**SECURITIES
      AND EXCHANGE COMMISSION**


Washington,
      D.C. 20549


**FORM
      20-F**


(Mark
      One)





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





X  **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, 2006





**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 RegisteredNone
            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, 2007 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 X No





Indicate
      by check mark which financial statement item the registrant has elected to
      follow.


Item
      17  Item 18 X



















**TABLE
      OF CONTENTS**








**PART
                I**
            PageITEM
                1.
            IDENTITY
                OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS
            3ITEM
                2.
            OFFER
                STATISTICS AND EXPECTED TIMETABLE
            3ITEM
                3.
            KEY
                INFORMATION
            3ITEM
                4.
            INFORMATION
                ON THE COMPANY
            4ITEM
                5.
            OPERATING
                AND FINANCIAL REVIEW AND PROSPECTS
            7ITEM
                6.
            DIRECTORS,
                SENIOR MANAGEMENT AND EMPLOYEES
            10ITEM
                7.
            MAJOR
                SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
            12ITEM
                8.
            SELECTED
                CONSOLIDATED FINANCIAL DATA
            14ITEM
                9.
            THE
                OFFER AND LISTING
            14ITEM
                10.
            ADDITIONAL
                INFORMATION
            15ITEM
                11.
            QUANTITATIVE
                AND QUALITATIVE DISCLOSURES ABOUT THE MARKET
            15ITEM
                12.
            DESCRIPTION
                OF SECURITIES OTHER THAN EQUITY SECURITIES
            16**PART
                II**ITEM
                13.
            DEFAULTS
                DIVIDEND ARREARAGES AND DELINQUENCIES
            16ITEM
                14.
            MATERIAL
                MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF
                PROCEEDS
            16ITEM
                15.
            CONTROLS
                AND PROCEDURES
            16ITEM
                16A.
            AUDIT
                COMMITTEE FINANCIAL EXPERT
            17ITEM
                16B.
            CODE
                OF ETHICS
            17ITEM
                16C.
            PRINCIPAL
                ACCOUNTANT FEES AND SERVICES
            17**PART
                III**ITEM
                17.
            FINANCIAL
                STATEMENTS
            17ITEM
                18.
            FINANCIAL
                STATEMENTS
            17ITEM
                19.
            EXHIBITS
            18**SIGNATURES**
            18**CERTIFICATION**
            19-21







































**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**








Year
                Ended December 31,2002
            2003
            2004
            2005
            2006Statement
                of Income Data:Net
                sales
            $25,802
            $22,219
            $28,554
            $
                26,683
            $28,944Cost
                of sales
            20,322
            18,772
            22,309
            20,599
            22,244Gross
                profit
            5,480
            3,447
            6,245
            6,084
            6,700Operating
                expenses
            4,990
            5,052
            5,665
            5,815
            5,884Income
                (loss) from operations before the
              Restructuring
                Costs
            490
            (1,605)
            580
            269
            816Restructuring
                Costs
            -
            -
            -
            -
            (378)Other
                income (expense) - net
            (248)
            (299)
            (349)
            (458)
            (562)Income
                (loss) before income taxes
            242
            (1,904)
            231
            (189)
            (124)Income
                data:Income
                (tax) benefit
            36
            -
            -
            (3)
            (3)Net
                income (loss)
            $
                278
            $
                (1904)
            $
                231
            $
                (192)
            $
                (127)Net
                income (loss) per common share
            $
                .11
            $
                (.75)
            $
                .09
            $
                (.08)
            $
                (.05)Cash
                distributions per common share
            $
                -
            $
                -
            $
                -
            $
                -
            $
                -Weighted
                average number of common shares outstanding
            2,554,700
            2,554,700
            2,554,700
            2,554,700
            2,554,700Year
                Ended December 31,2002
            2003
            2004
            2005
            2006Balance
                Sheet Data:Working
                capital
            $3,010
            $
                1,233
            $
                1,528
            $
                1,342
            $
                1,225Total
                assets
            14,255
            15,327
            17,466
            18,540
            19,352Long-term
                debt
            0
            0
            0
            0
            0Shareholders’
                equity
            3,335
            1,431
            1,662
            1,470
            1,343














**SELECTED
      CONSOLIDATED FINANCIAL DATA**


(In
      thousands, except share data)




















**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 component 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
      32%,
      11% and 10% of its net sales from three customers during 2006. 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.





Year
                Ended December 31,2004
            2005
            2006Jewelry
                retail stores
            0.3
                %
            0.3
                %
            0.2
                %Specialty
                markets
            12.3
            20.8
            26.1Mass
                merchandisers
            16.9
            9.2
            11.8Department
                stores
            50.8
            46.5
            46.5National
                jewelry chains
            17.5
            22.4
            14.5Catalog
                showrooms
            2.2
            0.8
            0.9Total
            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 31,2004
            2005
            2006Amount
            %
            Amount
            %
            Amount
            %First
                Quarter
            $
                5,058
            17.7
            $
                5,707
            21.4
            $
                5,285
            18.3Second
                Quarter
            5,494
            19.3
            4,972
            18.6
            6,759
            23.3Third
                Quarter
            6,628
            23.2
            5,137
            19.3
            6,573
            22.7Fourth
                Quarter
            11,374
            39.8
            10,867
            40.7
            10,327
            34.7Total
            $28,554
            100.0
            $26,683
            100.0
            $28,944
            100.0















**Purchasing**





The
      Company imports most of its jewelry from the People’s Republic of China (“PRC”)
      and Hong Kong. Approximately 10% 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 pearls are assembled by and for the Company primarily overseas with limited
      assembly 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 February 2007, the Company amended its lease reducing its space needs
      to approximately 7,500 square feet. 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 principle 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, 2007 there has been no response from counsel
      for
      the class action lawsuit or from the lead counsel.















**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.








2004
            2005
            2006Amount
            %
                Sales
            %
                Change
            Amount
            %
                Sales
            %
                Change
            Amount
            %
                Sales
            %
                ChangeNet
                sales
            $28,554
            100.0
            28.5
            $26,683
            100.0
            (6.6)
            $28,944
            100.0
            8.5Gross
                profit
            6,245
            21.9
            81.2
            6,084
            22.8
            (2.6)
            6,700
            23.1
            10.1Operating
                expenses
            5,665
            19.9
            12.1
            5,815
            21.8
            2.7
            5,884
            20.3
            1.2Income
                (Loss) from oper.
            580
            2.0
            n/a
            269
            1.0
            n/a
            816
            2.8
            n/aRestructuring
                Costs
            -
            -
            -
            -
            -
            -
            -
            (378)
            (1.3)Other
                income (expense)
            (349)
            (1.2)
            (16.7)
            (458)
            (1.7)
            (31.2)
            (562)
            (1.9)
            (22.7)(Loss)
                Income before income taxes
            231
            0.8
            n/a
            (189)
            (0.7)
            n/a
            (124)
            (0.4)
            n/aIncome
                tax benefit
            -
            -
            n/a
            (3)
            -
            n/a
            (3)
            -
            n/aNet
                (Loss) income
            231
            0.8
            n/a
            (192)
            (0.7)
            n/a
            (127)
            (0.4)
            n/aNet
                (Loss) income per common share
            
            $
                0.09
            
            
            $(0.08)
            
            
            $(0.05)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:





2002
            2003
            2004
            2005
            2006Jewelry
                retail stores
            1.1%
            0.6%
            0.3%
            0.3%
            0.2%Specialty
                markets
            28.8
            28.5
            12.3
            20.8
            26.1Mass
                merchandisers
            27.9
            12.7
            16.9
            9.2
            11.8Department
                stores
            26.6
            39.5
            50.8
            46.5
            46.5National
                jewelry chains
            12.5
            16.3
            17.5
            22.4
            14.5Catalog
                showrooms
            3.1
            2.4
            2.2
            0.8
            0.9Total
            100.0%
            100.0%
            100.0%
            100.0%
            100.0%











The
      changes in net sales are primarily attributable to changes in values of goods
      delivered to customers. Most of the goods which we sell are produced in China.
      Until July 21, 2005, the Renminbi (RMB) (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 7.71 to US$1, or approximately 4.5% through April 2007. Therefore,
      foreign currency fluctuation has had a minimal impact on the
      Company.















**Year
      Ended December 31,2006 Compared to Year Ended December 31,
      2005**







Net
      Sales. Net sales increased approximately $2.3 million or 8.5% to $28.9 million
      in 2006 from $26.7 million in 2005. This increase in net sales reflects an
      increase in gross sales from the prior year of $3.3 million partially offset
      by
      an increase in returns compared to 2005 of approximately $1.0 million. This
      increase in 2006 revenues reflect a combination of the expansion of our customer
      base as well as increased sales to other existing customers offset by decreased
      sales from the Company’s largest customer of approximately $2.2
      million.





Gross
      Profit. Gross profit increased $616,000 or 10.1% to $6.7 million in 2006 from
      $6.1 million in 2005. Gross margins improved slightly in 2006 to 23.15% vs.
      22.80% in 2005; an improvement of .35%. 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 $816,000 in 2006 compared to
      $269,000 in 2005, representing an increase from the prior year of $547,000.
      Operating expenses increased $69,000 and primarily reflects increased salary
      and
      related costs.





Restructuring
      Costs. The Company incurred costs associated with restructuring of approximately
      $378,000. The Company began restructuring its operations late in the 2nd quarter
      and early 3rd quarter.  These
      costs comprised severance costs associated with the elimination of 14 employees
      or approximately 25% of total employees, start up costs to integrate the
      operations and systems which were outsourced to China with the operations and
      systems in the U.S. net of labor savings generated. Most of the functions
      outsourced overseas were production related and includes in part boxing, tagging
      and packaging of the product as well as certain other clerical data
      entry.





Other
      Income (Expense). Other expenses representing interest costs increased $128,000
      to $586,000 from $458,000 in 2006 representing a combination of increased
      borrowings and increased interest rates experienced in 2005. This was partially
      offset by the gain recorded from the sale of an unused trademark of
      approximately $25,000.





Net
      Loss.
      The net loss for 2006 totaled $127,000 a change of $65,000 compared to the
      net
      loss reported in 2005 of $192,000.








**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.





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 experienced 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.






**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, 2006 was $1.2 million as compared to $1.3 million at December 31,
      2005.





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 0.25% over prime with respect
      to the revolving loan. In addition, an unused commitment fee is assessed at
      a
      rate of 0.25% 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.





The
      Company did not meet certain financial covenants as of September 30, 2006 and
      continues to be out of compliance regarding certain financial covenants
      primarily the minimum income requirement. As a result the financial institution
      has placed the Company under a forbearance agreement. Under this forbearance
      agreement, the Company’s borrowing ability as it relates to inventory has been
      decreased by approximately $250,000 as of February 1, 2007 and further
      reductions of approximately $250,000 on each of April 1, 2007 and May 1, 2007.
      Further, the Company’s borrowing is capped as it relates to inventory to a
      maximum of $2,000,000. In addition, the financial institution has increased
      the
      interest rate on the borrowing facility to 4% over the bank’s prime rate with
      respect to the revolving loan. The current  forbearance
      agreement expires on May 31, 2007. The Company is confident that if new
      financing is not secured by this date, that the present financial institution
      will renew or extend the present forbearance agreement.





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








2004
            2005
            2006Operating
                activities
            $
                (601)
            $(2,385)
            $
                (92)Investing
                activities
            (2)
            (12)
            (5)Financing
                activities
            604
            2,535
            60Increase
                (decrease) in cash
            1
            138
            (37)




















**Operating
      Activities** .
      The net
      cash used in 2006 was principally due to the increase in trade and affiliated
      accounts payable of $1.0 million and increases in inventories of $1.1 million
      offset partially by lower accounts receivable levels of $0.2 million as of
      December 31, 2006.


**Investing
      Activities.** Cash
      uses
      in 2006 were minimal and reflect the upgrade of our computer and related
      systems.












**Financing
      Activities.** During
      2006, the Company decreased the amounts outstanding under its line of credit
      by
      $0.2 million to $7.7 million at December 31, 2006. Notes payable others
      increased by $270,000.





During
      the coming twelve months, the Company does not anticipate any significant
      capital expenditures. Expenditures relating to leasehold improvements associated
      with the build out of the new lease is expected to be in the range of $100,000.
      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:





Payments
                due by PeriodLess
                than
            1-3
            4-5
            More
                thanContractual
                Obligations
            Total
            1
                year
            Years
            Years
            5
                yearsOperating
                Lease Obligations
            $822,000
            $111,000
            $303,000
            $217,000
            $191,000Overseas
                Housing Rental
            45,000
            34,000
            11,000
            -
            -Total
            $867,000
            $145,000
            $314,000
            $217,000
            $191,000








**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
            PositionJoseph
                K. Lau
            59
            Chairman
                of the Board of Directors: President of IWI Holding Limited, Principal
                Financial Officer and SecretaryRichard
                J. Mick
            66
            Sr.
                Vice President - Sales and DirectorConnie
                S. Yui
            56
            Inventory
                Manager and DirectorJoseph
                A. Benjamin
            64
            DirectorSamuel
                H. Lou
            53
            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.





**Compensation
      of Directors and Officers**





The
      aggregate cash compensation paid by the Company to all directors and officers
      as
      a group during 2006 was approximately $637,000. 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 $13,000 for this individual in lieu of motel accommodations and
      incurs an estimated $9,000 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 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 2006, 2005 and 2004 of
      approximately $29,000, $31,000 and $30,000, respectively.












**Employment
      Contracts**





The
      Company has an employment contract with Joseph K. Lau which was renewed for
      a
      five-year period expiring on July 31, 2011. The agreement calls for a base
      salary of $280,000 per year with an automatic salary increase of 5 percent
      (5%)
      if the Company reports a minimum of $100,000 pretax income. If the required
      minimum pretax income is not attained the salary level remains the same. The
      agreement also provides for a bonus of 5 percent (5%) of the Company’s pretax
      profit. The agreement includes provisions for severance payments for the greater
      of one half (1/2) of the compensation earned under this agreement for the
      remaining term of this agreement or severance pay equal to one year’s base
      salary or any period for which the employee is required not to compete.





**Committees
      and Attendance of the Board of Directors Meetings**





During
      the year ended December 31, 2006, the Board of Directors held two formal
      meetings. The Audit Committee held four meetings and the Compensation Committee
      held two meetings. 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, 2006, the Company had 33 permanent employees, including 2 executive
      officers, 8 persons in sales and merchandising, 16 persons in operations, and
      7
      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, 2007, the Company
      had 36 employees, including 2 executive officers, 8 persons in sales and
      merchandising, 18 persons in operations, and 8 persons in administrative and
      support functions. The Company supports its operations by the use of seasonal
      or
      part time employees. As of December 31, 2006 and May 1, 2007 the Company
      employed 8 and 3 seasonal employees, respectively.





**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, 2007, 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.





Name
                and Address
              of
                Beneficial Owner
            Amount
                and Nature ofBeneficial
                Ownership (1)
            Title
                of
              Class
            Percent
                of
              Class
            Percent
                ofVoting
                PowerBamberg
                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%











**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 2006. All of the filing requirements were satisfied on a timely
      basis in 2006. 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, 2006, 2005 and 2004, the Company’s purchases from this
      manufacturer were approximately $232,000, $3,284,000, and $7,887,000
      respectively. The Company no longer purchases products from this
      manufacturer.





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 2006 and 2005 were approximately
      $3,710,000 and $521,000, respectively.





The
      Company uses an outside company to provide product quality review at the point
      of manufacturing in Hong Kong and China. This company is owned and managed
      by a
      relative of an officer of the Company. Services and product provided by this
      company were $137,000 and $66,000 in 2006 and 2005, respectively.





The
      Company uses an outside company to route gold components from suppliers in
      the
      U.S. to manufacturers in Hong Kong and China. This company also provides on
      a
      limited basis some product to the Company. This company is owned and managed
      by
      a relative of an officer of the Company. Services and product provided by this
      company were approximately $140,000 and $18,000 in 2006 and 2005,
      respectively.





The
      Company purchases some of its gift boxes from a supplier in Hong Kong, which
      is
      part owned or controlled by a relative of an officer of the Company. Services
      and product supplied by this company were approximately $192,000, $234,000
      and
      $149,000 in 2006, 2005, and 2004, respectively.












The
      Company uses outside entities to pursue most of its sales, because it has proven
      to be both effective and economical. The majority stakeholder of the primary
      outside sales entity is a family member of an officer of the Company. 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
      2006, 2005 and 2004 were $522,000, $619,000 and $688,000, 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
      Spector & Wong, 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
“IWIHF.”





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.





2006
            2005High
            Low
            High
            LowFirst
                Quarter
            $.100
            $
                .070
            $.080
            $.080Second
                Quarter
            .090
            .060
            .100
            .070Third
                Quarter
            .070
            .060
            .120
            .070Fourth
                Quarter
            .115
            .060
            .100
            .070







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
            Low2006
            November
            $.060
            $
                .060December
            .115
            .0602007
            January
            $.090
            $
                .090February
            .090
            .060March
            .060
            .060April
            .060
            .060














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





At
      May
      10, 2007, the bid price of the Common Stock was $.06.





As
      of May
      10, 2007, 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.





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.





Since
      the
      Company imports the majority of the product it sells from China any significant
      change or restrictions implemented in the exportation or importation laws and
      procedures between China and the U.S. could have a detrimental impact on future
      operations and earnings.





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.















**ITEM
      12.**  **DESCRIPTION
      OF SECURITIES OTHER THAN EQUITY SECURITIES**





Not
      applicable.








**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.**  **MANAGEMENTS
      ANNUAL REPORT ON INTERNAL CONTROLS OVER FINANCIAL
      REPORTING**





Our
      management is responsible for establishing and maintaining adequate internal
      control over financial reporting, as defined by SEC rules adopted under the
      Securities Exchange Act of 1934, as amended. Our internal control over financial
      reporting is designed to provide reasonable assurance regarding the reliability
      of financial reporting and the preparation of financial statements for external
      purposes in accordance with generally accepted accounting principals. It
      consists of policies and procedures that:





A)
      Pertain to the maintenance of records that, in reasonable detail, accurately
      and
      fairly reflect the transactions and dispositions of our assets;


B)
      Provide reasonable assurance that transactions are recorded as necessary to
      permit preparation of the financial statements in accordance with generally
      accepted accounting principles, and that our receipts and expenditures are
      being
      made only in accordance with authorizations of our management and directors:
      and


C)
      Provide reasonable assurance regarding prevention or timely detection of
      unauthorized acquisition, use or disposition of our assets that could have
      a
      material effect on the financial statements.





Under
      the
      supervision and with the participation of management, including the Chief
      Executive Officer (CEO) and Chief Financial Officer (CFO), we made an assessment
      of the effectiveness of our **** internal
      control over financial reporting as of December 31, 2006. Based on our
      evaluation, we concluded **** that
      our **** internal
      control over financial reporting was effective as of December 31,
      2006.









**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.





**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, 2006 and 2005 were $104,847 and
      $79,837, respectively.





**All
      Other Fees**





The
      aggregate fees paid for other accounting services, primarily audit related,
      for
      the years ended December 31, 2006 and 2005 were $10,531 and $0, respectively.








**PART
      III**








**ITEM
      17.**  **FINANCIAL
      STATEMENTS**





Not
      applicable





**ITEM
      18.**  **FINANCIAL
      STATEMENTS**








(a)Financial
                Statements
            PageReport
                of Independent Auditors
            23Consolidated
                Balance Sheets as of December 31, 2006 and 2005
            24Consolidated
                Statements of Operations for Each of the Years
              in
                the Three-Year Period Ended December 31, 2006
            25Consolidated
                Statements of Shareholders’ Equity for Each of the
              Years
                in the Three-Year Period Ended December 31, 2006
            26Consolidated
                Statements of Cash Flows for Each of the Years in
              the
                Three-Year Period Ended December 31, 2006
            27Notes
                to Consolidated Financial Statements
            28-40Financial
                Statement Schedules (1)I
                -
                Condensed Financial Information of Registrant
            41II
                - Valuation and Qualifying Accounts
            42





(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.












**ITEM
      19.**  **FINANCIAL
      STATEMENTS AND EXHIBITS**





(a)  Exhibits




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






Date:
      June 7, 2007     By:


s/Joseph
      K. Lau


Chairman,
      President and Director












Certifications





Certification
      by Joseph K. Lau


Pursuant
      to Securities Exchange Act Rule 13a-14(a)





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 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 annual report:





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





4.
      The
      Company’s other certifying officer and I are responsible for establishing and
      maintaining disclosure controls and procedures (as defined in Exchange Act
      Rules
      13a-15(e) and 15d-15(e)) and internal control over financial reporting (as
      defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and
      have:


(a)
      Designed such disclosure controls and procedures, or caused such disclosure
      control and procedures to be designed under our supervision, to ensure that
      material information relating to the  Company,
      including its consolidated subsidiaries, is made known to us by others within
      those entities, particularly during the period in which this report is being
      prepared;


(b)
      Designed such internal control over financial reporting, or caused such internal
      control over financial reporting to be designed under our supervision, to
      provide reasonable assurance regarding the reliability of financial reporting
      and the preparation of financial statements for external purposes in accordance
      with generally accepted accounting principles:


(c)
      Evaluated the effectiveness of the Company’s disclosure controls and procedures
      and presented in this  report
      our conclusions about the effectiveness of the disclosure controls and
      procedures, as of the end  of
      the
      period covered by this report based on such evaluation; and


(d)
      Disclosed in this report any change in the Company’s internal control over
      financial reporting that occurred during the Company's most recent fiscal
      quarter (the Company's fourth fiscal quarter in the case of an annual report)
      that has materially affected, or is reasonably likely to materially affect,
      the
      Company’s internal control over financial reporting; and





5.
      The
      Company’s other certifying officer and I have disclosed, based on our most
      recent evaluation of internal control over financial reporting, to the Company’s
      auditors and the audit committee of Company’s board of directors (or persons
      performing the equivalent function);


(a)
      All
      significant deficiencies and material weaknesses in the design or operation
      of
      internal controls  over
      financial reporting which are reasonably likely to adversely affect the
      Company’s ability to record, process, summarize and report financial
      information: and


(b)
      Any
      fraud, whether or not material, that involves management or other employees
      who
      have a significant role in the Company’s internal control over financial
      reporting.








Date:
      June 7, 2007


By:
      /s/
      Joseph K. Lau











Chairman,
      President and Director
















For
      purposes of 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002, the undersigned, Joseph K. Lau, the Chief executive
      officer of IWI Holding Limited (the “Company”), hereby certifies that, to his
      knowledge:


(i)
      the
      Annual Report on Form 20-F of the Company for the year ended December 31, 2006,
      as filed with the Securities and Exchange Commission on the date hereof (the
      “Report”) fully complies with the requirements of section 13(a) or 15(d) of the
      Securities Exchange Act of 1934; and


(ii)
      the
      information contained in the Report fairly presents, in all material respects,
      the financial condition and results of operations of the Company.








Date:
      June 7, 2007      By:
      /s/
      Joseph K. Lau


Chairman,
      President and Director










Certifications





Certification
      by Kenneth S. Rich


Pursuant
      to Securities Exchange Act Rule 13a-14(a)





I,
      Kenneth S. Rich, certify that:





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





2.
      Based
      on my knowledge, this 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 annual report:





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





4.
      The
      Company’s other certifying officer and I are responsible for establishing and
      maintaining disclosure controls and procedures (as defined in Exchange Act
      Rules
      13a-15(e) and 15d-15(e)) and internal control over financial reporting (as
      defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and
      have:


(a)
      Designed such disclosure controls and procedures, or caused such disclosure
      control and procedures to be designed under our supervision, to ensure that
      material information relating to the Company, including its consolidated
      subsidiaries, is made known to us by others within those entities, particularly
      during the period in which this report is being prepared;


(b)
      Designed such internal control over financial reporting, or caused such internal
      control over financial reporting to be designed under our supervision, to
      provide reasonable assurance regarding the reliability of financial reporting
      and the preparation of financial statements for external purposes in accordance
      with generally accepted accounting principles:


(c)
      Evaluated the effectiveness of the Company’s disclosure controls and procedures
      and presented in this report our conclusions about the effectiveness of the
      disclosure controls and procedures, as of the end of the period covered by
      this
      report based on such evaluation; and


(d)
      Disclosed in this report any change in the Company’s internal control over
      financial reporting that occurred during the Company's most recent fiscal
      quarter (the Company's fourth fiscal quarter in the case of an annual report)
      that has materially affected, or is reasonably likely to materially affect,
      the
      Company’s internal control over financial reporting; and





5.
      The
      Company’s other certifying officer and I have disclosed, based on our most
      recent evaluation of internal control over financial reporting, to the Company’s
      auditors and the audit committee of Company’s board of directors (or persons
      performing the equivalent function);


(a)
      All
      significant deficiencies and material weaknesses in the design or operation
      of
      internal controls over financial reporting which are reasonably likely to
      adversely affect the Company’s ability to record, process, summarize and report
      financial information: and


(b)
      Any
      fraud, whether or not material, that involves management or other employees
      who
      have a significant role in the Company’s internal control over financial
      reporting.








Date:
      June 7, 2007


By:
      /s/
      Kenneth S. Rich            Controller












For
      purposes of 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002, the undersigned, Kenneth S. Rich, the Controller
      of
      IWI Holding Limited (the “Company”), hereby certifies that, to his
      knowledge:


(i)
      the
      Annual Report on Form 20-F of the Company for the year ended December 31, 2006,
      as filed with the Securities and Exchange Commission on the date hereof (the
      “Report”) fully complies with the requirements of section 13(a) or 15(d) of the
      Securities Exchange Act of 1934; and


(ii)
      the
      information contained in the Report fairly presents, in all material respects,
      the financial condition and results of operations of the Company.














Date:
      June 7, 2007      By:
      /s/
      Kenneth S. Rich


Controller



































































**IWI
      HOLDING LIMITED**





**CONSOLIDATED
      FINANCIAL STATEMENTS AND**


**INDEPENDENT
      AUDITOR’S REPORT**





**Years
      Ended December 31, 2006, 2005 and 2004**



















































































**REPORT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**











The
      Board
      of Directors and


Stockholders
      of IWI Holding Limited


Westmont,
      Illinois





We
      have
      audited the accompanying consolidated balance sheets of IWI Holding Limited
      as
      of December 31, 2006, and the related consolidated statements of operations,
      stockholders’ equity and cash flows for the year then ended. These consolidated
      financial statements are the responsibility of the Company’s management. Our
      responsibility is to express an opinion on these consolidated financial
      statements based on our audits. The consolidated financial statements of IWI
      Holdings Limited as of December 31, 2005, were audited by other auditors whose
      report dated April 17, 2006, expressed an unqualified opinion on the statements.





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
      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, 2006, and the results of its operations and its cash flows for
      the
      year then ended 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/Spector
      & Wong, LLP


Pasadena,
      California


June
      7,
      2007





















Exhibit
      A


**IWI
      Holding Limited**


**Consolidated
      Balance Sheets**


(In
      Thousands, Except Share Data)





**December 31, 2006 and 2005**





Assets
            2006
            2005**Current
                Assets**Cash
            $102
            $
                139Accounts
                receivable, less allowance for doubtful accounts of $551 in 2006
                and $710
                in 2005
            9,071
            9,336Inventories
            9,771
            8,676Deferred
                income taxes
            156
            156Prepaid
                expenses
            134
            105**Total
                Current Assets**
            19,234
            18,412**Leasehold
                Improvements, Machinery and Equipment**
            2,983
            2,978Less
                accumulated depreciation
            (2,865)
            (2,850)Property
                and Equipment, Net
            118
            128**Total
                Assets**
            $
                19,352
            $
                18,540**Liabilities
                and Stockholders’ Equity**
            2006
            2005**Current
                Liabilities**Line
                of credit
            $7,704
            $
                7,913Notes
                payableEmployees,
                related parties
            294
            294Other
            922
            653Accounts
                payable - Trade
            6,117
            5,272Accounts
                payable to affiliated companies
            1,573
            1,418Accrued
                liabilities
            1,399
            1,520**Total
                Current Liabilities**
            18,009
            17,070**Stockholders’
                Equity (Deficit)**Preferred
                stock - $1 par value; authorized 5,000,000 shares; issued and outstanding
                3,644,880 shares
            3,645
            3,645Common
                stock No par value; authorized 10,000,000 shares; issued and outstanding
                2,554,700 shares
            -Additional
                paid-in capital
            12,446
            12,446Accumulated
                deficit
            (14,748)
            (14,621)Total
                Stockholders’ Equity
            1,343
            1,470**Total
                Liabilities & Stockholders’ Equity**
            $19,352
            $
                18,540




















See
      notes
      to consolidated financial statements













Exhibit
      B


**IWI
      Holding Limited**


**Consolidated
      Statements of Operations**


(In
      Thousands, Except Share Data)





**Years
      Ended December 31, 2006, 2005 and 2004**








2006
            2005
            2004Net
                Sales
            $
                28,944
            $
                26,683
            $28,554Cost
                of Sales
            22,244
            20,599
            23,309Gross
                Profit
            6,700
            6,084
            6,245Selling,
                General and Administrative Expenses
            5,884
            5,815
            5,665Income
                (Loss) from Operations
            816
            269
            580Interest
                Expense
            (586)
            (458)
            (349)Restructuring
                Cost
            (378)
            -
            -Other
                Income
            24
            -
            -(Loss)
                Income Before Income Taxes
            (124)
            (189)
            231Income
                Tax Expense
            (3)
            (3)
            -Net
                (Loss) Income
            $(127)
            $
                (192)
            $
                231Net
                (Loss) Income per Common Share
            $(0.05)
            $
                (0.08)
            $
                0.09Weighted-Average
                Number of Common
              Shares
                Outstanding
            2,554,700
            2,554,700
            2,554,700





























See
      notes
      to consolidated financial statements








































Exhibit
      C





**IWI
      Holding Limited**


**Consolidated
      Statements of Stockholders’ Equity**


(In
      Thousands, Except Share Data)





**Years
      Ended December 31, 2006, 2005 and 2004**











Preferred
                Stock
            Common
                StockNumber
              of
                Shares
            Amount
            Number
              of
                Shares
            Amount
            Additional
                Paid-inCapital
            Accumulated
              Deficit
            TotalBalance,
                January 1, 2004
            3,644,880
            $3,645
            2,554,700
            $
                -
            $12,446
            $(14,660)
            $1,431Net
                Income
            -
            -
            -
            -
            231
            231Balance,
                December 31, 2004
            3,644,880
            3,645
            2,554,700
            -
            12,446
            (14,429)
            1,662Net
                Loss
            -
            -
            -
            -
            -
            (192)
            (192)Balance,
                December 31, 2005
            3,644,880
            3,645
            2,554,700
            -
            12,446
            (14,621)
            1,470Net
                Loss
            -
            -
            -
            -
            -
            (127)
            (127)Balance,
                December 31, 2006
            3,644,880
            $3,645
            2,554,700
            $
                -
            $12,446
            $(14,748)
            $1,343








































See
      notes
      to consolidated financial statements

























Exhibit
      D


**IWI
      Holding Limited**


**Consolidated
      Statements of Cash Flows**


(In
      Thousands)





**Years
      Ended December 31, 2006, 2005 and 2004**

















2006
            2005
            2004**Cash
                Flows from Operating Activities**Net
                (loss) income
            $(127)
            $(192)
            $231Adjustments
                to reconcile net (loss) to income net cash used in operating activities
                Depreciation and amortization
            15
            18
            66Provision
                for doubtful accounts
            33
            116
            351(Increase)
                decrease in Accounts receivable
            232
            (1,738)
            (2,508)Inventories
            (1,095)
            622
            (63)Prepaid
                expenses
            (29)
            58
            18Increase
                (decrease) in Accounts payable - Trade
            845
            (622)
            1,491Accounts
                payable to affiliated companies
            155
            (667)
            (483)Accrued
                liabilities
            (121)
            20
            296Net
                Cash Used in
              Operating
                Activities
            (92)
            (2,385)
            (601)**Net
                Cash Used in Investing Activities**Purchases
                of property and equipment
            (5)
            (12)
            (2)Net
                Cash Used in Investing****Activities
            (5)
            (12)
            (2)**Cash
                Flows from Financing Activities**Checks
                issued in excess of Funds on deposit
            **-**
            **-**
            (24)(Payments
                on) borrowings from notes payable
              Employees
            -
            (21)
            (20)Other
            269
            226
            -Borrowings
                from line of credit, net
            (209)
            2,330
            333Net
                Cash Provided by
              Financing
                Activities
            60
            2,535
            604Net
                Increase (Decrease) in Cash
            (37)
            138
            1Cash,
                Beginning of Year
            139
            1
            -Cash,
                End of Year
            $102
            $
                139
            $
                1




























See
      notes
      to consolidated financial statements


























**IWI
      Holding Limited**


**Notes
      to Consolidated Financial Statements**





**Years
      Ended December 31, 2006, 2005 and 2004**








**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 during 2006 was successful in its effort to diversify its customer
      base
      thereby reducing its reliance on two to three major customers. The
      diversification effort was successful in 2006 as the Company added three
      customers to its customer base accounting for sales in excess of $5 million.
      These new customers have significant upside potential. The increase was offset
      in part by lower sales from other customers. Overall net sales reported in
      2006
      increased $ 2,261,000 or 8.5% compared to one year ago. Moving forward in 2007
      the Company expects its core major customers to increase its sales from 2006
      levels and continue the expansion of its customer base.





Gross
      margins for the Company increased 0.3% to 23.1% in 2006 from 22.8% experienced
      in 2005. Gross profit increased $616,000 compared to 2005 levels. Excluding
      the
      effect of consignment and liquidation sales for 2006 and 2005 gross profit
      increased $651,000. Gross margin excluding the effect of consignment and
      liquidation sales increased 0.8% from 25.1% in 2005 to 25.9% in 2006. This
      change in overall gross margins was in part due to a change in the mix of sales
      by customer. Continued emphasis is placed on the profitability of each product
      sold and standard profit levels implemented.





Income
      from operations in 2006 was $816,000 an improvement of $547,000 from 2005 levels
      of $269,000. During 2006 the Company incurred costs associated with
      restructuring of approximately $378,000. The Company began restructuring its
      operations late in the 2 nd quarter
      and early 3 rd quarter.
      These costs comprised severance costs associated with the elimination of 14
      employees or approx. 25% of total employees, start up costs to integrate the
      operations and systems which were outsourced to China with the operations and
      systems in the U.S. net of labor savings generated. Most of the functions
      outsourced overseas were production related and includes in part boxing, tagging
      and packaging of the product as well as certain other clerical data entry.
      These
      functions have been contracted through a Mainland Chinese Company called Best
      Mark Logistics (BML). The effect on a go forward basis of these changes as
      well
      as renegotiating the current lease and reducing present square footage of the
      US
      office is expected to generate $85,000 to $100,000 saving in 2007. Effective
      April 1, 2007 six upper management members have voluntarily reduced their salary
      10% to aid the Company in attaining it’s profit objective. Should these
      objectives be exceeded these individuals would be reimbursed for this voluntary
      salary reduction. Further personnel reductions may be addressed in 2007 as
      the
      efficiencies and capability of BML improves.




Interest
      expense for 2006 was $586,000 an increase of $128,000 or 28.0% from $458,000
      in
      2005 reflecting increased borrowing levels and increases in overall interest
      rates. Other Income before taxes of 24,000 reflects the sale of one of the
      Company's trademarks. Tax expense recorded represents additional tax liability
      as a result of conclusion of a tax audit for the year 2004.











**IWI
      Holding Limited**


**Notes
      to Consolidated Financial Statements**





****    **Years Ended December 31, 2006, 2005 and 2004**





**Note
      2 - Status of Operations (Continued)**





As
      a
      result of above the Company is reporting a net loss for the year of $127,000
      representing an improvement of 65,000 compared to the net loss reported for
      2005.





Moving
      forward into 2007 the Company is confident that it will return to profitability
      on an ongoing basis. The Company continues to explore alternatives to reduce
      production costs and maintain lean overhead support levels.





**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 duty and
      freight are capitalized in inventories .





As
      of
      December 31, 2006 and 2005, the inventory valuation reserve was $1,215,000
      and
      $1,026,000 respectively. The Company recorded an expense of $252,000, $131,000
      and $308,000 during 2006, 2005 and 2004, 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 or FOB 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.





**Cost
      of Sales**





Cost
      of
      sales consisted of cost of goods purchased, packaging, assembly where
      applicable, quality review and freight to our warehouse.





**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 life of the lease. Useful lives















**IWI
      Holding Limited**


**Notes
      to Consolidated Financial Statements**





**Years
      Ended December 31, 2006, 2005 and 2004**








**Note
      3 - Summary of Significant Accounting Policies (Continued)**











range
      from three to ten years for machinery, equipment and leasehold improvements,
      vaults are amortized over 40 years.





**Trademarks**





Trademarks
      were capitalized and stated at historical cost and amortized using the
      straight-line method over estimated useful lives of 10 years.





**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 consists of all operating expenses other
      than costs of sales and interest. Such expenses would include salary and wages,
      commission, rent, travel, cooperative advertising and all other general and
      administrative expenses.





**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**





Prior
      to
      January 1, 2006, 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.
      Effective January 1, 2006, the Company adopted the fair value












**IWI
      Holding Limited**


**Notes
      to Consolidated Financial Statements**





**Years
      Ended December 31, 2006, 2005 and 2004**








**Note
      3 - Summary of Significant Accounting Policies (Continued)**





recognition
      provisions of FASB Statement No. 123 (R), “Share-Based Payment” (SFAS 123R),
      using the modified-prospective-transition method. Under that transition method,
      compensation cost recognized in 2006 includes: (a) compensation cost for all
      share-based payments granted prior to, but not yet vested as of January 1,
      2006
      based on the grant date fair value calculated in accordance with the original
      provisions of SFAS 123, and (b) compensation cost for all share-based payments
      granted subsequent to December 31, 2005, based on the grant-date fair value
      estimated in accordance with the provisions of SFAS 123 (R). As of December
      31,
      2006 and 2005, there were no stock options granted and outstanding.








**Advertising
      Costs**





The
      Company expenses all advertising costs as incurred. Advertising costs were
      approximately $1,282,000, $1,149,000 and $993,000 for 2006, 2005 and 2004,
      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.





**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, performs limited assembly, 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.
















**IWI
      Holding Limited**


**Notes
      to Consolidated Financial Statements**





**Years
      Ended December 31, 2006, 2005 and 2004**








**Note
      3 - Summary of Significant Accounting Policies (Continued)**





**New
      Accounting Pronouncements**





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, and are required to be adopted by the Company as of January
      1, 2006. 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.





In
      February 2006, the FASB issued SFAS Statement No. 155, “Accounting for Certain
      Hybrid Financial Instruments-an amendment of FASB Statements No. 133 and 140”.
      This statement permits fair value of re-measurement for any hybrid financial
      instrument that contains an embedded derivative that otherwise would require
      bifurcation; clarifies which interest-only strips and principal-only strips
      are
      not subject to the requirements of SFAS No. 133, “Accounting for Derivative
      Instruments and Hedging Activities”; establishes a requirement to evaluate
      interests in securitized financial assets to identify interests that are
      freestanding derivatives or that are hybrid financial instruments that contain
      an embedded derivative requiring bifurcation; clarifies that concentrations
      of
      credit risk in the form of subordination are not embedded derivatives; and
      amended SFAS No. 140 “Accounting for Transfers and Servicing of Financial Assets
      and Extinguishments of Liabilities”, to eliminate the prohibition on a
      qualifying special-purpose entity from holding a derivative financial instrument
      that pertains to a beneficial interest other than another derivative financial
      instrument, SFAS No. 155 is effective for all financial instruments acquired
      ,
      issued, or subject to a re-measurement (new Basis) event occurring after the
      beginning of an entity’s fiscal year that begins after September 15, 2006. The
      Company does not currently have any hybrid financial instruments.








In
      March
      2006, the FASB issued SFAS No. 156 “Accounting for Servicing of Financial
      Assets”, which amends SFAS No. 140, “Accounting for Transfers and Servicing of
      Financial Assets and Extinguishments of Liabilities”. In a significant change to
      current guidance, SFAS No. 156 permits an entity to choose either of the
      following subsequent measurement methods for each class of separately recognized
      servicing assets and servicing liabilities; (1) Amortization Method or (2)
      Fair
      Value Measurement Method. SFAS No. 156 is effective as of the beginning of
      an
      entity’s fiscal year that begins after September 15, 2006. This pronouncement
      does not currently apply to the Company.





In
      July
      2006, the FASB issued Interpretation No. 48 “Accounting for Uncertainty in
      Income Taxes” (“FIN 48”) FIN 48 clarifies the accounting for uncertainty in
      income taxes recognized in an enterprises’ financial statements in accordance
      with SFAS No. 109, “Accounting for Income Taxes”. FIN 48 prescribes a
      recognition threshold and measurement attributable for the financial statement
      recognition and measurement of a tax position taken or expected to be taken
      in a
      tax return. FIN 48 also provides guidance on derecognizing, classification,
      interest and penalties, accounting in interim periods, disclosures and
      transitions. FIN 48 is effective for fiscal years beginning after December
      15,
      2006. The Company does not believe that FIN 48 will have a significant impact
      on
      its financial position and results of operations.















**IWI
      Holding Limited**


**Notes
      to Consolidated Financial Statements**





**Years
      Ended December 31, 2006, 2005 and 2004**








**Note
      3 - Summary of Significant Accounting Policies (Continued)**





**New
      Accounting Pronouncements (Continued)**





In
      September 2006, the FASB issued SFAS No. 157 “Fair Value Measures” (“SFAS No.
      157”). SFAS No. 157 defines fair value, establishes a framework for measuring
      fair value in generally accepted accounting principles (“GAAP”), expands
      disclosures about fair value measurements, and applies under other accounting
      pronouncements that require or permits fair value measurements. SFAS No. 157
      does not require any new fair value measurements, however the FASB anticipates
      that for some entities, the application of SFAS No. 157 will change current
      practice. SFAS No. 157 is effective for financial statements issued for fiscal
      years beginning after November 15, 2007. The implementation of SFAS No. 157
      is
      not expected to have a material impact on the Company’s results of operations
      and financial condition.





In
      September 2006, the FASB issued SFAS No. 158, “ Employers’ Accounting for
      Defined Benefit Pension and Other Postretirement Plans - an amendment of FASB
      Statements No. 87, 88, 106 and 132(R)”. This statement requires employers to
      recognize the overfunded or underfunded status of a defined benefit
      postretirement plan (other than a multi-employer plan) as an asset or liability
      in its statement of financial position and to recognize changes in that funded
      status in the year in which the changes occur through comprehensive income
      of a
      business entity or changes in unrestricted net assets of a not-for-profit
      organization. This statement also requires an employer to measure the funded
      status of a plan as of the date of it year-end statement of financial position,
      with limited exceptions. The provisions of SFAS No. 158 are effective for
      employers with publicly traded equity securities as of the end of the fiscal
      year ending after December 15, 2006. This pronouncement does not currently
      apply
      to the Company.





In
      September 2006, the Securities and Exchange Commission (“SEC”) issued Staff
      Accounting Bulletin No. 108 (Topic 1N), “Quantifying Misstatements in Current
      Year Financial Statements” (SAB No. 108”). SAB No. 108 addresses how the effect
      of prior year uncorrected misstatements should be considered when quantifying
      misstatements in current year financial statements. SAB No. 108 requires SEC
      registrants (i) to quantify misstatements using a combined approach which
      considers both the balance sheet and income statement approaches: (ii) to
      evaluate whether either approach results in quantifying and error that is
      material in light of relevant quantitative and qualitative factors; and (iii)
      to
      adjust their financial statements if the new combined approach results in a
      conclusion that an error is material. SAB No. 108 addresses the mechanics of
      correcting misstatements that include effects from prior years. It indicates
      that the current year correction of a material error that includes prior year
      effects may result in the need to correct prior year financial statements even
      if the misstatement in the prior year or years is considered immaterial. Any
      prior year financial statements found to be materially misstated in years
      subsequent to the issuance of SAB No. 108 would be restated in accordance with
      SFAS No. 154 “Accounting Changes and Error Corrections.” Because the combined
      approach represents a change in practice, the SEC staff will not require
      registrants that followed an acceptable approach in the past to restate prior
      years’ historical financial statements. Rather, these registrants can report the
      cumulative effect of adopting the new approach as an adjustment to the current
      year’s beginning balance of retained earnings. If the new approach is adopted in
      a quarter other than the first quarter, financial statements for prior interim
      periods with the year of adoption may need to be restated. SAB No. 108 is
      effective for fiscal years ending after November 15, 2006. The adoption of
      SAB
      No. 108 is not expected to have an impact on the Company’s consolidated
      financial position or results of operations.


































**IWI
      Holding Limited**


**Notes
      to Consolidated Financial Statements**





**Years
      Ended December 31, 2006, 2005 and 2004**











**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 $19.4 million.





Under
      this borrowing facility, interest is calculated at 0.25% over the bank’s prime
      rate with respect to the revolving loan. In addition, an unused commitment
      fee
      is assessed at a rate of 0.25% 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.





As
      of
      December 31, 2006, borrowings under this credit agreement were approximately
      $7.7 million. As of December 31,2006, maximum additional available borrowings
      under the line of credit were approximately $1.3 million, subject to certain
      borrowing base limitations.





The
      Company did not meet certain financial covenants as of September 30, 2006 and
      continues to be out of compliance regarding certain financial covenants
      primarily the minimum income requirement. As a result the financial institution
      has placed the Company under a forbearance agreement. Under this forbearance
      agreement, the Company’s borrowing ability as it relates to inventory has been
      decreased by approximately $250,000 as of February 1, 2007 and a further
      reduction of approximately $250,000 on each of April 1, 2007 and May 1, 2007.
      Further, the Company’s borrowing is capped as it relates to inventory to a
      maximum of $2,000,000. In addition, the financial institution has increased
      the
      interest rate on the borrowing facility to 4% over the bank’s prime rate with
      respect to the revolving loan. The current forbearance agreement expires on
      May
      31, 2007. The Company is confident that if new financing is not secured by
      this
      date, that the present financial institution will renew or extend the present
      forbearance agreement.








**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% non-cumulative 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.












**IWI
      Holding Limited**


**Notes
      to Consolidated Financial Statements**





**Years
      Ended December 31, 2006, 2005 and 2004**











**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 2006,
      2005 and 2004, the Company’s purchases from this manufacturer were approximately
      $232,000, $3,284,000 and $7,887,000, respectively. The Company no longer
      purchases products from this manufacturer.





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 2006 and 2005 were approximately
      $3,710,000 and $521,000, respectively.





The
      Company uses an outside company to provide product quality review at the point
      of manufacturing in Hong Kong and China. This company is owned and managed
      by a
      relative of an officer of the Company. Cost for the services provided by this
      company were approximately $137,000 and $66,000 in 2006 and 2005, respectively.





The
      Company also uses an outside company to route gold components from suppliers
      in
      U.S. to manufacturers in Hong Kong and China. This company also provides on
      a
      limited basis some product to the Company. This company is owned and managed
      by
      a relative of an officer of the Company. Services and product provided by this
      company were $140,000 and $18,000 in 2006 and 2005, respectively.





The
      Company purchases some of its gift boxes from a supplier in Hong Kong, which
      is
      part owned or controlled by a relative of an officer of the Company. Services
      and product supplied by this company were approximately $192,000, $234,000
      and
      $149,000 in 2006, 2005, and 2004, respectively.





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





Commission
      expense of the Company associated with this entity for the years 2006, 2005
      and
      2004 was approximately $522,000, $619,000 and $688,000, respectively. Selling
      expenses such as salaries, travel, entertainment etc. are borne directly by
      the
      sales entity.



































**IWI
      Holding Limited**


**Notes
      to Consolidated Financial Statements**





**Years
      Ended December 31, 2006, 2005 and 2004**





**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 2006 of
      9.5%
      and increased during the year reflecting the increase in the prime rate to
      9.75%
      at year end. Interest was accrued and paid at a rate ranging from 7.5% to 9.5%
      in 2005 and 7.5% in 2004.








**Note
      8 - Income Taxes**





The
      following table summarizes income taxes (benefits):





(In
                Thousands)
            
            Year
                Ended December 312006
            2005
            2004CurrentU.S.
                federal
            $(3)
            $
                (3)
            $-U.S.
                state
            -
            -
            -Other
            -
            -
            -(3)
            (3)
            -DeferredU.S.
                federal
            -
            -
            -U.S.
                state
            -
            -
            -Other
            -
            -
            --
            -
            -Income
                Tax Expense
            (3)
            (3)
            -








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





Year
                Ended December 312006
            2005
            2004U.S.
                federal statutory tax rate
            34%
            34%
            34%Change
                in valuation allowance
            (35)
            (35)
            (35)Other
            1
            1
            1Consolidated
                Effective Tax Rate
            -%
            -%
            -%














**IWI
      Holding Limited**


**Notes
      to Consolidated Financial Statements**





**Years
      Ended December 31, 2006, 2005 and 2004**





**Note
      8 - Income Taxes (Continued)**





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





(In
                Thousands)
            2006
            2005Deferred
                Tax Assets
              Net
                operating and capital loss
              carry
                forward
            $2,891
            $2,951Accounts
                receivable
            215
            277Inventories
            576
            488Property
                and equipment
            192
            203Accrued
                expenses
            482
            75Deferred
                Tax Liability
              Accrued
                expenses
            -
            -4,356
            3,994Less:
                Valuation allowance
            (4,200)
            (3,838)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 $6,100,000 of net operating loss carry forward
      available for immediate use as of December 31, 2006. 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
      $7,400,000. This net operating loss carryforward will expire through 2026.


.











**Note
      9 - Supplemental Cash Flow Information**








(In
                Thousands)
            Year
                Ended December 312006
            2005
            2004Cash
                paid for interest
            $583
            $409
            $334





















































**IWI
      Holding Limited**


**Notes
      to Consolidated Financial Statements**





**Years
      Ended December 31, 2006, 2005 and 2004**





**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 $29,000, $31,000 and
      $30,000 in 2006, 2005 and 2004, respectively.








**Note
      11 - Significant Customers**





The
      Company derived 32%, 11% and 10% of its net sales from three customers during
      2006. The Company derived 44% and 12% of its net sales from two customers during
      2005 and 44%, and 18% from two customers in 2004. The receivable balances for
      significant customers were $6,596,000 and $5,817,000 as of December 31, 2006
      and
      2005, 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, 2006, there has been no response from counsel for the class action lawsuit
      or from the lead plaintiff.




















































**IWI
      Holding Limited**


**Notes
      to Consolidated Financial Statements**





**Years
      Ended December 31, 2006, 2005 and 2004**





**Note
      12 - Commitments and Contingencies (Continued)**





**Operating
      Leases**





On
      February 5,  2007
      Imperial amended and downsized it’s rentable square feet under it’s existing
      lease. The length of the lease was also extended through August 2014. 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 August 2014.





The
      future minimum lease payments required under this lease as of December 31,
      2006
      are as follows:





Year
                Ending December 31:2007
            $
                111,0002008
            98,0002009
            101,0002010
            104,0002011
            107,0002012
            110,0002013
            114,0002014
            77,000$
                822,000














Year
      Ending December 31:










Rent
      expense included in the accompanying statements of operations amounted to
      $242,000, $238,000 and $221,000 for 2006, 2005 and 2004, respectively.





The
      Company also entered into a lease arrangement to secure living arrangements
      for
      Company representatives in both Hong Kong and Guangzhou, China. This lease
      is
      for a two-year period and runs from May 1, 2006 through April 30,
      2008.





The
      future minimum lease payments required under this lease as of December 31,
      2006
      are as follows:





Year
                Ending December 31:2007
            $
                34,0002008
            11,000$
                45,000










Rent
      expense included in the accompanying statements of operations amounted to
      $22,000 for 2006.








**Employment
      Agreements**





The
      Company has an employment agreement with an officer, which was renewed for
      a
      five-year period expiring on July 31, 2011. The agreement calls for a base
      salary of $280,000 per year with an automatic salary increase of 5 percent
      (5%)
      if the Company reports a minimum of $100,000 pretax income. If the required
      minimum pretax income is not attained the salary level remains the same. The
      agreement also provides for a bonus of 5 percent (5%) of the Company’s pretax
      profit. The agreement includes provisions for severance payments for the greater
      of one half (1/2) of the compensation earned under this agreement












**IWI
      Holding Limited**


**Notes
      to Consolidated Financial Statements**





**Years
      Ended December 31, 2006, 2005 and 2004**





**Note
      12 - Commitments and Contingencies (Continued)**





for
      the
      remaining term of this agreement or severance pay equal to one year’s base
      salary 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, 2006 are as follows:








Year
                Ending December 31:2007
            $
                280,0002008
            280,0002009
            280,0002010
            280,0002011
            163,000$
                1,283,000














**Note
      13 - Subsequent Event**





In
      June,
      2007, the Company reached a tentative agreement with a new financial institution
      subject to due diligence and credit committee approval whereby the Company
      can
      borrow up to $10 million. The new line of credit carries interest at 3% over
      the
      LIBOR rate or the bank prime rate and matures in June 2010.






























Schedule
      l


**IWI
      Holding Limited**


****    **Condensed Financial Information of Registrant**


**Balance
      Sheets**


**December
      31, 2006 and 2005**











**Assets**2006
            2005Cash
            $1,000
            $1,000Due
                from affiliate
            500,000
            500,000Investments
                in wholly owned subsidiaries
            842,000
            969,000Total
                Assets
            $
                1,343,000
            $
                1,470,000**Stockholders’
                Equity**Preferred
                stock - $1 par value; authorized - 5,000,000
              shares;
                issued and outstanding - 3,644,880 shares
            $
                3,644,880
            $3,644,880Common
                stock - No par value; authorized - 10,000,000
              shares;
                issued and outstanding - 2,544,700 shares
            -
            -Additional
                paid-in capital
            12,446,120
            12,446,120Accumulated
                deficit
            (14,748,000)
            (14,621,000)$
                1,343,000
            $1,470,000**Statements
                of Income and Accumulated Deficit**
            2006
            2005Equity
                in net (loss) income of subsidiaries
            $
                (127,000)
            $(192,000)Accumulated
                deficit, beginning of year
            (14,621,000)
            (14,429,000)Accumulated
                deficit, end of year
            $
                (14,748,000)
            $(14,621,000)








**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, 2006, 2005 and 2004**














Description
            Balance
                at
              Beginning
              of
                Period
            Additions
              Charged
                to Cost andExpenses
            Additions
              Charged
                to OtherAccounts
            Deduction
            Balance
              at
                End
              of
                Period**Year
                Ended December 31, 2004**Allowance
                for
              Doubtful
                Accounts
            $
                532,000
            351,000
            -
            287,000(1)
            $596,000Inventory
                Valuation
              Allowance
            $
                828,000
            308,000
            308,000
            187,000(2)
            187,000(2)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)
            $710,000Inventory
                Valuation
              Allowance
            $
                949,000
            111,000
            -
            34,000(2)
            $1,026,000Deferred
                Income Tax
              Valuation
                Allowance
            $
                3,279,000
            559,000
            -
            -(3)
            $
                3,838,000**Year
                Ended December 31, 2006**Allowance
                for
              Doubtful
                Accounts
            $
                710,000
            25,000
            -
            184,000(1)
            $551,000Inventory
                Valuation
              Allowance
            $
                1,026,000
            268,000
            -
            149,000(2)
            $
                1,145,000Deferred
                Income Tax
              Valuation
                Allowance
            $
                3,838,000
            362,000
            -
            -
            $
                4,200,000





(1)  Write-off
      of uncollectible accounts


(2)  Inventory
      losses realized


(3)  Decreases
      in deferred tax assets