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

                                   FORM 10-QSB

             QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

               FOR THE QUARTERLY PERIOD ENDED: SEPTEMBER 30, 2006

                         COMMISSION FILE NUMBER: 0-16075


                      IRONCLAD PERFORMANCE WEAR CORPORATION
        (Exact name of small business issuer as specified in its charter)


              NEVADA                                      95-4762694
(State or other  jurisdiction of               (IRS Employer Identification No.)
 incorporation or organization)


                           2201 PARK PLACE, SUITE 101
                              EL SEGUNDO, CA 90245
                    (Address of principal executive offices)

                                 (310) 643-7800
                          (Issuer's telephone number)



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

                             Yes [X]     No [_]

         Indicate by check mark whether the registrant is an  accelerated  filer
(as defined in Rule 12b-2 of the Exchange Act). Yes [_] No [X]

         As of November 9, 2006,  29,977,764  shares of the registrant's  common
stock were outstanding.

         Transitional  Small Business  Disclosure Format (Check One):

                             Yes [_]     No [X]


<PAGE>


                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----

PART I        Financial Information

Item 1.       Financial Statements

              a.  Consolidated Balance Sheet as of September 30, 2006          1

              b.  Consolidated Statements of Operations for the three
                  months and the nine months ended September 30, 2006
                  and September 30, 2005                                       2

              c.  Consolidated Statements of Cash Flows for the nine
                  months ended September 30, 2006 and September 30, 2005       3

              d.  Notes to Consolidated Financial Statements                4-15


Item 2.       Management's Discussion and Analysis or Plan of Operation    16-36

Item 3.       Controls and Procedures                                         37


PART II       Other Information

Item 1.       Legal Proceedings                                               38

Item 2.       Unregistered Sales of Equity Securities and Use of Proceeds     38

Item 6.       Exhibits                                                        39


<PAGE>


                                     PART I

ITEM 1.       FINANCIAL STATEMENTS

                      IRONCLAD PERFORMANCE WEAR CORPORATION
                           CONSOLIDATED BALANCE SHEET
                                  SEPTEMBER 30,
                                                                        2006
ASSETS                                                             -------------
CURRENT ASSETS
   Cash and cash equivalents .................................     $  2,176,852
   Accounts receivable net of allowance for doubtful
      accounts of $22,000 ....................................        1,725,771
   Inventory .................................................        2,940,234
   Prepaid and other .........................................          180,097
     TOTAL CURRENT ASSETS ....................................        7,022,954

PROPERTY, PLANT AND EQUIPMENT
   Computer equipment and software ...........................          203,085
   Vehicles ..................................................           46,280
   Office equipment and furniture ............................          120,132
      Leasehold improvements .................................           27,399
    Less:  accumulated depreciation ..........................         (243,433)
   TOTAL PROPERTY, PLANT AND EQUIPMENT, NET ..................          153,463

   Trademarks, net of $4,760 of accumulated amortization .....           77,134
   Deposits ..................................................           22,354
   TOTAL ASSETS ..............................................     $  7,275,905

LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
   Accounts payable ..........................................     $    755,473
     Accrued expenses ........................................        1,125,010
     Line of credit ..........................................          821,205
      Current portion of capital lease .......................            3,239
     TOTAL CURRENT LIABILITIES ...............................        2,704,927

   Long term portion of capital lease obligations ............            2,562
     Fair value of warrant liability .........................        7,905,684
     TOTAL LIABILITIES .......................................       10,613,173

STOCKHOLDERS' DEFICIT
   Common stock, $.001 par value; 172,744,750 million
     shares authorized; 29,977,764 shares issued and
     outstanding .............................................           29,978
   Additional paid-in capital ................................        4,112,994
     Accumulated deficit .....................................       (7,480,240)
     TOTAL STOCKHOLDERS' DEFICIT .............................       (3,337,268)
     TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT .............     $  7,275,905


                                       1
<PAGE>


<TABLE>
                      IRONCLAD PERFORMANCE WEAR CORPORATION
                      CONSOLIDATED STATEMENTS OF OPERATIONS


<CAPTION>
                                              THREE MONTHS    THREE MONTHS     NINE MONTHS     NINE MONTHS
                                                  ENDED           ENDED           ENDED           ENDED
                                              SEPTEMBER 30,   SEPTEMBER 30,   SEPTEMBER 30,   SEPTEMBER 30,
                                                  2006            2005            2006            2005
                                              ------------    ------------    ------------    ------------
<S>                                           <C>             <C>             <C>             <C>
REVENUES
  Net sales ...............................   $  2,373,508    $  1,611,017    $  5,702,642    $  4,653,352
                                              ------------    ------------    ------------    ------------

COST OF SALES
  Cost of sales ...........................      1,565,689         923,553       3,606,422       2,464,575
                                              ------------    ------------    ------------    ------------

OPERATING EXPENSES
  General and administrative ..............        826,335         299,246       1,989,993         916,317
  Sales and marketing .....................        661,683         423,572       1,766,112       1,351,171
  Research and development ................        114,661          57,358         219,443         159,857
  Operations ..............................        134,537          94,859         360,548         232,475
  Depreciation and amortization ...........         11,406          14,644          26,776          43,001
                                              ------------    ------------    ------------    ------------

   TOTAL OPERATING EXPENSES ...............      1,748,622         889,679       4,362,872       2,702,821
                                              ------------    ------------    ------------    ------------

LOSS FROM OPERATIONS ......................       (940,803)       (202,215)     (2,266,652)       (514,044)
                                              ------------    ------------    ------------    ------------

OTHER INCOME (EXPENSE)

  Interest expense ........................         (1,978)        (11,042)        (75,413)        (48,904)
  Interest expense from warrants issued
    as financing cost .....................           --              --          (256,188)           --
  Interest income .........................         26,314            --            42,327            --
  Change in fair value of warrant liability        392,002            --        (2,061,016)           --
   Loss on disposition of equipment .......           --            (3,288)           --            (3,288)
  Other income (expense), net .............            216         (29,049)          2,397          (2,243)
                                              ------------    ------------    ------------    ------------
   TOTAL OTHER INCOME (EXPENSE) ...........        416,554         (43,379)     (2,347,893)        (54,435)
                                              ------------    ------------    ------------    ------------

NET LOSS BEFORE PROVISION FOR INCOME TAXES        (524,249)       (245,594)     (4,614,545)       (568,479)

PROVISION FOR INCOME TAXES ................           --              --               800             (24)
                                              ------------    ------------    ------------    ------------

NET LOSS ..................................   $   (524,249)   $   (245,594)   $ (4,615,345)   $   (568,455)
                                              ------------    ------------    ------------    ------------

BASIC AND DILUTED NET LOSS PER COMMON SHARE   $      (0.02)   $      (0.02)   $      (0.20)   $      (0.04)
                                              ------------    ------------    ------------    ------------
WEIGHTED AVERAGE
COMMON SHARES OUTSTANDING .................     29,717,211      15,510,687      23,256,831      15,470,853
                                              ------------    ------------    ------------    ------------
</TABLE>


                  See Notes to Condensed Financial Statements.


                                       2
<PAGE>


                      IRONCLAD PERFPRMANCE WEAR CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS


                                                     NINE MONTHS    NINE MONTHS
                                                        ENDED          ENDED
                                                    SEPTEMBER 30,  SEPTEMBER 30,
                                                        2006           2005
                                                    -----------    -----------
CASH FLOWS FROM OPERATING ACTIVITIES
  Net loss .......................................  $(4,615,345)   $  (568,455)
  Adjustments to reconcile net loss to net cash
  provided by (used in) operating activities
     Allowance for bad debts .....................        1,000           --
     Depreciation ................................       24,788         42,040
     Amortization ................................        1,989            961
     Warrants issued as financing cost ...........      256,188           --
     Loss on disposition of equipment ............         --            3,288
     Change in fair value of warrant liability ...    2,061,016           --
     Non-cash compensation:
       Common stock issued for services ..........       51,779         43,750
       Stock option expense ......................      431,860           --
     Changes in operating assets and liabilities:
       Receivables ...............................     (316,647)       (82,993)
       Inventory .................................   (1,956,196)       275,865
       Deposits on inventory .....................      300,277          9,828
       Prepaid and other .........................      (31,908)       (31,280)
       Loan costs ................................       15,798           --
       Bank overdraft ............................         --           35,364
       Accounts payable and accrued liabilities ..       (1,041)       523,418
                                                    -----------    -----------
         Net cash flows provided by (used in)
            operating activities .................   (3,776,442)       251,786

CASH FLOWS FROM INVESTING ACTIVITIES
  Property, plant and equipment purchased ........     (118,909)        (8,218)
  Investment in trademarks .......................      (25,512)       (10,996)
                                                    -----------    -----------
     Net cash flows used in investing activities .     (144,421)       (19,214)

CASH FLOWS FROM FINANCING ACTIVITIES
  Proceeds from issuance of common stock .........    7,828,691         50,000
   Offering costs ................................   (1,284,453)          --
   Proceeds from exercise of warrants ............       66,338          2,001
  Payments on  note payable ......................     (500,000)      (398,202)
   Payments on bank loans ........................     (861,612)      (248,309)
   Proceeds from bank loans ......................      821,205           --
   Payments on capital leases ....................       (2,027)          (764)
                                                    -----------    -----------
     Net cash flows provided by (used in)
        financing activities .....................    6,068,142       (595,274)

NET INCREASE (DECREASE) IN CASH ..................    2,147,279       (362,702)
CASH AND CASH EQUIVALENTS BEGINNING OF PERIOD ....       29,573        362,702
CASH AND CASH EQUIVALENTS END OF PERIOD ..........  $ 2,176,852    $      --

SUPPLEMENTAL DISCLOSURES
  Interest paid in cash ..........................  $    75,413    $    48,904
   Income taxes ..................................          800            (24)


                                       3
<PAGE>


                      IRONCLAD PERFORMANCE WEAR CORPORATION
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


1.       BASIS OF PRESENTATION

         The accompanying  unaudited financial  statements have been prepared in
accordance with generally  accepted  accounting  principles in the United States
for  interim  financial  information  and with the  instructions  to Item 310 of
Regulation  S-B.  Accordingly,  they do not include all of the  information  and
footnotes  required by generally  accepted  accounting  principles in the United
States for complete financial statements.  The accompanying  unaudited financial
statements  reflect all  adjustments  that,  in the opinion of  management,  are
considered necessary for a fair presentation of the financial position,  results
of  operations,  and cash  flows  for the  periods  presented.  The  results  of
operations  for such  periods  are not  necessarily  indicative  of the  results
expected  for the full fiscal year or for any future  period.  The  accompanying
financial  statements  should be read in conjunction with the audited  financial
statements of Ironclad  Performance Wear Corporation,  a California  corporation
(the "Company"),  included with the Registrant's  Current Report on Form 8-K, as
amended, filed with the Securities and Exchange Commission on May 12, 2006.

         The  discussion and analysis of the Company's  financial  condition and
results of operations are based upon its financial  statements,  which have been
prepared in accordance  with  accounting  principles  generally  accepted in the
United  States.  The  preparation  of these  financial  statements  requires the
Company to make  estimates  and  judgments  that affect the reported  amounts of
assets, liabilities, revenues and expenses, and related disclosure of contingent
assets  and  liabilities.  On an  on-going  basis,  the  Company  evaluates  its
estimates,  including  those related to reserves for bad debts and those related
to the possible impairment of long-lived assets. The Company bases its estimates
on historical  experience and on various other  assumptions that are believed to
be reasonable under the  circumstances,  the results of which form the basis for
making judgments about the carrying value of assets and liabilities that are not
readily  apparent  from other  sources.  Actual  results  may differ  from these
estimates  under  different  assumptions  or  conditions.  The  Company's use of
estimates,  however,  is quite  limited,  as it has adequate time to process and
record actual results from operations.

         The Company was  incorporated  in Nevada on May 26, 2004 and engages in
the  business  of  design  and  manufacture  of  branded  performance  work wear
including task-specific gloves and apparel designed to significantly improve the
wearer's  ability to safely and  efficiently  perform general to highly specific
job functions.  Its customers are primarily specialty retailers,  "Big Box" home
centers and  hardware/industrial  distributors.  The Company  has  received  one
patent and has four  patents  pending for design and  technological  innovations
incorporated  in its performance  work gloves.  The Company has 35 registered US
trademarks,  10 registered international trademarks and 23 in-use US trademarks.
The Company  introduced its line of specialty work apparel in the fourth quarter
of 2005. The apparel is engineered to keep the wearer dry and cool under extreme
work conditions.


                                       4
<PAGE>


2.       REVERSE MERGER AND FINANCING

COMPLETION OF MERGER

         On April 20, 2006,  Ironclad  Performance  Wear  Corporation  (formerly
Europa Trade Agency Ltd.),  a Nevada  corporation  (the  "Company"),  along with
Ironclad Merger  Corporation.,  a Nevada  corporation  and the Company's  wholly
owned  subsidiary  ("Merger  Sub")  entered into an Agreement and Plan of Merger
(the "Merger Agreement") with Ironclad Performance Wear Corporation, a privately
held California corporation ("Ironclad California"),  pursuant to which Ironclad
California  would be  acquired by the  Company in a merger  transaction  wherein
Merger  Sub  would  merge  with  and into  Ironclad  California,  with  Ironclad
California being the surviving  corporation (the "Merger").  On May 9, 2006, the
Merger closed and Ironclad  California  became a wholly-owned  subsidiary of the
Company.  At the closing,  the Company changed its name to Ironclad  Performance
Wear Corporation.

         Accordingly,  from an historical  perspective,  Ironclad California was
deemed to have been the acquirer in the reverse  merger and Ironclad  California
is  deemed  the  survivor  of the  reorganization.  As a result,  the  financial
statements of the Company presented  reflect the historical  results of Ironclad
California  prior to the Merger,  and of the  combined  entities  following  the
merger,  and do not  include  the  historical  financial  results  of the entity
formerly known as Europa Trade Agency Ltd.  Common stock has been  retroactively
restated to reflect the number of shares received by Ironclad  California equity
holders in the Merger after giving effect to the  difference in par value,  with
the offset to additional paid-in capital. The equity of the Company survives the
reorganization.  Upon the closing of the reorganization, the Company changed its
fiscal year to December 31,  beginning with the quarter ended June 30, 2006. All
costs associated with the Merger were expensed as incurred.

PRINCIPAL TERMS OF THE MERGER

         On  May  9,  2006,  Merger  Sub  was  merged  with  and  into  Ironclad
California, the separate existence of Merger Sub ceased, and Ironclad California
continued as the surviving  corporation  at the  subsidiary  level.  The Company
issued shares of its common stock pursuant to certain  exchange ratios set forth
in the Merger Agreement to the  stockholders of Ironclad  California in exchange
for 100% of the  issued  and  outstanding  shares  of common  stock of  Ironclad
California.  Additionally,  the Company  assumed  options to purchase  shares of
common stock and  warrants to purchase  shares of common stock on the same terms
and conditions as previously issued by Ironclad California.

         Immediately  prior to the Merger the Company canceled  2,000,000 shares
of its common stock held by our former sole officer and  director,  Thomas Lamb,
and one of its former principal  stockholders Craig Lamb, pursuant to an Amended
and Restated Share  Cancellation  Agreement  dated May 8, 2006.  Thomas Lamb and
Craig Lamb received cash  remuneration  of $349,413 from third party  purchasers
for their agreement to cancel such shares.  At the time of the payment and share
cancellation  the third  party  purchasers  were also  party to an  Amended  and
Restated Share Purchase and Escrow Agreement,  dated May 9, 2006 with holders of
approximately  90% of our common  stock.  The  holders of such shares of Company
common stock received $765,938 in consideration for the transfer of their shares
to the third party purchasers.

         Immediately  after the  consummation of the  cancellation  and purchase
transaction,  but prior to the  Merger,  the Company  effected a  3.454895-for-1
forward  stock split of its common stock and  increased  the number of shares of
authorized common stock to 172,744,750.


                                       5
<PAGE>


         Immediately  after the closing of the Merger,  and without  taking into
consideration  the Private Placement  offering  described below, the Company had
outstanding  19,858,404  shares of common stock,  options to purchase  2,588,314
shares of common  stock and  warrants  to  purchase  2,817,416  shares of common
stock.

THE PRIVATE PLACEMENT

         Immediately  following the closing of the Merger,  the Company received
gross proceeds of approximately $7.3 million in a private placement  transaction
(the "Private Placement") with institutional  investors and other high net worth
individuals ("Investors"). Pursuant to Subscription Agreements entered into with
these  Investors,  the Company sold  9,761,558  Investment  Units,  at $0.75 per
Investment Unit. Each "Investment  Unit" consists of one share of Company common
stock, and a five year  non-callable  warrant to purchase  three-quarters of one
share of Company  common  stock,  at an exercise  price of $1.00 per share.  The
value of the warrants was  determined to be $5,278,388  using the  Black-Scholes
option  pricing  model with the  following  assumptions:  a  volatility  rate of
185.5%,  risk free  interest  rate of 5.13%,  an expected life of five years and
zero  dividends.  They have been  recorded as a warrant  liability in accordance
with SFAS No. 133 and EITF 00-19.

         As partial  consideration  for services rendered further to the Private
Placement, one of the Company's placement agents was issued warrants to purchase
390,464  shares of Company  common stock at an exercise price of $0.75 per share
and warrants to purchase  292,848  shares of Company common stock at an exercise
price of $1.00  per  share.  The  value of the  warrants  was  determined  to be
$494,182  using  the  Black-Scholes  option  pricing  model  with the  following
assumptions:  a volatility rate of 185.5%,  risk free interest rate of 5.13%, an
expected  life of five years and zero  dividends.  They have been  recorded as a
warrant liability in accordance with SFAS No. 133 and EITF 00-19.

3.       ACCOUNTING POLICIES

REVENUE RECOGNITION

         A  customer  is  obligated  to pay for  products  sold to it  within  a
specified number of days from the date that title to the products is transferred
to the customer. The Company's standard terms are typically net 30 days from the
transfer  of  title to the  products  to the  customer.  The  Company  typically
collects payment from a customer within 30 to 45 days from the transfer of title
to the  products to a customer.  Transfer of title  occurs and risk of ownership
passes to a customer at the time of shipment or delivery, depending on the terms
of the  agreement  with a particular  customer.  The sale price of the Company's
products is  substantially  fixed or  determinable  at the date of sale based on
purchase  orders  generated  by a  customer  and  accepted  by  the  Company.  A
customer's  obligation  to  pay  the  Company  for  products  sold  to it is not
contingent upon the resale of those products.  The Company  recognizes  revenues
when products are delivered to customers.

RETURNS POLICY

         The Company has a warranty  policy that covers defects in  workmanship.
The Company also periodically  accepts stock adjustments from certain customers.
Stock  adjustment  returns are  typically  for new  customers  who are given the
opportunity  to `trade  out' of a style of  product  that does not sell in their
territory,  usually in exchange  for  another  product.  Historically,  warranty
returns  have  averaged 1% a year and stock  adjustment  returns  have  averaged
approximately  0.5% of gross  sales.  The Company  records an estimate for these
returns at the time of sale.


                                       6
<PAGE>


RESERVE FOR WARRANTY RETURNS

Reserve Balance 12/31/05 ........................................      $ 38,000
Payments Recorded During the Period .............................       (28,149)
                                                                       --------
                                                                          9,851
Adjustment to Reserve for Pre-existing Liabilities ..............         3,500
Accrual for New Liabilities During the Reporting Period .........        28,149
                                                                       --------

Reserve Balance 3/31/06 .........................................        41,500
Payments Recorded During the Period .............................       (12,190)
                                                                       --------
                                                                         29,310
Adjustment to Reserve for Pre-existing Liabilities ..............         4,500
Accrual for New Liabilities During the Reporting Period .........        12,190
                                                                       --------

Reserve Balance 6/30/06 .........................................        46,000
Payments Recorded During the Period .............................       (22,691)

Adjustment to Reserve for Pre-existing Liabilities ..............        25,000
Accrual for New Liabilities During the Reporting Period .........        22,691
                                                                       --------

Reserve Balance 9/30/06 .........................................      $ 71,000
                                                                       ========

CUSTOMER CONCENTRATIONS

         One customer accounted for approximately 25% of net sales for the three
months  ended   September  30,  2006  and  the  same   customer   accounted  for
approximately 15% of net sales for the nine months ended September 30, 2006. Two
customers  accounted  for  approximately  27% of net sales for the three  months
ended September 30, 2005 and the no customer  accounted for more than 10% of net
sales for the nine months ended September 30, 2005.

SUPPLIER CONCENTRATIONS

         One supplier,  which is located  overseas,  accounted for approximately
72% of total purchases  during the three months ended September 30, 2006 and 74%
of total  purchases  during the nine months ended  September 30, 2006.  The same
supplier  accounted  for 82% of total  purchases  during the three  months ended
September 30, 2005 and 82% during the nine months ended September 30, 2005.


LOSS PER SHARE

         The Company utilizes SFAS No. 128, "Earnings per Share." Basic loss per
share is computed by  dividing  loss  available  to common  shareholders  by the
weighted-average number of common shares outstanding.  Diluted loss per share is
computed  similar  to basic  loss per  share  except  that  the  denominator  is
increased to include the number of additional common shares that would have been
outstanding if the potential common shares had been issued and if the additional
common  shares were  dilutive.  Common  equivalent  shares are excluded from the
computation if their effect is anti-dilutive.


                                       7
<PAGE>


         The  following  potential  common  shares have been  excluded  from the
computation of diluted net loss per share for the periods  presented because the
effect would have been anti-dilutive:



                                              Three and Nine Months
                                               Ended September 30,
                                             -----------------------
                                                2006          2005
                                             ----------    ---------
            Options outstanding under the
               Company's stock option plan    5,093,134    2,584,000
            Common Stock Warrants ........   10,454,510      749,079


INCOME TAXES

         Income  taxes are  provided  for the tax  effects  of the  transactions
reported in the  financial  statements  and consist of taxes  currently due plus
deferred  taxes  related  primarily to the  difference  between the basis of the
allowance for doubtful  accounts,  accumulated  depreciation  and  amortization,
accrued  payroll and net operating loss  carryforwards  for financial and income
tax reporting.  The deferred tax assets and liabilities represent the future tax
return  consequences  of those  differences,  which  will  either be  taxable or
deductible when the assets and liabilities are recovered or settled.

         Deferred tax assets and  liabilities  are reflected at income tax rates
applicable  to the period in which the  deferred tax assets or  liabilities  are
expected to be realized or settled. As changes in tax laws or rates are enacted,
deferred tax assets and  liabilities  are  adjusted  through the  provision  for
income  taxes.  If it is more  likely  than not that  some  portion  or all of a
deferred tax asset will not be realized, a valuation allowance is recognized.

         The  significant  components  of the provision for income taxes for the
nine months ended September 30, 2006 and 2005 were $800 and $(24), respectively,
for the current  state  provision.  There was no state  deferred and federal tax
provision.  Due to its current  net loss  position,  the Company has  provided a
valuation  allowance in full on its net deferred tax assets in  accordance  with
SFAS 109 and in light of the uncertainty  regarding ultimate  realization of the
net deferred tax assets.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

         In February 2006, the FASB issued SFAS No. 155, "Accounting for Certain
Hybrid  Financial  Instruments",  which  amends  SFAS No. 133,  "Accounting  for
Derivatives  Instruments and Hedging  Activities" and SFAS No. 140,  "Accounting
for  Transfers  and  Servicing  of  Financial  Assets  and   Extinguishment   of
Liabilities". SFAS No. 155 amends SFAS No. 133 to narrow the scope exception for
interest-only and principal-only strips on debt instruments to include only such
strips  representing  rights to receive a specified  portion of the  contractual
interest or principle cash flows. SFAS No. 155 also amends SFAS No. 140 to allow
qualifying  special-purpose  entities  to hold a  passive  derivative  financial
instrument  pertaining  to  beneficial  interests  that  itself is a  derivative
instrument.  Management  does not  expect  adoption  of SFAS  No.  155 to have a
material impact on our financial statements.


                                       8
<PAGE>


         In March 2006, the FASB issued SFAS No. 156,  "Accounting for Servicing
of Financial  Assets"  ("SFAS NO. 156"),  which provides an approach to simplify
efforts to obtain  hedge-like  (offset)  accounting.  This Statement amends FASB
Statement No. 140,  "Accounting for Transfers and Servicing of Financial  Assets
and  Extinguishments  of  Liabilities",  with  respect  to  the  accounting  for
separately recognized servicing assets and servicing liabilities.  The Statement
(1)  requires an entity to recognize a servicing  asset or  servicing  liability
each time it undertakes  an obligation to service a financial  asset by entering
into a servicing contract in certain situations;  (2) requires that a separately
recognized  servicing asset or servicing liability be initially measured at fair
value, if practicable;  (3) permits an entity to choose either the  amortization
method or the fair value  method for  subsequent  measurement  for each class of
separately recognized servicing assets or servicing liabilities;  (4) permits at
initial adoption a one-time reclassification of available-for-sale securities to
trading securities by an entity with recognized  servicing rights,  provided the
securities  reclassified  offset the  entity's  exposure  to changes in the fair
value  of the  servicing  assets  or  liabilities;  and  (5)  requires  separate
presentation of servicing assets and servicing liabilities subsequently measured
at fair value in the balance sheet and additional disclosures for all separately
recognized servicing assets and servicing liabilities. SFAS No. 156 is effective
for  all  separately  recognized  servicing  assets  and  liabilities  as of the
beginning of an entity's  fiscal year that begins after September 15, 2006, with
earlier  adoption  permitted  in  certain  circumstances.   The  Statement  also
describes the manner in which it should be initially  applied.  Management  does
not expect  adoption of SFAS No. 156 to have a material  impact on our financial
statements.

         In July 2006, the FASB released FASB  Interpretation No. 48, ACCOUNTING
FOR  UNCERTAINTY IN INCOME TAXES,  AN  INTERPRETATION  OF FASB STATEMENT NO. 109
(FIN 48). FIN 48 clarifies the  accounting  and reporting for  uncertainties  in
income tax law. This  Interpretation  prescribes a  comprehensive  model for the
financial  statement  recognition,  measurement,  presentation and disclosure of
uncertain  tax  positions  taken or expected to be taken in income tax  returns.
This statement is effective for fiscal years  beginning after December 15, 2006.
We are currently in the process of evaluating  the expected  effect of FIN 48 on
our results of operations and financial position.

         In  September   2006,  the  FASB  issued  SFAS  No.  157,  "Fair  Value
Measurements"  ("SFAS  No.  157"),  which  defines  fair  value,  establishes  a
framework for measuring fair value in generally accepted accounting  principles,
and expands  disclosures about fair value  measurements.  This Statement applies
under  other  accounting  pronouncements  that  require  or  permit  fair  value
measurements.  SFAS No. 157 is effective  for  financial  statements  issued for
fiscal years beginning after November 15, 2007, and interim periods within those
fiscal years.  Management will evaluate the effect of this statement, if any, on
its financial statements.

         In October 2006, the FASB issued SFAS No. 158,  "Employers'  Accounting
for Defined Benefit Pension and Other  Postretirement Plans an amendment of FASB
Statements No. 87, 88, 106, and 132(R)." This Statement  requires an employer to
recognize  the   overfunded  or   underfunded   status  of  a  defined   benefit
postretirement  plan (other than a multiemployer  plan) as an asset or liability
in its statement of financial  position and to recognize  changes in that funded
status in the year in which the changes occur through  comprehensive income of a
business  entity or  changes  in  unrestricted  net  assets of a  not-for-profit
organization.  This  Statement  also  requires an employer to measure the funded
status of a plan as of the date of its year-end statement of financial position,
with limited exceptions.  This Statement amends Statement 87, FASB STATEMENT NO.
88,  "Employers'  Accounting for Settlements and Curtailments of Defined Benefit
Pension Plans and for Termination  Benefits",  Statement 106, and FASB STATEMENT
NO.  132  (revised  2003),  "Employers'  Disclosures  about  Pensions  and Other
Postretirement Benefits", and other related accounting literature.  Upon initial
application of this Statement and  subsequently,  an employer should continue to
apply the  provisions in Statements 87, 88, and 106 in measuring plan assets and
benefit obligations as of the date of its statement of financial position and in


                                       9
<PAGE>


determining  the amount of net periodic  benefit cost. An employer with publicly
traded equity securities is required to initially recognize the funded status of
a defined benefit postretirement plan and to provide the required disclosures as
of the end of the fiscal  year  ending  after  December  15,  2006.  An employer
without  publicly  traded equity  securities is required to recognize the funded
status of a defined  benefit  postretirement  plan and to provide  the  required
disclosures  as of the end of the fiscal year ending after June 15,  2007.  This
statement is not applicable to us.

USE OF ESTIMATES

         The preparation of financial  statements  requires management to make a
number of  estimates  and  assumptions  relating to the  reporting of assets and
liabilities  and the  disclosure of contingent  assets and  liabilities.  Actual
results could differ from those estimates. Significant estimates and assumptions
made by management  are used for, but not limited to, the allowance for doubtful
accounts, inventory obsolescence, allowance for returns and the estimated useful
lives of long-lived assets.

VALUATION OF DERIVATIVE INSTRUMENTS

         SFAS  No.  133  "Accounting  for  Derivative  Instruments  and  Hedging
Activities"  requires that embedded  derivative  instruments  be bifurcated  and
assessed,  along with free-standing  derivative instruments such as warrants, on
their  issuance date in accordance  with EITF 00-19  "Accounting  for Derivative
Financial  Instruments  Indexed to, and Potentially  Settled in, a Company's Own
Stock" to determine whether they should be considered a derivative liability and
measured  at their  fair  value for  accounting  purposes.  In  determining  the
appropriate fair value, the Company uses the Black-Scholes-Merton Option Pricing
Formula (the "Black Scholes Model").  At each period end, or when  circumstances
indicate  that  the  Company   reevaluate  the  accounting  for  the  derivative
liability, derivative liabilities are adjusted to reflect changes in fair value,
with any  increase or  decrease  in the fair value being  recorded in results of
operations as Adjustments to Fair Value of Derivatives.

4.       INVENTORY

         At  September  30, 2006 the Company had two classes of  inventory - raw
materials and finished goods.

                                                            September 30,
                                                                2006
                                                             ----------

         Raw Materials ...........................           $  309,291
         Finished Goods ..........................            2,630,943
                                                             ----------
         Total ...................................           $2,940,234
                                                             ==========


5.       NOTE PAYABLE AND BANK LINES OF CREDIT

NOTES PAYABLE

         In October 2005, the Company obtained short term financing from Westrec
Capital  Partners,  LLC. The amount of the note was $500,000.  It matured at the
earlier of 180 days or when the Company  received an aggregate of $550,000  from
the sale of equity  securities.  The Company  received a 30-day extension of the
maturity  date to May 20,  2006.  On May 9,  2006,  the  Registrant  closed on a
private  placement  financing of $7,321,191  of common stock.  Proceeds from the
Private Placement were used to retire the Note. The loan agreement also required
the  issuance of a warrant to purchase  400,000  shares of common stock at $0.56


                                       10
<PAGE>


per  share.  Westrec  Capital  Partners,  LLC also  agreed to extend  its bridge
financing  loan to the  Company  for up to thirty (30) days under the same terms
and  conditions  in exchange for a warrant for 100,000  shares of the  Company's
common stock, exercisable at $1.00 per share.

         The value of the 400,000  warrants was  determined to be $291,368 using
the Black-Scholes Option Pricing Model with the following assumptions: risk-free
interest rate of 5.13%,  volatility  factor of 185.5%,  five-year  life and zero
dividends. They have been recorded as equity in accordance with SFAS No. 133 and
EITF 00-19. The value of the 100,000 warrants was determined to be $72,097 using
the Black-Scholes Option Pricing Model with the following assumptions: risk-free
interest rate of 5.13%,  volatility  factor of 185.5%,  five-year  life and zero
dividends.  They have been recorded as a warrant  liability in  accordance  with
SFAS No. 133 and EITF 00-19.

BANK LINES OF CREDIT

         In March 2005 the Company renewed its senior secured loan facility with
a third party bank.  This  agreement was scheduled to mature on May 30, 2006. On
May  9,  2006,  the  Registrant  closed  on a  private  placement  financing  of
$7,321,191 of common stock.  Proceeds  from the Private  Placement  were used to
repay the balance outstanding on the loan facility.

FACTORING AGREEMENT

         On September  15, 2006 the Company  entered into a factoring  agreement
with Wells  Fargo  Century,  Inc.  whereby it assigned  certain of its  accounts
receivables  with full recourse.  This factoring  facility allows the Company to
borrow 85% against eligible accounts  receivable,  up to $3,000,000.  All of the
Company's  assets secure  amounts  borrowed  under the terms of this  agreement.
Interest on outstanding  balances  accrues at the prime rate announced from time
to time by Wells  Fargo Bank N.A.  (or such other bank as Wells  Fargo  Century,
Inc. shall select in its  discretion) as its "prime" or base rate for commercial
loans and the agreement has an initial term of twenty-four (24) months.

6.       EQUITY TRANSACTIONS

COMMON STOCK

         During  the three  months  ended  March  31,  2006 the  Company  issued
investment  units  consisting  of 676,667  shares of common  stock and rights to
receive  warrants to purchase  1,568,334 shares of common stock upon the closing
of the Merger for an aggregate cash price of $507,500  (unaudited) pursuant to a
subscription  based sale at $0.75 per unit.  The  warrants  were issued upon the
closing of the Merger on May 9, 2006 at an aggregate exercise price of $0.75 per
share.  The value of the  1,568,334  warrants  so issued  was  determined  to be
$1,136,884  using the  Black-Scholes  Option  Pricing  Model with the  following
assumptions:  risk-free  interest  rate of 5.13%,  volatility  factor of 185.5%,
five-year  life and zero  dividends.  They  have  been  recorded  as  equity  in
accordance with SFAS No. 133 and EITF 00-19.

         On April 30, 2006 the Company issued 14,346 shares of common stock to a
consultant  in exchange for services.  The services were valued at $10,000,  and
were valued at a pre-merger expected valuation of $0.32 per common share. In May
2006 the Company employed this consultant as its Chief Financial Officer.

         Immediately  after the  consummation of the  cancellation  and purchase
transaction  in  connection  with the  Merger  of  Ironclad  California  and the
Company, a 3.455895-for-1  forward stock split of common stock was completed and
increased  the  number of  authorized  shares of  common  stock to  172,744,750.


                                       11
<PAGE>


Immediately after the closing of the Merger on May 9, 2006,  without taking into
account the private placement completed concurrently with the Merger, there were
19,858,404 outstanding shares of common stock.

         Following  the  closing  of the merger  with  Ironclad  California,  we
received gross  proceeds of  approximately  $7.3 million in a private  placement
transaction with  institutional  investors and other high net worth individuals.
Pursuant to our subscription  agreements with these investors, we sold 9,761,558
investment units, at $0.75 per investment unit. Each investment unit consists of
one share of our common stock, and a five year non-callable  warrant to purchase
three-quarters  of one share of our common stock,  at an exercise price of $1.00
per  share.  After  commissions  and  expenses,  we  received  net  proceeds  of
approximately $6.1 million in the private placement.

         On September 5, 2006 the Company  issued 357,772 shares of common stock
upon the exercise of two warrants at an exercise price of $0.185.

         On completion of the Merger on May 9, 2006,  and at September 30, 2006,
there were outstanding 29,619,992 shares and 29,977,764 shares, respectively, of
Common Stock of the Registrant.

WARRANT ACTIVITY

         A summary of warrant activity is as follows:

                                                                      Weighted
                                                                      Average
                                                       Number of      Exercise
                                                        Shares          Price
                                                      -----------    -----------
Warrants outstanding at December 31, 2005 .........       749,079    $      0.23
Warrants expired ..................................        (4,448)   $      0.67
                                                      -----------    -----------
Warrants outstanding at March 31, 2006 ............       744,631    $      0.23
Warrants issued ...................................    10,072,840    $      0.93
Warrants expired ..................................        (5,190)   $      0.67
                                                      -----------    -----------
Warrants outstanding at June 30, 2006 .............    10,812,281    $      0.89
                                                      -----------    -----------
Warrants exercised ................................      (357,772)   $      0.19
                                                      -----------    -----------
Warrants outstanding at September 30, 2006 ........    10,454,509    $      0.91


STOCK BASED COMPENSATION

         Effective with the Company's  current fiscal year that began on January
1, 2006, the Company has adopted the  accounting  and  disclosure  provisions of
Statement of Financial  Accounting  Standards ("SFAS") No. 123(R),  "SHARE-BASED
PAYMENTS" using the modified prospective application transition method.

         For fiscal years prior to January 1, 2006,  the Company  accounted  for
the  Plan  under  the  recognition  and  measurement  principles  of  Accounting
Principles Board Opinion No. 25, "ACCOUNTING FOR STOCK ISSUED TO EMPLOYEES," and
related  interpretations.  The Company had adopted the  disclosure  provision of
Statement of Financial  Accounting  Standards ("SFAS") No. 123,  "ACCOUNTING FOR
STOCK-BASED   COMPANSATION,"  as  amended  by  SFAS  No.  148,  "ACCOUNTING  FOR
STOCK-BASED  COMPENSATION-TRANSITION  AND  DISCLOSURE,"  an  amendment  of  FASB
Statement  No. 123. The  following  table  illustrates  the effect on net income
(loss) and income  (loss) per share if the  Company  had  applied the fair value


                                       12
<PAGE>


recognition  provision of SFAS No. 123 to stock-based employee  compensation for
the three and nine months ended September 30, 2005:

                                                    Nine Months    Three Months
                                                       Ended           Ended
                                                   September 30,   September 30,
                                                       2005            2005
                                                   ------------    ------------
Net loss as reported ...........................   $   (568,455)   $   (245,594)
Less:  Total stock-based employee
     compensation expense determined
     under Black-Scholes option pricing
     model, net of tax effects .................         88,641          49,079
                                                   ------------    ------------
PRO FORMA NET LOSS .............................   $   (657,096)   $   (297,673)
                                                   ============    ============

Net loss per share - as reported
     Basic and diluted .........................   $      (0.04)   $      (0.02)
                                                   ============    ============
Net loss per share - pro forma
     Basic and diluted .........................   $      (0.04)   $      (0.02)
                                                   ============    ============

         Ironclad  California  reserved 7,000,000 shares of its common stock for
issuance to employees,  directors and consultants under the 2000 Stock Incentive
Plan, which the Company assumed in the Merger ("the 2000 Plan").  Under the 2000
Plan,  options may be granted at prices not less than the fair  market  value of
the Company's common stock at the grant date.  Options generally have a ten-year
term and shall be exercisable as determined by the Board of Directors.

         Effective May 18, 2006, the Company  reserved  4,250,000  shares of its
common stock for issuance to employees, directors and consultants under its 2006
Stock  Incentive  Plan (the "2006  Plan").  Under the 2006 Plan,  options may be
granted at prices not less than the fair market  value of the  Company's  common
stock at the grant date.  Options  generally  have a ten-year  term and shall be
exercisable as determined by the Board of Directors.

         The fair value of each stock  option  granted  under either the 2000 or
2006 Plan is estimated on the date of the grant using the  Black-Scholes  option
pricing  model and factors in an estimated  forfeiture  rate based on management
assessment of historical  employee  termination  experience.  The  Black-Scholes
option pricing model has assumptions  for risk free interest  rates,  dividends,
stock  volatility  and expected life of an option grant.  The risk free interest
rate is based the U.S.  Treasury Bill rate with a maturity based on the expected
life of the options and on the closest day to an individual  stock option grant.
Dividend rates are based on the Company's dividend history. The stock volatility
factor is based on historical  market prices of the Company's  common stock. The
expected  life of an option grant is based on  management's  estimate.  The fair
value of each  option  grant is  recognized  as  compensation  expense  over the
vesting period of the option on a straight line basis.

         For stock options issued during the nine month periods ended  September
30, 2005 and 2006,  the fair value of these options was estimated at the date of
the grant using a Black-Scholes option pricing model with the following range of
assumptions:


                                       13
<PAGE>


                                    SEPTEMBER 30, 2005        SEPTEMBER 30, 2006
                                    ------------------        ------------------
Risk free interest rate ........           4.2%                 4.97% - 5.25%
Dividends ......................             -                        -
Volatility factor ..............        146% - 177%              170% - 185%
Expected life ..................          4 years                  4 years

A summary of stock option activity is as follows:

                                                               WEIGHTED AVERAGE
                                         NUMBER OF SHARES       EXERCISE PRICE
                                         ----------------      ----------------
Outstanding, December 31, 2005 .......      2,584,000                $0.35
Outstanding, March 31, 2006 ..........      2,584,000                $0.35
Granted ..............................      2,511,134                $0.88
Exercised ............................          -                      -
Cancelled/Expired ....................          -                      -
Outstanding June 30, 2006 ............      5,095,134                $0.64
Cancelled/Expired ....................          2,000                $1.05
Outstanding at September 30, 2006 ....      5,093,134                $0.64
Exercisable at September 30, 2006 ....      2,241,914                $0.40



The following tables summarize  information  about stock options  outstanding at
September 30, 2006:

<TABLE>
<CAPTION>
                                                   WEIGHTED AVERAGE
                                                      REMAINING
                                                     CONTRACTUAL         WEIGHTED AVERAGE        INTRINSIC VALUE
RANGE OF EXERCISE PRICE    NUMBER OUTSTANDING        LIFE (YEARS)         EXERCISE PRICE        OUTSTANDING SHARES
-----------------------    -----------------        ------------          --------------        ------------------
<S>                            <C>                      <C>                    <C>                  <C>
     $0.19 - $0.35             2,584,000                7.31                   $0.35                1,720,650
     $0.75 - $1.05             2,511,134                9.63                   $0.95                 132,584
</TABLE>

The following tables summarize  information  about stock options  exercisable at
September 30, 2006:

<TABLE>
<CAPTION>
                                                   WEIGHTED AVERAGE
                                                      REMAINING
                                                     CONTRACTUAL         WEIGHTED AVERAGE        INTRINSIC VALUE
RANGE OF EXERCISE PRICE    NUMBER EXERCISABLE        LIFE (YEARS)         EXERCISE PRICE        OUTSTANDING SHARES
-----------------------    -----------------        ------------          --------------        ------------------
<S>                            <C>                      <C>                    <C>                  <C>
     $0.19 - $0.35             1,915,979                7.03                   $0.34                1,347,824
     $0.75 - $1.05              143,651                 9.64                   $1.05                    --
</TABLE>

         The Company  recorded  $27,408,  $218,404 and $186,047 of  compensation
expense for employee  stock  options  during the three  months  ending March 31,
2006,  the  three  months  ending  June 30,  2006 and the  three  months  ending
September  30,  2006,  respectively.  These  compensation  expense  charges were
recorded  in  the   following   operating   expense   categories,   general  and
administrative  -  $356,149;  sales  and  marketing  -  $55,759;   research  and
development - $9,829;  and operations - $10,122.  There was a total of $198,982,
$2,184,169  and  $1,998,822  of  unrecognized   compensation  costs  related  to
non-vested share-based  compensation  arrangements under the Plan outstanding at
March 31, 2006, June 30, 2006 and September 30, 2006, respectively. This cost is
expected to be recognized over a weighted average period of 3.5 years. The total
fair value of shares  vested  during the nine month period ended  September  30,
2006 was $288,172.


                                       14
<PAGE>


7.       LEGAL PROCEEDINGS

CLAIM

          On September 12, 2006,  American Sports Group, Inc.  ("ASG"),  filed a
lawsuit  against  the  Company,   including  Ironclad  California,  and  certain
individuals,  in the Superior Court of the State of California for the County of
Los Angeles.  ASG alleges that in 2002, Ironclad California agreed to issue, and
did, in fact,  issue to ASG a warrant to purchase  1,200,000  shares of Ironclad
California  common stock at $0.05 per share and a warrant to purchase  1,083,333
shares of Ironclad  California  common stock at $0.06 per share.  ASG is seeking
declaratory relief in the form of a determination as to validity of the warrants
and its rights to exchange such warrants for warrants to purchase  shares of the
Company's  common  stock  pursuant  to the terms of the  Merger  Agreement  with
Ironclad California. In the alternative,  ASG is seeking specific performance of
the alleged  agreement  to issue the  warrants,  and the issuance of warrants to
purchase  517,746 shares of the Company's common stock at $0.1157 per share, and
476,410 shares of common stock at a price of $0.1388 per share,  which represent
the number of warrants and exercise  prices for which these  warrants would have
been exchanged pursuant to the Merger Agreement.

          According to the Company's records, the transactions pursuant to which
the warrants were intended to be issued were never consummated, and the warrants
were never issued. Any purported  warrants that plaintiff  possesses were issued
without authorization, and therefore, are invalid and unenforceable. The Company
believes  ASG's claims are without  merit and the Company  intends to vigorously
defend against these claims.

          To the extent ASG is  successful in its claim,  the Company  agreed to
cause the issuance of additional shares of the Registrant's common stock to each
of the  investors in the private  placement  financing  that  occurred on May 9,
2006,  and to  each  of  the  holders  of the  Registrant's  shares  issued  and
outstanding  immediately  prior to the Merger,  on a pro rata  basis,  in such a
manner and in such  amounts as would be  necessary  to adjust  their  respective
ownership  of the  Registrant's  common  stock as of the  closing of the Private
Placement  financing  and Merger for any dilution  caused by the issuance of the
warrants or any shares thereunder.

8.       SUBSEQUENT EVENT

REGISTRATION STATEMENT

         On October  2, 2006 the  registration  statement  we filed in June 2006
became  effective,  and up to 27,117,720  shares of common stock became eligible
for sale,  subject  to the terms of  certain  lock-up  agreements  with  certain
holders of such shares.


                                       15
<PAGE>


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

         THIS  DISCUSSION  SUMMARIZES  THE  SIGNIFICANT  FACTORS  AFFECTING  THE
OPERATING  RESULTS,  FINANCIAL  CONDITION  AND  LIQUIDITY  AND CASH FLOWS OF THE
COMPANY FOR THE THREE AND NINE MONTHS  ENDED  SEPTEMBER  30, 2006 AND 2005.  THE
FOLLOWING DISCUSSION OF OUR RESULTS OF OPERATIONS AND FINANCIAL CONDITION SHOULD
BE READ TOGETHER WITH THE  CONSOLIDATED  FINANCIAL  STATEMENTS  AND THE NOTES TO
THOSE  STATEMENTS  INCLUDED  ELSEWHERE  IN THIS  REPORT.  EXCEPT FOR  HISTORICAL
INFORMATION,  THE MATTERS DISCUSSED IN THIS MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL  CONDITION AND RESULTS OF OPERATIONS ARE FORWARD LOOKING STATEMENTS
THAT INVOLVE RISKS AND  UNCERTAINTIES  AND ARE BASED UPON  JUDGMENTS  CONCERNING
VARIOUS  FACTORS THAT ARE BEYOND OUR CONTROL.  OUR ACTUAL  RESULTS  COULD DIFFER
MATERIALLY FROM THE RESULTS ANTICIPATED IN ANY  FORWARD-LOOKING  STATEMENTS AS A
RESULT OF A VARIETY OF FACTORS, INCLUDING THOSE DISCUSSED IN "--RISK FACTORS."

OVERVIEW

         We are a leading  designer  and  manufacturer  of  branded  performance
workwear.  Founded  in  1998,  we  have  grown  and  leveraged  our  proprietary
technologies  to produce  job-specific  gloves and apparel  that are designed to
significantly  improve the wearer's  ability to safely and  efficiently  perform
general to highly specific job functions.  We have built and continue to augment
our reputation among  professionals  in the construction and industrial  service
industries  with products  specifically  designed for  individual  tasks or task
types.  Utilizing our brand equity, we are currently  expanding our product line
into specialty  apparel (e.g. long and short sleeved shirts,  pants and jackets)
also designed to enhance the wearer's comfort and  performance.  We believe that
our  dedication  to quality  and  durability  and focus on our client  needs has
created a high  level of brand  loyalty  and has  solidified  substantial  brand
equity.

         We  plan  to  increase  our  domestic   revenues  by   leveraging   our
relationships  with existing retail customers,  expanding into Big Box retailers
and increasing our product offerings in new and existing locations. Although the
addition of retail  locations by our largest  customers does not always directly
correlate to an increase in our net sales, as our products may not be carried in
every such additional  location,  we believe our growth has been  facilitated by
our largest retail customers opening additional locations since our inception.

         We believe that our products will have  international  appeal. In 2005,
we began selling products in Australia through an independent distributor, which
accounted  for less  than 5% of  total  sales.  We plan to  increase  net  sales
internationally by expanding our distribution into European countries during the
fiscal year ending December 31, 2007.

         Our  historical   operations  before  May  9,  2006  reflect  only  the
operations of Ironclad  Performance Wear Corporation,  a California  corporation
(or "Ironclad California").  Before May 9, 2006, we existed as a "shell company"
with  nominal  assets  whose  sole  business  was  to  identify,   evaluate  and
investigate various companies to acquire or with which to merge. On May 9, 2006,
we  consummated a merger  transaction  in which we acquired all of the shares of
Ironclad California (the "Merger").  Concurrently with the closing of the merger
we  completed  a private  placement  financing  and certain  other  transactions
related to the merger.  Upon completion of the merger and the private  placement
financing,  Ironclad  California  became our  wholly-owned  subsidiary,  and the
former  stockholders  of Ironclad  California  and the  investors in the private
placement  financing  received in the aggregate  26,130,548 shares of our common
stock,  or  approximately  88% of our  issued and  outstanding  shares of common
stock.  Ironclad  California  was formed and commenced its business in 1998. Our
merger with  Ironclad  California  was  accounted  for as a reverse  merger with
Ironclad  California  deemed  to be the  accounting  acquirer,  and us the legal
acquirer.


                                       16
<PAGE>


GENERAL

         Net sales are comprised of gross sales less returns and cash discounts.
Our operating results are seasonal, with a greater percentage of net sales being
earned in the third and fourth  quarters  of our fiscal year due to the fall and
winter selling seasons.

         Cost of goods sold consists primarily of product costs, inbound freight
and  duty  costs,  handling  costs  to make  products  floor-ready  to  customer
specifications and a reserve for inventory obsolescence.

         Our  operating   expenses   consist   primarily  of  marketing   costs,
non-marketing payroll and related costs, corporate  infrastructure costs and our
distribution facility costs. We expect that our operating expenses will decrease
as a percentage  of net sales if we are able to increase  our net sales  through
expansion  and growth.  We expect this  reduction  in  operating  expenses to be
offset by  investment  in sales and  marketing  to  achieve  brand  growth,  the
development  of new product  lines,  and the  increased  costs of operating as a
public company.

         Historically,  we have  funded  our  working  capital  needs  primarily
through our existing  asset-based  credit facility along with subordinated debt.
In 2005,  we completed an equity  financing,  the proceeds of which were used to
extinguish  certain  subordinated  debt.  In 2006 we have  completed  two equity
financing transactions. A portion of the proceeds of the second equity financing
transaction  was used to  extinguish  certain  debt.  On September  15, 2006 the
Company entered into a factoring  agreement  whereby it assigned  certain of its
accounts  receivables  with full recourse.  This facility  allows the Company to
borrow 85% against eligible accounts receivable, up to $3,000,000. This facility
had an outstanding balance of $821,205 at September 30, 2006.

     CRITICAL ACCOUNTING POLICIES AND ESTIMATES

         Our Management's Discussion and Analysis of Financial Condition of Plan
of  Operations  section  discusses  our  financial  statements,  which have been
prepared in accordance  with  accounting  principles  generally  accepted in the
United States. To prepare these financial statements, we must make estimates and
assumptions that affect the reported  amounts of assets and  liabilities.  These
estimates also affect our reported  revenues and expenses.  On an ongoing basis,
Management  evaluates its estimates  and  judgment,  including  those related to
revenue  recognition,  accrued expenses,  financing operations and contingencies
and  litigation.  Management  bases its  estimates  and  judgment on  historical
experience and on various other factors that are believed to be reasonable under
the  circumstances,  the  results of which  form the basis for making  judgments
about the carrying value of assets and liabilities that are not readily apparent
from other  sources.  Actual  results  may differ  from  these  estimates  under
different  assumptions or conditions.  The following represents a summary of our
critical accounting policies,  defined as those policies that we believe are the
most  important  to the  portrayal  of our  financial  condition  and results of
operations and that require  management's most difficult,  subjective or complex
judgments,  often as a result of the need to make estimates about the effects of
matters that are inherently uncertain.

     REVENUE RECOGNITION

         Under our sales  model,  a customer is obligated to pay us for products
sold to it within a  specified  number  of days from the date that  title to the
products is transferred to the customer. Our standard terms are typically net 30
days from the  transfer of title to the  products to a  customer.  We  typically
collect  payment from a customer within 30 to 45 days from the transfer of title
to the  products to a customer.  Transfer of title  occurs and risk of ownership
passes to a customer at the time of shipment or delivery, depending on the terms
of our agreement with a particular  customer.  The sale price of our products is
substantially fixed or determinable at the date of sale based on purchase orders


                                       17
<PAGE>


generated by a customer and  accepted by us. A customer's  obligation  to pay us
for products sold to it is not contingent upon the resale of those products.  We
recognize revenue at the time product is delivered to a customer.

     INVENTORY OBSOLESCENCE ALLOWANCE

         We review the inventory level of all products quarterly.  For all items
that have been in the  market for one year or  greater,  we  consider  inventory
levels of greater  than one  year's  sales to be  excess.  Products  that are no
longer  part of the  current  product  offering  are  considered  obsolete.  The
potential for re-sale of slow-moving and obsolete  inventories is based upon our
assumptions  about future  demand and market  conditions.  The recorded  cost of
obsolete  inventories is then reduced to zero and a reserve is  established  for
slow moving products.  Both the write down and reserve  adjustments are recorded
as charges to cost of goods sold.  For the quarters  ended March 31, 2006,  June
30, 2006 and  September  30, 2006 we increased  our  inventory  reserve by $-0-,
$10,000 and $23,500,  respectively, to a current balance of $65,500 and recorded
a  corresponding  increase in cost of goods sold. All  adjustments  for obsolete
inventory  establish  a new cost basis for that  inventory  as we  believe  such
reductions  are  permanent  declines  in  the  market  price  of  our  products.
Generally,  obsolete  inventory  is sold to  companies  that  specialize  in the
liquidation  of these items or  contributed  to charities,  while we continue to
market  slow-moving  inventories  until  they are sold or  become  obsolete.  As
obsolete or slow-moving inventory is sold or disposed of, we reduce the reserve.
During the three months ended March 31, 2006,  June 30, 2006 and  September  30,
2006, we sold inventories  previously  reserved for and accordingly  reduced the
reserve by approximately $150, $50 and $-0- and recorded corresponding gains for
these sales.  During the same three month  periods we adjusted our estimates for
slow moving inventory, based on recent sales volumes, downward by $8,300, $3,500
and $4,300, respectively.  Although we have no specific statistical data on this
matter,  we believe that our practices are reasonable and consistent  with those
of our industry.

     ALLOWANCE FOR DOUBTFUL ACCOUNTS

         We maintain  allowances  for  doubtful  accounts for  estimated  losses
resulting  from the inability of our customers to make  required  payments.  Our
current  customers consist of large national,  regional and smaller  independent
customers with good payment histories with us. Since we have not experienced any
previous payment defaults with any of our current  customers,  our allowance for
doubtful  accounts is minimal.  We perform  periodic  credit  evaluations of our
customers  and  maintain   allowances  for  potential  credit  losses  based  on
management's evaluation of historical experience and current industry trends. If
the financial  condition of our customers were to deteriorate,  resulting in the
impairment  of their  ability to make  payments,  additional  allowances  may be
required.  New customers are evaluated through Dun & Bradstreet before terms are
established.  Although we expect to collect all amounts due, actual  collections
may differ.

     PRODUCT RETURNS

         We have a warranty policy that covers defects in workmanship.  We allow
our  customers  to return  damaged  or  defective  products  to us  following  a
customary return merchandise authorization process. We also allow for some stock
adjustments returns, typically for new customers,  whereby the customer is given
the  opportunity to `trade out' of a style of product that does not sell well in
their territory,  usually in exchange for another  product,  again following the
customary return merchandise authorization process. For both types of returns we
utilize actual historical return rates to determine our allowance for returns in
each  period.  Gross  sales  is  reduced  by  estimated  returns.  We  record  a
corresponding  accrual for the estimated liability associated with the estimated
returns  which  is  based  on  the  historical   gross  sales  of  the  products
corresponding  to the estimated  returns.  This accrual is offset each period by
actual product returns.


                                       18
<PAGE>


         Our  current   estimated   future  warranty   product  return  rate  is
approximately 1.0% and our current estimated future stock adjustment return rate
is  approximately  0.5%. As noted above,  our return rate is based upon our past
history of actual  returns  and we estimate  amounts  for product  returns for a
given period by applying this  historical  return rate and reducing actual gross
sales  for that  period by a  corresponding  amount.  We  believe  that  using a
trailing  12-month  return rate provides us with a sufficient  period of time to
establish recent  historical  trends in product returns for two primary reasons;
(1) our products useful life is approximately  3-4 months and (2) we are able to
quickly  correct any  significant  quality  issues as we learn about them. If an
unusual circumstance exists, such as a product that has begun to show materially
different  actual return rates as compared to our average 12-month return rates,
we will make appropriate adjustments to our estimated return rates. Factors that
could cause materially different actual return rates as compared to the 12-month
return rates  include a new product line, a change in materials or product being
supplied by a new factory. Although we have no specific statistical data on this
matter,  we believe that our practices are reasonable and consistent  with those
of our industry. Our warranty terms under our arrangements with our suppliers do
not provide for individual products returned by retailers or retail customers to
be returned to the vendor.

     RESERVE FOR WARRANTY RETURNS

Reserve balance 12/31/05 .........................................   $   38,000
Payments recorded during the period ..............................      (28,149)
                                                                     ----------
                                                                          9,851
Adjustment to reserve for pre-existing liabilities ...............        3,500
Accrual for new liabilities during the reporting period ..........       28,149
                                                                     ----------
Reserve balance 3/31/06 ..........................................       41,500
Payments recorded during the period ..............................      (12,190)
                                                                     ----------
                                                                         29,310
Adjustment to reserve for pre-existing liabilities ...............        4,500
Accrual for new liabilities during the reporting period ..........       12,190
                                                                     ----------
Reserve balance 6/30/06 ..........................................       46,000
Payments recorded during the period ..............................      (22,691)
                                                                     ----------
                                                                         23,309
Adjustment to reserve for pre-existing liabilities ...............       25,000
Accrual for new liabilities during the reporting period ..........       22,691
                                                                     ----------

Reserve balance 9/30/06 ..........................................   $   71,000
                                                                     ==========

     STOCK BASED COMPENSATION

         On January 1, 2006, we adopted the  provisions of Financial  Accounting
Standards  Board  Statement  123R,   SHARE-BASED  PAYMENT  ("SFAS  123R").  This
statement  establishes  standards surrounding the accounting for transactions in
which an entity  exchanges its equity  instruments  for goods and services.  The
statement  focuses  primarily on accounting for  transactions in which an entity
obtains  employee  services in  share-based  payment  transactions,  such as the
options issued under the Company's  Stock Option Plans.  The statement  provides
for, and we have elected to adopt the  standard  using the modified  prospective
application under which compensation cost is recognized on or after the required
effective date for the fair value of all future share based award grants and the
portion of  outstanding  awards at the date of  adoption of this  statement  for
which the requisite service has not been rendered,  based on the grant-date fair
value of those awards calculated under Statement 123 for pro forma disclosures.


                                       19
<PAGE>


INCOME TAXES

         Income  taxes are  provided  for the tax  effects  of the  transactions
reported in the  financial  statements  and consist of taxes  currently due plus
deferred  taxes  related  primarily to the  difference  between the basis of the
allowances  for returns and doubtful  accounts and for  inventory  obsolescence,
accrued  payroll and bonus and net operating  loss carry  forwards for financial
and income tax reporting.  The deferred tax assets and liabilities represent the
future tax  return  consequences  of those  differences,  which  will  either be
taxable or deductible when the assets and liabilities are recovered or settled.

         Deferred tax assets and  liabilities  are reflected at income tax rates
applicable  to the period in which the  deferred tax assets or  liabilities  are
expected to be realized or settled. As changes in tax laws or rates are enacted,
deferred tax assets and  liabilities  are  adjusted  through the  provision  for
income  taxes.  If it is more  likely  than not that  some  portion  or all of a
deferred tax asset will not be realized, a valuation allowance is recognized. As
the  Company  has  reported  losses for 2003,  2004 and 2005,  we have taken the
conservative approach, and fully reserved the deferred tax assets.

VALUATION OF DERIVATIVE INSTRUMENTS

SFAS No. 133  "Accounting  for Derivative  Instruments  and Hedging  Activities"
requires that embedded derivative instruments be bifurcated and assessed,  along
with free-standing  derivative  instruments such as warrants,  on their issuance
date  in  accordance  with  EITF  00-19  "Accounting  for  Derivative  Financial
Instruments  Indexed to, and  Potentially  Settled in, a Company's Own Stock" to
determine whether they should be considered a derivative  liability and measured
at their fair value for accounting purposes. In determining the appropriate fair
value,  the Company uses the  Black-Scholes-Merton  Option Pricing  Formula (the
"Black Scholes Model"). At each period end, or when circumstances  indicate that
the Company reevaluate the accounting for the derivative  liability,  derivative
liabilities are adjusted to reflect changes in fair value,  with any increase or
decrease  in  the  fair  value  being  recorded  in  results  of  operations  as
Adjustments to Fair Value of Derivatives.

RESULTS OF OPERATIONS

     COMPARISON  OF THREE  MONTHS AND NINE MONTHS ENDED  SEPTEMBER  30, 2006 AND
     SEPTEMBER 30, 2005

         NET SALES  increased  $762,491,  or 47.3%, to $2,373,508 in the quarter
ended September 30, 2006 from $1,611,017 for the  corresponding  period in 2005.
Net sales  increased  $1,049,290,  or 22.5%,  to $5,702,642  for the nine months
ended  September 30, 2006 from $4,653,352 in the  corresponding  period in 2005.
One customer  accounted  for  approximately  25% of net sales during the quarter
ended  September  30,  2006  and 15% of net  sales  for the  nine  months  ended
September 30, 2006.  These  increases  were  primarily  due to a winter  display
program  with a major  home  center  retailer  of  approximately  $688,000.  Two
customers  accounted for approximately  27% and no customers  accounted for more
than 10% of net sales for the quarter  ended  September 30, 2005 and nine months
ended  September  30,  2005,  respectively.  Included  in net  sales  are  co-op
advertising expenses of approximately  $72,000 and $134,000 for the three months
and nine months ended September 30, 2006, respectively.

         GROSS  PROFIT  increased  $120,355  to $807,819  for the quarter  ended
September 30, 2006 from $687,464 for the quarter ended September 30, 2005. Gross
profit  decreased  $92,557 to $2,096,220 for the nine months ended September 30,
2006 from $2,188,777 for the nine months ended September 30, 2005.  Gross profit
as a  percentage  of net sales,  or gross  margin,  decreased  to 34.0% in third
quarter  of 2006  from  42.7% in the same  quarter  of 2005.  Gross  profit as a
percentage of net sales,  or gross margin,


                                       20
<PAGE>


decreased to 36.8% in nine months of 2006 from 47.0% in the  corresponding  nine
months of 2005. The decrease in gross margin was mainly  attributable to a shift
in product  mix,  aggressive  sales  promotion  programs  with new and  existing
customers,  the  introduction  of apparel  sales,  and an  increase  in in-bound
transportation  costs,  including air freight,  between the comparative periods.
Our product mix changed  primarily  because sales to home centers have increased
as a  proportion  of our  sales.  Sales to home  centers  generally  include  an
assortment of lower priced  products  than are sold to our specialty  customers.
This decrease in gross margin was partially  offset by reduced product costs due
to better pricing from our manufacturers.

         OPERATING  EXPENSES  increased by $858,943,  or 96.5%, to $1,748,622 in
the third  quarter of 2006 from  $889,679  in the third  quarter  of 2005.  As a
percentage  of net sales,  operating  expenses  increased  to 73.7% in the third
quarter  of 2006  from  55.2% in the same  period  of 2005.  Operating  expenses
increased $1,660,051,  or 61.4%, to $4,362,872 for the first nine months of 2006
from  $2,702,821  in the  corresponding  period of 2005.  As a percentage of net
sales,  operating  expenses increased to 76.5% for the first nine months of 2006
from  58.1% in the same  period of 2005.  The  increased  spending  in the third
quarter was primarily due to increased costs associated with implementing  brand
development initiatives,  including a NASCAR sponsorship and increased print and
cooperative  advertising  -  approximately  $25,000 and  $83,000,  respectively;
professional fees of approximately $61,000;  expenses associated with our status
as public company costs of approximately  $180,000;  increased rents of $35,000;
increased travel & entertainment  expenses of $30,000;  increased commissions of
$28,000;   increased  trade  show  expenses  of  $20,000;  Financial  Accounting
Standards No. 123R options  expense of $186,000;  and salaries,  bonus  accrual,
temporary  labor  expenses of  approximately  $201,000.  Our number of Employees
increased to 24 at September 30, 2006 from 17 at September  30, 2005.  Sales and
marketing expenses were increased to build brand recognition and increase sales.
Expenses  associated with being a public company included public  accounting and
legal fees and investor relations expenses.

         LOSS FROM OPERATIONS  increased  $738,588 or 365.2%, to $940,803 in the
third  quarter  of 2006  from  $202,215  in third  quarter  of 2005.  Loss  from
operations as a percentage of net sales  increased to 39.6% in the third quarter
of 2006 from 12.6% in the third quarter of 2005. Loss from operations  increased
$1,752,608  or 340.9%,  to  $2,266,652  for the first  nine  months of 2006 from
$514,044 for the first nine months of 2005. Loss from operations as a percentage
of net sales  increased  to 39.7 % for the first nine  months of 2006 from 11.0%
for the first nine months of 2005.  The  increases in the third  quarter and the
nine  months  were  primarily  the result of a decrease  in gross  profit and an
increase in operating expenses, as discussed above.

         INTEREST  EXPENSE  decreased  $9,064 to $1,978 in the third  quarter of
2006 from  $11,042  in the same  quarter  of 2005.  Interest  expense  increased
$282,697  to  $331,601  for the first  nine  months of 2006 from  $48,904 in the
corresponding  period of 2005. The increase was primarily due to the addition of
the short term financing with Westrec Capital Partners,  the amortization of the
loan  acquisition  costs  associated  with this  debt,  and the  recognition  of
$256,188 of imputed warrant interest charges.

         INTEREST INCOME increased  $42,327 in the third quarter and nine months
ended  September  30, 2006.  Interest  income is a result of investment of funds
from the private equity funding  completed  concurrent with the merger on May 9,
2006.

         OTHER  INCOME  (EXPENSE)  net was $216 in the third  quarter of 2006 as
compared with  $(29,049) in the third  quarter of 2005.  Other income was $2,397
for the first nine months of 2006 as compared  with  ($2,243) for the first nine
months of 2005.  Change in the fair value of warrant liability was ($392,002) in
the third quarter and  $2,061,016  for the first nine months of 2006 as compared
to $-0-  for the  third  quarter  and  first  nine  months  of 2005.  This  loss
represents the difference in the fair value of warrants  recorded as liabilities
at September 30, 2006 and their issue date on May 9, 2006.  These  warrants will
be revalued at


                                       21
<PAGE>


the end of each reporting period until the terms of the  registration  statement
for the shares and warrants  issued,  that result in liability  accounting,  are
satisfied.

         NET LOSS  increased  $278,655 to $524,249 in the third  quarter of 2006
from $245,594 in the third quarter of 2005.  Net loss  increased  $4,046,890 for
the first nine  months of 2006 from  $568,455  for the  corresponding  period in
2005.  These  increased  losses are a result of the  combination  of each of the
factors discussed above plus the recognition of change in fair value of warrants
recorded as liabilities during the period of $2,061,016.

SEASONALITY AND QUARTERLY RESULTS

         Our business  generally shows an increase in sales during the third and
fourth quarters due primarily to a consistent increase in the sale of our winter
glove line during this period. We typically  generate 55% - 65% of our net sales
during these months.  Management  has yet to determine  whether our apparel line
will affect the seasonality of our overall business.

         Our working capital,  at any particular time,  reflects the seasonality
of our business.  We expect inventory,  accounts payable and accrued expenses to
be higher in the third and fourth quarters in preparation for our winter selling
season.

LIQUIDITY AND CAPITAL RESOURCES

         Our cash requirements are principally for working capital. Our need for
working capital is seasonal,  with the greatest  requirements  from July through
the end of October each year as a result of our inventory  build-up  during this
period for our fall and winter selling seasons.  Historically,  our main sources
of liquidity have been borrowings under our existing  revolving credit facility,
the issuance of subordinated  debt and the sale of equity. On September 15, 2006
the Company entered into a new factoring agreement,  whereby it assigned certain
of its accounts receivable with full recourse.  This facility allows the Company
to borrow 85% against eligible accounts receivable, up to $3,000,000.

         OPERATING  ACTIVITIES:  For the nine months ended  September  30, 2006,
cash used in operating  activities was  $3,776,442 and consisted  primarily of a
net loss of $4,615,345,  reduced by non-cash items of $2,828,620, an increase in
inventory of $1,956,196,  an increase in accounts  receivable of $316,647 and an
increase in other  assets of $16,110,  a decrease  in deposits on  inventory  of
$300,277,  and decreases in accounts payable and accrued expenses of $1,041. For
the nine months ended September 30, 2005, cash provided by operating  activities
was $251,786 and consisted of a net loss of $568,455,  reduced by non-cash items
of  $90,039,  an  increase in  accounts  receivable  of  $82,993,  a decrease in
inventory of $275,865,  deposits on inventory of $9,828,  an increase in prepaid
expenses of $31,280,  and a decrease in accounts  payable,  accrued expenses and
bank overdraft of $558,782.

         INVESTING  ACTIVITIES for the nine months ended  September 30, 2006 and
2005 were  primarily  the result of capital  expenditures,  mainly for  computer
equipment,  warehouse  equipment  and  trademark  applications.   Cash  used  in
investing activities increased $144,421 for 2006 from $19,241 in 2005.

         FINANCING  ACTIVITIES  for the nine  months  ended  September  30, 2006
consisted  primarily  of the  payoff of our net  borrowing  under  our  existing
asset-based credit facility,  payoff of an existing note payable,  proceeds from
the issuance of common stock, financing provided by a capital lease,  completion
of our merger and  associated  financing on May 9, 2006,  and the new  factoring
agreement  entered  into on  September  15,  2006.  Cash  provided by  financing
activities  increased  $6,068,142  for 2006 and decreased  $595,274 in 2005. The
increase in cash provided by financing  activities  was due to proceeds from the
issuance of common  stock of  $507,500,  the  completion  of the merger  related
equity financing of $6,036,738 (net of $1,284,453 in offering costs), borrowings
under the new factoring  agreement of


                                       22
<PAGE>


$821,205 and proceeds  from the exercise of warrants of $66,338,  and was offset
by  payments  made on our bank  lines of credit of  $861,612,  outstanding  note
payable of $500,000,  and payments on a capital lease of $2,027. We believe that
our cash flows from operations  together with the net proceeds from our offering
and our new factoring  agreement,  will be adequate to meet our liquidity  needs
and capital expenditure requirements for the foreseeable future.

OFF BALANCE SHEET ARRANGEMENTS

         At  September  30,  2006,  we  did  not  have  any  relationships  with
unconsolidated  entities  or  financial  partnerships,  such as  entities  often
referred  to  as  structured  finance,  variable  interest  or  special  purpose
entities,  which would have been  established  for the  purpose of  facilitating
off-balance  sheet  arrangements  or  other  contractually   narrow  or  limited
purposes.  As such, we are not exposed to any  financing , liquidity,  market or
credit risk that could arise if we had engaged in such relationships.

RECENT ACCOUNTING PRONOUNCEMENTS

SFAS NO. 123R

         In December 2004,  the Financial  Accounting  Standards  Board ("FASB")
issued  SFAS 123  Revised  "Share-Based  Payment,"  "SFAS  123R." The  statement
eliminates the alternative to account for stock-based  compensation using APB 25
and requires such  transactions  be recognized  as  compensation  expense in the
statement  of  operations  based on their fair  values on the date of the grant,
with the compensation  expense  recognized over the period in which a grantee is
required to provide  service in exchange for the stock award. We will adopt this
statement  for the year ended  December  31,  2006.  We  recorded  $186,047  and
$431,860 of  compensation  expense for employee stock options during the quarter
and nine months ended September 30, 2006.

SFAS NO. 151

         In November 2004, the FASB issued SFAS No. 151,  "Inventory Costs" SFAS
No. 151 amends the  accounting  for abnormal  amounts of idle facility  expense,
freight, handling costs and wasted material (spoilage) under the guidance in ARB
No. 43, Chapter 4,  "Inventory  Pricing."  Paragraph 5 of ARB No. 43, Chapter 4,
previously  stated that "under some  circumstances,  items such as idle facility
expense,  excessive  spoilage,  double  freight and  rehandling  costs may be so
abnormal as to require  treatment as current  period  charges."  This  Statement
requires that those items be recognized as current-period  charges regardless of
whether they meet the criterion of "so  abnormal." In addition,  this  Statement
requires  that  allocation  of  fixed  production  overheads  to  the  costs  of
conversion be based on the normal  capacity of the production  facilities.  This
statement  is  effective  for  inventory  costs  incurred  during  fiscal  years
beginning  after June 15, 2005.  Management does not expect adoption of SFAS No.
151 to have a material impact on our financial statements.

SFAS NO. 152

         In March  2004,  the FASB issued  SFAS No.  152,  "Accounting  for Real
Estate Time-Sharing Transactions." The FASB issued this Statement as a result of
the guidance provided in AICPA Statement of Position (SOP) 04-2, "Accounting for
Real  Estate  Time-Sharing  Transactions."  SOP 04-2  applies to all real estate
time-sharing  transactions.  Among other items, the SOP provides guidance on the
recording  of credit  losses and the  treatment of selling  costs,  but does not
change the revenue recognition  guidance in SFAS No 66, "Accounting for Sales of
Real Estate",  for real estate  time-sharing  transactions.  SFAS No. 152 amends
Statement No 66 to reference  the  guidance  provided in SOP 04-2.  SFAS No. 152
also amends SFAS No. 67,  "Accounting for Costs and Initial Rental Operations of
Real Estate  Projects," to


                                       23
<PAGE>


state that SOP 04-2 provides the relevant  guidance on accounting for incidental
operations   and  costs  related  to  the  sale  of  real  estate   time-sharing
transactions. SFAS No. 152 is effective for years beginning after June 15, 2005,
with restatements of previously  issued financial  statements  prohibited.  This
statement is not applicable to us.

SFAS NO. 153

         In March 2004, the FASB issued SFAS No. 153,  "Exchanges of Nonmonetary
Assets,"  an  amendment  to  Opinion  No.  29,   "Accounting   for   Nonmonetary
Transactions."  Statement No. 153 eliminates certain differences in the guidance
in Opinion No. 29 as compared to the guidance  contained in standards  issued by
the  International  Accounting  Standards Board. The amendment to Opinion No. 29
eliminates  the fair  value  exception  for  nonmonetary  exchanges  of  similar
productive  assets and  replaces it with a general  exception  for  exchanges of
nonmonetary assets that do not have commercial  substance.  Such an exchange has
commercial  substance  if the future  cash flows of the entity are  expected  to
change significantly as a result of the exchange.  SFAS No. 153 is effective for
nonmonetary asset exchanges occurring in periods beginning after March 16, 2004.
Management does not expect adoption of SFAS No. 153 to have a material impact on
our financial statements.

SFAS NO. 154

         In May 2005,  the FASB  issued SFAS No.  154,  "Accounting  Changes and
Error Corrections" an amendment to Accounting  Principles Bulletin (APB) Opinion
No. 20, "Accounting  Changes," and SFAS No. 3, "Reporting  Accounting Changes in
Interim Financial  Statements"  though SFAS No. 154 carries forward the guidance
in APB No. 20 and SFAS No.3 with respect to accounting for changes in estimates,
changes  in  reporting  entity,  and the  correction  of  errors.  SFAS No.  154
establishes  new standards on accounting  for changes in accounting  principles,
whereby all such changes must be accounted for by  retrospective  application to
the financial  statements of prior periods unless it is  impracticable to do so.
SFAS No. 154 is effective for accounting  changes and error  corrections made in
fiscal years beginning  after December 15, 2005,  with early adoption  permitted
for changes and corrections made in years beginning after May 2005.

FIN NO. 47

         In  March  2005,  the  FASB  issued  FASB  Interpretation  FIN No.  47,
"Accounting for Conditional Asset Retirement Obligations".  FIN No. 47 clarifies
the meaning of the term conditional asset retirement  obligation as used in FASB
Statement No. 143,  "Accounting for Asset Retirement  Obligations" and clarifies
when an entity would have sufficient information to reasonable estimate the fair
value of an asset retirement  obligation.  This  interpretation  is effective no
later than the end of fiscal years ending after  December 15, 2005 (December 31,
2005  for  calendar-year   companies).   Retrospective  application  of  interim
financial  information  is permitted  but is not required.  Management  does not
expect  adoption  of FIN  No.  47 to have a  material  impact  on our  financial
statements.

SFAS NO. 155

         In February 2006, the FASB issued SFAS No. 155, "Accounting for Certain
Hybrid  Financial  Instruments",  which  amends  SFAS No. 133,  "Accounting  for
Derivatives Instruments and Hedging Activities" and SFAS No. 140,"Accounting for
Transfers and Servicing of Financial Assets and  Extinguishment of Liabilities".
SFAS No. 155 amends SFAS No. 133 to narrow the scope exception for interest-only
and  principal-only  strips on debt  instruments  to  include  only such  strips
representing  rights to receive a specified portion of the contractual  interest
or  principle  cash  flows.  SFAS No.  155  also  amends  SFAS No.  140 to allow
qualifying  special-purpose  entities  to hold a  passive  derivative  financial


                                       24
<PAGE>


instrument  pertaining  to  beneficial  interests  that  itself is a  derivative
instrument.  Management  does not  expect  adoption  of SFAS  No.  155 to have a
material impact on our financial statements.

SFAS NO. 156

         In March 2006, the FASB issued SFAS No. 156,  "Accounting for Servicing
of Financial  Assets"  ("SFAS NO. 156"),  which provides an approach to simplify
efforts to obtain  hedge-like  (offset)  accounting.  This Statement amends FASB
Statement No. 140,  "Accounting for Transfers and Servicing of Financial  Assets
and  Extinguishments  of  Liabilities",  with  respect  to  the  accounting  for
separately recognized servicing assets and servicing liabilities.  The Statement
(1)  requires an entity to recognize a servicing  asset or  servicing  liability
each time it undertakes  an obligation to service a financial  asset by entering
into a servicing contract in certain situations;  (2) requires that a separately
recognized  servicing asset or servicing liability be initially measured at fair
value, if practicable;  (3) permits an entity to choose either the  amortization
method or the fair value  method for  subsequent  measurement  for each class of
separately recognized servicing assets or servicing liabilities;  (4) permits at
initial adoption a one-time reclassification of available-for-sale securities to
trading securities by an entity with recognized  servicing rights,  provided the
securities  reclassified  offset the  entity's  exposure  to changes in the fair
value  of the  servicing  assets  or  liabilities;  and  (5)  requires  separate
presentation of servicing assets and servicing liabilities subsequently measured
at fair value in the balance sheet and additional disclosures for all separately
recognized servicing assets and servicing liabilities. SFAS No. 156 is effective
for  all  separately  recognized  servicing  assets  and  liabilities  as of the
beginning of an entity's  fiscal year that begins after September 15, 2006, with
earlier  adoption  permitted  in  certain  circumstances.   The  Statement  also
describes the manner in which it should be initially  applied.  Management  does
not expect  adoption of SFAS No. 156 to have a material  impact on our financial
statements.

FIN NO. 48

         In July 2006, the FASB released FASB Interpretation No. 48, "Accounting
for Uncertainty in Income Taxes",  an  interpretation  of FASB Statement No. 109
(FIN 48). FIN 48 clarifies the  accounting  and reporting for  uncertainties  in
income tax law. This  Interpretation  prescribes a  comprehensive  model for the
financial  statement  recognition,  measurement,  presentation and disclosure of
uncertain  tax  positions  taken or expected to be taken in income tax  returns.
This statement is effective for fiscal years  beginning after December 15, 2006.
We are currently in the process of evaluating  the expected  effect of FIN 48 on
its results of operations and financial position.

SFAS NO. 157

         In  September   2006,  the  FASB  issued  SFAS  No.  157,  "Fair  Value
Measurements"  ("SFAS  No.  157"),  which  defines  fair  value,  establishes  a
framework for measuring fair value in generally accepted accounting  principles,
and expands  disclosures about fair value  measurements.  This Statement applies
under  other  accounting  pronouncements  that  require  or  permit  fair  value
measurements.  SFAS No. 157 is effective  for  financial  statements  issued for
fiscal years beginning after November 15, 2007, and interim periods within those
fiscal years.  Management will evaluate the effect of this statement, if any, on
its financial statements.

SFAS NO. 158

         In October 2006, the FASB issued SFAS No. 158,  "Employers'  Accounting
for Defined Benefit Pension and Other  Postretirement Plans an amendment of FASB
Statements No. 87, 88, 106, and 132(R)." This Statement  requires an employer to
recognize the overfunded or underfunded status of a


                                       25
<PAGE>


defined  benefit  postretirement  plan (other than a  multiemployer  plan) as an
asset or  liability  in its  statement  of  financial  position and to recognize
changes in that  funded  status in the year in which the changes  occur  through
comprehensive  income of a business entity or changes in unrestricted net assets
of a  not-for-profit  organization.  This Statement also requires an employer to
measure the funded status of a plan as of the date of its year-end  statement of
financial position, with limited exceptions. This Statement amends Statement 87,
FASB STATEMENT NO. 88,  "Employers'  Accounting for Settlements and Curtailments
of Defined Benefit Pension Plans and for Termination  Benefits",  Statement 106,
and FASB  STATEMENT  NO.  132  (revised  2003),  "Employers'  Disclosures  about
Pensions  and  Other  Postretirement  Benefits",  and other  related  accounting
literature.  Upon initial  application  of this Statement and  subsequently,  an
employer  should  continue to apply the provisions in Statements 87, 88, and 106
in measuring plan assets and benefit obligations as of the date of its statement
of financial  position  and in  determining  the amount of net periodic  benefit
cost.  An  employer  with  publicly  traded  equity  securities  is  required to
initially  recognize the funded status of a defined benefit  postretirement plan
and to provide the required  disclosures as of the end of the fiscal year ending
after December 15, 2006. An employer without  publicly traded equity  securities
is required to recognize the funded status of a defined  benefit  postretirement
plan and to provide the  required  disclosures  as of the end of the fiscal year
ending after June 15, 2007. This statement is not applicable to us.

RISK FACTORS

         INVESTING  IN OUR  COMMON  STOCK  INVOLVES A HIGH  DEGREE OF RISK.  YOU
SHOULD CAREFULLY  CONSIDER THE FOLLOWING RISK FACTORS AND ALL OTHER  INFORMATION
CONTAINED  IN THIS REPORT  BEFORE  PURCHASING  OUR COMMON  STOCK.  THE RISKS AND
UNCERTAINTIES  DESCRIBED BELOW ARE NOT THE ONLY ONES FACING US. ADDITIONAL RISKS
AND UNCERTAINTIES  THAT WE ARE UNAWARE OF, OR THAT WE CURRENTLY DEEM IMMATERIAL,
ALSO MAY BECOME IMPORTANT  FACTORS THAT AFFECT US. IF ANY OF THE FOLLOWING RISKS
OCCUR,  OUR  BUSINESS,  FINANCIAL  CONDITION OR RESULTS OF  OPERATIONS  COULD BE
MATERIALLY AND ADVERSELY AFFECTED. IN THAT CASE, THE TRADING PRICE OF OUR COMMON
STOCK  COULD  DECLINE,  AND YOU MAY LOSE  SOME OR ALL OF THE  MONEY  YOU PAID TO
PURCHASE OUR COMMON STOCK.

RISKS RELATING TO OUR BUSINESS

OUR  OPERATING  RESULTS MAY  FLUCTUATE  SIGNIFICANTLY  AND OUR STOCK PRICE COULD
DECLINE OR FLUCTUATE IF OUR RESULTS DO NOT MEET THE  EXPECTATION  OF ANALYSTS OR
INVESTORS.

         Management  expects that we will experience  substantial  variations in
our net sales and operating results from quarter to quarter. We believe that the
factors which influence this variability of quarterly results include:

         o        the  timing  of  our   introduction   of  new  product  lines,
                  particularly our specialty apparel;

         o        the level of consumer acceptance of each new product line;

         o        general economic and industry  conditions that affect consumer
                  spending and retailer purchasing;

         o        the availability of manufacturing capacity;

         o        the seasonality of the markets in which we participate;

         o        the timing of trade shows;

         o        the product mix of customer orders;

         o        the  timing  of the  placement  or  cancellation  of  customer
                  orders;

         o        the weather;


                                       26
<PAGE>


         o        transportation delays;

         o        quotas and other regulatory matters; and

         o        the timing of  expenditures in anticipation of increased sales
                  and actions of competitors.

         As a result of fluctuations in our revenue and operating  expenses that
may occur, management believes that period-to-period  comparisons of our results
of  operations  are  not a good  indication  of our  future  performance.  It is
possible that in some future quarter or quarters,  our operating results will be
below the  expectations of securities  analysts or investors.  In that case, our
common stock price could fluctuate significantly or decline.

WE  MAY  NEED   ADDITIONAL   FUNDING  TO  SUPPORT  OUR  OPERATIONS  AND  CAPITAL
EXPENDITURES,  WHICH MAY NOT BE AVAILABLE  TO US AND WHICH LACK OF  AVAILABILITY
COULD ADVERSELY AFFECT OUR BUSINESS.

         We intend to fund our operations and capital  expenditures from limited
cash flow from  operations,  our cash on hand,  the net  proceeds of the private
placement  completed on May 9, 2006 and the new factoring agreement entered into
on September 15, 2006. We believe we will have  sufficient  funds to finance the
cost of our operations and planned expansion for at least the next 18 months. As
part  of our  planned  growth  and  expansion,  we  will  be  required  to  make
expenditures  necessary  to expand and  improve  our  operating  and  management
infrastructure.  We also plan to invest more heavily in research and development
of new products,  designs or services. In addition, we may need additional funds
to  pursue  business   opportunities  (such  as  acquisitions  of  complementary
businesses),  to react to unforeseen  difficulties  or to respond to competitive
pressures.

         If our  capital  resources  are  insufficient,  we will  need to  raise
additional funds. There can be no assurance that any financing arrangements will
be available in amounts or on terms  acceptable  to us, if at all.  Furthermore,
the sale of  additional  equity or  convertible  debt  securities  may result in
additional dilution to existing  stockholders.  If adequate additional funds are
not  available,  we may be required to delay,  reduce the scope of or  eliminate
material parts of the implementation of our business  strategy.  This limitation
could  substantially  harm our  business,  results of  operations  and financial
condition.

WE HAVE A HISTORY OF OPERATING  LOSSES AND THERE CAN BE NO ASSURANCE THAT WE CAN
ACHIEVE OR MAINTAIN PROFITABILITY.

         We have a history of  operating  losses and may not  achieve or sustain
profitability.  We cannot guarantee that we will become  profitable.  Even if we
achieve profitability, given the competitive and evolving nature of the industry
in which we operate,  we may be unable to sustain or increase  profitability and
our failure to do so would adversely affect our business,  including our ability
to raise additional funds.

WE MAY BE UNABLE TO EFFECTIVELY MANAGE OUR GROWTH.

         Our  strategy  envisions  growing our  business.  We plan to expand our
technology, sales, administrative and marketing organizations.  Any growth in or
expansion  of our  business  is  likely  to  continue  to place a strain  on our
management and administrative  resources,  infrastructure  and systems.  As with
other  growing  businesses,  we expect  that we will need to further  refine and
expand our business development capabilities,  our systems and processes and our
access to financing  sources.  We also will need to hire,  train,  supervise and
manage new employees.  These  processes are time  consuming and expensive,  will
increase management  responsibilities and will divert management  attention.  We
cannot assure you that we will be able to:

         o        expand our systems  effectively  or efficiently or in a timely
                  manner;


                                       27
<PAGE>


         o        allocate our human resources optimally;

         o        meet our capital needs;

         o        identify  and  hire  qualified   employees  or  retain  valued
                  employees; or

         o        incorporate  effectively  the  components  of any  business or
                  product  line that we may  acquire  in our  effort to  achieve
                  growth.

          Our   inability  or  failure  to  manage  our  growth  and   expansion
effectively  could harm our business and  materially  and  adversely  affect our
operating results and financial condition.

SUBSTANTIALLY  ALL OF OUR REVENUES  HAVE BEEN DERIVED FROM A RELATIVELY  LIMITED
PRODUCT LINE  CONSISTING OF WORK GLOVES,  AND OUR FUTURE SUCCESS  DEPENDS ON OUR
ABILITY TO EXPAND OUR PRODUCT LINE AND ACHIEVE BROADER MARKET  ACCEPTANCE OF OUR
COMPANY AND OUR PRODUCTS.

         To  date,  our  products  have  consisted  mainly  of  high-performance
specialty gloves, targeted primarily to the construction, general and industrial
markets. Our success and the planned growth and expansion of our business depend
on us achieving  greater and broader  acceptance in our existing market segments
as well as in new segments.  In  particular,  our success,  growth and expansion
depend largely on new and increasing  sales of our recently  launched  specialty
work  apparel.  We have  little  or  virtually  no  experience  in this  line of
business, which creates substantial uncertainty regarding our ability to succeed
in this  sector.  We will be  required  to develop  and  execute a strategy  for
effectively  marketing and  distributing  our specialty work apparel.  We may be
required  to  enter  into  new  arrangements  and  relationships  with  vendors,
suppliers and others. We also may be required to undertake new types of risks or
obligations  that we may be unable to  manage.  There can be no  assurance  that
consumers  will  purchase  our  products or that retail  outlets  will stock our
products.  Though we plan to spend significant  amounts on promotion,  marketing
and advertising to increase  product  awareness,  we cannot guarantee that these
expenses will generate the desired product awareness or commensurate increase in
sales of our products. If we are unable to effectively market and distribute our
specialty work apparel or expand into new market segments,  we will be unable to
grow and expand our business or implement our business  strategy as described in
this  report.  This could  materially  impair our ability to increase  sales and
revenue and  materially and adversely  affect our margins,  which could harm our
business and cause our stock price to decline.

WE  MAY  BE  UNABLE  TO  COMPETE   SUCCESSFULLY   AGAINST  EXISTING  AND  FUTURE
COMPETITORS, WHICH COULD DECREASE OUR REVENUE AND MARGINS AND HARM OUR BUSINESS.

         The  performance  glove and  specialty  work  apparel  segments  of the
apparel industry are highly competitive. Our future growth and financial success
depend on our ability to further penetrate and expand our existing  distribution
channels and to increase the size of our average annual net sales per account in
these  channels,   as  well  as  our  ability  to  penetrate  and  expand  other
distribution  channels.  For example,  we encounter  competition in our existing
workwear distribution channel from Gorgonz,  among others. Unknown or unforeseen
new entrants into our  distribution  channels,  particularly  low-cost  overseas
producers,  will further  increase the level of competition  in these  channels.
There can be no  assurance  that we will be able to maintain  our growth rate or
increase  our  market  share in our  distribution  channels  at the  expense  of
existing  competitors  and other  apparel  manufacturers  choosing  to enter the
market segments in which we compete. In addition, there can be no assurance that
we will be able to enter and achieve  significant  growth in other  distribution
channels.

FAILURE TO EXPAND INTO NEW DISTRIBUTION  CHANNELS AND NEW INTERNATIONAL  MARKETS
COULD MATERIALLY AND ADVERSELY IMPACT OUR GROWTH PLAN AND PROFITABILITY.


                                       28
<PAGE>


         Our sales  growth  depends in part on our  ability  to expand  from the
specialty  retail channels that we have focused on for the past seven years into
new  distribution  channels,  particularly  high-volume big box hardware chains.
Failure to expand  into these  mass-market  channels  could  severely  limit our
growth.

         Our  business  plan also  depends in part on our ability to expand into
international  markets. We have begun the distribution of our products in Japan,
Australia  and Canada and we are in the  process  of  establishing  distribution
networks in Europe.  Failure to expand  international  sales  through  these and
other markets could limit our growth  capability and leave us vulnerable  solely
to United States market conditions.

OUR DEPENDENCE ON INDEPENDENT  MANUFACTURERS  REDUCES OUR ABILITY TO CONTROL THE
MANUFACTURING  PROCESS,  WHICH  COULD HARM OUR  SALES,  REPUTATION  AND  OVERALL
PROFITABILITY.

         We depend on independent contract  manufacturers to maintain sufficient
manufacturing and shipping capacity in an environment characterized by declining
prices,  labor  shortages,  continuing  cost pressure and increased  demands for
product  innovation and  speed-to-market.  This  dependence  could subject us to
difficulty in obtaining  timely delivery of products of acceptable  quality.  In
addition, a contractor's failure to ship products to us in a timely manner or to
meet the required  quality  standards  could cause us to miss the delivery  date
requirements of our customers.  The failure to make timely  deliveries may cause
our  customers  to  cancel   orders,   refuse  to  accept   deliveries,   impose
non-compliance charges through invoice deductions or other charge-backs,  demand
reduced  prices or reduce  future  orders,  any of which  could  harm our sales,
reputation and overall profitability.

         We do  not  have  long-term  contracts  with  any  of  our  independent
contractors  and any of  these  contractors  may  unilaterally  terminate  their
relationship with us at any time. While management believes that there exists an
adequate  supply of contractors  to provide  products and services to us, to the
extent we are not able to  secure or  maintain  relationships  with  independent
contractors  that are able to fulfill its  requirements,  our business  would be
harmed.

         We  have  initiated  standards  for  our  suppliers,  and  monitor  our
independent  contractors'  compliance with applicable  labor laws, but we do not
control our  contractors  or their labor  practices.  The  violation of federal,
state or foreign labor laws by one of our  contractors  could result in us being
subject to fines and our goods that are  manufactured  in violation of such laws
being seized or their sale in interstate commerce being prohibited.  To date, we
have not been subject to any sanctions  that,  individually or in the aggregate,
have had a material adverse effect on our business,  and we are not aware of any
facts on which any such  sanctions  could be based.  There can be no  assurance,
however,  that in the future we will not be subject to  sanctions as a result of
violations of applicable labor laws by our  contractors,  or that such sanctions
will  not  have a  material  adverse  effect  on our  business  and  results  of
operations.

TRADE  MATTERS MAY DISRUPT OUR SUPPLY  CHAIN,  WHICH COULD  RESULT IN  INCREASED
EXPENSES AND DECREASED SALES.

         We cannot predict whether any of the countries in which our merchandise
currently is  manufactured  or may be manufactured in the future will be subject
to  additional  trade  restrictions  imposed  by  the  U.S.  and  other  foreign
governments,  including the likelihood, type or effect of any such restrictions.
Trade restrictions, including increased tariffs or quotas, embargoes, safeguards
and customs  restrictions,  against  apparel  items,  as well as U.S. or foreign
labor strikes, work stoppages or boycotts, could increase the cost or reduce the
supply of apparel  available to us and adversely affect our business,  financial
condition and results of  operations.  Although the quota system  established by
the Agreement on Textiles and Clothing was completely phased out for World Trade
Organization countries effective


                                       29
<PAGE>


January  1,  2005,  there can be no  assurances  that  restrictions  will not be
reestablished  for certain  categories in specific  countries.  We are unable to
determine  the  impact  of the  changes  to the  quota  system  on our  sourcing
operations,  particularly  in China.  Our sourcing  operations  may be adversely
affected by trade limits or political and financial instability resulting in the
disruption of trade from  exporting  countries,  significant  fluctuation in the
value  of the  U.S.  dollar  against  foreign  currencies,  restrictions  on the
transfer of funds and/or other trade disruptions.

OUR  INTERNATIONAL  OPERATIONS  AND  THE  OPERATIONS  OF OUR  MANUFACTURERS  AND
SUPPLIERS IN CHINA ARE SUBJECT TO  ADDITIONAL  RISKS THAT ARE BEYOND OUR CONTROL
AND THAT COULD HARM OUR BUSINESS.

         All of our  glove  products  are  manufactured  by three  manufacturers
operating in China and Indonesia.  Our specialty  apparel products are currently
manufactured in the United States,  Taiwan and Mexico.  We may in the future use
offshore  manufacturers  for  all  or  some  of  these  products.  In  addition,
approximately  5% of  our  fiscal  2005  net  revenues  were  generated  through
international  sales and we plan to increase our sales to international  markets
in the future. As a result of our international  manufacturing and sales, we are
subject to additional risks associated with doing business abroad, including:

         o        political unrest, terrorism and economic instability resulting
                  in the disruption of trade from foreign countries in which our
                  products are manufactured;

         o        difficulties  in  managing   foreign   operations,   including
                  difficulties   associated   with   inventory   management  and
                  collection on foreign accounts receivable;

         o        dependence on foreign distributors and distribution networks;

         o        currency exchange  fluctuations and the ability of our Chinese
                  manufacturers  to change  the prices  they  charge us based on
                  fluctuations in the value of the US dollar relative to that of
                  the Chinese Yuan;

         o        the imposition of new laws and  regulations,  including  those
                  relating to labor conditions,  quality and safety standards as
                  well as restrictions on the transfer of funds;

         o        disruptions or delays in shipments;

         o        changes in local  economic  and  non-economic  conditions  and
                  standards in which our  manufacturers,  suppliers or customers
                  are located; and

         o        reduced   protection  for  intellectual   property  rights  in
                  jurisdictions outside the United States.

         These  and  other  factors  beyond  our  control  could  interrupt  our
manufacturers'  production in offshore facilities,  influence the ability of our
manufacturers to export our products cost-effectively or at all, inhibit our and
our  unaffiliated  manufacturer's  ability  to  produce  certain  materials  and
influence  our ability to sell our  products in  international  markets,  any of
which could have an adverse  effect on our business,  financial  conditions  and
operations.

WE MAY BE UNABLE TO ADEQUATELY PROTECT OUR INTELLECTUAL PROPERTY RIGHTS.

         We rely in part on patent,  trade secret, trade dress and trademark law
to protect  our rights to certain  aspects of our  products,  including  product
designs, proprietary manufacturing processes and technologies,  product research
and concepts and recognized trademarks, all of which we believe are important to
the  success  of our  products  and our  competitive  position.  There can be no
assurance that any of our pending patent or trademark  applications  will result
in the  issuance  of a  registered  patent or  trademark,  or that any patent or
trademark granted will be effective in thwarting competition or be held valid if
subsequently challenged. In addition, there can be no assurance that the actions
taken by us to  protect  our  proprietary  rights  will be  adequate  to prevent
imitation of our  products,  that our  proprietary  information  will not become
known to competitors,  that we can meaningfully protect our rights to unpatented
proprietary   information  or  that  others  will  not   independently   develop
substantially equivalent


                                       30
<PAGE>


or better products that do not infringe on our intellectual  property rights. We
could be  required  to devote  substantial  resources  to enforce our patent and
protect our intellectual  property,  which could divert our resources and result
in increased expenses. In addition, an adverse determination in litigation could
subject  us  to  the  loss  of  our  rights  to a  particular  patent  or  other
intellectual  property,  could  require us to grant  licenses to third  parties,
could prevent us from  manufacturing,  selling or using  certain  aspects of our
products or could subject us to substantial  liability,  any of which could harm
our business.

WE MAY BECOME SUBJECT TO LITIGATION FOR  INFRINGING  THE  INTELLECTUAL  PROPERTY
RIGHTS OF OTHERS.

         Others  may  initiate   claims  against  us  for  infringing  on  their
intellectual property rights. We may be subject to costly litigation relating to
such infringement claims and we may be required to pay compensatory and punitive
damages or license fees if we settle or are found  culpable in such  litigation,
we may be required to pay damages,  including punitive damages. In addition,  we
may be precluded from offering products that rely on intellectual  property that
is found to have been infringed by us. We also may be required to cease offering
the affected  products while a  determination  as to infringement is considered.
These developments could cause a decrease in our operating income and reduce our
available cash flow,  which could harm our business and cause our stock price to
decline.

WE MAY BE UNABLE TO ATTRACT AND RETAIN  QUALIFIED,  EXPERIENCED,  HIGHLY SKILLED
PERSONNEL, WHICH COULD ADVERSELY AFFECT THE IMPLEMENTATION OF OUR BUSINESS PLAN.

         Our  success  depends  to a  significant  degree  upon our  ability  to
attract,  retain and motivate  skilled and  qualified  personnel.  If we fail to
attract,  train and retain  sufficient  numbers of these qualified  people,  our
prospects,  business,  financial  condition  and results of  operations  will be
materially and adversely  affected.  In particular,  we are heavily dependent on
the  continued  services  of Eduard  Jaeger and the other  members of our senior
management team. We do not have long-term employment  agreements with any of the
members of our senior  management  team, each of whom may voluntarily  terminate
his  employment  with us at any time.  Following any  termination of employment,
these employees would not be subject to any non-competition  covenants. The loss
of any key employee,  including  members of our senior  management team, and our
inability to attract highly skilled personnel with sufficient  experience in our
industries could harm our business.

OUR SENIOR  MANAGEMENT'S  LIMITED RECENT  EXPERIENCE  MANAGING A PUBLICLY TRADED
COMPANY MAY DIVERT MANAGEMENT'S ATTENTION FROM OPERATIONS AND HARM OUR BUSINESS.

         Our management team has relatively limited recent experience managing a
publicly traded company and complying with federal  securities  laws,  including
compliance with recently adopted disclosure  requirements on a timely basis. Our
management  will be required to design and  implement  appropriate  programs and
policies in responding to increased legal,  regulatory  compliance and reporting
requirements, and any failure to do so could lead to the imposition of fines and
penalties and harm our business.

RISKS RELATING TO OUR INDUSTRY

IF WE ARE UNABLE TO RESPOND TO THE ADOPTION OF  TECHNOLOGICAL  INNOVATION IN OUR
INDUSTRY  AND  CHANGES  IN  CONSUMER  DEMAND,  OUR  PRODUCTS  WILL  CEASE  TO BE
COMPETITIVE, WHICH COULD RESULT IN A DECREASE IN REVENUE AND HARM OUR BUSINESS.

         Our future success will depend, in part, on our ability to keep up with
changes in  consumer  tastes and our  continued  ability  to  differentiate  our
products through  implementation of new technologies,  such as new materials and
fabrics. We may not, however, be able to successfully do so, and our competitors


                                       31
<PAGE>


may  be  able  to  produce  designs  that  are  more  appealing,  implement  new
technologies or innovations in their design,  or manufacture their products at a
much lower cost.  These types of  developments  could render our  products  less
competitive and possibly eliminate any  differentiating  advantage in design and
materials that we might hold at the present time.

WE ARE  SUSCEPTIBLE  TO  GENERAL  ECONOMIC  CONDITIONS,  AND A  DOWNTURN  IN OUR
INDUSTRIES OR A REDUCTION IN SPENDING BY CONSUMERS  COULD  ADVERSELY  AFFECT OUR
OPERATING RESULTS.

         The apparel industry in general has historically been  characterized by
a high degree of volatility and subject to substantial cyclical variations.  Our
operating  results  will be subject to  fluctuations  based on general  economic
conditions,   in  particular   conditions  that  impact  consumer  spending  and
construction and industrial activity. A downturn in the construction, industrial
or housing sectors could be expected to directly and negatively  impact sales of
protective  gear to workers in these  sectors,  which  could cause a decrease in
revenue and harm our sales.

         Difficult economic conditions could also increase the risk of extending
credit to our retailers. In the event we enter into a factoring relationship,  a
customer's  financial  problems  would limit the amount of customer  receivables
that we could  assign to such factor on the  receivables,  and could cause us to
assume more credit risk  relating to those  assigned  receivables  or to curtail
business with that customer.

GOVERNMENT REGULATION AND SUPERVISION

         Any negative changes to international  treaties and regulations such as
the North  American  Free  Trade  Agreement  (or  NAFTA)  and to the  effects of
international  trade  agreements and embargoes  imposed by such entities such as
the World  Trade  Organization  which  could  result in a rise in trade  quotas,
duties,  taxes and similar  impositions  or which could limit the countries from
whom we can purchase  our fabric or other  component  materials,  or which could
limit the countries  where we might market and sell our products,  could have an
adverse effect on our business.

         Any changes in regulation by the Federal Trade Commission (or FTC) with
respect to labeling and advertising of our products could have an adverse affect
on our business.  The FTC requires apparel  companies to provide a label clearly
stating  the  country  of  origin  of  manufacture  and  the  company's  apparel
registration  number and a second label  stating  washing  instructions  for the
product.  A change  in  these  requirements  could  add  additional  cost to the
production of our products,  though we do not believe that this  additional cost
would be material, especially in relation to the cost of producing our products.

RISKS RELATING TO OUR COMMON STOCK

THERE IS A LIMITED  TRADING  MARKET  FOR OUR  COMMON  STOCK AND A MARKET FOR OUR
STOCK MAY NEVER DEVELOP OR SUSTAINED,  WHICH WILL ADVERSELY AFFECT THE LIQUIDITY
OF OUR COMMON STOCK AND COULD CAUSE OUR MARKET PRICE TO DECLINE.

         Although  prices for our shares of common  stock are quoted on NASDAQ's
Over-the-Counter  Bulletin  Board  (under  the  symbol  ICPW.OB),  there  is  no
established  public trading market for our common stock, and no assurance can be
given that a public trading  market will develop or, if developed,  that it will
be sustained.

         Active trading markets  generally  result in lower price volatility and
more  efficient  execution  of buy and sell  orders.  The  absence  of an active
trading  market  reduces the liquidity of our common  stock.  As a result of the
lack of  trading  activity,  the  quoted  price  for  our  common  stock  on the
Over-the-Counter  Bulletin Board is not necessarily a reliable  indicator of its
fair market value. Further, if we cease to be


                                       32
<PAGE>


quoted,  holders of our common stock would find it more difficult to dispose of,
or to obtain  accurate  quotations  as to the market value of, our common stock,
and the market value of our common stock would likely decline.

IF AND WHEN A TRADING MARKET FOR OUR COMMON STOCK DEVELOPS,  THE MARKET PRICE OF
OUR  COMMON  STOCK  IS  LIKELY  TO  BE  HIGHLY  VOLATILE  AND  SUBJECT  TO  WIDE
FLUCTUATIONS,  AND YOU MAY BE  UNABLE  TO  RESELL  YOUR  SHARES  AT OR ABOVE THE
OFFERING PRICE.

         The market  price of our common  stock is likely to be highly  volatile
and could be subject to wide  fluctuations  in  response  to a number of factors
that are beyond our control, including announcements of new products or services
by our competitors.  In addition,  the market price of our common stock could be
subject to wide fluctuations in response to a variety of factors, including:

         o        quarterly variations in our revenues and operating expenses;

         o        developments in the financial  markets,  apparel  industry and
                  the worldwide or regional economies;

         o        announcements of innovations or new products or services by us
                  or our competitors;

         o        announcements  by the  government  that  affect  international
                  trade treaties;

         o        fluctuations  in  interest  rates  and / or the  asset  backed
                  securities market;

         o        significant  sales of our common stock or other  securities in
                  the open market;

         o        variations in interest rates; and

         o        changes in accounting principles.

         In the past, stockholders have often instituted securities class action
litigation  after  periods  of  volatility  in the market  price of a  company's
securities. If a stockholder were to file any such class action suit against us,
we would  incur  substantial  legal  fees  and our  management's  attention  and
resources  would be  diverted  from  operating  our  business  to respond to the
litigation, which could harm our business.

SUBSTANTIAL  FUTURE SALES OF OUR COMMON  STOCK IN THE PUBLIC  MARKET COULD CAUSE
OUR STOCK PRICE TO FALL.

         On October  2, 2006 the  registration  statement  we filed in June 2006
became  effective,  and up to 27,117,720  shares of common stock became eligible
for sale,  subject to the terms of certain lock-up  agreements  described below.
The sale of these  shares could  depress the market  price of our common  stock.
Sales of a  significant  number of shares of our common stock in the open market
could harm the market price of our common stock.  A reduced market price for our
shares could make it more  difficult to raise funds through  future  offering of
common stock.

         Moreover, as additional shares of our common stock become available for
resale in the open market  (including  shares  issued  upon the  exercise of our
outstanding  warrants),  the supply of our publicly traded shares will increase,
which could  decrease its price.  Gemini  Partners,  Inc., or Gemini,  and other
stockholders that funded the purchase and cancellation of shares from our former
stockholders  have  demand  registration  rights  with  respect to the resale of
3,489,444  shares they received in connection with the purchase and cancellation
transaction completed immediately before the closing of the merger with Ironclad
California.  Brean Murray, Carret & Co., or Brean Murray, the placement agent in
the private  placement  completed  on May 9, 2006,  also has demand  rights with
respect to the resale of its shares of common stock and common stock  underlying
warrants. The resale of these shares may be registered  subsequently pursuant to
these demand registration rights.

         In addition,  8,536,953 of the 27,117,720  shares  referenced above are
subject to restrictions on transfer set forth in lock-up agreements with holders
of these shares. These include 6,497,509 shares of


                                       33
<PAGE>


common stock and common stock underlying warrants that were issued in connection
with the merger with Ironclad California to former holders of preferred stock of
Ironclad  California  and  warrants  to  purchase  preferred  stock of  Ironclad
California,  and 2,039,444  shares  acquired in connection with the purchase and
cancellation  transaction  completed immediately before our merger with Ironclad
California. Under our lock-up agreements with holders of 6,497,509 shares issued
in exchange  for  preferred  stock and warrants to purchase  preferred  stock of
Ironclad  California,  the shares will only be released from  restriction on the
first anniversary of the effective date of our merger with Ironclad  California.
Our lock-up  agreements  with  holders of  2,039,444  shares of our common stock
acquired in connection with the purchase and cancellation  transaction  restrict
the resale of these shares until the first  anniversary of the effective date of
the merger,  but provide for the termination of  restrictions  with respect to a
limited number of shares at various times before the one-year  anniversary date.
We, with the consent of the placement agents in the private placement  financing
completed  concurrently  with the  merger,  may also elect to waive the  lock-up
agreement  restrictions as to certain shares. The release of shares from lock-up
agreements may have a negative impact on our stock price if such released shares
are sold by their holders.

         Some of our shares  may also be  offered  from time to time in the open
market pursuant to Rule 144, and these sales may have a depressive effect on the
market for our shares. In general, a person who has held restricted shares for a
period of one year may, upon filing with the Securities and Exchange  Commission
(or SEC) a notification on Form 144, sell into the market shares up to an amount
equal to 1% of the outstanding  shares.  The resale of the 3,489,444 shares held
by Gemini  and the  stockholders  who  acquired  shares in  connection  with the
purchase and cancellation  transaction  completed  immediately before the merger
with Ironclad  California may be registered as discussed above, but these shares
also may  currently  be  eligible  for sale under Rule 144.  The resale of these
shares under Rule 144 may cause our stock price to decline.

THE SALE OF  SECURITIES  BY US IN ANY EQUITY OR DEBT  FINANCING  COULD RESULT IN
DILUTION TO OUR EXISTING  STOCKHOLDERS AND HAVE A MATERIAL ADVERSE EFFECT ON OUR
EARNINGS.

         Any sale of common stock by us in a future private  placement  offering
could result in dilution to the existing  stockholders as a direct result of our
issuance of additional  shares of our capital stock.  In addition,  our business
strategy  may  include   expansion   through  internal   growth,   by  acquiring
complementary  businesses,  by acquiring or licensing  additional  brands, or by
establishing strategic  relationships with targeted customers and suppliers.  In
order to do so, or to  finance  the cost of our other  activities,  we may issue
additional  equity   securities  that  could  dilute  our  stockholders'   stock
ownership.  We may also  assume  additional  debt and  incur  impairment  losses
related to goodwill and other tangible  assets if we acquire another company and
this could negatively impact our earnings and results of operations.

THE TRADING OF OUR COMMON STOCK ON THE  OVER-THE-COUNTER  BULLETIN BOARD AND THE
POTENTIAL  DESIGNATION  OF OUR COMMON STOCK AS A "PENNY  STOCK" COULD IMPACT THE
TRADING MARKET FOR OUR COMMON STOCK.

         Our securities,  as traded on the Over-the-Counter  Bulletin Board, may
be subject to SEC rules that  impose  special  sales  practice  requirements  on
broker-dealers  who sell  these  securities  to persons  other than  established
customers or  accredited  investors.  For the  purposes of the rule,  the phrase
"accredited  investors"  means,  in general terms,  institutions  with assets in
excess of $5,000,000,  or individuals having a net worth in excess of $1,000,000
or having an annual income that exceeds  $200,000 (or that, when combined with a
spouse's income,  exceeds $300,000).  For transactions  covered by the rule, the
broker-dealer  must make a special  suitability  determination for the purchaser
and receive the  purchaser's  written  agreement to the  transaction  before the
sale. Consequently, the rule may affect the


                                       34
<PAGE>


ability of broker-dealers to sell our securities and also may affect the ability
of  purchasers  to sell  their  securities  in any  market  that  might  develop
therefore.

         In addition,  the SEC has adopted a number of rules to regulate  "penny
stock" that restrict transactions involving these securities. Such rules include
Rules 3a51-1,  15g-1,  15g-2, 15g-3, 15g-4, 15g-5, 15g-6, 15g-7, and 15g-9 under
the Securities Exchange Act of 1934, as amended. These rules may have the effect
of reducing the liquidity of penny stocks.  "Penny stocks"  generally are equity
securities  with a price of less than  $5.00 per share  (other  than  securities
registered  on certain  national  securities  exchanges  or quoted on the NASDAQ
Stock  Market  if  current  price  and  volume   information   with  respect  to
transactions in such securities is provided by the exchange or system).  Because
our securities may constitute "penny stock" within the meaning of the rules, the
rules would apply to us and to our securities.

         Stockholders  should be aware that,  according  to SEC,  the market for
penny stocks has suffered in recent years from patterns of fraud and abuse. Such
patterns  include  (i)  control of the market for the  security  by one or a few
broker-dealers   that  are  often  related  to  the  promoter  or  issuer;  (ii)
manipulation of prices through  prearranged  matching of purchases and sales and
false and misleading  press releases;  (iii) "boiler room"  practices  involving
high-pressure  sales tactics and unrealistic  price projections by inexperienced
sales persons;  (iv) excessive and undisclosed bid-ask differentials and markups
by selling broker-dealers;  and (v) the wholesale dumping of the same securities
by promoters and broker-dealers  after prices have been manipulated to a desired
level,  resulting in investor losses. Our management is aware of the abuses that
have occurred historically in the penny stock market.  Although we do not expect
to be in a position to dictate the  behavior of the market or of  broker-dealers
who  participate  in the market,  management  will strive within the confines of
practical  limitations to prevent the described  patterns from being established
with respect to our securities.

WE HAVE NOT PAID  DIVIDENDS IN THE PAST AND DO NOT EXPECT TO PAY  DIVIDENDS  FOR
THE FORESEEABLE FUTURE, AND ANY RETURN ON INVESTMENT MAY BE LIMITED TO POTENTIAL
FUTURE APPRECIATION ON THE VALUE OF OUR COMMON STOCK.

         We  currently  intend to retain any  future  earnings  to  support  the
development  and  expansion of our business  and do not  anticipate  paying cash
dividends in the foreseeable future. Our payment of any future dividends will be
at the  discretion of our Board of Directors  after taking into account  various
factors,  including  without  limitation,  our  financial  condition,  operating
results, cash needs, growth plans and the terms of any credit agreements that we
may be a party to at the time. To the extent we do not pay dividends,  our stock
may be less valuable  because a return on  investment  will only occur if and to
the extent our stock price  appreciates,  which may never  occur.  In  addition,
investors must rely on sales of their common stock after price  appreciation  as
the only way to realize their investment, and if the price of our stock does not
appreciate,  then there will be no return on investment.  Investors seeking cash
dividends should not purchase our common stock.

OUR  OFFICERS,  DIRECTORS  AND  PRINCIPAL  STOCKHOLDERS  CAN  EXERT  SIGNIFICANT
INFLUENCE  OVER US AND MAY MAKE  DECISIONS THAT ARE NOT IN THE BEST INTERESTS OF
ALL STOCKHOLDERS.

         Our officers,  directors and  principal  stockholders  (greater than 5%
stockholders)  collectively control  approximately 22% of our outstanding common
stock. As a result, these stockholders will be able to affect the outcome of, or
exert significant  influence over, all matters requiring  stockholder  approval,
including  the election and removal of directors  and any change in control.  In
particular,  this  concentration of ownership of our common stock could have the
effect  of  delaying  or  preventing  a change  of  control  of us or  otherwise
discouraging  or  preventing  a potential  acquirer  from  attempting  to obtain
control of us. This, in turn,  could have a negative  effect on the market price
of our common stock.  It could also prevent our  stockholders  from  realizing a
premium over the market prices for their shares of


                                       35
<PAGE>


common stock. Moreover, the interests of this concentration of ownership may not
always coincide with our interests or the interests of other  stockholders,  and
accordingly,  they could cause us to enter into  transactions or agreements that
we would not otherwise consider.

ANTI-TAKEOVER  PROVISIONS  MAY LIMIT THE ABILITY OF ANOTHER PARTY TO ACQUIRE US,
WHICH COULD CAUSE OUR STOCK PRICE TO DECLINE.

         Our Articles of Incorporation,  as amended,  our by-laws and Nevada law
contain  provisions that could  discourage,  delay or prevent a third party from
acquiring  us,  even if  doing  so may be  beneficial  to our  stockholders.  In
addition,  these  provisions could limit the price investors would be willing to
pay in the future for shares of our common stock.


                                       36
<PAGE>


ITEM 3.  CONTROLS AND PROCEDURES

         As of September 30, 2006, the end of the period covered by this report,
the  Company  conducted  an  evaluation,  under  the  supervision  and  with the
participation of the Chief Executive Officer and Chief Financial Officer, of the
Company's  disclosure controls and procedures (as defined in Rules 13a-15(e) and
15d-15(e))  under the 1934 Act. Based on this  evaluation,  the Chief  Executive
Officer and Chief  Financial  Officer  concluded  that the Company's  disclosure
controls and procedures are effective.

         There was no change in the Company's  internal  control over  financial
reporting  during the Company's most recently  completed fiscal quarter that has
materially affected, or is reasonably likely to materially affect, the Company's
internal control over financial reporting.


                                       37
<PAGE>


                                     PART II

ITEM 1.  LEGAL PROCEEDINGS

CLAIM

          On September 12, 2006,  American Sports Group, Inc.  ("ASG"),  filed a
lawsuit  against  the  Company,   including  Ironclad  California,  and  certain
individuals,  in the Superior Court of the State of California for the County of
Los Angeles.  ASG alleges that in 2002, Ironclad California agreed to issue, and
did, in fact,  issue to ASG a warrant to purchase  1,200,000  shares of Ironclad
California  common stock at $0.05 per share and a warrant to purchase  1,083,333
shares of Ironclad  California  common stock at $0.06 per share.  ASG is seeking
declaratory relief in the form of a determination as to validity of the warrants
and its rights to exchange such warrants for warrants to purchase  shares of the
Company's  common  stock  pursuant  to the terms of the  Merger  Agreement  with
Ironclad California. In the alternative,  ASG is seeking specific performance of
the alleged  agreement  to issue the  warrants,  and the issuance of warrants to
purchase  517,746 shares of the Company's common stock at $0.1157 per share, and
476,410 shares of common stock at a price of $0.1388 per share,  which represent
the number of warrants and exercise  prices for which these  warrants would have
been exchanged pursuant to the Merger Agreement.

         According to the Company's records, the transactions  pursuant to which
the warrants were intended to be issued were never consummated, and the warrants
were never issued. Any purported  warrants that plaintiff  possesses were issued
without authorization, and therefore, are invalid and unenforceable. The Company
believes  ASG's claims are without  merit and the Company  intends to vigorously
defend against these claims.

         On October 16, 2006 and November 13, 2006,  Ironclad California and the
Company,  respectively,  filed a Demurrer to, and Motion to Strike  Portions of,
the  complaint by ASG.  The court is currently  scheduled to hear the motions on
February 5, 2007. Additionally, on October 31, 2006, Ironclad California filed a
cross-complaint  against ASG and certain  other  defendants  alleging  breach of
written contract, unfair business practices, aiding and abetting unfair business
practices,  and civil conspiracy to commit unfair business practices. The claims
are based on, among other  matters,  violations  by ASG, its owner,  and certain
other  entities  in using  and  disclosing  confidential  information  and other
proprietary  materials of Ironclad California to acquire and operate a competing
business.  The cross-complaint was filed with the Superior Court of the State of
California for the County of Los Angeles.

          To the extent the plaintiff is  successful  in its claim,  the Company
agreed to cause the issuance of additional shares of its common stock to each of
the investors in the Private Placement financing,  and to each of the holders of
its shares issued and outstanding immediately prior to the Merger, on a pro rata
basis,  in such a manner  and in such  amounts as would be  necessary  to adjust
their  respective  ownership of the Company's  common stock as of the closing of
the  Private  Placement  financing  and  Merger for any  dilution  caused by the
issuance of the warrants or any shares thereunder.

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

         During the three months ended  September 30, 2006,  holders of warrants
to purchase  357,772  shares of our common stock  exercised  their  warrants for
total proceeds of  approximately  $66,338.  The issuance of these securities was
exempt from the  registration  requirements  of the  Securities  Act pursuant to
Section 4(2) of the  Securities  Act as a  transaction  not involving any public
offering.


                                       38
<PAGE>


ITEM 6.  EXHIBITS

         THE FOLLOWING EXHIBITS ARE FILED AS PART OF THIS REPORT:

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

3.1      Articles of Incorporation(1)

3.2      Certificate  of Change  effecting a forward stock split and  increasing
         the number of authorized shares, filed May 9, 2006 (2)

3.3      Articles of Merger effecting a name change to Ironclad Performance Wear
         Corporation (2)

3.4      Bylaws (1)

10.1     Factoring   Agreement  by  and  between   Ironclad   Performance   Wear
         Corporation  and Wells Fargo  Century,  Inc.,  effective  September 15,
         2006. (3)

10.2     Letter  of  Credit  and  Security  Agreement  by and  between  Ironclad
         Performance Wear Corporation and Wells Fargo Century,  Inc.,  effective
         September 15, 2006. (3)

31.1     Certification  of  CEO  pursuant  to  Securities   Exchange  Act  Rules
         13a-14(a)  or  15d-14(a)  as adopted  pursuant  to  Section  302 of the
         Sarbanes-Oxley Act of 2002.

31.2     Certification  of  CFO  pursuant  to  Securities   Exchange  Act  Rules
         13a-14(a)  or  15d-14(a)  as adopted  pursuant  to  Section  302 of the
         Sarbanes-Oxley Act of 2002.

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

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

(1)      Incorporated by reference to our  Registration  Statement on Form SB-2,
         filed September 3, 2004.
(2)      Incorporated  by reference to our Current  Report on Form 8-K filed May
         12, 2006.
(3)      Incorporated  by  reference  to our  Current  Report  on Form 8-K filed
         September 21, 2006.


                                       39
<PAGE>


                                   SIGNATURES

         In  accordance  with  Section  13 or 15(d)  of the  Exchange  Act,  the
registrant  caused  this  report to be signed on its behalf by the  undersigned,
thereunto duly authorized.


                                           IRONCLAD PERFORMANCE WEAR CORPORATION

Date: November 14, 2006                    By:  /S/ THOMAS E. WALSH
                                                ------------------------
                                                 Thomas E. Walsh
                                                 Chief Financial Officer


                                       40
<PAGE>


                                  EXHIBIT INDEX

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

3.1      Articles of Incorporation(1)

3.2      Certificate  of Change  effecting a forward stock split and  increasing
         the number of authorized shares, filed May 9, 2006 (2)

3.3      Articles of Merger effecting a name change to Ironclad Performance Wear
         Corporation (2)

3.4      Bylaws (1)

10.1     Factoring   Agreement  by  and  between   Ironclad   Performance   Wear
         Corporation  and Wells Fargo  Century,  Inc.,  effective  September 15,
         2006. (3)

10.2     Letter  of  Credit  and  Security  Agreement  by and  between  Ironclad
         Performance Wear Corporation and Wells Fargo Century,  Inc.,  effective
         September 15, 2006. (3)

31.1     Certification  of  CEO  pursuant  to  Securities   Exchange  Act  Rules
         13a-14(a)  or  15d-14(a)  as adopted  pursuant  to  Section  302 of the
         Sarbanes-Oxley Act of 2002.

31.2     Certification  of  CFO  pursuant  to  Securities   Exchange  Act  Rules
         13a-14(a)  or  15d-14(a)  as adopted  pursuant  to  Section  302 of the
         Sarbanes-Oxley Act of 2002.

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

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

(1)      Incorporated by reference to our  Registration  Statement on Form SB-2,
         filed September 3, 2004.
(2)      Incorporated  by reference to our Current  Report on Form 8-K filed May
         12, 2006.
(3)      Incorporated  by  reference  to our  Current  Report  on Form 8-K filed
         September 21, 2006.


                                       41