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**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D. C. 20549**




**FORM
      10-QSB**


**AMENDMENT
      NO. 1**





x
            QUARTERLY
                REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
                1934




For
      the
      quarterly period ended September 30, 2005




o
            TRANSITION
                REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
                1934




Commission
      File Number 0-50520












**BIOMASS
      PROCESSING TECHNOLOGY, INC.**


(Name
      of
      Small Business Issuer as Specified in Its Charter)




**Delaware**
            
            **65-0638890**(State
                or Other Jurisdiction of
              Incorporation
                or Organization)
            
            (I.R.S. Employer
              Identification
                No.)**3222
                Commerce Place, Suite A, West Palm Beach, Florida**
            
            **33407**(Address
                of Principal Executive Offices)
            
            (Zip
                Code)




**(561)
      684-6611**


(Issuer’s
      Telephone Number, Including Area Code)




Check
      whether the issuer: (1) filed all reports required to be filed by Section 13
      or
      15(d) of the Exchange Act during the past 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 90 days. Yes x No
o




Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act). Yes o No
x




As
      of
      December 9, 2005, there were 71,145,657 shares of Common Stock issued and
      outstanding.




Transitional
      Small Business Disclosure Format: Yes x No
o









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**TABLE
      OF CONTENTS**




PART
                I FINANCIAL INFORMATIONItem
                1. Financial Statements
            4Item
                2. Plan of Operation
            15Item
                3. Controls and Procedures
            22PART
                II OTHER INFORMATIONItem
                2. Unregistered Sales of Equity Securities and Use of
                Proceeds
            23Item
                6. Exhibits
            24SIGNATURES
            25Certifications:
                Exhibits 31.1 and 31.2
            26Certifications:
                Exhibits 32.1 and 32.2
            28






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**CAUTION
      REGARDING FORWARD-LOOKING INFORMATION**




This
      quarterly report contains both historical and forward-looking statements that
      reflect the Company’s current views with respect to future events. All
      statements, other than statements of historical facts, that address future
      activities, events or developments are forward-looking statements, including,
      but not limited to, statements containing the words "believe," "anticipate,"
      "expect" and words of similar import. These statements are based on certain
      assumptions and analyses made by us in light of our experience and our
      assessment of historical trends, current conditions and expected future
      developments as well as other factors we believe are appropriate under the
      circumstances. Whether actual results will conform to the expectations and
      predictions of management, however, is subject to a number of risks and
      uncertainties that may cause actual results to differ materially. These risks
      include, among others, the risks described under "Description of Business -
      Risk
      Factors" in the Company's Annual Report on Form 10-KSB for the year ended
      December 31, 2004.




Consequently,
      all of the forward-looking statements made in this Form 10-QSB/A are qualified
      by these cautionary statements and there can be no assurance that the actual
      results anticipated by management will be realized or, even if substantially
      realized, that they will have the expected consequences to or effects on the
      Company's business operations. Furthermore, forward-looking statements that
      were
      true at the time made may ultimately prove to be incorrect or false. Readers
      are
      cautioned to not place undue reliance on forward-looking statements, which
      reflect our management’s view only as of the date of this report.




Forward-looking
      statements are made in reliance upon the safe harbor provisions of Section
      27A
      of the Securities Act of 1933, as amended, and Section 21E of the Securities
      Exchange Act of 1934, as amended, and the Company undertakes no obligation
      to
      update forward-looking statements to reflect further developments or information
      obtained after the date of filing of this Quarterly Report and disclaims any
      obligation to do so.




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**PART
      I****.
      FINANCIAL INFORMATION**




**ITEM
      1. FINANCIAL STATEMENTS**




**BIOMASS
      PROCESSING TECHNOLOGY, INC. AND SUBSIDIARIES**


**(A
        DEVELOPMENT STAGE COMPANY)**
 **CONSOLIDATED** **BALANCE
        SHEETS**


**(Unaudited)****September
                30,**
            
            **December
                31,****2005**
            
            **2004****ASSETS**Current
                assetsCash
                and cash equivalents
            
            $
            411,143
            
            $
            44,559Accounts
                receivable
            
            
            —
            
            
            79,963Prepaid
                expenses and other current assets
            
            
            190,428
            
            
            284,427Total
                Current Assets
            
            
            601,571
            
            
            408,949Property
                and equipment, net
            
            
            24,056,762
            
            
            24,974,665Other
                assetsEquipment
                system
            
            
            2,175,290
            
            
            2,137,783Patent
                application costs
            
            
            336,050
            
            
            246,489Deposits
                and other assets
            
            
            101,780
            
            
            101,780Total
                Other Assets
            
            
            2,613,120
            
            
            2,486,052Total
                Assets
            
            $
            27,271,453
            
            $
            27,869,666**LIABILITIES
                AND STOCKHOLDERS' EQUITY**Current
                liabilitiesAccounts
                payable
            
            $
            849,751
            
            $
            1,709,511Accrued
                expenses
            
            
            781,127
            
            
            1,033,880Current
                portion of long term debt and capital leases
            
            
            55,802
            
            
            124,810Total
                Current Liabilities
            
            
            1,686,680
            
            
            2,868,201Long
                term debtLong
                term debt and capital leases, less current portion
            
            
            2,852
            
            
            45,461Note
                payable - officer
            
            
            39,325
            
            
            107,700Total
                Long-term Liabilities
            
            
            42,177
            
            
            153,161Commitments
                and ContingenciesStockholders'
                equityCommon
                stock, $.02 par value; 100,000,000 sharesauthorized;
                issued and outstanding, 71,145,657at
                September 30, 2005 and 69,931,413at
                December 31, 2004
            
            
            1,422,913
            
            
            1,398,628Additional
                paid in capital
            
            
            46,265,149
            
            
            40,959,999Deficit
                accumulated during the development stage
            
            
            (22,145,466
            )
            
            (17,510,323
            )Total
                Stockholders' Equity
            
            
            25,542,596
            
            
            24,848,304Total
                Liabilities and Stockholders' Equity
            
            $
            27,271,453
            
            $
            27,869,666


**See
      accompanying notes to the consolidated financial
      statements**




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**BIOMASS
      PROCESSING TECHNOLOGY, INC. AND SUBSIDIARIES**


**(A
        DEVELOPMENT STAGE COMPANY)**
 **CONSOLIDATED
        STATEMENTS OF OPERATIONS (UNAUDITED)**


CumulativeDuring
            
            For
                the Three
            
            For
                the NineDevelopment
            
            Months
                Ended September 30,
            
            Months
                Ended September 30,Stage
            
            2005
            
            2004
            
            2005
            
            2004Revenues
                (Note 5)
            
            $
            —
            
            $
            —
            
            $
            —
            
            $
            —
            
            $
            —Operating
                ExpensesResearch
                and development
            
            
            20,674,188
            
            
            1,041,098
            
            
            460,641
            
            
            4,175,232
            
            
            1,605,921Loss
                on disposal of assets
            
            
            736,690
            
            
            —
            
            
            118,549
            
            
            541,384
            
            
            96,357Total
                Operating Expenses
            
            
            21,410,878
            
            
            1,041,098
            
            
            579,190
            
            
            4,716,616
            
            
            1,702,278Interest
                Expense
            
            
            (400,701
            )
            
            (3,526
            )
            
            (10,857
            )
            
            (27,520
            )
            
            (27,202
            )Loss
                from continuing operationsbefore
                income tax benefit
            
            
            (21,811,579
            )
            
            (1,044,624
            )
            
            (590,047
            )
            
            (4,744,136
            )
            
            (1,729,480
            )Income
                tax benefit
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            —Loss
                from continuing operations
            
            
            (21,811,579
            )
            
            (1,044,624
            )
            
            (590,047
            )
            
            (4,744,136
            )
            
            (1,729,480
            )Discontinued
                Operations (Note 5):Profit
                (loss) from discontinuedLandfill
                contract activities
            
            
            (333,887
            )
            
            —
            
            
            (29,870
            )
            
            108,993
            
            
            (507,840
            )NET
                LOSS
            
            $
            (22,145,466
            )
            $
            (1,044,624
            )
            $
            (619,917
            )
            $
            (4,635,143
            )
            $
            (2,237,320
            )**Loss
                per Common Share, Basic and Diluted:**From
                Continuing Operations
            
            
            
            
            $
            (0.01
            )
            $
            (0.01
            )
            $
            (
                0.07
            )
            $
            (0.02
            )From
                Discontinued Operations
            
            
            
            
            $
            0.00
            
            $
            (0.00
            )
            $
            0.00
            
            $
            (0.01
            )Net
                Loss
            
            
            
            
            $
            (0.01
            )
            $
            (0.01
            )
            $
            (0.07
            )
            $
            (0.03
            )Weighted
                average number of common shares outstanding
            
            71,038,093
            
            
            69,836,020
            
            
            70,543,368
            
            
            69,644,527


**See
      accompanying notes to the consolidated financial
      statements**




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**BIOMASS
      PROCESSING TECHNOLOGY, INC. AND SUBSIDIARIES**


**(A
        DEVELOPMENT STAGE COMPANY)**
 **CONSOLIDATED
        STATEMENT OF STOCKHOLDERS’ EQUITY**
 **(UNAUDITED)**


DeficitAccumulatedNumber
                of
            
            Common
            
            
            
            During
                theCommon
            
            Stock,
            
            Paid
                in
            
            DevelopmentShares
            
            at
                Par Value
            
            Capital
            
            Stage
            
            Total**Balances
                as of December 31, 2004**
            
            
            69,931,413
            
            $
            1,398,628
            
            $
            40,959,999
            
            $
            (17,510,323
            )
            $
            24,848,304Issuance
                of common shares
            
            
            1,179,444
            
            
            23,589
            
            
            4,624,346
            
            
            —
            
            
            4,647,935Issuance
                of common shares to
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            —Related
                Party (Note 2):Contribution
                of common stock
            
            
            (127,600
            )
            
            (2,552
            )
            
            2,552
            
            
            
            
            
            —Acquisition
                of common stock
            
            
            (127,600
            )
            
            (2,552
            )
            
            (40,948
            )
            
            
            
            
            (43,500
            )Issuance
                to related party
            
            
            290,000
            
            
            5,800
            
            
            719,200
            
            
            
            
            
            725,000Net
            
            
            34,800
            
            
            696
            
            
            680,804
            
            
            
            
            
            681,500Net
                loss for the nine monthperiod
                ended September 30, 2005
            
            
            —
            
            
            —
            
            
            —
            
            
            (4,635,143
            )
            
            (4,635,143
            )**Balances
                as of September 30, 2005**
            
            
            71,145,657
            
            $
            1,422,913
            
            $
            46,265,149
            
            $
            (22,145,466
            )
            $
            25,542,596


**See
      accompanying notes to the consolidated financial
      statements**




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**BIOMASS
      PROCESSING TECHNOLOGY, INC. AND SUBSIDIARIES**


**(A
        DEVELOPMENT STAGE COMPANY)**
 **CONSOLIDATED
        STATEMENTS OF CASH FLOWS (UNAUDITED)**


Cumulative
                During
            
            For
                the Nine Months EndedDevelopment
            
            September
                30,Stage
                (see Note 1)
            
            2005
            
            2004**Operating
                Activities**Net
                Loss
            
            $
            (22,145,466
            )
            $
            (4,635,143
            )
            $
            (2,237,320
            )Adjustments
                to reconcile net loss to net cash used in operations:Depreciation
            
            
            3,367,029
            
            
            1,764,641
            
            
            158,971Loss
                on disposal of assets
            
            
            736,690
            
            
            541,384
            
            
            96,357Stock-based
                compensation
            
            
            163,700
            
            
            —
            
            
            —Non-cash
                expense - stock transaction
            
            
            290,000
            
            
            290,000
            
            
            —Changes
                in certain assets and liabilities:Accounts
                receivable
            
            
            —
            
            
            79,963
            
            
            45,514Prepaid
                expenses & other current assets
            
            
            (335,436
            )
            
            (51,009
            )
            
            8,550Deposits
                and other assets
            
            
            (101,780
            )
            
            —
            
            
            (500
            )Accounts
                payable and accrued expenses
            
            
            1,638,550
            
            
            (1,112,513
            )
            
            1,119,245Net
                Cash Used in Operations
            
            
            (16,386,713
            )
            
            (3,122,677
            )
            
            (809,183
            )**Investing
                Activities**Proceeds
                from sale of assets
            
            
            137,230
            
            
            —
            
            
            41,300****Patent
                application costs
            
            
            (336,050
            )
            
            (89,561
            )
            
            (141,673
            )Construction
                of equipment system
            
            
            (2,175,290
            )
            
            (37,507
            )
            
            (490,462
            )Purchases
                of property and equipment
            
            
            (26,965,647
            )
            
            (1,243,114
            )
            
            (2,392,901
            )Net
                Cash Used in Investing Activities
            
            
            (29,339,757
            )
            
            (1,370,182
            )
            
            (2,983,736
            )**Financing
                Activities**Proceeds
                from long-term debt issuances
            
            
            219,596
            
            
            —
            
            
            10,000


Repayment
                of debt and capital leases
            
            
            (1,345,670
            )
            
            (111,617
            )
            
            (218,837
            )Proceeds
                from (payments on)Note
                payable - officer
            
            
            39,325
            
            
            (68,375
            )
            
            112,700


Acquisition
                of stock
            
            
            (43,500
            )
            
            (43,500
            )
            
            —Proceeds
                from common stock issuance
            
            
            47,267,862
            
            
            5,082,935
            
            
            3,588,750Net
                Cash Provided by Financing Activities
            
            
            46,137,613
            
            
            4,859,443
            
            
            3,492,613Net
                increase (decrease) in cash and cash equivalents
            
            
            411,143
            
            
            366,584
            
            
            (300,306
            )Cash
                and cash equivalentsat
                beginning of the period
            
            
            —
            
            
            44,559
            
            
            394,816Cash
                and cash equivalentsat
                the end of the period
            
            $
            411,143
            
            $
            411,143
            
            $
            94,510*(Continued)*


**See
      accompanying notes to the consolidated financial
      statements**




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**BIOMASS
      PROCESSING TECHNOLOGY, INC. AND SUBSIDIARIES**


**(A
        DEVELOPMENT STAGE COMPANY)**
 **CONSOLIDATED
        STATEMENTS OF CASH FLOWS (UNAUDITED)**


CumulativeDuring
            
            For
                the Nine Months EndedDevelopment
            
            September
                30,Stage
                (see Note 1)
            
            2005
            
            2004**Supplemental
                Disclosure of Cash Flow Information**CASH
                PAID DURING THE PERIOD FOR:Interest
                (net of amounts capitalized)
            
            $
            399,963
            
            $
            31,100
            
            $
            23,986Income
                taxes
            
            $
            —
            
            $
            —
            
            $
            —**Supplemental
                Disclosure of Noncash Investing and Financing
                Activities:****Equipment
                Financing.**During
                the nine months ended September 30, 2005 and 2004 the Company acquired
                equipment and vehicles by entering into capital leases and debt agreements
                totaling $-0- and $155,975, respectively. Since inception, the Company
                acquired equipment and vehicles by entering into capital leases and
                debt
                agreements totaling $1,330,277.During
                the three months ended September 30, 2004, the Company assigned a
                capital
                lease with respect to certain equipment subject to that lease. On
                the date
                of assignment, the equipment had a book value of $134,103 and the
                capital
                lease balance assumed by the buyer was $135,549.**Debt
                to Equity Conversion.**During
                the three months ended September 30, 2004, the holder of a convertible
                promissory note in the amount of $10,000 elected, in accordance with
                provisions of the note, to convert the note to 2,500 shares of common
                stock valued at $4.00 per share.


**See
      accompanying notes to the consolidated financial
      statements**




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**BIOMASS
      PROCESSING TECHNOLOGY, INC. AND SUBSIDIARIES**


**(A
        DEVELOPMENT STAGE COMPANY)**
 **NOTES
        TO CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS**




**NOTE
      1 - BASIS OF PRESENTATION**





The
      consolidated financial statements include the accounts of Biomass Processing
      Technology, Inc. and its wholly-owned subsidiaries, Omni Environmental
      Corporation, (formerly known as Omni Technologie International, Ltd. and
      incorporated in Delaware on June 23, 1989), BPT CAV1 Corporation (“CAV1”), and
      BPT Intellectual Property Corporation (“IP”) (collectively, “the Company”). All
      significant inter-company transactions have been eliminated. CAV1 was
      incorporated in the State of Florida on October 24, 2003, to operate the CAV1
      facility and IP was incorporated in the State of Delaware on October 24, 2003,
      to manage certain intellectual property assets. The consolidated financial
      statements have been prepared in accordance with accounting principles generally
      accepted in the United States of America (“GAAP”).





Development
      Stage and Going Concern Considerations :
      In
      December 2004, the Company commenced operating the CAV1 facility on a test
      basis
      by initiating test production operations. The Company continues to be a
      development stage enterprise as defined under GAAP because it has not yet
      generated significant revenues in its intended business. Historically, the
      Company has relied upon outside investor funds to maintain its operations and
      develop its business. The accompanying financial statements have been prepared
      on a going concern basis, which contemplates the realization of assets and
      the
      settlement of liabilities in the normal course of business. The Company
      currently expects initial
      shipment of product to occur during the fourth quarter of 2005. While
      the Company believes that its current resources may be sufficient to enable
      it
      to commence production activities with lines one and two of its CAV facility,
      the Company will need to raise additional capital to fund the construction
      costs
      required to bring lines three and four operational and to complete
      implementation of the hydrolysis process at the CAV facility. Further, the
      Company will need to raise additional capital to fund the cost of constructing
      lines five and six at the CAV facility. The Company has commenced efforts to
      raise additional capital through private placements of equity securities. There
      is no assurance that the Company will be able to raise additional funds that
      may
      be necessary to enable it to continue its planned business operations including
      expansion at the planned rate. Should any of management’s planned events not
      occur, the Company's financial condition and results of operations may be
      materially affected.





Interim
      Reporting: The
      accompanying unaudited financial statements of the Company have been prepared
      in
      accordance with GAAP for interim financial information and with the instructions
      to Item 310(b) of Regulation S-B. Accordingly, they do not include all of the
      information and footnotes required by GAAP for complete financial statements.
      The consolidated balance sheets, statements of operations, and statements of
      cash flows include, in the opinion of management, all the adjustments,
      consisting of normal recurring adjustments, necessary for a fair presentation
      of
      the results of these periods and the financial condition as of that date.
 There are no additional material subsequent events




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**BIOMASS
        PROCESSING TECHNOLOGY, INC. AND SUBSIDIARIES**
 **(A
          DEVELOPMENT STAGE COMPANY)**
 **NOTES
          TO CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS**
 
  **NOTE
          1 - BASIS OF PRESENTATION (Continued)**





or
      material contingencies that require disclosure. The information included in
      these unaudited financial statements should be read in conjunction with Part
      I,
      Item 2, “Plan of Operation” contained in this report and with the financial
      statements and accompanying notes included in the Company’s Annual Report on
      Form 10-KSB for the fiscal year ended December 31, 2004. Historical interim
      results are not necessarily indicative of results that may be expected for
      any
      future period.





**NOTE
      2 - RELATED PARTY TRANSACTIONS**





During
      2004, Larry W. Denney, the Company’s
      principal stockholder, Chairman of the Board, President and Chief Executive
      Officer, loaned
      the Company $110,000 for working capital under a note in a principal amount
      not
      to exceed $200,000 and bearing simple interest at 4%. Through December 31,
      2004,
      Mr. Denney made additional advances of $59,700 to the Company under the note
      and
      the Company repaid $62,000 under the note. The note, as amended, is payable
      on
      or before October 1, 2006 and may be prepaid without penalty. The balance as
      of
      December 31, 2004 was $107,700. Accrued interest, which is presented as a
      component of accrued expenses, totaled $738 and $4,318 as of September 30,
      2005,
      and December 31, 2004, respectively. During the nine months ended September
      30,
      2005, the Company made payments of $68,375 in principal and $5,240 in interest
      and $1,660 in interest was accrued. As of September 30, 2005, the balance of
      principal was $39,325.





On
      September 27, 2005, Philip H. Good, a Director of the Company, acquired 290,000
      shares of the Company’s common stock, pursuant to the following transactions.
      Larry W. Denney, President, Chief Executive Officer, and Chairman of the Board,
      contributed 127,600 of his personally owned common shares to the Company for
      no
      consideration; the Company purchased 127,600 of personally owned common shares
      from Jack B. Simpson, a cofounder of the Company, for $43,500; then the Company
      sold the 255,200 contributed shares, plus 34,800 of newly issued common shares
      for a total of 290,000 shares, to Mr. Good for cash consideration of $435,000.
      The transactions resulted in net cash proceeds to the Company of $391,500 for
      a
      net increase of 34,800 issued and outstanding common shares.




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**BIOMASS
        PROCESSING TECHNOLOGY, INC. AND SUBSIDIARIES**
 **(A
          DEVELOPMENT STAGE COMPANY)**
 **NOTES
          TO CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS**
 
  **NOTE
          2 - RELATED PARTY TRANSACTIONS (Continued)**





The
      shares contributed by Mr. Denney for no consideration and the shares sold to
      the
      Company at approximately $.34 per share by Mr. Simpson were contributed or
      sold
      to reduce the dilutive effect on existing stockholders that would have resulted
      had the Company sold newly issued shares at lower prices than those paid by
      previous investors. As the Company’s largest stockholders, Mr. Denney and Mr.
      Simpson stood to benefit from an increase in the Company's value resulting
      from
      raising the additional capital. After the transactions, Mr. Denney owned
      32,802,663.5 shares and Mr. Simpson owned 15,768,431.5 shares. The
      contributed shares were accounted for as capital contributions to the Company
      at
      par value of $.02 per share as
      a
      decrease in common stock issued and outstanding and an increase in additional
      paid in capital .





Pursuant
      to accounting rules and principles applicable to these types of related party
      transactions, the Company recorded a $290,000 non-cash increase in its
“additional paid in capital” account, and it recorded a non-cash expense for the
      same amount; the recording of this non-cash accounting entry has no effect
      on
      total stockholders’ equity. (Also see Note 7 - Subsequent Events.)





Jack
      B.
      Simpson, a principal stockholder, advanced the Company $3,000 as a short-term,
      non-interest bearing loan as of December 31, 2004, which was included in accrued
      expenses. Mr. Simpson was a director at the time the loan was advanced. This
      amount was repaid to Mr. Simpson during the three months ended March 31, 2005.


During
      the year ended December 31, 2004, the Board of Directors approved $67,110 in
      consulting fees for shareholder relations services provided by a company
      wholly-owned by Mr. Simpson. As of December 31, 2004, the balance due on these
      fees of $42,110 was included in accrued expenses. This amount was paid during
      the three months ended March 31, 2005. The Board also approved the payment
      of an
      additional $16,777 in consulting fees to the same company during the three
      months ended March 31, 2005.





**NOTE
      3 - NET LOSS PER COMMON SHARE**





Statement
      of Financial Accounting Standards (“SFAS”) No. 128, "Earnings Per Share"
      requires companies with complex capital structures or common stock equivalents
      to present both basic and diluted earnings per share (EPS). The Company’s only
      authorized capital stock is 100,000,000 shares of common stock, $0.02 par value
      per share. There were no common share equivalents as of or during the periods
      ended September 30, 2005. In February 2004, the Company issued a convertible
      promissory note, which constituted a common stock equivalent. The note was
      converted into shares of the Company’s common stock on July 26, 2004. Therefore,
      the Company did not have common stock equivalents as of September 30, 2004,
      and
      there was no diluted EPS during the periods ended September 30, 2004 as the
      effect was anti-dilutive.




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**BIOMASS
        PROCESSING TECHNOLOGY, INC. AND SUBSIDIARIES**
 **(A
          DEVELOPMENT STAGE COMPANY)**
 **NOTES
          TO CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS**


Basic
      EPS
      is calculated by dividing net income (loss) by the weighted average number
      of
      common shares outstanding during the period. Diluted EPS is calculated by
      dividing net income (loss) available to common stockholders by the weighted
      average number of common shares and common stock equivalents. Common stock
      equivalents are excluded from the computation in periods in which they have
      an
      anti-dilutive effect. In
      accordance with SFAS No. 128, the weighted average number of shares includes
      shares issued and shares reacquired during the respective periods.





A
      reconciliation of the number of common shares shown as outstanding in the
      consolidated financial statements with the number of shares used in the
      computation of weighted average common shares outstanding is shown
      below:





For
                the Three
            
            For
                the NineMonths
                Ended September 30,
            
            Months
                Ended September 30,2005
            
            2004
            
            2005
            
            2004Outstanding
                shares
            
            
            71,145,657
            
            
            69,904,913
            
            
            71,145,657
            
            
            69,904,913Effect
                of Weighting
            
            
            (107,564
            )
            
            (68,893
            )
            
            (602,289
            )
            
            (260,386
            )Weighted
                Average
            
            
            71,038,093
            
            
            69,836,020
            
            
            70,543,368
            
            
            69,644,527





**NOTE
      4 - ACCRUED LIABILITIES**





Accrued
      liabilities represent expenses that apply to the reported period and have not
      been billed by the provider or paid by the Company. At September 30, 2005,
      and
      December 31, 2004, accrued liabilities consisted of the following:





September
                30, 2005
            
            December
                31, 2004Accrued
                Property Taxes
            
            $
            317,217
            
            $
            206,639Reserve
                for Casualty Loss
            
            
            223,597
            
            
            445,687Deferred
                Officers Salaries
            
            
            148,019
            
            
            176,950Accrued
                Vacation
            
            
            36,620
            
            
            35,885Accrued
                Payroll and Payroll Taxes
            
            
            26,824
            
            
            56,543Accrued
                Professional Fees
            
            
            28,850
            
            
            104,810Other
            
            
            —
            
            
            7,366Total
                Accrued Liabilities
            
            $
            781,127
            
            $
            1,033,880






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**BIOMASS
        PROCESSING TECHNOLOGY, INC. AND SUBSIDIARIES**
 **(A
          DEVELOPMENT STAGE COMPANY)**
 **NOTES
          TO CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS**
 
  **NOTE
          5 - DISCONTINUED OPERATIONS**





Effective
      January 13, 2005, the Company terminated its contract with St. Lucie County
      for
      services in disposal of vegetative waste at the St. Lucie County landfill.
      At
      the request of St. Lucie County, the Company continued to perform the services
      through April 5, 2005 in order to maintain service until a new contractor
      commenced work.





These
      activities were never intended to be a primary business of the Company, but
      rather a means for the Company to obtain vegetative biomass to be used in the
      production of the Company’s primary product. The Company now expects to use
      animal based biomass which is less expensive than the vegetative waste from
      the
      municipal landfill.





Consistent
      with the requirements of SFAS No. 144, the above noted activities are being
      reported as discontinued operations. There are no income tax liabilities or
      benefits associated with the discontinued operations.





Because
      of the reclassification of previously reported revenues to discontinued
      operations, the Company now reports $ -0- revenues. The revenue and the
      operating results of the discontinued activities described above for the three
      month periods ended September 30, 2005 and 2004, for the nine month periods
      ended September 30, 2005 and 2004, and for the cumulative period during
      development stage were as follows:





CumulativeDuring
            
            For
                the Three Months
            
            For
                the Nine MonthsDevelopment
            
            Ended
                September 30,
            
            Ended
                September 30,Stage
            
            2005
            
            2004
            
            2005
            
            2004Revenues
            
            $
            8,448,276
            
            $
            —
            
            $
            267,302
            
            $
            468,772
            
            $
            939,655Cost
                of Services Provided
            
            
            8,782,163
            
            
            —
            
            
            297,172
            
            
            359,779
            
            
            1,447,495Net
                Income (Loss)
            
            $
            (333,887
            )
            $
            —
            
            $
            (29,870
            )
            $
            108,993
            
            $
            (507,840
            )





The
      following items have been reclassified from presentation within operating
      expenses in prior period financial statements to discontinued operations as
      reflected above. Effective May 2004, the Company recorded a $485,000 loss
      accrual related to equipment damaged in a fire at the St. Lucie landfill site.
      “Cost of Services Provided” in the discontinued operations shown above for the
      nine months ended September 30, 2005 includes an adjustment of $109,718 for
      revisions reducing the accrual.




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**BIOMASS
        PROCESSING TECHNOLOGY, INC. AND SUBSIDIARIES**
 **(A
          DEVELOPMENT STAGE COMPANY)**
 **NOTES
          TO CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS**
 
  **NOTE
          5 - DISCONTINUED OPERATIONS (Continued)**





Assets
      related to discontinued operations consist of accounts receivable of $ -0-
      and
      $79,963 as of September 30, 2005 and December 31, 2004, respectively.
      Liabilities related to discontinued operations are $223,597 and $639,144 as
      of
      September 30, 2005


and
      December 31, 2004, respectively. These liabilities are included in accounts
      payable and accrued expenses.





**NOTE
      6 - CHANGES IN ESTIMATED SERVICE LIVES OF CERTAIN ASSETS AND RECLASSIFICATION
      OF
      CERTAIN CURRENT ASSETS**




In
      December 2004, the Company began depreciating equipment at its CAV1 facility
      using a preliminary estimated service life of five years. During the second
      quarter of 2005, the Company analyzed all of the facility’s component assets and
      their estimated service lives and made the following changes within property
      and
      equipment: (1) the Company wrote off components valued at $541,384 which were
      determined to be obsolete portions of the facility; (2) the Company reclassified
      as construction in process components valued at $4,340,691 identified as parts
      of the facility not yet in service; (3) the Company identified a group of
      machinery components with service lives of seven years and another group of
      machinery and equipment with service lives of twenty years. As of the beginning
      of the second quarter of 2005, the Company began depreciating assets based
      on
      the revised assessment of assets placed in service and the revised estimate
      of
      the service lives of the components of the equipment as described
      above.





During
      the second quarter of 2005, the Company enhanced its system of spare parts
      inventory reporting and system of physical counts of spare parts inventory.
      As a
      result of the analysis, spare parts valued at an aggregate of $145,008 and
      previously included in current assets were reclassified as a component of
      property and equipment as of June 30, 2005.





During
      the second quarter of 2005, the Company reclassified “Equipment in process, held
      for sale” from current assets to “Other Assets - Equipment system” consistent
      with the Company’s current intention to offer the equipment for rental, with
      servicing and licensing included, by the end of 2005. The equipment, which
      is
      reflected at its cost of $2,175,290 and $2,137,783, as of September 30, 2005,
      and December 31, 2004, respectively, has also been reclassified in the
      presentation herein of the December 31, 2004 balance sheet.




**NOTE
        7 - SUBSEQUENT EVENTS**





On
      November 14, 2005, the Company sold 965,000 shares of common stock for $965,000
      to Philip H. Good, a director. Of the shares sold, 482,500 shares were
      contributed to the Company without consideration by Larry W. Denney, Chairman
      of
      the Board, President, and Chief Executive Officer, and 482,500 shares were
      contributed to the Company without consideration by Jack B. Simpson, a cofounder
      of the Company.




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**ITEM
      2.  PLAN OF OPERATION**





As
      of
      September 30, 2005, the Company was a development stage company, as its planned
      principal operations had not commenced and it had not conducted significant
      operations or generated significant operating revenues since its inception.
      The
      principal business of the Company is intended to be the development and
      commercialization of its proprietary biomass processing technology, through
      the
      application of which biomass material may be converted into its constituent
      components using hydrolysis and fermentation-based processing. The plan of
      operations for the next twelve months and beyond of the Company is to produce
      and sell basic feed protein and other products for the animal feed, food,
      chemical, and energy markets. These products are to be produced by the Company
      from the processing of biomass material using the Company’s proprietary
      technology and production facilities.





**Liquidity
      and Capital Resources**





As
      of
      September 30, 2005, the Company’s working capital deficit was $1,085,109. This
      represents a reduction in working capital deficit of $1,374,143 during the
      nine
      month period over the working capital deficit of $2,459,252 as of December
      31,
      2004 (See Note 6 to the financial statements regarding reclassification of
      certain assets from current assets to long-term). The $1,374,143 change in
      working capital consisted of a $192,622 increase in current assets and a
      $1,181,521 decrease in current liabilities. The change in working capital was
      primarily due to the Company’s receipt of $5,082,935 in proceeds from private
      placements of the Company’s common stock during the period.





The
      Company is substantially dependent upon the proceeds from sales of its common
      stock for working capital. The Company's principal uses of its working capital
      are to pay operating expenses and to fund expansion costs, including capital
      expenditures and the cost of additional personnel. Should the funds available
      to
      the Company be insufficient to fulfill all of these needs, the Company manages
      its available funds according to the following priorities (from highest to
      lowest): (1) payment of operating expenses, (2) creation or maintenance of
      a
      sufficient working capital reserve, and (3) expansion of personnel and equipment
      to implement the Company's business plan.





The
      Company believes that its current capital resources are insufficient to fund
      both its intended operations and expansion at its planned expansion rate. While
      the Company believes that its current resources may be sufficient to enable
      it
      to commence production activities with lines one and two of its CAV facility,
      the Company will need to raise additional capital to fund the construction
      costs
      required to bring lines three and four operational and to complete
      implementation of the hydrolysis process at the CAV facility. Further, the
      Company will need to raise additional capital to fund the cost of constructing
      lines five and six at the CAV facility.





The
      Company is continuing efforts to raise additional capital through private
      placements of common stock. There is no assurance that the Company will be
      able
      to raise additional funds that may be necessary to enable it to continue its
      planned business operations including expansion at the planned rate. Should
      any
      of management’s planned events not occur, the Company's financial condition and
      results of operations may be materially affected.




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As
      a
      consequence of the shortfalls in capital raising which the Company has
      experienced, the Company has incurred significant staffing limitations and
      personnel reductions. The capital limitations have restricted the Company’s
      ability to obtain and train experienced personnel required to reach established
      goals. After identifying, attracting, and hiring qualified personnel, a period
      of time is required to acquaint new employees with Company policies and goals
      and to train them in the Company's technology. During and subsequent to the
      third quarter 2005, the Company has begun to hire and train additional personnel
      with the funds raised from recent equity placements. As of November 14, 2005,
      the Company has added five engineers and has qualified and trained sufficient
      operators for the Company’s intended three-shift operation at the CAV facility.





The
      Company's ability to add and train qualified personnel is a key element of
      its
      ability to fully pursue its business plan in the time desired. Should the
      Company be unable to attract and retain sufficient qualified personnel, its
      ability to achieve its goals within predicted time frames will be adversely
      affected.





**The
      CAV Facility**





During
      the nine months ended September 30, 2005, the Company continued testing of
      its
      combined animal and vegetative (“CAV”) biomass conversion and fermentation
      operation, including testing of underground pipeline delivery to the CAV of
      nutrient extracted from dairy barn waste. The Company has completed this testing
      successfully.





As
      a
      result of testing in September and October 2005, it was decided to implement
      a
      productivity change in the dryers which is in progress and expected to be
      completed by the end of November 2005.





While
      no
      damage to facilities occurred, the Company experienced weeks of lost time during
      the testing phase due to the passage of hurricanes Katrina and Wilma.





As
      described in our previous quarterly report, in August 2005, the Company began
      the process of bringing production lines one and two of the CAV facility into
      operation with the goal of commencing production and accumulation of initial
      finished product inventory. At the time, the Company expected to begin
      generating revenues from the sale of products near the beginning of the fourth
      quarter of 2005. Although the Company experienced delays, primarily as a result
      of the hurricanes and improvements in the dryers, the Company currently expects
      initial shipment of product to occur during the fourth quarter of 2005. The
      Company expects to emerge from the development stage and commence financial
      reporting as an operating company when it recognizes significant revenues from
      product sales.




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The
      CAV
      facility as currently constructed has four fermenter lines, each of which includes
      a 200,000-gallon fermentation reactor. Two lines are fully constructed to
      production capability and ready to commence production operations, including
      extensive production level testing. Subject to raising the additional capital
      necessary, the Company plans to complete the work necessary to expand its
      production capacity to utilize all four fermentation lines. The production
      capacity of the CAV facility utilizing all four fermentation lines is
      approximately 300% of the production capacity of the facility utilizing only
      lines one and two.





The
      CAV
      facility is permitted for up to six production lines. Although the Company
      plans
      to construct the fifth and sixth production lines as soon as feasible, the
      Company has not entered into any construction contracts and will require
      additional capital to fund the cost of constructing these additional lines.
      The
      Company expects its commercial processing operations at its CAV facility to
      initially consist of processing yeast in a sterile environment utilizing
      phosphorus, nitrogen, carbohydrate, and other nutrients contained in barn waste
      from adjacent farming operations. The primary product to be produced by the
      CAV
      facility is yeast to be marketed to animal feed manufacturers for use as a
      protein and pro-biotic supplement to animal feed. The secondary product
      presently planned to be produced at the CAV facility is lignin, a natural
      polymer.





The
      Company’s investment in its CAV facility and supporting spare parts inventory is
      $25.4 million as of September 30, 2005. This amount includes construction and
      installation of all reactors and major equipment for four lines of fermentation,
      with piping and control for two production lines to operational status. This
      amount also includes the cost of construction of redundant infrastructure,
      such
      as boilers, hydrolysis reactors, compressed air, freon chillers, evaporative
      water cooling, reverse osmosis, process control, and ancillary buildings, all
      to
      support up to six production lines. Of the total construction costs of the
      facility, $17.7 million represents lines one and two and related equipment
      already operational, $5.5 million represents construction in process in lines
      three and four and the hydrolysis system, and $2.2 million represents buildings,
      leasehold improvements, and back up spare parts.





The
      Company has in place the major processing equipment for four production lines
      and is in the process of contracting for the construction work necessary to
      bring lines three and four operational by adding piping, sensor and control
      elements. The Company is seeking to raise additional capital to fund a portion
      of these costs, as it does not currently have sufficient funds on hand for
      this
      purpose.





Construction
      costs remaining to bring line three operational are estimated at $57,500 in
      parts and $325,000 in vendor labor. Construction costs remaining to complete
      line four are estimated at $765,500. Subject to raising the additional capital
      required to fund these costs, the Company expects to complete construction
      of
      lines three and four during the fourth quarter of 2005. Should the Company
      be
      unable to raise the necessary additional capital to pay these costs, it is
      likely to be unable to complete these construction activities within these
      time
      periods.




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In
      addition, most major components required for hydrolysis are in place.
      Implementation of the hydrolysis process requires the in-place components plus
      the addition of material handling equipment, piping and control. The Company
      has
      authorized final construction on the hydrolysis process with completion expected
      early in 2006 at an estimated cost of about $315,000. The hydrolysis process
      is
      expected to be implemented in three phases. Unlike the fermentation aspect
      of
      the process at the CAV, no production-scale testing of the hydrolysis process
      has been performed. Should the Company be unable to raise the necessary
      additional capital to pay these costs, it is likely to be unable to complete
      the
      implementation of the hydrolysis process at the CAV facility within this time
      period.





The
      fifth
      and sixth production lines will require construction and installation of
      foundations and all major process equipment, as well as piping and control.
      The
      Company estimates the cost of constructing these two additional lines (lines
      five and six) of production to be $4,000,000 and projects the addition of these
      two lines will increase production capacity by two thirds (167%) of the original
      estimated production capability of the first four lines, and 450% of the
      production capacity of lines one and two combined. The Company will need to
      raise additional capital to fund this expansion through additional private
      offerings of its securities.





**Patent
      Applications**





On
      May
      16, 2005, the Company filed seven Patent Cooperation Treaty (“PCT”)
      applications, claiming priority to seven provisional patent applications the
      Company previously filed with the United States Patent and Trademark Office
      with
      respect to its proprietary technology for the processing of biomass materials.
      A
      provisional application is a patent filing allowing the Company one year to
      complete the final application. The filing of the PCT applications extends
      the
      time allowed to the Company to complete filing formal U.S. applications, and
      gives the Company the ability to extend the time for filing applications with
      foreign governments that are Patent Cooperation Treaty participants.





Based
      on
      the PCT applications, the Company has been advised by its patent counsel that
      the final applications may seek issuance of 50 or more U.S. and foreign
      patents.  Upon
      the
      granting of any patents, the associated costs will be amortized over the life
      of
      the patents.




The
      technology covered by the Company’s patent applications involves pre-treatment,
      core fermentation, and post treatment a spects.
      The Company believes each of these aspects has unique elements, and the PCT
      patent applications seek coverage in each of these general areas. Both equipment
      and process innovations are covered for many diverse waste streams. Treatment
      of
      all the waste streams utilizes the central inventive aspects of the process
      (“core technology”).




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The
      waste
      streams explored are:





·
            Ruminant
                cattle manure


·
            Swine
                and other animal manure


·
            Municipal
                cellulosistic solid waste


·
            Other
                cellulosistic solid waste


·
            Whey
                broth from cheese production


·
            Fermentation
                broth remediation from alcohol and yeast
                production


·
            Other
                undefined dilute waste streams





Ruminant
      cattle and swine manure treatment and remediation are dealt with more
      extensively in the presentation as specific instances of application of the
      core
      technology.





The
      Company believes that the discoveries presented in its patent applications
      constitute a novel means of fermentation. In general the core technology
      presented, taken as a whole, addresses the major problems of waste stream
      treatment—sub optimal, very dilute, poor, and variable concentration nutrient
      supply. The Company believes that its technology can address remediation of
      waste streams as dilute as certain river water, or as concentrated as manure,
      potentially with recovery of valuable product that may more than offset the
      cost
      of the processing.





Other
      innovations presented in the patent applications may be separated into (1)
      proper preparation of the waste stream and (2) the core technology—equipment
      design, fermentation organism selection, sensor and control selection, and
      process definition.





The
      Company’s technology includes elements relating to the proper preparation of
      waste streams for fermentation that are both necessary to optimize utilization
      of waste streams for use in the core technology and are otherwise generally
      useful, innovative tools. These elements relate to:





·
            Recovery
                of organic material suitable for
                fermentation.


·
            Limiting
                presence of substances that interfere with, or make less optimal,
                proper
                recovery.





The
      Company refers to these processes as its EcoGoldTM technology (discussed below).
      The processes involve the recovery of nutrient value from dilute, variable
      waste
      streams by fermentation processing. The technology encompasses several
      variations that include cheese whey, ethanol fermentation waste, and recovery
      of
      nutrient specific to various manure waste animal species such as hogs, poultry,
      and cattle.





The
      Company can give no assurance that the provisional patent applications will
      result in the issuance of any specific patents, or that any patents that may
      be
      issued will withstand challenge, provide any specific protection or ultimately
      be of commercial value to the Company.




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**EcoGoldTM
      - The Dilute Waste Stream Recovery Technology**





The
      Company’s seven provisional patent applications, and the additional seven PCT
      applications discussed above, are related to a unique biomass processing
      technology that the Company refers to as EcoGoldTM. EcoGoldTM is the name of the
      Company’s ecologically beneficial process and equipment as well as the name of
      the product produced through the process, which is a golden colored, high value
      nutrient. The EcoGoldTM process is designed to reduce phosphorus and nitrogen
      pollution from waste streams, by creating a valuable product (protein) at farms
      and industrial sites.





The
      Company plans to complete installation of the first equipment developed using
      the EcoGoldTM process at a large dairy testing site by the end of 2005, after
      commencing sales of the products of its CAV facility processing operations.





The
      Company expects to complete testing and any necessary modifications to this
      unit
      and to then offer the unit for rental with servicing and licensing included
      by
      the end of 2005. This test site equipment is shown on the Company’s balance
      sheet as of September 30, 2005 as “Equipment system” reflected at a cost of $2,175,290, although
      the cost of future smaller units may be considerably less if the Company is
      able
      to successfully produce these units through larger scale production. The
      rental/lease agreement anticipated for this first unit is expected to be based
      on anticipated future lower cost of production, but to return full value to
      the
      Company as a result of the inclusion of licensing fees in the revenue base.
      The
      Company has had initial discussions with several vendors, but has not yet
      entered into any agreements with respect to the sale or production of these
      units.





**Other
      Products in Development**





The
      Company presently is concentrating its efforts on its CAV and EcoGoldTM
operations as discussed above. The Company has other potential products and
      applications of its technology which are in various stages of research and
      development.





**Annual
      Meeting of Stockholders**





On
      October 4, 2005 the Company held its Annual Meeting for Stockholders at the
      Company’s corporate offices in West Palm Beach, Florida. Shareholders
      representing over 71% of outstanding shares of common stock attended. Current
      directors Larry W. Denney, Sandra McDonald, P.E. MacAllister, and Philip H.
      Good
      were elected unanimously by those attending to continue serving until the next
      Annual Meeting of Stockholders in 2006. Following the meeting, stockholders
      in
      attendance took a tour of the CAV facility in Okeechobee, Florida to see it
      in
      operation.





**Discontinued
      Operations**





Effective
      January 13, 2005, the Company terminated its contract with St. Lucie County
      for
      services in disposal of vegetative waste at the St. Lucie landfill. At the
      request of St. Lucie County, the Company continued to perform the services
      through April 5, 2005 in order to maintain service until a new contractor
      commenced work.




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The
      Company’s activities in handling vegetative waste at municipal landfills were
      intended as a feasibility test and not as the Company’s planned business
      operations or a core business activity. The Company’s purpose in engaging in
      these activities historically was to demonstrate the availability and actual
      costs of this form of raw material. The Company was attempting to establish
      that
      the material could be obtained at a cost of approximately zero net of fees
      or at
      a slight profit. The Company referred to this concept of obtaining low cost
      waste material for use in production as “zero to negative cost” of raw
      materials. During the five year life (2000-2005) of the contracts, the Company
      established that a “zero to negative cost” (net of fees) in obtaining the
      material was possible.





The
      Company’s CAV biomass processing plant has been designed to utilize animal
      biomass, vegetative biomass, or a combination of both as raw material for the
      production of yeast. The vegetative biomass was intended to be used as raw
      material in production of the Company’s primary product, yeast animal feed
      protein supplement. While use of vegetative biomass material such as the
      landfill material remains an option, use of this material has been relegated
      to
      a back-up plan due to the intended total replacement of the vegetative material
      with animal-based material processed by the Company’s EcoGoldTM technology. This
      animal based biomass is expected to be less expensive than the vegetative waste
      from the municipal landfill because transportation is a negligible cost due
      to
      proximity of the material and as a result of automated processing and
      underground pipe transporting systems. The cost of the material itself is
      negligible because the Company has a contract in place under which it receives
      a
      significant supply of barn waste at no cost.





In
      the
      future, the Company may consider utilizing some form of vegetative biomass
      as
      raw material if it becomes cost beneficial or if greater quantities of raw
      material are required. Currently the Company does not intend to continue any
      activities similar to those related to the St. Lucie County contract noted
      above.





The
      Company continues to be a development stage enterprise as defined under GAAP
      because it has not yet generated significant revenues in its intended business.
      In prior years the Company’s financial statements have presented revenues and
      related operating expenses of the St. Lucie County contract and a similar
      contract with Indian River County, Florida, which contract expired in a prior
      year, as gross revenues from operations although these activities were never
      intended to be a primary business of the Company. The Company anticipates that
      fees it may receive from processing animal or vegetative waste will not be
      material.




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**ITEM
      3.  CONTROLS AND PROCEDURES**





As
      required by Rule 13a-15 under the Securities Exchange Act of 1934, as of
      September 30, 2005, the Company's management carried out an evaluation of the
      effectiveness of the design and operation of the Company's disclosure controls
      and procedures. This evaluation was carried out by Larry W. Denney, the
      Company's Chief Executive Officer, and Robert F. Kendall, the Company’s Chief
      Financ ial
      Officer. Based upon that evaluation, the Company's Chief Executive Officer
      and
      Chief Financial Officer concluded that as of September 30, 2005, the Company's
      disclosure controls and procedures were not effective in timely alerting them
      to
      material information required to be included in the Company's periodic SEC
      reports.





The
      Company's independent auditors, in conjunction with their audit of the Company’s
      financial statements for the year ended December 31, 2004, advised the Company
      and the Audit Committee that in the auditors' view, the Company's disclosure
      controls and procedures were subject to a material weakness resulting from
      inadequate segregation of duties related to accounting controls caused by the
      limited number of personnel available for accounting duties. The accounting
      department consists of the chief financial officer, who is a CPA, one
      accountant, and the controller, who is married to the chief executive officer
      of
      the Company. Additionally, the chief executive officer of the Company is active
      in review of all aspects of financial reporting. As a mitigating control, the
      chief executive officer, chief financial officer, controller, and the accountant
      do extensive review of all of the accounting records and financial reporting.
      The Company is a research and development company in the development stage.
      Since inception in 1996 the Company has been entirely funded by investment
      and
      has had no revenues to date in its intended business. Management believes that
      remediation of the cited lack of segregation of duties can be accomplished
      through the hiring of additional accounting personnel or by adding or modifying
      certain existing internal control procedures. For example, the Company is
      evaluating guidance set forth in COSO’s “Exposure Draft on Internal Controls -
      Integrated Framework Guidance for Smaller Public Companies Reporting on Internal
      Controls Over Financial Reporting.” As for hiring additional personnel, it has
      not been reasonable or cost beneficial for the Company to hire extra accounting
      personnel who have no other purpose, duties, or workload than to provide formal
      segregation of duties under internal control principles. In the future, the
      Company may hire additional accounting personnel as soon as it has sufficient
      financial resources and additional workload to justify such hiring.





It
      should
      be noted that the design of any system of controls is based in part upon certain
      assumptions about the likelihood of future events and there can be no assurance
      that any design will succeed in achieving its stated goals under all potential
      future conditions, regardless of how remote. Disclosure
      controls and procedures are controls and other procedures that are designed
      to
      ensure that information required to be disclosed in the Company's reports filed
      or submitted under the Exchange Act is recorded, processed, summarized and
      reported within the time periods specified in the SEC’s rules and forms.
      Disclosure controls and procedures include, without limitation, controls and
      procedures designed to ensure that information required to be disclosed in
      the
      Company's reports filed under the Exchange Act is accumulated and communicated
      to management, including the Company's Chief Executive Officer and Chief
      Financial Officer, to allow timely decisions regarding required
      disclosure.




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There
      were no changes in the Company's internal control over financial reporting
      identified in connection with the evaluation required by paragraph (d) of Rule
      13a-15 under the Exchange Act with respect to the fiscal quarter ended September
      30, 2005 that have materially affected, or are reasonably likely to materially
      affect, the Company's internal control over financial reporting.




**PART
      II. OTHER INFORMATION**




**ITEM
      2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
      PROCEEDS.**




On
      various dates from July 5, 2005 through September 5, 2005, in a private offering
      limited to existing stockholders which commenced on June 15, 2005, the Company
      had received an aggregate of $889,625 in proceeds from the sale of an aggregate
      of 355,850 shares of common stock at a price of $2.50 per share to 47 existing
      stockholders only, each of whom the Company believes to be an accredited
      investor. The shares were offered and sold without general solicitation or
      advertising and without registration in reliance on Section 4(2) of the
      Securities Act of 1933, as amended, and Rule 506 of Regulation D
      thereunder.





On
      various dates between August 22, 2005, and September 12, 2005, the Company
      sold
      an aggregate of 6,500 shares of common stock at a price of $10 per share to
      three investors, all of whom the Company believes to be accredited investors,
      for aggregate proceeds of $65,000. The shares were offered and sold without
      general solicitation or advertising without registration in reliance on Section
      4(2) of the Securities Act of 1933, as amended, and Rule 506 of Regulation
      D
      thereunder.





On
      September 27, 2005, the Company sold 290,000 shares of common stock to Philip
      H.
      Good, a Director of the Company, at a price of $1.50 per share, for aggregate
      proceeds of $435,000. Larry W. Denney, Chairman, President, and Chief Executive
      Officer of the Company, contributed 127,600 of his personally owned shares
      to
      the Company for no consideration and the Company purchased 127,600 of personally
      owned common shares from Jack B. Simpson, a former Director, for $43,500. The
      net effect of these transactions was that the Company received net proceeds
      of
      $391,500 for the net issuance of 34,800 additional shares of common stock.
      The
      shares were issued without registration in reliance on Section 4(2) of the
      Securities Act of 1933, as amended, and Rule 506 of Regulation D
      thereunder.




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**ITEM
      6. EXHIBITS**




**List
      of Exhibits:**




Document
            Exhibit
                No.Certificate
                of Incorporation filed with the Delaware Secretary of State on January
                30,
                1996 (incorporated herein by reference to Exhibit 2.1.1 of the
                registrant's Form 10-SB, filed with the Commission on December 19,
                2003)
            3.1.1Certificate
                of Amendment to Certificate of Incorporation filed with the Delaware
                Secretary of State on September 12, 1997 (incorporated herein by
                reference
                to Exhibit 2.1.2 of the registrant's Form 10-SB, filed with the Commission
                on December 19, 2003)
            3.1.2Certificate
                of Amendment to Certificate of Incorporation filed with the Delaware
                Secretary of State on May 23, 2001 (incorporated herein by reference
                to
                Exhibit 2.1.3 of the registrant's Form 10-SB, filed with the Commission
                on
                December 19, 2003)
            3.1.3By-Laws
                (incorporated herein by reference to Exhibit 2.2 of the registrant's
                Form
                10-SB, filed with the Commission on December 19, 2003)
            3.2Certification
                by the Chief Executive Officer of the Company pursuant to Rule 13a-14
                under the Securities Exchange Act of 1934, as amended*
            31.1Certification
                by the Chief Financial Officer of the Company pursuant to Rule 13a-14
                under the Securities Exchange Act of 1934, as amended*
            31.2Certification
                by the Chief Executive Officer of the Company pursuant to 18 U.S.C.
                Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley
                Act
                of 2002*
            32.1Certification
                by the Chief Financial Officer of the Company pursuant to 18 U.S.C.
                Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley
                Act
                of 2002*
            32.2


*
              Filed
                  herewith





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**SIGNATURES**





In
      accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused
      this report to be signed on its behalf by the undersigned, thereunto duly
      authorized.




**BIOMASS
              PROCESSING TECHNOLOGY, INC.**Dated: 
May
              9, 2006
            By:
            /s/ Larry
              W.
              DenneyName:  
                Larry W. Denney
              Title:    
                Chairman of the Board, President and
              Chief
                Executive Officer
              (principal executive officer)




Dated: 
May
              9, 2006
            By:
            /s/ Robert
              F.
              KendallName:  
                Robert F. Kendall
              Title:    
                CPA, Chief Financial Officer
              (principal financial officer)




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