.

<TABLE>
<CAPTION>
<S>              <C>                <C>              <C>
                       NAME         AMOUNT RECEIVED  DEPOSIT  DATE
                       ----         ---------------  -------------
                 Patrick Connelly     $ 10,000.00     04/14/2005
                 ----------------     -----------     ----------
                  Ronald Feldman      $ 20,000.00     05/06/2005
                  --------------      -----------     ----------
                   Ronald Feldman     $  4,000.00     05/06/2005
                   --------------     -----------     ----------
                 Raymond Champagne    $ 10,000.00     05/06/2005
                 -----------------    -----------     ----------
                   Dennis Gerber      $ 20,000.00     05/23/2005
                   -------------      -----------     ----------
                   Sandra Walls       $ 10,000.00     06/08/2005
                   ------------       -----------     ----------
                  Mike Lochirco       $100,000.00     06/17/2005
                  -------------       -----------     ----------
                    John Layne        $ 20,000.00     07/20/2005
                    ----------        -----------     ----------
                  Gerald Treichel     $ 10,000.00     08/05/2005
                  ---------------     -----------     ----------
                    Thomas Lutz       $ 10,000.00     09/30/2005
                    -----------       -----------     ----------
                   Arnold Kramer      $  6,000.00     10/20/2005
                   -------------      -----------     ----------
</TABLE>
                                       18
<PAGE>

CAPITAL  COMMITMENTS

At  December  31, 2005, the Company had two short term Notes Payable as follows:

Happy Apple Company of $153,768, due on demand, unsecured, and bears interest at
a  rate  of  20%.

Sun  Security  Bank  of $27,950, secured by a fire boat, and bears interest at a
rate  of  US  Bank  Prime  Rate  plus 1.0%, with an interest rate floor of 7.5%.

In June, 2005, we entered into an agreement with Edgarization.com, for marketing
services.  We  agreed  to  compensate  Edgarization.com  $4,000  monthly.

In  October  2005, we entered into an agreement to purchase a 33' Sportfish boat
from Sea Machines for $125,000.  As of December 31, 2005, we have paid $5,000 on
the  boat  and  have  a  remaining  capital  commitment  of  $120,000.

In  October  2005,  we entered into an agreement to purchase a 2002 GMC350 truck
from Sean Minogue for $24,000.  As of December 31, 2005, we have paid $3,000 and
have  a  remaining  capital  commitment  of $21,000.  As of March 28, 2006, this
capital  commitment  was  paid  in  full.

In  November,  2005,  we  entered  into  a  consulting  agreement  with Dutchess
Advisors,  LLC,  whereby  they  advise  us  with respect to operations, business
strategy,  capital  structure  and  other  matters pertaining to the company. We
agreed  to  compensate Dutchess Advisors, LLC $10,000 monthly, as well as issued
$500,000  of convertible debentures at a $497,000 discount.  The debenture has a
5%  interest rate and is due and payable November 1, 2010.  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 five trading days prior to the Conversion
Date  or  (ii)  100% of the average closing bid prices for the five trading days
immediately  preceding  the  Closing  Date  of  the  Transaction.

INFLATION

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

RISK  FACTORS

The  following risk factors and other information included in this Annual Report
should  be carefully considered. The risks and uncertainties described below are
not  the  only  ones  we  face. Additional risks and uncertainties not presently
known  to  us  or that we currently deem immaterial also may impair our business
operations.  If  any  of  the  following  risks  occur,  our business, financial
condition,  operating  results,  and  cash  flows  could be materially adversely
affected.

IF  WE CANNOT OBTAIN ADDITIONAL FINANCING, WE MAY HAVE TO CURTAIL OPERATIONS AND
MAY  ULTIMATELY  CEASE  TO  EXIST.

Our audited financial statements for the year ended December 31, 2005, reflect a
net  loss  of  ($2,416,967)  and  negative  cash  flows  from  operations  of
($4,107,444).  These  conditions  require  sufficient  additional  funding  or
alternative  sources  of  capital  to  meet  our working capital needs.  We have
raised  capital  by  issuing  convertible debentures and anticipate that we will
continue  to  be able to do so in the foreseeable future, however, financing may
not  be  available  in  amounts  or on terms acceptable to us, if at all.  If we
cannot raise funds on acceptable terms, or achieve positive cash flow, we may be
forced  to  curtail  operations  or  may  ultimately  cease  to  exist.

WE  HAD  LOSSES SINCE OUR INCEPTION AND EXPECT LOSSES TO CONTINUE IN THE FUTURE,
THEREFORE WE MAY NOT BE ABLE TO MEET OUR DEBT SERVICE OBLIGATIONS.  WE MAY NEVER
BECOME  PROFITABLE.

We  have  historically  generated substantial losses, which, if continued, could
make  it  difficult  to fund our operations or successfully execute our business
plan,  and  could adversely affect our stock price.  As of December 31, 2005, we
had total liabilities of $4,846,100.  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, to plan for, or react
to,  changes  in  our  business and competition, and to react in the event of an
economic  downturn.  We  anticipate  losses  for  the foreseeable future. We may
never  become  profitable.

                                       19
<PAGE>

WE  HAVE A LIMITED OPERATING HISTORY AND MAY NEVER ACHIEVE OR SUSTAIN PROFITABLE
OPERATIONS.

We  are  a  development  stage  production  company.  We  acquired our operating
subsidiary,  Rockwell  Power  Systems,  Inc.  on October 1, 2003. Our ability to
successfully  commercialize  our  products  will  depend on, among other things,
ability to manufacture and distribute the products, and the relative cost to the
customer of our product as compared to alternative competitive products. Because
we  focus on emerging markets, market reaction can be difficult to predict. As a
result,  we  may  never  achieve  or  sustain  profitable  operations.

OUR INDEPENDENT ACCOUNTANTS HAVE ISSUED A GOING CONCERN OPINION AND IF WE DO NOT
GENERATE  ENOUGH  CASH  FROM  OPERATIONS  TO SUSTAIN OUR BUSINESS WE MAY HAVE TO
LIQUIDATE  ASSETS  OR  CURTAIL  OUR  OPERATIONS.

The  accompanying  financial  statements  have  been  prepared  assuming we will
continue  as  a  going  concern.  Conditions exist which raise substantial doubt
about  our  ability  to  continue unless we are able to generate sufficient cash
flows  to  meet  our  obligations  and  sustain  our  operations.  The financial
statements  do  not include any adjustment that might result from the outcome of
this  uncertainty.

WE  DEPEND  ON OUR SUPPLIERS AND IF WE CAN NOT OBTAIN CERTAIN COMPONENTS FOR OUR
PRODUCTS,  WE  MIGHT HAVE TO DEVELOP ALTERNATIVE DESIGNS THAT COULD INCREASE OUR
COSTS.

We depend upon a number of suppliers for components of our products. There is an
inherent  risk  that  certain components of our products will be unavailable for
prompt  delivery  or,  in some cases, discontinued. We have only limited control
over  any  third-party  manufacturer  as  to  quality  controls,  timeliness  of
production,  deliveries  and  various  other factors. Should the availability of
certain  components  be  compromised,  it  could force us to develop alternative
designs  using  other  components, which could add to the cost of goods sold and
compromise  delivery  commitments.  If  we  are unable to obtain components in a
timely  manner,  at  an  acceptable  cost,  or at all, we may need to select new
suppliers,  redesign  or  reconstruct  process  we use to build the hulls, which
management  believes  would  take  a  minimum of one-year. We may not be able to
manufacture  any vehicles for a period of time, which could materially adversely
affect  our  business,  results  from  operations,  and  financial  condition.

OUR  GOVERNMENT BUSINESS TARGETS A LIMITED NUMBER OF POTENTIAL CUSTOMERS, AND IF
WE  CANNOT  OBTAIN  GOVERNMENT  CONTRACTS,  WE  MAY  NOT  EARN  REVENUES.

Obtaining  government  contracts  may  involve long purchase and payment cycles,
competitive  bidding,  qualification requirements, delays or changes in funding,
budgetary  constraints,  political agendas, extensive specification development,
price  negotiations  and  milestone  requirements.  Each  government agency also
maintains  its own rules and regulations with which we must comply and which can
vary  significantly among agencies. Governmental agencies also often retain some
portion  of  fees  payable  upon completion of a project and collection of these
fees  may  be  delayed  for  several  months.

WE  ARE  SUBJECT  TO  SUBSTANTIAL  COMPETITION

We  are  subject  to  significant competition that could harm our ability to win
business  and  increase  the  price  pressure  on  our  products. We face strong
competition  from  a wide variety of firms. Moreover, we may not have sufficient
resources  to  undertake  the  continuing  research and development necessary to
remain  competitive.  Competitors  may  attempt to independently develop similar
designs  or  duplicate  our  products  or  designs.  We  or  our competitors may
intentionally  or  unintentionally  infringe  upon or misappropriate products or
proprietary  information.  In the future, litigation may be necessary to enforce
intellectual  property  rights  or  to  determine  the validity and scope of the
proprietary  rights  of  others. Any such litigation could be time consuming and
costly.  We operate under a licensing agreement with Albert Mardikian who owns a
patented  progress  v-hull  design  patent  #6168481.  Any  patent  or  patents
sub-licensed  to  us  relating  to current or future products may be challenged,
invalidated,  or  circumvented  or the rights granted thereunder may not be held
valid  if  subsequently  challenged.

Our  products  are  based  on  technological  innovation.  Our  success  depends
significantly on our ability to establish and maintain a competitive position in
this  field.  Our  products may not remain competitive in light of technological
developments  by  others.  Our  competitors  may  succeed  in  discovering  and
developing  technology  before we do that would render our technology, and hence
our  products,  obsolete  and  noncompetitive.

WE  MUST  COMPLY  WITH ENVIRONMENTAL REGULATIONS OR WE MAY HAVE TO PAY EXPENSIVE
PENALTIES  OR  CLEAN  UP  COSTS.

We  are  subject  to  federal,  state,  local  and foreign laws, and regulations
regarding  protection  of  the  environment, including air, water, and soil. Our
manufacturing  business involves the use, handling, storage, and contracting for
recycling  or  disposal  of,  hazardous or toxic substances or wastes, including
environmentally  sensitive  materials,  such as batteries, solvents, lubricants,
degreasing  agents, gasoline and resin. We must comply with certain requirements
for  the  use,  management, handling, and disposal of these materials. We do not
maintain  insurance  for  pollutant  cleanup  and  removal.  If  we  are  found
responsible  for any hazardous contamination, we may have to pay expensive fines
or penalties or perform costly clean-up. Even if we are charged, and later found
not  responsible,  for such contamination or clean up, the cost of defending the
charges  could  be  high.

                                       20
<PAGE>

IF  WE  DO  NOT COMPLY WITH GOVERNMENT REGULATIONS, WE MAY BE UNABLE TO SHIP OUR
PRODUCTS  OR  HAVE  TO  PAY  EXPENSIVE  FINES  OR  PENALTIES.

We  are  subject  to  regulation  by  county,  state  and  federal  governments,
governmental  agencies,  and  regulatory  authorities  from  several  different
countries.  If  we  fail  to  obtain  regulatory  approvals  or suffer delays in
obtaining regulatory approvals, we may not be able to marketing our products and
services, and generate product and service revenues. Further, we may not be able
to obtain necessary regulatory approvals. Although we do not anticipate problems
satisfying any of the regulations involved, we cannot foresee the possibility of
new regulations, which could adversely affect our business. Further our products
are  subject  to  export  limitations  and we may be prevented from shipping our
products  to  certain  nations  or  buyers.

WE  RELY  ON  PROPRIETARY  DESIGNS  AND  RIGHTS AND IF WE HAVE TO LITIGATE THOSE
RIGHTS,  OUR  EXPENSES  COULD  SUBSTANTIALLY  INCREASE.

Our intellectual property is important to our business. We rely on a combination
of license rights, trade secret laws, confidentiality procedures and contractual
provisions to protect our intellectual property. The patents and patents-pending
protect  and  enhance  the construction of the sleek, progressive "V" and double
pad-bottomed "V-hull" boat. The hull is designed so that as water hits the hull,
it  flows  to  the next convenient degree, creating a lift and literally raising
the  boat  to  the  top  of  the water. The progressive "V" hull gives the boats
excellent  stability,  unmatched  handling at low and high speeds, extraordinary
tracking  for  precision  handling,  and  a  competitive  edge  when utilized in
emergency  and  natural  disaster  situations.

Our  success  and  ability  to compete depend, in part, on the protection of our
designs and technology. In addition, our technology could infringe on patents or
proprietary  rights  of  others.  We  have  not  undertaken  or  conducted  any
comprehensive patent infringement searches or studies. If any third parties hold
any  conflicting rights, we may be required to stop making, using or selling our
products  or  to  obtain  licenses from and pay royalties to others. Further, in
such  event,  we  may  not  be  able  to obtain or maintain any such licenses on
acceptable  terms,  if  at  all.  We  may need to engage in future litigation to
enforce  intellectual  property  rights  or  the rights of customers, to protect
trade  secrets  or  to determine the validity and scope of proprietary rights of
others,  including  customers. This litigation could result in substantial costs
and diversion of resources and could materially and adversely affect our results
of  operations.

Pursuant  to the Business Asset Sale, License and Assignment of Rights Agreement
between  Sonic  Jet  Performance, Inc. and Rockwell Power Systems, Inc., we were
granted  a  license  for  a  period  of  twenty  years to the use the "Sonic Jet
Performance" name and granted Rockwell the authority to market and sell Fire and
Rescue  and  Recreational  boasts  everywhere  in  the  world  except the Middle
East(including  Egypt,  Lebanon,  Turkey,  Syria,  Jordan,  Iraq,  Saudi Arabia,
Bahrain,  Oman,  Qatar,  the  UAE  and  Yemen).

In  addition,  Rockwell  was  assigned the contractual right to use the Fire and
Rescue  Jet design as provided for under the 2001 License Agreement made between
Sonic Jet Performance, Inc. and Mardikian Marine Design et al dated December 21,
2001.

"PENNY  STOCK"  RULES  MAY  MAKE  BUYING  OR  SELLING  OUR SECURITIES DIFFICULT.

Trading in our securities is subject to the Securities and Exchange Commission's
"penny  stock"  rules  and it is anticipated that trading in our securities will
continue  to be subject to the penny stock rules for the foreseeable future. The
Securities and Exchange Commission has adopted regulations that generally define
a  penny  stock  to  be any equity security that has a market price of less than
$5.00  per  share,  subject  to certain exceptions. These rules require that any
broker-dealer  who  recommends  our  securities  to  persons  other  than  prior
customers  and  accredited  investors  must,  prior  to the sale, make a special
written  suitability determination for the purchaser and receive the purchaser's
written  agreement to execute the transaction. Unless an exception is available,
the regulations require the delivery, prior to any transaction involving a penny
stock,  of a disclosure schedule explaining the penny stock market and the risks
associated  with  trading in the penny stock market. In addition, broker-dealers
must  disclose  commissions payable to both the broker-dealer and the registered
representative  and  current  quotations  for  the  securities  they  offer. The
additional  burdens  imposed  upon  broker-dealers  by  such  requirements  may
discourage  broker-dealers  from  recommending  transactions  in our securities,
which  could  severely  limit  the  liquidity of our securities and consequently
adversely  affect  the  market  price  for  our  securities.

OUR  SECURITIES  HAVE BEEN THINLY TRADED ON THE OVER-THE-COUNTER BULLETIN BOARD,
WHICH  MAY  NOT  PROVIDE  LIQUIDITY  FOR  OUR  INVESTORS.

Our  securities  are  quoted  on  the  Over-the-Counter  Bulletin  Board.  The
Over-the-Counter Bulletin Board is an inter-dealer, over-the-counter market that
provides  significantly  less liquidity than the NASDAQ Stock Market or national
or  regional exchanges. Securities traded on the Over-the-Counter Bulletin Board
are usually thinly traded, highly volatile, have fewer market makers and are not
followed  by  analysts.  The Securities and Exchange Commission's order handling
rules,  which  apply  to  NASDAQ-listed  securities,  do not apply to securities
quoted on the Over-the-Counter Bulletin Board. Quotes for stocks included on the
Over-the-Counter  Bulletin Board are not listed in newspapers. Therefore, prices
for  securities  traded  solely  on  the  Over-the-Counter Bulletin Board may be
difficult  to obtain and holders of our securities may be unable to resell their
securities  at  or  near  their  original  acquisition  price,  or at any price.

                                       21
<PAGE>

INVESTORS  MUST CONTACT A BROKER-DEALER TO TRADE OVER-THE-COUNTER BULLETIN BOARD
SECURITIES.  AS  A  RESULT, YOU MAY NOT BE ABLE TO BUY OR SELL OUR SECURITIES AT
THE  TIMES  THAT  YOU  MAY  WISH.

Even  though  our  securities are quoted on the Over-the-Counter Bulletin Board,
the  Over-the-Counter  Bulletin  Board  may  not  permit  our  investors to sell
securities when and in the manner that they wish. Because there are no automated
systems  for negotiating trades on the Over-the-Counter Bulletin Board, they are
conducted  via  telephone.  In  times of heavy market volume, the limitations of
this  process  may  result  in  a  significant  increase in the time it takes to
execute  investor orders. Therefore, when investors place market orders an order
to  buy  or  sell  a specific number of shares at the current market price it is
possible  for  the  price  of  a stock to go up or down significantly during the
lapse  of  time  between  placing  a  market  order  and  its  execution.

WE  DO NOT INTEND TO PAY DIVIDENDS IN THE FORESEEABLE FUTURE; THEREFORE, YOU MAY
NEVER  SEE  A  RETURN  ON  YOUR  INVESTMENT.

We  do  not  anticipate the payment of cash dividends on our common stock in the
foreseeable  future.  We anticipate that any profits from our operations will be
devoted to our future operations. Any decision to pay dividends will depend upon
our  profitability  at  the  time,  cash  available  and  other  factors.

                                       22
<PAGE>

ITEM  7.  FINANCIAL  STATEMENTS.

                               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 audited the accompanying balance sheet of Xtreme Companies, Inc., as of
December  31,  2005,  and  the  related  statements of operations, stockholders'
equity  (deficit)  and  cash  flow  for  the  year  then  ended. These financial
statements  are  the  responsibility  of  the  Company's  management.  Our
responsibility  is  to express an opinion on these financial statements based on
our  audit.

We  conducted  our  audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and  perform  the  audits  to  obtain  reasonable  assurance  about  whether the
financial  statements  are  free  of  material  misstatement.  An audit includes
examining,  on  a test basis, evidence supporting the amounts and disclosures in
the  financial  statements.  An  audit  also  includes  assessing the accounting
principles  used  and  significant  estimates  made  by  management,  as well as
evaluating  the  overall  financial  statement presentation. We believe that our
audit  provides  a  reasonable  basis  for  our  opinion.

In  our  opinion,  the financial statements referred to above present fairly, in
all  material  respects,  the  financial  position  of Xtreme Companies, Inc. at
December  31, 2005, and the results of their operations and their cash flows for
the year then ended, 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 to the
financial  statements,  the  Company's  recurring losses from operations and its
difficulties  in  generating  sufficient  cash  flow  to meet its obligation and
sustain  its operations raise substantial doubt about its ability to continue as
a  going concern. Management's plans concerning these matters are also described
in  Note  1.  The financial statements do not include any adjustments that might
result  from  the  outcome  of  this  uncertainty.



                             /s/  Jaspers + Hall, PC
                                Denver,  Colorado
                                 March 31, 2006

                                       23
<PAGE>
<TABLE>
                             XTREME COMPANIES, INC.
                           CONSOLIDATED BALANCE SHEET
                  AS OF DECEMBER 31, 2005 AND DECEMBER 31, 2004
<CAPTION>
<S>                                                      <C>            <C>

ASSETS                                                       2005           2004
                                                         -----------    -----------
CURRENT ASSETS
Cash . . . . . . . . . . . . . . . . . . . . . . . . .  $    331,386   $    110,673
Accounts Receivable. . . . . . . . . . . . . . . . . .        72,530              0
Inventory. . . . . . . . . . . . . . . . . . . . . . .       375,000              0
Prepaid expenses . . . . . . . . . . . . . . . . . . .             0          2,955
Deposits . . . . . . . . . . . . . . . . . . . . . . .             0          4,514
                                                         -----------    -----------

   TOTAL CURRENT ASSETS. . . . . . . . . . . . . . . .       778,916        118,142
                                                         -----------    -----------

NET PROPERTY & EQUIPMENT . . . . . . . . . . . . . . .        61,285          4,440

OTHER ASSETS
Advances to Marine Holdings, Inc . . . . . . . . . . .     2,311,891        144,605
                                                         -----------    -----------

 TOTAL ASSETS. . . . . . . . . . . . . . . . . . . . .  $  3,152,092   $    267,187
                                                         ===========    ===========


LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES
Accounts payable . . . . . . . . . . . . . . . . . . .  $    239,731   $    173,289
Accrued Expenses . . . . . . . . . . . . . . . . . . .       131,000        152,977
Accrued interest . . . . . . . . . . . . . . . . . . .       186,719         63,249
Payroll tax liabilities. . . . . . . . . . . . . . . .        95,831        118,375
Deferred revenues. . . . . . . . . . . . . . . . . . .        22,098         68,000
Private promissory notes . . . . . . . . . . . . . . .       332,000        232,000
Notes payable. . . . . . . . . . . . . . . . . . . . .       181,718              0
Promissory notes - related party (net of discount) . .     2,014,708              0
                                                         -----------    -----------

     TOTAL CURRENT LIABILITIES . . . . . . . . . . . .     3,203,805        807,890
                                                         -----------    -----------

LONG TERM LIABILITIES
Long-term debt, less current portion . . . . . . . . .     1,642,295        354,150
                                                         -----------    -----------

  TOTAL LIABILITIES. . . . . . . . . . . . . . . . . .     4,846,100      1,162,040
                                                         -----------    -----------

SHAREHOLDERS' EQUITY (DEFICIT)
Common stock, 100,000,000 shares authorized
  shares at $.001 par value, 19,551,376 shares issued
  and outstanding at December 31, 2005 . . . . . . . .        19,551         11,035
Additional paid-in capital . . . . . . . . . . . . . .    18,438,244     16,861,183
Shares to be issued. . . . . . . . . . . . . . . . . .             0       (110,000)
Subscriptions receivable . . . . . . . . . . . . . . .        77,766              -
Accumulated deficit. . . . . . . . . . . . . . . . . .   (20,074,038)   (17,657,071)
                                                         -----------    -----------

      TOTAL SHAREHOLDERS' EQUITY (DEFICIT) . . . . . .    (1,694,008)      (894,853)
                                                         ------------   ------------

TOTAL LIABILITIES AND SHAREHOLDERS'
  EQUITY (DEFICIT) . . . . . . . . . . . . . . . . . .  $  3,152,092   $    267,187
                                                         ============   ============
<FN>
Accompanying footnotes are an integral part of these financial statements
</TABLE>

                                       24
<PAGE>

<TABLE>
                          XTREME COMPANIES, INC.
                       CONSOLIDATED INCOME STATEMENT
               FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004
<CAPTION>
<S>                                                      <C>            <C>
                                                             2005           2004
                                                         -----------    -----------
REVENUE
Fire and Patrol Boats . . . . . . . . . . . . . . . .   $    328,206   $    164,712
Performance and Pleasure Boats. . . . . . . . . . . .      1,455,420              0
                                                         -----------    -----------
  TOTAL REVENUE . . . . . . . . . . . . . . . . . . .      1,783,626        164,712

Cost of Goods Sold - Fire and Patrol Boats. . . . . .        164,982        129,211
Cost of Goods Sold - Performance and Pleasure Boats .      1,385,714              0
                                                         -----------    -----------
  TOTAL COST OF GOODS SOLD. . . . . . . . . . . . . .      1,550,696        129,211
                                                         -----------    -----------
  GROSS PROFIT. . . . . . . . . . . . . . . . . . . .        232,930         35,501

OPERATING EXPENSES
Consulting fees . . . . . . . . . . . . . . . . . . .        523,070          6,100
Documentation fees for funding. . . . . . . . . . . .        187,500              0
Officer compensation. . . . . . . . . . . . . . . . .        174,000        231,929
Investor relations. . . . . . . . . . . . . . . . . .        373,440        183,150
Marketing . . . . . . . . . . . . . . . . . . . . . .        124,541              0
Sales consulting and commissions. . . . . . . . . . .         54,000        152,404
Directors' fees . . . . . . . . . . . . . . . . . . .              0        149,240
Professional fees . . . . . . . . . . . . . . . . . .         58,089         84,654
Payroll and taxes . . . . . . . . . . . . . . . . . .         41,311         65,130
Financing inducement fees . . . . . . . . . . . . . .         50,600         41,400
Depreciation and amortization . . . . . . . . . . . .          1,118          1,004
Writedown of assets . . . . . . . . . . . . . . . . .              0         84,821
Other operating expenses. . . . . . . . . . . . . . .         82,829        290,994
                                                         -----------    -----------
  TOTAL OPERATING EXPENSES. . . . . . . . . . . . . .      1,670,498      1,290,826
                                                         -----------    -----------
  LOSS FROM OPERATIONS. . . . . . . . . . . . . . . .     (1,437,568)    (1,255,325)

OTHER INCOME (EXPENSES)
Interest expense. . . . . . . . . . . . . . . . . . .        979,399        210,207
                                                         -----------    -----------

  LOSS BEFORE INCOME TAXES. . . . . . . . . . . . . .     (2,416,967)    (1,465,532)
                                                         -----------    -----------

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

  NET LOSS. . . . . . . . . . . . . . . . . . . . . .   $ (2,416,967)  $ (1,465,532)
                                                         ===========    ===========

BASIC AND DILUTED NET LOSS PER SHARE. . . . . . . . .   $      (0.14)  $      (0.21)
                                                         ===========    ===========

BASIC AND DILUTED WEIGHTED AVERAGE
SHARES OUTSTANDING. . . . . . . . . . . . . . . . . .     16,943,614      6,893,759
                                                         ===========    ===========
<FN>
Accompanying footnotes are an integral part of these financial statements
</TABLE>

                                       25
<PAGE>

<TABLE>
                           XTREME COMPANIES, INC.
                    CONSOLIDATED STATEMENT OF CASH FLOWS
               FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004
<CAPTION>
<S>                                                    <C>            <C>
                                                           2005           2004
                                                       -----------    -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss. . . . . . . . . . . . . . . . . . . . . .   $ (2,416,967)  $ (1,465,532)
Adjustment to reconcile net loss to net cash
  provided by (used in) operating activities:
Depreciation and amortization . . . . . . . . . . .          1,118          1,004
Writedown of assets . . . . . . . . . . . . . . . .              0         84,821
Issuance of stock for services. . . . . . . . . . .              0        330,272
Issuance of stock for officer's compensation. . . .         54,000        111,929
Issuance of stock for directors' fees . . . . . . .              0        149,240
Issuance of stock for debt inducement . . . . . . .        250,774        154,338
Debt conversion feature expense . . . . . . . . . .        329,771        185,200
Issuance of warrants. . . . . . . . . . . . . . . .        218,150              0
Issuance of stock for consulting services . . . . .        444,365              0
Issuance of stock for marketing services. . . . . .         83,591              0

 (Increase) decrease in current assets:
Accounts receivable . . . . . . . . . . . . . . . .        (72,530)             0
Inventory . . . . . . . . . . . . . . . . . . . . .       (375,000)             0
Advances to Marine Holdings, Inc. . . . . . . . . .     (2,167,286)      (144,605)
Deposits. . . . . . . . . . . . . . . . . . . . . .          4,514         10,000
Prepaid expenses. . . . . . . . . . . . . . . . . .          2,955              0
 Increase (decrease) in current liabilities:
Accrued expenses and accounts payable . . . . . . .        167,935        (77,446)
Payroll tax liabilities payable . . . . . . . . . .        (22,544)             0
Deferred revenues . . . . . . . . . . . . . . . . .        (45,902)        68,000
                                                       -----------     ----------

NET CASH USED IN OPERATING ACTIVITIES . . . . . . .     (3,543,056)      (592,779)
                                                       -----------     ----------

NET CASH FLOWS PROVIDED (USED) BY INVESTING ACTIVITIES
Purchase of fixed assets. . . . . . . . . . . . . .        (57,963)             0
                                                       -----------     ----------

CASH FLOWS FROM FINANCING ACTIVITIES:
Notes payable . . . . . . . . . . . . . . . . . . .        181,718              0
Proceeds from private convertible promissory notes.        100,000        232,000
Proceeds from related party convertible debts            3,522,780        409,700
Proceeds from line of credit. . . . . . . . . . . .         17,234              0
                                                       -----------     ----------

NET CASH PROVIDED BY FINANCING ACTIVITIES . . . . .      4,386,120        641,700
                                                       -----------     ----------

NET INCREASE IN CASH. . . . . . . . . . . . . . . .        220,713         48,921

CASH AT BEGINNING OF PERIOD . . . . . . . . . . . .   $    110,673    $    61,752
                                                       ===========     ==========

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

SUPPLEMENTAL DISCLOSURE OF CASHFLOWS
Cash paid for interest. . . . . . . . . . . .                8,777            353
Income taxes paid . . . . . . . . . . . . . .                    0              0
<FN>
Accompanying footnotes are an integral part of these financial statements
</TABLE>

                                       26
<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)
                      -----------  ---------  ------------   ---------   ----------   ----------   -------------    -----------

BABALANCE,
December 31, 2005      19,551,376  $  19,551  $ 18,438,244   $       -   $        -   $  (77,766)  $ (20,074,038)   $(1,694,008)
                      ===========  =========  ============   =========   ==========   ==========   =============    ===========
</TABLE>

                                       27
<PAGE>

                             XTREME COMPANIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2005

NOTE  1.  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES

BUSINESS  AND  BASIS  OF  PRESENTATION

Xtreme  Companies  was  organized August 14, 1994 under the laws of the State of
Nevada,  under  the  name  of  Shogun  Advertising,  Inc. On May 10, 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. (the "Company"). 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 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.

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 $2,424,889 as of December 31,
2005.  The Company had operating losses of $1,444,714 and $1,255,325 in 2005 and
2004,  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  subsidiary,  Rockwell  Power  Systems,  Inc.  All
significant  intercompany  accounts  and  transactions  are  eliminated  in
consolidation.

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.

                                       28
<PAGE>

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.

ADVANCES  TO  MARINE  HOLDINGS,  INC.

During  2004  and  2005, the Company provided financing to Marine Holdings, Inc.
("Challenger"),  a  Missouri boat manufacturer totaling $144,605 and $2,311,891,
respectively.  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.

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  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.

INVENTORY
The  inventory  consists  of  a  SV-42  pleasure  boat  purchased through Marine
Holdings,  Inc. and a center console sportfish boat purchased from Sea Machines.
These  items are intended for resale and are carried on the financial statements
at  cost  of  $250,000  and  $125,000  respectively.

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.
computers  (5  years),  software  (3 years), office equipment and furniture (3-7
years),  tenant  improvements  (life  of  the  lease - approximately 60 months).

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. The Company has adopted this
statement  and  determined  an  impairment  loss was needed to be recognized for
applicable  assets  of  continuing  operations  in  2004.

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.

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 form 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  December  31,  2005  and December 31, 2004, 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.

                                       29
<PAGE>

REVENUE  RECOGNITION

We  recognize  income  when  the  products  are shipped, and when the service is
provided.  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.  Xtreme
fire  rescue and patrol boats are sold 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 the Company's earnings per share in
the  future  but  are not included in the calculation.  As of December 31, 2005,
convertible  debentures  could  convert  to 14,198,780 shares and warrants could
convert  to  1,662,000  shares.

ADVERTISING  COSTS

Advertising  and  promotional  activities  are  expensed  when  incurred.  Total
advertising  costs  were $4,260 and $6,950 for the years ended December 31, 2005
and  2004,  respectively.

SHIPPING  AND  HANDLING  COSTS

Shipping  and handling costs are expensed when incurred.  All sales are recorded
when  the products are received by the customer. 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 $4,591 for the years
ended  December  31,  2005  and  2004,  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:

<TABLE>
<CAPTION>
<S>                                                         <C>             <C>
                                                                   2005             2004
                                                                 -------          -------
Deferred  tax  assets:
    Net  operating  loss  carryforwards                       $ 20,074,038  $   17,657,071
    Valuation  allowance  for  deferred  tax  assets           (20,074,038)    (17,657,071)
                                                            --------------- ---------------
    Net  deferred tax assets                                $            -  $            -
                                                            =============== ===============
</TABLE>

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 December 31, 2005,
the Company had net operating loss carryforwards of approximately $20,074,038 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.

                                       30
<PAGE>

NOTE  2.  ACCOUNTS  RECEIVABLE

As  of  December  31,  2005,  accounts  receivable  consists  of  the following:

<TABLE>
<CAPTION>
<S>       <C>                                        <C>
Accounts  Receivable
          City  of  Philadelphia,  PA                $60,000
          Bob  Macalady                               11,979
          Mark  Spellicy                                 345
          New  Albany  Fire  Dept                        206
                                                    --------
                                                     $72,530
</TABLE>

NOTE  3.  INVENTORY

As  of  December  31,  2005,  inventory  consists  of  the  following:
<TABLE>
<CAPTION>
<S>        <C>                                       <C>

           SV-42  pleasure  boat                     $250,000
           Center  console  sportfish                 125,000
                                                     --------
                                                     $375,000
</TABLE>

NOTE  4.  PROPERTY  AND  EQUIPMENT

Property  and equipment at December 31, 2005 and 2004 consists of the following:

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

                                     2005      2004
                                   --------  -------
Machinery  &  equipment            $  6,621  $ 4,505
Furniture  and  fixtures                985      985
Demonstration  boat                  30,452
Leasehold  improvements              25,395
                                   --------  -------
                                     63,453    5,490
Less  accumulated  depreciation
 and  amortization                   (2,168)  (1,050)
                                   --------  -------
                                   $ 61,285  $ 4,440
                                   ========  =======
</TABLE>

NOTE  5.  ADVANCES  TO  MARINE  HOLDINGS,  INC.

During  2004  and  2005, the Company provided financing to Marine Holdings, Inc.
("Challenger"),  a  Missouri boat manufacturer totaling $144,605 and $2,311,891,
respectively.  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  at  December  31, 2005 consist of the
following:

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

Accounts  payable                $  239,731
Accrued  expenses                   131,000
Accrued  interest                   186,719
Accrued  payroll  taxes              95,831
                                 ----------
                                 $  389,515
                                 ==========
</TABLE>

                                       31
<PAGE>

NOTE  7.  CONVERTIBLE  DEBENTURES  AND  PROMISSORY  NOTES

On  February  3,  2004,  the  Company  entered into an investment agreement with
Preston  Capital  Partners,  LLC  for  $28,000  whereby  the  Company  issued  a
convertible  debenture.  The  debenture is convertible into the Company's common
stock  at  the lesser of 75% of the lowest closing bid price of the common stock
during  the  previous  fifteen  trading  days or 100% of the average of the five
lowest  bid  prices  of  the  common  stock for the thirty trading days prior to
closing.

On  February  18,  2004,  the  Company entered into an investment agreement with
eFund Capital Partners, LLC for $28,000 whereby the Company issued a convertible
debenture.  The  debenture is convertible into the Company's common stock at the
lesser  of  75%  of  the lowest closing bid price of the common stock during the
previous  fifteen  trading  days  or  100% of the average of the five lowest bid
prices  of  the  common  stock  for  the  thirty  trading days prior to closing.

On  October  18,  2004,  the  Company  entered into an investment agreement with
Dutchess  Private  Equity Fund, II, L.P for $20,000 whereby the Company issued a
convertible  debenture.  The  debenture is convertible into the Company's common
stock  at  the lesser of 75% of the lowest closing bid price of the common stock
during  the  previous  fifteen  trading  days or 100% of the average of the five
lowest  bid  prices  of  the  common  stock for the thirty trading days prior to
closing.

On October 18, 2004, the Company entered into an investment agreement with eFund
Capital  Partners,  LLC  for  $18,000  whereby  the Company issued a convertible
debenture.  The  debenture is convertible into the Company's common stock at the
lesser  of  75%  of  the lowest closing bid price of the common stock during the
previous  fifteen  trading  days  or  100% of the average of the five lowest bid
prices  of  the  common  stock  for  the  thirty  trading days prior to closing.

On  December  23,  2004,  the  Company entered into an investment agreement with
Dutchess  Private Equity Fund, II, L.P for $240,000 whereby the Company issued a
convertible  debenture.  The  debenture is convertible into the Company's common
stock  at  the lesser of 75% of the lowest closing bid price of the common stock
during  the  previous  fifteen  trading  days or 100% of the average of the five
lowest  bid  prices  of  the  common  stock for the thirty trading days prior to
closing.

On  January  3, 2005, the Company entered into a Convertible Debenture Agreement
with  Dutchess  Private  Equities Fund, II, L.P, in the amount of $240,000, at a
discount  of  $40,000.  The  debenture  has  an  8% interest rate and is due and
payable  January  3,  2010.  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  of  the  common  stock  during  the  fifteen  trading  days  prior to the
Conversion  Date  or  (ii) 100% of the average closing bid prices for the twenty
trading  days  immediately  preceding  the  Closing  Date  of  the  Transaction.

In  connection  with  the  above  financing,  the  Company  issued  a warrant to
Dutchess Private Equities Fund, LP to purchase 240,000 shares of common stock at
$0.15  per  share.  The  warrant  has  a  term  of  five  years.

On  March  8,  2005,  the Company entered into a Convertible Debenture Agreement
with  Dutchess  Private  Equities  Fund,  LP,  in  the  amount of $120,000, at a
discount  of  $20,000.   The  debenture  has  an 8% interest rate and is due and
payable  March 8, 2010.  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) 100% of the
average closing bid prices for the twenty trading days immediately preceding the
Closing  Date  of  the  Transaction.

In connection with the above financing, the Company issued a warrant to Dutchess
Private  Equities  Fund,  LP to purchase 120,000 shares of common stock at $0.15
per  share.  The  warrant  has  a  term  of  five  years.

On  March  10,  2005, the Company entered into a Convertible Debenture Agreement
with  eFund  Capital  Partners,  LLC, in the amount of $60,000, at a discount of
$10,000.   The  debenture  has  an 8% interest rate and is due and payable March
10,  2010.  The  purchaser  of the convertible debentures is entitled to convert
the  face  amount  of  the  debentures  plus accrued interest into the Company's
common stock at the lesser of (i) 75% of the lowest closing bid price during the
fifteen  trading  days prior to the Conversion Date or (ii) fifteen cents ($.15)
per  share.

In  connection  with the above financing, the Company  issued a warrant to eFund
Capital  Partners,  LLC  to  purchase 60,000 shares of common stock at $0.15 per
share.  The  warrant  has  a  term  of  five  years.

On  March  18,  2005, the Company entered into a Convertible Debenture Agreement
with  eFund  Capital  Partners,  LLC, in the amount of $60,000, at a discount of
$10,000.   The  debenture  has  an 8% interest rate and is due and payable March
10,  2010.  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) 100% of the average
closing bid prices for the twenty trading days immediately preceding the Closing
Date  of  the  Transaction.

In  connection  with  the above financing, the Company issued a warrant to eFund
Capital  Partners,  LLC  to  purchase 60,000 shares of common stock at $0.15 per
share.  The  warrant  has  a  term  of  five  years.

                                       32
<PAGE>

On  April  18,  2005, the Company entered into a Convertible Debenture Agreement
with Dutchess Private Equities Fund, LP, in the amount of $84,000, at a discount
of $14,000.   The debenture has an 8% interest rate and is due and payable April
18,  2010.  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) 100% of the average
closing bid prices for the twenty trading days immediately preceding the Closing
Date  of  the  Transaction.

In connection with the above financing, the Company issued a warrant to Dutchess
Private  Equities  Fund, LP to purchase 84,000 shares of common stock at .35 per
share.  The  warrant  has  a  term  of  five  years.

On  May 5, 2005, the Company entered into a Convertible Debenture Agreement with
Dutchess  Private Equities Fund, LP, in the amount of $192,000, at a discount of
$32,000.  The  debenture  has  an 8% interest rate and is due and payable May 5,
2010.  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) 100% of the average
closing bid prices for the twenty trading days immediately preceding the Closing
Date  of  the  Transaction.

In connection with the above financing, the Company issued a warrant to Dutchess
Private  Equities Fund, LP to purchase 192,000 shares of common stock at .22 per
share.  The  warrant  has  a  term  of  five  years.

On May 13, 2005, the Company entered into a Convertible Debenture Agreement with
Dutchess Private Equities Fund, II, LP, in the amount of $228,000, at a discount
of  $38,000.  The  debenture  has an 8% interest rate and is due and payable May
13,  2010.  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) 100% of the average
closing bid prices for the twenty trading days immediately preceding the Closing
Date  of  the  Transaction.

In connection with the above financing, the Company issued a warrant to Dutchess
Private  Equities Fund, LP to purchase 228,000 shares of common stock at .20 per
share.  The  warrant  has  a  term  of  five  years.

On May 18, 2005, the Company entered into a Convertible Debenture Agreement with
Dutchess Private Equities Fund, II, LP, in the amount of $101,817, at a discount
of  $26,817.  The  debenture  has an 8% interest rate and is due and payable May
18,  2010.  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) 100% of the average
closing bid prices for the twenty trading days immediately preceding the Closing
Date  of  the  Transaction.

In connection with the above financing, the Company issued a warrant to Dutchess
Private  Equities Fund, LP to purchase 101,817 shares of common stock at .20 per
share.  The  warrant  has  a  term  of  five  years.

On May 20, 2005, the Company entered into a Convertible Debenture Agreement with
eFund  Capital  Partners,  LLC,  in  the  amount  of  $120,000, at a discount of
$20,000.  The  debenture  has an 8% interest rate and is due and payable May 20,
2010.  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) 100% of the average
closing bid prices for the twenty trading days immediately preceding the Closing
Date  of  the  Transaction.

In  connection  with  the above financing, the Company issued a warrant to eFund
Capital  Partners,  LLC  to  purchase  120,000 shares of common stock at .20 per
share.  The  warrant  has  a  term  of  five  years.

On  June  16,  2005,  the Company entered into a Convertible Debenture Agreement
with  Dutchess  Private  Equities  Fund, II, LP, in the amount of $240,000, at a
discount  of  $30,000.  The  debenture  has  an  8% interest rate and is due and
payable  June 16, 2010.  The purchaser of the convertible debentures is entitled
to  convert  the  face  amount  of the debentures plus accrued interest into the
Company's  common stock at the lesser of (i) 75% of the lowest closing bid price
during  the  fifteen  trading  days prior to the Conversion Date or (ii) fifteen
cents  ($.15)  per  share.

In connection with the above financing, the Company issued a warrant to Dutchess
Private  Equities  Fund,  II,  LP  to purchase 240,000 shares of common stock at
$0.16  per  share.  The  warrant  has  a  term  of  five  years.

On July 7, 2005, the Company entered into a Convertible Debenture Agreement with
Dutchess  Private Equities Fund, LP, in the amount of $228,000, at a discount of
$28,000.  The  debenture  has an 8% interest rate and is due and payable July 7,
2010.  The  purchaser  of  the convertible debentures is entitled to convert the
face  amount  of  the debentures plus accrued interest into the Company's common
stock  at  the  lesser  of  (i)  75%  of the lowest closing bid price during the
fifteen  trading  days prior to the Conversion Date or (ii) fifteen cents ($.15)
per  share.

In connection with the above financing, the Company issued a warrant to Dutchess
Private  Equities Fund, LP to purchase 228,000 shares of common stock at .12 per
share.  The  warrant  has  a  term  of  five  years.

On July 7, 2005, the Company entered into a Convertible Debenture Agreement with
eFund Capital Partners, LLC, in the amount of $72,000, at a discount of $12,000.
The  debenture has an 8% interest rate and is due and payable July 7, 2010.  The
purchaser  of  the convertible debentures is entitled to convert the face amount
of  the  debentures plus accrued interest into the Company's common stock at the
lesser  of  (i)  75%  of the lowest closing bid price during the fifteen trading
days  prior  to  the  Conversion  Date  or  (ii) fifteen cents ($.15) per share.

                                       33
<PAGE>

In connection with the above financing, the Company issued a warrant to eFund to
purchase  72,000 shares of common stock at .12 per share. The warrant has a term
of  five  years.

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 is due on December 21,
2005.  The  note carries a discounted amount of $10,000.   During the year ended
December  31,  2005,  $0.00 of this Note was repaid, and the balance at December
31,  2005  is $120,000.  The Note was extended and is due and payable.  The Note
was  extended  and  is  due  and  payable  with thirty days notice from Dutchess
Private  Equities  Fund,  LP.

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 is due on January 5, 2006.
The note carries a discounted amount of $24,000.  During the year ended December
31, 2005, $0.00 of this Note was repaid, and the balance at December 31, 2005 is
$144,000.  The  Note was extended and is due and payable with thirty days notice
from  Dutchess  Private  Equities  Fund,  LP.

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 is due on August 22, 2006.
The note carries a discounted amount of $30,000.  During the year ended December
31, 2005, $0.00 of this Note was repaid, and the balance at December 31, 2005 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 is due
on  September 1, 2006.  The note carries a discounted amount of $12,000.  During
the year ended December 31, 2005, $0.00 of this Note was repaid, and the balance
at  December  31,  2005  is  $72,000.

On  September  7,  2005,  the  Company issued a non-interest bearing Convertible
Promissory  Note  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 is due
on  September 7, 2006.  The note carries a discounted amount of $18,000.  During
the year ended December 31, 2005, $0.00 of this Note was repaid, and the balance
at  December  31,  2005  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 is due on September 15,
2006.  The  note  carries a discounted amount of $33,500.  During the year ended
December  31,  2005,  $0.00 of this Note was repaid, and the balance at December
31,  2005  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 is due on September 22,
2006.  The  note  carries a discounted amount of $26,400.  During the year ended
December  31,  2005,  $0.00 of this Note was repaid, and the balance at December
31,  2005  is  $158,400.

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 is due on September 30,
2006.  The  note  carries a discounted amount of $39,400.  During the year ended
December  31,  2005,  $0.00 of this Note was repaid, and the balance at December
31,  2005  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 is due on October 7, 2006.
The note carries a discounted amount of $37,000.  During the year ended December
31, 2005, $0.00 of this Note was repaid, and the balance at December 31, 2005 is
$222,000.

On  October  14,  2005,  we 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 is due on October 14, 2006.  The
note carries a discounted amount of $32,000.  During the year ended December 31,
2005,  $0.00  of  this  Note was repaid, and the balance at December 31, 2005 is
$192,000.

On  November  1,  2005,  the  Company  entered  into  a  twelve month consulting
agreement  with  Dutchess  Advisors,  LLC.  In  connection  with  the consulting
agreement,  the  Company  entered  into  a  Convertible Debenture Agreement with
Dutchess  Advisors,  LLC,  in the amount of $500,000, at a discount of $497,000.
The  debenture  has  a 5% interest rate and is due and payable November 1, 2010.
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 five trading
days prior to the Conversion Date or (ii) 100% of the average closing bid prices
for  the  five  trading  days  immediately  preceding  the  Closing  Date of the
Transaction.

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 is due on
November  1, 2006.  The note carries a discounted amount of $26,000.  During the
year  ended December 31, 2005, $0.00 of this Note was repaid, and the balance at
December  31,  2005  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 is due on
November  9, 2006.  The note carries a discounted amount of $36,000.  During the
year  ended December 31, 2005, $0.00 of this Note was repaid, and the balance at
December  31,  2005  is  $216,000.

                                       34
<PAGE>

On  November  22,  2005,  the  Company issued a non-interest bearing Convertible
Promissory  Note  to  Dutchess  Private  Equities  Fund, II, LP in the amount of
$60,000.  The  note  carries  an  interest  rate  of  0%  per year and is due on
November 22, 2006.  The note carries a discounted amount of $10,000.  During the
year  ended  December 31, 2005, $17,234 of this Note was repaid, and the balance
at  December  31,  2005  is  $42,766.

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.  During the
year  ended December 31, 2005, $0.00 of this Note was repaid, and the balance at
December  31,  2005  is  $216,000.

In  the  year  ended  December  31,  2005,  the Company raised $220,000 from the
following  individual  investors  on the date and in the amount described below.
The  Company  issued convertible promissory notes with a 20% interest rate and a
conversion  feature equal to a 30% discount to market at the time of conversion.

<TABLE>
<CAPTION>
<S>              <C>                <C>              <C>
                       NAME         AMOUNT RECEIVED  DEPOSIT  DATE
                       ----         ---------------  -------------
                 Patrick Connelly     $ 10,000.00     04/14/2005
                 ----------------     -----------     ----------
                  Ronald Feldman      $ 20,000.00     05/06/2005
                  --------------      -----------     ----------
                   Ronald Feldman     $  4,000.00     05/06/2005
                   --------------     -----------     ----------
                 Raymond Champagne    $ 10,000.00     05/06/2005
                 -----------------    -----------     ----------
                   Dennis Gerber      $ 20,000.00     05/23/2005
                   -------------      -----------     ----------
                   Sandra Walls       $ 10,000.00     06/08/2005
                   ------------       -----------     ----------
                  Mike Lochirco       $100,000.00     06/17/2005
                  -------------       -----------     ----------
                    John Layne        $ 20,000.00     07/20/2005
                    ----------        -----------     ----------
                  Gerald Treichel     $ 10,000.00     08/05/2005
                  ---------------     -----------     ----------
                    Thomas Lutz       $ 10,000.00     09/30/2005
                    -----------       -----------     ----------
                   Arnold Kramer      $  6,000.00     10/20/2005
                   -------------      -----------     ----------
</TABLE>

Amortization  of  the  debt discount on all convertible debentures, warrants and
promissory  notes  outstanding  as of December 31, 2005 amounted to $246,660 and
$338 for the years ended December 31, 2005 and 2004, and is included in interest
expense  on  the  consolidated  statement  of operations.  Beneficial conversion
feature  expense  relating  to  the  convertible  debentures and warrants issued
during  the year ended December 31, 2005 amounted to $795,623 and is included in
interest  expense  on  the  consolidated  statement  of  operations.

NOTE  8.  NOTES  PAYABLE

At  December  31, 2005, the Company had two short term Notes Payable as follows:

Happy Apple Company of $153,768, due on demand, unsecured, and bears interest at
a  rate  of  20%.

Sun  Security  Bank  of $27,950, secured by a fire boat, and bears interest at a
rate  of  US  Bank  Prime  Rate  plus 1.0%, with an interest rate floor of 7.5%.


NOTE  9.  COMMITMENTS  AND  CONTINGENCIES

Legal  Matters

We believe that there are no claims or litigation pending against the Company or
our  officers  and  directors in their roles as such, the outcome of which could
have  a material adverse effect on our financial condition or operating results.

                                       35
<PAGE>

NOTE  10.  CAPITAL  STOCK  TRANSACTIONS

The  authorized  common stock of the Company consists of 100,000,000 shares with
par  value of $.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.

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.

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.  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.  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.  As of March
31,  2006,  proceeds  for 2,269,448 shares were applied as payment to promissory
notes with Dutchess Private Equities Fund, II, LP.  The remaining 230,552 shares
had  not  been  returned  to  the  company  as  of  March  31,  2006.


NOTE  11.  RENTS

The Company occupies office and manufacturing space at the Marine Holdings, Inc.
manufacturing  facility  in Washington, Missouri.  The Company does not pay rent
for  use of this space per the Marketing and Distribution Agreement signed March
1,  2005.

NOTE  12.  SUBSEQUENT  EVENTS

In  January  2006,  the  Company  received funds totaling $42,000 as payment for
stock  subscription agreements entered into during October 2005.  See footnote 7
to  these  financial  statements  for  further  information.

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.

On January 3, 2006, we 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 note
carries  a  discounted  amount  of  $50,400.

On  January  27,  2006,  we issued a non-interest bearing Convertible Promissory
Note to Dutchess Private Equities Fund, II, LP in the amount of $59,253.82.  The
note  carries  an interest rate of 0% per year and is due on July 27, 2006.  The
note  carries  a  discounted  amount  of  $9,875.63.

On  February  1,  2006,  we  entered into a Convertible Debenture Agreement with
Dutchess  Private Equities Fund, LP, in the amount of $132,000, at a discount of
$22,000.  The  debenture has a 10% interest rate and is due and payable February
1, 2011.  The purchaser of the convertible debentures is entitled to convert the
face amount of the debentures plus accrued interest into our common stock at the
lesser  of  (i)  75%  of the lowest closing bid price during the fifteen trading
days  prior  to the Conversion Date or (ii) at a "Fixed Conversion Price" of ten
cents  ($.10).

                                       36
<PAGE>

On  February  3,  2006,  we  entered into a Convertible Debenture Agreement with
Dutchess  Private Equities Fund, LP, in the amount of $192,000, at a discount of
$32,000.  The  debenture has a 10% interest rate and is due and payable February
3, 2011.  The purchaser of the convertible debentures is entitled to convert the
face amount of the debentures plus accrued interest into our common stock at the
lesser  of  (i)  75%  of the lowest closing bid price during the fifteen trading
days  prior  to the Conversion Date or (ii) at a "Fixed Conversion Price" of ten
cents  ($.10).

On  February  10,  2006,  we entered into a Convertible Debenture Agreement with
Dutchess  Private Equities Fund, LP, in the amount of $192,000, at a discount of
$32,000.  The  debenture has a 10% interest rate and is due and payable February
10,  2011.  The  purchaser  of the convertible debentures is entitled to convert
the face amount of the debentures plus accrued interest into our common stock at
the lesser of (i) 75% of the lowest closing bid price during the fifteen trading
days  prior  to the Conversion Date or (ii) at a "Fixed Conversion Price" of ten
cents  ($.10).

On  February  22,  2006,  we entered into a Convertible Debenture Agreement with
Dutchess Private Equities Fund, II, LP, in the amount of $150,000, at a discount
of  $25,000.  The  debenture  has  a  10%  interest  rate and is due and payable
February  22,  2011.  The purchaser of the convertible debentures is entitled to
convert  the face amount of the debentures plus accrued interest into our common
stock  at  the  lesser  of  (i)  75%  of the lowest closing bid price during the
fifteen trading days prior to the Conversion Date or (ii) at a "Fixed Conversion
Price"  of  ten  cents  ($.10).

On  February  24,  2006,  we entered into a Convertible Debenture Agreement with
Dutchess  Private  Equities  Fund,  II,  LP,  in  the amount of $1,236,000, at a
discount  of  $206,000.  The  debenture  has  a 10% interest rate and is due and
payable  February  24,  2011.  The  purchaser  of  the convertible debentures is
entitled to convert the face amount of the debentures plus accrued interest into
our common stock at the lesser of (i) 75% of the lowest closing bid price during
the  fifteen  trading  days  prior  to  the  Conversion Date or (ii) at a "Fixed
Conversion  Price"  of  eight  cents  ($.08).

On  February  28,  2006,  we entered into a Convertible Debenture Agreement with
Dutchess  Private Equities Fund, LP, in the amount of $234,000, at a discount of
$39,000.  The  debenture has a 10% interest rate and is due and payable February
28,  2011.  The  purchaser  of the convertible debentures is entitled to convert
the face amount of the debentures plus accrued interest into our common stock at
the lesser of (i) 75% of the lowest closing bid price during the fifteen trading
days  prior  to the Conversion Date or (ii) at a "Fixed Conversion Price" of ten
cents  ($.10).

On  March  2,  2006,  we  entered  into  a  Convertible Debenture Agreement with
Dutchess  Private Equities Fund, LP, in the amount of $132,000, at a discount of
$22,000.  The  debenture has a 10% interest rate and is due and payable March 2,
2011.  The  purchaser  of  the convertible debentures is entitled to convert the
face amount of the debentures plus accrued interest into our common stock at the
lesser  of  (i)  75%  of the lowest closing bid price during the fifteen trading
days prior to the Conversion Date or (ii) at a "Fixed Conversion Price" of eight
cents  ($.08).

On  March  9,  2006,  we  entered  into  a  Convertible Debenture Agreement with
Dutchess  Private Equities Fund, LP, in the amount of $434,400, at a discount of
$72,400.  The  debenture has a 10% interest rate and is due and payable March 2,
2011.  The  purchaser  of  the convertible debentures is entitled to convert the
face amount of the debentures plus accrued interest into our common stock at the
lesser  of  (i)  75%  of the lowest closing bid price during the fifteen trading
days prior to the Conversion Date or (ii) at a "Fixed Conversion Price" of eight
cents  ($.08).

On  April  3,  2006,  we  entered  into  a  Convertible Debenture Agreement with
Dutchess  Private Equities Fund, LP, in the amount of $375,600, at a discount of
$62,600.  The  debenture has a 10% interest rate and is due and payable March 2,
2011.  The  purchaser  of  the convertible debentures is entitled to convert the
face amount of the debentures plus accrued interest into our common stock at the
lesser  of  (i)  75%  of the lowest closing bid price during the fifteen trading
days prior to the Conversion Date or (ii) at a "Fixed Conversion Price" of eight
cents  ($.08).


ITEM  8.  CHANGES  IN  AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING AND
FINANCIAL  DISCLOSURE.

None.

ITEM  8A.  CONTROLS  AND  PROCEDURES.

As  of  the  end  of the period covered by this Annual Report on Form 10-KSB, 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.

                                       37
<PAGE>

CHANGES  IN  INTERNAL  CONTROLS

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

ITEM  8B.  OTHER  INFORMATION

None.

                                    PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
WITH  SECTION  16(A)  OF  THE  EXCHANGE  ACT.

The  following  table  sets  forth  the  name,  age,  positions,  and offices or
employments  for  the  past five years as of December 31, 2005, of our executive
officers  and directors. Members of the board are elected and serve for one year
terms  or  until  their  successors are elected and qualify. All of the officers
serve  at  the  pleasure  of  the  Board  of  Directors.

<TABLE>
<CAPTION>
<S>                         <C>          <C>
NAME                        AGE                 POSITION

Kevin  Ryan                  34          Chief  Executive  Officer  and  Director
Laurie Phillips              37          Chief Financial Officer
Michael  Novielli            41          Director,  Chairman
Barrett  Evans               34          Director,  Treasurer
Douglas  Leighton            37          Director
Theodore  Smith              29          Director,  Secretary
</TABLE>

KEVIN  RYAN  has  served as our CEO and Chairman since October 1, 2003. Prior to
taking  on these responsibilities, Mr. Ryan played an integral role in acquiring
the boat assets from the former parent company. As a major investor in Sonic Jet
Performance,  Inc.  he  has  been  involved  with  us since 2001 and has a broad
understanding  of the boating/fire/rescue industry, having also guided us in our
overall  business  strategy. Mr. Ryan has gained experience with federal grants,
having helped Sonic Jet Performance secure a government contract with the United
States  Army  in  2003.

Prior  to  joining  Xtreme, in 2003 Mr. Ryan worked as a venture capitalist with
eFund  Capital  Partners,  LLC  since  1999.  While  with  eFund,  he  has  been
instrumental  in  funding  several start-up companies as well as assisting these
companies  with  overall  business strategy. In 1998, Mr. Ryan earned his Series
Seven,  Series  63  and  Life & Disability licenses while working as a financial
consultant  for  WM  Financial  Services,  before  moving  on to eFund. Mr. Ryan
received  his Bachelor's degree from the University of Southern California, with
an  emphasis  in  entrepreneurship,  management,  sales  and  marketing.

LAURIE  PHILLIPS  has been our Chief Financial Officer since May 17, 2005. Prior
to joining us, Ms. Phillips worked for twelve years at Ace Electric in Columbus,
Kansas,  holding various positions in the Accounting department, including Chief
Financial  Officer  /  Controller  from  1997-2001, and Vice President & General
Manager  from  2001 through February 2005. Ms. Phillips received her Bachelor of
Business  Administration  degree  from  Pittsburg State University in Pittsburg,
Kansas  with a major in Accounting. She also holds a certified public accountant
certificate.

MICHAEL  A.  NOVIELLI  has  served  as  our  director since January 7, 2004. Mr.
Novielli  is a Managing Partner of Dutchess Capital Management, LLC and Dutchess
Advisors, LLC. A co-founder of Dutchess in 1996, Mr. Novielli advises the senior
management  of  issuers in which Dutchess Private Equities Fund LP has invested,
in  areas  of business development, legal, accounting and regulatory compliance.
Prior  to co-founding Dutchess, Mr. Novielli was a partner at Scharff, Witchel &
Company, a 40 year-old, full service investor relations firm, where he consulted
with  publicly-traded  companies  on  areas of finance and business development.
Prior  to  joining  Scharff,  Mr.  Novielli  was Vice-President of Institutional
Sales-Private  Placements  at  Merit  Capital  Associates,  an  independent NASD
registered  broker-dealer.  Before  joining  Merit,  Mr.  Novielli  began  his
investment  career at PaineWebber, where he served for approximately three years
as  a  registered  representative  servicing  high  net  worth  individuals  and
institutional  clientele. Mr. Novielli has held series 7, 63 and 65 licenses and
received  his  B.S.  in  Business  from the University of South Florida in 1987.

                                       38
<PAGE>

BARRETT  EVANS has been our director since January 7, 2004 and was Interim Chief
Financial  Officer between January 7, 2003 and May 15, 2005.  Mr. Evans is eFund
Capital  Partner's  Managing Partner. In 1990, Mr. Evans started his career with
Cruttenden  Roth,  a  regional  emerging  growth  focused  investment  bank.  At
Cruttenden,  Mr.  Evans  developed  significant relationships with institutional
investors.  Additionally,  Mr.  Evans  was  engaged  in all facets of investment
banking  from  private  debt  and  equity financing to Initial Public Offerings,
retail  brokerage  and  institutional  trading,  Mezzanine  financing and bridge
capital.

Mr.  Evans  founded BRE Investments & Consulting, LLC in 1996. BRE Investments &
Consulting  evolved  into  what  is now eFund Capital Partners in 1999. At eFund
Capital Partners, Mr. Evans has utilized his institutional contacts to help fund
numerous  start-up  companies and has advised these companies on a wide range of
issues  including  raising  capital,  securing  management  and overall business
strategy.  Mr.  Evans  received  his  Bachelor's  degree  from the University of
California,  Santa  Barbara.

DOUGLAS  LEIGHTON has served as our director since January 7, 2004. Mr. Leighton
is a Managing Partner of Dutchess Capital Management, LLC and Dutchess Advisors,
LLC.  A  co-founder  of  Dutchess  in  1996,  Mr.  Leighton oversees trading and
portfolio  risk  management  of  investments  made on behalf of Dutchess Private
Equities  Fund  LP.  Prior to co-founding Dutchess, Mr. Leighton was founder and
president  of Boston-based Beacon Capital from 1990-1996, which engaged in money
management.  Mr.  Leighton  holds  a  BS/BA  in  Economics  &  Finance  from the
University  of  Hartford.

THEODORE  SMITH  has  served  as  our  director since January 7, 2004. Mr. Smith
serves  as  Executive Vice President of Dutchess Advisors LLC, whom he joined in
1998  and  is  a  liaison  between Dutchess Capital Management, LLC on behalf of
Dutchess  Private  Equities  Fund,  LP and senior management of companies in the
Fund's  portfolio.  Prior to joining Dutchess in 1998, Mr. Smith was a principal
at  Geneva Atlantic Capital, LLC where he focused on assisting corporate clients
with  SEC  compliance  matters,  business  plan preparation and presentation and
capital  markets  financing.  Mr. Smith received his BS in Finance and Marketing
from  Boston  College. Mr. Smith has also served as a director of several public
as  well  as  private  companies.

EMPLOYMENT  AGREEMENTS

We have an employment agreement with Kevin Ryan, our Chief Executive Officer, on
a  monthly  salary  of  $10,000. Mr. Ryan was given 450,000 shares of our common
stock.  His employment is at will. He may terminate this employment relationship
at  any  time  for  any  reason  with  or  without  cause.

We  have  an  employment  agreement  with  Laurie  Phillips, our Chief Financial
Officer,  on  a monthly salary of $8,000.  Ms. Phillips was awarded common stock
purchase  warrants  upon her hire in May 2005.  The warrants can be exercised at
any  time  on  or after May 16, 2006 and through May 16, 2009, to purchase up to
two percent of the outstanding shares of Xtreme common stock as of May 16, 2006.
The  purchase  price  of  one  share  of stock under the warrant is equal to the
lesser of; (i) ten percent of the average closing bid price of the stock for the
five  trading  days  immediately  preceding  May  16, 2006 or (ii) ten cents per
share,  subject  to  adjustment.   Her employment is at will.  She may terminate
this  employment  relationship at any time for any reason with or without cause.

BOARD  OF  DIRECTORS

We  currently  have  five  members of our Board of Directors, who are elected to
annual  terms  and until their successors are elected and qualified or until his
resignation  or  removal  by  the board. Executive officers are appointed by the
Board of Directors on an annual basis and serve until their successors have been
duly  elected  and qualified. There are no family relationships among any of our
directors,  officers  or  key  employees.

AUDIT  COMMITTEE

We  do not have a separate Audit Committee. Our full Board of Directors performs
the  functions  usually designated to an Audit Committee. Mr. Evans qualifies as
an  "audit  committee  financial  expert"  under the rules of the Securities and
Exchange  Commission.

SECTION  16(A)  BENEFICIAL  OWNERSHIP  REPORTING  COMPLIANCE

Section  16(a) of the Securities Exchange Act of 1934 requires our directors and
executive officers and persons who beneficially own more than ten percent of our
common  stock,  to  file  initial reports of ownership and reports of changes in
ownership  with  the  Securities  and  Exchange  Commission. Executive officers,
directors  and  greater  than  ten percent beneficial owners are required by SEC
regulation  to  furnish  us with copies of all Section 16(a) forms they file. To
our  knowledge, based solely on a review of the copies of such reports furnished
to us and written representations from our executive officers and directors, all
required  reports  were  filed  during  the fiscal year ended December 31, 2005.

We  believe  that  all  Section  16(a)  filing  requirements  applicable  to the
executive  officers,  directors  and  greater than ten percent beneficial owners
were  complied  with.

CODE  OF  ETHICS

We  have  adopted  a  code  of  ethics  that  applies to our principal executive
officer,  principal  financial  officer,  principal  accounting  officer  or
controller, or persons performing similar functions. Our Code of Ethics is filed
with  our  Report  on  Form  10-KSB  for  the period ending December 31, 2003 as
Exhibit  14.1.

                                       39
<PAGE>

ITEM  10.  EXECUTIVE  COMPENSATION.

The  following  table  presents  a summary of the compensation paid to our Chief
Executive  Officer.  No  other executive officer received compensation in excess
of  $100,000  during  2005.  Except as listed below, there are no bonuses, other
annual  compensation, restricted stock awards or stock options/SARs or any other
compensation  paid  to  the  executive  officers.

<TABLE>
<CAPTION>
<S>                    <C>   <C>        <C>    <C>    <C>        <C>           <C>      <C>
                             Annual Compensation                  Long Term Compensation
                       ------------------------------  ------------------------------------------
                                                               Awards               Payouts
                                                       ----------------------  ------------------
                                                        Un-
                                               Other  Restricted  Securities
                                               Annual   Stock    Underlying     LTIP    All Other
Name and               Year  Salary ($)  Bonus  Comp.   Awards   Options/SARs  Payout     Comp.
Principal Position                        ($)    ($)                 ($)         ($)       ($)
------------------     ----  ----------  -----  -----  --------  ------------  -------  ---------
Kevin Ryan, Chief
Executive Officer
and Director           2005  $  120,000    0      0          0        0           0         0
         (1) (2) (3)   2004  $    4,500    0      0   $111,929        0           0         0
Donald Bradly (1)      2003  $        0    0      0          0        0           0         0

<FN>
(1)    Mr.  Donald Bradley served as our CEO from 2002 until his resignation September 26, 2003.  Before this time, we did not
have a CEO and only had a President.  As of that date, Mr. Bradley had not been paid for his services.  Mr. Bradley's successor,
Kevin Ryan, agreed to be paid $10,000 per month through the fiscal year ending December 31, 2003, which was extended in 2004 and
2005. However, Mr. Ryan deferred $35,500 until such time we are capitalized enough to pay for his services.

(2)   Mr. Ryan was granted 450,000 shares that were registered pursuant to Form S-8 for his participation as a member of our
board of directors on January 7, 2004.

(3)    Mr. Ryan deferred a portion of his 2004 salary for a total of $121,000 still owed to him as of December 31, 2005.
</TABLE>

DIRECTORS  COMPENSATION

On February 13, 2004, we issued 150,000 registered shares of our common stock to
three directors for services. On February 27, 2004, we issued 150,000 registered
shares  of  our  common  stock to one director for services. On the same date we
issued  our  director and CEO, Kevin Ryan, 150,000 registered shares and 300,000
restricted  shares.  We  do  not have a formal plan to compensate our directors.
During the three months ended March 31, 2004, we issued 950,000 shares of common
stock  for  board  compensation  amounting  to $260,569.   Our directors did not
receive  any  compensation  for  their  services  in  2005.

ITEM  11.  SECURITY  OWNERSHIP  OF  CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED  STOCKHOLDER  MATTERS.

The  following  table  sets  forth certain information concerning the beneficial
ownership  of  our outstanding classes of stock as of December 31, 2005, by each
person  known  by  us to own beneficially more than 5% of each class, by each of
our Directors and Executive Officers and by all Directors and Executive Officers
as  a  group.  Unless  otherwise  indicated below, to our knowledge, all persons
listed  below have sole voting and investment power with respect to their shares
of  common  stock except to the extent that authority is shared by spouses under
applicable  law.

The number of shares of common stock issued and outstanding on December 31, 2005
was  19,551,376  shares. The calculation of percentage ownership for each listed
beneficial  owner  is based upon the number of shares of common stock issued and
outstanding on December 31, 2005, plus shares of common stock subject to options
held  by  such  person  on  December  31,  2005  and  exercisable within 60 days
thereafter.

<TABLE>
<CAPTION>
<S>                                             <C>          <C>                 <C>          <C>         <C>
NAME AND ADDRESS OF BENEFICIAL OWNER               OWNED     CONVERSION RIGHTS   WARRANTS       TOTAL     PERCENTAGE
Kevin M. Ryan (a)  300 Westlink Dr,
Washington, MO  63090                             450,000                 0              0       450,000      2.3%
Michael Novielli (b)  1110 Rt. 55,
Suite 206, LaGrangeville, NY  12540               137,500        11,958,780      1,422,000    30,528,161     65.9%
Barrett  Evans  (c)  301  East  Ocean
Blvd.,  Suite  640, Long Beach, CA  90802         130,000         2,240,000        240,000    10,347,013     42.6%
Douglas Leighton (d)  50 Commonwealth Ave,
Suite 2, Boston, MA  02116                        137,500        11,958,780      1,422,000    30,528,161     65.9%
Ted Smith (e)  50 Commonwealth Ave,
Suite 2, Boston, MA  02116                        130,000                 0              0       130,000      0.7%
eFund  Capital Partners, LLC (f)  301 East
Ocean Blvd, Suite 640, Long Beach, CA  90802     4,111,123        2,240,000        240,000     6,591,123     29.9%
eFund Small-Cap. Fund (g)  301 East
Ocean Blvd, Suite 640, Long Beach, CA  90802     1,385,650                0              0     1,385,650      7.1%
Dutchess Private Equities Fund, LP (h)
50 Commonwealth Ave, Suite 2, Boston, MA 02116   1,400,000        3,306,667        396,000     5,102,667     21.9%
Dutchess Private Equities Fund, II, LP
(i) 50 Commonwealth Ave, Suite 2, Boston, MA 02116       0        8,652,113      1,026,000     9,678,113     38.9%
Dutchess Advisors, LLC (j)  50 Commonwealth
Ave, Suite 2, Boston, MA  02116                  2,229,101                0              0     2,229,101     11.4%
All directors and current executive
officers as a group                                985,000       40,356,340      4,746,000    46,087,340     85.4%
<FN>

 (a)  Mr. Ryan has sole voting and dispositive power of 450,000 shares of common
stock issued to him.  Mr. Ryan is our Chief Executive Officer and is a member of
the  board  of  directors.

(b)  Mr. Novielli has sole voting and dispositive power of 137,500 shares issued
to  him.  Mr.  Novielli is a member of our board of directors.  Mr. Novielli may
acquire  1,422,000 shares of common stock within 60 days through the exercise of
warrants.  He  may also acquire 11,958,780 shares of common stock within 60 days
through  the  conversion of debentures.  In addition, Mr. Novielli is a managing
member  of  Dutchess  Capital  Management, LLC, which acts as general partner to
Dutchess  Private  Equities Fund, LP, Dutchess Private Equities Fund II, LP, and
Dutchess Advisors, LLC.  The securities owned by those entities are attributable
to  Mr.  Novielli,  and  are  listed  below  in  note  (h),  note (i), note (j).

 (c) Mr. Evans has sole voting and dispositive power of 130,000 shares issued to
him  January  2004.  Mr. Evans is a member of our board of directors.  Mr. Evans
may  acquire  240,000 shares of common stock within 60 days through the exercise
of  warrants.  He  may  also  acquire 2,240,000 shares of common stock within 60
days  through  the  conversion  of  debentures.  In  addition,  Mr. Evans is the
managing  member  of  eFund  Capital Partners, LLC and eFund Small-Cap Fund, LP.
The  securities  owned  by those entities are attributable to Mr. Evans, and are
listed  below  in  note  (f)  and  note  (g).

(d)  Mr.  Leighton  has sole voting and dispositive power of 137,500 shares. Mr.
Leighton  is  a  member  of  our  board  of directors.  Mr. Leighton may acquire
1,422,000  shares  of  common  stock  within  60  days  through  the exercise of
warrants.  He  may also acquire 11,958,780 shares of common stock within 60 days
through  the  conversion of debentures.  In addition, Mr. Leighton is a managing
member  of  Dutchess  Capital  Management, LLC, which acts as general partner to
Dutchess  Private  Equities Fund, LP, Dutchess Private Equities Fund II, LP, and
Dutchess Advisors, LLC.  The securities owned by those entities are attributable
to  Mr.  Evans,  and  are  listed  below  in  note  (h),  note  (i),  note  (j).

(e) Mr. Smith has sole voting and dispositive power of 130,000 shares. Mr. Smith
is  a  member  of  our  board  of  directors.

(f)  eFund  Small  Cap Fund owns 1,385,650 shares of common stock. eFund Capital
Partners,  LLC  is controlled by Barrett Evans. Mr. Evans is the Managing Member
of  EFund  Capital  Partners,  LLC  and  a  member  of  our  board of directors.

(g)  eFund  Capital  Partners,  LLC owns 4,111,123 shares of common stock. eFund
Capital  Partners,  LLC,  also  may acquire up to 240,000 shares of common stock
within  60  days  through  the exercise of warrants.  In addition, eFund Capital
Partners,  LLC,  may  acquire  2,240,000  shares  of common stock within 60 days
through  the  conversion of debentures. eFund Small-Cap Fund, L.P. is controlled
by  Barrett  Evans.  Mr.  Evans is the Managing Partner of EFund Small-Cap Fund,
L.P.  and  a  member  of  our  board  of  directors.

(h)  Dutchess  Private Equities Fund, LP, owns 1,400,000 shares of common stock.
Dutchess  Private  Equities  Fund,  LP, also may acquire up to 396,000 shares of
common  stock  within  60  days  through the exercise of warrants.  In addition,
Dutchess Private Equities Fund, LP, may acquire 3,306,667 shares of common stock
within  60  days  through  the  conversion  of debentures.  Mr. Leighton and Mr.
Novielli are managing members of Dutchess Capital Management, LLC, which acts as
general  partner to Dutchess Private Equities Fund, LP, and have sole voting and
dispositive  power  over the shares owned by Dutchess Private Equities Fund, LP.

(i)  Dutchess  Private Equities Fund, II, LP, may acquire up to 1,026,000 shares
of  common  stock within 60 days through the exercise of warrants.  In addition,
Dutchess Private Equities Fund, LP, may acquire 8,652,113 shares of common stock
within  60  days  through  the  conversion  of debentures.  Mr. Leighton and Mr.
Novielli are managing members of Dutchess Capital Management, LLC, which acts as
general  partner to Dutchess Private Equities Fund, II, LP, and have sole voting
and  dispositive  power over the shares owned by Dutchess Private Equities Fund,
II,  LP.

(j)  Dutchess  Advisors,  LLC,  owns 2,229,101 shares of common stock.  Dutchess
Advisors,  LLC,  is  controlled  by  Mr.  Novielli  and  Mr.  Leighton.
</TABLE>

                                       40
<PAGE>

ITEM  12.  CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS.

On  January  3,  2005,  we  entered  into a Convertible Debenture Agreement with
Dutchess  Private  Equities  Fund,  II,  L.P,  in  the  amount of $240,000, at a
discount  of  $40,000.  The  debenture  has  an  8% interest rate and is due and
payable  January  3,  2010.  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 of the
common  stock  during  the  fifteen trading days prior to the Conversion Date or
(ii)  100%  of  the  average  closing  bid  prices  for  the twenty trading days
immediately  preceding  the  Closing  Date  of  the  Transaction.

In  connection with the above financing, we issued a warrant to Dutchess Private
Equities Fund, LP to purchase 240,000 shares of common stock at $0.15 per share.
The  warrant  has  a  term  of  five  years.

On  March  8,  2005,  we  entered  into  a  Convertible Debenture Agreement with
Dutchess  Private Equities Fund, LP, in the amount of $120,000, at a discount of
$20,000.   The debenture has an 8% interest rate and is due and payable March 8,
2010.  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) 100% of the average closing bid prices
for  the  twenty  trading  days  immediately  preceding  the Closing Date of the
Transaction.

In  connection with the above financing, we issued a warrant to Dutchess Private
Equities Fund, LP to purchase 120,000 shares of common stock at $0.15 per share.
The  warrant  has  a  term  of  five  years.

On  March 10, 2005, we entered into a Convertible Debenture Agreement with eFund
Capital Partners, LLC, in the amount of $60,000, at a discount of $10,000.   The
debenture  has  an  8% interest rate and is due and payable March 10, 2010.  The
purchaser  of  the convertible debentures is entitled to convert the face amount
of  the  debentures plus accrued interest into our common stock at the lesser of
(i) 75% of the lowest closing bid price during the fifteen trading days prior to
the  Conversion  Date  or  (ii)  fifteen  cents  ($.15)  per  share.

In  connection  with  the  above financing, we issued a warrant to eFund Capital
Partners,  LLC to purchase 60,000 shares of common stock at $0.15 per share. The
warrant  has  a  term  of  five  years.

On  March 18, 2005, we entered into a Convertible Debenture Agreement with eFund
Capital Partners, LLC, in the amount of $60,000, at a discount of $10,000.   The
debenture  has  an  8% interest rate and is due and payable March 10, 2010.  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)  100%  of the average closing bid prices for the
twenty  trading  days immediately preceding the Closing Date of the Transaction.

In  connection  with  the  above financing, we issued a warrant to eFund Capital
Partners,  LLC to purchase 60,000 shares of common stock at $0.15 per share. The
warrant  has  a  term  of  five  years.

On  April  18,  2005,  we  entered  into  a Convertible Debenture Agreement with
Dutchess  Private  Equities Fund, LP, in the amount of $84,000, at a discount of
$14,000.   The  debenture  has  an 8% interest rate and is due and payable April
18,  2010.  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) 100% of the average closing bid prices
for  the  twenty  trading  days  immediately  preceding  the Closing Date of the
Transaction.

In  connection with the above financing, we issued a warrant to Dutchess Private
Equities  Fund,  LP  to purchase 84,000 shares of common stock at .35 per share.
The  warrant  has  a  term  of  five  years.

On  May 5, 2005, we entered into a Convertible Debenture Agreement with Dutchess
Private  Equities Fund, LP, in the amount of $192,000, at a discount of $32,000.
The  debenture  has an 8% interest rate and is due and payable May 5, 2010.  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)  100%  of the average closing bid prices for the
twenty  trading  days immediately preceding the Closing Date of the Transaction.

In  connection with the above financing, we issued a warrant to Dutchess Private
Equities  Fund,  LP to purchase 192,000 shares of common stock at .22 per share.
The  warrant  has  a  term  of  five  years.

                                       41
<PAGE>

On May 13, 2005, we entered into a Convertible Debenture Agreement with Dutchess
Private  Equities  Fund,  II,  LP,  in  the amount of $228,000, at a discount of
$38,000.  The  debenture  has an 8% interest rate and is due and payable May 13,
2010.  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) 100% of the average closing bid prices
for  the  twenty  trading  days  immediately  preceding  the Closing Date of the
Transaction.

In  connection with the above financing, we issued a warrant to Dutchess Private
Equities  Fund,  LP to purchase 228,000 shares of common stock at .20 per share.
The  warrant  has  a  term  of  five  years.

On May 18, 2005, we entered into a Convertible Debenture Agreement with Dutchess
Private  Equities  Fund,  II,  LP,  in  the amount of $101,817, at a discount of
$26,817.  The  debenture  has an 8% interest rate and is due and payable May 18,
2010.  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) 100% of the average closing bid prices
for  the  twenty  trading  days  immediately  preceding  the Closing Date of the
Transaction.

In  connection with the above financing, we issued a warrant to Dutchess Private
Equities  Fund,  LP to purchase 101,817 shares of common stock at .20 per share.
The  warrant  has  a  term  of  five  years.

On  May  20,  2005, we entered into a Convertible Debenture Agreement with eFund
Capital  Partners, LLC, in the amount of $120,000, at a discount of $20,000. The
debenture  has  an  8%  interest  rate and is due and payable May 20, 2010.  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)  100%  of the average closing bid prices for the
twenty  trading  days immediately preceding the Closing Date of the Transaction.

In  connection  with  the  above financing, we issued a warrant to eFund Capital
Partners,  LLC  to purchase 120,000 shares of common stock at .20 per share. The
warrant  has  a  term  of  five  years.

On  June  16,  2005,  we  entered  into  a  Convertible Debenture Agreement with
Dutchess Private Equities Fund, II, LP, in the amount of $240,000, at a discount
of  $30,000.  The  debenture has an 8% interest rate and is due and payable June
16,  2010.  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)  fifteen  cents  per  share.

In  connection with the above financing, we issued a warrant to Dutchess Private
Equities  Fund,  II,  LP to purchase 240,000 shares of common stock at $0.16 per
share.  The  warrant  has  a  term  of  five  years.

On July 7, 2005, we entered into a Convertible Debenture Agreement with Dutchess
Private  Equities Fund, LP, in the amount of $228,000, at a discount of $28,000.
The  debenture has an 8% interest rate and is due and payable July 7, 2010.  The
purchaser  of  the convertible debentures is entitled to convert the face amount
of  the  debentures plus accrued interest into our common stock at the lesser of
(i) 75% of the lowest closing bid price during the fifteen trading days prior to
the  Conversion  Date  or  (ii)  fifteen  cents  ($.15)  per  share.

In  connection with the above financing, we issued a warrant to Dutchess Private
Equities  Fund,  LP to purchase 228,000 shares of common stock at .12 per share.
The  warrant  has  a  term  of  five  years.

On  July  7,  2005, we entered into a Convertible Debenture Agreement with eFund
Capital  Partners, LLC, in the amount of $72,000, at a discount of $12,000.  The
debenture  has  an  8%  interest  rate and is due and payable July 7, 2010.  The
purchaser  of  the convertible debentures is entitled to convert the face amount
of  the  debentures plus accrued interest into our common stock at the lesser of
(i) 75% of the lowest closing bid price during the fifteen trading days prior to
the  Conversion  Date  or  (ii)  fifteen  cents  ($.15)  per  share.

In connection with the above financing, we issued a warrant to eFund to purchase
72,000  shares  of common stock at .12 per share. The warrant has a term of five
years.

On  July  21, 2005, we 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 is due on December 21, 2005.  The
note  carries  a  discounted amount of $10,000.   During the year ended December
31, 2005, $0.00 of this Note was repaid, and the balance at December 31, 2005 is
$120,000.  The  Note was extended and is due and payable.  The Note was extended
and  is  due  and payable with thirty days notice from Dutchess Private Equities
Fund,  LP.

On  August 5, 2005, we 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 is due on January 5, 2006.  The note
carries  a  discounted  amount  of  $24,000.  During the year ended December 31,
2005,  $0.00  of  this  Note was repaid, and the balance at December 31, 2005 is
$144,000.  The  Note was extended and is due and payable with thirty days notice
from  Dutchess  Private  Equities  Fund,  LP.

On August 22, 2005, we 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 is due on August 22, 2006.  The note
carries  a  discounted  amount  of  $30,000.  During the year ended December 31,
2005,  $0.00  of  this  Note was repaid, and the balance at December 31, 2005 is
$180,000.

                                       42
<PAGE>

 On  September  1, 2005, we 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 is due on
September 1, 2006.  The note carries a discounted amount of $12,000.  During the
year  ended December 31, 2005, $0.00 of this Note was repaid, and the balance at
December  31,  2005  is  $72,000.

On  September  7,  2005, we issued a non-interest bearing Convertible Promissory
Note  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 is due on
September 7, 2006.  The note carries a discounted amount of $18,000.  During the
year  ended December 31, 2005, $0.00 of this Note was repaid, and the balance at
December  31,  2005  is  $108,000.

On  September  15, 2005, we 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 is due on September 15, 2006.  The
note carries a discounted amount of $33,500.  During the year ended December 31,
2005,  $0.00  of  this  Note was repaid, and the balance at December 31, 2005 is
$201,000.

On  September  22, 2005, we 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 is due on September 22, 2006.  The
note carries a discounted amount of $26,400.  During the year ended December 31,
2005,  $0.00  of  this  Note was repaid, and the balance at December 31, 2005 is
$158,400.

On  September  30, 2005, we 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 is due on September 30, 2006.  The
note carries a discounted amount of $39,400.  During the year ended December 31,
2005,  $0.00  of  this  Note was repaid, and the balance at December 31, 2005 is
$236,400.

On October 7, 2005, we 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 is due on October 7, 2006.  The note
carries  a  discounted  amount  of  $37,000.  During the year ended December 31,
2005,  $0.00  of  this  Note was repaid, and the balance at December 31, 2005 is
$222,000.

On  October  14,  2005,  we 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 is due on October 14, 2006.  The
note carries a discounted amount of $32,000.  During the year ended December 31,
2005,  $0.00  of  this  Note was repaid, and the balance at December 31, 2005 is
$192,000.

On  November  1,  2005, we entered into a twelve month consulting agreement with
Dutchess Advisors, LLC.  In connection with the consulting agreement, we entered
into  a  Convertible  Debenture  Agreement  with  Dutchess Advisors, LLC, in the
amount  of $500,000, at a discount of $497,000.  The debenture has a 5% interest
rate  and is due and payable November 1, 2010.  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 five trading days prior to the Conversion Date or (ii) 100%
of  the  average  closing  bid  prices  for  the  five  trading days immediately
preceding  the  Closing  Date  of  the  Transaction.

On  November  1,  2005,  we 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 is due on November 1, 2006.
The note carries a discounted amount of $26,000.  During the year ended December
31, 2005, $0.00 of this Note was repaid, and the balance at December 31, 2005 is
$156,000.

On  November  9,  2005,  we 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 November 9, 2006.
The note carries a discounted amount of $36,000.  During the year ended December
31, 2005, $0.00 of this Note was repaid, and the balance at December 31, 2005 is
$216,000.

On  November  22,  2005, we issued a non-interest bearing Convertible Promissory
Note  to  Dutchess  Private Equities Fund, II, LP in the amount of $60,000.  The
note  carries  an  interest rate of 0% per year and is due on November 22, 2006.
The note carries a discounted amount of $10,000.  During the year ended December
31,  2005, $17,234 of this Note was repaid, and the balance at December 31, 2005
is  $42,766.

On  December  6,  2005,  we 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.  During the year ended December
31, 2005, $0.00 of this Note was repaid, and the balance at December 31, 2005 is
$216,000.

                                       43
<PAGE>

ITEM  13.  EXHIBITS.

EXHIBIT
NUMBER     DESCRIPTION

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  (filed  herewith).

4.51  Promissory  Note  between  the Company and Dutchess Private Equities Fund,
L.P.,  dated  October  14,  2005  (filed  herewith).

4.52 Promissory Note between the Company and Dutchess Private Equities Fund, II,
L.P.,  dated  November  1,  2005  (filed  herewith).

4.53 Promissory Note between the Company and Dutchess Private Equities Fund, II,
L.P.,  dated  November  9,  2005  (filed  herewith).

4.54 Promissory Note between the Company and Dutchess Private Equities Fund, II,
L.P.,  dated  November  22,  2005  (filed  herewith).

4.55 Promissory Note between the Company and Dutchess Private Equities Fund, II,
L.P.,  dated  December  7,  2005  (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  (filed  herewith).

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.

31.2  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.

                                       44
<PAGE>

ITEM  14.  PRINCIPAL  ACCOUNTANT  FEES  AND  SERVICES.

Jaspers  +  Hall,  PC,  were  our  primary  auditors  for the fiscal years ended
December  31,  2005  and  2004.  Beckstead and Watts, LLP performed the year end
audit  on  Form  10-KSB  for  the  year  ended  December  31,  2003.

AUDIT  FEES

For  their  2004 year end audit and review of our Quarterly Reports on Form 10-Q
for  2004,  Jaspers  +  Hall,  PC  billed  us  $10,500.  For their review of our
Quarterly  Reports  on Form 10-Q for 2005, Jaspers + Hall, PC, billed us a total
of  $6,000.  We estimate paying Jaspers + Hall, PC, $10,000 to complete the 2005
year  end  audit.

AUDIT  RELATED  FEES

None.

TAX  FEES

None.

ALL  OTHER  FEES

None.

THE  BOARD  OF  DIRECTORS  PRE-APPROVAL  POLICY  AND  PROCEDURES

We  do not have a separate Audit Committee. Our full Board of Directors performs
the  functions  of  an  Audit  Committee.  During fiscal year 2003, the Board of
Directors  adopted  policies  and  procedures  for the pre-approval of audit and
non-audit  services  for  the  purpose  of  maintaining  the independence of our
independent  auditors.  We may not engage our independent auditors to render any
audit  or  non-audit service unless either the service is approved in advance by
the  Board  of Directors or the engagement to render the service is entered into
pursuant  to the Board of Director's pre-approval policies and procedures. On an
annual  basis, the Board of Directors may pre-approve services that are expected
to be provided to us by the independent auditors during the following 12 months.
At  the  time  such  pre-approval  is  granted,  the Board of Directors must (1)
identify the particular pre-approved services in a sufficient level of detail so
that  management  will  not  be  called  upon  to  make judgment as to whether a
proposed  service  fits  within  the  pre-approved  services and (2) establish a
monetary limit with respect to each particular pre-approved service, which limit
may  not  be  exceeded  without obtaining further pre-approval under the policy.

The  Board  has considered whether the provision of the services described above
under  the caption "All Other Fees" is compatible with maintaining the auditor's
independence.

                                       45
<PAGE>

                                   SIGNATURES

Pursuant  to  the requirements of Section 13 or 15(d) of the Securities Exchange
Act  of 1934, the Company has duly caused this report to be signed on its behalf
by  the undersigned, thereunto duly authorized, in the City of Washington, State
of  Missouri  on  the  14th  day  of  April,  2006.

XTREME  COMPANIES,  INC.



          /s/  Kevin  Ryan
          ----------------
By:       Kevin  Ryan
          President  and  Chief  Executive  Officer





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



SIGNATURE                           TITLE                       DATE
/s/  Kevin  Ryan
----------------          Director,  President,  and
Kevin  Ryan               Chief  Executive  Officer          April  14,  2006

/s/  Laurie  Phillips     Chief  Financial  Officer          April  14,  2006
--------------------- and  Principal  Accounting  Officer
Laurie  Phillips

/s/  Barrett  Evans
-------------------
Barrett  Evans                     Director                  April  14,  2006


/s/Michael  A.  Novielli
-------------------------       Chairman  of  the
Michael  A.  Novielli          Board  of  Directors          April  14,  2006


/s/Douglas  H.  Leighton
------------------------
Douglas  H.  Leighton              Director                  April  14,  2006


/s/Theodore  J.  Smith
----------------------
Theodore  J.  Smith                Director                  April  14,  2006

                                       46
<PAGE>