UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

Form 10-QSB

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

For the Quarter Ended September 30, 2005

Commission File Number 000-31233

## Green Dolphin Systems Corporation

(Name of Small Business in its Charter)

Delaware                                                          88-0432539

(State of  Incorporation or organization)            IRS Employer Identification No.



3702 Neal Drive, Suite 102, Knoxville, TN              37918

(Address of principal executive offices)         (Zip code)

Issuer's Telephone Number:  (865) 922-6947

Transitional Small Business Disclosure Format (Check one):  Yes[]  No [x]

**Part I**

**Item 1.** Financial Statements

Green Dolphin Systems Corporation

INDEX TO FINANCIAL STATEMENTS

|CONTENTS                                                                                                          |    
|----------------------------------------------------------------------------------------------------------------- | ---
|Consolidated Balance Sheet at September 30, 2005 (unaudited)                                                      | 3  
|Consolidated Statements of Operations for the three and nine months ended
September 30, 2005 and 2004 (unaudited) | 4  
|Consolidated Statements of Cash Flows for the nine months ended September
30, 2005 and 2004 (unaudited)           | 5  
|Notes to Consolidated Financial Statements                                                                        | 6-8





Green Dolphin Systems Corporation

Consolidated Balance Sheet

|                                                                                                                              | (unaudited)
September 30,
2005
|----------------------------------------------------------------------------------------------------------------------------- | ------------------------------
|ASSETS                                                                                                                        |                               
|Current Assets                                                                                                                |                               
|Cash                                                                                                                          | $     18,708                  
|Accounts receivable, net                                                                                                      | 10,245                        
|Inventory                                                                                                                     | 24,200                        
|Prepaid expenses                                                                                                              | 1,250                         
|Total Current Assets:                                                                                                         | 54,403                        
|Property and equipment, net                                                                                                   | 620                           
|Other Assets                                                                                                                  |                               
|Trademarks and copyrights, net                                                                                                | 173,331                       
|Total Assets:                                                                                                                 | $   228,354                   
|LIABILITIES AND SHAREHOLDERS' DEFICIT                                                                                         |                               
|Current Liabilities                                                                                                           |                               
|Accounts payable                                                                                                              | $     51,559                  
|Accrued expenses                                                                                                              | 1,226                         
|Total Current Liabilities                                                                                                     | 52,785                        
|Other Liabilities                                                                                                             |                               
|Due to related companies                                                                                                      | 428,650                       
|Total Liabilities:                                                                                                            | 481,435                       
|Shareholders' deficit Common stock (0.001 par value; 100,000,000
shares authorized; 29,673,700 shares issued and outstanding) | 29,674                        
|Additional paid in capital                                                                                                    | 809,382                       
|Accumulated deficit                                                                                                           | (1,092,137)                   
|Total Shareholders' deficit                                                                                                   | (253,081)                     
|Total Liabilities and Shareholders' Deficit:                                                                                  | $   228,354                   

The accompanying notes are an integral part of these financial statements.

Green Dolphin Systems Corporation

Consolidated Statements of Operations

|                                                               | (unaudited)Three months ended
September 30 | (unaudited)Nine months ended
September 30
|-------------------------------------------------------------- | ------------------------------------------ | -----------------------------------------
|                                                               | 2005                                       | 2004                                     
|Sales                                                          |                                            |                                          
|Related party                                                  | $   85,418                                 | $      135,951                           
|Other                                                          | 34,882                                     | 24,169                                   
|Total Sales:                                                   | 120,300                                    | 160,120                                  
|Cost of Sales                                                  | 54,932                                     | 133,751                                  
|Gross margin                                                   | 65,368                                     | 26,369                                   
|Expenses                                                       |                                            |                                          
|General and
administrative
expenses                            | 93,086                                     | 41,517                                   
|Compensation
for Officers and
Directors                        | ---                                        | ---                                      
|Loss before
income taxes                                       | (27,718)                                   | (15,148)                                 
|Income taxes                                                   | ---                                        | ---                                      
|Net Loss                                                       | (27,718)                                   | (15,148)                                 
|Weighted
average
common shares
outstanding ­
basic and diluted | 29,673,700                                 | 21,848,700                               
|Net loss per
common share­
basic and diluted                   | $       (0.00)                             | $       (0.00)                           
|                                                               |                                            |                                          

The accompanying notes are an integral part of these financial statements.

Green Dolphin Systems Corporation

Statements of Cash Flows

For the nine months ended September 30,

|                                                                             | (unaudited)2005 | (unaudited)2004
|---------------------------------------------------------------------------- | --------------- | ---------------
|Net cash flows from operating activities                                     | $  (26,135)     | $   (80,457)   
|Cash flows from investing activities                                         |                 |                
|Acquisition of furniture and equipment                                       | ---             | (788)          
|Cash flows from financing activities                                         |                 |                
|Advances from related companies                                              | 17,802          | 43,565         
|Net change in cash                                                           | (8,333)         | (37,680)       
|Cash, beginning of period                                                    | 27,041          | 74,255         
|Cash, end of period                                                          | $   18,708      | $     36,575   
|Supplemental Disclosures:                                                    |                 |                
|Interest Paid                                                                | ---             | ---            
|Income Taxes Paid                                                            | ---             | ---            
|Non-Cash Investing and Financing Activities                                  |                 |                
|Issuance of common stock to Officers and
    Directors for services rendered | $   207,000     | $    ---       
|Issuance of common stock to consultants for
    services rendered            | $     41,750    | $    ---       

The accompanying notes are an integral part of these financial statements.

Green Dolphin Systems Corporation

Notes to Consolidated Financial Statements

1. Basis of Presentation

The accompanying unaudited financial statements of Green Dolphin Systems Corporation have
been prepared in accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-QSB and Article 10 of regulation S-X.
Accordingly, they do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements.  In the opinion of management,
all adjustments (consisting of normal recurring accruals) considered necessary for fair
presentation have been included.  Operating results for the periods ended September 30, 2005 are
not necessarily indicative of the results that may be expected for the fiscal year ended December
31, 2005.

For further information, refer to the audited financial statements and the footnotes thereto for the
fiscal year ended December 31, 2004 included in the Company's Annual Report on Form
10-KSB.

2. Common Stock

In January 2005, the Company issued 6,600,000 shares of restricted common stock with a fair
value of $198,000 or $0.03 per share to a Director and Officer for services rendered for the past
four years to the Company.

In January 2005, the Company issued 300,000 shares of restricted common stock with a fair
value of $9,000 or $0.03 per share to three Directors (each receiving 100,000 shares) for services
rendered to the Company.

In January 2005, the Company issued 575,000 shares of restricted common stock with a fair
value of $17,250 or $0.03 per share to nine consultants for services rendered to the Company.

In March 2005, the Company issued 350,000 shares of restricted common stock with a fair value
of $24,500 or $0.07 per share to Hollandale Farms Ltd. for research and development services
rendered to the Company.

3. Segment Information

The Company's sales consist of sales in the United States and Canada.  The composition of sales
for the three months ended September 30, 2005 and 2004 were U.S. sales of $34,882 and
$24,169, and Canadian sales of $85,418 and $135,951, respectively.  The composition of sales
for the nine months ended September 30, 2005 and 2004 in the U.S. were $170,883 and
$220,244, and in Canada were $360,534 and $329,749, respectively.

Green Dolphin Systems Corporation

Notes to Consolidated Financial Statements

4. Recently Issued Accounting Standards

In November 2004, the Financial Accounting Standards Board ("FASB") issued Statement of
Financial Accounting Standard ("SFAS") No. 151 "Inventory Costs ­ an amendment of ARB No.
43, Chapter 4" ("SFAS 151").  This statement amends the guidance in ARB No. 43, Chapter 4,
"Inventory Pricing," to clarify the accounting for abnormal amounts of idle facility expense,
freight, handling costs, and wasted material (spoilage).  SFAS 151 requires that those items be
recognized as current-period charges.  In addition, this Statement requires that allocation of fixed
production overheads to costs of conversion be based upon the normal capacity of the production
facilities.  The provisions of SFAS 151 are effective for fiscal years beginning after June 15,
2005.  As such, the Company is required to adopt these provisions at the beginning of the fiscal
year ended December 31, 2006.  The Company is currently evaluating the impact of SFAS 151
on its consolidated financial statements.

In December 2004, the FASB issued SFAS No. 153, "Exchanges of Nonmonetary Assets - an
amendment of APB Opinion No. 29" ("SFAS 153").  SFAS 153 replaces the exception from fair
value measurement in APB Opinion No. 29 for nonmonetary exchanges of similar productive
assets with a general exception from fair value measurement for exchanges of nonmonetary
assets that do not have commercial substance.  A nonmonetary exchange has commercial
substance if the future cash flows of the entity are expected to change significantly as a result of
the exchange.  SFAS 153 is effective for all interim periods beginning after June 15, 2005.  As
such, the Company is required to adopt these provisions at the beginning of the fiscal quarter
ended September 30, 2005.  The Company does not anticipate the adoption of SFAS 153 to have
a material impact on its consolidated financial statements.

In December 2004, the FASB issued SFAS No. 123R, "Share-Based Payment" ("SFAS 123R").
SFAS 123R revises FASB Statement No. 123 "Accounting for Stock-Based Compensation" and
supersedes APB Opinion No. 25 "Accounting for Stock Issued to Employees".  SFAS 123R
requires all public and non-public companies to measure and recognize compensation expense
for all stock-based payments for services received at the grant-date fair value, with the cost
recognized over the vesting period (or the requisite service period).  SFAS 123R is effective for
small business issuers for fiscal years beginning after December 15, 2005.  As such, the
Company is required to adopt these provisions at the beginning of the fiscal year ended
December 31, 2006.  The Company is currently evaluating the impact of SFAS 123R on its
consolidated financial statements.

In May 2005, the FASB issued SFAS No. 154, "Accounting Changes and Error Corrections ­ a
replacement of APB Opinion No. 20 and FASB Statement No. 3" ("SFAS 154").  SFAS 154
changes the requirements for the accounting for and reporting of a change in accounting
principle.  These requirements apply to all voluntary changes and changes required by an
accounting pronouncement in the unusual instance that the pronouncement does not include
specific transition provisions.  SFAS 154 is effective for fiscal years beginning after December
15, 2005.  As such, the Company is required to adopt these provisions at the beginning of the
fiscal year ended December 31, 2006.  The Company is currently evaluating the impact of SFAS
154 on its consolidated financial statements.

Green Dolphin Systems Corporation

Notes to Consolidated Financial Statements

5. Acquisition

In June 2005, the Company entered into a Securities Exchange Agreement with Kettleby Soap
Company Inc.

in exchange for 8,000,000 shares.  The Agreement was subsequently terminated in December
2005 for non-

compliance with the terms of the Agreement.  The shares issued in connection with this
agreement were also

returned and cancelled.

6. Subsequent Events

In January 2006, in an effort to address the debt of the Company and to restructure, the Board
agreed to sell the Company's chemical operations and assets to Penta Deltex Ltd. (a related party)
in exchange for the forgiveness of the balance owed by the Company to Penta Deltex Ltd. of
$153,683.

In January 2006, an agreement was reached between the Company and Green Dolphin Systems
Canada (a related party) ("GDS Canada") and Nicholas Plessas, stockholder, whereby GDS
Canada and Mr. Plessas would forgive the balance owed by the Company to GDS Canada and
Mr. Plessas of $263,717, along with GDS Canada assuming responsibility of the Company's
balance on the cash overdraft line of credit with the Royal Bank of Canada of $65,000.

**Item 2.** MANAGEMENT'S DISCUSSION AND ANALYSIS OR

PLAN OF OPERATION

**Results of Operation:**

Revenues:

For the three months ended September 30, 2005, total revenues were $120,300, while in the same
period 2004, revenues were $160,120.  The cost of sales was $54,932 for the three months ended
September 30, 2005, compared to $133,751 in 2004, with the gross margin being $65,368 and
$26,369, respectively.  The decrease in total revenues was primarily due to the overall decrease
in Canadian sales, due to the decrease in sales orders from a major Canadian customer.  For the
three months ended September 30, 2005, the cost of sales was 46% of total revenues, compared
to 84% of total revenues in the same quarter of 2004.  The decrease in the cost of sales was
primarily due to the overall decrease in revenues, in addition to a shift in sales activities to more
service/application work, which have more favorable profit margins than product sales.

For the nine months ended September 30, 2005, the revenues totaled $531,417, showing a
decrease of 3% over the same period in 2004 of $549,993.  The gross margin for the same period
increased to 53% in 2005, versus 33% in 2004.  The increase in the gross margin was seen
primarily in Canada, where the bulk of the revenues were realized through service/applications
work, which have more favorable margins than from product sales.

General and Administrative Expenses:

Expenses for the three months ended September 30, 2005 totaled $93,086, compared to $41,517
for the same period in 2004.  The increase was primarily due to the addition of an office support
staff position, and overall increases in licenses/permits, travel, and freight expenses.

For the nine months ended September 30, 2005, the expenses totaled $401,371, including
$41,750 in stock issuances for services rendered, compared to $236,041 for the nine months
ended September 30, 2004.  While there were decreased expenditures in areas such as rent,
increases were notable in licenses/permits, travel, freight, and administrative staff/consultants.

Officers and Directors Compensation:

The amount for the nine months ended September 30, 2005 was due to the issuance of shares to
the former CEO and President and the three members of the Board of Directors for prior services
performed, valued at $207,000.  There was no corresponding stock issuance and charge in the
prior year period ended September 30, 2004.

**Plan of Operation:**

Green Dolphin Systems Corporation is in the business of distributing water based, environmental
and user-friendly products in four primary areas:

1. products for the cleaning and remediation of ceiling and wall tiles,

2. fire retardants suitable for use on fabrics, wood and other building materials,

3. oxygen activated stain remover and laundry detergent and additives, and

4. general cleaning chemicals.

The breakdown of the gross revenue generated from each segment is as follows:

1. ceiling and wall tiles ­ 30%

2. fire retardants ­ 20%

3. laundry ­ 35%

4. general ­ 15%

As funding becomes available, the Company intends to increase expenditures for tradeshow
presentations, trade journal advertising and direct marketing by hiring additional in-house
personnel.  Such increases will be affected only if warranted by increased revenues.

Green Dolphin is working diligently to increase its revenues by focusing on the fundamentals.
There is intent is to grow its market for ceiling and wall restorers, fire retardant and non-slip
floor treatment products by increasing the number of product distributors.  This is being done
through direct face-to-face presentations, as well as, generally expanding the network of business
associates.

At the present time, Green Dolphin does not have any substantial commitments for capital
expenditures.  It intends to operate on its current business plan, without substantial change or
additional expenditures for the foreseeable future.

Billing and delivery policies are as follows:

International sales, that which are sales to purchasers outside North America, are made to
distributors pursuant to Exclusive Agency Distribution Agreements which require payment for
the shipments by irrevocable letter of credit, certified checks or bank drafts before the items leave
the plant.

They are shipped F.O.B. shipping point.  Overseas Agents are responsible to assign their
independent inspection service companies to inspect each shipment.  North America sales are
made F.O.B. shipping point, but are made subject to the right of the purchasers to inspect and
either accept or reject damaged shipments within seven (7) days of receipt.  Terms of payment on
domestic shipments are 2% - 15 days, net ­ 30 days.  On both domestic and off-shore shipments,
revenues are recorded when the goods are shipped and the right of return has expired.

On both domestic and off-shore shipments, Green Dolphin's policy is to replace goods received
in damaged condition.  Over the last two years, Green Dolphin has been required to replace $688
in damaged goods.  In light of the durability of the goods shipped, the resulting small return rate
and the return rate that is likely to prevail in the future, no material change in our historical or
future net income would, or is likely to result from the adoption of different revenue recognition
or damaged goods policy.

The Company also expects to sign additional international agents consistently over the next
eighteen months.  There is no known fact which would cause the expenses of operation to
increase more than corresponding increases in revenues.  Though the volume of sales fluctuates
somewhat from quarter to quarter, those fluctuations are not seasonal.  They result from natural
variations in selling success, which are typical of companies involved in product distribution.

Green Dolphin believes it will continue as a going concern on the basis of present revenues from
operations.  Its present growth assumptions are based on internal expansion from execution of its
business plan.  The Company does not anticipate any need for additional financing during fiscal
year 2005.  If capital acquisition should become feasible on any basis during the next year, such
prospect will be evaluated on their merit.

The Company effected two Board Resolutions during the first quarter of 2005.  The first Board
Resolution was made effective as of January 28, 2005 to issue a total of 7,475,000 restricted
common shares compensating the four Board members in lieu of cash for the work and
consultation on the business development during the past four years.  The majority of the shares
were awarded to Mr. Nicholas Plessas for the inadequate income compensation during the past
four years.  There were nine additional individuals that have assisted and supported the Company
over the past few years and they received shares in lieu of cash.  The restricted common shares
were issued on reliance for the exemption provided by Section 4(2) of the 1933 Act.  The second
Board Resolution was made effective as of March 2, 2005, and Hollandale Farms Ltd. was
awarded 350,000 restricted common shares for the research and development and on-site training
of two natural Green Dolphin products.  The shares were issued on reliance on the exemption
provided by Section 4(2) of the 1933 Act.

Off-Balance Sheet Transactions

The Company has no off-balance sheet arrangements that have or are reasonably likely to have a
current or future effect on our financial condition, changes in financial condition, revenues or
expenses, results of operations, liquidity, capital expenditures or capital resources that is material
to investors.

Primary Risks of Operations

Investment in Green Dolphin shares involves a high degree of risk arising from the following
factors, among others:

1. The uncertainty of additional financing;

2. The start-up posture of the Company;

3. The limited scope of the present market for the Company's products;

4. The early stage of execution of its business plan;

5. The lack of voluntary adoption of certain safeguards, including creation of an audit committee,
adherence to director independence standards and adoption of a Code of Ethics, may not provide
protections to investors that adoption of these and other corporate governance measures might
provide; and

6. As a result of its small sales volume, minimal capitalization, its limited sales force and
production capacity, its over-all lack of exposure in the relevant markets, and its inability to pay
for substantial advertising, it is unlikely that Green Dolphin will be able to overcome its
competitive disadvantages or establish a significant impact on the markets for the products it
distributes in the foreseeable future.

**Item 3.** CONTROLS & PROCEDURES

There have been no changes in our internal control over financial reporting as defined in Rule
13a-15(f) of the Exchange Act that occurred during the period ended September 30, 2005, that
has materially affected, or is reasonably likely to affect, our internal control over financial
reporting. We intend to continually review and evaluate the design and effectiveness of our
disclosure controls and procedures and to improve our controls and procedures over time and to
correct any deficiencies that we may discover in the future.

**PART II ­ OTHER INFORMATION**

**Item 1.** Legal Proceedings

As of the date of this report, we are not a party to any pending legal proceeding and are not aware
of any threatened legal proceeding.

**Item 2**.  Unregistered sales of Equity Securities and Use of Proceeds

On January 28, 2005, we issued 6,600,000 shares of restricted common stock with a fair value of
$198,000 or $0.03 per share to a Director and Officer for services rendered for the past four years
to the Company.

On January 28, 2005, we issued 300,000 shares of restricted common stock with a fair value of
$9,000 or $0.03 per share to three Directors (each receiving 100,000 shares) for services rendered
to the Company.

On January 28, 2005, we issued 575,000 shares of restricted common stock with a fair value of
$17,250 or $0.03 per share to nine consultants for services rendered to the Company.

On March 2, 2005, we issued 350,000 shares of restricted common stock with a fair value of
$24,500 or $0.07 per share to Hollandale Farms Ltd. for research and development services
rendered to the Company.

**Item 3.** Defaults upon Senior Securities

There have been no material defaults in the payments of principal, interest, a sinking or purchase
fund installment, or any other material default not cured within thirty days during the period
covered by this report.

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

No matter has been submitted to a vote of security holders through solicitation or proxies during
the period covered by this report.

**Item 5.** Other Information

None.

**Item 6.** Exhibits:

The exhibits required by Item 601 of Regulation S-B, as described in the following index of
exhibits, are incorporated by reference or filed with this report as follows:

Exhibit No. Description of Exhibit

31.1 Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002

31.2 Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002

32.1 Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906
of the Sarbanes-Oxley Act of 2002

**SIGNATURES**

In accordance with the requirements of the Exchange Act, the registrant caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.

Green Dolphin Systems Corporation

/s/ William Kefalas

Date:  May 18, 2006

William Kefalas

President and CEO