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UNITED STATES
 SECURITIES AND EXCHANGE
    COMMISSION
 Washington D.C. 20549
 FORM 10-K
 FOR ANNUAL AND TRANSITION REPORTS
    PURSUANT TO SECTIONS 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934
 (Mark One)þ

ANNUAL REPORT PURSUANT TO
    SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    December 31, 2006ORo

TRANSITION REPORT PURSUANT TO
    SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to   Commission file number: 0-25918
 EVERLAST WORLDWIDE
    INC.
 (Exact name of registrant as
    specified in its charter)
  Delaware(State
    or Other Jurisdiction of Incorporation or
    Organization)

13-3672716(IRS
    Employer 
    Identification No.)1350 Broadway,
    Suite 2300, New York, New York

10018(Address of Principal Executive
    Offices)

(Zip Code)   Registrants telephone number (212) 239-0990
  Securities registered under Section 12(b) of the
    Exchange Act:
  Name of Each ExchangeTitle Of Each Class

On Which RegisteredNone

None     Common Stock, $0.002 par value
 (Title of class)
  Indicate by check mark if the registrant is a well-known
    seasoned issuer, as defined in Rule 405 of Securities
    Act.  YES  o     NO  þ
  Indicate by check mark if the registrant is not required to
    file reports pursuant to Section 13 or Section 15(d)
    of the
    Act  YES  o     NO  þ
  þ o
  Regulation S-K Form 10-K Form 10-K. o
  Rule 12b-2).  YES o þ
  Indicate by check mark whether the registrant is a shell
    company (as defined in
    Rule 12b-2
    of the Exchange
    Act)  Yes  o     No  þ
      DOCUMENTS
    INCORPORATED BY REFERENCE




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TABLE OF
    CONTENTS
  PART I


1ITEM 1.

Business


1ITEM 1A.

Risk
    Factors


13ITEM 1B.

Unresolved Staff
    Comments


26ITEM 2.

Properties


26ITEM 3.

Legal
    Proceedings


26ITEM 4.

Submission of
    Matters to a Vote of Security Holders


26PART II


27ITEM 5.

Market for
    Registrants Common Equity, Related Stockholder Matters and
    Issuer Purchases of Equity Securities


27ITEM 6.

Selected Financial
    Data


29ITEM 7.

Managements
    Discussion and Analysis of Financial Condition and Results of
    Operation


31ITEM 7A.

Quantitative and
    Qualitative Disclosures About Market Risk


41ITEM 8.

Financial
    Statements and Supplementary Data


42ITEM 9.

Changes in and
    Disagreements with Accountants on Accounting and Financial
    Disclosure


42ITEM 9A.

Controls and
    Procedures


42ITEM 9B.

Other
    Information


42PART III


42Item 10

Directors,
    Executive Officers and Corporate Governance


42Item 11

Executive
    Compensation


47Item 12

Security Ownership
    of Certain Beneficial Owners and Management and Related
    Stockholder Matters


60Item 13

Certain
    Relationships and Related Transactions,  and Director
    Independence


62Item 14

Principal
    Accountant Fees and Services


62PART IV


63ITEM 15.

Exhibits, Financial
    Statement Schedules


63SIGNATURES


66    We have registered the trademark Everlast in the
    U.S. and certain other countries. Choice of
    Champions, EverGel and Greatness is
    Within are also trademarks of Everlast Worldwide Inc. This
    annual report also contains trademarks and service marks
    belonging to other entities including INFUSION,
    Micro Pump and HydroEdge.




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PART I  Item 1.
    Business  Note Regarding
    Forward Looking Information
    
    maintenance and expansion of our brand recognition;
    our ability to expand our brand into new categories and
    territories;
    our reliance on market acceptance of the products we and our
    licensees sell;
    the ability of our current licensees to continue executing their
    business plans with respect to their product lines;
    our ability to develop and sell new products;
    our ability to obtain and protect intellectual property rights;
    our ability to attract and retain management talent;
    the effect of competition in our industry;
    our limited manufacturing capacity and distribution channels;
    our reliance on third party manufacturing and logistics
    providers for the production and distribution of our products;
    and
    other factors described in this annual report under the heading
    Risk Factors.    Overview
   1




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Background
      
    expanded our brand into new and complementary product categories
    and additional geographic territories through licensee partners,
    which allowed us to leverage the strength of our brand to
    increase our revenue and profitability while reducing the risk
    inherent in entering new product categories and geographic
    territories. Since 2002, we expanded the number of licensing
    arrangements worldwide from 35 in 2002 to 88 currently. In 2006,
    our current licensees generated $12.3 million in net
    license revenues as compared to $5.5 million in net license
    revenues in 2002;
    transitioned our womens and mens wholesale apparel
    business in the U.S. and Canada to a license model in January
    2005 and January 2006, respectively. We licensed our brand for
    these categories to Jacques Moret, a leading manufacturer and
    marketer of licensed apparel. These licenses allowed us to more
    effectively build our apparel presence as a result of our
    licensees significant design, sourcing and distribution
    capabilities;
    rationalized our U.S. manufacturing and distribution
    facilities and implemented several cost saving initiatives in
    our supply chain to improve our gross margins, reduce our
    operating costs and enhance our customer service. Specifically,
    in 2003, we closed our Bronx, New York manufacturing facility
    where we manufactured a significant portion of our sporting
    goods equipment and moved a portion of that manufacturing to
    Moberly, Missouri. In addition, we transitioned a significant
    portion of our manufactured sporting goods equipment to third
    party suppliers overseas, where we are able to more efficiently
    source these products without jeopardizing the high quality
    standards required by our retailers and consumers; and
    reorganized and strengthened our executive management team to
    provide a platform to become a leading global active lifestyle
    brand. We added a chief merchandising officer, a senior vice
    president of manufacturing and distribution and a senior vice
    president of marketing to enhance our ability to develop, source
    and market branded active consumer products on a global basis.   2




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Global
    Brand Integration
    
    Vision:  To unleash strength and
    determination in individuals.
    Mission Statement:  The Everlast brand
    is built upon Strength, Dedication, Individuality and
    Authenticity. We aspire to be a necessary part of the lives of
    consumers who train, compete and live. We build boxing equipment
    and consumer products for an active lifestyle. Our rich heritage
    and brand equity fuels our ability to meet this aspiration.
    Brand Ethos:  Strength, Dedication,
    Individuality and Authenticity.
    Product Strategy:  Our product strategy
    will revolve around our core consumers and can be categorized as
    follows:  
    Train  designed for those who view fitness as
    a core activity. Our products in this segment will incorporate
    functional fashion design combined with the most current
    high-tech fabrics and finishes for core training;
    Compete  designed for professional and amateur
    athletes who actively train for a range of competitive
    activities. Our products in this segment will incorporate
    extreme designs combined with the latest in high-tech fabrics
    and finishes for competition and cross training; and
    Live  designed for consumers who live an
    active lifestyle. Our products in this segment will incorporate
    fashion athletic inspired design combined with the most
    comfortable fabrics for casual and leisure activities.    Competitive
    Strengths
    
    Authentic and powerful brand identity.  We
    believe that our rich heritage and 97 year history
    providing innovative, high quality equipment to the best boxers
    in the world 3




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established Everlast as the most powerful brand in boxing and a
    widely-recognized brand worldwide. Our brand image is enhanced
    by active sponsorship of professional, amateur and Olympic
    athletes and our continued support of USA boxing, in addition to
    integrated marketing and promotion strategies aimed at
    increasing our brand awareness. In addition, due to the
    authenticity of the Everlast brand in boxing, our brand benefits
    from continued exposure in print, television and movies,
    including Ali, Million Dollar Baby, Cinderella Man and the
    recent release of Rocky Balboa. We believe that the rich
    heritage and the authenticity of the Everlast brand allows us to
    continue to expand our market position and assert our relevance
    as a broader active lifestyle brand.  
    Commitment to product innovation.  Since our
    development of innovative protective training gear and the first
    boxing trunks with an elastic waistband in the early 1900s, we
    continued to be a leading innovator in the sport of boxing. We
    strive to improve the quality, durability and performance
    features of our products through the use of the most advanced
    designs, materials and technology available to serve the needs
    of professional and amateur boxers. In addition, we expanded our
    product offering to include a number of new, innovative products
    designed for consumers interested in boxing as a form of
    fitness, such as our new patented EverGel gloves which provide
    improved protective features and ease of use when compared to
    traditional hand wraps. Our commitment to continued product
    innovation has allowed us to maintain our leading market
    position in boxing and enhances the broader image of our brand
    at retail.
    Strong relationships with retailers in multiple distribution
    channels.  The strength and relevance of our brand
    and the quality of our products and service allows us to
    maintain strong relationships with retailers in multiple
    distribution channels. We believe that our strong brand
    recognition, innovative product offerings and space efficient
    packaging result in increased consumer traffic and higher sales
    per square foot for our retailers. We maintain strong
    relationships with sporting goods retailers, mass merchants,
    mid-tier department stores, specialty retailers and fitness
    clubs, and we believe the diversity of our distribution allows
    us to reach a broad consumer demographic. We believe the quality
    of our relationships enables us to continue to expand the shelf
    space dedicated to our products, improve the positioning of our
    products in stores and allows us and our licensees to introduce
    a broader range of products into our retailers locations.
    Demonstrated ability to increase brand value through a broad
    network of licensees.  We believe we have a
    demonstrated track record of building brand awareness and
    increasing brand value by extending the Everlast brand into
    complementary product categories and international markets
    through careful selection of licensee partners. Our direction
    and implementation of a creative marketing and innovative
    product development strategy enables our licensee partners to
    leverage the strength of the Everlast brand for their product
    categories and territories. For example, we recently entered the
    U.K. and South Korea markets through highly experienced
    licensees who have significantly enhanced our brand in those
    markets employing our product and marketing strategies. We
    believe that utilizing experienced licensees allows us to
    leverage the strength of our brand to increase our sales and
    improve our profitability while reducing the risk inherent in
    entering new product categories and geographic territories. We
    also believe entering new, complementary product categories
    enhances our brand image and reinforces our relevance to the
    active lifestyle.
    Integrated global sourcing network.  We and our
    licensees source our products through an integrated global
    network of third party manufacturers. Our international
    licensees for sporting goods equipment source a significant
    portion of product for their markets from established vendors
    who supply our domestic sporting goods business. In addition,
    our domestic and international footwear and apparel licensees
    source their product from common third party manufacturers. We
    believe utilizing an integrated network of third 4




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party vendors ensures brand consistency and product quality and
    also allows us and our licensees to leverage economies of scale
    for lower unit costs and increases the availability of our
    products to fill in-season demand on shorter lead times.  
    Experienced management team.  Our senior
    management team possesses substantial experience in the sporting
    goods, apparel and consumer product industries, collectively
    averaging over 15 years in these industries. We built a
    dynamic and talented management team with significant experience
    across all of our functional areas at companies such as
    Timberland, Tommy Hilfiger, Converse, Russ Berrie, Hain
    Celestial and Ernst & Young. We believe the strength of
    our current management team plays an important role in our
    continued success in the marketplace.  Growth
    Strategy
    
    Expand domestic retail presence of our licensed
    products.  We maintain a strong, diverse base of
    28 domestic licensing arrangements for a range of complementary
    product categories, such as apparel, footwear, sporting goods
    equipment, eyewear and nutritional products. In July 2006, we
    added E.S. Originals as our U.S. footwear licensee,
    completing our strategy of consistent U.S. retail
    distribution across our licensed product categories. We believe
    our current base of domestic licensees enables us to create and
    offer consistent and cohesive product offerings through the
    categories of Train, Compete, Live. We plan to launch a
    coordinated product and marketing strategy that we believe will
    expand our target market and domestic retail distribution of our
    licensed product and increase demand for the Everlast brand. We
    also believe that the success of our sporting goods equipment at
    retail will provide an opportunity for much broader retail
    distribution and penetration of our licensed products. In
    addition, we intend to actively grow our
    direct-to-consumer
    offering through enhanced
    e-commerce
    and catalog offerings.
    Expand our international retail
    penetration.  We intend to expand our well
    recognized global brand in international markets and active
    lifestyle product categories through a consistent and cohesive
    brand and product strategy built upon our vision of unleashing
    strength and determination in individuals. We manage 60
    international licensing arrangements with licensees who sell a
    wide range of Everlast branded product in over 100 countries. We
    believe there is an opportunity to continue to expand our
    penetration in our current markets, such as Germany and France
    where we have limited penetration, but believe our brand
    recognition and brand positioning are strong. In addition, we
    will continue to support our licensees in markets that
    experienced significant growth in the last several years,
    including Brazil, Italy and South Korea, through innovative
    product and marketing programs. Finally, there are new markets,
    particularly China and India, which represent large market
    opportunities where we believe the Everlast brand will be well
    accepted by consumers. We are currently in the process of
    seeking highly qualified licensees in these markets.
    Broaden our core sporting goods equipment
    offering.  We intend to continue to improve the
    performance features of our current sporting goods equipment
    through technical innovation as well as expand our product
    offering to include products used for general fitness related
    activities to capitalize on current trends and long-term shifts
    in the fitness category. For example, in 2006 we introduced a
    line of mixed martial arts training gear to capitalize on the
    growing popularity of that sport. In 2007, we plan to introduce
    several new products for consumers interested in boxing as a
    home fitness activity, such as an interactive workout system and
    a multi-purpose home boxing gym to support the 5




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anticipated growth in home gym use over the next ten years. We
    believe the growing popularity of boxing as a form of exercise,
    particularly among women and aspirational athletes, will
    increase our target market and we intend to continue to offer
    products to meet our customers evolving needs.  
    Increase domestic distribution of our sporting goods
    equipment.  We intend to expand domestic
    distribution of our sporting goods equipment through continued
    penetration of our current retail partners, as well as adding
    new retailers to our customer base. We believe that the strength
    of our relationships, quality of our products and customer
    service and new, innovative product introductions allows us to
    leverage the growth of our current retail customers, increase
    floor space dedicated to our products and improve the placement
    of our products in our retailers stores. In addition, we
    believe there are significant opportunities to add new retailers
    to our customer base, such as home improvement and home
    furnishing national chains. We also intend to increase our
    presence in fitness club and boxing gyms, by offering a broader
    selection of sporting goods equipment and services that combine
    the latest trends in fitness and activities to capitalize on the
    increasing interest in active lifestyles.  Products
    Sporting Goods Equipment.
  
    Boxing gloves.  We believe our boxing gloves
    are our most recognizable product. We design, manufacture,
    import and market boxing gloves for professional, amateur and
    personal fitness use. Our professional gloves are certified
    worldwide by the World Boxing Council, World Boxing Association,
    International Boxing Federation, World Boxing Organization and
    the Association of Boxing Commissions. In addition, we recently
    introduced boxing gloves specifically designed for women who
    utilize boxing as a form of fitness.
    Heavy bags, speed bags and platforms.  We offer
    a wide range of heavy bags, a variety of small, air-filled speed
    bags and their required platforms. We continually update our
    products to incorporate the latest technology and design to
    improve quality, durability and functionality. For example, we
    recently signed a license agreement to use Spalding INFUSION
    Micro Pump technology for speed bags and double end striking
    bags which we plan to introduce in June 2007. With built-in
    Micro Pumps, each INFUSION product can be inflated or deflated
    at any time without the need for a separate pump or needle.
    Heavy bag stands and freestanding heavy
    bags.  Primarily for home gym use, we offer a
    variety of stands that are used to suspend heavy bags as well as
    speed bags. We recently introduced a freestanding heavy bag that
    can be filled with either water or sand for easier
    transportation and storage of the unit to address the growing
    home gym market.
    Boxing trunks, robes and shoes.  Our
    boxing-related apparel and footwear products are offered in a
    variety of styles and fits intended to enhance comfort and
    performance while catering to the boxers individual
    preferences and style. We continue to improve the 6




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functionality and performance of these products. For example, we
    recently partnered with Michelin, combining our expertise and
    resources to develop the first boxing shoes that incorporate
    Michelin HydroEdge sole technology, which increases traction and
    stability. We plan to introduce this product in June 2007. We
    believe our boxing trunks and robes are iconic products in the
    boxing industry, and we often customize them for professional
    and amateur boxers.  
    Mixed martial arts equipment.  We recently
    introduced a new line of products, including heavy bags and
    protective gear, designed for mixed martial arts in response to
    the rapidly growing popularity of these activities as a form of
    competition and exercise.
    Additional sporting goods equipment.  In
    addition to the aforementioned core offerings, we design,
    manufacture, source and market a wide range of training and
    competitive gear including protective headgear, protection cups,
    mouthpieces, hand wraps, boxing rings, gym mats and medicine
    balls. In addition, we design a number of fitness products and
    accessories targeted at the home gym market, including an
    interactive workout system and multi-purpose home boxing gym. We
    also developed a number of products to address the fitness
    market including our EverGel glove wraps.  Licensed Products.
   Apparel.  Our
    U.S. and international apparel licensees offer a wide range of
    technical and lifestyle apparel products for men, women and
    children including t-shirts, shorts, sweatshirts, compression
    products, outerwear and socks.
     Footwear.  Our licensees primarily
    offer athletic and performance footwear designed for
    competitive, training and casual activities.
     Sporting goods equipment.  We
    primarily license the Everlast brand for sporting goods
    equipment internationally to licensees with category expertise
    and knowledge of local markets. Our licensees offer the same
    range and quality of our products customized for the preferences
    of their local markets.

2006 License Revenue By
    Category(PIE CHART) Other active
    lifestyle products.  Our licensees offer a wide
    range of active lifestyle products including nutritional
    products, eyewear, sports bags, hats and fragrances.    7




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Sales and
    Distribution
  Sporting Goods Equipment.
  
    Sporting goods stores  including The Sports
    Authority, Dicks Sporting Goods and Big 5 Sporting Goods;
    Mass merchants  including Wal-Mart, K-Mart and
    Target;
    Mid-tier department stores  including
    Kohls, J.C. Penney and Sears;
    Specialty stores and fitness clubs; and
    Direct to consumer  internet and the Everlast
    catalog.      8




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Licensed
    Products.Our
    licensed products are distributed through a deliberate range of
    retail channels depending on country of origin, product category
    and intended use. For example, products manufactured by
    licensees for active lifestyles are distributed through sporting
    goods stores worldwide. Certain fashion lifestyle products built
    on the strength of the Everlast brand are distributed through
    department and specialty stores worldwide. Contractual approvals
    and controls are in place to ensure brand consistency at
    retail.
    We require our licensees to submit samples of all products that
    are to be sold under our license agreements. Samples of licensed
    products are inspected by us for quality, concept and
    appropriate use of the Everlast trademark. Licensees that do not
    comply with our quality or trademark standards are notified that
    they are in breach of their license agreement and immediate
    measures are taken to protect our brand integrity.

2006 License Revenue by
    Territory(PIE GRAPH)45.6% of our license revenue is
    generated from sales of licensed products in the U.S. and
    Canada. The remainder of license revenue is generated from sales
    of licensed products in over 100 countries.   Marketing,
    Advertising and Promotions
    Marketing Campaign.
    Marketing and Advertising. point-of-purchase
 9




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Sports Marketing and Promotions.
      Direct-to-Consumer
    Business. direct-to-consumer e-mail direct-to-consumer
  Trade Marketing.
  Manufacturing,
    Sourcing and Distribution
   10




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Inventory
    Management
      Intellectual
    Property
   11




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Competition
  Sporting Goods Equipment.
  Licensed Products.
  Employees
    Environmental
    Considerations
       12




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Available
    Information
    
    our annual report on
    Form 10-K,
    quarterly reports on Form
    10-Q,
    current reports on
    Form 8-K,
    and all amendments to those reports as soon as reasonably
    practicable after such material is electronically filed with the
    Securities and Exchange Commission (SEC); and
    our policies related to corporate governance, including our Code
    of Business Conduct and Ethics applying to our directors,
    officers and employees (including our principal executive
    officer, and principal financial and accounting officer) that we
    have adopted to meet the requirements set forth in the rules and
    regulations of the SEC.  Item 1A.
    Risk
    Factors    If our
    marketing efforts do not effectively maintain and expand our
    brand recognition, we may not be able to achieve our growth
    strategy.
    Expanding
    our brand into new categories or territories may be difficult
    and expensive, and if we are unable to successfully expand into
    these categories or territories as expected, our brand may be
    adversely affected, and we may not achieve our planned sales
    growth.
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We
    currently have an informal business arrangement with
    Title Boxing, L.L.C. to administer the Everlast catalog
    sales business our products and provide all order fulfillment of
    our catalog and
    e-commerce
    business, and any alteration to these arrangements could impact
    our sales and growth strategy.
  e-commerce e-commerce e-commerce e-commerce e-commerce
  We may
    be unable to sustain our past growth or manage our future
    growth, which may have a material adverse effect on our future
    operating results.
   14




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Failure
    to adapt to changes in consumer market trends may materially
    affect our business and results of operations.
    The
    failure to successfully protect our intellectual property rights
    could have a material adverse effect on our licensing
    business.
       15




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The
    failure of our licensing partners to preserve the value of our
    licenses could have a material adverse effect on our
    business.
    
    obtain capital;
    manage its labor relations;
    maintain relationships with its suppliers;
    maintain the quality and marketability of products bearing our
    trademarks;
    manage its credit risk effectively;
    meet its financial obligations to us; and
    maintain relationships with its customers.   16




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Failure
    to maintain and integrate licensing partners could harm our
    business.
      Our
    womens apparel license with Jacques Moret contains a
    99-year exclusive renewal option which, if exercised, would
    provide us with a one-time royalty of $24.0 million, which
    may be less than the future discounted royalty cash flows over
    this 99-year term.
    We
    depend on certain key employees, the loss and replacement of
    whom could have a material adverse effect on our
    business.
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The
    issuance of additional warrants to purchase shares of our common
    stock could adversely affect our financial results and the
    trading price of shares of our common stock.
  365-day
  Our
    financial success may be limited to the strength of our
    relationships with our retail customers and to the success of
    these retail customers.
  order-by-order
      If we
    or our licensees do not accurately forecast consumer demand, we
    or our licensees may have excess inventory to liquidate or have
    greater difficulty filling our customers orders, either of
    which could adversely affect our business.
   18




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Third
    parties may claim that we are infringing their intellectual
    property rights, and these claims may be costly to defend, may
    require us to pay licensing fees, damages, or other amounts, and
    may prevent, or otherwise impose limitations on the manufacture,
    distribution or sale of our products.
    The
    failure to comply with our quality control standards may have a
    material adverse effect on our business.
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Our
    business is subject to intense competition and could be
    adversely affected by the failure to effectively
    compete.
    
    significantly greater financial resources than we have;
    more comprehensive product lines than we have;
    longer-standing relationships with suppliers, manufacturers and
    retailers than we have;
    greater distribution capabilities than we have; and
    stronger brand recognition and loyalty than we have, and spend
    substantially more on product advertising and sales than we do.      Returns
    and chargebacks may have a material adverse effect on our
    business.
    Potential
    liability exposure in our sporting goods equipment business may
    have a material adverse effect on the consumer demand for our
    products.
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Our
    business is subject to the general economic cycle, a downturn in
    which could cause a material adverse effect on our business,
    financial condition and results of operations.
      Fluctuations
    in the price, availability and quality of raw materials could
    cause delays and increase costs which may have a material
    adverse effect on our business.
    If the
    U.S. continues to impose tariffs and import quota
    restrictions on products manufactured in China and we are unable
    to meet our manufacturing needs from countries other than China
    or from domestic sources, it could materially affect our gross
    margin and financial performance.
    Failure
    to control the costs for the products that we manufacture could
    adversely affect our sales and results of
    operations.
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Because
    we depend on third party manufacturers, we may face challenges
    in maintaining a sufficient supply of goods to meet sales
    demand, and we may experience interruptions in our supply chain.
    Any shortfall in the supply of our products may decrease our
    sales and have an adverse impact on our customer
    relationships.
      Our
    business could suffer if our third party manufacturers violate
    labor laws or fail to conform to generally accepted ethical
    standards.
    We
    depend on a limited number of suppliers for key production
    materials, and any disruption in the supply of these materials
    could interrupt product manufacturing and increase product
    costs.
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An
    interruption of the services of our manufacturing and
    distribution facility in Moberly, Missouri could negatively
    impact our sporting goods equipment business.
    Failure
    to comply with environmental laws and regulations may have a
    material adverse effect on our business.
        We
    will incur significant time and expense in documenting, testing
    and certifying our internal control over financial reporting,
    and any deficiencies in our financial reporting or internal
    controls could adversely affect our business and the price of
    our common stock.
  Form 10-K
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We may
    fail to successfully expand our distribution network or
    introduce our products both domestically and internationally,
    and this may cause our results of operations to fall short of
    expectations.
    
    the strength of the Everlast brand and competitive conditions in
    new markets that we attempt to enter;
    our ability to attract and retain qualified licensees,
    distributors or agents or to develop direct sales channels;
    our ability to use and protect the Everlast brand, and our other
    intellectual property, in these new markets and territories; and
    our ability to successfully enter and compete in markets and
    territories, especially internationally, where we have little
    distribution experience and where our Everlast brand is not as
    well known.    We
    conduct a significant portion of our activities outside the
    U.S., and therefore we are subject to the risks of international
    commerce.
    
    trade restrictions, tariffs, import and export controls and
    other non-tariff barriers such as quotas and local content rules;
    increased transportation costs due to distance, energy prices or
    other factors;
    delays in the transportation and delivery of goods due to
    increased security concerns; 24




---



##### Table of Contents




    restrictions on the transfer of funds;
    longer payment cycles for, and greater difficulty collecting,
    accounts receivable and royalty payments;
    unexpected changes in regulatory requirements, royalties and
    withholding taxes that restrict the repatriation of earnings;
    changing economic conditions;
    restrictions, due to privacy laws, on the handling and transfer
    of consumer and other personal information;
    changes in governmental policies and regulations;
    political and economic instability, including wars, terrorism,
    political unrest, boycotts, curtailment of trade and other
    business restrictions;
    expropriation and nationalization;
    natural disasters;
    difficulties encountered by our international licensees or us in
    staffing and managing foreign operations or international sales;
    difficulties in managing foreign operations effectively and
    efficiently from the U.S.; and
    difficulties in understanding and complying with local laws,
    regulations and customs in foreign jurisdictions.      We can
    issue shares of preferred stock without stockholder approval,
    which could adversely affect the rights of common stock
    stockholders.
   25




---



##### Table of Contents



Our
    certificate of incorporation, our bylaws and Delaware law
    contain provisions that could discourage a third party from
    acquiring us and consequently decrease the market value of an
    investment in our stock.
    
    authorize us to issue preferred stock that can be created and
    issued by the board of directors without prior stockholder
    approval, with rights senior to those of common stock;
    do not permit cumulative voting in the election of directors,
    which would otherwise allow less than a majority of stockholders
    to elect director candidates;
    classify our board of directors so that only some of our
    directors are elected each year; and
    allow the authorized number of directors to be changed only by
    resolution of the board of directors.    Item 1B.
    Unresolved
    Staff Comments    Item 2.
    Properties      Item 3.
    Legal
    Proceedings    Item 4.
    Submission
    of Matters to A Vote of Security Holders   26




---



##### Table of Contents



PART II  Item 5.
    Market
    for Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities  Market
    Information
  Performance
    Graph
  COMPARE
    5-YEAR
    CUMULATIVE TOTAL RETURN AMONG EVERLAST WORLDWIDE INC., NASDAQ
    MARKET INDEX AND HEMSCOTT GROUP INDEX
  
  
  COMPARISON
    OF CUMULATIVE TOTAL RETURN OF ONE OR MORE
    COMPANIES, PEER GROUPS, INDUSTRY INDEXES AND/OR BROAD
    MARKET
  FISCAL YEAR ENDCompany/Index/Market

12/31/2001

12/31/2002

12/31/2003

12/31/2004

12/30/2005

12/29/2006Everlast Worldwide Inc


100.00



155.32



125.53



322.98



438.72



723.40Textile-Apparel Clothing


100.00



98.83



126.65



151.89



165.07



211.11NASDAQ Market Index


100.00



69.75



104.88



113.70



116.19



128.12    27




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##### Table of Contents



2006High


Low1st Quarter

$
20.63


$
9.872nd Quarter

$
20.04


$
11.053rd Quarter

$
16.45


$
12.654th Quarter

$
19.73


$
14.61   2005High


Low1st Quarter

$
14.60


$
5.572nd Quarter

$
10.06


$
5.773rd Quarter

$
7.75


$
4.504th Quarter

$
11.50


$
3.39   Holders
    Dividends
    Disclosure
    of Equity Compensation Plan Information (as of December 31,
    2006)
  Number ofsecuritiesremaining availableNumber of





for future issuancesecurities to be





under equityissued upon


Weighted-average


compensation plansexercise of


exercise price of


(excludingoutstanding


outstanding


securitiesoptions, warrants


options, warrants


reflected in columnPlan Category

and rights(a)


and rights


(a))Equity compensation plans approved
    by security holders


662,336


$
7.66



1,212,503  28




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##### Table of Contents



Item 6.
    Selected
    Financial Data      For the Year Ended December 31,2002


2003(a)


2004


2005


2006(unaudited)(in thousands, except per share data)Consolidated Statement of
    Operations DataNet sales

$
27,922


$
25,126


$
24,438


$
31,271


$
39,630Net license revenues


5,501



6,669



9,059



11,982



12,257Net revenues


33,423



31,795



33,497



43,253



51,887Cost of goods sold


20,069



18,999



18,553



24,807



29,887Gross profit


13,354



12,796



14,944



18,446



22,000Selling, general and administrative
    expenses


12,760



14,954



13,881



13,220



13,916Operating income (loss) from
    continuing operations


594



(2,158
)


1,063



5,226



8,084Interest expense and financing costs


249



503



1,087



2,238



3,342Other expense (income)


(96
)


(48
)


(17
)


17



(2,053
)Income (loss) before provision for
    income taxes from continuing operations


441



(2,613
)


(7
)


2,971



6,795Provision (benefit) for income
    taxes from continuing operations


281



(640
)


47



1,145



2,071Net income (loss) from continuing
    operations


160



(1,973
)


(54
)


1,826



4,724(Loss) income from discontinued
    components, net of tax


2,288



1,018



(973
)


(2,774
)


Net income (loss)

$
2,448


$
(955
)

$
(1,027
)

$
(948
)

$
4,724Dividends on redeemable preferred
    stock


1,451















Basic per share
    data:(b)Net income (loss) from continuing
    operations

$
0.05


$
(0.63
)

$
(0.02
)

$
0.55


$
1.22Net income (loss) from discontinued
    components

$
0.74


$
0.32


$
(0.31
)

$
(0.83
)


Net income (loss)

$
0.79


$
(0.31
)

$
(0.33
)

$
(0.28
)

$
1.22Diluted per share
    data:(b)Net income (loss) from continuing
    operations

$
0.04


$
(0.63
)

$
(0.02
)

$
0.47


$
1.14Net income (loss) from discontinued
    components

$
0.55


$
0.32


$
(0.31
)

$
(0.71
)


Net income (loss)

$
0.59


$
(0.31
)

$
(0.33
)

$
(0.24
)

$
1.14 29




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##### Table of Contents



For the Year Ended December 31,2002


2003(a)


2004


2005


2006(unaudited)(in thousands, except per share data)Weighted average common
    shares:(c)Basic


3,101



3,108



3,132



3,326



3,865Diluted


4,139



3,108



3,132



3,894



4,136   As of December 31,2002


2003


2004


2005


2006(in thousands)Consolidated Balance Sheet
    DataCash and cash equivalents

$
2,530


$
1,937


$
649


$
58


$
216Total assets


63,847



64,257



64,756



61,441



65,276Long-term obligations:Redeemable preferred stock


35,000



30,000



25,000







Long-term debt, net of current
    maturities


3,227



4,866



6,643



26,531



19,161    (a)
    During 2003, we incurred restructuring and non-recurring
    duplicative manufacturing costs aggregating $3.3 million,
    pretax, related to the relocation and consolidation of our
    Bronx, New York manufacturing facility which closed in December
    2003. These costs are included in the operating income (loss)
    from continuing operations.  (b)
    Excludes the effect of the preferred stock dividends
    impact on earnings per share for 2002 as follows:
    Basic  $0.47; Diluted  $0.35.  (c)
    As a result of the net losses from continuing operations in 2003
    and 2004, the dilutive effect of options and contingent
    considerations (1,091,000 and 1,434,000 shares
    respectively) are not shown as the results would be
    anti-dilutive. 30




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##### Table of Contents



Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operation  You should read the following discussion and analysis of our
    financial condition and results of operations in conjunction
    with our financial statements and related notes included in this
    annual report. This discussion and analysis contains
    forward-looking statements based on our current expectations,
    assumptions, estimates and projections. These forward-looking
    statements involve risks and uncertainties. See
    Note Regarding Forward-Looking Information. Our
    actual results could differ materially from those indicated in
    these forward-looking statements as a result of various factors,
    as more fully discussed below and elsewhere in this annual
    report, particularly in the section entitled Risk
    Factors.
  Overview
      Sporting Goods Equipment.
 31




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##### Table of Contents



Licensed Products.
  Background
    
    Licensed our wholesale apparel business in the U.S. and
    Canada.  On December 17, 2004, we entered
    into the largest licensing agreement in our history, whereby we
    licensed our U.S. womens apparel business to Jacques
    Moret, effective January 1, 2005. Effective January 1,
    2006, we expanded our relationship with Jacques Moret by
    licensing our U.S. mens apparel business. We believe
    that our decision to license our U.S. apparel businesses
    reduced our operating risk, increased our profitability and
    enhanced the Everlast apparel presence as a result of Jacques
    Morets ability to source product more competitively and
    their expertise in various channels of distribution. We estimate
    that the discontinuance of the components and their replacement
    with the license arrangement would have improved our net income
    available to common stock stockholders by approximately
    $1.4 million in 2005, had the transition been completed at
    the beginning of the year, after giving effect to income taxes
    and dividends associated with our preferred stock. We estimate
    that the discontinuance of the mens and womens
    apparel components and their replacement with the license
    arrangements, would have improved our net income available to
    common stock stockholders by approximately $1.4 million in
    2004, had the transaction been completed at the beginning of the
    year, after giving effect to income taxes and dividends
    associated with our preferred stock. Accordingly, we reported
    our results of operations on a GAAP basis, including the
    application of FASB No. 144, Accounting for the
    Disposal of Long-Lived Assets, which requires us to report
    the results of operations of our mens and womens
    apparel businesses as discontinued components for all current
    and prior periods presented.  Our U.S. womens apparel license with Jacques Moret
    terminates on December 31, 2009 and, subject to certain
    conditions, may be renewed for two additional five-year terms
    for a minimum of $13.5 million in guarantees per term. In
    addition, subject to certain conditions, Jacques Moret has the
    option as of December 31, 2009 to convert the license
    agreement to a fully paid 99-year exclusive license for
    $24.0 million. None of our other licensing agreements
    contain a similar long-term license provision.  
    Rationalized our U.S. manufacturing and
    distribution.  In the second half of 2003, we
    closed our Bronx, New York manufacturing facility as a result of
    significant lease escalation costs expected in April 2004 and
    our inability to reach practical capacity at both the Bronx, New
    York and Moberly, Missouri facilities. During the fourth quarter
    of 2003, we recorded 32




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##### Table of Contents



charges aggregating $2.1 million, before taxes, related to
    this relocation and consolidation, approximately
    $1.2 million of which were non-cash.  In the fourth quarter of 2004, we were notified by the former
    union representing employees of the Bronx, New York facility
    that a potential minimum withdrawal pension liability existed on
    these former employees that were covered under a defined benefit
    multi-employer pension plan. In the second quarter 2005, we and
    the union agreed on a settlement for $273,000 for this minimum
    withdrawal liability resulting in a charge for 2005. Through
    December 31, 2006, we paid $130,000 towards this settlement
    and are required to pay quarterly installments of $12,000
    through July 2009.  
    Implemented capital structure initiatives.  In
    February 2006, we recorded a $2.0 million tax-free gain
    from the early redemption of our preferred stock in the
    aggregate principal amount of $20.0 million and the
    prepayment of our outstanding $6.0 million in notes payable
    to one of the holders of the preferred stock by entering into a
    term facility with Wells Fargo. Using the proceeds from the term
    facility, we redeemed all our outstanding preferred stock,
    prepaid all of our outstanding notes payable associated with the
    preferred stock, and eliminated all rights and privileges of
    holders of the preferred stock, for an aggregate amount of
    $22.7 million. The remaining $2.3 million available
    under the term facility was used to pay financing and
    professional costs associated with the term facility.  Results
    of Operations
  Net revenues.
  Cost of goods sold.
  Selling, general and administrative
    expenses.
  Year Ended December 31, 2006 Compared to Year Ended
    December 31, 2005
  Net revenues.
 33




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##### Table of Contents



Gross profit.
  Selling, general and administrative
    expenses.
    30-year
  Operating income from continuing
    operations.
  Interest expense and financing costs.
 34




---



##### Table of Contents



Other expense (income).
    Income before provision for income taxes from continuing
    operations.
  Provision for income taxes.
  Net income (loss).
  Year Ended December 31, 2005 Compared to Year Ended
    December 31, 2004
  Net revenues.
  Gross profit.
  Selling, general and administrative
    expenses.
 35




---



##### Table of Contents



Operating income from continuing
    operations.
  Interest expense and financing cost.
  Other expense (income).
  Income (loss) before provision for income taxes from
    continuing operations.
  Provision for income taxes.
  Net income (loss).
  Off-Balance
    Sheet Arrangements
   36




---



##### Table of Contents



Liquidity
    and Capital Resources
             37




---



##### Table of Contents



Contractual
    Obligations and Commercial Commitments
    Payments Due by PeriodLess than








More thanTotal


1 Year


1-3 Years


3-5 Years


5 Years(in thousands)Senior term facility

$
23,095


$
3,934


$
19,161


$



$
Long-term debt obligations


2,419



2,419











Capital lease obligations


19



19











Operating leases


782



408



374







Total contractual cash obligations

$
26,315


$
6,780


$
19,535


$



$
   Critical
    Accounting Policies and Estimates
    Revenue Recognition Policy.
  Trade Receivables.
  Deferred Taxes.
 38




---



##### Table of Contents



Inventory. first-in-first-out
  Valuation of Goodwill, Long-Lived Assets and Intangible
    Assets.
  Contingencies and Litigation.
  Impact of
    Recent Accounting Pronouncements
    No. 06-3, No. 06-3
   39




---



##### Table of Contents



40




---



##### Table of Contents



Item 7A.  Quantitative and Qualitative
    Disclosures About Market Risk  Quantitative
    and Qualitative Disclosures About Market Risk
    Interest Rate Risk.
  Foreign Currency Exchange Risk.
 41




---



##### Table of Contents



Item 8.
    Financial
    Statements and Supplementary Data  Consolidated
    Financial Statements
  page F-2 through F-28.
   Item 9.
    Changes
    in and Disagreements with Accountants on Accounting     Item 9A.
    Controls
    and Procedures        Form 10-K.
  Item 9B.
    Other
    Information.    PART III  Item 10.
    Directors,
    Executive Officers and Corporate Governance  Executive
    Officers and Directors
    Name

Age

Position(s)Seth A. Horowitz


30


Chairman, Chief Executive Officer
    and PresidentGary J. Dailey


39


Chief Financial OfficerGerard J. deLisser


48


Chief Merchandising OfficerAngelo V. Giusti


56


Senior Vice President of Sales and
    SecretaryThomas K. Higgerson


58


Senior Vice President of
    Manufacturing and DistributionMark Ackereizen


62


DirectorJames K. Anderson


70


DirectorTheodore A. Atlas


50


DirectorEdward R. Epstein


67


DirectorLarry A. Kring


66


DirectorJames J. McGuire, Jr.


71


DirectorJeffrey M. Schwartz


47


Director  42




---



##### Table of Contents



Seth A. Horowitz
  Gary J. Dailey
  Gerard J. deLisser 26-year
  Angelo V. Giusti
  Thomas K. Higgerson
  Mark Ackereizen
  James K. Anderson
  Theodore Teddy A. Atlas
 43




---



##### Table of Contents



Edward R. Epstein
  Larry A. Kring
  James J. McGuire, Jr.
  Jeffrey M. Schwartz
  Director
    Independence
    Committees
    of the Board of Directors
    Corporate Governance and Nominating
    Committee.
 44




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##### Table of Contents



Compensation Committee. Rule 16b-3
  Audit Committee.
  Code of
    Ethics
   45




---



##### Table of Contents



Limitation
    of Liability and Indemnification
    
    any breach of their duty of loyalty to us or our stockholders;
    acts or omissions not in good faith or which involve intentional
    misconduct or a knowing violation of law;
    unlawful payments of dividends or unlawful stock repurchases,
    redemptions or other distributions; and
    any transaction from which the director derived an improper
    personal benefit.      Section 16(a)
    Beneficial Ownership Reporting Compliance.
   46




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##### Table of Contents



Item 11.
    Executive
    Compensation.  Compensation
    Discussion and Analysis
  Compensation Objectives.
    
    attract and retain individuals of superior ability and
    managerial talent;
    ensure officer compensation is aligned with our corporate
    strategies, business objectives and the long-term interests of
    our stockholders; and
    enhance the officers incentive to increase our stock price
    and maximize stockholder value, as well as promote retention of
    key people, by providing a portion of total compensation for
    management in the form of direct ownership in us through stock
    options.    Determination of Compensation
    Awards.
 47




---



##### Table of Contents



Compensation Benchmarking and Peer
    Group.
      Elements
    of Compensation
  Base salary.
  Performance-based compensation.
   48




---



##### Table of Contents



Discretionary long-term equity incentive
    awards.
      Defined contribution plans.
  Other
    Elements of Compensation and Perquisites
  Medical insurance.
  Life and disability insurance.
  Automobile and commuting allowances.
 49




---



##### Table of Contents



Policies with respect to equity compensation
    awards.
  New compensation policies.
 50




---



##### Table of Contents



Summary
    Compensation Table
    Non- EquityName and










Incentive Plan


All OtherPrincipal Position

Year


Salary ($)


Option Awards
    ($)(1)


Compensation
    ($)(2)


Compensation ($)


Total ($)Seth A. Horowitz


2006



325,000



494,865



496,467



20,107
(3)


1,336,439Chief Executive
    OfficerGary J. Dailey


2006



200,000



40,265



235,518



9,384
(4)


485,167Chief Financial
    OfficerHal G. Worsham


2006



176,451



29,183



125,000



5,761
(5)


336,395Senior Vice President,
    Global LicensingAngelo V. Giusti


2006



215,000



21,198



43,000



11,760
(6)


290,958Senior Vice President,
    SalesThomas K.
    Higgerson(8)


2006



65,000



5,912



13,333



2,400
(7)


86,645Senior Vice President,
    Manufacturing and
    Distribution    (1)
    Represents the expensed fair value of options determined under
    FASB 123(R) and therefore includes amounts from awards
    granted in and prior to 2006. These amounts utilize the
    assumptions set forth in the footnotes to the consolidated
    financial statements.(2)
    Represents amounts awarded to named executives under our
    performance based compensation program, earned in 2006 and paid
    in full in cash by February 2007.(3)
    Includes amounts paid by us on behalf of Mr. Horowitz for:
    auto lease  $11,846; car insurance  $2,500
    and parking  $5,761.(4)
    Includes $9,384 paid by us on behalf of Mr. Dailey for
    commuting allowance.(5)
    Includes annual health insurance premium and reimbursements paid
    by us on behalf of Mr. Worsham in the amount of $5,761.(6)
    Includes amounts paid by us on behalf of Mr. Giusti for:
    commuting allowance  $6,960 and parking 
    $4,800.(7)
    Includes $2,400 paid by us on behalf of Mr. Higgerson for
    commuting allowance.(8)
    Mr. Higgerson was appointed senior vice president,
    manufacturing and distribution, of our company on
    September 6, 2006. 51




---



##### Table of Contents



Grants of
    Plan-Based Awards
    All OtherOptionAwards:


Exercise orNumber of


Base Price


Grant Date FairSecurities


of Option


Value of StockUnderlying


Awards


and OptionName

Grant Date


Options
    (#)(1)


($/Sh)(2)


Awards
    ($)(3)Seth A. Horowitz


1/9/2006



120,000



8.30



335,2006/16/2006



100,000



12.31



84,666Gary J. Dailey


6/16/2006



25,000



12.31



21,166Hal G. Worsham


6/16/2006



15,000



12.31



12,700Angelo V. Giusti


6/16/2006



10,000



12.31



8,465Thomas K. Higgerson


9/6/2006



12,000



14.42



5,912    (1)
    Mr. Horowitz was awarded a special grant of stock options
    on January 9, 2006, the date of his appointment as chief
    executive officer. Mr. Higgersons stock option grant
    was due to his appointment as senior vice president of
    manufacturing and distribution in September 2006.(2)
    The closing price of our common stock on the grant date is
    considered the fair market value of the stock determined under
    the terms of our 2000 stock option plan.(3)
    Represents the fair value of options on the date of grant
    determined under FASB 123(R), and therefore includes
    amounts from awards granted and prior to 2006, the amount
    included in the Compensation of Directors table uses assumptions
    set forth in the footnotes to the consolidated financial
    statements. Options were granted under the 2000 stock option
    plan and vest and become exercisable in equal annual
    installments over three years. The value shown relates
    specifically to the expense allocated in the 2006 vesting period.  Narrative
    Disclosure to Summary Compensation Table and Grants of
    Plan-Based Awards Table
  Employment Agreements.
  Mr. Horowitz:
  Term.
  Base Salary.
  Restrictive Covenants.
 52




---



##### Table of Contents



Termination.
  Mr. Dailey:
  Term.
  Base Salary.
  Restrictive Covenants.
  Termination.
  Potential Payments Upon Termination or
    Change-in-Control.
   53




---



##### Table of Contents



Change in Control


Failure to Renew Agreement


TerminationCash


Equity





Cash








CashName

Amount(1)


Acceleration(2)


Total


Amount(3)


Equity(4)


Total


Amount(5)


Equity(4)


TotalSeth A. Horowitz

$
2,456,186


$
3,091,000


$
5,547,186


$



$



$



$



$



$
Gary J. Dailey


1,302,199



460,567



1,762,766























Hal G. Worsham














301,451



114,545



415,996



419,677



114,545



534,732    (1)
    The maximum cash severance payments for Mr. Horowitz and
    Mr. Dailey are calculated by taking the sum of 2.99 times
    Mr. Horowitzs and Mr. Daileys current
    annual base salary and bonus amounts, respectively as of
    December 31, 2006.(2)
    Assumes vesting of all outstanding options. Calculated as of
    December 31, 2006 and assuming a price per share of $17.00,
    the closing price of our common stock as of December 31,
    2006. Represents the full acceleration of unvested stock options
    held by the executives.(3)
    Represents Mr. Worshams maximum cash severance
    amount, calculated pursuant to the terms of his agreement
    providing for one year of salary and bonus to be paid in
    quarterly calendar installments as set forth in his employment
    agreement assuming the agreement is not renewed.(4)
    Assumes the exercising of vested stock options on the date of
    termination and assuming a price per share of $17.00, the
    closing price of our common stock as of December 31, 2006.(5)
    Represents 1.5 times Mr. Worshams base salary for
    2006 plus the bonus earned by him during 2006. 54




---



##### Table of Contents



Outstanding
    Equity Awards at Fiscal Year-End
  Outstanding Equity Award.
  Number of


Number ofSecurities


SecuritiesUnderlying


Underlying





OptionUnexercised Options(#)


Unexercised Options(#)


Option Exercise


ExpirationName

Exercisable(1)


Unexercisable(1)


Price ($)


DateSeth A. Horowitz






16,667



2.75



07/23/201433,333



66,667



3.59



11/02/2015



120,000



8.30



01/09/2016



100,000



12.31



06/15/2016Gary J. Dailey


1,667



1,667



2.85



07/01/20143,333



3,333



2.75



07/23/20145,000



10,000



3.59



11/02/2015



25,000



12.31



06/15/2016Hal G. Worsham


3,333



3,333



2.75



07/23/20145,000



10,000



3.59



11/02/2015



15,000



12.31



06/15/2016Angelo V. Giusti


6,667



3,333



2.75



07/23/20143,333



6,667



3.59



11/02/2015



10,000



12.31



06/15/2016Thomas K. Higgerson






12,000



14.42



09/06/2016    (1)
    The following table sets forth information concerning the
    outstanding vested and non-vested stock options of each of the
    named executive officers as of December 31, 2006:  Exercise


Expiration


Exercisable on Anniversary of Grant Date in Fiscal Year
    Ending December 31,Date Issued


Options


Price


Date


2005


2006


2007


2008


2009Seth A. Horowitz


07/23/04



16,667



2.75



07/23/14











16,667







11/02/05



100,000



3.59



11/02/15







33,333



33,333



33,334



01/09/06



120,000



8.30



01/09/16











40,000



40,000



40,00006/16/06



100,000



12.31



06/15/16











33,333



33,333



33,333336,667















33,333



123,333



106,667



73,333Gary J. Dailey


07/01/04



3,334



2.85



07/01/14







1,667



1,667







07/23/04



6,666



2.75



07/23/14







3,333



3,333







11/02/05



15,000



3.59



11/02/15







5,000



5,000



5,000



06/16/06



25,000



12.31



06/15/16











8,333



8,333



8,33450,000















10,000



18,333



13,333



8,334Hal G. Worsham


07/23/04



6,667



2.75



07/23/14







3,333



3,333







11/02/05



15,000



3.59



11/02/15







5,000



5,000



5,000



06/16/06



15,000



12.31



06/15/16











5,000



5,000



5,00036,667















8,333



13,333



10,000



5,000Angelo V. Giusti


07/23/04



10,000



2.75



07/23/14



3,333



3,333



3,333







11/02/05



10,000



3.59



11/02/15







3,333



3,333



3,333



06/16/06



10,000



12.31



06/15/16











3,333



3,333



3,33330,000











3,333



6,666



9,999



6,666



3,333Thomas K. Higgerson


09/06/06



12,000



14.42



09/06/16











4,000



4,000



4,00012,000



















4,000



4,000



4,000  55




---



##### Table of Contents



Option
    Exercises
    Option AwardsNumber of Shares Acquired


Value Received on ExerciseName

on Exercise (#)


($)(1)Seth A. Horowitz


33,333



459,343Gary J. Dailey


5,000



67,550Hal G. Worsham


3,333



49,158Angelo V. Giusti


12,500



183,510    (1)
    Value received represents the difference between the exercise
    price of the stock option and the market price of common stock
    upon exercise. Mr. Giustis exercise price is a
    weighted average of the price of options granted from years
    prior to 2002.  Compensation
    of Directors
    Fees Earned or





All OtherName

Paid in Cash ($)


Option Awards
    ($)(1)


Compensation ($)


Total ($)James K.
    Anderson(4)


12,000



18,020







30,020Larry A.
    Kring(5)


12,000



17,635







29,635Edward R.
    Epstein(6)


12,000



22,245



288,000
(2)


322,245Theodore A.
    Atlas(7)


12,000



15,830



42,000
(3)


69,830James J.
    McGuire, Jr.(8)


12,000



11,730







23,730Jeffrey M.
    Schwartz(9)


12,000



16,060







28,060Mark
    Ackereizen(10)


12,000



11,500







23,500    (1)
    Represents the fair value of options on the date of grant
    determined under FASB 123(R) and therefore includes amounts
    from awards granted in or prior to 2006. The amount included in
    the Compensation of Directors table uses assumptions set forth
    in the footnotes to the financial statements. Options were
    granted under the 2005 non-employee director stock option plan
    and vest and become exercisable in equal annual installments
    over three years.(2)
    Mr. Epstein was paid an aggregate of $288,000 for legal
    services in his capacity as our general counsel (acting as an
    independent contractor) to us for the year ending
    December 31, 2006. Mr. Epstein is entitled to receive
    an amount equal to 2.99 times his base compensation and
    bonus in the event of a change in control of our company, as
    defined in his retainer agreement with our company.(3)
    Mr. Atlas was paid an aggregate of $42,000 for consultation
    in accordance with his consulting agreement in which he advises
    us on boxing promotion matters and new product introduction
    initiatives.    (4)
    Mr. Anderson owns 22,600 shares of common stock
    issuable upon exercise of vested and non-vested options
    including: 
    3,400 vested shares at $2.05 expiring January 2, 2008
    3,400 vested shares at $2.35 expiring January 2, 2009
    3,400 vested shares at $3.83 expiring January 2, 2010
    3,400 vested shares at $3.03 expiring January 2, 2011
    2,333 vested shares and 1,167 non-vested shares at $7.00
    expiring January 2, 2012
    1,833 vested shares and 3,667 non-vested shares at $10.31
    expiring January 2, 2013  (5)
    Mr. Kring owns 22,000 shares of common stock issuable
    upon the exercise of vested and non-vested options, including: 
    3,300 vested shares at $2.05 expiring January 2, 2008
    3,300 vested shares at $2.35 expiring January 2, 2009
    3,300 vested shares at $3.83 expiring January 2, 2010
    3,300 vested shares at $3.03 expiring January 2, 2011  Footnotes continued on following page.
  56




---



##### Table of Contents




    2,266 vested shares and 1,134 non-vested shares at $7.00
    expiring January 2, 2012
    1,800 vested shares and 3,600 non-vested shares at $10.31
    expiring January 2, 2013  (6)
    Mr. Epstein owns 19,533 shares of common stock
    issuable upon exercise of vested and non-vested options,
    including: 
    1,033 vested shares at $3.03 expiring January 2, 2011
    2,200 vested shares and 1,100 non-vested shares at $7.00
    expiring January 2, 2012
    6,666 vested shares and 3,334 non-vested shares at $2.75
    expiring July 23, 2014
    1,733 vested shares and 3,467 non-vested shares at $10.31
    expiring January 2, 2013  (7)
    Mr. Atlas owns 8,000 shares of common stock issuable
    upon exercise of vested and non-vested options, including: 
    2,000 vested shares and 1,000 non-vested shares at $7.00
    expiring January 2, 2012
    1,666 vested shares and 3,334 non-vested shares at $10.31
    expiring January 2, 2013  (8)
    Mr. McGuire owns 7,100 shares of common stock issuable
    upon exercise of vested and non-vested options, including: 
    2,000 non-vested shares at $7.00 expiring January 2, 2012
    1,700 vested shares and 3,400 non-vested shares at $10.31
    expiring January 2, 2013  (9)
    Mr. Schwartz owns 8,100 shares of common stock
    issuable upon exercise of vested and non-vested options,
    including: 
    1,000 vested shares and 2,000 non-vested shares at $7.00
    expiring January 2, 2012
    1,700 vested shares and 3,400 non-vested shares at $10.31
    expiring January 2, 2013  (10)
    Mr. Ackereizen owns 7,000 shares of common stock
    issuable upon exercise of vested and non-vested options,
    including: 
    2,000 non-vested shares at $7.00 expiring January 2, 2012
    1,666 vested shares and 3,334 non-vested shares at $10.31
    expiring January 2, 2013   Cash Compensation. out-of-pocket
  Equity Compensation.
 57




---



##### Table of Contents



COMPENSATION
    COMMITTEE REPORT
  General
  Rule 16b-3
  Compensation
    Philosophy
    Committee
    Authority and Responsibilities
    
    evaluated the performance of the chief executive officer in
    light of our goals and objectives and determined the chief
    executive officers compensation based on this evaluation
    and such other factors as the committee deemed appropriate;
    approved all salary, bonus, and long-term incentive awards for
    our chief executive officer and provided the chief executive
    officer guidelines to help make the determination on
    compensation for the other executive officers and key management
    personnel within our company;
    reviewed and recommended equity-based compensation plans to the
    full board of directors and approved all grants and awards
    thereunder;
    reviewed and approved changes to our equity-based compensation
    plans other than those changes that require stockholder approval
    under the plans, the requirements of the Nasdaq Stock Market or
    any applicable law;
    reviewed and recommended to the full board of directors changes
    to our equity-based compensation plans that require stockholder
    approval under the plans, the requirements of the Nasdaq Stock
    Market or any applicable law;
    administered our equity-based compensation plans; and 58




---



##### Table of Contents




    approved the annual compensation committee report on executive
    compensation for inclusion in our annual report on
    Form 10-K.            Compensation
    Committee Interlocks and Insider Participation
    Compensation
    Discussion and Analysis
  Regulation S-K
       59




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##### Table of Contents



Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters.  PRINCIPAL
    STOCKHOLDERS  Rule 13d-3
  Shares Beneficially
    Owned(1)Name and Address of Beneficial Owner

Number


Percentage(2)Executive Officers and
    DirectorsSeth A. Horowitz


859,207
(3)


20.8
%James K. Anderson


113,322
(4)


2.8
%Larry A. Kring


47,566
(5)


1.2
%Edward R. Epstein


14,633
(6)


*Theodore A. Atlas


3,666
(7)


*James J. McGuire, Jr.


20,519
(8)


*Jeffrey M. Schwartz


3,700
(9)


*Mark Ackereizen


2,666
(10)


*Angelo V. Giusti


13,699
(11)


*Gary J. Dailey


10,000
(12)


*Over 5% Beneficial
    OwnersThe Estate of George Q. Horowitz


616,360



15.2
%c/o Seth A.
    Horowitz, Trustee
    1350 Broadway, Suite 2300 
    New York, New York 10018The Estate of Ben Nadorf


455,700



11.2
%6650 Audubon Trace West,
    West Palm Beach, Florida
    33412-3301Burlingame Equity Investors, LP


580,524
(13)


14.3
%Burlingame Equity
    Investors II, LP
    Burlington Asset Management, LLC
    Blair E. SanfordOne Sansome St., Suite 2900,
    San Francisco, CA 94104Burlingame Equity Investors
    (Offshore) Ltdc/o Appleby Corporate Services (Cayman) Limited,
    Clifton House, 75 Fort St., PO Box 350 GT, George
    Town,
    Grand Cayman, Cayman IslandsAll directors and executive
    officers as a group(10 persons)


1,088,978
(14)


26.4
%     *
    Less than one percent.   60




---



##### Table of Contents



(1)
    Under rules adopted by the Securities and Exchange Commission, a
    person is deemed to be a beneficial owner of securities with
    respect to which the person has or shares: (a) voting
    power, which includes the power to vote or direct the vote of
    the security, or (b) investment power, which includes the
    power to dispose of or to direct the disposition of the
    security. Unless otherwise indicated below, the persons named in
    the table above have sole voting and investment power with
    respect to all shares beneficially owned.(2)
    As of March 21, 2007, there
    were 4,066,525 shares of our common stock outstanding.(3)
    Consists of
    (a) 169,514 shares of common stock, and
    (b) 616,360 shares of common stock beneficially held
    by Seth A. Horowitz, as trustee of The Estate of George Q.
    Horowitz and (c) 73,333 shares of common stock
    issuable upon exercise of options exercisable currently or
    within 60 days, including: 
    33,333 shares at $3.59 expiring November 2, 2015
    40,000 shares at $8.30 expiring January 9, 2016  (4)
    Consists of (a) 95,556 shares of common stock of which
    Mr. Anderson owns 39,300 shares of common stock with
    his wife, as joint tenants, and (b) 17,766 shares of
    common stock issuable upon exercise of options exercisable
    currently or within 60 days, including: 
    3,400 shares at $2.05 expiring January 2, 2008
    3,400 shares at $2.35 expiring January 2, 2009
    3,400 shares at $3.83 expiring January 2, 2010
    3,400 shares at $3.03 expiring January 2, 2011
    2,333 shares at $7.00 expiring January 2, 2012
    1,833 shares at $10.31 expiring January 2, 2013  (5)
    Consists of (a) 30,300 shares of common stock and
    (b) 17,266 shares of common stock issuable upon the
    exercise of options currently exercisable or within
    60 days, including: 
    3,300 shares at $2.05 expiring January 2, 2008
    3,300 shares at $2.35 expiring January 2, 2009
    3,300 shares at $3.83 expiring January 2, 2010
    3,300 shares at $3.03 expiring January 2, 2011
    2,266 shares at $7.00 expiring January 2, 2012
    1,800 shares at $10.31 expiring January 2, 2013  (6)
    Consists of 3,000 shares of common stock and
    11,633 shares of common stock issuable upon the exercise of
    options exercisable currently or within 60 days, including: 
    1,033 shares at $3.03 expiring January 2, 2011
    2,200 shares at $7.00 expiring January 2, 2012
    6,667 shares at $2.75 expiring July 23, 2014
    1,733 shares at $10.31 expiring January 2, 2013 (7)
    Consists of 3,666 shares of common stock issuable upon
    exercise of options exercisable currently or within
    60 days, including: 
    2,000 shares at $7.00 expiring January 2, 2012
    1,666 shares at $10.31 expiring January 2, 2013  (8)
    Consists of (a) 17,819 of common stock held jointly by
    Mr. McGuire and his wife and (b) 2,700 shares of
    common stock issuable upon exercise of options exercisable
    currently or within 60 days, including: 
    1,000 shares at $7.00 expiring January 2, 2012
    1,700 shares at $10.31 expiring January 2, 2013  (9)
    Consists of 3,700 shares of common stock issuable upon
    exercise of options exercisable currently or within
    60 days, including: 
    2,000 shares at $7.00 expiring January 2, 2012
    1,700 shares at $10.31 expiring January 2, 2013  (10)
    Consists of 2,666 shares of common stock issuable upon
    exercise of options exercisable currently or within
    60 days, including: 
    1,000 shares at $7.00 expiring January 2, 2012
    1,666 shares at $10.31 expiring January 2, 2013  (11)
    Consists of 3,700 shares of common stock and
    9,999 shares of common stock issuable upon exercise of
    options exercisable currently or within 60 days, including: 
    6,666 shares at $2.75 expiring July 23, 2014
    3,333 shares at $3.59 expiring November 2, 2015  (12)
    Consists of 10,000 shares of common stock issuable upon
    exercise of options exercisable currently or within
    60 days, including: 
    1,667 shares at $2.85 expiring July 1, 2014
    3,333 shares at $2.75 expiring July 23, 2014
    5,000 shares at $3.59 expiring November 2, 2015  (13)
    Based on a Schedule 13G jointly filed with the Securities
    and Exchange Commission on February 14, 2007 by Burlingame
    Equity Investors, LP, Burlingame Equity Investors II, LP,
    Burlingame Equity Investors (Offshore) Ltd., Burlingame Asset
    Management, LLC and Blair E. Sanford.   (14)
    Includes all options included in footnotes (3) through (12)
    above. 61




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##### Table of Contents



Item 13.
    Certain
    Relationships and Related Transactions, and Director
    Independence.      Item 14.
    Principal
    Accounting Fees and Services.        Audit
    Fees
  Form 10-Q,
  Audit
    Related Fees
   62




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##### Table of Contents



Tax
    Fees
    All
    Other Fees
     PART IV  Item 15.
    Exhibits,
    Financial Statement Schedules  (a) (1) List of Financial statements
             63




---



##### Table of Contents



(b)
    Exhibits  Exhibit



FiledIndex

Description of Document

Herewith

Incorporated by Reference To:3.1(a)

Certificate of Incorporation, as
    amended



Exhibit 3. (i) of Registration
    Statement File No. 33-87954 (the 1995 Registration
    Statement)3.1(b)

Certificate of Amendment of the
    Certificate of Incorporation



Exhibit 3.1(b) of the Annual
    Report on
    Form 10-KSB
    for the year ended December 31, 20003.2

Bylaws



Exhibit 3. (ii) of the
    1995 Registration Statement3.3

Amendment to the Bylaws



Exhibit A of
    Schedule 14A filed on May 3, 200610.1

Lease, dated as of
    December 1, 2003, between us and 1350 Broadway
    Associates



Exhibit 10.2 of the Annual
    Report on
    Form 10-K
    for the year ended December 31, 2003.10.2

2000 Stock Option Plan, as amended



Appendix A of
    Schedule 14A filed on May 2, 200510.3

2005 Non-employee Director Stock
    Option Plan, as amended



Exhibit 99.1 of the Current
    Report on
    Form 8-K
    filed January 19, 200710.4

Term Loan



Exhibit 99.1 of the Current
    Report on
    Form 8-K
    filed February 7, 200610.5

Second Amended and Restated
    Security Agreement



Exhibit 99.2 of the Current
    Report on
    Form 8-K
    filed February 7, 200610.6

Amended and Restated Factoring
    Agreement



Exhibit 99.3 of the Current
    Report on
    Form 8-K
    filed February 7, 200610.7

Security Purchase Agreement with
    Benjamin Nadorf



Exhibit 99.4 of the Current
    Report on
    Form 8-K
    filed February 7, 200610.8

Security Purchase Agreement with
    Arlene Shechet



Exhibit 99.5 of the Current
    Report on
    Form 8-K
    filed February 7, 200610.9

Security Purchase Agreement with
    Arthur Shechet



Exhibit 99.6 of the Current
    Report on
    Form 8-K
    filed February 7, 200610.10

Employment Agreement, dated
    November 28, 2005 by and between Everlast Worldwide Inc.
    and Seth A. Horowitz



Exhibit 99.1 to the Current
    Report on
    Form 8-K
    filed January 24, 200610.11

Employment Agreement, dated
    January 1, 2006 by and between Everlast Worldwide Inc. and
    Gary J. Dailey



Exhibit 10.1 of the Quarterly
    Report on
    Form 10-Q
    filed August 4, 200610.12

Retainer Agreement, dated
    July 1, 2006 by and between Everlast Worldwide Inc. and
    Edward R. Epstein



Exhibit 10.2 of the Quarterly
    Report on
    Form 10-Q
    filed August 4, 200621.1

List of Subsidiaries

X23.1

Consent of Independent Auditors

X31.1a

Certification of Chief Executive
    Officer pursuant to
    Rule 13a14(a)
    and
    Rule 15d-14(a)
    of the Securities Exchange Act, as amended.

X31.2a

Certification of Chief Financial
    Officer pursuant to
    Rule 13a-14(a)
    and
    Rule 15d-14(a)
    of the Securities Exchange Act, as amended.

X 64




---



##### Table of Contents



Exhibit



FiledIndex

Description of Document

Herewith

Incorporated by Reference To:32.1

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

X32.2

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

X   (c) Financial Statement Schedule
  Schedule II Valuation
    and Qualifying Accounts
  Balance at


Charged to





Balance atBeginning of


Costs and





End ofPeriod


Expenses


Deductions


PeriodAllowance for Doubtful
    Accounts:Year ended December 31, 2006

$
49,000


$
192,000


$
55,000


$
186,000Year ended December 31, 2005


10,000



39,000







49,000Year ended December 31, 2004


412,000







402,000



10,000Reserve for
    Chargebacks:Year ended December 31, 2006


413,000



2,473,000



1,317,000



1,569,000Year ended December 31, 2005


275,000



420,000



282,000



413,000Year ended December 31, 2004


215,000



2,829,000



2,769,000



275,000Restructuring
    Accrual:Year ended December 31, 2006


192,000







48,000



144,000Year ended December 31, 2005






273,000



81,000



192,000Year ended December 31, 2004


500,000







500,000



  65




---



##### Table of Contents



SIGNATURES      By:
    /s/  Seth
    Horowitz   Chairman, Chief Executive Officer and
    President
    By:
    /s/  Gary
    J. Dailey   Chief Financial Officer
      March 22, 2006

/s/  Seth
    HorowitzSeth
    Horowitz

(Chairman; Chief Executive
    Officer; President and Principal Executive Officer)March 22, 2006

/s/  Gary
    J. DaileyGary
    J. Dailey

(Chief Financial Officer; and
    Chief Accounting Officer)March 22, 2006

/s/  James
    AndersonJames
    Anderson

(Director)March 22, 2006

/s/  Larry
    KringLarry
    Kring

(Director)March 22, 2006

/s/  Edward
    EpsteinEdward
    Epstein

(Director)March 22, 2006

/s/  Teddy
    AtlasTeddy
    Atlas

(Director) 66




---



##### Table of Contents



March 22, 2006

/s/  Mark
    AckereizenMark
    Ackereizen

(Director)March 22, 2006

/s/  James
    McGuire, Jr.James
    McGuire, Jr.

(Director)March 22, 2006

/s/  Jeffrey
    SchwartzJeffrey
    Schwartz

(Director)  67




---



##### 



EVERLAST
    WORLDWIDE INC. AND SUBSIDIARIES
  TABLE OF
    CONTENTS
  
  PageReport of
    Independent Registered Public Accounting Firm


F-2Consolidated
    Balance Sheets


F-3Consolidated
    Statements of Operations


F-4Consolidated
    Statements of Changes in Stockholders Equity


F-5Consolidated
    Statements of Cash Flows


F-7Notes to
    Consolidated Financial Statements


F-8   F-1




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM                  F-2




---



##### Table of Contents



EVERLAST
    WORLDWIDE INC. AND SUBSIDIARIES
  CONSOLIDATED BALANCE SHEETS
  December 31,2006


2005ASSETSCurrent assets:Cash and cash equivalents

$
216,000


$
58,000Accounts and licensing receivables,
    net


15,649,000



11,117,000Inventory


8,766,000



6,732,000Inventory of discontinued component






1,205,000Prepaid expenses and other current
    assets


1,098,000



2,761,000Total current assets


25,729,000



21,873,000Property and equipment, net


6,235,000



6,213,000Goodwill


6,718,000



6,718,000Trademarks, net


22,664,000



22,664,000Restricted cash


1,109,000



1,059,000Other assets


2,821,000



2,914,000$
65,276,000


$
61,441,000LIABILITIES AND
    STOCKHOLDERS EQUITYCurrent liabilities:Mortgage payable expected to be
    refinanced

$
2,419,000


$
Due to factor


9,079,000



13,028,000Current maturities of long-term debt


3,953,000



2,141,000Accounts payable


5,638,000



3,159,000Accrued expenses and other current
    liabilities


1,696,000



3,252,000Total current liabilities


22,785,000



21,580,000License deposits payable


667,000



465,000Long-term debt, net of current
    maturities


19,161,000



26,531,00042,613,000



48,576,000Commitments and contingenciesStockholders equity:Common stock, par value $.002;
    19,000,000 shares authorized; 4,240,525 issued
    (3,552,743 - 2005), 4,066,525 outstanding (3,378,743 -
    2005)


10,000



8,000Class A common stock, par
    value $.01; 100,000 shares authorized, issued and
    outstanding in 2005






1,000Paid-in capital


17,380,000



12,307,000Retained earnings


6,000,000



1,276,00023,390,000



13,592,000Less: treasury stock, at cost
    (174,000 common shares)


(727,000
)


(727,000
)22,663,000



12,865,000$
65,276,000


$
61,441,000    F-3




---



##### Table of Contents



EVERLAST
    WORLDWIDE INC. AND SUBSIDIARIES
  CONSOLIDATED STATEMENTS OF OPERATIONS
  Years ended December 31,2006


2005


2004Net sales

$
39,630,000


$
31,271,000


$
24,438,000Net license revenues


12,257,000



11,982,000



9,059,000Net revenues


51,887,000



43,253,000



33,497,000Cost of goods sold


29,887,000



24,807,000



18,553,000Gross profit


22,000,000



18,446,000



14,944,000Operating expenses:Selling and shipping


6,984,000



5,178,000



6,262,000General and administrative


6,231,000



6,660,000



6,706,000Restructuring and non-recurring
    costs






287,000



Stock-based compensation and costs
    in connection with warrant issuance, net


701,000



182,000



Amortization expense






913,000



913,00013,916,000



13,220,000



13,881,000Operating income from continuing
    operations


8,084,000



5,226,000



1,063,000Other expense (income):Interest expense and financing costs


3,342,000



2,238,000



1,087,000Gain on early extinguishment of
    preferred stock and prepayment of notes payable, net


(2,032,000
)






Proceeds from life insurance
    benefit, net






(653,000
)


Loss on litigation settlement






692,000



Investment income


(21,000
)


(22,000
)


(17,000
)1,289,000



2,255,000



1,070,000Income (loss) before provision for
    income taxes from continuing operations


6,795,000



2,971,000



(7,000
)Provision for income taxes


2,071,000



1,145,000



47,000Net income (loss) from continuing
    operations


4,724,000



1,826,000



(54,000
)Loss from discontinued components,
    net of tax






(2,774,000
)


(973,000
)Net income (loss) available to
    common stockholders

$
4,724,000


$
(948,000
)

$
(1,027,000
)Basic earnings (loss) per share
    from continuing operations

$
1.22


$
0.55


$
(0.02
)Diluted earnings (loss) per share
    from continuing operations

$
1.14


$
0.47


$
(0.02
)Basic earnings (loss) per share
    from discontinued components

$



$
(0.83
)

$
(0.31
)Diluted earnings (loss) per share
    from discontinued components

$



$
(0.71
)

$
(0.31
)Net basic earnings (loss) per share

$
1.22


$
(0.28
)

$
(0.33
)Net diluted earnings (loss) per
    share

$
1.14


$
(0.24
)

$
(0.33
)    F-4




---



##### Table of Contents



EVERLAST
    WORLDWIDE INC. AND SUBSIDIARIES



CONSOLIDATED
    STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY

Years Ended December 31, 2006, 2005 and 2004 Total








Class AComprehensive


Common Stock


Common StockIncome (loss)


Shares


Amount


Shares


AmountBalance, December 31, 2003






3,028,904


$
6,000



100,000


$
1,000Comprehensive loss:Net loss

$
(1,027,000
)Exercise of stock options






41,455



1,000







Balance, December 31, 2004






3,070,359



7,000



100,000



1,000Comprehensive loss:Net loss

$
(948,000
)Issuance of shares associated with
    make-whole provision of merger






70,108Issuance of warrants and exercises
    of stock options






238,276



1,000Balance, December 31, 2005






3,378,743



8,000



100,000



1,000Comprehensive income:Net income

$
4,724,000Conversion of Class A common
    stock into common stock






112,500



1,000



(100,000
)


(1,000
)Stock-based compensation and
    warrant issuance costsIssuance of warrants to Contender
    Partners and exercises of stock options






575,282



1,000Reduction of income taxes payable
    associated with exercises of non-qualified stock optionsBalance, December 31, 2006






4,066,525


$
10,000






$
    F-5




---



##### Table of Contents



EVERLAST
    WORLDWIDE INC. AND SUBSIDIARIES
    CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS
    EQUITY
    Years Ended December 31, 2006, 2005 and 2004
    (continued)
  Paid-in


Retained


Treasury Stockcapital


earnings


Shares


Amount


TotalBalance, December 31, 2003

$
11,697,000


$
3,251,000



174,000


$
(727,000
)

$
14,228,000Comprehensive loss:






(1,027,000
)










(1,027,000
)Net lossExercise of stock options


124,000















124,000Balance, December 31, 2004


11,821,000



2,224,000



174,000



(727,000
)


13,326,000Comprehensive loss:Net loss






(948,000
)










(948,000
)Issuance of shares associated with
    make-whole provision of merger


















Issuance of warrants and exercises
    of stock options


486,000















487,000Balance, December 31, 2005


12,307,000



1,276,000



174,000



(727,000
)


12,865,000Comprehensive income:Net income






4,724,000











4,724,000Conversion of Class A common
    stock into common stock


















Stock-based compensation and
    warrant issuance costs


701,000















701,000Issuance of warrants to Contender
    Partners and exercises of stock options


3,040,000















3,041,000Reduction of income taxes payable
    associated with exercises of non-qualified stock options


1,332,000















1,332,000Balance, December 31, 2006

$
17,380,000


$
6,000,000



174,000


$
(727,000
)

$
22,663,000    F-6




---



##### Table of Contents



EVERLAST
    WORLDWIDE INC. AND SUBSIDIARIES
  CONSOLIDATED STATEMENTS OF CASH FLOWS
  Years ended December 31,2006


2005


2004Cash flows from operating
    activities:Net income (loss)

$
4,724,000


$
(948,000
)

$
(1,027,000
)Adjustments to reconcile net income
    (loss) to net cash provided by (used in) operating activities:Bad debts


137,000



39,000



Depreciation


558,000



542,000



537,000Amortization


669,000



1,468,000



1,389,000Non-cash cost in connection with
    warrant issuance and stock-based compensation


701,000



182,000



Interest income on restricted cash


(50,000
)


(31,000
)


(13,000
)Gain on early extinguishment of
    preferred stock and notes payable


(2,032,000
)






Changes in assets (increase)
    decrease:Accounts receivable


(4,669,000
)


4,125,000



(1,048,000
)Inventories


(829,000
)


4,844,000



(1,770,000
)Prepaid expenses and other current
    assets


1,662,000



(1,839,000
)


186,000Other assets


221,000



(350,000
)


(111,000
)Changes in liabilities increase
    (decrease):Accounts payable and accrued
    expenses and other liabilities


2,255,000



(1,373,000
)


423,000License deposits payable


202,000



25,000



(129,000
)Net cash provided by (used)
    operating activities


3,549,000



6,684,000



(1,563,000
)Cash flows used in investing
    activities:Acquisition of property and
    equipment


(580,000
)


(572,000
)


(531,000
)Cash flows from financing
    activities:(Repayments) advances of short-term
    borrowings from factor


(3,949,000
)


(3,789,000
)


4,091,000Proceeds from term facility


25,000,000







Redemption of preferred stock and
    prepayment of notes payable


(22,703,000
)


(3,000,000
)


(3,000,000
)Financing costs in connection with
    term facility


(2,059,000
)






(100,000
)Repayments of term facility


(1,905,000
)






Issuance of common stock in
    connection with exercise of options


3,040,000



305,000



125,000Repayments of other debt instruments


(235,000
)


(219,000
)


(310,000
)Net cash (used) provided by
    financing activities


(2,811,000
)


(6,703,000
)


806,000Net increase (decrease) in cash and
    cash equivalents


158,000



(591,000
)


(1,288,000
)Cash and cash equivalents,
    beginning of year


58,000



649,000



1,937,000Cash and cash equivalents, end of
    year

$
216,000


$
58,000


$
649,000    F-7




---



##### Table of Contents



EVERLAST
    WORLDWIDE INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 DECEMBER 31,
    2006, 2005 AND 2004
   (1)
    Nature of
    business:  ®
  (2)  Significant
    accounting policies:
                first-in,
     F-8




---



##### Table of Contents



EVERLAST
    WORLDWIDE INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
                           F-9




---



##### Table of Contents



EVERLAST
    WORLDWIDE INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     As of


As ofDecember 31,


December 31,2006


2005Gross carrying amount of
    trademarks, at cost

$
27,380,000


$
27,380,000Accumulated amortization


4,716,000



4,716,000Trademarks  net

$
22,664,000


$
22,664,000                    F-10




---



##### Table of Contents



EVERLAST
    WORLDWIDE INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
              F-11




---



##### Table of Contents



EVERLAST
    WORLDWIDE INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     2005


2004Net loss as reported

$
(948,000
)

$
(1,027,000
)Deduct: total stock-based employee
    compensation expense determined under fair value based method
    for all awards, net of related tax effects


78,000



57,000Pro forma net loss

$
(1,026,000
)

$
(1,084,000
)Earnings (loss) per share:Basic  as reported

$
(0.28
)

$
(0.33
)Basic  pro forma

$
(0.30
)

$
(0.35
)Diluted  as reported

$
(0.24
)

$
(0.33
)Diluted  pro forma

$
(0.26
)

$
(0.35
)                      F-12




---



##### Table of Contents



EVERLAST
    WORLDWIDE INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        (3) Disposal
    of components:
   F-13




---



##### Table of Contents



EVERLAST
    WORLDWIDE INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     2005


2004Net sales

$
10,406,000


$
32,665,000Costs and expenses


14,638,000



33,464,000Loss before income taxes


(4,232,000
)


(799,000
)Income tax benefit (provision)


1,458,000



(174,000
)Loss from discontinued components

$
(2,774,000
)

$
(973,000
)     (4)  Restructuring
    and non-recurring charges:
        (5)  Loss
    on litigation settlement:
   F-14




---



##### Table of Contents



EVERLAST
    WORLDWIDE INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     (6)  Proceeds
    from life insurance benefit:
    (7)  Short-term
    borrowings from factor:
   F-15




---



##### Table of Contents



EVERLAST
    WORLDWIDE INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    As ofDecember 31,2005Outstanding borrowings from factor

$
14,811,000Outstanding accounts receivable
    assigned to factor


2,259,000Reserve for chargebacks


(476,000
)Net outstanding accounts receivable
    assigned to factor


1,783,000Net due to factor

$
13,028,000Non-factored accounts and licensing
    receivables

$
11,579,000Less: allowance for doubtful
    accounts


(462,000
)Net non-factored accounts and
    licensing receivables

$
11,117,000     (8)  Inventories:
    As of


As ofDecember 31,


December 31,2006


2005Raw materials

$
1,197,000


$
1,429,000Work-in-process


233,000



188,000Finished goods


7,336,000



5,115,000$
8,766,000


$
6,732,000   (9)
    Property
    and equipment:  As of


As ofDecember 31,


December 31,2006


2005Land

$
309,000


$
309,000Buildings and building improvements


5,504,000



5,392,000Furniture and fixtures


604,000



553,000Machinery and equipment


5,056,000



4,640,000Vehicles


42,000



42,00011,515,000



10,936,000Less: accumulated depreciation


5,280,000



4,723,000$
6,235,000


$
6,213,000  F-16




---



##### Table of Contents



EVERLAST
    WORLDWIDE INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  (10)
    Gain on
    early extinguishment of Series A redeemable participating
    preferred stock and notes payable and long-term
    debt:               F-17




---



##### Table of Contents



EVERLAST
    WORLDWIDE INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
       As of


As ofDecember 31,


December 31,2006


2005$25.0 million senior secured
    four-year term facility with quarterly installments commencing
    April 30, 2006 of $635,000 and a balloon payment of up to
    $15,500,000 due December 31, 2009, before any excess cash
    flow recaptures due annually each April. Interest is charged
    monthly on the outstanding then principal, at prime plus 1.0%
    (9.25% at December 31, 2006.) The term facility is secured
    by all tangible and intangible assets, as defined

$
23,095,000


$
26,000,000Term loan of $3,400,000 due in
    60 monthly payments of principal and interest, based on an
    amortization of 180 months, with a balloon payment due in
    the 60th month, October 2007. The interest rate is equal to
    the thirty day LIBOR yield plus 4.0% (9.5% at December 31,
    2006). The term loan is secured by property and equipment having
    a net book value of $3,700,000. The term loan requires
    maintenance of minimum cash flow coverage, as defined. A letter
    of credit of $1,000,000 must be in place during the entire term
    of this loan, or until no longer required. Our factor has issued
    this letter of credit on our behalf. As collateral for the
    letter of credit, we have cash restricted as to withdrawal of
    $1,100,000


2,419,000



2,645,000Equipment loans due in monthly
    installments of principal and interest through 2008. The
    interest rates on these loans range from 7.5% to 8.8%


19,000



27,00025,533,000



28,672,000Less current maturities


6,372,000



2,141,000$
19,161,000


$
26,531,000  F-18




---



##### Table of Contents



EVERLAST
    WORLDWIDE INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Twelve months ending
    December 31, 2007

$
6,372,0002008


2,545,0002009


16,616,000   (11)
    Cash
    surrender value, life insurance:    (12)
    Commitments
    and contingencies:        Twelve months ending
    December 31, 2007

$
408,0002008


380,000Total

$
788,000            F-19




---



##### Table of Contents



EVERLAST
    WORLDWIDE INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
       (13)  License
    revenues:
    Twelve Months EndingDecember 31,2007

$
11,000,0002008


10,200,0002009


7,100,0002010


1,700,0002011


1,200,0002012 and thereafter


5,400,000Total

$
36,600,000       (14)
    Equity
    instruments:  Stock
    Options:
     F-20




---



##### Table of Contents



EVERLAST
    WORLDWIDE INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
                  F-21




---



##### Table of Contents



EVERLAST
    WORLDWIDE INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    1995





2005 Non-





Weighted1993


Non-Employee


2000


Employee





AverageStock Option


Director Stock


Stock Option


Director Stock





Exercise2006

Plan


Option Plan


Plan


Option Plan


Total


PriceOutstanding at January 1


83,356



48,644



975,134







1,107,134


$
6.75Granted










344,000



36,300



380,300


$
10.71Forfeited






(6,400
)


(370,603
)






(377,003
)

$
9.18Exercised


(73,500
)


(22,867
)


(351,728
)






(448,095
)

$
6.70Outstanding at December 31


9,856



19,377



596,803



36,300



662,336


$
7.66Exercisable at December 31


9,856



19,377



107,202







136,435


$
3.32   1995








Weighted1993


Non-Employee


2000





AverageStock Option


Director Stock


Stock Option





Exercise2005

Plan


Option Plan


Plan


Total


PriceOutstanding at January 1


202,856



63,244



687,500



953,600


$
7.08Granted










290,300



290,300


$
3.89Forfeited


(3,000
)


(10,467
)


(1,000
)


(14,467
)

$
4.18Exercised


(116,500
)


(4,133
)


(1,666
)


(122,299
)

$
2.81Outstanding at December 31


83,356



48,644



975,134



1,107,134


$
6.75Exercisable at December 31


83,356



48,644



555,845



687,845


$
8.48   1995








Weighted1993


Non-Employee


2000





AverageStock Option


Director Stock


Stock Option





Exercise2004

Plan


Option Plan


Plan


Total


PriceOutstanding at January 1


320,211



55,400



505,000



880,611


$
7.73Granted






13,800



185,000



198,800


$
2.77Forfeited


(78,500
)


(3,356
)


(2,500
)


(84,356
)

$
5.70Exercised


(38,855
)


(2,600
)






(41,455
)

$
3.00Outstanding at December 31


202,856



63,244



687,500



953,600


$
7.08Exercisable at December 31


199,500



43,802



505,000



748,302


$
8.26   Outstanding


ExercisableWeighted-


Weighted-





Weighted-Average


Average





AverageContractual Life


Exercise





ExerciseExercise Price Range

Shares


Remaining


Price


Shares


Price$0.85 - $2.99


83,737



6.30 years


$
2.65



60,958


$
2.65$3.00 - $6.99


178,099



8.28 years



3.58



68,744



3.59$7.00 - $11.99


176,500



8.57 years



7.88



6,733



7.00$12.00 - $16.94


224,000



9.50 years



12.59







Total


662,336



7.74 years


$
7.66



136,435


$
3.32  F-22




---



##### Table of Contents



EVERLAST
    WORLDWIDE INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      December 31,
    2007  $683,000
    December 31, 2008  $638,000
    December 31, 2009  $249,000
  Warrants:
    365-day
    (15)
    Earnings
    per share:   F-23




---



##### Table of Contents



EVERLAST
    WORLDWIDE INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     2006


2005


2004Net income (loss) available to
    common stockholders:Net income (loss)

$
4,724,000


$
(948,000
)

$
(1,027,000
)Basic weighted average common stock
    outstanding


3,865,000



3,326,000



3,132,000Effect of dilutive
    securities(a):Stock options and warrants


271,000



279,000



Contingent consideration






289,000



Diluted weighted average common
    stock outstanding


4,136,000



3,894,000



3,132,000Basic earnings (loss) per common
    share

$
1.22


$
(0.28
)

$
(0.33
)Diluted earnings (loss) per common
    share(a)

$
1.14


$
(0.24
)

$
(0.33
)    (a)
    As a result of the net loss from continuing operations in 2004
    the dilutive effect of options and contingent consideration
    (1,091,000) is not shown as the results would be anti-dilutive.    (16)
    Stockholders
    equity:    (17)
    Income
    taxes:    2006


2005


2004Current tax provision (benefit):Federal

$
1,184,000


$



$
(153,000
)State and local


318,000



100,000



(70,000
)Foreign


0



136,000



1,502,000



236,000



(223,000
)Deferred tax provision (benefit):Federal


484,000



(437,000
)


344,000State and local


85,000



(112,000
)


21,000Foreign










569,000



(549,000
)


365,000Total

$
2,071,000


$
(313,000
)

$
142,000    F-24




---



##### Table of Contents



EVERLAST
    WORLDWIDE INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     As of


As ofDecember 31,


December 31,2006


2005Deferred tax assets:Benefit of loss carryforward

$



$
715,000Inventories


70,000



63,000Allowance for doubtful accounts


174,000



124,000Stock-based compensation


133,000



Other


43,000



420,000



902,000Deferred tax liabilities:Fixed assets


80,000



126,000Prepaid assets


244,000



236,000Deferred financing costs


124,000



448,000



362,000Net deferred tax asset (liability)

$
(28,000
)

$
540,000     Years Ended December 31,2006


2005


2004Federal income tax rate


34.0
%


(34.0
)%


(34.0
)%State and local taxes, net of
    federal income tax benefit


6.0



(8.0
)


(5.5
)Nondeductible amortization of
    intangible assets and other items






117.8



45.0Nontaxable life insurance proceeds






(119.3
)


Income tax assessments


0.7



10.8



Nontaxable gain on preferred stock
    redemption


(12.9
)






Other


2.7



7.9



10.730.5
%


(24.8
)%


16.2
%   (18)
    Economic
    dependency in our sporting goods business:    (19)
    Licensing
    contracts with Jacques Moret:   F-25




---



##### Table of Contents



EVERLAST
    WORLDWIDE INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  99-year
            (20)  Cash
    flow information:
    2006


2005


2004Cash paid during the year for:Interest

$
2,750,000


$
1,237,000


$
1,266,000Income taxes


8,000



9,000



3,000     paid-in-capital
 F-26




---



##### Table of Contents



EVERLAST
    WORLDWIDE INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   (21)  Recently
    issued accounting standards:
    (22)  Operating
    segments:
        SportingGoods


Licensing


Other


TotalNet revenues

$
39,630,000


$
12,257,000


$



$
51,887,000Depreciation and amortization


310,000







436,000



746,000Other (income) and interest
    expense, net










(1,289,000
)


(1,289,000
)Income (loss) before income taxes
    from continuing operations

$
2,976,000


$
12,257,000


$
(8,438,000
)

$
6,795,000Identifiable component assets

$
27,325,000


$
2,554,000


$
35,397,000


$
65,276,000     SportingGoods


Licensing


Other


TotalNet revenues

$
31,271,000


$
11,982,000


$



$
43,253,000Depreciation and amortization


250,000







1,360,000



1,610,000Other (income) and interest
    expense, net










2,255,000



2,255,000Income (loss) before income taxes
    from continuing operations

$
488,000


$
11,982,000


$
(9,499,000
)

$
2,971,000Identifiable component assets

$
22,668,000


$
1,173,000


$
37,600,000


$
61,441,000  F-27




---



##### Table of Contents



EVERLAST
    WORLDWIDE INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    SportingGoods


Licensing


Other


TotalNet revenues

$
24,438,000


$
9,059,000


$



$
33,497,000Depreciation and amortization


250,000







1,276,000



1,526,000Interest and financing costs, net










1,087,000



1,087,000Income (loss) before income taxes
    from continuing operations

$
437,000


$
9,059,000


$
(9,503,000
)

$
(7,000
)   (23)  Quarterly
    financial data (unaudited):
    2006First


Second


Third


FourthQuarter


Quarter


Quarter


QuarterNet revenues

$
9,970,000


$
9,837,000


$
13,414,000


$
18,666,000Gross profit


4,441,000



4,497,000



5,723,000



7,339,000Net income available to common
    stockholders


2,484,000



402,000



689,000



1,149,000Earnings per share  basic

$
0.69


$
0.10


$
0.18


$
0.28Earnings per share 
    diluted

$
0.64


$
0.10


$
0.16


$
0.27   2005First


Second


Third


FourthQuarter


Quarter


Quarter


QuarterNet revenues

$
8,324,000


$
10,251,000


$
10,560,000


$
14,118,000Gross profit


4,004,000



4,351,000



4,436,000



5,655,000Restructuring and non-recurring
    charges






273,000







14,000Discontinued component, net


(320,000
)


(902,000
)


(489,000
)


(1,063,000
)Net income (loss) available to
    common stockholders


(94,000
)


(596,000
)


175,000



(433,000
)Earnings (loss) per
    share  basic

$
(0.03
)

$
(0.18
)

$
0.05


$
(0.13
)Earnings (loss) per
    share  diluted

$
(0.03
)

$
(0.16
)

$
0.04


$
(0.11
)  F-28




---



##### Table of Contents



EXHIBIT INDEX
  Exhibit



FiledIndex

Description of Document

Herewith

Incorporated by Reference To:3.1(a)

Certificate of Incorporation, as
    amended



Exhibit 3. (i) of Registration
    Statement File No. 33-87954 (the 1995 Registration
    Statement)3.1(b)

Certificate of Amendment of the
    Certificate of Incorporation



Exhibit 3.1(b) of the Annual
    Report on
    Form 10-KSB
    for the year ended December 31, 20003.2

Bylaws



Exhibit 3. (ii) of the
    1995 Registration Statement3.3

Amendment to the Bylaws



Exhibit A of Schedule 14A
    filed on May 3, 200610.1

Lease, dated as of December 1,
    2003, between us and 1350 Broadway Associates



Exhibit 10.2 of the Annual
    Report on
    Form 10-K
    for the year ended December 31, 200310.2

2000 Stock Option Plan, as amended



Appendix A of
    Schedule 14A filed on May 2, 200510.3

2005 Non-employee Director Stock
    Option Plan, as amended



Exhibit 99.1 of the Current
    Report on
    Form 8-K
    filed January 19, 200710.4

Term Loan



Exhibit 99.1 of the Current
    Report on
    Form 8-K
    filed February 7, 200610.5

Second Amended and Restated
    Security Agreement



Exhibit 99.2 of the Current
    Report on
    Form 8-K
    filed February 7, 200610.6

Amended and Restated Factoring
    Agreement



Exhibit 99.3 of the Current
    Report on
    Form 8-K
    filed February 7, 200610.7

Security Purchase Agreement with
    Benjamin Nadorf



Exhibit 99.4 of the Current
    Report on
    Form 8-K
    filed February 7, 200610.8

Security Purchase Agreement with
    Arlene Shechet



Exhibit 99.5 of the Current
    Report on
    Form 8-K
    filed February 7, 200610.9

Security Purchase Agreement with
    Arthur Shechet



Exhibit 99.6 of the Current
    Report on
    Form 8-K
    filed February 7, 200610.10

Employment Agreement, dated
    November 28, 2005 by and between Everlast Worldwide Inc.
    and Seth A. Horowitz



Exhibit 99.1 to the Current
    Report on
    Form 8-K
    filed January 24, 200610.11

Employment Agreement, dated
    January 1, 2006 by and between Everlast Worldwide Inc. and
    Gary J. Dailey



Exhibit 10.1 of the Quarterly
    Report on
    Form 10-Q
    filed August 4, 200610.12

Retainer Agreement, dated
    July 1, 2006 by and between Everlast Worldwide Inc. and
    Edward R. Epstein



Exhibit 10.2 of the Quarterly
    Report on
    Form 10-Q
    filed August 4, 200621.1

List of Subsidiaries

X23.1

Consent of Independent Auditors

X31.1a

Certification of Chief Executive
    Officer pursuant to
    Rule 13a-14(a)
    and
    Rule 15d-14(a)
    of the Securities Exchange Act, as amended.

X31.2a

Certification of Chief Financial
    Officer pursuant to
    Rule 13a-14(a)
    and
    Rule 15d-14(a)
    of the Securities Exchange Act, as amended.

X32.1

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

X32.2

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

X