WASHINGTON, PITTMAN & McKEEVER, LLC

CERTIFIED PUBLIC ACCOUNTANTS AND

MANAGEMENT CONSULTANTS

819 South Wabash Avenue	Ph. (312) 786-0330
Suite 600	Fax (312)786-0323
Chicago, Illinois  60605	www.wpmck.com

INDEPENDENT AUDITOR'S REPORT

To the Board of Directors and Shareholders of

  AAA Industries, Inc. and Subsidiaries

We have audited the accompanying consolidated balance sheets of AAA Industries, Inc. and Subsidiaries (an Illinois corporation) as of December 31, 2006 and 2005, and the related consolidated statements of income, changes in the shareholders' equity, and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of AAA Industries, Inc. and Subsidiaries as ofDecember 31, 2006 and 2005, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

/s/ WASHINGTON, PITTMAN & McKEEVER, LLC

WASHINGTON, PITTMAN & McKEEVER, LLC

Chicago, Illinois

April 10, 2007

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AAA INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

AS OF DECEMBER 31,

	2006			Restated 2005
ASSETS
Current Assets
Cash	$	1,148,718		$	488,484
Accounts receivable, net of allowance for doubtful accounts of $764,215 and $158,517		9,497,240			4,351,855
Inventory		11,461,715			4,725,533
Prepaid expenses		156,037			50,567
Security Deposit		29,381			28,936
Due from employees		10,968			19,325
Total Current Assets		22,304,059			9,664,700
Property and equipment, net of accumulated depreciation of $12,679,058 and $10,709,956		22,511,074			18,773,226
Other Assets
Loan issue cost, net of accumulated amortization of $21,433 and $18,754		18,754			21,433
Goodwill		601,838			601,838
Deposit on Building		100,000			-
Total Other Assets		720,592			623,271
TOTAL ASSETS	$	45,535,725		$	29,061,197
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable	$	5,321,816		$	2,763,857
Notes payable		7,898,167			4,203,063
Current portion of capital lease obligation		168,932			50,454
Current portion of auto loan payable		25,704			24,309
Other current liabilities		254,496			120,428
Total Current Liabilities		13,669,115			7,162,111
Long-Term Liabilities
Notes payable, less current portion		12,637,325			11,740,741
Capital lease obligation, less current portion		1,190,863			86,882
Auto loan payable, less current portion		40,910			66,614
Total Long-Term Liabilities		13,869,098			11,894,237
Total Liabilities		27,538,213			19,056,348
Shareholders' Equity
Capital stock (No par value; 20,000 shares authorized; 14,196 and 13,218 issued and 13,546 and 12,568 outstanding in 2006 and 2005 respectively)		1,777,076			1,298,604
Less: Treasury stock (650 common shares at cost)		(233,184	)		(233,184	)
Retained earnings		16,453,620			8,939,429
Total Shareholders' Equity		17,997,512			10,004,849
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	45,535,725		$	29,061,197

See accompanying Notes to Consolidated Financial Statements.

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AAA INDUSTRIES. INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

FOR THE YEARS ENDED DECEMBER 31,

	2006			Restated 2005
REVENUES
Net sales	$	48,607,398		$	25,216,923
Cost of Goods Sold		32,074,022			17,935,220
Gross Profit		16,533,376			7,281,703
OPERATING EXPENSES
Office salaries		1,205,915			1,083,711
Professional fees		154,229			200,017
Payroll taxes		103,461			86,214
Coporate expenses		2,085,044			1,372,154
Office supplies and expenses		99,779			43,660
Repairs and maintenance		31,598			12,215
Utilities and telephone		43,023			44,921
Insurance expenses		60,075			75,822
Freight out		6,989			7,329
Scavenger service		428,928			178,981
Depreciation and amortization		110,932			557,329
Bad debts		585,806			90,479
Other operating expenses		369,867			177,522
Total Operating Expenses		5,285,646			3,930,354
Operating Income		11,247,730			3,351,349
OTHER INCOME AND (EXPENSES)
Tax refund		5,000			40,043
Rental income		-			36,162
Loss on disposal of asset		-			(4,316	)
Other non-operating expenses		-			(255,982	)
Interest expenses		(1,119,018	)		(789,141	)
Total Other Income and (Expenses)		(1,114,018	)		(973,234	)
INCOME BEFORE STATE REPLACEMENT TAX		10,133,712			2,378,115
State replacement tax		(219,521	)		(46,019	)
NET INCOME	$	9,914,191		$	2,332,096

See accompanying Notes to Consolidated Financial Statements.

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AAA INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31.

	2006			Restated 2005
OPERATING ACTIVITIES:
Net Income	$	9,914,191		$	2,332,096
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization		1,969,121			2,367,038
Bad debts provision		585,806			90,479
Loss on disposal of assets		-			4,316
(Increase)/decrease in:
Accounts receivable		(5,751,083	)		(1,301,084	)
Prepaid expenses		(105,470	)		137,505
Security deposits		(445	)		-
Inventory		(6,736,182	)		(1,510,193	)
Deposit on building		(100,000	)		-
Due from employees		8,357			10,526
Increase/(decrease) in:
Accounts payable		2,557,959			1,657,308
Other current liabilities		134,068			26,468
Net Cash Provided by Operating Activities		2,476,322			3,814,459
INVESTING ACTIVITIES:
Purchase of property and equipment		(4,335,045	)		(3,505,097	)
Proceeds from disposal of property and equipment		-			400
Goodwill		-			(601,838	)
Decrease in notes receivable and investment		-			1,000
Net Cash Used by Investing Activities		(4,335,045	)		(4,105,535	)
FINANCING ACTIVITIES:
Proceeds from loans		6,352,073			3,390,000
Principal payment on loans		(1,760,405	)		(1,740,634	)
Payment on lease obligations		(126,873	)		(59,788	)
Payment on auto loan		(24,310	)		(19,353	)
Issuance of common shares		478,472			-
Distribution to shareholders		(2,400,000	)		(1,400,000	)
Net Cash Provided by Financing Activities		2,518,957			170,225
Increase/(decrease) in Cash		660,234			(120,851	)
Cash, Beginning of Year		488,484			609,335
CASH, END OF YEAR	$	1,148,718		$	488,484
SUPPLEMENTAL DISCLOSURES
Cash paid for:
Interest expense	$	1,119,018		$	789,141
State replacement taxes	$	219,521		$	46,019

See accompanying Notes to Consolidated Financial Statements.

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AAA INDUSTRIES. INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2006 AND 2005

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations

AAA Galvanizing, Inc. was incorporated in Illinois on January 7, 1993. The Company's business is coating oxide free iron or steel with a thin high quality layer of zinc, by a well-established process called hot dip galvanizing. This process protects the surface against corrosion, thus extending the product life and resulting in minimal maintenance costs. On June 29, 2002, AAA Galvanizing, Inc. changed its corporate name to AAA Industries, Inc. ("AAA or the "Company").

On July 3, 2002, under a Bill of Sale and Assignment Agreement, the operating assets and liabilities of AAA were transferred to AAA Galvanizing of Joliet, Inc. ("Joliet"), a new company that was incorporated on July 2, 2002. After such transfer, AAA became a holding company having Joliet, AAA Galvanizing of Dixon, Inc. ("Dixon"), AAA Galvanizing of Hamilton, Indiana, Inc. ("Hamilton"), AAA Galvanizing of Peoria, Inc. ("Peoria"), and AAA Quality Galvanizing, Inc. ("Oklahoma") as its wholly-owned subsidiaries. Dixon was incorporated in Illinois on August 4, 1998. Hamilton was incorporated in Indiana on February 12, 2001 and commenced its operations in April 2002. Peoria was incorporated in Illinois on September 23, 2003 and started its operations in March 2004. Oklahoma was incorporated in Illinois and began operations in October 2005.

The consolidated financial statements of AAA for 2006 and 2005 include the accounts of Joliet, Dixon, Hamilton, Peoria, and Oklahoma.

Principles of Consolidation

The consolidated financial statements of the Company include the accounts of its wholly-owned subsidiaries. All material intercompany accounts and transactions have been eliminated in consolidation.

Basis of Accounting

The accompanying financial statements have been prepared on the accrual basis of accounting. The accrual basis recognizes revenues in the accounting period in which revenues are earned and recognizes expenses in the period in which expenses are incurred.

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AAA INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2006 AND 2005

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Accounting Estimates

The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America require management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Estimates are used for, but not limited to, the accounting for the allowance for doubtful accounts, depreciation and amortization, and sales returns. Actual results could differ from those estimates.

Income Taxes

The Company has elected to be treated as a "small business corporation" under Section 1362 of the Internal Revenue Code for federal income tax purposes. As an S Corporation, the Company does not pay federal income tax; its income is passed to its shareholders. The Company has also elected to treat its wholly owned subsidiaries as Qualified Subchapter S Subsidiaries (QSUB).

Accounts Receivable and Related Allowance

The Company extends credit to some of its customers. The Company maintains an allowance for doubtful accounts carried at a level that, in management's judgment, is adequate to provide for estimated probable losses from uncollectible receivables. The amount of the allowance is based on management's forma! review and analysis of total receivables as of year-end. Receivables are considered past due when payment is not received within 120 days. Receivables over 120 days are $433,110 and $170,524 as of December 31, 2006 and 2005, respectively.

Inventory

The Company's inventory is valued at cost, under the first in, first out method.

Depreciation and Amortization

Property and equipment are stated at cost and depreciated on a straight-line basis over the estimated useful lives of assets of approximately five to seven years for personal property and approximately thirty-nine years for real property. Assets costing over $1,000 and having useful life of more than one year are capitalized.

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AAA INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31. 2006 AND 2005

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Depreciation and Amortization (Continued)

Loan issue cost is being amortized over 15 years, which is the term of the loan.

Goodwill

The Company adopted SFAS 142 during 2005. In connection with the adoption of SFAS 142, the Company reviewed the recorded goodwill for impairment and determined that there were no goodwill losses that should be recognized. Information pertaining to the reporting of goodwill and the effects of adopting SFAS 142 is presented in Note 12.

Notes Payable

Short-term notes payable is estimated at fair value. Long-term notes payable is reported at discounted value based on the loan agreement.

Concentration of Credit Risk

The Company has concentrated its credit risk for cash by maintaining deposits in TCF Bank which may at times exceed amounts covered by insurance provided by the U.S. Federal Deposit Insurance Corporation (FDIC). The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk.

NOTE 2 - INVENTORY

Inventory consist of the following:

	2006		2005
Zinc	$	10,982,583	$	4,107,374
Chemicals and others		479,132		618,159
TOTAL INVENTORY	$	11,461,715	$	4,725,533

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AAA INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2006 AND 2005

NOTE 3 - PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

	2006			2005
Land	$	1,079,198		$	1,079,198
Building and improvements		17,138,417			14,118,744
Factory equipment		16,137,555			13,567,270
Office furniture and equipment		493,564			396,272
Automobile and trucks		341,398			321,698
Sub Total		35,190,132			29,483,184
Less: Accumulated depreciation		(12,679,058	)		(10,709,956	)
PROPERTY AND EQUIPMENT	$	22,511,074		$	18,773,226

NOTE 4 - OTHER CURRENT LIABILITIES

Other current liabilities are summarized as follows:

	2006		2005
Withholding tax payable	$	- -	$	9,983
Pension contribution payable		36,997		49,967
State replacement tax payable		210,000		44,500
Interest and other payables		7,499		15,978
TOTAL OTHER CURRENT LIABILITIES	$	254,496	$	120,428

NOTE 5 - NOTES PAYABLE

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AAA INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2006 AND 2005

NOTE 5 - NOTES PAYABLE (Continued)

The following is a summary of principal maturities of notes payable over the next five years:

Year Ending	Amount
December 31, 2007		7,898,167
December 31, 2008		1,509,106
December 31, 2009		1,601,015
December 31, 2010		1,420,061
December 31, 2011 and thereafter		8,107,143
TOTAL		20,535,492

NOTE 6 - CAPITAL LEASES

The Company is leasing certain factory and office equipment under capital lease agreements. The lease terms range from two to ten years. These assets are being depreciated over their estimated useful economic lives and are included in depreciation expense for the years ended December 31, 2006 and 2005. At December 31, 2006, the leased factory and office equipment are carried at a cost of $1,526,615 and $59,913, respectively, less accumulated depreciation of $244,764 and $9,986, respectively. The carrying cost of factory equipment includes $1,250,000, representing equipment leased from Real Estate Development Associates, a related entity (see Note 9).

Future minimum lease payments under capital leases are:

December 31, 2007	$	264,299
December 31, 2008		234,954
December 31, 2009		202,826
December 31, 2010		191,477
December 31, 2011		179,284
Thereafter		770,190
Total		1,843,030
Less: Amount Representing Interest		(483,235	)
Present Value of Minimum Lease Payments		1,359,795
Less: Current Portion		(168,932	)
LONG-TERM PORTION	$	1,190,863

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AAA INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2006 AND 2005

NOTE 7 - COST OF GOODS SOLD

Cost of Goods Sold consists of the following:

	2006			2005
Beginning inventory	$	4,725,532		$	3,215,340
Purchase of raw materials		24,035,676			8,737,574
Direct and casual labor		7,259,849			5,129,653
Payroll taxes		501,081			325,388
Purchased services		139,195			74,080
Health and dental Insurance		683,129			383,291
Factory supplies		1,036,877			481,564
Repairs and maintenance		658,210			408,103
Utilities		2,009,639			1,533,378
Rental expenses		39,852			24,080
Factory Rent		88,035			39,960
Factory insurance		336,370			283,081
Freight-in		9,345			1,600
Real estate taxes		183,164			137,672
Depreciation		1,829,783			1,885,989
Ending inventory		(11,461,715	)		(4,725,533	)
COST OF GOODS SOLD	$	32,074,022		$	17,935,220

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AAA INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2006 AND 2005

NOTE 8 - OTHER OPERATING EXPENSES

The following is a summary of the items included in Other Operating Expenses:

	2006		2005
Bank charges	$	42,315	$	12,710
Advertising		4,248		1,639
Dues & publications		20,253		7,707
Entertainment		12,951		5,275
Fees & licenses		89,898		18,416
Contributions & gifts		37,128		8,811
Auto expenses		8,611		11,824
Postage		16,878		14,995
Security expenses		3,614		4,294
Travel		51,797		51,852
Pension contribution		42,268		20,553
Miscellaneous		39,906		19,446
TOTAL	$	369,867	$	177,522

NOTE 9 - RELATED PARTY TRANSACTONS - CAPITAL LEASE

In May 2006, the Company entered into a lease agreement for equipment owned by Real Estate Development Associates, LLC (REDA). REDA is owned by the Chief Executive Officer and a majority shareholder of AAA. During 2006, REDA obtained a loan from Amcore Bank for $1,250,000 to purchase factory equipment. AAA is not party to the loan and is not obligated to repay the loan. The terms of the lease agreement is 10 years at $14,811.13 per month, paid directly to Amcore Bank on behalf of REDA. The lease obligation at December 31, 2006 is $1,192,630, see Note 6.

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AAA INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2006 AND 2005

NOTE 10 - RETIREMENT SAVINGS PLAN

The Company changed from a Simple Retirement 401(k) Savings Plan to a 401(k) Savings Plan effective January 1, 2005. The plan covers all employees who have worked for the company for at least one year with a minimum age of 21 years. Employees may defer up to 50% of their gross earnings, up to a maximum of $13,000 and the Company matches the same percentage of the employee's deferral up to 4% of the gross income with a cap of $8,200. During 2006 and 2005, the Company's contribution was $48,268 and $49,967, respectively.

NOTE 11 -CONTINGENT LIABILITIES

The Company is a defendant in a lawsuit filed by the estate of a former employee, who was deceased as a result of an accident at the Joliet plant on November 11, 2002. The outside counsel believes that the Company has a 70% chance to prevail in the lawsuit. In the event of an unfavorable outcome, the possible loss estimated by the counsel is in the range of $2,000,000 to $3,000,000. The Company has an insurance policy that provides coverage for such losses up to $500,000 of a primary coverage and an additional $5 million of umbrella liability coverage.

NOTE 12- INTANGIBLE ASSETS - GOODWILL

In October 2005, certain assets of Quality Galvanizing LLC were acquired. The excess of the cost of this acquisition over the fair value of the acquired net assets at the date of acquisition is reported as goodwill. The Company adopted SFAS 142 as of the acquisition date, and accordingly, did not amortize amounts related to goodwill starting from that date.

As required by SFAS 142, goodwill is subject to an annual impairment test. The test consists of a two-step process whereby a determination is made as to whether impairment exists, and then whether an adjustment is required. No impairment losses were recognized for 2006.

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