Execute Sports net sales for the first quarter ended March 31, 2007 and 2006 were $553,482 and $595,534, respectively, representing a $42,052, or 7% decrease. The three month year-over-year decrease is due to the disposition of the Academy and Eagle Rider product lines.

Gross margin for the three months ended March 31, 2007 and 2006 was $212,535, or 38% and $117,592, or 20%, respectively. The $94,943 increase in gross margin over the previous year was primarily due to decreased cost of goods and overhead costs.

CEO, Geno Apicella commented, “Although the disposition of our capital intensive Academy and Eagle Rider product lines put a temporary strain on gross sales during the first quarter, Execute Sports made significant operational improvements in many regards during the reporting period.” Mr. Apicella also stated, “As the company pushes forward with 100% focus on the growth of our burgeoning water sports business, we expect the continued improvements being made to our business processes to generate increased sales growth over the near to mid-term.”

Selling, General and Administrative expenses for the three months ended March 31, 2007 and 2006 was $363,828 and $932,976, respectively, representing a $569,148 decrease. The year-over-year decrease was the result of no acquisition costs, significantly less stock based compensation expense, lower selling and advertising costs and lower personnel and professional service costs in the current quarter compared to the same quarter in the prior year.

Net loss from continuing operations for the three months ended March 31, 2007 and 2006 was $672,202 and $824,621, respectively, representing a $152,419, or 19% decrease in the net loss from continuing operations compared to the same period last year. The improvement in net loss is due primarily to decreased operating costs described above offset by higher, non-cash convertible debenture related amortization and interest expense.

Net loss for the three months ended March 31, 2007 and 2006 was $465,511 and $824,621, respectively, representing a $359,110, or 44% decrease in net loss compared to the same period last year. The improvement in the net loss compared to the net loss from continuing operations is due to the $206,691 net gain recognized by the Company upon the disposition of the Academy brand.