SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                    FORM 20-F/A
(Mark One)


[  ]  REGISTRATION  STATEMENT  PURSUANT  TO  SECTION  12(b)  OR  12(g) OF THE
      SECURITIES EXCHANGE ACT OF 1934 [Fee Required]

[  ]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE
      ACT OF 1934 [Fee Required]

                   For the Fiscal Year Ended December 31, 2005

[  ]  TRANSITION  REPORT  PURSUANT  TO SECTION  13 OR 15(d) OF THE  SECURITIES
      EXCHANGE ACT OF 1934 [No Fee Required]

        For the transition period from ______________ to _______________.

                           Commission File No. 0-25108

                               IWI HOLDING LIMITED
             (Exact Name of Registrant as Specified in Its Charter)

                             British Virgin Islands
                 (Jurisdiction of Incorporation or Organization)

   P.O. Box 3340, Dawson Building, Road Town, Tortola, British Virgin Islands
                     Address of Principal Executive Offices

           Securities Registered Pursuant to Section 12(b) of the Act:

   Title of Each Class       Name of Each Exchange on Which Registered
            None                               None

           Securities Registered Pursuant to Section 12(g) of the Act:

                           Common Stock, no par value
                                (Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d)
of the Act:

                                      None
                                (Title of Class)

As of May 10, 2006 the Registrant had outstanding 2,554,700 shares of Common
Stock and 3,644,880 shares of Preferred Stock.

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the  Exchange  Act during the past  twelve
(12) months (or for such shorter period that the registrant was required to file
such reports); and (2) has been subject to such filing requirements for the past
ninety (90) days. Yes R No (pound)

Indicate by check mark which financial statement item the registrant has elected
to follow. Item 17 (pound) Item 18R
<PAGE>





         TABLE OF CONTENTS


         PART I                                                           Page

ITEM   1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS            3
ITEM   2. OFFER STATISTICS AND EXPECTED TIMETABLE                          3
ITEM   3. KEY INFORMATION                                                  3
ITEM   4. INFORMATION ON THE COMPANY                                       4
ITEM   5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS                     7
ITEM   6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES                      10
ITEM   7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS               12
ITEM   8. SELECTED CONSOLIDATED FINANCIAL DATA                            13
ITEM   9. THE OFFER AND LISTING                                           13
ITEM  10. ADDITIONAL INFORMATION                                          14
ITEM  11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT THE MARKET       15
ITEM  12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES          15


         PART II

ITEM 13.    DEFAULTS DIVIDEND ARREARAGES AND DELINQUENCIES                16
ITEM 14.    MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY
            HOLDERS AND USE OF PROCEEDS                                   16
ITEM 15.    CONTROLS AND PROCEDURES                                       16
ITEM 16A.   AUDIT COMMITTEE FINANCIAL EXPERT                              16
ITEM 16B.   CODE OF ETHICS                                                17
ITEM 16C.   PRINCIPAL ACCOUNTANT FEES AND SERVICES                        17


         PART III

ITEM 17.    FINANCIAL STATEMENTS                                          17
ITEM 18.    FINANCIAL STATEMENTS                                          17
ITEM 19.    FINANCIAL STATEMENTS AND EXHIBITS                             17


         SIGNATURES                                                       18

         CERTIFICATION                                                 19-20


<PAGE>


                  PART I

ITEM 1.  IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS

                  Not applicable.


ITEM 2.  OFFER STATISTICS AND EXPECTED TIMETABLE

                  Not applicable.


ITEM 3.  KEY INFORMATION


                      SELECTED CONSOLIDATED FINANCIAL DATA
                        (In thousands, except share data)
<TABLE>


                                                                   Year Ended December 31,
                                                2001         2002          2003         2004        2005
                                                ----         ----          ----        ------        ----
<S>                                            <C>        <C>           <C>           <C>           <C>

Statement of Income Data:

Net sales                                     $23,280      $25,802       $22,219      $ 28,554      $26,683
Cost of sales                                  17,751       20,322        18,772        22,309       20,599
                                              --------     --------      --------      --------     --------
Gross profit                                    5,529        5,480         3,447         6,245        6,084
Operating expenses                              5,011        4,990         5,052         5,665        5,815
                                              --------     --------      --------      --------     --------
Income (loss) from operations before the
   Gain on Trade Settlement                       518          490        (1,605)          580          269
   Gain on Trade Settlement                     1,141            -             -             -            -
Other income (expense) - net                     (306)        (248)         (299)         (349)        (458)
                                              --------     ---------     --------      --------     --------
Income (loss) before income taxes               1,353          242        (1,904)          231         (189)
Income data:
   Income (tax) benefit                           120           36             -             -           (3)
                                              --------     ----------    ---------     --------     --------
   Net income (loss)                        $   1,473      $   278      $ (1,904)     $    231      $  (192)
                                              --------     ----------    ---------    ---------     --------
   Net income (loss) per common share       $     .58      $   .11      $   (.75)     $    .09      $  (.08)
                                             ---------     ----------    ---------    ---------     --------
Cash distributions per common share         $       -      $     -      $      -      $      -      $     -
Weighted average number of common
    shares outstanding                      2,554,700     2,554,700     2,554,700    2,554,700    2,554,700
                                            ----------     -----------  ----------   ----------    ---------


                                           Year Ended December 31,
                                   2001         2002       2003         2004          2005
                                   ----         ----       ----         ----          ----

Balance Sheet Data:

Working capital                   $2,569     $ 3,010    $  1,233      $ 1,528       $ 1,342
Total assets                      11,625      14,255      15,327       17,466        18,540
Long-term debt                         0           0           0            0             0
Shareholders' equity               3,057       3,335       1,431        1,662         1,470

</TABLE>






Risk Factors

The nature of the business and industry that the Company operates is very
seasonal. This seasonality combined with customer sales concentration and the
reliance of consumers using their discretionary disposable income on fashion
related products within current economic conditions compounded by the increase
in cost of the gold componet of our product presents a potential risk that
continued growth may be impacted.

The majority of the products that the Company sells are imported from the
Peoples Republic of China ("PRC") and Hong Kong and as such reliance on non
restrictive trading agreements between the United States of America and these
countries is critical.


ITEM 4.   INFORMATION ON THE COMPANY

General

IWI Holding Limited ("Company") was incorporated in the British Virgin Islands
on February 22, 1993. The Company, through its wholly-owned subsidiary, Imperial
World, Inc. ("Imperial"), incorporated in the State of Illinois, is engaged in
the design, assembly, merchandising and wholesale distribution of jewelry. The
Company provides a broad range of fashionable jewelry targeted at consumers who
seek fine jewelry at moderate prices for every day wear. These customers are
likely to purchase jewelry at frequent intervals as fashions and styles change.
The majority of the Company's U.S. sales are under the trade name of "World
Pacific Jewelry." Customers of the Company are principally large retail
establishments with jewelry departments and mass media marketers.


Products and Pricing

The Company's principal products are fine jewelry of rings, earrings, pendants,
bracelets and necklaces, made of 10, 14 and 18 karat gold, set with diamonds,
precious or semi-precious stones. In addition, the Company is also a major
supplier of pearl products in the industry. The Company's products are currently
sold in over 7,000 retail outlets. For the majority of products, the average
wholesale price is approximately $75 with the prices ranging from approximately
$20 to $500.


Marketing

The primary marketing efforts are product design and customer support services.
The Company markets its proprietary products and product designs through a
selling team that includes company management, internal account executives and
independent sales representatives. Each major account has thorough involvement
of internal sales management, to insure that quality of sales meet or exceed the
company requirement.

Customers

The Company's customers consist of jewelry retail stores, mass merchandisers,
such as Wal-Mart Stores, Inc., department stores, such as J.C. Penney Company,
Inc., national jewelry chains, catalog showrooms and various specialty markets
to include television and internet outlets. The Company derived approximately
44% and 12% of its net sales from two customers during 2005. The Company has no
long-term contracts with any customers; however, the core of each of its large
volume purchasers had been customers for at least five years. The following
table sets forth the approximate percentage of net sales for the major markets
for the periods indicated.

<PAGE>


                                    Year Ended December 31,
                               2003           2004           2005
                               ----           ----           ----

Jewelry retail stores           0.6   %       0.3   %        0.3  %
Specialty markets              28.5          12.3           20.8
Mass merchandisers             12.7          16.9            9.2
Department stores              39.5          50.8           46.5
National jewelry chains        16.3          17.5           22.4
Catalog showrooms               2.4           2.2            0.8
                              -----         -----          -----
         Total                100.0   %     100.0   %      100.0  %
                              -----         -----          -----


Competition

The jewelry industry in the United States is highly fragmented, with little
significant brand name recognition or consumer loyalty. Selection is generally a
function of design appeal, high perceived value and quality in relation to
price.

Retail jewelry industry generates an estimated $44 billion in annual sales in
the United States. Retail jewelry sales have historically increased at a rate in
excess of the inflation rate. This increase is principally attributable to the
growth in the number of dual working households which in turn has increased the
amount of disposable income for women, the largest group of jewelry purchasers.

While many competitors may have a wider selection of products or greater
financial resources, the Company believes its competitive position is enhanced
by its information system, performance and its close relationship with its
customers and vendors. Therefore, although the competition is intense, the
Company believes it is well positioned in the jewelry industry.


Seasonality

The jewelry business is highly seasonal, with the fourth calendar quarter, which
includes the Christmas shopping season, historically contributing the highest
sales of any quarter during the year. Seasonality cannot be predicted or counted
upon, and the results of any interim period are not necessarily indicative of
the results that might be expected during a full fiscal year.



The following table sets forth the Company's unaudited net sales for the periods
indicated (dollar amounts are in thousands):

                                       Year Ended December 31,
                               2003             2004            2005
                               ----            -----            ----
                           Amount     %     Amount     %    Amount    %
                           ------    --     ------    --    ------   --

First Quarter            $  4,524    20.3  $ 5,058   17.7 $ 5,707    21.4
Second Quarter              5,079    22.9    5,494   19.3   4,972    18.6
Third Quarter               5,801    26.1    6,628   23.2   5,137    19.3
Fourth Quarter              6,815    30.7   11,374   39.8  10,867    40.7
                         ---------  -----   ------   ----  ------    ----
Total                     $22,219   100.0  $28,554  100.0 $26,683   100.0
                         ---------  -----  -------  -----  ------   -----

<PAGE>


Purchasing

The Company imports most of its jewelry from the People's Republic of China
("PRC") and Hong Kong. Approximately 20% of the Company's products are sourced
in the U.S. Fresh water and cultured pearls are imported from the PRC and Hong
Kong. The imported pearls are assembled by and for the Company both overseas and
at the Company's location into various pearl jewelry products. The Company
purchases jewelry from a number of suppliers based on quality, pricing and
available quantities.

Although purchases of material are made from a relatively small number of
suppliers, the Company believes there are numerous alternative sources for all
materials, and that the failure of any principal supplier would not have a
material adverse effect on operations or the Company's financial condition. The
Company believes it has good relations with its suppliers, most of whom have
supplied the Company for many years. The Company has not experienced any
difficulty in securing product.


Manufacturing and Assembly

Since the Company imports most of its jewelry in an assembled state from
suppliers in the PRC and Hong Kong, manufacturing and assembly operations
conducted by the Company are primarily limited to designing jewelry, assembly of
pearl products and quality control. Upon completing a design, the Company
provides such design to its suppliers, who will purchase the raw materials, such
as diamonds, other precious stones, gold and silver, and manufacture the product
or subcontract for its manufacture. The use of third party manufacturers enables
the Company to shift the risk and capital cost of manufacturing.

The Company maintains a light assembly operation in the United States for the
stringing of pearls. This enables the Company to assemble pearls specifically to
customer order and to provide shipment within two days of the order date.


Property, Plants and Equipment

The Company maintains its registered offices in the BVI; the Company leases
approximately 13,000 square feet of space for operations and pearl assembly in
Westmont, Illinois. The Company has been at its current location since November
1993. In December 2003 the Company extended its present lease through January
2007, future minimum annual lease payments are approximately $200,000. The
facility, which provides state of the art security, was designed to maximize the
efficiency of the Company's current operations and to provide for the Company's
anticipated growth.


Legal Proceedings

In September 1996, Robert J. Rosen filed a class action lawsuit in the Supreme
Court in the state of New York alleging claims of fraudulent misrepresentations
by IWI Holding Limited and some Company officers, accountants and lawyers in
connection with the Company's initial public offering on December 16, 1994, and
in connection with the dissemination of financial data thereafter. The Plaintiff
claims damages on behalf of the class in excess of $11,000,000, which allegedly
resulted from a decline of the market value of the Company's common stock after
the initial public offering.

The parties reached an agreement in principal to settle the claim for a
significantly lesser amount, which was accrued as of December 31, 1999. The
settlement agreement is subject to court approval and the Company may decline to
proceed with the agreement if a significant number of class members "opt out" of
the settlement. As of April 30, 2006 there has been no response from counsel for
the class action lawsuit or from the lead counsel.
<PAGE>




ITEM 5.   OPERATING AND FINANCIAL REVIEW AND PROSPECTS

This report contains forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of Securities Exchange Act of
1934. Actual results could differ materially from those projected in the
forward-looking statements as a result of the risks which the Company cannot
foresee. Such risks include, but are not limited to an economic turndown,
changes in government policies, financial difficulty with or loss of a major
customer or interruption in supplies.


Results of Operations

The following table sets forth, for the periods indicated, certain information
derived from the Consolidated Statements of Income of the Company. All dollar
and share amounts are set forth in thousands, except per share data.
<TABLE>

                                    2003                                   2004                      2005
                                  --------                               ---------                   ----
                                       %         %                     %         %                 %         %
                             Amount   Sales   Change      Amount    Sales    Change   Amount    Sales    Change
<S>                        <C>        <C>     <C>         <C>        <C>     <C>      <C>       <C>      <C>


Net sales                   $22,219   100.0   (13.9)    $28,554     100.0    28.5    $26,683    100.0    (6.6)
Gross profit                  3,447    15.5   (37.1)      6,245      21.9    81.2      6,084     22.8    (2.6)
Operating expenses            5,052    22.7    (1.2)      5,665      19.9    12.1      5,815     21.8     2.7
                           --------  ------   ------    --------   -------  -----     -------   ------   -----
Income (Loss) from oper.     (1,605)  (7.2)  (427.5)        580       2.0    n/a         269      1.0     n/a
Other income (expense)         (299)  (1.4)     n/a        (349)     (1.2)   16.7)      (458)    (1.7)  (31.2)
                           --------  ------   ------    --------   -------  -----     -------    -----   -----
(Loss) Income before
  income taxes               (1,904)  (8.6)  (886.8)        231       0.8    n/a        (189)     0.7     n/a
Income tax benefit                -      -      n/a           -         -    n/a          (3)       -     n/a
                           --------  ------   ------    --------   -------  -----     -------    -----   -----
Net (Loss) income           (1,904)   (8.6)  (784.9)        231       0.8    n/a        (192)     0.7     n/a
                           --------  ------   ------    --------   -------  -----     -------    -----   -----

Net (Loss) income per
common share                        $(0.75)                        $ 0.09                      $(0.08)
                                     ------                        -------                      -----
Weighted average number of
shares outstanding                   2,555                          2,555                       2,555
                                    -------                        -------                      ------

The Company's sales are generated through the wholesaling of jewelry products to
the following groups:

                              2001     2002     2003     2004    2005
                              ----     ----     ----     ----    ----

Jewelry retail stores          3.2%     1.1%     0.6%    0.3%     0.3%
Specialty markets             22.1     28.8     28.5     12.3    20.8
Mass merchandisers            22.3     27.9     12.7     16.9     9.2
Department stores             41.7     26.6     39.5     50.8    46.5
National jewelry chains        9.9     12.5     16.3     17.5    22.4
Catalog showrooms              0.8      3.1      2.4      2.2     0.8
                              -----    -----    -----    -----  ------
Total                        100.0%   100.0%   100.0%   100.0%  100.0%
                              -----    -----    -----    -----  ------

</TABLE>

     The change in net sales is primarily  attributable to changes in volumes of
goods  delivered  to our  customers.  While most of the goods  which we sell are
produced in China until July 21, 2005, the Renminbi (RMB) (the Chinese currency)
was  pegged  to the  U.S.  dollar  at the  exchange  rate of 8.28  RMB to  US$1.
Therefore, we were not impacted by foreign currency fluctuations. Since July 21,
2005 the value of the RMB is pegged to a basket of currencies.  As a result, the
RMB was immediately  revalued to 8.11 RMB to US$1.  Since July 21, 2005, the RMB
has declined to approximately  8.00 RMB to US$1, or approximately  1.3% over the
past year.  Therefore,  foreign currency fluctuation has had a minimal impact on
the Company.

<PAGE>


Year Ended December 31,2005 Compared to Year Ended December 31, 2004

     Net Sales. Net sales decreased  approximately $1.9 million or 6.6% to $26.7
million in 2005 from $28.6 million in 2004.  This decrease in net sales reflects
a decrease in gross sales from the prior year of $3.4 million  partially  offset
by a decrease in returns  compared to 2004 of approximately  $1.5 million.  This
decrease in 2005  revenues  reflect a  combination  of decreased  sales from the
Company's two largest  customers of approximately  $5.9 million offset partially
by the  expansion  of our  customer  base as well as  increased  sales  to other
existing  customers.  The  change  in net sale was  nearly  entirely  made up of
changes in unit volume . Only  approximately  1.5% of the change is attributable
to higher prices.

         Gross Profit. Gross profit decreased $161,000 or 2.6% to $6.1 million
in 2005 from $6.2 million in 2004. Gross margins improved slightly in 2005 to
22.80% vs 21.87%in 2004; an improvement of .93%. This improvement in overall
gross margins was in part due to continued emphasis placed on the profitability
of each product sold and increased standard profit levels implemented.

         Income from Operations. Income from operations was $269,000 in 2005
compared to $580,000 in 2004, representing a decrease from the prior year of
$311,000. Operating expenses increased $150,000 and primarily reflects increased
salary and related costs as salaries that had been rolled back in 2004 were
reinstated in 2005.

         Other Income (Expense). Other expenses representing interest costs
increased $109,000 to $458,000 from $349,000 in 2005 representing a combination
of increased borrowings and increased interest rates experianced in 2005.

         Net Loss. The net loss for 2005 totaled $192,000 a change of $423,000
compared to the net income reported in 2004 of $231,000.

Year Ended December 31, 2004 Compared to Year Ended December 31, 2003

         Net Sales. Net Sales increased $6.3 million or 28.5% to $28.6 million
in 2004 from $22.2 million in 2003. This increase in Net Sales reflects both an
increase in gross sales from the prior year of $5.4 million combined with a
decrease in returns compared to 2003 of nearly $1.0 million. This increase in
2004 revenues reflects a combination of increase in net sales to the Company's
two largest customers of $7.9 million and modest increases in the balance of its
customer base. This increase in net sales overcame the loss of a major customer
during 2004, which had represented approximately 20% of the Company's net sales
in 2003 and represents a decrease in sales from this customer in 2004 of $3.8
million compared to 2003 levels.

         Gross Profit. Gross profit increased $2.8 million or 81.0% to $6.2
million in 2004 from $3.4 million in 2003. Excluding the effect of consignment
and liquidation sales for 2004 and 2003, gross profit increased $2.5 million.
Gross margin excluding the effect of consignment and liquidation sales increased
6.1% from 18.5% in 2003 to 24.6% in 2004. This improvement in overall gross
margin was, in part, due to renewed emphasis placed on the profitability of each
product sold and increased standard profit levels implemented. In addition, due
to the relative consistency of overall gold pricing throughout 2004 the impact
of the change in gold prices throughout 2004 had minimal impact on
profitability.

         Income from Operations. Income from Operations were $508,000 in 2004
compared to a loss from operations in 2003 of $1.6 million, representing an
increase over the prior year of $2.2 million. This primarily reflects the
increased sales and margins experianced in 2004. Operating expenses increased
$613,000 or 12.1% and primarily reflect increased sales related costs such as
advertising and commissions.

         Other Income (Expense). Other Expenses representing interest costs
increased $50,000 to $349,000 from $299,000 in 2003 representing a combination
of increased borrowings and increased interest rates experianced in 2004.
<PAGE>

         Net Income. The net income for 2004 totaled $231,000 a change of
$2,136,000 compared to the net loss reported in 2003 of $1,904,000.

Trends

     The Company has expended  significant efforts and expenses to diversify its
customer  base.  Although  this  resulted  in the  addition  of a number  of new
accounts,  two customers still accounted for approximately 56% of our total sale
in 2005.  For 2006,  we believe that these two accounts will total less than 50%
of our total sales.

     Our  sales  are  often  driven  by  promotions  or  special  events  at our
customers.  The  absence  or  inclusion  of such  events in any year can cause a
significant swing in the sales volume to such customers.  Generally,  promotions
or special event sales to our  customers are at lower profit  margins than sales
in the ordinary course of business.

     During  2005,   there  was  a  significant   spike  in  commodity   prices,
particularly  gold and  silver.  While our  customer  agreements  provide  for a
modification  to the price of our  goods  sold,  there is  always a short  delay
before these price changes can be implemented. Accordingly, in periods of rising
prices such as 2005, our margins were  negatively  impacted.  However,  in 2006,
these  commodity  prices have  declined  considerably,  which should  positively
impact our margins.

     Pricing in jewelry is  substantially  dependent on commodity prices such as
gold, silver, diamonds, etc. When commodity prices rise, so do jewelry prices.
When  commodity  prices fall, so do jewelry  prices,  although  generally not as
quickly as prices can rise.

     Because of the  broadening  of our  customer  base,  sales are  expected to
increase in 2006.  Our margins  should  remain  relatively  constant  because of
competitive  conditions  with large customer  companies.  Our  inventories  too,
should remain relatively  constant.  Our inventories are principally affected by
our sales, as well as returns and liquidation sales (generally sales of returned
merchandise).  While we expect an increase in sales  which  would  increase  our
inventories,  we also  anticipate an increase in  liquidation  sales which would
decrease our inventories.


Analysis of Financial Position, Liquidity and Capital Resources

The Company's primary liquidity needs are to fund accounts receivable and
inventories. The Company has historically financed its working capital
requirements through a combination of internally generated cash and short-term
borrowings under bank lines of credit. The Company's working capital at December
31, 2005 was $1.3 million as compared to $1.5 million at December 31, 2004.

On June 14, 2004 the Company entered into a credit agreement with a new
financial institution, whereby the Company can borrow up to $7.5 million, plus
the seasonal over-line amount of $1.5 million, payable on demand. The total
credit facility is governed by a formula, as defined in the agreement, based
principally on accounts receivable and inventory levels. This agreement
provides, among other things, that the credit facilities are collateralized by
substantially all the assets of the Company.

Under this borrowing facility, interest is calculated at .25% over prime with
respect to the revolving loan. In addition, an unused commitment fee is assessed
at a rate of .25% representing the difference between the maximum revolving loan
and average daily outstanding balance. An officer of the Company has agreed to
personally guarantee up to $3,500,000 of the borrowing.

The agreement  contains  certain  reporting and financial  covenants,  which the
Company is required to maintain.  The credit agreement  matures on June 1, 2007,
or may be accelerated by the lender upon certain events as specified in the loan
agreement.  For the  year-ended  December 31, 2005 the Company was in compliance
with all of the financial covenants except the debt service coverage ratio. This
covenant was waived by the Bank for the year-ended December 31, 2005.


The following table summarizes cash provided by (used in) the Company's business
activities for the past three years (dollar amounts are in thousands):

                                     2003         2004           2005
                                     ----         ----           ----

Operating activities               $ (2,286)     $(601)       $ (2,385)
Investing activities                    (32)        (2)            (12)
Financing activities                  2,302        604           2,535
Increase (decrease) in cash             (16)         1             138


Operating Activities. The net cash used in 2005 was principally due to the
increase in accounts receivable of $1.6 million and decreases in accounts
payables of $1.3 million offset partially by lower inventory levels of .6
million December 31, 2005.

Investing Activities.  Cash uses in 2005 were minimal and reflect the upgrade of
our computer and related systems.

Financing Activities. During 2005, the Company increased the amounts outstanding
under its line of credit by $2.3 million to $7.9 million at December 31, 2005.
Notes payable to employees and others increased by $205,000.

Off Balance Sheet Arrangements

The Company has no off balance sheet arrangements.

During the coming twelve months, the Company does not anticipate any significant
capital  expenditures.  As a result,  given the cash flow  generated  by current
operations  and the  existing  bank line of credit,  the Company has  sufficient
working  capital  to cover  its  operations  for the  next  twelve  months.  The
following are its future contractual obligations:

                                              Payment due by Period
                                          Less than   1-3     3-5     More than
Contractual Obligations         Total      1 year     years   years   5 years
------------------------        -----     ---------   -----   ------  ----------
Operating Lease Obligations     200,000   184,000     16,000

<PAGE>

Inflation

Inflation has historically not had a material effect on the Company's
operations. When the price of gold or precious stones has increased, these costs
historically have been passed on to the customer, quarterly in arrears.
Furthermore, because the Company does not have either long-term supply contracts
or long-term contracts with customers, prices are quoted based on the prevailing
prices for semi-precious gemstones or metals. Accordingly, the Company does not
believe inflation will have a material effect on its future operations.


ITEM 6.  DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES


Directors and Executive Officers

The following table sets forth certain information as of the date hereof with
respect to the directors and executive officers of the Company.

Name                    Age      Position
Joseph K. Lau           58       Chairman of the Board of Directors: President
                                 of IWI Holding Limited, Principal Financial
                                 Officer and Secretary
Richard J. Mick         65       Sr. Vice President - Sales and Director
Connie S. Yui           55       Inventory Manager and Director
Joseph A. Benjamin      63       Director
Samuel H. Lou           52       Director

Each director is serving a one-year term that expires after the next annual
meeting of the Company's shareholders, or until their successors are elected and
qualified. Executive officers of the Company are elected by, and serve at the
discretion of, the Board of Directors.

Joseph K. Lau and Connie Yui are brother and sister.

Joseph K. Lau joined the Company in November, 1982 and was elected Senior Vice
President, Chief Operating Officer, Secretary and Director in February, 1986 and
Chairman of the Board, President and Chief Executive Officer in August, 1998.
For the 11 years prior to joining the Company, he held a management position in
the restaurant industry and owned a trading company in Hong Kong.

Richard J. Mick joined the Company in February, 1996 as Vice President - Sales
and Director, in January 2006 he was promoted to Senior Vice President - Sales
and Director. For 6 years prior to joining the Company he was President of a
sales and marketing firm selling jewelry and related products. Prior thereto,
Mr. Mick was employed by J.C. Penney Company, Inc. for 26 years.

Connie S. Yui joined the Company in March, 1985 and has served as the Product
Development Manager and is responsible for inventory control and pearl assembly.

Joseph A. Benjamin has served as a Director of the Company since December, 1997.
Mr. Benjamin is a CPA and is the Managing Partner of Benjamin & Birkenstein,
P.C., a business and tax consulting firm in Chicago, Illinois.

Samuel H. Lou has served as a Director of the Company since December, 1997. Mr.
Lou is a business consultant with his own firm in Chicago, Illinois.

<PAGE>

Compensation of Directors and Officers

The aggregate cash compensation paid by the Company to all directors and
officers as a group during 2005 was approximately $584,000. Due to an extensive
travel schedule, one of the officers of the Company resides in New York. Because
of this, the Company also provides locally an apartment and related costs of
approximately $12,000 for this individual in lieu of motel accommodations and
incurs an estimated $7,900 a year in airfare costs.

Certain officers of the Company will be entitled to bonuses from the Company
based on performance criteria to be established by the Compensation Committee of
the Board of Directors of the Company. Additionally, in December, 1993, the
Company adopted a Stock Option Plan (the "Option Plan") to assist the Company
and its subsidiaries in retaining the service of current employees, motivating
selected key management personnel, and attracting new management by providing
the opportunity for such personnel to acquire a proprietary interest in the
Company and thereby share in its growth and success. Participation in the Option
Plan and the granting of options under the Option Plan are made by the
Compensation Committee of the Board of Directors, subject to ratification by the
Board. Pursuant to the Option Plan, a total of 150,000 shares of Common Stock
are reserved for issuance. The Option Plan requires that the exercise price of
the option be the fair market value of the Company's stock on the date of the
grant of the option but not less than $8.50 per share. The fair market value for
purposes of the Option Plan is for so long as Common Stock is quoted on the
OTCBB, the final closing sales price per share on the date of the grant. The
exercise price with respect to any option must be paid in cash. As of the date
hereof, there are no options to purchase shares of Common Stock outstanding
under the Option Plan.

The Company, during 1995, also adopted a Non-Qualified Stock Option Plan (the
"Non-Qualified Plan.") A total of 600,000 shares are reserved for issuance under
the Non-Qualified Plan. The Non-Qualified Stock Option Plan provides for the
granting of options and stock appreciation rights to non-employee directors, key
management employees and consultants and is administered by the Compensation
Committee. The terms of any options and/or stock appreciation rights granted
under the Non-Qualified Plan shall be determined by the Compensation Committee
provided that options may not be exercisable for a term longer than ten years
and may not be exercisable at a price less than the stated value of the Common
Stock. No options or stock appreciation rights have been granted under the
Non-Qualified Stock Option Plan. This plan expired in 2005.

In addition, the Company maintains a defined contribution plan which has both a
profit sharing feature and a 401(k) savings feature (the "Plan.") Under the
profit sharing portion of the Plan, contributions are an amount determined by
the Company's Board of Directors. Subject to certain limitations required by
law, the Company's contribution is allocated to each participant who is employed
by the Company at the end of the Plan year in the proportion that the total
compensation paid by the Company to each participant bears to the aggregate
compensation paid by the Company to all participants during such Plan year.
Under the 401(k) savings feature, eligible employees may elect, subject to
certain limitations required by law, to defer payment of up to 15% of their
compensation. The Plan provides that if an employee defers payment, the Company
will contribute 50% in 2003, effective January 1, 2004, 25% of the first 6% of
compensation deferred, by making a cash payment to the Plan on behalf of such
participant. Contributions by the Company to the profit sharing feature of the
plan, and earnings thereon, vest based on the participant's years of service
with the Company, vesting 20% per year after one year of service and being fully
vested after six years of service. Employee contributions are always 100%
vested. Contributions by the Company to the 401(k) savings feature vest on the
employees first day of employment. All contributions vest, regardless of years
of service, upon termination of employment by reason of death of disability,
attainment of age 62 or the termination of the Plan. After termination of
employment, an employee is entitled to receive the distribution of his or her
entire vested interest in the Plan in a lump sum, in installments for a specific
period of time, or an annuity for life. The amounts held under the Plan are
invested according to the instructions of the participant in investment funds
designated by the plan administrator. The Company made contributions to the Plan
during 2005, 2004 and 2003 of approximately $31,000, $30,000 and $61,000,
respectively.

<PAGE>

Employment Contracts

The Company has an employment contract with Joseph K. Lau who is employed by
Imperial pursuant to a contract expiring July 2006. Mr. Lau has waived salary
increases as provided for in the contract since 2003 and has waived any bonus
earned since that time. The contract provides for at a base salary of $163,000
in 2006, and bonuses as determined by the Compensation Committee of the Board of
Directors.

Committees and Attendance of the Board of Directors Meetings

During the year ended December 31, 2005, the Board of Directors held two formal
meetings. The Audit Committee held four meetings and the Compensation Committee
held one meeting. Each director attended all of the meetings of the Board of
Directors. The Audit and Compensation Committees were attended by all members.
The members of the Audit Committee are Messrs. Benjamin and Lou. The members of
the Compensation Committee are Messrs. Lau, Benjamin and Lou.

Employees

As of December 31, 2005, the Company had 55 employees, including 2 executive
officers, 9 persons in sales and merchandising, 34 persons in operations, and 10
persons in administrative and support functions. None of the employees is
governed by a collective bargaining agreement and the Company considers its
relations with its employees to be satisfactory. As of May 1, 2006, the Company
had 52 employees, including 2 executive officers, 9 persons in sales and
merchandising, 31 persons in operations, and 10 persons in administrative and
support functions.

Share Ownership

Share ownership of Directors and Officers is illustrated in Item 7.


ITEM 7.  MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

Share ownership of major shareholders, Directors and Officers

The following table is furnished as of May 10, 2006, to indicate beneficial
ownership of shares of the Company's Common Stock and Preferred Stock by (1)
each shareholder of the Company who is known by the Company to be a beneficial
owner of more than 10% of the Company's Common Stock or Preferred Stock and (2)
all officers and directors of the Company as a group. The information in the
following table was provided by such persons.
<TABLE>

Name and Address           Amount and Nature of      Title of       Percent of    Percent of
of Beneficial Owner        Beneficial Ownership (1)   Class          Class        Voting Power
-------------------        ------------------------  ------         ---------    ------------
<S>                        <C>                        <C>           <C>           <C>

Bamberg Company Ltd.             918,750              Common          35.96%          20.99%
Bamberg Company Ltd            3,644,880            Preferred        100.00%          41.64%
Joseph K. Lau                     15,000              Common           0.59%           0.34%
Richard J. Mick                  117,500              Common           4.60%           2.68%
Joseph A. Benjamin                10,000              Common           0.39%           0.23%
                               -----------          ----------      ----------      ----------

All executive officers
and directors
 As a  group (3 persons)         142,500               Common          5.58%           3.26%
</TABLE>


<PAGE>


Compliance with Section 16(a) of Exchange Act

Under the securities laws of the United States, the Company's Directors, its
executive officers, and any persons holding more than ten percent of the
Company's common stock are required to report their initial ownership of the
Company's common stock and any subsequent changes in ownership to the Securities
and Exchange Commission. Specific due dates for these reports have been
established and the Company is required to disclose in this Form 20F any failure
to file by these dates during 2005. All of the filing requirements were
satisfied on a timely basis in 2005. In making these disclosures, the Company
has relied solely on written statements of its directors, executive officers and
shareholders and copies of the reports that were filed with the Commission.

Related Party Transactions

All transactions between the Company, its officers, directors, principal
shareholder or affiliates, whether presently existing are, or in the future will
be, in the belief of management, on terms no less favorable to the Company than
may be obtained from unaffiliated third parties.

Since 1998, some of the Company's products were purchased from a manufacturer in
Hong Kong, which is managed by a relative of an officer of the Company. For the
years ended December 31, 2005, 2004 and 2003, the Company's purchases from this
manufacturer were approximately $3,284,000, $7,887,000, and $7,394,000
respectively. Beginning in October 2005 the Company began purchasing products
from another manufacturer in Hong Kong, which is owned and managed by another
relative of an officer of the Company. Purchases from this company in 2005 were
approximately $521,000.

The Company uses outside entities to pursue most of its sales, because it has
proven to be both effective and economical. The stakeholders of a primary
outside sales entity are an officer of the Company and a family member of such
officer. All negotiations of pricing, compensation, contracts or any other
matters involving this entity are conducted by persons other than the related
party officer. Commission expense of the Company associated with this entity for
the years 2005, 2004 and 2003 were $619,000, $688,000 and $569,000,
respectively. Selling expenses such as salaries, travel, entertainment etc. are
borne directly by the sales entity.


ITEM 8.  FINANCIAL  INFORMATION

Reference is made to the index to Consolidated Financial Statements of the
Company, and notes thereto, appearing under Item 19 below, together with the
report of Blackman Kallick Bartelstein, LLP thereon.


ITEM 9.  THE OFFER AND LISTING

There is no non-U.S. trading market for the Common Stock of the Company. Within
the United States, the Company's Common Stock is traded in the over-the-counter
market. The Company's Common Stock is quoted on the OTCBB under the symbol
"JEWLF."

The following table sets forth the high and low bid price per share for the
Company's Common Stock for each quarterly period for the past two years.

                             2005                   2004
                             ----                   ----
                       High         Low      High             Low

First Quarter         $.080      $ .080     $.200           $.120
Second Quarter         .100        .070      .120            .100
Third Quarter          .120        .070      .100            .100
Fourth Quarter         .100        .070      .110            .080




The  following  table  sets  forth  the high and low bid price per share for the
Company's Common Stock for each month for the past six months.


                                         High        Low
         2005     November               $.080     $ .080
                  December                .080       .070

         2006     January                $.070     $ .070
                  February                .070       .070
                  March                   .100       .070
                  April                   .090       .060


The quotations reflect inter-dealer prices without mark-up, mark-down or
commission and may not represent actual transactions.

At May 10, 2006, the bid price of the Common Stock was $.06.

As of May 10, 2006, there were approximately 250 beneficial holders of the
Common Stock of the Company, nearly all of which are believed to be in the
United States.


ITEM 10.          ADDITIONAL INFORMATION

Memorandum and Articles of Association.

The Company has two classes of stock, preferred and common.

Preferred stock has a par value of $1 per share, 5 million shares have been
authorized 3,644,880 shares are issued and outstanding. The preferred shares are
entitled to one-half vote per share and in the event of liquidation of the
Company, the holders of the preferred shares will be entitled to $1 per share
before any payment to holders of common stock. The preferred shares are subject
to redemption, at the option of the Company, in whole or in part, at any time
after March 21, 1997, at an amount not to exceed 50% of the net income in excess
of $15,000,000 for the preceding year, together with the accrued dividends, if
any. The preferred shares are entitled to a 4% non-cumulative dividend, payable
on all non-redeemed shares in cash, stock or property as the Board of Directors
shall, in its discretion, declare from time to time. There have been no
dividends paid or authorized to preferred shareholders.

Common stock has no par value, 10 million shares have been authorized 2,554,700
shares are issued and outstanding. Each share of common stock is entitled to one
vote. Common stock is entitled to dividends payable in cash stock or property as
the Board of Directors shall, in its discretion, declare from time to time.
There have been no dividends paid or authorized to common shareholders.

Exchange Controls

The Company is not subject to any governmental laws, decrees or regulations in
the BVI which restrict the export or import of capital, including any foreign
exchange controls, or which affect the remittance of dividends, interest or
other payments to non-resident holders of the Company's Common Stock.

<PAGE>


Additionally, neither the laws of the BVI nor the Company's Charter impose any
limitations on the right of non-resident foreign owners to hold or vote the
Common Stock of the Company.


Taxation

The BVI imposes no withholding taxes and holders of Common Stock who are not
resident in the BVI will not be subject to BVI tax on any dividends received
from the Company or on gains realized from a sale or other disposition of the
Common Stock. The United States does not have a tax treaty with the BVI.

Documents on Display

Documents concerning our Company which are referred to in this report may be
inspected, upon reasonable notice, at our principal executive office at Oakmont
Centre, 1010 Executive Court, Suite 300, Westmont, Illinois 60559.


ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The economy and its impact on discretionary disposable consumer spending could
be significant to future operating earnings.

The Company's sales are highly concentrated with several customers. A
significant change in the relationship with one or more of these customers could
have a material effect on the operations of the Company.

The Company does have some exposure to the change in market price of precious
metals, pearls and stones, particularly gold. Rapid or steady increase in the
price of gold could negatively impact the operating results in future periods.
Although the company can pass these costs along to its customers, these gold
level adjustments occur on a quarterly lag basis. Due to the increase in cost of
the gold component of our product the impact of which would require consumers to
devote more of their discretionary disposable income on fashion related
products. The impact of this combined with the price increases associated with
gasoline could potentially have an adverse effect on future earnings of the
Company and Industry as a whole.

The Company does not hold or issue financial instruments for trading or
speculative purposes. The Company's financial instruments include accounts
receivable, accounts payable, and notes payable. The exposure to the Company for
interest rate fluctuations is limited to the existing line of credit and is not
expected to be significant to its overall results of operation. The economy and
its impact on discretionary disposable consumer spending could be significant to
future operating earnings.


ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

                  Not applicable.


<PAGE>


PART II


ITEM 13. DEFAULTS, DIVIDENDS ARREARAGES AND DELINQUENCIES

                  None reportable.

ITEM 14. MATERIAL  MODIFICATIONS  TO THE RIGHTS OF SECURITY  HOLDERS AND USE OF
         PROCEEDS

                  None reportable.

ITEM 15. CONTROLS AND PROCEDURES

As of the end of the  period  covered  by this  report,  we have  evaluated  the
effectiveness  of the  design  and  operation  of our  disclosure  controls  and
procedures  under the  supervision  of and with the  participation  of our Chief
Executive Officer ("CEO") who is also our Chief Financial Officer ("CFO"). Based
on this evaluation, our management,  including our CEO / CFO, concluded that our
disclosure  controls  and  procedure  were  effective,  that  there have been no
significant  changes in our  internal  controls or in other  factors  that could
significantly affect internal controls subsequent to the evaluation.


ITEM 16A.         AUDIT COMMITTEE FINANCIAL EXPERT

The  Company's  Board of  Directors  has  determined  that it has at  least  one
financial  expert serving on its Audit  Committee.  This individual is Joseph A.
Benjamin who has served as a Director of the Company since  December,  1997. Mr.
Benjamin is a CPA and is the Managing Partner of Benjamin & Birkenstein, P.C., a
business and tax consulting firm in Chicago, Illinois.

<PAGE>


ITEM 16B.         CODE OF ETHICS

The Company has adopted a code of ethics for the Chief Executive Officer, Chief
Financial Officer and Principal Accounting Officer.

ITEM 16C.         PRINCIPAL ACCOUNTANT FEES AND SERVICES

Audit Fee

The aggregate fees paid relating to the audit of the Company's annual financial
statements for the years ended December 31, 2005 and 2004 were $79,837 and
$64,404, respectively.

All Other Fees

The aggregate fees paid for other accounting services, primarily audit related,
for the years ended December 31, 2005 and 2004 were $0 and $6,349, respectively.


PART III


ITEM 17. FINANCIAL STATEMENTS

                  Not applicable

ITEM 18. FINANCIAL STATEMENTS

Reference is made to the index to Consolidated Financial Statements of the
Company, and notes thereto, appearing under Item 19 below, together with the
report of Blackman Kallick Bartelstein, LLP thereon.


ITEM 19. FINANCIAL STATEMENTS AND EXHIBITS

         (a) Financial Statements Page

Report of Independent Auditors                                             22
Consolidated Balance Sheets as of  December 31, 2005 and 2004              23
Consolidated Statements of Operations for Each of the Years
    in the Three-Year Period Ended December 31, 2005                       24
Consolidated Statements of Shareholders' Equity for Each of the
    Years in the Three-Year Period Ended December 31, 2005                 25
Consolidated Statements of Cash Flows for Each of the Years in
     the Three-Year Period Ended December 31, 2005                         26
Notes to Consolidated Financial Statements                              27-36

Financial Statement Schedules (1)

I - Condensed Financial Information of Registrant                          37
II - Valuation and Qualifying Accounts                                     38


(1)      All other schedules are omitted since the required information is not
         present or is not present in amounts sufficient to require submission
         of the schedule.

         (b)      Exhibits
<PAGE>


Exhibit
Number                                     Description

2.1*     Bill of Sale dated February 4, 1995 re: acquisition of assets of
         Ullenberg Corporation (1)
2.2*     Stock Purchase Agreement relating to DACO Manufacturing Ltd. (3)
3.1*     Amended and Restated Memorandum of Association and Articles of
         Association of IWI Holding Limited (2)
4.1*     Specimen Form of Common Stock certificate (2)
10.1*    Lease Agreement between Imperial World, Inc. and American National Bank
         and Trust Company of Chicago dated October 15, 1993 for the site in
         Westmont, Illinois (2)
10.2*    Stock Option Plan (2)
10.3*    Amended and Restated Credit Agreement dated June, 1996 between Rhode
         Island Hospital Trust National Bank and Imperial World, Inc. (2)
10.4*    Indemnity Agreement (2)
10.5*    Profit Sharing Plan (2)
10.6*    Territorial Agreement (2)
10.8*    IWI Holding Limited 1995 Non-Qualified Stock Option Plan (4)
10.11*   Financing Agreement with Business Alliance Capital Corp.
10.12*   Settlement Agreement with Richard W. Sigman
10.13*   Settlement Agreement with Bruce W. Anderson
10.14*   Amended Lease Agreement
10.15*   DACO Sales Agreement
10.16*   Employment Contract with Joseph K. Lau
10.17*   Code of Ethics

*Previously Filed

(1)      Incorporated by reference to the Company's Report on Form 6-K for the
         month of February, 1995.
(2)      Incorporated by reference to the Company's Registration Statement on
         Form F-1 (File No. 33-78904) declared effective December 13, 1994.
(3)      Incorporated by reference to the Company's Report on Form 6-K for the
         month of August, 1995.
(4)      Incorporated by reference to the Company's Form 20-F for the year-ended
         December 31, 1995.

SIGNATURES

Pursuant to the requirements of Section 12 of the Securities Exchange Act of
1934, the registrant certifies that it meets all of the requirements for filing
on Form 20-F and has duly caused this annual report to be signed on its behalf
by the undersigned, thereunto duly authorized.


                      IWI HOLDING LIMITED


                      By:
                      s/Joseph K. Lau
                      Chairman,  President, Chief Financial Officer and Director

<PAGE>


CERTIFICATIONS

I, Joseph K. Lau, certify that:

1. I have reviewed this annual report on Form 20-F of IWI Holding Limited:

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4. I am responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the
registrant and I have:

         a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, is made known to me by others
within those entities, particularly during the period in which this quarterly
report is being prepared;

         b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and

         c) presented in this quarterly report my conclusions about the
effectiveness of the disclosure controls and procedures based on my evaluation
as of the Evaluation Date;

5. I have disclosed, based on my most recent evaluation, to the registrant's
auditors and the audit committee of registrant's board of directors (or persons
performing the equivalent function):

         a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and

         b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
controls; and

6. I have indicated in this quarterly report whether or not there were
significant changes in internal controls or in other factors that could
significantly affect internal controls subsequent to the date of our most recent
evaluation, including any corrective actions with regard to significant
deficiencies and material weaknesses.

Dated: October ___, 2006

By: /s/ Joseph K. Lau
Joseph K. Lau
Chief Executive Officer and Chief Financial Officer


                                       29
<PAGE>



 CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER PURSUANT
               TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
                 SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I,  Joseph K. Lau,  certify,  pursuant  to 18 U.S.C.  Section  1350,  as adopted
pursuant  to  Section  906 of the  Sarbanes-Oxley  Act of 2002,  that the Annual
Report of Form 20-F of IWI Holding  Limited for the annual period ended December
31, 2006 fully complies with the  requirements  of Section 13(a) or 15(d) of the
Securities  Exchange  Act of 1934 and that  information  contained  in such Form
10-KSB  fairly  presents in all material  respects the  financial  condition and
results of operations of Dragon Gold Resources, Inc.

By: /s/ Joseph K. Lau
----------------------------
Name: Joseph K. Lau
Title: Chief Executive Officer
& Chief Financial Officer

October __, 2006

                                       30





                               IWI HOLDING LIMITED

                      CONSOLIDATED FINANCIAL STATEMENTS AND
                          INDEPENDENT AUDITOR'S REPORT

                  Years Ended December 31, 2005, 2004 and 2003


<PAGE>


             Report of Independent Registered Public Accounting Firm



The Board of Directors
IWI Holding Limited
Westmont, Illinois

We have audited the accompanying consolidated balance sheets of IWI Holding
Limited as of December 31, 2005 and 2004, and the related consolidated
statements of operations, stockholders' equity and cash flows for each of the
three years in the period ended December 31, 2005. Our audits also included the
financial statement schedules listed in the index at item 19(a). These financial
statements and schedules are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements and schedules based on our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
consolidated financial statements are free of material misstatement. The Company
has determined that it is not required to have, nor were we engaged to perform,
an audit of its internal control over financial reporting. Our audit included
consideration of internal control over financial reporting as a basis for
designing audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the Company's
internal control over financial reporting. Accordingly, we express no such
opinion. An audit also includes examining, on a test basis, evidence supporting
the amounts and disclosures in the consolidated financial statements, assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of IWI Holding Limited
as of December 31, 2005 and 2004, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 2005, in
conformity with accounting principles generally accepted in the United States of
America. In addition, the information set forth in schedules listed in the index
at item 19(a) is fairly stated, in all material respects, in relation to the
consolidated financial statements from which it has been derived.




s/Blackman Kallick Bartelstein, LLP
Chicago, Illinois
April 17, 2006


<PAGE>

                                                                    Exhibit A

                               IWI Holding Limited
                           Consolidated Balance Sheets
                        (In Thousands, Except Share Data)

                           December 31, 2005 and 2004

<TABLE>

Assets
                                                                   2005             2004
                                                                   ----             ----
<S>                                                             <C>                  <C>


Current Assets
         Cash                                                 $      139          $    1
         Accounts receivable, less allowance for doubtful
           accounts of $710 in 2005 and $596 in 2004               9,336           7,714
         Inventories                                               8,676           9,298
         Deferred income taxes                                       156             156
         Prepaid expenses                                            105             163
                                                                  ------          ------
Total Current Assets                                              18,412          17,332
                                                                  ------          ------

Leasehold Improvements, Machinery and Equipment                    2,978           2,966
         Less accumulated depreciation                            (2,850)         (2,832)
                                                                  -------         -------
                  Property and Equipment, Net                        128             134
                                                                  -------         -------

Total Assets                                                  $   18,540         $17,466
                                                                  -------         -------

Liabilities and Stockholders' Equity
                                                                   2005            2004
                                                                   -----           -----

 Current Liabilities
         Line of credit                                       $   7,913        $  5,583
         Notes payable
           Employees, related parties                               294             315
           Other                                                    653             427
         Accounts payable - Trade                                 5,272           5,894
         Accounts payable to affiliated companies                 1,418           2,085
         Accrued liabilities                                      1,520           1,500
                                                                 ------          -------
Total Current Liabilities                                        17,070          15,804
                                                                 ------          -------

Stockholders' Equity (Deficit)
         Preferred stock - $1 par value; authorized  5,000,000
           shares; issued and outstanding  3,644,880 shares       3,645           3,645
         Common stock  No par value; authorized  10,000,000
           shares; issued and outstanding  2,554,700 shares           -
         Additional paid-in capital                              12,446          12,446
         Accumulated deficit                                    (14,621)        (14,429)
                                                                --------        --------
                  Total Stockholders' Equity                      1,470           1,662
                                                                --------        --------

Total Liabilities & Stockholders' Equity                     $   18,540        $ 17,466
                                                                --------        --------
</TABLE>

<PAGE>



                                                                      Exhibit B

                               IWI Holding Limited
                      Consolidated Statements of Operations
                        (In Thousands, Except Share Data)

                  Years Ended December 31, 2005, 2004 and 2003
<TABLE>


                                                       2005           2004           2003
                                                      ------         ------         ------
<S>                                                  <C>            <C>           <C>


Net Sales                                        $    26,683     $  28,554        $  22,219

Cost of Sales                                         20,599        22,309           18,772
                                                     -------       --------         -------

Gross Profit                                           6,084         6,245            3,447

Selling, General and Administrative Expenses           5,815         5,665            5,052
                                                     -------       --------         -------

 Income (Loss) from Operations                           269           580           (1,605)

Interest Expense                                        (458)         (349)            (299)
                                                     --------     ---------         --------

(Loss) Income  Before Income Taxes                      (189)          231           (1,904)

Income Tax Expense                                        (3)            -                -
                                                     --------     ---------         --------

Net (Loss) Income                               $       (192)    $     231         $ (1,904)
                                                     --------     ---------         --------

Net (Loss) Income per Common Share              $      (0.08)    $    0.09         $  (0.75)
                                                     --------     ---------         --------

Weighted-Average Number of Common
  Shares Outstanding                               2,554,700     2,554,700        2,554,700
                                                   ----------    ----------       ----------
</TABLE>


<PAGE>


                                                                  Exhibit C

                               IWI Holding Limited
                 Consolidated Statements of Stockholders' Equity
                        (In Thousands, Except Share Data)

                  Years Ended December 31, 2005, 2004 and 2003

<TABLE>


                              Preferred Stock            Common Stock
                                                                                 Additional
                                Number                        Number             Paid-in     Accumulated
                              of Shares    Amount      of Shares        Amount   Capital     Deficit       Total
                              ----------   ------      ---------        ------   --------    --------      -----
<S>                           <C>           <C>        <C>            <C>        <C>         <C>          <C>

Balance, January 1, 2003       3,644,880    $3,645     2,554,700       $    -    $12,446    $(12,756)      $3,335

Net Income                             -         -             -            -          -      (1,904)      (1,904)
                             ------------ --------     ----------      --------  --------    --------      -------

Balance, December 31, 2003     3,644,880     3,645     2,554,700            -     12,446     (14,660)       1,431

Net Income                             -         -             -            -          -         231          231
                             ------------ --------     ----------      --------  --------    --------      -------

Balance, December 31, 2004     3,644,880     3,645     2,554,700            -     12,446     (14,429)       1,662

Net Income                             -         -             -            -          -        (192)        (192)
                             ------------ --------     ----------      --------  --------    --------      -------

Balance, December 31, 2005     3,644,880    $3,645     2,554,700   $        -    $12,446    $(14,621)      $1,470
                             ------------ --------     ----------      --------  --------    --------      -------

</TABLE>
<PAGE>



                                                                     Exhibit D

                               IWI Holding Limited
                      Consolidated Statements of Cash Flows
                                 (In Thousands)

                  Years Ended December 31, 2005, 2004 and 2003
<TABLE>


                                                                  2005            2004         2003
                                                                  ----            ----         ----
<S>                                                             <C>              <C>           <C>

Cash Flows from Operating Activities
         Net (loss) income                                      $  (192)         $  231      $ (1,904)
         Adjustments to reconcile net (loss) to income
           net cash used in operating activities
                  Depreciation and amortization                      18              66           159
                  Provision for doubtful accounts                   116             351           (32)
                  (Increase) decrease in
                       Accounts receivable                       (1,738)         (2,508)       (1,674)
                        Inventories                                 622             (63)          370
                        Prepaid expenses                             58              18           121
                  Increase (decrease) in
                        Accounts payable - Trade                   (622)          1,491          (171)
                        Accounts payable to affiliated companies   (667)           (483)          810
                        Accrued liabilities                          20             296            35
                                                                --------          ------       -------

                           Net Cash Used in
                            Operating Activities                 (2,385)           (601)       (2,286)
                                                                --------          ------       -------

Net Cash Used in Investing Activities
         Purchases of property and equipment                        (12)             (2)          (32)
                                                                --------          -------      --------

Cash Flows from Financing Activities
         Checks issued in excess of Funds on deposit                  -             (24)           24
         (Payments on) borrowings from notes payable
            Employees                                               (21)            (20)          132
            Other                                                   226             315             -
         Borrowings from  line of credit, net                     2,330             333         2,146
                                                               ---------          --------     --------
                           Net Cash Provided by
                             Financing Activities                 2,535             604         2,302
                                                               ---------          --------     --------
Net Increase (Decrease) in Cash                                     138               1           (16)

Cash, Beginning of Year                                               1               -            16
                                                               ---------          --------     ---------

Cash, End of Year                                            $      139          $    1       $     -
                                                               ---------          --------     ---------
</TABLE>

<PAGE>





                               IWI Holding Limited
                   Notes to Consolidated Financial Statements

                  Years Ended December 31, 2005, 2004 and 2003


Note 1 - Description of Business and Acquisitions

IWI Holding Limited ("Holding") was incorporated in the British Virgin Islands
on February 22, 1993. Holding and its wholly owned subsidiary (together, the
"Company") import, assemble, and distribute wholesale fine jewelry. The Company
also imports pearls for assembly and resale through its wholly owned subsidiary,
Imperial World, Inc. ("Imperial").


Note 2 - Status of Operations

The Company continues in its effort to diversify its customer base thereby
reducing its reliance on two to three major customers. The diversification
effort was successful in 2005 but was offset by lower sales from two major
customers. These two customers' combined sales decreased in 2005 by
approximately $5.9 million. This decrease in sales was partially offset by the
expansion of our customer base as well as increased sales to other existing
customers. Overall net sales reported in 2005 decreased $1.9 million or 6.6%
compared to 2004. Moving forward in 2006, the Company expects to not only
increase its sales to core major customers but also to increase it sales to new
customers from 2005 levels, thus continuing the expansion of its customer base.

Gross margins for the Company continued to improve during 2005 from levels
experienced in 2004. Gross margins improved slightly in 2005 to 22.80% vs.
21.87% in 2004 an increase of .93%. Gross profit as a result of lower sales
levels in 2005 decreased by $161,000 as compared to 2004 levels. This
improvement in overall gross margins was in part due to continued emphasis
placed on the profitability of each product sold and increased standard profit
levels implemented.

Moving forward into 2006 the Company is confident that it will return to
profitability on an ongoing basis. The Company continues to explore alternatives
to reduce production costs such as moving certain production functions where
feasible overseas and maintain lean overhead support levels.

The Company's goal is to continue to diversify its customer base thereby
reducing its reliance on two to three major customers. This diversification
effort is expected to increase sales in 2006 from our non-major customers.
Within the first three months of 2006 the Company has either shipped or received
orders from two new customers. These new customers have significant volume
potential. Response to new styles and products presented to our customers has
been well received toward the end of 2005 and beginning of 2006. Where a
concerted effort to diverse our customer base continues, at the same time we are
attempting to expand opportunities with our major customers.

<PAGE>




                               IWI Holding Limited
                   Notes to Consolidated Financial Statements

                  Years Ended December 31, 2005, 2004 and 2003


Note 3 - Summary of Significant Accounting Policies

Basis of Presentation

The consolidated statements include the accounts of the Company and its
subsidiary. All intercompany accounts and transactions have been eliminated in
consolidation.

Receivables

Receivables are carried at the original invoice amount less estimates made for
doubtful receivables. Management determines the allowances for doubtful accounts
by reviewing and identifying troubled accounts on a periodic basis and by using
historical experience applied to an aging of accounts. A receivable is
considered to be past due if any portion of the receivable balance is
outstanding for more than thirty days beyond terms. Receivables are written off
when deemed uncollectible. Recoveries of receivables previously written off are
recorded into earnings when received.

Inventories

Inventories,  consisting  nearly entirely of finished  goods,  are stated at the
lower of  first-in,  first-out  - (FIFO)  cost or  market.  No costs  other than
purchased costs, freight or duties are capitalized in inventories.

As of December 31, 2005 and 2004, the inventory valuation reserve was $1,026,000
and $949,000 respectively. The Company recorded an expense of $131,000, $308,000
and $388,000 during 2005, 2004 and 2003, respectively, to adjust the inventory
value to lower of cost or market and to provide for future liquidations.

Revenue Recognition

Revenue is recognized in the  consolidated  financial  statements when materials
are relieved from  inventory and shipped  directly FOB from from our facility in
Westmont,Illinois. Nearly all freight expense is paid by the customer. Net sales
are arrived at by deducting returns and discounts from gross sales.  Returns are
deducted from sales when  received.  In addition,  allowances for future returns
are provided based on historic experience and accepted customer returns.

Cost of sales

Cost of sales  consists  of the cost of  goods relieved from our inventory.

Depreciation

Machinery and equipment are stated at historical cost and depreciated  primarily
on  a  straight-line   basis  over  their  estimated  useful  lives.   Leasehold
improvements  are  amortized  over the shorter of useful life or the life of the
lease.  Useful lives range from three to ten years for machinery,  equipment and
leasehold improvements.

Commissions

The Company accrues for commissions based on sales to customers based on
specific contractual agreements. These accruals are calculated based upon net
sales by customer, and the liability account is adjusted monthly to reflect
increases and decreases in each customer's sales and payments.

Income Taxes

Deferred tax assets and liabilities are determined based on the difference
between the financial reporting and tax bases of assets and liabilities using
the enacted tax rates in effect for the year in which the differences are
expected to reverse.

Selling, General and Administrative Expenses

Selling,  general and administrative expenses consist of all operating expenses
other than costs of goods purchased, inbound freight and interest. Such expenses
would  include  salary  and  wages,   commission,   rent,  travel,   cooperative
advertising and all other general operating expenses.

<PAGE>



                               IWI Holding Limited
                   Notes to Consolidated Financial Statements

                  Years Ended December 31, 2005, 2004 and 2003


Note 3 - Summary of Significant Accounting Policies (Continued)

Fair Value of Financial Instruments

The Company's financial instruments include accounts receivable, accounts
payable, and notes payable. The fair values of all financial instruments were
not materially different than their carrying values.

Accounting Estimates

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires Company management
to make estimates and assumptions that affect the amounts reported in the
financial statements and accompanying notes. Actual results could differ from
those estimates.

Stock-Based Compensation

The Company accounted for stock option grants in accordance with APB Opinion No.
25, "Accounting for Stock Issued to Employees" and, accordingly, recognized no
compensation expense for the stock option grants. As of December 31, 2005 and
2004, there were no stock options outstanding.

Advertising Costs

The Company expenses all advertising costs as incurred. Advertising costs were
approximately $1,149,000, $993,000 and $449,000 for 2005, 2004 and 2003,
respectively.

Foreign Currency

The functional currency of the Company is the U.S. dollar. Transactions arising
in foreign currencies have been translated at rates in effect at the dates of
the transactions. The gains or losses during the years presented are not
significant.

(Loss) Income Per Common Share

The Company has adopted the  provisions  of FASB No. 128,  "Earnings Per Share."
Income  per common  share is  computed  by  dividing  net  (loss)  income by the
weighted-average number of common shares outstanding during the period.

<PAGE>



                               IWI Holding Limited
                   Notes to Consolidated Financial Statements

                  Years Ended December 31, 2005, 2004 and 2003


Note 3 - Summary of Significant Accounting Policies (Continued)

Segment Information

The Company has adopted Statement of Financial Accounting Standards No. 131,
"Disclosures about Segments of an Enterprise and Related Information." The
internal reporting that is used by management for making operating decisions and
assessing performance is used as the source of determining the Company's
reportable segments. This statement requires disclosure of certain information
by reportable segment, geographic area and major customer.

The Company imports, assembles, distributes and wholesales fine jewelry.
Substantially all the Company's sales are within the United States. The Company
operates this product line as one operating segment, which is deemed to be one
reportable segment for purposes of this disclosure.

Comprehensive Income

Comprehensive income is a measure of all equity that results from recognized
transactions and other economic events other than owner transactions, such as
stock purchases and issuances and dividends. There were no significant
differences between the Company's net (loss) income and comprehensive income.

New Accounting Pronouncements

In November 2004, the FASB issued SFAS Statement No. 151 "Inventory Costs - An
amendment of ARB No. 43, Chapter 4." This new standard is the result of a
broader effort by the FASB to improve financial reporting by eliminating
differences between GAAP in the United States and GAAP developed by the
International Accounting Standards Board (IASB). As part of this effort, the
FASB and the IASB identified opportunities to improve financial reporting by
eliminating certain narrow differences between their existing accounting
standards. Statement No. 151 clarifies that abnormal amounts of idle facility
expense, freight, handling costs and spoilage should be expensed as incurred and
not included in overhead. Further, Statement No. 151 requires that allocation of
fixed production overheads to conversion costs should be based on normal
capacity of the production facilities. The provisions in Statement 151 are
effective for inventory costs incurred during fiscal years beginning after June
15, 2005. The adoption of SFAS Statement No. 151 is not expected to have an
impact on the Company's consolidated financial position or results of
operations.

In December 2004, the FASB issued SFAS Statement No. 123 (Revised 2004),
"Share-Based Payments". The new FASB rule requires that the compensation cost
relating to share-based payment transactions be recognized in the financial
statements. That cost will be measured based on the fair value of the equity or
liability instruments issued. Public entities (other than those filing as small
business issuers) will be required to apply Statement No. 123R beginning with
the first interim or annual reporting period of the company's first fiscal year
beginning after June 15, 2005. The adoption of SFAS Statement No. 123 (Revised)
is not expected to have an impact on the Company's consolidated financial
position or results of operations.

<PAGE>



                               IWI Holding Limited
                   Notes to Consolidated Financial Statements

                  Years Ended December 31, 2005, 2004 and 2003


Note 3 - Summary of Significant Accounting Policies (Continued)

New Accounting Pronouncements (Continued)

In December 2004, the FASB issued SFAS No. 153 "Exchanges of Nonmonetary Assets
- An Amendment of APB Opinion No. 29". This new standard is the result of a
broader effort by the FASB to improve financial reporting by eliminating
differences between GAAP in the United States and GAAP developed by the
International Accounting Standards Board (IASB). As part of this effort, the
FASB and the IASB identified opportunities to improve financial reporting by
eliminating certain narrow differences between their existing accounting
standards. Statement 153 amends APB Opinion No. 29, "Accounting for Nonmonetary
Transactions", that was issued in 1973. The amendments made by Statement 153 are
based on the principle that exchanges of nonmonetary assets should be measured
based on the fair value of the assets exchanged. Further, the amendments
eliminate the narrow exception for nonmonetary exchanges of similar productive
assets and replace it with a broader exception for exchanges of nonmonetary
assets that do not have "commercial substance." Previously, Opinion 29 required
that the accounting for an exchange of a productive asset for a similar
productive asset or an equivalent interest in the same or similar productive
asset should be based on the recorded amount of the asset relinquished. The
provisions in Statement 153 are effective for nonmonetary asset exchanges
occurring in the fiscal periods beginning after June 15, 2005. The adoption of
SAFS Statement No. 153 is not expected to have an impact on the Company's
consolidated financial position or results of operation.

In May 2005, the FASB issued SFAS No. 154 "Accounting Changes and Error
Corrections - A Replacement of APB Opinion No. 20 and FASB Statement No. 3".
This Statement requires that a voluntary change in accounting principle be
applied retrospectively with all prior period financial statements presented on
the new accounting principle, unless it is impracticable to do so. Statement 154
also provides that (1) a change in method of depreciating or amortizing a
long-lived nonfinancial asset be accounted for as a change in estimate
(prospectively) that was effected by a change in accounting principle, and (2)
correction of errors in previously issued financial statements should be termed
a "restatement." The new standard is effective for accounting changes and
correction of errors made in fiscal years beginning after December 15, 2005. The
adoption of SAFS Statement No. 154 is not expected to have an impact on the
Company's consolidated financial position or results of operations.

Note 4 - Credit Arrangements

On June 14, 2005, the Company entered into a credit agreement with a new
financial institution whereby the Company can borrow up to $7.5 million, plus
the seasonal over-line amount of $1.5 million, payable on demand. The total
credit facility is governed by a borrowing base formula, as defined in the
agreement, based principally on accounts receivable and inventory levels. This
agreement provides, among other things, that the credit agreements are
collateralized by substantially all the assets of the Company with an
approximate net book value of $18.4 million.

Under this borrowing facility, interest is calculated at .25% over the bank's
prime rate with respect to the revolving loan. In addition, an unused commitment
fee is assessed at a rate of .25% representing the difference between the
maximum revolving loan and the average daily outstanding balance. An officer of
the Company personally guarantees up to $3.5 million of the borrowings.

The agreement contains certain reporting and financial covenants, which the
Company is required to maintain. The credit agreement matures on June 1, 2007,
or may be accelerated or called by the lender upon certain events as specified
in the loan agreement.
<PAGE>


                               IWI Holding Limited
                   Notes to Consolidated Financial Statements

                  Years Ended December 31, 2005, 2004 and 2003

Note 4 - Credit Arrangements (Continued)

As  of  December  31,  2005,   borrowings   under  this  credit  agreement  were
approximately $7.9 million. As of December 31,2005, maximum additional available
borrowings under the line of credit were approximately $1.1 million,  subject to
certain  borrowing base  limitations.  The Company was in compliance with all of
the financial  covenants during the year-ended December 31, 2005 except the debt
service coverage ratio . This covenant was waived by the bank for the year-ended
December 31, 2005.


Note 5 - Preferred Stock

The 3,644,880 issued preferred shares are redeemable at the Company's option
after March 21, 1997, at an amount not to exceed 50% of net income in excess of
$15 million for the preceding year. If not redeemed, the preferred shares will
begin to accrue a 4% noncumulative dividend as of that date. The preferred
shares have voting rights equivalent to one-half vote per share. In the event of
a liquidation of the Company, the holders of preferred shares will be entitled
to $1 per share before any payment is made to common shareholders.


Note 6 - Stock Option Plans

In January 1995, the Company adopted a nonqualified stock option plan under
which 600,000 shares of common stock have been reserved for options, which may
be granted to key employees and third-party consultants at an option price to be
determined by the Compensation Committee of the Board of Directors. No options
have been granted under this plan. This plan expired in 2005.


Note 7 - Related Party Transactions

Since 1998, some of the Company's products were purchased from a manufacturer in
Hong Kong, which is managed by a relative of an officer of the Company. For
2005, 2004 and 2003, the Company's purchases from this manufacturer were
approximately $3,284,000, $7,887,000 and $7,394,000, respectively. Beginning in
October 2005 the Company began purchasing products from another manufacturer in
Hong Kong, which is owned and managed by a relative of an officer of the
Company. Purchases from this company in 2005 were approximately $521,000.

The Company uses outside entities to pursue most of its sales, because it has
proven to be both effective and economical. The stakeholders of a primary
outside sales entity are an officer of the Company and a family member of such
officer.

Commission expense of the Company associated with this entity for the years
2005, 2004 and 2003 was approximately $619,000, $688,000 and $569,000,
respectively. Selling expenses such as salaries, travel, entertainment etc. are
borne directly by the sales entity.
<PAGE>



                               IWI Holding Limited
                   Notes to Consolidated Financial Statements

                  Years Ended December 31, 2005, 2004 and 2003

Note 7 - Related Party Transactions (Continue)


Notes Payable to Employees, Related Parties

Notes payable to employees and related parties reflect loans made to the Company
from employees and relatives of employees to enhance the cash flow of the
Company. These notes mature annually at December 31, but may be renewed if
concurred by both the Company and individual. These notes may be prepaid without
penalty. Interest was accrued and paid on these notes at a beginning rate in
2005 of 7.5% and increased periodically through the year reflecting increases in
the prime rate to 9.5% at year end. Interest was accrued and paid at a rate of
7.5% and 10.0% in 2004 and 2003 respectively.


Note 8 - Income Taxes

The following table summarizes income taxes (benefits):

(In Thousands)                                      Year Ended December 31
                                            2005         2004            2003
                                           -----        ------          ------
  Current
                    U.S. federal       $    (3)      $    -         $     -
                    U.S. state               -            -               -
                    Other                    -            -               -
                                         ------       ------          ------

                                            (3)           -               -
  Deferred
                    U.S. federal             -            -               -
                    U.S. state               -            -               -
                    Other                    -            -               -
                                         ------       ------          ------

                                             -            -               -
                                         ------       ------          ------
  Income Tax Expense                        (3)           -               -
                                         ------       ------          ------


The differences  between the U.S.  federal  statutory tax rate and the Company's
effective tax rate are as follows:


                                                Year Ended December 31
                                            2005        2004       2003
                                            ----        ----       ----

  U.S. federal statutory tax rate            34%          34%         34%
  Change in valuation allowance             (35)         (35)        (35)
  Other                                       1            1           1
                                            ----         ----         ---
  Consolidated Effective Tax Rate             - %          - %         - %
                                            ----         ----         ---

<PAGE>


                            IWI Holding Limited
                    Notes to Consolidated Financial Statements

                    Years Ended December 31, 2005, 2004 and 2003

Note 8 - Income Taxes (Continued)

The components of deferred income taxes as of December 31, are as follows:

 (In Thousands)
                                                     2005            2004
                                                     ----            ----
     Deferred Tax Assets
              Net operating and capital loss
                carry forward                     $  2,951        $ 2,682
              Accounts receivable                      277            232
              Inventories                              488            464
              Property and equipment                   203            212
              Accrued expenses                          75              -
     Deferred Tax Liability
              Accrued expenses                           -           (155)
                                                    -------         ------
                                                     3,994          3,435
     Less:  Valuation allowance                     (3,838)        (3,279)
                                                    -------         -------

     Net Deferred Tax Asset                       $    156        $   156
                                                   ---------        -------


In accordance with the provisions of Internal Revenue Code Section 382,
utilization of the company's net operating loss carry forward is estimated to be
limited to approximately $111,000 per year because of a change in corporate
ownership. However, because some of the net operating losses were incurred
during part of fiscal year 1998 and all of 1999 when the Section 382 limitation
did not apply, the company has approximately $6,200,000 of net operating loss
carry forward available for immediate use as of December 31, 2005. Because of
the Section 382 limitation, the portion of the company's total net operating
loss carry forward that may be utilized through expiration is estimated to be
approximately $7,600,000. This net operating loss carryforward will expire
through 2023.
..



Note 9 - Supplemental Cash Flow Information

(In Thousands)                                    Year Ended December 31
                                             2005        2004       2003
                                             ----       -----       -----
         Cash paid for interest            $  409      $   334     $  297
                                           ------     --------     ---------

<PAGE>


                               IWI Holding Limited
                   Notes to Consolidated Financial Statements

                  Years Ended December 31, 2005, 2004 and 2003

Note 10 - Employee Benefit Plan

The company sponsors a defined-contribution profit-sharing plan covering
substantially all full-time employees who have completed one year of service.
Company contributions to the plan are discretionary, determined by the Board of
Directors and fully vest to employees upon completion of six years of service.
The Company also has a voluntary 401(k) savings plan. Participants may
contribute up to 15% of their compensation to this plan. The Company matching to
this plan is discretionary and decided annually by the Board of Directors.
Participant and employer-matched contributions to the plan are 100% vested.
Company contributions to these plans were approximately $31,000, $30,000 and
$61,000 in 2005, 2004 and 2003, respectively.


Note 11 - Significant Customers

The Company derived 44% and 12% of its net sales from two customers during 2005.
The Company derived 44% and 18% of its net sales from two customers during 2004
and 36%, 20% and 12% from three customers in 2003. The receivable balances for
significant customers were $5,817,000 and $7,439,000 as of December 31, 2005 and
2004, respectively.


Note 12 - Commitments and Contingencies

Litigation

The Company is a codefendant in a class action lawsuit brought by a stockholder
in 1996 who alleges the Company misrepresented its financial position in interim
financial statements. The original suit seeks damages in excess of $11 million.
The Company has repeatedly disputed the stockholder's allegations and believes
that they will ultimately prevail in the litigation. The parties reached an
agreement in principal to settle the claim for a significantly lesser amount,
which was accrued for in 1999. The settlement agreement is subject to court
approval and the Company may decline to proceed with the agreement if a
significant number of class members "opt out" of the settlement. As of December
31, 2005, there has been no response from counsel for the class action lawsuit
or from the lead plaintiff.

<PAGE>

                               IWI Holding Limited
                   Notes to Consolidated Financial Statements

                  Years Ended December 31, 2005, 2004 and 2003

Note 12 - Commitments and Contingencies  (Continued)

Operating Leases

Imperial is obligated under a lease on its operating facility, located in
Westmont, Illinois for minimum rentals as well as real estate taxes and other
operating expenses through January 2007.

The future minimum lease payments required under this lease as of December 31,
2005 are as follows:


         Year Ending December 31:
                                    2006            $  184,000
                                    2007                16,000
                                                   -----------
                                                    $  200,000

Rent expense included in the accompanying statements of operations amounted to
$238,000, $221,000 and $187,000 for 2005, 2004 and 2003, respectively.

Employment Agreements

The Company has an employment agreement with an officer expiring on July 31,
2006. The agreement includes provisions for severance payments for the longer of
one year or any period for which the employee is required not to compete.


The future minimum annual compensation payments as required under the agreement
as of December 31, 2005 approximates $163,000.

<PAGE>




                                                                    Schedule l

                               IWI Holding Limited
                  Condensed Financial Information of Registrant
                                 Balance Sheets
                           December 31, 2005 and 2004




<TABLE>


                                     Assets
                                                               2005              2004
                                                               -----             ----
<S>                                                     <C>                   <C>


Cash                                                    $     1,000        $      1,000
Due from affiliate                                          500,000             500,000
Investments in wholly owned subsidiaries                    969,000           1,161,000
                                                          ----------          ---------

                  Total Assets                          $  1,470,000       $  1,662,000
                                                          ----------         -----------


                                    Stockholders' Equity

Preferred stock - $1 par value; authorized - 5,000,000
  shares; issued and outstanding - 3,644,880 shares      $ 3,644,880     $    3,644,880

Common stock - No par value; authorized - 10,000,000
  shares; issued and outstanding - 2,544,700 shares                -                  -

Additional paid-in capital                                12,446,120         12,446,120

Accumulated deficit                                      (14,621,000)       (14,429,000)
                                                         ------------        ------------

                                                     $     1,470,000      $   1,662,000
                                                         ------------        ------------


                           Statements of Income and Accumulated Deficit

                                                           2005                   2004
                                                          -----                  -----

Equity in net (loss) income of subsidiaries           $ (192,000)         $      231,000

Accumulated deficit, beginning of year               (14,429,000)            (14,660,000)
                                                     ------------            -------------

Accumulated deficit, end of year                    $(14,621,000)         $  (14,429,000)
                                                     ------------            -------------
</TABLE>


Note 1 - Basis of Presentation

The Company's share of net (loss) income of its unconsolidated subsidiaries, all
of which are wholly owned, is included in net income using the equity method.
Parent-company-only financial statements should be read in conjunction with the
Company's consolidated financial statements.




                                                                  Schedule ll

                               IWI Holding Limited
                        Valuation and Qualifying Accounts
                  Years Ended December 31, 2005, 2004 and 2003
<TABLE>


                                                Additions     Additions
                                 Balance at     Charged to    Charged to                         Balance
                                 Beginning      Cost and      Other                              at End
          Description            of Period      Expenses      Accounts      Deduction           of Period
<S>      <C>                    <C>              <C>         <C>            <C>                 <C>


Year Ended December 31, 2003

   Allowance for
    Doubtful Accounts           $ 568,000       (32,000)           -         4,000(1)         $ 532,000

   Inventory Valuation
    Allowance                  $1,073,000       388,000            -       633,000 (2)         $828,000

   Deferred Income Tax
    Valuation Allowance        $3,612,000             -            -        15,000 (3)      $ 3,597,000

Year Ended December 31, 2004

   Allowance for
    Doubtful Accounts            $532,000       351,000            -       287,000  (1)       $ 596,000

   Inventory Valuation
    Allowance                    $828,000       308,000            -       187,000  (2)       $ 949,000

   Deferred Income Tax
    Valuation Allowance        $3,597,000             -            -       318,000  (3)     $ 3,279,000

Year Ended December 31, 2005

   Allowance for
     Doubtful Accounts           $596,000       116,000            -         2,000  (1)       $ 710,000

   Inventory Valuation
    Allowance                    $949,000       111,000            -        34,000(2)      $  1,026,000

   Deferred Income Tax
     Valuation Allowance       $3,279,000       559,000            -            -          $  3,838,000

</TABLE>

(1) Write-off of uncollectible accounts (2) Inventory losses realized (3)
Decreases in deferred tax assets