**UNITED
STATES**
 **SECURITIES
AND EXCHANGE COMMISSION**
 
 **Washington,
D.C. 20549**
 
  **FORM
10-Q**
 
  **QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934**
  **For
The Quarterly Period Ended March 31, 2005**
  Commission
File No. **001-31354**
 
 
 
 **IFT
      Corporation***(Exact
      name of Registrant as Specified in its
Charter)*
 
 **Delaware**
    
    **13-3545304***(State
      of Incorporation)*
    
    *(I.R.S.
      Employer Identification No.)***Quorum
      Business Center****718
      South Military Trail****Deerfield
      Beach, Florida**
    
    **33442***(Address
      of Principal Executive Offices)*
    
    *(Zip
      Code)*
 
 **(954)
428-7011**
 *(Registrant’s
Telephone Number)*
 
 Indicate
by check mark 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, and (2) has been subject to such filing requirements for
the past 90 days. Yes þ No o
  Indicate
by check mark whether the registrant is an accelerated filer (as defined in Rule
12b-2 of the Exchange Act). Yes o No þ
 
 Indicate
the number of shares outstanding of each of the issuer's classes of common
stock, as of the latest practicable date.
  As of May
12, 2005 there were 50,200,219 shares of Common Stock, par value $.01,
outstanding.
  
 
  **IFT
CORPORATION**
 **FORM
10-Q**
 **FOR
THE QUARTER ENDED MARCH 31, 2005**
 **INDEX**
 
 **Page****PART
      I**
    **FINANCIAL INFORMATION****Item
      1**
    **Financial Statements**
    **3****Item
      2**
    **Management’s Discussion and Analysis of Financial Condition
      and Results of Operations**
    **11****Item
      3**
    **Quantitative and Qualitative Disclosures About Market
      Risk**
    **14****Item
      4**
    **Controls and Procedures**
    **14****PART
      II**
    **OTHER INFORMATION****Item
      1**
    **Legal Proceedings**
    **15****Item
      2**
    **Unregistered Sales of Equity Securities and Use of
      Proceeds**
    **15****Item
      3**
    **Defaults Upon Senior
Securities**
    **15****Item
      4**
    **Submission of Matters to a Vote of Security
      Holders**
    **15****Item
      5**
    **Other Information**
    **15****Item
      6**
    **Exhibits**
    **15****SIGNATURES**
    **16****INDEX OF EXHIBITS**
    **17**
  2
  **PART I — FINANCIAL INFORMATION**
 
 **Item 1. Financial Statements**
 
 **IFT
CORPORATION**
 **INDEX
TO FINANCIAL STATEMENTS AND**
 **FINANCIAL
STATEMENT SCHEDULES**
  **Page****Condensed Consolidated Balance Sheets at March 31, 2005
      (Unaudited) and December 31, 2004**
    **4****Condensed Consolidated Statements of Operations for the
      Three Months Ended March 31, 2005 and 2004
      (Unaudited)**
    **5****Condensed Consolidated Statements of Cash Flows for the
      Three Months Ended March 31, 2005 and 2004
      (Unaudited)**
    **6****Notes to Condensed Consolidated Financial Statements
      (Unaudited)**
    **7**
  3
  **IFT CORPORATION**
 **CONDENSED
CONSOLIDATED BALANCE SHEETS**
 
 **March
      31,**
    
    **December
      31,****2005**
    
    **2004****(Unaudited)****ASSETS**Current
      Assets:Cash
    
    $
    121,746
    
    $
    24,903Accounts
      Receivable (Net of Allowance For Doubtful Accounts of $97,721 and $74,339
      at March 31, 2005 and December 31, 2004, respectively)
    
    
    2,553,443
    
    
    630,408Inventory
    
    
    578,777
    
    
    249,039Prepaid
      Expenses and Other Current Assets
    
    
    133,259
    
    
    41,053Total
      Current Assets
    
    
    3,387,225
    
    
    945,403Property,
      Plant and Equipment, Net
    
    
    352,202
    
    
    287,784Other
      Assets:Intangibles
    
    
    2,158,707
    
    
    774,000Deposits
      and Other Non-Current Assets
    
    
    53,571
    
    
    56,470Total
      Other Assets
    
    
    2,212,278
    
    
    830,470Total
      Assets
    
    $
    5,951,705
    
    $
    2,063,657**LIABILITIES
      AND STOCKHOLDERS’ (DEFICIT)**Current
      Liabilities:Accounts
      Payable and Accrued Expenses
    
    $
    3,468,598
    
    $
    1,654,820Lines
      of Credit
    
    
    658,136
    
    
    719,070Loans
      Payable - Related Party
    
    
    3,164,407
    
    
    5,670,000Current
      Maturities of Long-Term Debt
    
    
    18,776
    
    
    22,398Current
      Maturity of Long-Term Capital Lease
    
    
    2,217
    
    
    2,184Commitments
      and Contingencies
    
    
    1,475,367
    
    
    1,203,601Total
      Current Liabilities
    
    
    8,787,501
    
    
    9,272,073Long-Term
      Debt
    
    
    5,827
    
    
    11,284Long-Term
      Capitalized Lease
    
    
    2,342
    
    
    2,959Total
      Liabilities
    
    
    8,795,670
    
    
    9,286,316Stockholders’
      (Deficit):Preferred
      Stock, $1.00 Par Value; 2,000,000 Shares Authorized, of which
      Designations:Series
      A Convertible, 750,000 Shares Authorized; 62,500 Issued and Outstanding atMarch
      31, 2005 and December 31, 2004; aggregate liquidation preference at March31,
      2005 and December 31, 2004 of $62,500
    
    
    55,035
    
    
    55,035Common
      Stock, $.01 Par Value; 60,000,000 Shares Authorized; 50,200,219 and
      32,014,369 Issued and Outstanding at March 31, 2005 and December 31, 2004,
      Respectively
    
    
    502,002
    
    
    320,14359,445,554
    
    
    53,625,390Accumulated
      (Deficit)
    
    
    (62,846,556
    )
    
    (61,223,227
    )Total
      Stockholders’ (Deficit)
    
    
    (2,843,965
    )
    
    (7,222,659
    )Total
      Liabilities and Stockholders’ (Deficit)
    
    $
    5,951,705
    
    $
    2,063,657
 
 See
accompanying notes to condensed consolidated financial
statements.
  4
  **IFT CORPORATION**
 **CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS**
 **(UNAUDITED)**
  **Three
      Months Ended****March
      31,**
    
    **March
      31,****2005**
    
    **2004**Revenue:Coatings,
      Sealants and Other Products
    
    $
    2,457,653
    
    $
    460,897Total
      Revenue
    
    
    2,457,653
    
    
    460,897Cost
      of Sales:Coatings,
      Sealants and Other Products
    
    
    2,072,230
    
    
    342,675Warranty
      Costs, Freight and Other Cost of Sales
    
    
    31,872
    
    
    7,848Total
      Cost of Sales
    
    
    2,104,102
    
    
    350,523Gross
      Profit
    
    
    353,551
    
    
    110,374Operating
      Expenses:Selling,
      General and Administrative
    
    
    1,238,971
    
    
    527,952Professional
      Fees
    
    
    266,495
    
    
    114,147Depreciation
      and Amortization
    
    
    26,435
    
    
    20,370Consulting
      Fees
    
    
    61,382
    
    
    10,213Interest
      Expense
    
    
    56,491
    
    
    43,301Total
      Operating Expenses
    
    
    1,649,774
    
    
    715,984Operating
      (Loss)
    
    
    (1,296,223
    )
    
    (605,610
    )(Loss)
      From Discontinued Operations
    
    
    (327,105
    )
    
    (1,084,929
    )Net
      (Loss)
    
    $
    (1,623,328
    )
    $
    (1,690,539
    )Net
      (Loss) Per Common Share-Basic and Diluted:Continuing
      Operations
    
    $
    (0.026
    )
    $
    (0.021
    )Discontinued
      Operations
    
    
    (0.007
    )
    
    (0.038
    )Total
    
    $
    (0.033
    )
    $
    (0.059
    )Weighted
      Average Shares Outstanding
    
    
    49,792,164
    
    
    28,833,543
  See
accompanying notes to condensed consolidated financial
statements
  5
  **IFT CORPORATION**
 **CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS**
 **(UNAUDITED)**
  **Three
      Months Ended****March
      31,**
    
    **March
      31,****2005**
    
    **2004**CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      (Loss)Continuing
      Operations
    
    $
    (1,296,223
    )
    $
    (605,610
    )Discontinued
      Operations
    
    
    (327,105
    )
    
    (1,084,929
    )Adjustments
      to Reconcile Net (Loss) to Net Cash Provided (Used) by Operating
      Activities:Depreciation
      and Amortization
    
    
    26,434
    
    
    20,370(Increase)
      Decrease In Operating Assets:Accounts
      Receivable
    
    
    (410,824
    )
    
    39,579Notes
      Receivable
    
    
    ---
    
    
    15,936Inventory
    
    
    (18,167
    )
    
    19,906Prepaid
      Expenses & Other Current Assets
    
    
    (81,832
    )
    
    (326,316
    )Increase
      (Decrease) In Operating Liabilities:Accounts
      Payable and Accrued Expenses
    
    
    748,244
    
    
    591,037Accounts
      Payable and Accrued Expenses - Related Party
    
    
    39,914
    
    
    ---Commitments
      and Contingencies
    
    
    (271,766
    )
    
    ---Net
      Cash (Used) In Operating Activities
    
    
    (1,047,793
    )
    
    (1,330,027
    )CASH
      FLOWS FROM INVESTING ACTIVITIES:(Acquisition)
      of Machinery and Equipment
    
    $
    (45,610
    )
    $
    24,549(Acquisition)
      of Business Entity
    
    
    (2,000,000
    )
    
    ---Dispositions
      of Deposits and Other Non Current Assets
    
    
    5,168
    
    
    38,543Net
      Cash Provided (Used) by Investing Activities
    
    
    (2,040,442
    )
    
    63,092CASH
      FLOWS FROM FINANCING ACTIVITIES:Proceeds
      from Notes Payable - Related Party
    
    
    3,187,500
    
    
    1,370,000Proceeds
      from Notes and Lines of Credit
    
    
    1,038
    
    
    3,875(Payments)
      of Notes and Lines of Credit
    
    
    (61,973
    )
    
    (17,824
    )(Payments)
      of Capital Lease Obligations
    
    
    (584
    )
    
    (357
    )(Payments)
      of Long Term Debt
    
    
    (9,079
    )
    
    ---Net
      Cash Provided By Financing Activities
    
    $
    3,116,902
    
    $
    1,355,694Net
      Increase In Cash
    
    
    28,667
    
    
    88,759Cash
      at Beginning of Period
    
    
    93,079
    
    
    42,718Cash
      at End of Period
    
    $
    121,746
    
    $
    131,477Supplemental
      Disclosure of Cash Flow Information:Cash
      Payments for Income Taxes
    
    $
    ---
    
    $
    ---Cash
      Payments for Interest
    
    $
    17,841
    
    $
    32,641Non-Cash
      Investing Activities:Machinery
      and Equipment acquired via Capital Lease Obligation
    
    $
    ---
    
    $
    7,200Non-Cash
      Financing Activities:Issuance
      of Common Stock Pursuant to Employment Agreements
    
    
    2,000
    
    
    6,370Issuance
      of Common Stock for Acquisition of Business Entity
    
    
    22
    
    
    ---Issuance
      of Common Stock for Cancellation of Indebtedness
    
    
    6,000,000
    
    
    ---Total
      Non-Cash Financing Activities
    
    $
    6,002,022
    
    $
    6,370
  See
accompanying notes to condensed consolidated financial
statements.
  6
  **IFT CORPORATION**
 **NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **(UNAUDITED)**
 
 
 **Note
      1.**
    **Basis
      of Presentation.**
 
 In the
opinion of management, the accompanying unaudited condensed consolidated
financial statements have been prepared by IFT Corporation (the “Company") in
accordance with accounting principles generally accepted in the United States of
America for interim financial information and with the instructions to Form 10-Q
and Article 10 of Regulation S-X. Certain information and footnote disclosures
normally included in annual financial statements prepared in accordance with
accounting principles generally accepted in the United States have been
condensed or omitted pursuant to those rules and regulations. However,
management believes that the disclosures contained herein are adequate to make
the information presented not misleading. The financial statements reflect, in
the opinion of management, all material adjustments (which include only normal
recurring adjustments) necessary to present fairly the Company’s financial
position and results of operations. The results of operations and cash flows for
the three months ended March 31, 2005 are not necessarily indicative of the
results of operations or cash flows, which may result for the remainder of 2005.
The accompanying unaudited condensed consolidated financial statements should be
read in conjunction with the audited consolidated financial statements and notes
thereto included in the Company’s Annual Report on Form 10-K for the year ended
December 31, 2004, including any amendments thereto, as filed with the
Securities and Exchange Commission. Certain amounts in the prior years have been
reclassified to conform to the 2005 unaudited condensed consolidated financial
statement presentation.
 
 **Note
      2.**
    **Going
      Concern.**
 
 While the
accompanying unaudited condensed consolidated financial statements have been
prepared on a going concern basis, which contemplates the realization of assets
and liquidation of liabilities during the normal course of operations, certain
adverse conditions and events cast substantial doubt upon the validity of this
assumption. The Company has experienced significant recurring operational losses
and negative cash flows from operations, and at March 31, 2005 has an
accumulated deficit, net of dividends, of $62,846,556, a working capital deficit
of $5,400,276 and its total liabilities exceeded its total assets by $2,843,965.
These factors raise doubt about the Company’s ability to continue as a going
concern. The Company has relied principally on non-operational sources of
financing, mainly from Richard J. Kurtz, Chairman of the Board (“Chairman”), to
fund its operations over the past six years ( ***See*** Note 7 - Cancellation of Indebtedness). Although the Company has no formal
commitment from the Chairman to fund the Company’s operating requirements for
the year ended December 31, 2005, the Company has received loans, during the
period January 1, 2005 through March 31, 2005, aggregating $3,187,500 from the
Chairman, of which $2,000,000 was for the acquisition of Lapolla Industries,
Inc. on February 11, 2005, and the remaining $1,187,500 for operational costs
during the first quarter. The Company’s ability to continue as a going concern
will be dependent on management’s ability to successfully execute its business
plan, which includes increasing revenues while decreasing operating costs and
expenses, as well as, increasing operational cash flow, continued funding of the
Company’s operations by the Chairman, and obtaining additional funding from
private placements of debt and/or equity securities. If management in
unsuccessful is obtaining one or more of the above mentioned goals, the
Company’s ability to continue as a going concern would be adversely impacted.
These financial statements do not include adjustments or disclosures that may
result from the Company’s inability to continue as a going concern.
 
 **Note
      3.**
    **Inventories.**
 
 Inventory
was comprised of the following:
 
 **March
      31, 2005**
    
    **December
      31, 2004**Raw
      Materials
    
    $
    154,682
    
    $
    1,257Finished
      Goods
    
    
    424,095
    
    
    187,781Total
    
    $
    578,777
    
    $
    249,039
 
 **Note
      4.**
    **Acquisition**
 
 On
January 25, 2005, the Company entered into a Stock Purchase Agreement with
LaPolla Industries, Inc., an privately held Arizona corporation and Billi Jo
Hagan, Trustee of the Billi Jo Hagan Trust, Dated October 6, 2003, wherein the
Company agreed to pay $2 Million in cash and issue thirty four shares of
restricted common stock in exchange for 100% of the issued and outstanding
capital stock of LaPolla with a closing scheduled on or before February 28,
2005. On February 11, 2005, the parties entered into an Amendment to Stock
Purchase Agreement and Closing Statement to close the transaction in accordance
with the terms of the Agreement, as amended. LaPolla is located in Tempe,
Arizona and has 10 employees. LaPolla has provided quality products and roofing
solutions to contractors, building owners and design professionals in the
Southwestern United States for over 20 years. The basic assets of LaPolla
include manufacturing equipment, product formulations, raw material and finished
goods inventory, long term employees, customers and vendors, office equipment,
accounts receivable, and goodwill.
  7
  **IFT
CORPORATION**
 **NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **(UNAUDITED-
CONTINUED)**
 
 The
unaudited pro forma statements of operations for the quarter ended March 31,
2005 gives effect to the acquisition by IFT of LaPolla Industries as if it had
occurred on January 1, 2005. The columns headed "LaPolla Industries" in the
below table gives effect to the revenues and expenses related to the acquisition
for the periods indicated and was not included in our historical financial
statements. The purchase was accounted for by using the purchase method of
accounting.
 
 **UNAUDITED
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS**
 **(UNAUDITED)**
 
 **IFT
      Corporation**
      **Quarter
      Ending**
      **March
      31, 2005**
    
    **LaPolla
      Industries**
      **Period
      From**
      **1/1/05
      to 2/10/05**
    
    **LaPolla
      Industries**
      **Period
      From**
      **2/11/05
      to 3/31/05**
    
    **Consolidated**
      **Pro
      Forma**
      **Income
      (Loss)**
      **March
      31, 2005**Revenues
    
    $
    799,815
    
    $
    777,166
    
    $
    1,657,838
    
    $
    3,234,819Cost
      of Goods Sold
    
    
    569,706
    
    
    615,862
    
    
    1,534,395
    
    
    2,719,963Gross
      Profit
    
    
    230,109
    
    
    161,304
    
    
    123,443
    
    
    514,856Operating
      Expenses
    
    
    1,027,009
    
    
    326,402
    
    
    566,275
    
    
    1,919,686Net
      (Loss) before Other Income (Expenses) and Provision for Income
      Taxes
    
    
    (796,900
    )
    
    (165,098
    )
    
    (442,832
    )
    
    (1,404,830
    )Other
      Income (Expense)
    
    
    (52,006
    )
    
    15,603
    
    
    (4,485
    )
    
    (40,888
    )Net
      (Loss) before Provision for Income Taxes
    
    
    (848,906
    )
    
    (149,495
    )
    
    (447,317
    )
    
    (1,445,718
    )Provision
      for Income Taxes (Benefit)
    
    
    ---
    
    
    ---
    
    
    ---
    
    
    ---Net
      (Loss) - Continuing Operations
    
    
    (848,906
    )
    
    (149,495
    )
    
    (447,317
    )
    
    (1,445,718
    )Net
      (Loss) - Discontinued Operations
    
    
    (327,105
    )
    
    ---
    
    
    ---
    
    
    (12,105
    )Net
      (Loss) - Total
    
    $
    (1,176,011
    )
    $
    (149,495
    )
    $
    (447,317
    )
    $
    (1,457,823
    )
 
 *The
total proceeds paid for LaPolla was $2,000,022 in cash and restricted common
stock. The goodwill recognized from the acquisition was $1,384,707, which is the
difference between the purchase price and the net assets of LaPolla of $615,315.
 
 **Note
      5.**
    **Lines
      of Credit.**
 
 Lines of
credit were comprised of the following:
 
 **March
      31, 2005**
    
    **December
      31, 2004**$180,000
      Line of Credit, maturing December 31, 2005, bears interest at prime plus
      1% per annum, secured by all the assets of Infiniti Products, Inc. and a
      personal guarantee from the Chairman of the Board.
    
    $
    158,218
    
    $
    219,152$500,000
      Line of Credit, maturing June 30, 2005, bears interest at prime plus 2%
      per annum, secured by all of the assets of IFT Corporation and the
      Chairman of the Board as a co-borrower.
    
    
    499,918
    
    
    499,918Total
    
    $
    658,136
    
    $
    719,070
 
 **Note
      6.**
    **Loans
      Payable - Related Party.**
 
 Loans
payable - related party is comprised of funds loaned to the Company, for working
capital and other corporate purposes, from the Chairman. These loans are payable
upon demand, unsecured and bear interest at 9% per annum. During the period from
January 1, 2005 to March 31, 2005 the Chairman loaned the Company funds
aggregating $3,187,500, of which $2,000,000 was used for the acquisition of
Lapolla Industries, Inc. on February 11, 2005, and the remaining $1,187,500 for
operational costs during the first quarter.
 
 **Note
      7.**
    **Cancellation
      of Indebtedness**
 
 On
January 4, 2005, the Company issued 18,181,818 shares of restricted common stock
to the Chairman of the Board, in exchange for his cancellation of $6,000,000 of
indebtedness represented by short term loans bearing interest at 9% per annum,
which were advanced to the Company and its subsidiaries for working capital and
other corporate purposes. The price per share used to determine the number of
shares of restricted common stock for this transaction was 110% of the closing
price of the Company’s common stock as traded on the American Stock Exchange on
January 4, 2005 or $ .33 per share.
  8
  **IFT
CORPORATION**
 **NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **(UNAUDITED
- CONTINUED)**
 
 **Note
      8.**
    **Net
      Loss Per Common Share - Basic and
Diluted.**
 
 The
following table reflects the computation of the basic and diluted net loss per
common share:
 
 **Three
      Months Ended March 31,****2005**
    
    **2004****Per
      Share**
    
    
    
    **Per
      Share****Amount**
    
    **Amount**
    
    **Amount**
    
    **Amount**Operating
      (Loss)
    
    $
    (1,623,328
    )
    $
    (0.033
    )
    $
    (1,690,539
    )
    $
    (0.059
    )(Loss)
      Available To Common Stockholders’
    
    
    (1,623,328
    )
    
    (0.033
    )
    
    (1,690,539
    )
    
    (0.059
    )Net
      (Loss)
    
    $
    (1,623,328
    )
    $
    (0.033
    )
    $
    (1,690,539
    )
    $
    (0.059
    )Weighted
      Average Common Shares Outstanding
    
    
    49,792,164
    
    
    
    
    
    28,833,543
 
 Basic and
diluted net loss per common share are the same since (a) the Company has
reflected net losses from continuing operations for all periods presented and
(b) the potential common shares of the Company would be
anti-dilutive.
 
 **Note
      9.**
    **Discontinued
      Operations**
 
 On
November 5, 2004, the Company discontinued the operations of its RSM
Technologies, Inc. business. RSM Technologies, Inc. consisted of two products
lines: Application Systems and Coatings. The consolidated financial statements
and the related notes contained herein have been recast to reflect the financial
position, results of operations and cash flows of RSM Technologies, Inc. as a
discontinued operation.
 
 **Note
      10.**
    **Business
      Segment Information.**
 
 Statement
of Financial Accounting Standards No. 131, “Disclosures about Segments of an
Enterprise and Related information,” requires disclosure of net profit or loss,
certain specific revenue and expense items and certain asset items by reportable
segments and how reportable segments are determined. This statement defines a
reportable segment as a component of an entity about which separate financial
information is produced internally, that is evaluated by the chief
decision-maker to assess performance and allocate resources.
 
 Effective
January 1, 2005, the Company determined that it had three distinct business
segments. These three business segments were defined as Corporate, Infiniti
Products and LaPolla Products. On November 5, 2004, the Company discontinued the
operations of its RSM Technologies, Inc. subsidiary and, therefore, the RSM
Products business segment has been eliminated. The business segment financial
data reflected in the table below was derived from the Company’s condensed
consolidated financial position and condensed consolidated results of operations
as follows:
  (i)
    Corporate
      was derived from the financial data of IFT
Corporation;
 (ii)
    Infiniti
      Products was derived from the financial data of Infiniti Products,
      Inc.
 (iii)
    LaPolla
      Products was derived from the financial data of LaPolla Industries,
      Inc.
 
 The
following table reflects certain business segment financial data as of and for
the three months ended March 31, 2005:
 
 **Corporate**
    
    **Infiniti
      Products**
    
    **LaPolla
      Products**
    
    **Total**Revenue
    
    $
    ---
    
    $
    799,815
    
    $
    1,657,838
    
    $
    2,457,653Gross
      Profit
    
    $
    ---
    
    $
    230,108
    
    $
    123,443
    
    $
    353,551Operating
      (Loss)
    
    $
    (663,407
    )
    $
    (185,499
    )
    $
    (447,317
    )
    $
    (1,296,223
    )Capital
      Expenditures (Net of Capital Leases)
    
    $
    10,764
    
    $
    25,104
    
    $
    9,742
    
    $
    45,610Depreciation
      and Amortization Expense
    
    $
    17,703
    
    $
    6,656
    
    $
    2,076
    
    $
    26,435Identifiable
      Assets
    
    $
    2,388,775
    
    $
    1,176,506
    
    $
    2,386,424
    
    $
    5,951,705
 
 The table
above does not include any financial data relating to the discontinued RSM
Products business segment, which is reported as discontinued operations in the
Company’s financial statements. ***See*** Note 9 -
Discontinued Operations .
  9
  **IFT
CORPORATION**
 **NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **(UNAUDITED
- CONTINUED)**
 
 **Note
      11.**
    **Commitments
      and Contingencies.**
 
 **Reserve**
 
 The
following is a summary of the reserve established for commitments and
contingencies:
 
 **March
      31, 2005**
    
    **December
      31, 2004**Accounts
      Payable and Accrued Expenses for Discontinued Operations
    
    $
    620,367
    
    $
    663,601Reserve
      for Litigation
    
    
    855,000
    
    
    540,000Total
    
    $
    1,475,367
    
    $
    1,203,601
 
 The
Company is involved in various lawsuits and claims arising in the ordinary
course of business.
 
 **Note
      12.**
    **Subsequent
      Events.**
 
 *Merger
of Infiniti Products, Inc. and LaPolla Industries, Inc.*
 
 Effective
April 1, 2005, Infiniti Products, Inc., a Florida corporation, merged with and
into LaPolla Industries, Inc., an Arizona corporation, whereupon the separate
existence of Infiniti Products, Inc. ceased and LaPolla Industries, Inc.
continued as the surviving corporation.
 
 **Item 2.**
    **Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations.**
 
 **Management’s
Discussion and Analysis of Financial Condition and Results of Operations for the
Three Months Ended March 31, 2005**
 
 As used
in this report, "IFT." and the "Company" or "Us" or "We" or “Our” refer to IFT
Corporation and its subsidiaries, unless the context otherwise requires. The
financial review below present our operating results for the three months ended
March 31, 2005 and March 31, 2004, and our financial condition at March 31,
2005. Except for the historical information contained herein, the following
discussion contains forward-looking statements, which are subject to known and
unknown risks, uncertainties and other factors that may cause our actual results
to differ materially from those expressed or implied by such forward-looking
statements. We discuss such risks, uncertainties and other factors throughout
this report and specifically under the caption “Forward Looking Statements”
below. In addition, the following review should be read in connection with the
information presented in our unaudited condensed consolidated financial
statements and related notes for the three months ended March 31,
2005.
 
 *Overview*
 
 We are a
publicly traded holding company focused on acquiring and developing companies
that operate in the coatings, paints, foams, sealants, and adhesives markets. We
operated two wholly-owned subsidiaries, Infiniti Products, Inc. (“Infiniti”) and
LaPolla Industries, Inc. (“LaPolla”) in the first quarter of 2005.
 
 Infiniti
markets, sells, manufactures and distributes acrylic roof coatings, roof paints,
sealers, and roofing adhesives to the home improvement retail and polyurethane
foam systems to the industrial/commercial construction industries (“Infiniti
Products”).
 
 We
acquired 100% of the capital stock of LaPolla on February 11, 2005 for $2
Million in cash and thirty four shares of restricted common stock. LaPolla
markets, sells, manufactures and distributes acrylic roof coatings, sealers, and
polyurethane foam systems to the industrial/commercial construction industries
(“LaPolla Products”).
 
 LaPolla
is located in Tempe, Arizona and has 10 employees. LaPolla has provided quality
products and roofing solutions to contractors, building owners and design
professionals in the Southwestern United States for over 20 years. The basic
assets of LaPolla include manufacturing equipment, product formulations, raw
material and finished goods inventory, long term employees, customers, vendors,
office equipment, accounts receivable, and goodwill.
  10
  On
November 5, 2004, pursuant to resolution of the Board of Directors, we
discontinued the operations of our RSM Technologies, Inc. subsidiary. Our
condensed consolidated financial statements and related notes have been recast
to reflect the financial position, results of operations and cash flows of RSM
Technologies, Inc. as a discontinued operation.
 
 We
operated our business on the basis of three reportable segments, which we refer
to as Corporate, Infiniti Products and LaPolla Products, during the first
quarter of 2005. Lapolla Products and Infiniti Products are collectively
referred to as “Coatings, Sealants and Other Products” in our condensed
consolidated financial statements.
 
 **Results
of Operations**
 ****
 **Three
Months Ended March 31, 2005 as Compared to the Three Months Ended March 31,
2004**
 
 ***Revenues***
 
 The
following is a summary of our revenue:
  **Three
      Months Ended****March
      31, 2005**
    
    **March
      31, 2004**Revenue:Coatings,
      Sealants and Other Products
    
    $
    2,457,653
    
    $
    460,897Total
      Revenue
    
    $
    2,457,653
    
    $
    460,897
 
 
 We
recognized revenue for the three months ended March 31, 2005 of $2,457,653 as
compared to $460,897 for the three months ended March 31, 2004, which represents
an increase of $1,996,756. The revenue generated from the sale of Coatings,
Sealants and Other Products represents 100% of total revenue, respectively, for
the three months ended March 31, 2005 and March 31, 2004. The increase in
revenue of $1,996,756 is primarily attributable to: (a) the acquisition of
Lapolla Industries, Inc. on February 11, 2005, which had revenue totaling
$1,657,838 for the interim period February 11, 2005 through March 31, 2005, and
(b) Infiniti Products revenue totaling $799,815 for the three months ended March
31, 2005, as compared to $460,897 for the three months ended March 31,
2004.
 
 ***Cost
of Sales***
 
 Our cost
of sales for the three months ended March 31, 2005 was $2,104,102 as compared to
$350,523 for the three months ended March 31, 2004. The cost of sales as a
percentage of our revenue for Coatings, Sealants and Other Products was
86% **** for the
three months ended March 31, 2005 as compared to 76% for the three months ended
March 31, 2004. The
increase in the total cost of sales of $1,753,579 was primarily attributable to:
(a) the acquisition of Lapolla Products, of which $1,534,395 was the cost of
sales for the period February 11, 2005 through March 31, 2005, and (b) the cost
of sales for Infiniti Products increased $219,183 from $350,222 for the three
months ended March 31, 2004 as compared to $569,706 for the three months ended
March 31, 2005. Infiniti Products cost of sales as a percentage of revenue for
Coatings, Sealants and Other Products was 71% and 76%, respectively, as of March
31, 2005 and March 31, 2004. This decrease in cost of sales as a percentage of
revenue (increase in gross profit) is attributable to price increases to
Infiniti Products customers based on supply and demand in the marketplace.
Lapolla Products cost of sales as a percentage of revenue for Coatings, Sealants
and Other Products was 93% for the three months ended March 31, 2005. This high
percentage was mainly attributable to former unprofitable customers, for which
we have either increased selling prices or eliminated from our customer
base.
 
 ***Operating
Expenses***
 
 *Selling,
General and Administrative Expenses*
 
 Our
selling, general and administrative expenses for the three months ended March
31, 2005 was $1,238,971 as compared to $527,952 for the three months ended March
31, 2004. The increase of $711,019 is primarily attributable to (a) the
acquisition of Lapolla Products, including the additional operating overhead
absorbed from the new location in Tempe, Arizona, (b) the addition of a new
sales and marketing team, which attributed to the rise in our sales during the
first quarter of 2005, (c) design and printing of marketing materials, (d)
attendance at two of the largest trade shows specific to the roof coating
industry, (e) additional travel expenses to obtain new and maintain existing
customers, and (f) opening a new sales and marketing office in
Texas.
  11
  *Professional
Fees*
 
 Our
professional fees for the three months ended March 31, 2005 were $266,495 as
compared to $114,147 for the three months ended March 31, 2004. The increase of
$152,348 is primarily attributable to attorney’s fees associated with past and
current litigation, as well as auditing and accounting fees associated with the
acquisition of Lapolla Products.
  *Depreciation
and Amortization*
 
 For the
three months ended March 31, 2005, our depreciation and amortization expense was
$26,435 as compared to $20,370 for the three months ended March 31, 2004. The
increase of $6,065 is primarily attributable to the acquisition of Lapolla
Products, which resulted in the purchase of additional assets and machinery and
equipment.
  *Research
and Development*
 
 We did
not incur any research and development costs in the three months ended March 31,
2005 or March 31, 2004.
  *Consulting
Fees*
 
 Our
consulting fees for the three months ended March 31, 2005 were $61,382 as
compared to $10,213 for the three months ended March 31, 2004. The increase of
$51,169 is primarily attributable to an increase in the number and type of
consultants engaged to provide business and financial consulting services for
us.
  *Interest
Expense*
 
 For the
three months ended March 31, 2005, our interest expense was $56,491 as compared
to $43,301 for the three months ended March 31, 2004. The increase of $13,190 is
primarily attributable to the interest incurred on the $3,164,407 of loans
payable - related party originated during the quarter ended March 31, 2005.
These loans are payable to the Chairman and bear interest at 9% per
annum.
 
 *Discontinued
Operations*
 
 The loss
from discontinued operations for the three months ended March 31, 2005 reflects
a $327,105 loss from our discontinued RSM Products business segment as compared
to $1,084,929 for the three months ended March 31, 2004. The $327,105 loss for
the three months ended March 31, 2005 is primarily attributable to an increase
in our commitments and contingencies related to the discontinued operations in
2004.
 
 **Financial
Condition, Liquidity and Capital Resources**
 
 We assess
our liquidity by our ability to generate cash to fund our operations.
Significant factors in the management of liquidity are: funds
generated by operations; levels of accounts receivable, inventories, accounts
payable and capital expenditures; funds required for acquisitions; adequate
credit facilities; and financial flexibility to attract long-term capital on
satisfactory terms. Historically, we have generated insufficient cash from
operations to meet our working capital requirements and have relied principally
on related party funding from our Chairman over the past six years and outside
investors to meet our working capital and other corporate needs. With the
discontinuation of our RSM Products business segment, increased focus on our
Infiniti Products and acquisition of LaPolla Products, in conjunction with our
retention of additional sales and marketing personnel, we are getting closer to
generating enough cash from our operations to meet and exceed our working
capital requirements. We were required to expend certain funds during the first
quarter to enhance our infrastructure to be able to effectively manage the
growth surge we are presently experiencing in our revenue, which included
attracting and retaining new executives, supplementing our existing sales and
marketing team with additional sales and marketing personnel, integrating our
LaPolla Products acquisition, creating sales, marketing and promotional
materials, rolling out our LaPolla Products in national trade shows, and
satisfying non-recurring liabilities related to our discontinued RSM Products
business.
 
 We had
$121,746 of cash on hand at March 31, 2005 as compared to $131,477 at December
31, 2004, which represents a decrease of $10,001. During the three months ended
March 31, 2005, our working capital deficit decreased $2,926,394 from a deficit
of $8,326,670 as of December 31, 2004 to a deficit of $5,400,274 as of March 31,
2005. This decrease in the working capital deficit was primarily attributable to
a decrease of $2,505,592 in monies due to the Chairman resulting from debt
cancellation, a $1,813,777 increase in accounts payable and accrued expenses, a
$1,923,035 increase in net accounts receivable, an increase in inventory of
$329,738, a $60,934 decrease in the line of credit, an increase of $92,206 in
prepaid expenses and other current assets, and an increase in commitments and
contingencies.
  12
  For the
three months ending March 31, 2005, the net cash used for operating and
investing activities was $1,047,793 and $2,040,442, respectively, and net cash
provided by financing activities was $3,116,902 compared to the net cash used
for operating activities of $1,330,027, and net cash provided by investing and
financing activities of $63,092 and $1,355,694, respectively, for the three
months ending in March 31, 2004.
 
 The net
cash used for operating activities for the three months ended March 31,
2005 was $1,047,793 compared to cash used of $1,330,027 for the three months
ended March 31, 2004. The decrease in net cash used for operating
activities of $282,234 was primarily due to a decrease in prepaid expenses and
other current assets and an increase in accounts payable and accrued expenses,
and was offset by an increase in accounts receivable and commitments and
contingencies.
 
 The net
cash used for investing activities for the three months ended March 31, 2005 was
$2,040,442 compared to the net cash provided by investing activities of $63,092
for the three months ended March 31, 2004. This increase in net cash used for
investing activities of $2,103,534 was primarily attributable to our investment
in Lapolla for $2,000,000 in cash, a decrease in deposits and other non current
assets, and was offset by an increase in acquisition of machinery and
equipment.
 
 The net
cash provided by financing activities for the three months ended March 31, 2005
was $3,116,902 compared to the cash provided of $1,335,694 for the three months
ended March 31, 2004. The increase in net cash provided from financing
activities of $1,761,208 was attributable to an increase in funding received by
the Chairman for the purchase of Lapolla, an increase in the payments made on
notes and lines of credit, and an increase on payments made on long term
debt.
 
 We
believe that our net cash received from operating activities will soon outpace
our net cash used for operating activities. We will continue to require
supplemental funds as necessary from borrowings from our Chairman or other
alternative sources of funding to the extent available, such as private
placements of debt and/or equity securities, to have sufficient resources to
meet our working capital requirements and other cash needs over the next year
until we become self sufficient with the cash received from our operating
activities. Although no formal commitment has been received from the Chairman,
he has continually provided us with the required funds to continue our
operations to date. There can be no assurance that the Chairman will continue to
provide us funds or that any alternative sources of financing will be available
to us at such point in time, or if obtainable, on terms that are commercially
feasible.
 
 **Going
Concern**
 
 While our
unaudited condensed consolidated financial statements have been prepared on a
going concern basis, which contemplates the realization of assets and
liquidation of liabilities during the normal course of operations, certain
adverse conditions and events cast substantial doubt upon the validity of this
assumption.  Factors contributing to this substantial doubt include
recurring losses from operations and net working capital deficiencies. As
mentioned in the Financial Condition, Liquidity and Capital Resources section
above, we are currently dependent on funding from the Chairman to continue our
operations, although such dependence is decreasing based on our increase in
revenues and profit margins.  The discontinuance of such funding, and the
unavailability of financing to replace such funding, could result in the Company
ceasing operations.
  
 **Forward
Looking Statements**
 
 Statements
made by us in this report and in other reports and statements released by us
that are not historical facts constitute “forward-looking statements” within the
meaning of Section 27A of the Securities Act of 1933, Section 21 of
the Securities Exchange Act of 1934 and the Private Securities Litigation Reform
Act of 1995. These forward-looking statements are necessarily estimates
reflecting the best judgment of senior management and express our opinions about
trends and factors which may impact future operating results. You can identify
these and other forward-looking statements by the use of words such as “may,”
“will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,”
“predicts,” “intends,” “potential,” “continue,” or the negative of such terms,
or other comparable terminology. Such statements rely on a number of assumptions
concerning future events, many of which are outside of our control, and involve
risks and uncertainties that could cause actual results to differ materially
from opinions and expectations. Any such forward-looking statements, whether
made in this report or elsewhere, should be considered in context with the
various disclosures made by us about our businesses including, without
limitation, the risk factors discussed below. Although we believe our
expectations are based on reasonable assumptions, judgments, and estimates,
forward-looking statements involve known and unknown risks, uncertainties,
contingencies, and other factors that could cause our or our industry's actual
results, level of activity, performance or achievement to differ materially from
those discussed in or implied by any forward-looking statements made by or on
the Company and could cause our financial condition, results of operations, or
cash flows to be materially adversely affected. In evaluating these statements,
some of the factors that you should consider include the following:
 
 (a)
    Financial
      position and results of operations, including general and administrative
      expense targets and effects on income from continuing
      operations;
 (b)
    Cash
      position and cash requirements, including the sufficiency of our cash
      requirements for the next twelve months;
 (c)
    Sales
      and margins;
    13
  (d)
    Sources,
      amounts, and concentration of revenue;
 (e)
    Costs
      and expenses;
 (f)
    Accounting
      estimates, including treatment of goodwill and intangible assets, doubtful
      accounts, inventory, restructuring, and warranty, and product
      returns;
 (g)
    Operations,
      supply chain, quality control, and manufacturing supply, capacity, and
      facilities;
 (h)
    Products
      and services, price of products, product lines, and product and sales
      channel mix;
 (i)
    Relationship
      with customers, suppliers and strategic
partners;
 (j)
    Raw
      material variations, substrate preparation, application specifications,
      operator techniques, and ambient weather
fluctuations;
 (k)
    Acquisition
      and disposition activity;
 (l)
    Credit
      facility and ability to raise capital;
 (m)
    Real
      estate lease arrangements;
 (n)
    Global
      economic, social, and geopolitical
conditions;
 (o)
    Industry
      trends and our response to these trends;
 (p)
    Tax
      position and audits;
 (q)
    Cost-reduction
      efforts, including workforce reductions, and the effect on
      employees;
 (r)
    Sources
      of competition;
 (s)
    Protection
      of intellectual property;
 (t)
    Outcome
      and effect of current and potential future
litigation;
 (u)
    Research
      and development efforts;
 (v)
    Future
      lease obligations and other commitments and
liabilities;
 (w)
    Common
      stock, including trading price;
 (x)
    Security
      of computer systems; and
 (y)
    Changes
      in accounting policies and practices, as may be adopted by regulatory
      agencies, and the Financial Accounting Standards
Board.
 
 We do not
plan to update any such forward-looking statements and expressly disclaim any
duty to update the information contained in this report except as required by
law.
 
 **Item 3.**
    **Quantitative
      and Qualitative Disclosures About Market
Risk.**
 
 We do not
issue or invest in financial instruments or their derivatives for trading or
speculative purposes and are not subject to material foreign currency exchange
risks at this time. Our outstanding debt and related interest expense, as it
relates to interest rate exposure, in the United States is currently not
material to our operations.
  **Item 4.**
    **Controls
      and Procedures.**
 
 We
maintain disclosure controls and procedures that are designed to ensure that
information required to be disclosed in our Exchange Act reports is recorded,
processed, summarized and reported within the time periods specified in the
Securities and Exchange Commission’s rules and forms, and that such information
is accumulated and communicated to our management, including our Principal
Executive Officer and our Principal Financial Officer, as appropriate, to allow
timely decisions regarding required disclosures. Our management, including our
Principal Executive Officer and our Principal Financial Officer, does not expect
that our disclosure controls or procedures will prevent all error and all fraud.
A control system, no matter how well conceived and operated, can provide only
reasonable, not absolute, assurance that the objectives of the control system
are met. Further, the benefits of controls must be considered relative to their
costs. Because of the inherent limitations in all control systems, no evaluation
of controls can provide absolute assurance that all control issues and instances
of fraud, if any, within IFT have been detected. These inherent limitations
include the realities that judgments in decision-making can be faulty, and that
breakdowns can occur because of simple error or mistake. Additionally, controls
can be circumvented by the individual acts of some persons, by collusion of two
or more people, or by management override of the control. The design of any
system of controls is also based in part upon certain assumptions about the
likelihood of future events, and there can be no assurance that any design will
succeed in achieving its stated goals under all potential future conditions.
Because of the inherent limitations in a cost-effective control system,
misstatements due to error or fraud may occur and not be detected.
 
 We
carried out an evaluation, under the supervision and with the participation of
our management, including our Principal Executive Officer and our Principal
Financial Officer, of the effectiveness of the design and operation of our
disclosure controls and procedures as of March 31, 2005, the end of the
quarterly period covered by this report. Based on the foregoing, our Principal
Executive Officer and our Principal Financial Officer concluded that our
disclosure controls and procedures were effective at the reasonable assurance
level.
 
 There has
been no change in our internal controls over financial reporting during our most
recent fiscal quarter that has materially affected, or is reasonably likely to
materially affect, our internal controls over financial
reporting
  14
  **PART II — OTHER INFORMATION**
  **Item 1.**
    **Legal
      Proceedings.**
  V *arious
Lawsuits and Claims Arising in the Ordinary Course of Business*
 
 We are
involved in various lawsuits and claims arising in the ordinary course of
business
  **Item 2.**
    **Changes
      in Securities and Use of Proceeds.**
  **Recent
Sales of Unregistered Securities**
 
 During
the quarterly period ended March 31, 2005, we issued restricted common stock for
certain private transactions, in reliance on Section 4(2) of the Act, as
described below:
 
 (a)
    On
      January 4, 2005, we issued 18,181,818 shares of restricted common stock to
      our Chairman of the Board, in exchange for his cancellation of $6,000,000
      of indebtedness represented by short term loans bearing interest at 9% per
      annum, which were advanced to us and our subsidiaries for working capital
      and other corporate purposes. The price per share used to determine the
      number of shares of restricted common stock for this transaction was 110%
      of the closing price of our common stock as traded on the American Stock
      Exchange on January 4, 2005 or $ .33 per
share.
 
 (b)
    On
      February 11, 2005, we issued 34 shares of restricted common stock to Billi
      Jo Hagan, Trustee of the Billi Jo Hagan Trust, Dated October 6, 2003, in
      connection with the acquisition of LaPolla Industries, Inc. This
      transaction was valued and recorded at approximately $22.***See***Part I - Financial Information, Item 1 - Financial Statements, Notes to
      Unaudited Condensed Consolidated Financial Statements, Note 7 -
      Acquisition for more information on this
transaction.
  (c)
    On
      March 31, 2005, we issued 4,000 shares of restricted common stock to our
      CEO, as other compensation, pursuant to his employment agreement, which
      was valued and recorded at $2,000.
  **Item 3.**
    **Defaults
      Upon Senior Securities.**
  None.
 
 **Item 4.**
    **Submission
      of Matters to a Vote of Security
Holders.**
  None.
  **Item 5.**
    **Other
      Information.**
 None.
  **Item 6.**
    **Exhibits.**
  ***See*** Index of
Exhibits on Page 17.
  15
  **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.
 
 **IFT
      CORPORATION**Date:
    May
      12, 2005
    By:Michael
      T. AdamsCEO**IFT
      CORPORATION**Date:
    May
      12, 2005
    By:Charles
      R. WeeksCFO
      and Treasurer
  16
  **INDEX OF EXHIBITS**
 
 **Exhibit**
      **Number**
    **Description**31.1
    Certification
      of Principal Executive Officer pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002.31.2
    Certification
      of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
      Act of 2002.32
    Certification
      of Principal Executive Officer and Principal Financial Officer pursuant to
      § 906 of Sarbanes-Oxley Act of 2002.
  17