|FORM 10-Q                                                                                                                                           
|----------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                    
|SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC  20549                                                                                            
|                                                                                                                                                    
|[X]   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2005     
|OR                                                                                                                                                  
|[  ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Transition Period From _________ to ________
|                                                                                                                                                    
|Commission File Number 0-20979                                                                                                                      
|                                                                                                                                                    
|INDUSTRIAL SERVICES OF AMERICA, INC.(Exact Name of Registrant as specified in its Charter)                                                          
|                                                                                                                                                    



|Florida                         | 59-0712746         
|------------------------------- | -------------------
|(State or other jurisdiction of | (IRS Employer      
|Incorporation or Organization)  | Identification No.)



|                                                                                                                                                                                                                                                                                                                                                      
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|7100 Grade Lane, PO Box 32428
Louisville, Kentucky  40232
(Address of principal executive offices)                                                                                                                                                                                                                                                    
|                                                                                                                                                                                                                                                                                                                                                      
|(502) 368-1661
(Registrant's Telephone Number, Including Area Code)                                                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                      
|Check whether the registrant (1) has filed all Reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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 ___
|                                                                                                                                                                                                                                                                                                                                                      
|Indicate by check mark whether the registrant is an accelerated filer (as defined in rule 12b-2 of the Exchange Act).  Yes   No X                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                      
|Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes _____ No X                                                                                                                                                                                                                      
|                                                                                                                                                                                                                                                                                                                                                      
|Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of September 30, 2005:  3,576,408.                                                                                                                                                                                                                      

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|INDUSTRIAL SERVICES OF AMERICA, INC. AND SUBSIDIARIES
|-----------------------------------------------------
|                                                     
|                                                     
|                                                     
|                                                     
|Part I                                               
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|Part II                                              
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|                                                     

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|Part I -- FINANCIAL INFORMATION                      
|-----------------------------------------------------
|                                                     
|ITEM 1: Condensed CONSOLIDATED FINANCIAL STATEMENTS. 
|                                                     
|INDUSTRIAL SERVICES OF AMERICA, INC. AND SUBSIDIARIES
|                                                     
|CONDENSED CONSOLIDATED BALANCE SHEETS                
|                                                     
|ASSETS                                               
|                                                     



|                                                                                                                    | September 30, 2005
(Unaudited) |  | December 31,
2004
|------------------------------------------------------------------------------------------------------------------- | ------------------------------ |  | -----------------
|Current assets                                                                                                      |                                |  |                  
|Cash and cash equivalents                                                                                           | $  1,375,394                   |  | $   1,129,690    
|Accounts receivable - trade (after allowance 
    for doubtful accounts of $50,000 in 2005
    and $75,000 in 2004) | 10,587,181                     |  | 8,577,328        
|Income tax receivable                                                                                               | -                              |  | 220,325          
|Notes receivable -- related party                                                                                   | 37,770                         |  | -                
|Net investment in sales-type leases                                                                                 | 90,480                         |  | 83,744           
|Inventories                                                                                                         | 2,079,682                      |  | 2,152,374        
|Deferred income taxes                                                                                               | 106,735                        |  | 84,251           
|Other                                                                                                               | 122,552                        |  | 71,905           
|                                                                                                                    |                                |  |                  
|Total current assets                                                                                                | 14,399,794                     |  | 12,319,617       
|                                                                                                                    |                                |  |                  
|Net property and equipment                                                                                          | 7,862,451                      |  | 7,600,941        
|                                                                                                                    |                                |  |                  
|Other Assets                                                                                                        |                                |  |                  
|Net investment in sales-type leases                                                                                 | 84,161                         |  | 124,494          
|Notes receivable -- related party                                                                                   | 236,062                        |  | 302,160          
|Goodwill                                                                                                            | 560,005                        |  | 560,005          
|Other                                                                                                               | 163,183                        |  | 172,194          
|                                                                                                                    | 1,043,411                      |  | 1,158,853        
|                                                                                                                    |                                |  |                  
|                                                                                                                    | $ 23,305,656                   |  | $ 21,079,411     
|                                                                                                                    |                                |  |                  
|________________________                                                                                           
|                                                                                                                   
|See accompanying notes to consolidated financial statements.                                                       
|3.                                                                                                                 

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|INDUSTRIAL SERVICES OF AMERICA, INC. AND SUBSIDIARIES
|-----------------------------------------------------
|                                                     
|CONDENSED CONSOLIDATED BALANCE SHEETS                
|CONTINUED                                            
|                                                     
|LIABILITIES AND STOCKHOLDERS' EQUITY                 
|                                                     





|                                                                                                                                                                           | September 30, 2005
(Unaudited) |  | December 31,
2004
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------ |  | -----------------
|Current liabilities                                                                                                                                                        |                                |  |                  
|Current maturities of capital lease obligation                                                                                                                             | $    127,379                   |  | $    559,038     
|Accounts payable                                                                                                                                                           | 14,797,799                     |  | 12,082,676       
|Income tax payable                                                                                                                                                         | 35,159                         |  | -                
|Other current liabilities                                                                                                                                                  | 732,457                        |  | 612,869          
|Total current liabilities                                                                                                                                                  | 15,692,794                     |  | 13,254,583       
|                                                                                                                                                                           |                                |  |                  
|Long-term liabilities                                                                                                                                                      |                                |  |                  
|Long-term debt                                                                                                                                                             | -                              |  | 1,000,000        
|Capital lease obligation                                                                                                                                                   | 183,248                        |  | 271,835          
|Deferred income taxes                                                                                                                                                      | 413,570                        |  | 632,974          
|                                                                                                                                                                           | 596,818                        |  | 1,904,809        
|                                                                                                                                                                           |                                |  |                  
|Stockholders' equity                                                                                                                                                       |                                |  |                  
|Common stock, $.005 par value, 10,000,000 shares authorized,
    4,255,000 shares issued in 2005 and 2004, 3,576,408 and
    3,575,468 shares outstanding in 2005 and 2004 | 21,275                         |  | 21,275           
|Additional paid-in capital                                                                                                                                                 | 3,065,882                      |  | 2,656,891        
|Retained earnings                                                                                                                                                          | 4,630,875                      |  | 3,944,814        
|Treasury stock, 678,592 and 679,532 shares at average cost                                                                                                                 |                                |  |                  
|in 2005 and 2004                                                                                                                                                           | (701,988)                      |  | (702,961)        
|                                                                                                                                                                           | 7,016,044                      |  | 5,920,019        
|                                                                                                                                                                           | $ 23,305,656                   |  | $ 21,079,411     
|                                                                                                                                                                           |                                |  |                  
|__________________________                                                                                                                                                
|                                                                                                                                                                          
|See accompanying notes to consolidated financial statements.                                                                                                              
|4.                                                                                                                                                                        

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|INDUSTRIAL SERVICES OF AMERICA, INC. AND SUBSIDIARIES
|-----------------------------------------------------
|                                                     
|CONDENSED CONSOLIDATED STATEMENTS OF INCOME          
|THREE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004       
|(UNAUDITED)                                          



|                                                             | 2005         |  | 2004        
|------------------------------------------------------------ | ------------ |  | ------------
|                                                             |              |  |             
|Revenue from services                                        | $ 25,899,409 |  | $ 25,385,051
|Revenue from product sales                                   | 8,680,320    |  | 12,838,855  
|Total revenue                                                | 34,579,729   |  | 38,223,906  
|                                                             |              |  |             
|Cost of goods sold for services                              | 24,846,751   |  | 24,411.934  
|Cost of goods sold for product sales                         | 7,780,247    |  | 11,657,475  
|Total cost of goods sold                                     | 32,626,998   |  | 36,069,409  
|                                                             |              |  |             
|Selling, general and administrative expenses                 | 1,406,563    |  | 1,356,421   
|                                                             |              |  |             
|Income before other income (expense)                         | 546,168      |  | 798,076     
|                                                             |              |  |             
|Other income (expense)                                       |              |  |             
|Interest expense                                             | (19,332)     |  | (44,965)    
|Interest income                                              | 30,155       |  | 22,223      
|Loss on sale of assets                                       | (10,413)     |  | -           
|Other income, net                                            | (4,383)      |  | 1,032       
|                                                             | (3,973)      |  | (21,710)    
|                                                             |              |  |             
|Income before income taxes                                   | 542,195      |  | 776,366     
|                                                             |              |  |             
|Provision for income taxes                                   | 216,901      |  | 346,782     
|                                                             |              |  |             
|Net income                                                   | $   325,294  |  | $   429,584 
|                                                             |              |  |             
|Basic earnings per share                                     | $       0.09 |  | $       0.12
|                                                             |              |  |             
|Diluted earnings per share                                   | $       0.09 |  | $       0.12
|                                                             |              |  |             
|Weighted average shares outstanding:                         |              |  |             
|Basic                                                        | 3,576,408    |  | 3,535,468   
|                                                             |              |  |             
|Diluted                                                      | 3,591,272    |  | 3,604,473   
|                                                            
|__________________________                                  
|                                                            
|See accompanying notes to consolidated financial statements.
|5.                                                          

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|INDUSTRIAL SERVICES OF AMERICA, INC. AND SUBSIDIARIES       
|------------------------------------------------------------
|                                                            
|CONDENSED CONSOLIDATED STATEMENTS OF INCOME                 
|NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004               
|(UNAUDITED)                                                 
|                                                            
|                                                            
|                                                            
|Revenue from services                                       
|Revenue from product sales                                  
|Total revenue                                               
|                                                            
|Cost of goods sold for services                             
|Cost of goods sold for product sales                        
|Total cost of goods sold                                    
|                                                            
|Selling, general and administrative expenses                
|                                                            
|Income before other income (expense)                        
|                                                            
|Other income (expense)                                      
|Interest expense                                            
|Interest income                                             
|Loss on sale of assets                                      
|Other income, net                                           
|                                                            
|                                                            
|Income before income taxes                                  
|                                                            
|Provision for income taxes                                  
|                                                            
|Net income                                                  
|                                                            
|Basic earnings per share                                    
|                                                            
|Diluted earnings per share                                  
|                                                            
|Weighted average shares outstanding:                        
|Basic                                                       
|                                                            
|Diluted                                                     
|                                                            
|______________________________                              
|                                                            
|See accompanying notes to consolidated financial statements.
|6.                                                          

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|INDUSTRIAL SERVICES OF AMERICA, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
NINE MONTHS ENDED SEPTEMBER 30, 2005
|----------------------------------------------------------------------------------------------------------------------------------------------------
|(UNAUDITED)                                                                                                                                         
|                                                                                                                                                    
|_________________________________________________________________________________________________________________________                           
|                                                                                                                                                    
|                                                                                                                                                    
|                                                                                                                                                    
|                                                                                                                                                    
|                                                                                                                                                    
|Balance as of December 31, 2004                                                                                                                     
|                                                                                                                                                    
|Treasury stock distribution to employees                                                                                                            
|                                                                                                                                                    
|Tax benefit of stock options exercised                                                                                                              
|                                                                                                                                                    
|Net income                                                                                                                                          
|                                                                                                                                                    
|Balance as of September 30, 2005                                                                                                                    
|                                                                                                                                                    
|__________________________________                                                                                                                  
|                                                                                                                                                    
|See accompanying notes to consolidated financial statements.                                                                                        
|7.                                                                                                                                                  

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|INDUSTRIAL SERVICES OF AMERICA, INC. AND SUBSIDIARIES
|-----------------------------------------------------
|CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS      
|NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004        
|(UNAUDITED)                                          



|                                                                               |              |  |                
|------------------------------------------------------------------------------ | ------------ |  | ---------------
|                                                                               | 2005         |  | 2004           
|Cash flows from operating activities                                           |              |  |                
|Net income                                                                     | $    686,061 |  | $     1,242,561
|Adjustments to reconcile net income to
    net cash from operating activities: |              |  |                
|Depreciation and amortization                                                  | 1,274,380    |  | 1,127,605      
|Treasury stock distribution to employees                                       | 6,524        |  | 109,621        
|Tax benefit of stock options exercised                                         | 403,440      |  | -              
|Deferred income tax                                                            | (241,888)    |  | 114,799        
|Loss on sale of property and equipment                                         | 21,988       |  | 11,931         
|Change in assets and liabilities                                               |              |  |                
|Receivables                                                                    | (2,009,853)  |  | (3,244,997)    
|Net investment in sales-type leases                                            | 33,597       |  | 234,407        
|Inventories                                                                    | 72,692       |  | (69,192)       
|Other assets                                                                   | 178,689      |  | (51,157)       
|Accounts payable                                                               | 2,715,123    |  | 5,184,963      
|Other current liabilities                                                      | 154,747      |  | 870,977        
|Net cash from operating activities                                             | 3,295,500    |  | 5,531,518      
|                                                                               |              |  |                
|Cash flows from investing activities                                           |              |  |                
|Payments from Related Parties                                                  | 28,328       |  | -              
|Proceeds from sale of property and equipment                                   | 72,482       |  | 1,000          
|Purchases of property and equipment                                            | (1,630,360)  |  | (1,373,861)    
|Net cash from investing activities                                             | (1,529,550)  |  | (1,372,861)    
|Cash flows from financing activities                                           |              |  |                
|Proceeds from exercise of common stock options                                 | -            |  | 386,141        
|Payment of cash dividend                                                       | -            |  | (353,547)      
|Payments on capital lease obligations                                          | (520,246)    |  | (118,421)      
|Payments on long-term debt                                                     | (1,000,000)  |  | (1,334,315)    
|Net cash from financing activities                                             | (1,520,246)  |  | (1,420,142)    
|                                                                               |              |  |                
|Net increase in cash                                                           | 245,704      |  | 2,738,515      
|                                                                               |              |  |                
|Cash at beginning of period                                                    | 1,129,690    |  | 662,772        
|                                                                               |              |  |                
|Cash at end of period                                                          | $  1,375,394 |  | $   3,401,287  
|                                                                               |              |  |                
|Supplemental disclosure of cash flow information                               |              |  |                
|Cash paid for interest                                                         | $  69,780    |  | $   44,965     
|Cash paid for taxes                                                            | 40,310       |  | 643,384        
|                                                                              
|____________________________                                                  
|                                                                              
|See accompanying notes to consolidated financial statements.                  
|8.                                                                            

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|INDUSTRIAL SERVICES OF AMERICA, INC. AND SUBSIDIARIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
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|NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|(UNAUDITED)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|NOTE 1 -- BASIS OF PRESENTATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U. S. generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X.  Accordingly, they do not include all of the information and footnotes required by U. S. generally accepted accounting principles for complete consolidated financial statements.  The information furnished includes all adjustments, which are, in the opinion of management, necessary to present fairly our financial position as of September 30, 2005 and the results of our operations and changes in our cash flow for the periods ended September 30, 2005 and 2004.  Results of operations for the period ended September 30, 2005 are not necessarily indicative of the results that may be expected for the entire year.  Additional information, including the audited December 31, 2004 consolidated financial statements and the Summary of Significant Accounting Policies, is included in our Annual Report on Form 10-K for the year ended December 31, 2004 on file with the Securities and Exchange Commission.
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|NOTE 2 -- ESTIMATES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|In preparing the condensed consolidated financial statements in accordance with U. S. generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X, management must make estimates and assumptions.  These estimates and assumptions affect the amounts reported for assets, liabilities, revenues and expenses, as well as affecting the disclosures provided.  Future results could differ from the current estimates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|NOTE 3 -- LONG TERM DEBT AND NOTES PAYABLE TO BANK                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|We currently maintain a $5.0 million senior revolving credit facility with the Branch Banking and Trust Company.  Indebtedness under this credit facility accrues interest at BB&T's prime rate less one eighth (6.625% at September 30, 2005). The maturity date under this agreement is January 2008.  We have collateralized the credit facility with all our assets.  As of September 30, 2005 and December 31, 2004, there were no borrowings against the credit facility.  The terms of the credit facility place certain restrictive covenants on us, including maintenance of a specified tangible net worth, debt to net worth and EBITDA ratio.  Consequently, these covenants restrict our ability to incur as much additional debt as we may desire for future growth.  At September 30, 2005, we were in compliance with all restrictive covenants and the entire amount of our credit facility was available for borrowings.                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

|NOTE 4 -- SEGMENT INFORMATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
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|The Company's operations include three primary segments:  ISA Recycling, Computerized Waste Systems (CWS), and Waste Equipment Sales & Service (WESSCO).  ISA Recycling provides products and services to meet the needs of its customers related to ferrous, non-ferrous and fiber recycling at two locations in the Midwest.  CWS provides waste disposal services including contract negotiations with service providers, centralized billing, invoice auditing, and centralized dispatching.  WESSCO sells, leases, and services waste handling and recycling equipment.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|The Company's three reportable segments are determined by the products and services that each offers.  The recycling segment generates its revenues based on buying and selling of ferrous, non-ferrous and fiber scrap; CWS's revenues consist of charges to customers for waste disposal services; and WESSCO sales and lease income comprise the primary source of revenue for this segment.  The components of the column labeled "other" are selling, general and administrative expenses that are not directly related to the three primary segments.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|On March 15, 2005, Home Depot notified us that they did not wish to allow the Solid Waste Management Services Agreement with us to renew for an additional three-year term but wished to enter into a new contract for the services provided under the agreement. In that letter, Home Depot stated its intent to continue the agreement on a month-to-month basis if a new contract was not in place by the expiration of the agreement on June 1, 2005. On September 16, 2005, we announced that Home Depot had notified us the previous day that they would allow the agreement to expire effective October 30, 2005.  As stated in our September 16th press release, the notification of termination from Home Depot came as somewhat of a surprise to us, given the fact that we had provided waste management services to Home Depot for over twenty years and were also the lowest bidder in the live on-line auction for Home Depot's waste services that took place on April 28, 2005. After the auction, we expected to participate in contract negotiations with Home Depot, but Home Depot did not pursue negotiations before abruptly ending the twenty-year business relationship.  Under the prior agreement, our Computerized Waste Systems segment was responsible for managing and overseeing the removal of solid waste and recyclable material for all locations designated by Home Depot.  Those locations exceeded 2,000 stores. Home Depot paid us a monthly management fee and a percentage of the gross sales of all of Home Depot's marketable recyclables.
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|We evaluate segment performance based on gross profit or loss and the evaluation process for each segment includes only direct expenses and selling, general and administrative costs, omitting any other income and expense and income taxes.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
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|NOTE 4 -- SEGMENT INFORMATION, continued   
|-------------------------------------------
|                                           
|FOR THE
NINE MONTHS ENDEDSEPTEMBER 30, 2005
|                                           
|Recycling revenues                         
|Equipment sales, service                   
|and leasing revenues                       
|Management fees                            
|Cost of goods sold                         
|Selling, general and                       
|administrative expenses                    
|                                           
|Segment profit (loss)                      
|                                           
|Segment assets                             
|                                           





|FOR
THE 
NINE MONTHS ENDEDSEPTEMBER 30, 2004 | ISARECYCLING |  | COMPUTERIZED 
WASTESYSTEMS |  | WASTE
EQUIPMENT
SALES &SERVICES |  | CORPORATE        |  | SEGMENTTOTALS
|-------------------------------------------- | ------------ |  | -------------------------- |  | ------------------------------- |  | ---------------- |  | -------------
|                                             |              |  |                            |  |                                 |  |                  |  |              
|Recycling revenues                           | $ 33,357,143 |  | $           -              |  | $         -                     |  | $              - |  | $ 33,357,143 
|Equipment sales, service                     |              |  |                            |  |                                 |  |                  |  |              
|and leasing revenues                         | -            |  | -                          |  | 2,298,882                       |  | -                |  | 2,298,882    
|Management fees                              | -            |  | 71,386,359                 |  | -                               |  | -                |  | 71,386,359   
|Cost of goods sold                           | (30,775,088) |  | (68,554,957)               |  | (1,342,400)                     |  | -                |  | (100,672,445)
|Selling, general and                         |              |  |                            |  |                                 |  |                  |  |              
|administrative expenses                      | (632,109)    |  | (1,391,564)                |  | (410,192)                       |  | (1,721,614)      |  | (4,155,479)  
|                                             |              |  |                            |  |                                 |  |                  |  |              
|Segment profit (loss)                        | $  1,949,946 |  | $   1,439,838              |  | $   546,290                     |  | $(1,721,614)     |  | $  2,214,460 
|                                             |              |  |                            |  |                                 |  |                  |  |              
|Segment assets                               | $ 11,182,489 |  | $   7,842,156              |  | $ 2,392,070                     |  | $  5,011,605     |  | $26,428,320  
|                                             |              |  |                            |  |                                 |  |                  |  |              



|NOTE 4 -- SEGMENT INFORMATION, continued    
|--------------------------------------------
|                                            
|FOR THE
THREE MONTHS ENDEDSEPTEMBER 30, 2005
|                                            
|Recycling revenues                          
|Equipment sales, service                    
|and leasing revenues                        
|Management fees                             
|Cost of goods sold                          
|Selling, general and                        
|administrative expenses                     
|                                            
|Segment profit (loss)                       
|                                            
|Segment assets                              
|                                            



|                                             |              |  |                            |  |                                  |  |             |  |              
|-------------------------------------------- | ------------ |  | -------------------------- |  | -------------------------------- |  | ----------- |  | -------------
|FOR THE
THREE MONTHS ENDEDSEPTEMBER 30, 2004 | ISARECYCLING |  | COMPUTERIZED 
WASTESYSTEMS |  | WASTE 
EQUIPMENT
SALES &SERVICES |  | CORPORATE   |  | SEGMENTTOTALS
|                                             |              |  |                            |  |                                  |  |             |  |              
|Recycling revenues                           | $ 12,077,250 |  | $            -             |  | $         -                      |  | $         - |  | $12,077,250  
|Equipment sales, service                     |              |  |                            |  |                                  |  |             |  |              
|and leasing revenues                         | -            |  | -                          |  | 761,605                          |  | -           |  | 761,605      
|Management fees                              | -            |  | 25,385,051                 |  | -                                |  | -           |  | 25,385,051   
|Cost of goods sold                           | (11,184,637) |  | (24,411,934)               |  | (472,838)                        |  | -           |  | (36,069,409) 
|Selling, general and                         |              |  |                            |  |                                  |  |             |  |              
|administrative expenses                      | (232,170)    |  | (433,825)                  |  | (143,049)                        |  | (547,377)   |  | (1,356,421)  
|                                             |              |  |                            |  |                                  |  |             |  |              
|Segment profit (loss)                        | $   660,443  |  | $    539,292               |  | $   145,718                      |  | $ (547,377) |  | $   798,076  
|                                             |              |  |                            |  |                                  |  |             |  |              
|Segment assets                               | $11,182,489  |  | $  7,842,156               |  | $ 2,392,070                      |  | $5,011,605  |  | $26,428,320  
|                                             |              |  |                            |  |                                  |  |             |  |              



|NOTE 5 -- INVENTORIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Our inventories primarily consist of ferrous and non-ferrous scrap metals and are valued at the lower of average purchased cost or market. Quantities of inventories are determined based on our inventory systems and are subject to periodic physical verification using estimation techniques including observation, weighing and other industry methods. We would recognize inventory impairment when the market value, based upon current market pricing, falls below recorded value or when the estimated volume is less than the recorded volume of the inventory.  We would record the loss in cost of goods sold in the period during which we identified the loss.                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Some commodities are in saleable condition at acquisition.  We purchase these commodities in small amounts until we have a truckload of material available for shipment.  Some commodities are not in saleable condition at acquisition.  These commodities must be torched, sheared or baled.  We do not have work-in-process inventory that we need to manufacture to become finished goods.  We include processing costs in inventory for all commodities by gross ton.   Ferrous inventory of $1,133,082 at September 30, 2005 was comprised of $319,178 in raw materials and $813,904 of finished goods.  Non-ferrous inventory of $820,460 at September 30, 2005 was comprised of $139,548 in raw materials and $680,912 of finished goods.  Ferrous inventory of $1,140,905 at December 31, 2004 was comprised of $326,917 in raw materials and $813,988 of finished goods.  Non-ferrous inventory of $870,038 at December 31, 2004 was comprised of $207,794 in raw materials and $662,244 of finished goods.
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Inventory also includes all types of industrial waste handling equipment and machinery held for resale such as compactors, balers, and containers.   Other inventory includes cardboard and baling wire.  Inventories as of September 30, 2005 and December 31, 2004 consist of the following:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     



|                                                                                      
|--------------------------------------------------------------------------------------
|NOTE 6 -- PER SHARE DATA                                                              
|                                                                                      
|The computation for basic and diluted earnings per share is as follows:               
|                                                                                      
|Nine months ended September 30, 2005 compared to nine months ended September 30, 2004:
|                                                                                      
|                                                                                      
|                                                                                      
|Basic earnings per share                                                              
|                                                                                      
|                                                                                      
|                                                                                      
|                                                                                      
|                                                                                      
|Diluted earnings per share                                                            
|                                                                                      
|                                                                                      
|                                                                                      
|                                                                                      
|Diluted average shares outstanding                                                    
|                                                                                      
|                                                                                      
|                                                                                      





|Three months ended September 30, 2005 compared to three months ended September 30, 2004:
|----------------------------------------------------------------------------------------
|                                                                                        



|                                   | 2005                                                         |                            | 2004         |             |            
|---------------------------------- | ------------------------------------------------------------ | -------------------------- | ------------ | ----------- | -----------
|Basic earnings per share           |                                                              |                            |              |             |            
|                                   | Net income                                                   | $   325,294                |              | $   429,584 |            
|                                   | Weighted average shares outstanding                          | 3,576,408                  |              | 3,535,468   |            
|                                   |                                                              |                            |              |             |            
|                                   |                                                              | Basic earnings per share   | $        .09 |             | $       .12
|                                   |                                                              |                            |              |             |            
|Diluted earnings per share         |                                                              |                            |              |             |            
|                                   | Net income                                                   | $   325,294                |              | $  429,584  |            
|                                   |                                                              |                            |              |             |            
|                                   | Weighted average shares outstanding                          | 3,576,408                  |              | 3,535,468   |            
|                                   | Add dilutive effect of assumed exercising
  of stock options | 14,864                     |              | 69,005      |            
|Diluted average shares outstanding | 3,591,272                                                    |                            | 3,604,473    |             |            
|                                   |                                                              |                            |              |             |            
|                                   |                                                              | Diluted earnings per share | $       .09  |             | $       .12
|                                   |                                                              |                            |              |             |            



|NOTE 6 -- PER SHARE DATA, continued                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|In the second quarter of 2004, a permanent tax benefit of $127,300 related to the exercise of non-employee stock options was inadvertently recorded as a reduction to income tax expense.  At year-end of 2004, we determined that the tax benefit should be reported as an increase to additional paid-in-capital in the second quarter of 2004.  For the nine months of 2004, the net income amount of $1,242,561 (with basic earnings per share of $0.36 and diluted earnings per share of $0.35) shown above is $127,300 less (with basic earnings per share of $0.04 and diluted earnings per share of $0.03) than the net income amount of $1,369,861 (with basic earnings per share of $0.40 and diluted earnings per share of $0.38) previously reported in the Report on Form 10-Q for the quarter ended September 30, 2004.
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|NOTE 7-- ADDITIONAL PAID-IN CAPITAL                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|The increase in additional paid-in capital relates to the exercise of options in 2004 for which the restrictions on the underlying common stock granted lapsed in 2005 resulting in a permanent tax benefit..                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

---





|ITEM 2:  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|The following discussion and analysis should be read in conjunction with our consolidated financial statements and the accompanying notes thereto included elsewhere in this report.  We have reclassified certain prior year amounts to conform to the current year presentation with no effect on previously reported net income (loss) or shareholders' equity.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|The following discussion and analysis contains certain financial predictions, forecasts and projections which constitute "forward-looking statements" within the meaning of the federal securities laws.  Actual results could differ materially from those financial predictions, forecasts and projections and there can be no assurance that we will achieve such financial predictions, forecasts and projections.  Factors that could affect financial predictions, forecasts and projections include the fluctuations in the commodity price index and any conditions internal to our major customers, including loss of their accounts.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|General                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|We continue to pursue a growth strategy in the waste management services arena by adding new locations of existing customers as well as aggressively marketing our services to potential customers. Although we recently lost our largest customer, Home Depot, we have added eleven new customers with 700 serviced locations through the first three quarters of 2005. Currently, we service 1,475 customer locations throughout the United States and we utilize an active database of over 6,000 vendors to provide timely, thorough and cost-effective service to our customers. Our goal is that our aggressive marketing strategy will allow us to continue to add new customers which lead to a diversity of business opportunities so that we are not as dependent upon the operating results of the recycling division or on a single customer, such as Home Depot.  This diversity will help to stabilize revenues and gross profit during a period of time when commodity prices fluctuate and affect the ferrous and non-ferrous markets, or we are in need of replacing contracts that our customers may not renew.  Much of our focus and attention now and in the future is directed towards the growth of the management services business segment through expansion in the existing markets.  We are also focused upon technology enhancements that we can provide to the new and existing customer base to further solidify customer relationships.  Additionally, we are exploring strategic alliances and relationships that will enable us to effectively execute our growth.
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|We have operating locations in Louisville, Kentucky and Seymour, Indiana, and recently added a location in Lexington, Kentucky.  We do not have operating locations outside the United States but we service 1,475 customer locations throughout the United States, building a base of approximately 965 service providers.  Revenue derived from customers located outside the United States was $2,894,146 for the nine months ended September 30, 2005.  Cost of goods sold derived from customers located outside the United States was $2,806,896.  Gross profit before selling, general and administrative expenses was $87,250.  We do not separate selling, general and administrative expenses between customers located in the United States or outside the United States.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|On March 15, 2005, Home Depot notified us that they did not wish to allow the Solid Waste Management Services Agreement with us to renew for an additional three-year term but wished to enter into a new contract for the services provided under the agreement. In that letter, Home Depot stated its intent to continue the agreement on a month-to-month basis if a new contract was not in place by the expiration of the agreement on June 1, 2005. On September 16, 2005, we announced that Home Depot had notified us the previous day that they would allow the agreement to expire effective October 30, 2005.  As stated in our September 16th press release, the notification of termination from Home Depot came as somewhat of a surprise to us, given the fact that we had provided waste management services to Home Depot for over twenty years and were also the lowest bidder in the live on-line auction for Home Depot's waste services that took place on April 28, 2005. After the auction, we expected to participate in contract negotiations with Home Depot, but Home Depot did not pursue negotiations before abruptly ending the twenty-year business relationship.  Under the prior agreement, our Computerized Waste Systems segment was responsible for managing and overseeing the removal of solid waste and recyclable material for all locations designated by Home Depot.  Those locations exceeded 2,000 stores. Home Depot paid us a monthly management fee and a percentage of the gross sales of all of Home Depot's marketable recyclables.              
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|ISA will continue to focus on servicing its other customers and marketing its waste and recycling management service solutions across the retail, commercial and industrial sectors, and real estate development, as well as initiating growth in its ferrous and non-ferrous recycling and processing operations and its waste and recycling equipment sales, service and leasing division.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|Our goal is to remain dedicated to the recycling, management services, and equipment industry while sustaining steady growth at an acceptable profit, adding to our net worth, and providing positive returns for stockholders.  We intend to increase efficiencies and productivity in our core business while remaining alert for possible acquisitions, strategic partnerships, mergers and joint-ventures that would enhance our profitability.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|Liquidity and Capital Resources                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|As of September 30, 2005 we held cash and cash equivalents of $1,375,394.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|We currently maintain a $5.0 million senior revolving credit facility with the Branch Banking and Trust Company.  Indebtedness under this credit facility accrues interest at BB&T's prime rate less one eighth (6.625% at September 30, 2005).  The maturity date under this agreement is January 2008. We have collateralized the credit facility with all our assets.  As of September 30, 2005 and December 31, 2004, there were no borrowings against the credit facility.  The terms of the credit facility place certain restrictive covenants on us, including maintenance of a specified tangible net worth, debt to net worth and EBITDA ratio.  Consequently, these covenants restrict our ability to incur as much additional debt as we may desire for future growth.  At September 30, 2005, we were in compliance with all restrictive covenants and the entire amount of our credit facility was available for borrowings.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|During the first nine months of 2005, we purchased $1,630,360 of property and equipment.  In the recycling segment we spent approximately $417,962 for two crane engines, a scale, a conveyor belt, a Mack truck and containers used in the New Orleans area.  In the equipment sales, leasing and service segment, we capitalized approximately $701,908 as rental equipment that we located at customer sites.  This rental fleet equipment consists of solid waste handling and recycling equipment such as compactors, containers and balers. It is our intention to continue to pursue this market.  We purchased 2.75 acres of unimproved land located at 7021-7103 Grade Lane, Louisville, Kentucky for $265,000.  Building and land improvements were $234,835.  Capitalized computer hardware and software was $10,655.  We purchased these fixed asset additions with existing cash flows.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|In the second quarter of 2005, we exercised the purchase option on a capital lease agreement for five acres at 1565 East 4th Street, Seymour, Indiana for $425,000.  The property is located approximately 60 miles north of Louisville, Kentucky.  The land is improved by an approximately 10,000 square foot maintenance and office building.  We use this property for ferrous and nonferrous operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|We implemented the use of a purchasing card with a credit limit of $6.0 million in the second quarter of 2004.  We have included the balance due on the purchasing card as part of accounts payable.  The outstanding balance on the purchasing card at September 30, 2005 was $412,566 with a due date of October 27, 2005; we paid the $412,566 balance on October 15, 2005.  The card accrues interest at prime plus 5.9% after the first twenty-five days of the purchase; our intention is to pay off the full balance every month so as to not incur finance charges.  To date, we have not incurred any interest charges on this purchasing card.  The card requires monthly minimum payments on any balance outstanding at month end.  We receive rebates on an annual basis for all purchases made with the card.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|We expect that existing cash flow from operations and available credit under our existing credit facilities will be sufficient to meet our cash needs during the remainder of 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|Results of Operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|The following table presents, for the years indicated, the percentage relationship that certain captioned items in our Consolidated Statements of Income bear to total revenues and other pertinent data:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   



|                                                                                                 | Nine months ended September 30,
|------------------------------------------------------------------------------------------------ | -------------------------------
|                                                                                                 | 2005                           
|Statements of Income Data:                                                                       |                                
|Total revenue .................................................................................. | 100.0%                         
|Cost of goods sold............................................................................   | 94.3%                          
|Selling, general and administrative expenses ..................................                  | 4.5%                           
|Income before other expenses.........................................................            | 1.2%                           



|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Nine months ended September 30, 2005 compared to nine months ended September 30, 2004                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Total revenue decreased $9,388,278 or 8.8% to $97,654,106 in 2005 compared to $107,042,384 in 2004. Recycling revenue decreased $10,931,275 or 32.8% to $22,425,868 in 2005 compared to $33,357,143 in 2004.  This is due to a decrease of 33% in the volume of shipments (the volume of shipments in the first nine months of 2004 was abnormally high).  Management services revenue increased $1,374,179 or 1.9% to $72,760,538 in 2005 compared to $71,386,359 in 2004.  This change is due to an increase in revenues per customer locations while maintaining a customer base that is substantially the same from 2004 to 2005. Equipment, service and leasing revenue increased $168,818 or 7.3% to $2,467,700 in 2005 compared to $2,298,882 in 2004.  This increase is due primarily to an increase in equipment sales of $289,000 in the first nine months of 2005.                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Total cost of goods sold decreased $8,557,212 or 8.5% to $92,115,233 in 2005 compared to $100,672,445 in 2004.  Recycling cost of goods sold decreased $10,121,643 or 32.9% to $20,653,445 in 2005 compared to $30,775,088 in 2004.  This is due to a decrease of 33% in the volume of purchases (the volume of purchases in the first nine months of 2004 was abnormally high).  Management services cost of goods sold increased $1,269,162 or 1.9% to $69,824,119 in 2005 compared to $68,554,957 in 2004 due to increases in vendor service fees per the customer locations while maintaining a customer base that is substantially the same from 2004 to 2005.  Equipment, service and leasing cost of goods sold increased $295,269 or 22.0% to $1,637,669 in 2005 compared to $1,342,400 in 2004.  The increase is due to an increase in cost of sales of equipment and an increase in rental fleet depreciation.                                                                                                                  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Selling, general and administrative expenses increased $226,729 or 5.5% to $4,382,208 in 2005 compared to $4,155,479 in 2004.  As a percentage of revenue, selling, general and administrative expenses were 4.5% in 2005 compared to 3.9% in 2004.  Drivers of the increase include the following:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
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|Other expense decreased $101,169 to $13,228 in 2005 compared to $114,397 in 2004.  This was primarily due to a decrease in interest expense of $76,000 due to the reduction of long-term debt in 2004 and an increase in interest income of approximately $38,000.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Three months ended September 30, 2005 compared to three months ended September 30, 2004                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Total revenue decreased $3,644,177 or 9.5% to $34,579,729 in 2005 compared to $38,223,906 in 2004.  Recycling revenue decreased $4,432,248 or 36.7% to $7,645,002 in 2005 compared to $12,077,250 in 2004. This is due to a decrease of 29% in the volume of shipments (the volume of shipments in the third quarter of 2004 was abnormally high) and a decrease of 9% in the average selling price of the commodities.  Management services revenue increased $514,358 or 2.0% to $25,899,409 in 2005 compared to $25,385,051 in 2004.  This change is due to an increase in revenues per customer locations while maintaining a customer base that is substantially the same from 2004 to 2005.  Revenues per customer location increased because of an increase in the volume of disposal of solid waste material.  Equipment, service and leasing revenue increased $273,713 or 35.9% to $1,035,318 in 2005 compared to $761,605 in 2004.  This increase is due to an increase in sale of equipment and an increase in rental revenue.
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Total cost of goods sold decreased $3,442,411 or 9.5% to $32,626,998 in 2005 compared to $36,069,409 in 2004.  Recycling cost of goods sold decreased $4,138,985 or 37.0% to $7,045,652 in 2005 compared to $11,184,637 in 2004.  This is due to a decrease of 27% in the volume of purchases and a 17% decrease in commodity purchase prices in the recycling market.  Management services cost of goods sold increased $434,817 or 1.8% to $24,846,751 in 2005 compared to $24,411,934 in 2004 due to increases in vendor service fees per the customer locations while maintaining a customer base that is substantially the same from 2004 to 2005.  Equipment, service and leasing cost of goods sold increased $261,757 or 55.4% to $734,595 in 2005 compared to $472,838 in 2004.  The increase is due to the cost of sales of equipment and the depreciation of rental fleet equipment.                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Selling, general and administrative expenses increased $50,142 or 3.7% to $1,406,563 in 2005 compared to $1,356,421 in 2004.  As a percentage of revenue, selling, general and administrative expenses were 4.1% in 2005 compared to 3.5% in 2004.  Drivers of the increase include the following:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Other expense decreased $17,737 to $3,973 in 2005 compared to $21,710 in 2004.  This was primarily due to a decrease in interest expense of $26,000 due to the reduction of long-term debt in 2004 and an increase in interest income of $8,000.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Financial condition at September 30, 2005 compared to December 31, 2004                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Cash and cash equivalents increased $245,704 to $1,375,394 as of September 30, 2005 compared to $1,129,690 as of December 31, 2004.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|We generated net cash from operating activities of $3,295,500 for the nine months ended September 30, 2005, primarily because of an increase in accounts payable due to an increase in revenues per customer locations while maintaining a customer base that is substantially the same from 2004 to 2005 in the management services segment.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|We used net cash from investing activities of $1,529,550 for the nine months ending September 30, 2005.  Primarily, we purchased land, rental fleet equipment and recycling equipment.  We purchased improved land in Seymour, Indiana for $425,000.   We also purchased 2.75 acres of unimproved land located at 7021-7103 Grade Lane, Louisville, Kentucky for $265,000.  We made rental fleet equipment purchases of $701,908 in the first nine months of 2005.  This rental fleet equipment consists of solid waste handling and recycling equipment such as compactors, containers and balers. It is our intention to continue to pursue this market.                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|We used our net cash from financing activities of $1,520,246 to pay off long-term debt and to pay capital lease obligations for the nine months ending September 30, 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Accounts receivable trade increased $2,009,853 or 23.4% to $10,587,181 as of September 30, 2005 compared to $8,577,328 as of December 31, 2004.  This change is primarily due to an increase in revenues per the customer locations while maintaining a consistent customer base in the Management Services segment.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Inventories consist principally of ferrous and nonferrous scrap materials and waste equipment machinery held for resale.  We value inventory at the lower of cost or market.  Inventory decreased $72,692 or 3.4% to $2,079,682 as of September 30, 2005 compared to $2,152,374 as of December 31, 2004.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Inventory aging for the period ended September 30, 2005 (Days Outstanding):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          



|Description           |  | 1-30        |  | 31-60      |  | 61-90      |  | Over 90   |  | Total      
|--------------------- |  | ----------- |  | ---------- |  | ---------- |  | --------- |  | -----------
|                      |  |             |  |            |  |            |  |           |  |            
|Equipment & parts     |  | $    26,372 |  | $        - |  | $        - |  | $  84,952 |  | $   111,324
|Ferrous materials     |  | 663,305     |  | 177,805    |  | 97,158     |  | 194,814   |  | 1,133,082  
|Non-ferrous materials |  | 597,522     |  | 113,095    |  | 45,967     |  | 63,876    |  | 820,460    
|Other                 |  | 14,816      |  | -          |  | -          |  | -         |  | 14,816     
|                      |  |             |  |            |  |            |  |           |  |            
|                      |  | $1,302,015  |  | $290,900   |  | $143,125   |  | $343,642  |  | $2,079,682 
|                      |  |             |  |            |  |            |  |           |  |            





|Inventory aging for the year ended December 31, 2004 (Days Outstanding):
|------------------------------------------------------------------------
|                                                                        



|Description           |  | 1-30         |  | 31-60     |  | 61-90      |  | Over 90 |  | Total      
|--------------------- |  | ------------ |  | --------- |  | ---------- |  | ------- |  | -----------
|                      |  |              |  |           |  |            |  |         |  |            
|Equipment & parts     |  | $          - |  | $  93,111 |  | $        - |  | $25,138 |  | $   118,249
|Ferrous Materials     |  | 616,089      |  | 387,907   |  | 136,909    |  | -       |  | 1,140,905  
|Non-ferrous materials |  | 726,302      |  | 124,157   |  | 12,664     |  | 6,915   |  | 870,038    
|Other                 |  | 23,182       |  | -         |  | -          |  | -       |  | 23,182     
|                      |  |              |  |           |  |            |  |         |  |            
|                      |  | $1,365,573   |  | $605,175  |  | $149,573   |  | $32,053 |  | $ 2,152,374
|                      |  |              |  |           |  |            |  |         |  |            



|Accounts payable trade increased $2,715,123 or 22.5% to $14,797,799 as of September 30, 2005 compared to $12,082,676 as of December 31, 2004, primarily due to market conditions.                                                                                                                                                                                            
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                             
|Working capital decreased $358,034 to a deficit of $1,293,000 as of September 30, 2005 compared to a deficit of $934,966 as of December 31, 2004.  The decrease was primarily due to the cash purchases of $1,630,360 of property and equipment during the first nine months of 2005 and the payoff of $1,000,000 in debt, partially offset by positive operating cash flows.





|                                                                                                                                    
|------------------------------------------------------------------------------------------------------------------------------------
|Contractual Obligations                                                                                                             
|                                                                                                                                    
|The following table provides information with respect to our known contractual obligations for the quarter ended September 30, 2005.
|                                                                                                                                    



|Obligation Description          | Total      | Less
than 1 year | 1-3 years | 3-5 years | More
than 5 years
|------------------------------- | ---------- | ---------------- | --------- | --------- | -----------------
|Long-Term Debt Obligations      | $0         | $0               | $0        | $0        | $0               
|Capital Lease Obligations (1)   | 310,627    | 127,379          | 183,248   | 0         | 0                
|Operating Lease Obligations (2) | 800,313    | 605,793          | 162,883   | 31,637    | 0                
|Total                           | $1,110,940 | $733,172         | $346,131  | $31,637   | $0               



|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) We lease various pieces of equipment that qualify for capital lease treatment.  These lease arrangements require monthly lease payments expiring at various dates through May 2008.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|(2) We lease the Louisville, Kentucky facility from K&R Corporation, the sole director, officer   and shareholder of which is Harry Kletter, our chief executive officer, under an operating lease expiring December 2007.  We have monthly rental payments of $42,106 through December 2007.  In the event of a change of control, the monthly payments become $62,500.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Long-term debt decreased $1,000,000 to $0 as of September 30, 2005 compared to $1,000,000 as of December 31, 2004 due to the payoff of the debt.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Impact of Recently Issued Accounting Standards                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|SFAS No. 123R (Revised 2004), Share-Based Payment, will apply to awards we grant or modify after December 31, 2005.  We will also record compensation cost as required for prior option grants that vest after that date.  The effect of adopting SFAS 123R (Revised 2004) on our consolidated results of operations will depend on the level of future option grants and the fair value of the options granted at such future dates, as well as the vesting periods provided by such awards and, therefore, cannot currently be estimated.  Existing outstanding options will not result in additional compensation expense upon adoption of SFAS 123R since all outstanding options are fully vested.  There will be no significant effect on our consolidated financial position since total stockholders' equity will not be impacted.                                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|SFAS No. 151, Inventory Costs-an amendment of ARB No. 43, Chapter 4, will require that items such as idle facility expense, excessive spoilage, double freight, and rehandling costs be recognized as current period charges.  Additionally, Statement 151 will require that allocation of fixed production overheads to the costs of conversion be based on the normal capacity of the production facilities.  Effective April 21, 2005 the SEC extended the implementation date from the first interim period after June 15, 2005 to the first day of the fiscal year beginning after June 15, 2005.  Therefore, our implementation date will be January 1, 2006.  Our adoption of Statement 151 will have no significant impact on our consolidated financial statements.                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|SFAS No. 154 - Accounting Changes and Error Corrections - A Replacement of APB Opinion No. 20 and FASB Statement No. 3, replaces APB Opinion No. 20, Accounting Changes, and FASB Statement No. 3, Reporting Accounting Changes in Interim Financial Statements, and changes the requirements for the accounting for and reporting of a change in accounting principle. This Statement applies to all voluntary changes in accounting principle. It also applies to changes required by an accounting pronouncement in the unusual instance that the pronouncement does not include specific transition provisions. When a pronouncement includes specific transition provisions, those provisions should be followed.  This Statement carries forward without change the guidance contained in Opinion 20 for reporting the correction of an error in previously issued financial statements and a change in accounting estimate. This Statement also carries forward the guidance in Opinion 20 requiring justification of a change in accounting principle on the basis of preferability.
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Item 3: QUANTITATIVE and Qualitative Disclosures About Market Risk.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Fluctuating commodity prices affect market risk in our recycling segment.  We mitigate this risk by selling our product on a monthly contract basis.  Each month we negotiate selling prices for all commodities.  Based on these monthly agreements, we determine purchase prices based on a margin needed to cover processing and administrative expenses.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|We are exposed to interest rate risk on our floating rate borrowings. As of September 30, 2005, we had no outstanding variable rate borrowings under our credit agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|ITEM 4: CONTROLS AND PROCEDURES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|(a) Evaluation of disclosure controls and procedures.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Based on the evaluation of the ISA Chief Executive Officer and the ISA Chief Financial Officer of our disclosure controls and procedures as of September 30, 2005, it has been concluded that the disclosure controls and procedures are effective for the purposes contemplated by Rules 13a-15(e) and 15d - 15(e) promulgated by the Securities and Exchange Commission.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|(b) Changes in internal controls.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|There have been no significant changes to ISA's internal controls or in other factors that have materially affected, or are reasonably likely to materially affect, these controls over financial reporting subsequent to September 30, 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

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|PART II -- OTHER INFORMATION
|----------------------------
|                            
|Item 1.                     
|                            
|                            
|Item 1A.                    
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|                            
|Item 2.                     
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|                            
|Item 3.                     
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|                            
|Item 4.                     
|                            
|                            
|Item 5.                     
|                            
|                            
|Item 6.                     
|                            
|                            

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|SIGNATURES                                                                                                                                                                              
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                        
|Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
|                                                                                                                                                                                        
|                                                                                                                                                                                        
|                                                                                                                                                                                        
|                                                                                                                                                                                        
|DATE:  November 14, 2005                                                                                                                                                                
|                                                                                                                                                                                        
|                                                                                                                                                                                        
|                                                                                                                                                                                        
|DATE:  November 14, 2005                                                                                                                                                                

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INDEX TO EXHIBITSExhibit Number

Description of Exhibits31.1

Rule 13a-14(a) Certification of Harry Kletter for the Form 10-Q for the quarter ended September 30, 2005.31.2

Rule 13a-14(a) Certification of Alan Schroering for the Form 10-Q for the quarter ended September 30, 2005.32.1

18 U.S.C. Section 1350 -  Certifications of Harry Kletter and Alan Schroering for the Form 10-Q for the quarter ended September 30, 2005.


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