**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 September 30, 2005**




Commission
      File No. **001-31354**












**LaPolla
                  Industries, Inc.***(Exact
                  name of Registrant as Specified in its
                  Charter)*
  **Delaware**
                  *(State
                    of Incorporation)*
                
                **13-3545304**
                  *(I.R.S.
                    Employer Identification No.)***Intercontinental
                    Business Park**
                  **15402
                    Vantage Parkway East, Suite 322**
                  **Houston,
                    Texas**
                  *(Address
                    of Principal Executive Offices)*
                
                **77032**
                  *(Zip
                    Code)*
  **(281)
                    219-4700**
                  *(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
      October 22, 2005 there were 50,572,986 shares of Common Stock, par value $.01,
      outstanding.













**LAPOLLA
      INDUSTRIES, INC.**


**FORM
      10-Q**


**FOR
      THE QUARTER ENDED SEPTEMBER 30, 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**
            
            **13****Item
                3. Quantitative and Qualitative Disclosures
                About
                Market Risk**
            
            **16****Item
                4. Controls and Procedures**
            
            **16****PART
                II****—****OTHER
                INFORMATION****Item
                1. Legal Proceedings**
            
            **17****Item
                2. Unregistered Sales of Equity Securities and Use of
                Proceeds**
            
            **17****Item
                3. Defaults Upon Senior
                Securities**
            
            **17****Item
                4. Submission of Matters to a Vote of Security
                Holders**
            
            **17****Item
                5. Other Information**
            
            **17****Item
                6. Exhibits**
            
            **17****SIGNATURES**
            
            **18****INDEX
                OF EXHIBITS**
            
            **19**




2
 *Index*




**PART
      I — FINANCIAL INFORMATION**





**Item
      1. Financial Statements.**




**LAPOLLA
      INDUSTRIES, INC.**


**INDEX
      TO FINANCIAL STATEMENTS AND**


**FINANCIAL
      STATEMENT SCHEDULES**




**CONDENSED
                CONSOLIDATED BALANCE
                SHEETS****September
                30, 2005 (Unaudited) and December 31,
                2004**
            **4****CONDENSED
                CONSOLIDATED STATEMENTS OF OPERATIONS
                (UNAUDITED)****Three
                and Nine Months Ended September 30, 2005 and
                2004**
            **5****CONDENSED
                CONSOLIDATED STATEMENTS OF CASH FLOWS
                (UNAUDITED)****Nine
                Months Ended September 30, 2005 and
                2004**
            **6****NOTES
                TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                (UNAUDITED)**
            **7**




All
      schedules for which provision is made in the applicable accounting regulations
      of the Securities and Exchange Commission are not required under the related
      instructions or are not applicable, and therefore have been
      omitted.




3
 *Index*





**LAPOLLA
      INDUSTRIES, INC.**


**CONDENSED
      CONSOLIDATED BALANCE SHEETS**





**September
                30,**
            
            **December
                31,****2005**
            
            **2004****(Unaudited)****ASSETS**Current
                Assets:Cash
            
            $
            357,706
            
            $
            24,465Trade
                Receivables (Net of Allowance For Doubtful Accounts of $144,885 and$74,339
                at September 30, 2005 and December 31, 2004, respectively)
            
            
            3,508,843
            
            
            630,408Inventories
                (Note 4)
            
            
            836,807
            
            
            249,039Prepaid
                Expenses and Other Current Assets
            
            
            199,123
            
            
            41,053Assets
                of Discontinued Operations (Note 12)
            
            
            2,500
            
            
            438Total
                Current Assets
            
            
            4,904,979
            
            
            945,403Property,
                Plant and Equipment, Net
            
            
            546,956
            
            
            287,784Other
                Assets:Goodwill
                and Other Intangible Assets, Net
            
            
            2,145,244
            
            
            774,000Deposits
                and Other Non-Current Assets
            
            
            143,769
            
            
            56,471Total
                Other Assets
            
            
            2,289,013
            
            
            830,471Total
                Assets
            
            $
            7,740,948
            
            $
            2,063,658**LIABILITIES
                AND STOCKHOLDERS’ (DEFICIT)**Current
                Liabilities:Accounts
                Payable
            
            $
            3,958,573
            
            $
            1,183,812Accrued
                Expenses and Other Current Liabilities
            
            
            431,491
            
            
            471,009Lines
                of Credit (Note 5)
            
            
            562,582
            
            
            719,070Loans
                Payable - Related Party (Note 6)
            
            
            4,302,500
            
            
            5,670,000Note
                Payable - Other (Note 7)
            
            
            1,250,000
            
            
            —Current
                Portion of Long-Term Debt
            
            
            50,427
            
            
            24,582Current
                Portion of Liabilities from Discontinued Operations (Note
                12)
            
            
            235,397
            
            
            663,601Total
                Current Liabilities
            
            
            10,790,970
            
            
            8,732,074Other
                LiabilitiesNon-Current
                Portion of Long-Term Debt
            
            
            131,896
            
            
            14,243Non-Current
                Portion of Liabilities from Discontinued Operations (Note
                12)
            
            
            140,642
            
            
            525,000Reserve
                for Litigation
            
            
            175,378
            
            
            15,000Total
                Other Liabilities
            
            
            447,916
            
            
            554,243Total
                Liabilities
            
            
            11,238,886
            
            
            9,286,317Stockholders’
                (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 Outstandingat
                September30,
                2005 and December 31, 2004; aggregate liquidation preference atSeptember
                30,
                2005 and December 31, 2004 of $62,500
            
            
            55,035
            
            
            55,035Common
                Stock, $.01 Par Value; 60,000,000 Shares Authorized; 50,572,986 and32,014,369
                Issued and Outstanding at September 30, 2005 and December 31, 2004,Respectively
            
            
            505,730
            
            
            320,144Additional
                Paid-In Capital
            
            
            59,958,097
            
            
            53,625,390Accumulated
                (Deficit)
            
            
            (64,016,800
            )
            
            (61,223,228
            )Total
                Stockholders’ (Deficit)
            
            
            (3,497,938
            )
            
            (7,222,659
            )Total
                Liabilities and Stockholders’ (Deficit)
            
            $
            7,740,948
            
            $
            2,063,658





See
      accompanying notes to condensed consolidated financial statements.




4
 *Index*




**LAPOLLA
      INDUSTRIES, INC.**


**CONDENSED
      CONSOLIDATED STATEMENTS OF OPERATIONS**


**(UNAUDITED)**





**Three
                Months Ended September 30,**
            
            **Nine
                Months Ended September 30,****2005**
            
            **2004**
            
            **2005**
            
            **2004**Sales:Coatings,
                Sealants and Other Products
            
            $
            5,559,461
            
            $
            521,852
            
            $
            13,223,289
            
            $
            1,569,378Total
                Sales
            
            
            5,559,461
            
            
            521,852
            
            
            13,223,289
            
            
            1,569,378Cost
                of Sales:Coatings,
                Sealants and Other Products
            
            
            4,306,491
            
            
            430,133
            
            
            10,527,695
            
            
            1,253,637Total
                Cost of Sales
            
            
            4,306,491
            
            
            430,133
            
            
            10,527,695
            
            
            1,253,637Gross
                Profit
            
            
            1,252,970
            
            
            91,719
            
            
            2,695,594
            
            
            315,741Operating
                Expenses:Selling,
                General and Administrative
            
            
            1,637,348
            
            
            331,853
            
            
            4,569,904
            
            
            1,630,267Professional
                Fees
            
            
            45,465
            
            
            57,000
            
            
            438,682
            
            
            322,521Depreciation
                and Amortization
            
            
            41,951
            
            
            16,424
            
            
            107,909
            
            
            58,092Consulting
                Fees
            
            
            69,516
            
            
            51,144
            
            
            194,908
            
            
            122,137Interest
                Expense
            
            
            22,787
            
            
            9,914
            
            
            51,325
            
            
            65,795Interest
                Expense - Related Party
            
            
            91,114
            
            
            101,493
            
            
            173,458
            
            
            184,898Gain
                (Loss) on Disposal of Property, Plantand
                Equipment
            
            
            —
            
            
            18,568
            
            
            (2,658
            )
            
            18,568Other
                (Income) Expense
            
            
            (5,258
            )
            
            —
            
            
            (19,836
            )
            
            —Total
                Operating Expenses
            
            
            1,902,923
            
            
            586,396
            
            
            5,513,692
            
            
            2,402,278Operating
                (Loss)
            
            
            (649,953
            )
            
            (494,677
            )
            
            (2,818,098
            )
            
            (2,086,537
            )Income
                (Loss) from Discontinued Operations
            
            
            349,117
            
            
            (1,745,463
            )
            
            24,526
            
            
            (3,399,643
            )Net
                (Loss)
            
            $
            (300,836
            )
            $
            (2,240,140
            )
            $
            (2,793,572
            )
            $
            (5,486,180
            )Net
                Income (Loss) Per Share-Basic and Diluted:Continuing
                Operations
            
            $
            (0.013
            )
            $
            (0.017
            )
            $
            (0.056
            )
            $
            (0.072
            )Discontinued
                Operations
            
            
            0.007
            
            
            (0.060
            )
            
            0.001
            
            
            (0.118
            )Total
                (Loss)
            
            $
            (
                0.006
            )
            $
            (0.077
            )
            $
            (0.055
            )
            $
            (0.190
            )Weighted
                Average Shares Outstanding
            
            
            50,306,865
            
            
            28,921,173
            
            
            50,351,466
            
            
            28,830,536





See
      accompanying notes to condensed consolidated financial statements.




5
 *Index*




**LAPOLLA
      INDUSTRIES, INC.**


**CONDENSED
      CONSOLIDATED STATEMENTS OF CASH FLOWS**


**(UNAUDITED)**





**Nine
                Months Ended September 30,****2005**
            
            **2004**CASH
                FLOWS FROM OPERATING ACTIVITIES:Net
                Income (Loss):Continuing
                Operations
            
            $
            (2,818,098
            )
            $
            (2,086,537
            )Discontinued
                Operations
            
            
            24,526
            
            
            (3,399,643
            )Adjustments
                to Reconcile Net (Loss) to Net Cash Provided by (Used in) Operating
                Activities:Depreciation
                and Amortization
            
            
            107,492
            
            
            58,092Share-Based
                Compensation Expense
            
            
            518,270
            
            
            261,454Allowance
                for Doubtful Accounts
            
            
            20,546
            
            
            (32,227
            )Loss
                on Disposition of Property, Plant, and Equipment
            
            
            —
            
            
            18,568Change
                in Assets and Liabilities Net of Effects from Acquisition of Business
                Entity:Trade
                Receivables
            
            
            (1,386,770
            )
            
            107,987Inventories
            
            
            (276,197
            )
            
            639Prepaid
                Expenses and Other Current Assets
            
            
            (166,941
            )
            
            (96,269
            )Accounts
                Payable
            
            
            1,606,607
            
            
            (329,116
            )Accrued
                Expenses and Other Current Liabilities
            
            
            299,487
            
            
            (54,345
            )Discontinued
                Operations
            
            
            (827,125
            )
            
            938,836Net
                Cash (Used) in Operating Activities
            
            
            (2,898,203
            )
            
            (4,612,561
            )CASH
                FLOWS FROM INVESTING ACTIVITIES:Additions
                to Property, Plant and Equipment
            
            
            (307,959
            )
            
            (154,157
            )Acquisition
                of Business Entity, Net of Cash Acquired
            
            
            (1,931,825
            )
            
            —Deposits
                and Other Non-Current Assets
            
            
            (68,283
            )
            
            12,420Net
                Cash (Used) in Investing Activities
            
            
            (2,308,067
            )
            
            (141,737
            )CASH
                FLOWS FROM FINANCING ACTIVITIES:Proceeds
                from Lines of Credit
            
            
            8,012
            
            
            12,042Proceeds
                from Loans Payable - Related Party
            
            
            4,302,500
            
            
            4,825,000Proceeds
                from Note Payable
            
            
            1,250,000
            
            
            —Proceeds
                from Issuance of Long Term Debt
            
            
            327,082Payments
                on Lines of Credit
            
            
            (164,500
            )
            
            (9,600
            )Principal
                Payments under Capital Lease Obligation
            
            
            (1,778
            )
            
            (1,482
            )Principal
                Repayments on Long Term Debt
            
            
            (181,805
            )
            
            (43,806
            )Net
                Cash Provided by Financing Activities
            
            $
            5,539,511
            
            $
            4,782,154Net
                Increase In Cash
            
            
            333,241
            
            
            27,856Cash
                at Beginning of Period
            
            
            24,465
            
            
            34,947Cash
                at End of Period
            
            $
            357,706
            
            $
            62,803***Supplemental
                Disclosure of Cash Flow Information:***Cash
                Paid During the Year for:Interest
            
            $
            34,579
            
            $
            69,815Income
                Taxes
            
            
            —
            
            
            —***Supplemental
                Schedule of Non Cash Investing and Financing
                Activities***Property,
                Plant and Equipment acquired via Capital Lease Obligation
            
            $
            —
            
            $
            7,200Grant
                Date Fair Value Recognized for Share-Based Payment
                Arrangements
            
            
            168,020
            
            
            —Common
                Stock Issued for Share-Based Payment Arrangements
            
            
            350,250
            
            
            261,454Common
                Stock Canceled pursuant to Settlement Agreement
            
            
            —
            
            
            (131,508
            )Common
                Stock Issued for Acquisition of Business Entity
            
            
            22
            
            
            —Conversion
                of Preferred Stock to Common Stock
            
            
            —
            
            
            674,315Cancellation
                of Indebtedness for Common Stock
            
            
            6,000,000
            
            
            —Total
                Non Cash Investing and Financing Activities
            
            $
            6,518,292
            
            $
            811,461




See
      accompanying notes to condensed consolidated financial statements.




6
 *Index*




**LAPOLLA
      INDUSTRIES, INC.**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL
      STATEMENTS**


**(UNAUDITED)**




**Note
              1.**
            **Basis
                of Presentation.**





Effective
      October 1, 2005, IFT Corporation, a Delaware corporation, merged its wholly
      owned subsidiary, LaPolla Industries, Inc., an Arizona corporation, into itself,
      whereupon the separate existence of LaPolla Industries, Inc. ceased and IFT
      Corporation continued as the surviving corporation. Effective November 8, 2005,
      IFT Corporation changed its corporate name to LaPolla Industries, Inc. ***See
      also*** *Note
      13 - Subsequent Events* ,
      Items
      (b) and (c). The unaudited condensed consolidated financial statements and
      related notes reflect the new corporation name, LaPolla Industries, Inc., which
      is the same name previously associated with the Company’s former wholly owned
      subsidiary LaPolla Industries, Inc. that was merged into IFT Corporation
      subsequent to the current period. To be clear, references to the former wholly
      owned subsidiary are reflected as “LaPolla Subsidiary” or “LaPolla Products”,
      where applicable, in this presentation to aid the reader in understanding the
      current period presentation. In the opinion of management, the accompanying
      unaudited condensed consolidated financial statements contain all adjustments
      necessary (consisting only of normal recurring accruals) to present fairly
      the
      financial information contained therein. These statements do not include all
      disclosures required by accounting principles generally accepted in the United
      States of America (GAAP) for annual periods and should be read in
      conjunction with the Company’s audited consolidated financial statements and
      related notes for the year ended December 31, 2004. The Company prepared
      the condensed consolidated financial statements following the requirements
      of
      the rules promulgated by the Securities and Exchange Commission for interim
      reporting. As permitted under those rules, certain footnotes or other financial
      information that are normally required by GAAP can be condensed or omitted.
      The
      results of operations for the nine months ended September 30, 2005 are not
      necessarily indicative of the results to be expected for the year ending
      December 31, 2005 or any other period(s). Certain reclassifications of
      prior period amounts have been made to conform to the current period
      presentation.





**Note
              2.**
            **Recently
                Adopted Accounting
                Standards.**





In
      December 2004, Statement of Financial Accounting Standards No. 123
      (revised 2004), *Share-Based
      Payment* (“SFAS
      123R”), was issued. SFAS 123R requires companies to recognize in the income
      statement the grant-date fair value of stock options and other equity-based
      compensation issued to employees. On March 29, 2005, the Securities and
      Exchange Commission (“SEC”) issued Staff Accounting Bulletin No. 107
      (“SAB 107”), “Share-Based Payment”. SAB 107 expresses the views of the SEC staff
      regarding the interaction between SFAS No. 123R and certain SEC rules and
      regulations, provides the staff’s views regarding the valuation of share-based
      payments by public companies, and provides guidance regarding share-based
      payments with non-employees. SFAS 123R sets accounting requirements for
      measuring, recognizing and reporting share-based compensation, including income
      tax considerations. In general, SFAS 123R does not express a preference for
      a
      type of valuation model for measuring the grant date fair value, generally
      requires equity- and liability-classified awards to be recognized in earnings
      over the requisite service period, generally the vesting period for service
      condition awards, allows for a one-time policy election regarding one of two
      alternatives for recognizing compensation cost for grant awards with graded
      vesting, and requires the use of the estimated forfeitures method. The Company
      adopted reporting under SFAS 123R, effective July 1, 2005 and began recognizing
      the cost of equity-based compensation using the modified prospective application
      method, whereby the cost of new awards and awards modified, repurchased or
      cancelled after the required effective date and the portion of awards for which
      the requisite service has not been rendered (unvested awards) that are
      outstanding as of the required effective date are recognized as the requisite
      service is rendered on or after the required effective date. ***See
      also***  *Note
      8 - Share-Based Payment Arrangements* .





**Note
              3.**
            **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 doubt upon the validity of this assumption.
      The Company has experienced significant recurring operational losses and
      negative cash flows from operations, and at September 30, 2005 has an
      accumulated deficit, net of dividends, of $64,016,800, a working capital deficit
      of $5,885,991 and its total liabilities exceeded its total assets by $3,497,938.
      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 for approximately seven years. Although the Company had
      no
      formal commitment from the Chairman to fund the Company’s operating requirements
      for the 2005 year, the Company received short term demand loans from the
      Chairman during the first half of the 2005 year to continue its operations.
      As
      of September 30, 2005, the Company’s indebtedness to the Chairman consists of
      $4,302,500, plus accrued interest of $147,412. ***See
      also***  *Note
      6 - Loans Payable - Related Party* .
      On June
      2, 2005, the Company (and the Chairman for added security) signed a Promissory
      Note with a national institution granting access to funds in the amount of
      $2,000,000, which may be drawn against from time to time by the Company for
      operations. ***See***  *Note
      7 - Note Payable - Other* .
      The
      Company’s ability to continue as a going concern is dependent on management’s
      ability to successfully execute its business plan, which includes increasing
      sales while decreasing operating costs and expenses, as well as, increasing
      operational cash flow, continued support from the Chairman, and obtaining
      additional funding to support longer term capital requirements. If management
      is
      unsuccessful in 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
              4.**
            **Inventories.**





Components
      of Inventories were:


**September
                30, 2005**
            
            **December
                31, 2004**Raw
                Materials
            
            $
            339,676
            
            $
            61,258Finished
                Goods
            
            
            497,131
            
            
            187,781Total
            
            $
            836,807
            
            $
            249,039




7
 *Index*




**LAPOLLA
      INDUSTRIES, INC.**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**


**(UNAUDITED)**





**Note
              5.**
            **Lines
                of Credit.**





Lines
      of
      Credit are comprised of the following:





**September
                30, 2005**
            
            **December
                31, 2004**$180,000
                Line of Credit, maturing February 1, 2006, bears interest at prime
                plus 1%
                per annum, secured by all the assets of the LaPolla Subsidiary and
                a
                personal guarantee from the Chairman.
            
            $
            62,665
            
            $
            219,152$500,000
                Line of Credit, maturing January 1, 2006, bears interest at a floating
                prime rate per annum, secured by all of the assets of the Company
                and the
                Chairman as a co-borrower.
            
            
            499,918
            
            
            499,918Total
                Lines of Credit
            
            $
            562,582
            
            $
            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 through December 31,
      2004, and at 6% per annum for the nine months ended September 30, 2005. During
      the period from January 1, 2005 to May 20, 2005, the Chairman loaned the Company
      funds aggregating $4,302,500; $2,000,000 of which was used for the purchase
      of
      the LaPolla Subsidiary on February 11, 2005.





**Note
              7.**
            **Note
                Payable - Other.**





On
      June
      2, 2005, the Company and the Chairman signed a Promissory Note with a national
      institution granting the Company access to funds in the amount of $2,000,000,
      which may be drawn against from time to time for the operations of the Company.
      During the third quarter, the Company used $750,000, which added to the $500,000
      used during the second quarter of 2005, represents the balance as of September
      30, 2005. The Note bears interest at a rate equal to 1-month LIBOR plus two
      and
      one-quarter percent (2.25) per annum (“LIBOR-Based Rate”), and has a maturity
      date of June 1, 2006. ***See
      also*** *Note
      13 - Subsequent Events* ,
      Item
      (a).





**Note
              8.**
            **Share-Based
                Payment Arrangements.**





The
      Company adopted reporting under SFAS 123R, effective July 1, 2005. ***See***  *Note
      2 - Recently Adopted Accounting Standards* .
      Previously, as allowed by Statement of Financial Accounting Standards No. 123,
      “ *Accounting
      for the Stock-Based Compensation* ”,
      the
      Company elected to apply the intrinsic-value-based method of accounting. Under
      this method, the Company measured stock based compensation for option grants
      to
      employees assuming that options granted at market price at the date of grant
      had
      no intrinsic value and restricted stock awards were valued based on a discounted
      market price of a share of unrestricted stock on the date the shares of
      restricted common stock were earned and vested. Prior to the adoption of the
      SFAS 123R, no compensation expense was ever recognized for stock options while
      compensation expense was recognized for restricted common stock only on the
      date
      when the shares were earned and vested. The Company has elected to use the
      modified prospective method, which requires compensation expense for all awards
      granted from the date of adoption, and for the unvested portion of previously
      granted awards that remain outstanding at the date of adoption, to be recorded.
      The fair value concepts were not changed significantly in SFAS 123R; however,
      in
      adopting SFAS 123R, companies must choose among alternative valuation models
      and
      amortization assumptions. After assessing alternative valuation models and
      amortization assumptions, the Company will begin using a lattice-based option
      valuation model to calculate compensation expense over the requisite service
      period of a grant(s). The Company uses historical data starting after November
      5, 2004 for estimated forfeitures and volatility based on the concentration
      of
      operating activities for the preceding seven years being related to the RSM
      Products, which were discontinued on November 5, 2004.





During
      the third quarter of 2005, the Company had four share-based compensation plans,
      which are described below. The compensation cost that has been charged against
      income for those plans was $173,380 and $1,060, respectively, for the three
      months ended September 30, 2005 and 2004, respectively, and $518,270 and
      $261,454, respectively, for the nine months ended September 30, 2005 and 2004,
      respectively.





***Equity
      Incentive Plan***





The
      Company’s Equity Incentive Plan (“Equity Plan”), which is shareholder-approved,
      permits the grant of share options and shares to its employees for up to
      3,250,000 shares of common stock. The Equity Plan replaced the Key Employee
      Stock Option Plan. The 2000 Stock Purchase and Option Plan, which was
      shareholder-approved, was amended by the Company to change its name to the
      Key
      Employee Stock Option Plan, combine its terms and conditions with the 2002
      Stock
      Option Plan (which was also shareholder-approved), and eliminate consultants
      and
      directors as Eligible Persons. The purpose of the Equity Plan is to advance
      the
      interests of the Company and its stockholders by providing an incentive to
      attract, retain and reward persons performing services for the Company and
      by
      motivating such persons to contribute to the growth and profitability of the
      Company. The Equity Plan provides, among other things, financial performance
      measures upon which specific performance goals applicable to certain awards
      would be based and limits on the numbers of shares or compensation that could
      be
      made subject to certain awards. Option awards are generally granted with an
      exercise price equal to the market price of the Company’s stock at the date of
      grant. Share options and shares may provide for accelerated vesting if there
      is
      a change in control (as defined in the Equity Plan). As described above, prior
      to the adoption of SFAS 123R, compensation expense was never recognized by
      the
      Company for share options. Therefore, certain portions of the following analysis
      only relate to share options beginning as of the adoption date for the current
      period presentation.




8
 *Index*




The
      fair
      value of each share option and share is estimated on the date of grant using
      a
      lattice-based valuation model that uses the assumptions noted in the following
      table. Because lattice-based valuation models incorporate ranges of assumptions
      for inputs, those ranges are disclosed. Expected volatilities are based on
      the
      historical volatility of the Company’s common stock. The Company uses historical
      data to estimate option exercise and employee termination within the valuation
      model. The expected term of options granted is derived from the output of the
      valuation model and represents the periods of time that options granted are
      expected to be outstanding; the range given below results from certain groups
      of
      employees exhibiting different behavior. The risk-free rate for periods within
      the contractual life of the option is based on the U.S. Treasury yield curve
      in
      effect at the time of grant.





**Three
                Months Ended September 30,**
            
            **Nine
                Months Ended September 30,****2005**
            
            **2004**
            
            **2005**
            
            **2004**Expected
                Volatility
            
            
            152.73
                % - 152.95
            %
            
            —
            
            
            152.73
                % - 152.95
            %
            
            —Weighted-Average
                Volatility
            
            
            152.92
            %
            
            —
            
            
            152.92
            %
            
            —Expected
                Dividends
            
            
            —
            
            
            —
            
            
            —
            
            
            —Expected
                Term (in years)
            
            
            1.2
                - 6
            
            
            —
            
            
            1.2
                - 6
            
            
            —Risk
                Free Rate
            
            
            2.879
                % - 3.259
            %
            
            —
            
            
            2.879
                % - 3.259
            %
            
            —





A
      summary
      of option activity under the Equity Plan as of September 30, 2005, and changes
      during the nine months then ended is presented below:





**Options**
            
            **Shares**
            
            **Weighted-Average**
              **Exercise**
              **Price**
            
            **Weighted-Average**
              **Remaining**
              **Contractual
                Term**
            
            **Aggregate**
              **Intrinsic**
              **Value**Outstanding
                at January 1, 2005
            
            
            115,321
            
            $
            3.16Granted
            
            
            2,954,680
            
            
            .67Exercised
            
            
            —
            
            
            —Forfeited
                or Expired
            
            
            (50,133
            )
            
            .86Outstanding
                at September 30, 2005
            
            
            3,019,868
            
            $
            .76
            
            
            1.81
            
            $
            2,300,635Exercisable
                at September 30, 2005
            
            
            113,368
            
            $
            3.11
            
            
            1.13
            
            $
            353,085





The
      weighted-average grant-date fair value of options granted during the three
      months ended September 30, 2005 was $.56. There were no options exercised during
      the three months ended September 30, 2005.





A
      summary
      of the status of the nonvested share options under the Equity Plan as of
      September 30, 2005, and changes beginning from the date of adoption of SFAS
      123R
      to the nine months then ended is presented below:





**Nonvested
                Awards**
            
            **Shares**
            
            **Weighted-Average**
              **Grant-Date**
              **Fair
                Value**Nonvested
                at July 1, 2005
            
            
            24,000
            
            $
            .49Granted
            
            
            2,940,000
            
            
            .57Vested
            
            
            (12,500
            )
            
            .29Forfeited
            
            
            (45,000
            )
            
            .64Nonvested
                at September 30, 2005
            
            
            2,906,500
            
            $
            .57





As
      of
      September 30, 2005, there was $1,540,018 of total unrecognized compensation
      cost
      related to nonvested share-based compensation arrangements granted under the
      Equity Plan. The cost is expected to be recognized over a weighted-average
      period of 2.73 years. During the three months ended September 30, 2005, the
      Company accelerated the vesting of an aggregate of 12,500 out-of-the-money
      options held by the CEO (6,500 options) and two employees (6,000 options).
      As a
      result of that modification, the Company recognized additional compensation
      expense of $3,626 in the current period. The total fair value of share options
      vested during the three months ended September 30, 2005 was $3,626.





***Director
      Compensation Plan***





The
      Company’s Director Compensation Plan (“Director Plan”), which is
      shareholder-approved, permits the grant of up to 1,600,000 shares of restricted
      common stock to non-employee directors only. Each non-employee director who
      is
      then serving as a member of the Board is automatically granted an award
      consisting of a number of shares of restricted common stock of the Company
      equal
      to: 48,000 for the Chairman of the Board, who is also a non-employee director;
      and 12,000 for other non-employee directors, upon initial election to the Board
      for a one year term (or a lesser amount prorated monthly if the initial election
      is for a shorter period).  In addition to the automatic grant of shares to
      non-employee directors described above, a one-time grant on May 28, 2002 of
      1,168,000 post split shares of restricted stock was approved for the Chairman
      of
      the Board, which recognized his personal cost for substantially funding the
      Company and acting as Chairman of the Board without adequate compensation over
      a
      three-year period prior to the date of the grant. This one-time grant vests
      at
      the end of each year at the rate of 25% per year. The Company does not consider
      the shares of restricted common stock granted and issued under the Director
      Plan
      as outstanding at the time of grant due to vesting restrictions. The shares
      of
      restricted common stock when granted are issued by the Company with a second
      restriction and held in the custody of the Company until such time that they
      are
      earned and vested.





9
 *Index*




At
      September 30, 2005, there were 364,000 shares of restricted common stock granted
      and issued but held in the custody of the Company (until they are earned and
      vested), of which 292,000 shares are for the last 25% of the one time grant
      scheduled to vest on May 28, 2006 and 72,000 are for automatic grants awarded
      at
      the annual meeting of stockholders held on June 29, 2005 which vest at the
      next
      annual meeting of stockholders scheduled for May 23, 2006. The compensation
      cost
      that has been charged against income for the Director Plan was $44,676 and
      $-0-,
      respectively, for the three months ended September 30, 2005 and 2004,
      respectively, and $383,966 and $251,820, respectively, for the nine months
      ended
      September 30, 2005 and 2004, respectively. Prior to the adoption of SFAS 123R,
      compensation expense was recognized under the Director Plan only on the date
      when the shares were earned and vested. Therefore, the grant date fair value
      portions of the following analysis only take into consideration the 364,000
      shares of restricted common stock granted and nonvested as described above
      for
      the current period presentation. The fair value of each award is estimated
      on
      the date of grant using a lattice-based valuation model that uses the
      assumptions noted in the following table. Because lattice-based valuation models
      incorporate ranges of assumptions for inputs, those ranges are disclosed, where
      applicable. Expected volatilities are based on the historical volatility of
      the
      Company’s common stock. The Company uses historical data to estimate award
      vesting and director termination within the valuation model and the
      straight-line method for attribution of compensation expense. The expected
      term
      of the of the awards are derived from the output of the valuation model and
      represent the period of time that awards granted are expected to be outstanding.
      The risk-free rate for periods within the contractual life of the award is
      based
      on the U.S. Treasury yield curve in effect at the time of grant.





**Three
                Months Ended September 30,**
            
            **Nine
                Months Ended September 30,****2005**
            
            **2004**
            
            **2005**
            
            **2004**Expected
                Volatility
            
            
            152.73
            %
            
            —
            
            
            152.73
            %
            
            —Weighted-Average
                Volatility
            
            
            152.73
            %
            
            —
            
            
            152.73
            %
            
            —Expected
                Dividends
            
            
            —
            
            
            —
            
            
            —
            
            
            —Expected
                Term (in years)
            
            
            .9
            
            
            —
            
            
            .9
            
            
            —Risk
                Free Rate
            
            
            3.259
            %
            
            —
            
            
            3.259
            %
            
            —





A
      summary
      of awards activity under the Director Plan as of September 30, 2005, and changes
      during the nine months then ended is presented below:


**Awards**
            
            **Shares**
            
            **Aggregate**
              **Intrinsic
                Value**Outstanding
                at January 1, 2005
            
            
            652,767Granted
            
            
            72,000Vested
            
            
            360,767Forfeited
                or Expired
            
            
            —Outstanding
                at September 30, 2005
            
            
            364,000
            
            $
            309,400





A
      summary
      of the status of the nonvested awards under the Director Plan as of September
      30, 2005, and changes beginning from the date of adoption of SFAS 123R to the
      nine months then ended is presented below:





**Nonvested
                Awards**
            
            **Shares**
            
            **Weighted-Average**
              **Grant-Date
                Fair Value**Nonvested
                at July 1, 2005
            
            
            364,000
            
            $
            162,000Granted
            
            
            —
            
            
            —Vested
            
            
            —
            
            
            —Forfeited
            
            
            —
            
            
            —Nonvested
                at September 30, 2005
            
            
            364,000
            
            $
            162,000





As
      of
      September 30, 2005, there was $117,324 of total unrecognized compensation cost
      related to nonvested share-based compensation arrangements granted under the
      Director Plan. The cost is expected to be recognized over a weighted-average
      period of .65 years. The total fair value of awards vested during the three
      months ended September 30, 2005 and 2004, respectively, was $-0- and $-0-,
      respectively, and nine months ended September 30, 2005 and 2004, respectively,
      was $339,290 and $251,820, respectively.





***Non
      Plan Restricted Stock Options***





The
      Company grants restricted options from time to time for special circumstances
      ("Non Plan Options").  The Company did not grant any Non Plan Options
      during 2004 or the three and nine months ended September 30, 2005.  At
      January 1, 2005, there were 70,000 Non Plan Options outstanding, of which 20,000
      were vested and 50,000 nonvested. During the three months ended September 30,
      2005, the Company accelerated the vesting of the 50,000 outstanding and
      nonvested options, which not only were out-of-the-money but the expected term
      was also expired in 2004. Therefore, notwithstanding the aforementioned
      acceleration, no fair value existed or was recorded for current period for
      Non
      Plan Options. As described above, prior to the adoption of SFAS 123R,
      compensation expense was never recognized by the Company for any share
      options.





***Restricted
      Stock Grants - Employment Agreements***





During
      the three months ended September 30, 2005, the Company accelerated and issued
      an
      aggregate of 8,000 shares of restricted common stock to the CEO, originally
      scheduled to vest in 4,000 share increments at the end of the third and fourth
      quarters of 2005 as other compensation, pursuant to an employment agreement,
      which were valued and recorded at $5,360. As described above, the Company did
      not recognize the fair value of restricted stock awards prior to the adoption
      of
      SFAS 123R until such time that they were earned and vested. As of September
      30,
      2005, there were no outstanding restricted stock grants.





10
 *Index*




**LAPOLLA
      INDUSTRIES, INC.**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**


**(UNAUDITED
      - CONTINUED)**





**Note
              9.**
            **(Loss)
                Per Share - Basic and
                Diluted.**





The
      table
      below presents the computation of basic and diluted (loss) per
      share:





**Three
                Months Ended September 30,**
            
            **Nine
                Months Ended September 30,****2005**
            
            **2004**
            
            **2005**
            
            **2004**Net
                Income (Loss):Continued
                Operations
            
            $
            (649,953
            )
            $
            (494,677
            )
            $
            (2,818,098
            )
            $
            (2,086,537
            )Discontinued
                Operations
            
            $
            349,117
            
            $
            (1,745,463
            )
            $
            24,526
            
            $
            (3,399,643
            )Total
                Net (Loss)
            
            $
            (300,836
            )
            $
            (2,240,140
            )
            $
            (2,793,572
            )
            $
            (5,486,180
            )Diluted
                Shares
            
            
            50,306,865
            
            
            28,921,173
            
            
            50,351,466
            
            
            28,830,536(Loss)
                Per Share-Basic and Diluted
            
            
            (0.006
            )
            
            (0.077
            )
            
            (0.055
            )
            
            (0.190
            )





Basic
      and
      diluted net (loss) per share are the same since (a) the Company has reflected
      net losses for all periods presented and (b) the potential issuance of shares
      of
      the Company would be antidilutive. The securities that could potentially dilute
      (loss) per share in the future that were not included in the computation of
      diluted (loss) per share were (i) 364,000 and 680,000 shares, respectively,
      of
      nonvested restricted common stock issued to eligible directors but held by
      the
      Company pursuant to vesting restrictions under the Director Compensation Plan,
      (ii) exercise of 183,368 and 213,774 vested stock options, respectively, and
      (iii) conversion of securities (preferred stock) convertible into 2,250 and
      2,250 shares, respectively, of common stock, for the three and nine months
      ended
      September 30, 2005 and 2004, respectively.





**Note
              10.**
            **Discontinued
                Operations.**





On
      November 5, 2004, the Company discontinued the operations of its RSM
      Technologies, Inc. business (“RSM Subsidiary”). The operations of the RSM
      Subsidiary related to 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 the RSM Subsidiary as a discontinued operation.





The
      following is a summary of the net assets of and liabilities from discontinued
      operations:





**September
                30, 2005**
            
            **December
                31, 2004**Cash
            
            $
            —
            
            $
            438Prepaid
                Expenses
            
            
            2,500
            
            
            —Accounts
                Payable
            
            
            (235,397
            )
            
            (663,601
            )Reserve
                for Litigation
            
            
            (140,642
            )
            
            (525,000
            )Total
            
            $
            (373,539
            )
            $
            (1,188,163
            )





**Note
              11.**
            **Merger
                of Subsidiary.**





Effective
      April 1, 2005, Infiniti Products, Inc. (“Infiniti Subsidiary”), a Florida
      corporation, merged with and into the LaPolla Subsidiary, an Arizona
      corporation, whereupon the separate existence of Infiniti ceased and the LaPolla
      Subsidiary continued as the surviving corporation.





**Note
              12.**
            **Business
                Segment Information.**





Statement
      of Financial Accounting Standards No. 131, “Disclosures about Segments of an
      Enterprise and Related information” (“SFAS 131”) requires disclosure of net
      profit or loss, certain specific sales 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
      April 1, 2005, the Company determined that it had two distinct business
      segments. These two business segments were defined as Corporate and LaPolla
      Products. On April 1, 2005, the Company’s Infiniti Subsidiary ( ***See***  *Note
      10 - Merger of Subsidiary* )
      merged
      with and into the LaPolla Subsidiary and, therefore, the Infiniti Subsidiary
      business segment, formerly reflected as Infiniti Products, has been combined
      with and into the LaPolla Products segment.





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 LaPolla Industries, Inc.;
                  and
 (ii)
              LaPolla
                  Products was derived from the financial data of the LaPolla
                  Subsidiary.




11
 *Index*




The
      following table reflects certain business segment financial data as of and
      for
      the nine months ended September 30, 2005:





**Corporate**
            
            **LaPolla
                Products**
            
            **Total**Sales
            
            $
            ---
            
            $
            13,223,289
            
            $
            13,223,289Gross
                Profit
            
            $
            ---
            
            $
            2,695,594
            
            $
            2,695,594Operating
                (Loss)
            
            $
            (2,243,354
            )
            $
            (574,744
            )
            $
            (2,818,098
            )Capital
                Expenditures (Net of Capital Leases)
            
            $
            81,728
            
            $
            434,930
            
            $
            516,658Depreciation
                and Amortization Expense
            
            $
            60,278
            
            $
            47,631
            
            $
            107,909Identifiable
                Assets
            
            $
            2,883,885
            
            $
            4,854,563
            
            $
            7,738,448





On
      November 5, 2004, the Company discontinued the operations of its RSM Subsidiary
      and the related business segment, formerly reflected as RSM Products, was
      eliminated at that time. 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
      also*** *Note
      10 - Discontinued Operations* .





On
      October 1, 2005, the Company merged its LaPolla Subsidiary into itself. ***See
      also*** *Note
      11 - Merger of Subsidiary* and *Note
      13 - Subsequent Events* ,
      Item
      (b). Based on the recent mergers, the Company, in future reporting periods,
      will
      no longer provide business segment data and information using the above business
      segment format. The Company is in the process of developing a new business
      segment reporting format, which will report the data and information required
      under SFAS 131 by product categories in future reporting periods.





**Note
              13.**
            **Subsequent
                Events.**





(a)  The
      Company borrowed an additional $250,000 under the Note Payable for working
      capital purposes. ***See***  *Note
      7. Note Payable - Other* .





(b)  Effective
      October 1, 2005, IFT Corporation, a Delaware corporation, merged its wholly
      owned subsidiary, the LaPolla Subsidiary, an Arizona corporation, into itself
      pursuant to the resolution of the board of directors of each respective entity,
      whereupon the separate existence of the LaPolla Subsidiary ceased and IFT
      Corporation continued as the surviving corporation.





(c)  Effective
      November 8, 2005, IFT Corporation changed its corporate name to LaPolla
      Industries, Inc.




12
 *Index*




**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 QUARTER ENDED SEPTEMBER
      30, 2005**





As
      used
      in this report, "LaPolla" and the "Company" or "Us" or "We" or “Our” refer to
      LaPolla Industries, Inc., a Delaware corporation, and its subsidiaries, unless
      the context otherwise requires. Effective October 1, 2005, IFT Corporation,
      a
      Delaware corporation, merged its wholly owned subsidiary, LaPolla Industries,
      Inc., an Arizona corporation, into itself, whereupon the separate existence
      of
      LaPolla Industries, Inc. ceased and IFT Corporation continued as the surviving
      corporation. Effective November 8, 2005, IFT Corporation changed its corporate
      name to LaPolla Industries, Inc. The financial review reflects the new
      corporation name, LaPolla Industries, Inc., which is the same name previously
      associated with the Company’s former wholly owned subsidiary LaPolla Industries,
      Inc. that was merged into IFT Corporation immediately after the end of the
      current period. To be clear, references to this former wholly owned subsidiary
      are reflected as “LaPolla Subsidiary” or “LaPolla Products”, where applicable,
      in this review to aid the reader in understanding the current period review.
      The
      financial review below presents our operating results for the three and nine
      months ended September 30, 2005 and 2004, and our financial condition at
      September 30, 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
      conjunction with the information presented in our unaudited condensed
      consolidated financial statements and related notes for the three and nine
      months ended September 30, 2005 above.





*Overview*





We
      are a
      public business enterprise that markets, sells, manufactures and distributes
      acrylic roof coatings, roof paints, sealers, roofing adhesives, polyurethane
      foam and wall systems, and other related products to the commercial/industrial
      construction and home improvement retail chain store markets. Prior to October
      1, 2005, we were organized under a holding company and subsidiary structure.
      At
      September 30, 2004, we had two active subsidiaries, Infiniti Products, Inc.
      (“Infiniti Subsidiary”) and RSM Technologies, Inc. (“RSM Subsidiary”). We
      acquired our Infiniti Subsidiary, which was a Florida based coatings, sealants,
      paints, and foam distributor, effective September 1, 2001, to among other
      things, diversify our product lines (“Infiniti Products”). Our Infiniti
      Subsidiary started manufacturing some of its Infiniti Products instead of using
      outside toll blenders during the third quarter of 2004 as part of a strategy
      to
      become a manufacturer in addition to being a distributor for the Southeastern
      United States. On November 5, 2004, we discontinued the operations of our RSM
      Subsidiary and resulting RSM Products. The financial information relating to
      our
      discontinued RSM Subsidiary operations are reported and discussed as
      discontinued operations in our financial statements and this review. We
      implemented an aggressive sales and marketing strategy after discontinuing
      our
      RSM Products to substantially grow our Infiniti Products sales. During the
      first
      quarter of 2005, we engaged additional sales and marketing personnel in
      connection with our first acquisition to support our new strategic growth plan.
      On February 11, 2005, we closed our acquisition of the LaPolla Subsidiary,
      an
      Arizona based manufacturer of acrylic roof coatings and sealers, and provider
      of
      polyurethane foam systems to the commercial/industrial construction markets.
      We
      acquired 100% of the capital stock of the LaPolla Subsidiary for $2 Million
      in
      cash and stock. The LaPolla Subsidiary marketed, sold, manufactured and
      distributed acrylic roof coatings, sealers, and polyurethane foam systems to
      the
      commercial/industrial construction markets (“LaPolla Products”). The LaPollaTM
name has been recognized in the Southwestern United States for over 27 years
      by
      roofing contractors, building owners and design professionals. The acquisition
      broadened our customer base and established us as a leader in the roof coatings
      industry. Effective April 1, 2005, our Infiniti Subsidiary merged with and
      into
      our LaPolla Subsidiary, whereupon the separate existence of our Infiniti
      Subsidiary ceased and the LaPolla Subsidiary continued as the surviving
      corporation. To be clear, references to our former wholly owned subsidiary,
      Infiniti Products, Inc., are reflected as “Infiniti Subsidiary” or “Infiniti
      Products”; our Infiniti Products and LaPolla Products are sometimes collectively
      referred to as “Comprehensive Products”; and our Infiniti Subsidiary and LaPolla
      Subsidiary are sometimes collectively referred to as “Combined Subsidiary”,
      where applicable, to aid the reader in understanding the current period
      review.





We
      are
      continuing to attract and recruit the best available talent to manage our
      existing and further propel our growth. Our sales offices are located in Texas,
      Florida, Arizona, Georgia, California, and Pennsylvania. LaPolla operates two
      manufacturing plants located in Tempe, Arizona and Deerfield Beach, Florida,
      and
      uses public warehousing in a multitude of locations throughout the United States
      to service customers. We moved our corporate headquarters to Houston, Texas
      during the third quarter of 2005, and will begin manufacturing products at
      this
      location in the fourth quarter of 2005.





**Results
      of Operations**





We
      operated our business on the basis of two reportable segments, which we refer
      to
      as Corporate and LaPolla Products, during the third quarter of 2005. LaPolla
      Products are collectively referred to as “Coatings, Sealants and Other Products”
in our condensed consolidated financial statements for this reporting period.


The
      following table compares 2005 and 2004 sales for the three and nine month
      periods ended September 30, 2005 and 2004:





**Three
                Months Ended September 30,**
            
            **Nine
                Months Ended September 30,****2005**
            
            **2004**
            
            **2005**
            
            **2004**Sales:Coatings,
                Sealants and Other Products
            
            $
            5,559,461
            
            $
            521,852
            
            $
            13,223,289
            
            $
            1,569,378Total
                Sales
            
            $
            5,559,461
            
            $
            521,852
            
            $
            13,223,289
            
            $
            1,569,378





The
      $5,037,609 or 965% increase in sales for the three months ended September 30,
      2005 compared to the same 2004 period was primarily the result of an increase
      due to strong demand for our Comprehensive Products as compared to just our
      Infiniti Products in 2004. The increase in sales of $11,653,911, which
      represents an increase of 743% in sales for the nine months ended September
      30,
      2005 as compared to the nine months ended September 30, 2004 was due primarily
      to sales of our Infiniti Products in the amount of $799,815, LaPolla Products
      of
      $1,657,838 and Comprehensive Products of $9,196,258 compared to just our
      Infiniti Products of $1,569,378.





13
 *Index*




Our
      cost
      of sales for the three months ended September 30, 2005 was $4,306,491, or 78%,
      as compared to $430,133, or 82%, for the three months ended September 30, 2004.
      The increase in the total cost of sales of $3,876,358 was primarily due to
      increased purchases of the raw materials and finished goods relating to the
      manufacturing and distribution of our Comprehensive Products as compared to
      just
      our Infiniti Products for 2004. This 4% decrease in cost of sales as a
      percentage of sales from the comparable 2004 period is attributable to the
      mix
      of Comprehensive Product margins as compared to just our Infiniti Products.
      For
      the nine months ended September 30, 2005, our cost of sales was $10,527,695,
      or
      80%, as compared to $1,253,637, or 80%, for the nine months ended September
      20,
      2004. The $9,274,058 increase in cost of sales for the nine months ended
      September 30, 2005 compared to the same 2004 period was due primarily to cost
      of
      sales relating to our Infiniti Products in the amount of $578,606, LaPolla
      Products of $1,534,396 and Comprehensive Products of $8,414,693 compared to
      just
      our Infiniti Products of $1,253,637. Our cost of sales includes $73,861 and
      $14,235 for direct labor, receiving, purchasing and inspection, respectively,
      and $114,697 and $10,297 inbound and outbound freight, respectively, for the
      three months ended September 30, 2005 for our Combined Subsidiary and September
      30, 2004 for our Infiniti Subsidiary, respectively. For the nine months ended
      September 30, 2005, our cost of sales include direct labor, receiving,
      purchasing and inspection, respectively, and inbound and outbound freight,
      respectively, of $8,900 and $9,331 for our Infiniti Subsidiary, $-0- and $18,095
      for our LaPolla Subsidiary and $63,329 and $212,711 for our Combined Subsidiary,
      respectively, versus $23,972 and $25,169 for just our Infiniti Subsidiary,
      respectively, for the comparable 2004 period.





Gross
      profit as a percentage for the third quarter of 2005 was 22% of sales, which
      represents a 4 percentage point increase from the 18% rate for the third quarter
      of 2004. Our gross profit percentage increased in the third quarter of 2005
      compared to the third quarter of 2004 primarily as a result of an increase
      in
      sales of higher margin products as compared to lower margin products. The gross
      profit percentage of 20% did not change in the first nine months of 2005
      compared to the nine months ended September 30, 2004.





Selling,
      general and administrative, or SG&A, expenses were $1,637,348 or 29% of
      sales, in the third quarter of 2005, of which $551,851 was for Corporate and
      $1,085,497 was for our Combined Subsidiary compared to $331,853, or 64% of
      sales, in the third quarter of 2004, of which $158,468 was for Corporate and
      $173,385 for our Infiniti Subsidiary. This $1,305,495 increase in SG&A
      expense dollars in the third quarter of 2005 compared to the third quarter
      of
      2004 is primarily the result of expenses related to Corporate and our Combined
      Subsidiary, as compared to just Corporate and our Infiniti Subsidiary. For
      the
      nine months ended September 30, 2005, our SG&A expenses were $4,569,904 as
      compared to $1,630,267 for the comparable 2004 period. The $2,939,637 increase
      in SG&A expenses for the nine months ended September 30, 2005 compared to
      the same 2004 period was due primarily to expenses related to Corporate of
      $1,502,676, our Infiniti Subsidiary of $383,965, LaPolla Subsidiary of $534,524,
      and Combined Subsidiary of $2,148,739 compared to just Corporate of $1,039,247
      and our Infiniti Subsidiary of $591,020. The SG&A as a percent of our sales
      was 35 % for the nine months ended September 30, 2005 as compared to greater
      than 100% for the same 2004 period. The increase in SG&A expense dollars was
      a result of higher selling and marketing expenses in support of our sales
      growth, additional sales personnel, promotion and advertising costs, investor
      relations, and American Stock Exchange fees, sales travel, opening new sales
      offices, various insurance coverage premium increases connected to sales growth,
      opening warehouses in strategic locations nationally, stock compensation
      expenses to officers and directors, and relocating our corporate headquarters
      to
      Houston, Texas.





Professional
      fees consist of accounting, auditing, and legal fees. Our professional fees
      for
      the three months ended September 30, 2005 were $45,465, of which $29,877 was
      for
      Corporate and $15,588 was for our Combined Subsidiary as compared to $57,000,
      of
      which $56,539 was for Corporate and $461 was for our Infiniti Subsidiary for
      the
      comparable 2004 period. The decrease of $11,535 was primarily due to a decrease
      in attorney’s fees for past and current litigation related to Corporate. For the
      nine months ended September 30, 2005, our professional fees were $438,682,
      of
      which $355,967 was for Corporate, $75 was for our Infiniti Subsidiary, $19,117
      was for our LaPolla Subsidiary, and $63,523 was for our Combined Subsidiary
      as
      compared to $322,521, of which $316,914 was for Corporate and $5,607 was for
      our
      Infiniti Subsidiary, in the comparable period in 2004. The $116,162 increase
      in
      professional fees in the first nine months of 2005 compared to the same 2004
      period was primarily the result of an increase in attorney’s fees related to
      past and current Corporate litigation as well as auditing and accounting fees
      related to our acquisition of the LaPolla Subsidiary.





Our
      depreciation and amortization expense was $41,951 for the third quarter of
      2005,
      of which $18,936 was for Corporate and $23,015 was for our Combined Subsidiary
      compared to $16,424 for the third quarter of 2004, of which $15,834 was for
      Corporate and $590 was for our Infiniti Subsidiary. The increase of $25,527
      was
      primarily the result of purchasing property, plant and equipment for our
      manufacturing plants in Florida, Arizona and Texas and amortization of our
      intangible assets relating to the acquisition of our LaPolla Subsidiary. For
      the
      nine months ended September 30, 2005, our depreciation and amortization expense
      was $107,909, of which $60,278 was for Corporate, $6,656 was for our Infiniti
      Subsidiary, $2,076 was for our LaPolla Subsidiary, and $38,899 was for our
      Combined Subsidiary, while our depreciation and amortization expense was $58,092
      for the comparable 2004 period, of which $56,442 was for Corporate and $1,650
      was for our Infiniti Subsidiary. The $49,817 increase in depreciation and
      amortization expense in the first nine months of 2005 compared to the same
      2004
      period was primarily due to the acquisition of additional property, plant and
      equipment from our acquisition of the LaPolla Subsidiary, additional purchases
      of property, plant and equipment for our manufacturing and distribution
      facilities in Florida, Arizona and Texas, and amortization of our intangible
      assets in connection with our acquisition of the LaPolla
      Subsidiary.




We
      did
      not incur any research and development costs in the three or nine months ended
      September 30, 2005 or 2004.





Consulting
      fees for the three months ended September 30, 2005 were $69,516, of which
      $40,580 was for Corporate and $28,936 was for the Combined Subsidiary as
      compared to $51,144 for the three months ended September 30, 2004, of which
      $45,902 was for Corporate and $5,242 was for our Infiniti Subsidiary. For the
      nine months ended September 30, 2005, consulting fees were $194,908, of which
      $116,538 was for Corporate, $12,445 was for our Infiniti Subsidiary, $10,558
      was
      for our LaPolla Subsidiary and $55,367 was for our Combined Subsidiary as
      compared to $122,137 for the nine months ended September 30, 2004, of which
      $116,125 was for Corporate and $6,012 was for our Infiniti Subsidiary. The
      $72,771increase for the nine months ended September 30, 2005 as compared to
      the
      same period in 2004 was the result of an increase in the number and type of
      consultants engaged to provide business and financial consulting services to
      us.





14
 *Index*




For
      the
      three months ended September 30, 2005, our interest expense was $113,901, of
      which $108,254 was for Corporate and $5,647 was for our Combined Subsidiary
      as
      compared to $111,407 for the three months ended September 30, 2004, of which
      $101,401 was for Corporate and $10,006 was for our Infiniti Subsidiary. Our
      interest expense for the nine months ended September 30, 2005 was $224,783,
      of
      which $210,553 was for Corporate, $3,565 was for our Infiniti Subsidiary, $4,485
      was for our LaPolla Subsidiary, and $6,180 was for our Combined Subsidiary
      as
      compared to $250,693 for the nine months ended September 30, 2004, of which
      $202,036 was for Corporate and $48,657 was for our Infiniti Subsidiary. The
      decreases were primarily attributable to a decrease in the interest rate on
      loans payable - related party from 9% per annum for the 2004 year to 6% per
      annum for the 2005 year, partially offset by an increase from the note payable
      -
      other commencing on June 1, 2005. In addition, the principal balance on the
      loans payable - related party was $4,302,500 with accrued interest of $147,412
      as of September 30, 2005, as compared to a principal balance of $4,885,000
      with
      accrued interest of $184,898 as of September 30, 2004. Moreover, the principal
      balance on the note payable - other was $1,250,000 with accrued interest of
      $16,751 for the nine months ended September 30, 2005 as compared to $ -0- in
      2004.





Other
      income in the three months ended September 30, 2005 was $5,269 and other expense
      was $12, all of which related to our Combined Subsidiary, as compared to $
      -0-
      other income and other expense for the comparable 2004 period. Other income
      for
      the nine months ended September 30, 2005 was $19,847 and other expense of $12,
      all of which related to our Combined Subsidiary, as compared to $ -0- for the
      comparable period in 2004.





The
      income from discontinued operations for the three months ended September 30,
      2005 was $349,117 compared to a loss of $1,745,463 for the three months ended
      September 30, 2004. The income of $349,117 resulted primarily from a gain
      related to the disposition of prior written off machinery and equipment during
      the third quarter of 2005, partially offset by a nominal rent expense, revised
      estimate related to our discontinued operations reserve for litigation and
      accrued workman’s compensation liability. Our income from discontinued
      operations for the nine months ended September 30, 2005 was $24,526 compared
      to
      a loss of $3,399,643 for the nine months ended September 30, 2004. The income
      of
      $24,526 resulted primarily from a gain related to the disposition of prior
      written off machinery and equipment during the third quarter of 2005, partially
      offset by a nominal rent expense, revised estimate related to our discontinued
      operations reserve for litigation and accrued workman’s compensation
      liability.





**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, the acquisition of the
      LaPolla Subsidiary, merger of the Infiniti Subsidiary with and into the LaPolla
      Subsidiary, merger of the LaPolla Subsidiary with and into LaPolla, in
      conjunction with our initial and continuing retention of additional sales and
      marketing personnel during the first three quarters of 2005, we are experiencing
      substantial improvement in our ability to generate enough cash from our
      operations to meet our working capital requirements. The net cash used in
      operating activities for the nine months ended September 30, 2005 was $2,898,203
      compared to cash used of $4,612,561 for the nine months ended September 30,
      2004. The decrease in net cash used in operating activities of $1,714,358 was
      primarily due to the discontinuation of our RSM Subsidiary, partially offset
      by
      an increase in cash required to fund growth in trade receivables, and a net
      increase in cash required to fund changes in other net operating assets and
      liabilities. We were required to expend certain funds during the first three
      quarters of 2005 to enhance our infrastructure to be able to effectively manage
      the growth surge we are continuing to experience in our sales, which included
      attracting and retaining new executives, integrating our LaPolla Subsidiary,
      creating sales, marketing and promotional materials, rolling out our LaPolla
      Products in national trade shows, implementing new software to centralize
      accounting processes, satisfying non-recurring liabilities related to our
      discontinued RSM Products business, adding more sales personnel to open up
      new
      markets for our Comprehensive Products in strategic locations, identifying
      and setting up a multitude of geographically situated public warehouses to
      support our national sales strategies, and relocating our corporate offices
      to
      Texas.





Net
      cash
      used in investing activities in the first nine months of 2005 was $2,308,067
      as
      compared to $141,737 in the comparable 2004 period. We invested $307,959 in
      property, plant and equipment during the nine months ended September 30, 2005
      compared to $154,157 during the same period in 2004. Additionally, we invested
      $1,931,825, which is $2,000,000 net of $68,175 cash acquired, for the
      acquisition of our LaPolla Subsidiary, of which $1,384,707 was capitalized
      as
      goodwill and other intangible assets. Net cash used in investing activities
      also
      includes $68,283 used for and $12,420 provided by deposits and other non-current
      assets during the nine months ended September 30, 2005 and 2004,
      respectively.





Net
      cash
      provided by financing activities was $5,539,511 in the first nine months of
      2005
      compared to net cash provided by financing activities of $4,782,154 in the
      first
      nine months of 2004. During the first nine months of 2005, we repaid $164,500,
      $181,805, and $1,778, respectively, as compared to $9,600, $43,806, and $1,482,
      respectively, on our lines of credit, long term debt, and capital lease
      obligations, respectively, in the first nine months of 2004. During the first
      nine months of 2005, we borrowed $8,012, $4,302,500, and $1,250,000,
      respectively, as compared to $12,042, $4,825,000, and $-0-, respectively, from
      our lines of credit, loans payable - related party, and note payable - other,
      respectively, in the first nine months of 2004. We had proceeds from issuance
      of
      long term debt in the amount of $327,082 for the nine months ended September
      30,
      2005 compared to $-0- for the same period in 2004.





As
      of
      September 30, 2005, we had $357,706 of cash on hand as compared to $24,465
      at
      December 31, 2004, representing a net increase in cash of $333,241 for the
      nine
      months ended September 30, 2005. During the nine months ended September 30,
      2005, our working capital deficit decreased $1,900,680 from a deficit of
      $7,786,671 as of December 31, 2004 to a deficit of $5,885,991 as of September
      30, 2005. This decrease in the working capital deficit resulted from a decrease
      of $1,367,500 in loans payable - related party and a decrease in interest of
      $138,454 due to the Chairman from debt cancellation, a $2,774,761increase in
      accounts payable, a $39,518 decrease in accrued expenses and other current
      liabilities and an increase of $143,498 in long-term debt, after taking into
      account a $2,878,435 increase in net accounts receivable, an increase in
      inventory of $587,768, a $156,488 decrease in the lines of credit, an increase
      of $158,070 in prepaid expenses and other current assets, and a decrease of
      $812,562 in liabilities from discontinued operations. We also had an increase
      in
      the reserve for litigation in the amount of $160,378.




15
 *Index*




We
      believe that the net cash provided by our operating activities, supplemented
      as
      necessary with borrowings available under our existing credit facilities, will
      provide us with sufficient resources to meet our working capital requirements
      during the remainder of this year and into the first quarter of 2006. Based
      on
      our sales growth trend, we will require additional funds to maintain and further
      improve our financial relationships with our main vendors and to fund growth
      in
      our trade receivables. The Chairman has loaned us $4,302,500 and is a
      co-borrower or has personally guaranteed $2,524,080 for added security on lines
      of credit, vendor accounts, and a note payable, which we are responsible to
      repay or otherwise settle. Based on the foregoing, the Company is anticipating
      raising monies during the fourth quarter of 2005 and first quarter of 2006,
      through private placements of debt or equity, to obtain sufficient resources
      to
      meet its long term working capital requirements, debt service and other cash
      needs over the next twelve months or until we repay or settle the financial
      matters between us and the Chairman and become self sufficient with the cash
      received from our operating activities to operate our business without outside
      financial assistance. There can be no assurance that the Company will be able
      to
      obtain any funds, or if obtainable, on terms that are commercially
      feasible.





**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 SG&A 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; (d) sources, amounts, and concentration
      of
      sales; (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. 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.**
            **Quantitativeand
                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 LaPolla 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 September 30, 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.




16
 *Index*




**PART
      II — OTHER INFORMATION**




**Item
              1.**
            **Legal
                Proceedings.**





The
      disclosures set forth under Part I, Item 3, “Legal Proceedings” in our
      Annual Report on Form 10-K for the year ended December 31, 2004 and
      Part II, Item 1 in our Quarterly Reports on Form 10-Q for the quarters
      ended March 31, 2005 and June 30, 2005, as may be amended from time to
      time, are hereby incorporated in their entirety herein by this
      reference.





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, which are, in our opinion, immaterial both individually and in the
      aggregate with respect to our consolidated financial position, liquidity or
      results of operations.




**Item
              2.**
            **Changes
                in Securities and Use of
                Proceeds.**




**Recent
      Sales of Unregistered Securities**





During
      the quarterly period ended September 30, 2005, we issued restricted common
      stock
      for a certain private transaction, in reliance on Section 4(2) of the Act,
      as
      described below:





(a)  On
      July
      12, 2005, we issued an aggregate of 8,000 shares of restricted common stock
      to
      our CEO, originally scheduled to vest in 4,000 share increments at the end
      of
      the third and fourth quarters of 2005 as other compensation, pursuant to his
      employment agreement, which were valued and recorded at $5,360.




**Item
              3.**
            **Defaults
                Upon Senior Securities.**




None.





**Item
              4.**
            **Submission
                of Matters to a Vote of Security
                Holders.**





An
      Information Statement was provided to all of our stockholders to comply with
      the
      requirements of Section 14(c) of the Securities Exchange Act of 1934, as
      amended, and to provide information to all stockholders in connection with
      actions by written consent taken on July 12, 2005 by certain stockholders
      collectively owning 75.06% of our outstanding shares of common stock as of
      the
      record date of July 11, 2005. Such action constituted the approval and consent
      of stockholders representing a sufficient percentage of the total outstanding
      shares of common stock to approve the proposed Equity Incentive Plan.
      Accordingly, the actions were not submitted to our other stockholders for a
      vote. The written consent became effective on August 31, 2005.





**Item
              5.**
            **Other
                Information.**





None.




**Item
              6.**
            **Exhibits.**




***See*** Index of
      Exhibits on Page 19.




17
 *Index*




**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.







**LAPOLLA
              INDUSTRIES, INC.**Date: 11/14/05
            By:
            /s/ Michael
              T. AdamsMichael T. AdamsCEO







**LAPOLLA
              INDUSTRIES, INC.**Date: 11/14/05
            By:
            /s/ C.
              David Stearnes, CFOC. David StearnesCFO
              and Treasurer




18
 *Index*




**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 Principal 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.




19