**UNITED      STATES SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON,      D.C. 20549**

----

**FORM      10-QSB**

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**Commission      File Number **
**000-51155**

**Coastal      Bancshares Acquisition Corp.**

| **Delaware**                                                  | **20-1191778**                                      |
|---------------------------------------------------------------|-----------------------------------------------------|
| (State                or other Jurisdiction of incorporation) | (I.R.S.                Employer Identification No.) |

**9821      Katy Freeway, Suite 500**

**Houston,      Texas**

**(713)      827-2104**

** **

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|  **Index**                                            |   | **Page                No.**                                                                            |
|------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------|
| **Part                I: Condensed Financial Information** |   |                                                                                                   |
|                                                       |   |                                                                                                   |   |   |   |   |
|                                                       |   | Item                1 -Financial Statements                                                            |   | 3 |
|                                                       |   |                                                                                                   |   |   |   |   |
|                                                       |   |                                                                                                   |   | Condensed                Balance Sheets |   | 3 |
|                                                       |   |                                                                                                   |   | Condensed                Unaudited Statements of Operations |   | 4 |
|                                                       |   |                                                                                                   |   | Condensed                Unaudited Statements of Cash Flows |   | 5 |
|                                                       |   |                                                                                                   |   | Notes                to Condensed Financial Statements |   | 6 |
|                                                       |   |                                                                                                   |   |   |   |   |
|                                                       |   | Item                2 - Management’s Discussion and Analysis or Plan of                Operation |   | 11 |
|                                                       |   |                                                                                                   |   |   |   |   |
|                                                       |   | Item                3 - Controls and Procedures                                                        |   | 15 |
|                                                       |   |                                                                                                   |   |   |   |   |
| **Part                II. Other Information**              |   |                                                                                                   |
|                                                       |   |                                                                                                   |   |   |   |   |
|                                                       |   | Item                2 - Unregistered Sales of Equity Securities and Use of Proceeds                    |   | 15 |
|                                                       |   |                                                                                                   |   |   |   |   |
|                                                       |   | Item                6 - Exhibits and Reports on Form 8-K                                               |   | 15 |
|                                                       |   |                                                                                                   |   |   |   |   |
| Signatures                                                 |   |                                                                                                   |   | 17 |
| Exhibit                Index                               |   |                                                                                                   |

----

**PART      I. CONDENSED FINANCIAL INFORMATION**

**Item      1. Condensed Financial Statements**

**COASTAL      BANCSHARES ACQUISITION CORP.**

**(A      Corporation in the Development Stage)**

**CONDENSED      BALANCE SHEETS**

|                                                                                                                                                                                                          |   | **December                  31, 2005 (restated)** |       | **June                  30, 2006**  |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------|------------|------------------------------------------|--------|
| **ASSETS**                                                                                                                                                                                                    |   |                                              |       |                                     |   |
| **Current                  Assets**                                                                                                                                                                           |   |                                              |       |                                     |   |
| Cash                  and cash equivalents                                                                                                                                                                    |   | $                                                 | 925,643    |                                     | $      | 100,236 |   |
| Trust                  fund                                                                                                                                                                                   |   |                                              | 29,269,727 |                                     |   | 29,908,477 |   |
| Prepaid                  expenses                                                                                                                                                                             |   |                                              | 19,630     |                                     |   | 15,540 |   |
| Total                  current assets                                                                                                                                                                         |   |                                              | 30,215,000 |                                     |   | 30,024,253 |   |
| **Deferred                  acquisition costs**                                                                                                                                                               |   |                                              | -          |                                     |   | 624,584 |   |
|                                                                                                                                                                                                          |   | $                                                 | 30,215,000 |                                     | $      | 30,648,837 |   |
|                                                                                                                                                                                                          |   |                                              |       |                                     |   |   |   |
| **LIABIITES                  AND STOCKHOLDERS' EQUITY**                                                                                                                                                       |   |                                              |       |                                     |   |   |   |
| **Current                  Liabilities**                                                                                                                                                                      |   |                                              |       |                                     |   |   |   |
| Accounts                  payable and accrued expenses                                                                                                                                                        |   | $                                                 | 95,550     |                                     | $      | 227,779 |   |
| Warrant                  liability                                                                                                                                                                            |   |                                              | 4,747,200  |                                     |   | 3,532,800 |   |
| Federal                  income tax payable                                                                                                                                                                   |   |                                              | 123,000    |                                     |   | 144,000 |   |
| Total                  liabilities                                                                                                                                                                            |   |                                              | 4,965,750  |                                     |   | 3,904,579 |   |
|                                                                                                                                                                                                          |   |                                              |       |                                     |   |   |   |
| **Common                  stock subject to stockholders' right to conversion; 1,103,448 shares                  at                  conversion value**                                                        |   |                                              | 5,851,018  |                                     |   | 5,978,704 |   |
|                                                                                                                                                                                                          |   |                                              |       |                                     |   |   |   |
| **Commitment                  - Note 7**                                                                                                                                                                      |   |                                              |       |                                     |   |   |   |
|                                                                                                                                                                                                          |   |                                              |       |                                     |   |   |   |
| **Stockholders'                  equity:**                                                                                                                                                                    |   |                                              |       |                                     |   |   |   |
| Preferred                  stock, $0.01 par value; 5,000,000 shares authorized                                                                                                                                |   |                                              | -          |                                     |   | - |   |
| Common                  stock, $0.01 par value; 50,000,000 million shares authorized; 6,520,000                  outstanding (including the 1,103,448 shares subject to possible                  conversion) |   |                                              | 54,166     |                                     |   | 54,166 |   |
| Additional                  paid-in capital                                                                                                                                                                   |   |                                              | 16,836,761 |                                     |   | 16,709,075 |   |
| Deferred                  compensation                                                                                                                                                                        |   |                                              | (93,506    | )                                        |   | (21,578 | ) |
| Earnings                  accumulated during the development stage                                                                                                                                            |   |                                              | 2,600,811  |                                     |   | 4,023,891 |   |
|                                                                                                                                                                                                          |   |                                              | 19,398,232 |                                     |   | 20,765,554 |   |
|                                                                                                                                                                                                          |   | $                                                 | 30,215,000 |                                     | $      | 30,648,837 |   |

*See        accompanying notes to condensed financial statements*

----

**COASTAL      BANCSHARES ACQUISITION CORP.**

**(A      Corporation in the Development Stage)**

**CONDENSED      UNAUDITED STATEMENTS OF OPERATIONS**

|                                                      |   | **Three                  Months Ended June 30,** |       | **Six                  Months Ended June 30,** |   | **Period                  from incepton****(May                  19,** |   |
|-----------------------------------------------------------|--------|--------------------------------------------------|------------|------------------------------------------------|--------|------------------------------------------------------------------------|--------|
|                                                      |   | **(Restated)**                                   |       |                                           |   | **(Restated)**                                                         |   |   |   | **2004)                  Ended **  |   |
|                                                      |   | **2005**                                         |       | **2006**                                       |   | **2005**                                                               |   | **2006** |   | **June                  30,                  2006**  |   |
|                                                      |   |                                             |       |                                           |   |                                                                   |   |   |   |   |   |
| Formation                  and operating costs            |   | $                                                | 135,867    |                                           | $      | 150,264                                                                |   | $ | 203,801 |   | $ | 293,675 |   | $ | 804,089 |   |
|                                                      |   |                                             |       |                                           |   |                                                                   |   |   |   |   |   |   |   |   |   |   |
| Operating                  income (loss)                  |   |                                             | (135,867   | )                                              |   | (150,264                                                               | )      |   | (203,801 | ) |   | (293,675 | ) |   | (804,089 | ) |
|                                                      |   |                                             |       |                                           |   |                                                                   |   |   |   |   |   |   |   |   |   |   |
| Interest                  income:                         |   |                                             |       |                                           |   |                                                                   |   |   |   |   |   |   |   |   |   |   |
| Received                  and accrued                     |   |                                             | 5,457      |                                           |   | 1,938                                                                  |   |   | 7,980 |   |   | 6,709 |   |   | 756,736 |   |
| Market                  value adjustment                  |   |                                             | 211,364    |                                           |   | 346,944                                                                |   |   | 289,856 |   |   | 638,749 |   |   | 694,146 |   |
|                                                      |   |                                             | 216,821    |                                           |   | 348,882                                                                |   |   | 297,836 |   |   | 645,458 |   |   | 1,450,882 |   |
|                                                      |   |                                             |       |                                           |   |                                                                   |   |   |   |   |   |   |   |   |   |   |
| Warrant                  liability income                 |   |                                             | 3,422,400  |                                           |   | 3,091,200                                                              |   |   | 1,876,800 |   |   | 1,214,400 |   |   | 3,643,200 |   |
|                                                      |   |                                             |       |                                           |   |                                                                   |   |   |   |   |   |   |   |   |   |   |
| Pre-tax                  income                           |   |                                             | 3,503,354  |                                           |   | 3,289,818                                                              |   |   | 1,970,835 |   |   | 1,566,183 |   |   | 4,289,993 |   |
| Provision                  for income taxes               |   |                                             | 39,785     |                                           |   | 80,000                                                                 |   |   | 43,385 |   |   | 143,103 |   |   | 266,102 |   |
|                                                      |   |                                             |       |                                           |   |                                                                   |   |   |   |   |   |   |   |   |   |   |
| **Net                  income**                           |   | $                                                | 3,463,569  |                                           | $      | 3,209,818                                                              |   | $ | 1,927,450 |   | $ | 1,423,080 |   | $ | 4,023,891 |   |
|                                                      |   |                                             |       |                                           |   |                                                                   |   |   |   |   |   |   |   |   |   |   |
| **Weighted                  average shares outstanding:** |   |                                             |       |                                           |   |                                                                   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                     |   |                                             | 6,520,000  |                                           |   | 6,520,000                                                              |   |   | 5,056,133 |   |   | 6,520,000 |   |   | 4,553,679 |   |
| Diluted                                                   |   |                                             | 17,560,000 |                                           |   | 17,560,000                                                             |   |   | 13,168,398 |   |   | 17,560,000 |   |   | 11,661,036 |   |
|                                                      |   |                                             |       |                                           |   |                                                                   |   |   |   |   |   |   |   |   |   |   |
| **Earnings                  per share:**                  |   |                                             |       |                                           |   |                                                                   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                     |   | $                                                | 0.53       |                                           | $      | 0.49                                                                   |   | $ | 0.38 |   | $ | 0.22 |   | $ | 0.88 |   |
| Diluted                                                   |   | $                                                | 0.00       |                                           | $      | 0.01                                                                   |   | $ | 0.00 |   | $ | 0.01 |   | $ | 0.03 |   |

*See        accompanying notes to condensed financial statements*

----

**COASTAL        BANCSHARES ACQUISITION CORP.**

**(A        Corporation in the Development Stage)**

**CONDENSED        UNAUDITED STATEMENTS OF CASH FLOWS**

|                                                                                                                                                              |   | **Six                      Months Ended June 30,** |        | **Period                      from incepton (May 19,** |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------|-------------|--------------------------------------------------------|--------|
|                                                                                                                                                              |   | **(Restated)**                                     |        |                                                   |   | **2004)                      ended **  |   |
|                                                                                                                                                              |   | **2005**                                           |        | **2006**                                               |   |  **June                      30,                      2006** |   |
| **CASH                      FLOW FROM OPERATING ACTIVITIES**                                                                                                      |   |                                               |        |                                                   |   |   |   |
| Net                      income                                                                                                                                   |   | $                                                  | 1,927,450   |                                                   | $      | 1,423,080 |   | $ | 4,023,891 |   |
| Adjustments                      to reconcile net income (loss) to net cash provided by (used                      in) operating                      activities: |   |                                               |        |                                                   |   |   |   |   |   |   |
| Increase                      in market value of treasury bill                                                                                                    |   |                                               | (289,856    | )                                                      |   | (638,749 | ) |   | (694,146 | ) |
| Amortization                      of deferred compensation                                                                                                        |   |                                               | 33,566      |                                                   |   | 71,928 |   |   | 177,422 |   |
| Decrease                      in warrant liability                                                                                                                |   |                                               | (1,876,800  | )                                                      |   | (1,214,400 | ) |   | (3,643,200 | ) |
| Changes                      in operating assets and liabilities:                                                                                                 |   |                                               | (28,483,200 | )                                                      |   |   |   |   | (29,214,331 | ) |
| Purchases                      of treasury bill in trust account                                                                                                  |   |                                               |        |                                                   |   |   |   |   |   |   |
| (Increase)                      decrease in prepaid expenses                                                                                                      |   |                                               | (82,880     | )                                                      |   | 4,090 |   |   | (15,540 | ) |
| Increase                      (decrease) in accounts payable and accrued expenses                                                                                 |   |                                               | 19,803      |                                                   |   | (2,739 | ) |   | 227,779 |   |
| Increase                      in income taxes payable                                                                                                             |   |                                               | 43,385      |                                                   |   | 21,000 |   |   | 144,000 |   |
| Net                      cash provided by (used in) operating activities                                                                                          |   |                                               | (28,708,532 | )                                                      |   | (335,790 | ) |   | (28,994,125 | ) |
|                                                                                                                                                              |   |                                               |        |                                                   |   |   |   |   |   |   |
| CASH                      FLOW FROM INVESTING ACTIVITIES                                                                                                          |   |                                               | -           |                                                   |   | - |   |   | - |   |
| Net                      cash used in investing activities                                                                                                        |   |                                               | -           |                                                   |   | - |   |   | - |   |
|                                                                                                                                                              |   |                                               |        |                                                   |   |   |   |   |   |   |
| CASH                      FLOW FROM FINANCING ACTIVITIES                                                                                                          |   |                                               |        |                                                   |   |   |   |   |   |   |
| Proceeds                      from private sale of common stock                                                                                                   |   |                                               | 25,000      |                                                   |   | - |   |   | 25,000 |   |
| Gross                      proceeds from public offering                                                                                                          |   |                                               | 33,120,000  |                                                   |   | - |   |   | 33,120,000 |   |
| Costs                      of public offering                                                                                                                     |   |                                               | (3,387,523  | )                                                      |   | - |   |   | (3,227,055 | ) |
| Common                      stock granted as compensation                                                                                                         |   |                                               |        |                                                   |   | - |   |   | (199,000 | ) |
| Deferred                      acquisition costs, net                                                                                                              |   |                                               |        |                                                   |   | (489,617 | ) |   | (624,584 | ) |
| Proceeds                      from stockholder loan                                                                                                               |   |                                               | 20,000      |                                                   |   | - |   |   | 75,000 |   |
| Repayment                      of stockholder loan                                                                                                                |   |                                               | (75,000     | )                                                      |   | - |   |   | (75,000 | ) |
| Net                      cash provided by (used in) financing activities                                                                                          |   |                                               | 29,702,477  |                                                   |   | (489,617 | ) |   | 29,094,361 |   |
|                                                                                                                                                              |   |                                               |        |                                                   |   |   |   |   |   |   |
| NET                      INCREASE (DECREASE) IN CASH                                                                                                              |   |                                               | 993,945     |                                                   |   | (825,407 | ) |   | 100,236 |   |
| CASH                      AT BEGINNING OF PERIOD                                                                                                                  |   |                                               | 21,711      |                                                   |   | 925,643 |   |   | - |   |
| CASH                      AT END OF PERIOD                                                                                                                        |   | $                                                  | 1,015,656   |                                                   | $      | 100,236 |   | $ | 100,236 |   |
|                                                                                                                                                              |   |                                               |        |                                                   |   |   |   |   |   |   |
| **Supplemental                      disclosure of cash flow information:**                                                                                        |   |                                               |        |                                                   |   |   |   |   |   |   |
| Income                      taxes paid                                                                                                                            |   | $                                                  | -           |                                                   | $      | 122,102 |   | $ | 122,102 |   |
| **Supplemental                      disclosure of non-cash financing activities:**                                                                                |   |                                               |        |                                                   |   |   |   |   |   |   |
| Deferred                      acquisiton costs included in accounts payable                                                                                       |   | $                                                  | -           |                                                   | $      | 134,968 |   | $ | 134,968 |   |
|                                                                                                                                                              |   |                                               |        |                                                   |   |   |   |   |   |   |
| Test                                                                                                                                                              |   |                                               |        |                                                   | $      | - |   | $ | - |   |

*See        accompanying notes to condensed financial statements*

----

**COASTAL      BANCSHARES ACQUISITION CORP.**

**(A      Corporation in the Development Stage)**

**NOTES      TO CONDENSED FINANCIAL STATEMENTS**

**1.    **
**BASIS      OF PRESENTATION**

*Restatement*

*“Accounting      for Derivative Financial Instruments Indexed to, and Potentially Settled in,      a      Company’s Own Stock”*

----

| *(in                thousands except per share amounts)* |   |                                                                      |      |                                                                    |   |                                            |   |                           |      |                                      |   |                           |   |
|----------------------------------------------------------|--------|---------------------------------------------------------------------------|-----------|-------------------------------------------------------------------------|--------|-------------------------------------------------|--------|--------------------------------|-----------|-------------------------------------------|--------|--------------------------------|--------|
|                                                     |   |                                                                      |      |                                                                    |   |                                            |   |                           |      |                                      |   |                           |   |
|                                                     |   | **As                of and for the Three****Months                Ended** |      | **As                of and for the Six****Months                Ended** |   | **As                of and for the Year Ended** |   |
|                                                     |   | **June                30, 2005**                                          |      | **June                30, 2005**                                        |   | **December                31, 2005**            |   |
|                                                     |   | **As                Previously Reported**                                 |      | **As                Restated**                                          |   | **As                Previously Reported**       |   | **As                Restated** |      | **As                Previously Reported** |   | **As                Restated** |   |
| Assets                                                   |   | $                                                                         | 29,872    |                                                                    | $      | 29,872                                          |   | $                              | 29,872    |                                      | $      | 29,872                         |   | $ | 30,215 |   | $ | 30,215 |   |
|                                                     |   |                                                                      |      |                                                                    |   |                                            |   |                           |      |                                      |   |                           |   |   |   |   |   |   |   |
| Liabilities                                              |   | $                                                                         | 71        |                                                                    | $      | 5,370                                           |   | $                              | 71        |                                      | $      | 5,370                          |   | $ | 219 |   | $ | 4,966 |   |
|                                                     |   |                                                                      |      |                                                                    |   |                                            |   |                           |      |                                      |   |                           |   |   |   |   |   |   |   |
| Common                stock subject to conversion        |   | $                                                                         | 5,752     |                                                                    | $      | 5,752                                           |   | $                              | 5,752     |                                      | $      | 5,752                          |   | $ | 5,851 |   | $ | 5,851 |   |
|                                                     |   |                                                                      |      |                                                                    |   |                                            |   |                           |      |                                      |   |                           |   |   |   |   |   |   |   |
| Stockholders'                equity                      |   | $                                                                         | 24,049    |                                                                    | $      | 18,750                                          |   | $                              | 24,049    |                                      | $      | 18,750                         |   | $ | 24,145 |   | $ | 19,398 |   |
|                                                     |   |                                                                      |      |                                                                    |   |                                            |   |                           |      |                                      |   |                           |   |   |   |   |   |   |   |
| Warranty                liability income (expense)       |   | $                                                                         | -         |                                                                    | $      | 3,422                                           |   | $                              | -         |                                      | $      | 1,877                          |   | $ | - |   | $ | 2,429 |   |
|                                                     |   |                                                                      |      |                                                                    |   |                                            |   |                           |      |                                      |   |                           |   |   |   |   |   |   |   |
| Pre-tax                income (loss)                     |   | $                                                                         | 81        |                                                                    | $      | 3,503                                           |   | $                              | 94        |                                      | $      | 1,971                          |   | $ | 297 |   | $ | 2,726 |   |
|                                                     |   |                                                                      |      |                                                                    |   |                                            |   |                           |      |                                      |   |                           |   |   |   |   |   |   |   |
| Provision                for income taxes                |   | $                                                                         | 40        |                                                                    | $      | 40                                              |   | $                              | 43        |                                      | $      | 43                             |   | $ | 123 |   | $ | 123 |   |
|                                                     |   |                                                                      |      |                                                                    |   |                                            |   |                           |      |                                      |   |                           |   |   |   |   |   |   |   |
| Net                income (loss)                         |   | $                                                                         | 41        |                                                                    | $      | 3,463                                           |   | $                              | 51        |                                      | $      | 1,928                          |   | $ | 174 |   | $ | 2,603 |   |
|                                                     |   |                                                                      |      |                                                                    |   |                                            |   |                           |      |                                      |   |                           |   |   |   |   |   |   |   |
| **Weighted                average shares:**              |   |                                                                      |      |                                                                    |   |                                            |   |                           |      |                                      |   |                           |   |   |   |   |   |   |   |
| Basic                                                    |   |                                                                      | 6,520,000 |                                                                    |   | 6,520,000                                       |   |                           | 5,056,133 |                                      |   | 5,056,133                      |   |   | 5,794,082 |   |   | 5,794,082 |   |
| Diluted                                                  |   |                                                                      | 6,520,000 |                                                                    |   | 17,560,000                                      |   |                           | 5,056,133 |                                      |   | 13,168,398                     |   |   | 5,794,082 |   |   | 15,382,247 |   |
|                                                     |   |                                                                      |      |                                                                    |   |                                            |   |                           |      |                                      |   |                           |   |   |   |   |   |   |   |
| **Earnings                (loss) per share**             |   |                                                                      |      |                                                                    |   |                                            |   |                           |      |                                      |   |                           |   |   |   |   |   |   |   |
| Basic                                                    |   | $                                                                         | 0.01      |                                                                    | $      | 0.53                                            |   | $                              | 0.01      |                                      | $      | 0.38                           |   | $ | 0.03 |   | $ | 0.45 |   |
| Diluted                                                  |   | $                                                                         | 0.01      |                                                                    | $      | -                                               |   | $                              | 0.01      |                                      | $      | -                              |   | $ | 0.03 |   | $ | 0.01 |   |

*Reclassification*

**2.    **
**ORGANIZATION,        BUSINESS OPERATIONS**

----

**3.    **
**PUBLIC        OFFERING**

----

**4.    **
**TREASURY        SECURITIES**

**5.    **
**DEFERRED        COMPENSATION**

**6.    **
**WARRANT        LIABILITY**

*“Accounting        for Derivative Financial Instruments Indexed to, and Potentially Settled        in, a        Company’s Own Stock”*

**7.    **
**COMMITMENT**

**8.    **
**COMMON        STOCK**

**9.    **
**PREFERRED        STOCK**

----

**10.        **
**PROPOSED        BUSINESS COMBINATION**

----

**Item        2. Management’s Discussion and Analysis or Plan of        Operation**

**Forward        Looking Statements**

**Restatement:**

*“Accounting        for Derivative Financial Instruments Indexed to, and Potentially Settled        in, a        Company’s Own Stock”*

----

| *(in                    thousands except per share amounts)* |   |                                                                              |      |                                                                            |   |                                                |   |                               |      |                                          |   |                               |   |
|--------------------------------------------------------------|--------|-----------------------------------------------------------------------------------|-----------|---------------------------------------------------------------------------------|--------|-----------------------------------------------------|--------|------------------------------------|-----------|-----------------------------------------------|--------|------------------------------------|--------|
|                                                         |   |                                                                              |      |                                                                            |   |                                                |   |                               |      |                                          |   |                               |   |
|                                                         |   | **As                    of and for the Three****Months                    Ended** |      | **As                    of and for the Six****Months                    Ended** |   | **As                    of and for the Year Ended** |   |
|                                                         |   | **June                    30, 2005**                                              |      | **June                    30, 2005**                                            |   | **December                    31, 2005**            |   |
|                                                         |   | **As                    Previously Reported**                                     |      | **As                    Restated**                                              |   | **As                    Previously Reported**       |   | **As                    Restated** |      | **As                    Previously Reported** |   | **As                    Restated** |   |
| Assets                                                       |   | $                                                                                 | 29,872    |                                                                            | $      | 29,872                                              |   | $                                  | 29,872    |                                          | $      | 29,872                             |   | $ | 30,215 |   | $ | 30,215 |   |
|                                                         |   |                                                                              |      |                                                                            |   |                                                |   |                               |      |                                          |   |                               |   |   |   |   |   |   |   |
| Liabilities                                                  |   | $                                                                                 | 71        |                                                                            | $      | 5,370                                               |   | $                                  | 71        |                                          | $      | 5,370                              |   | $ | 219 |   | $ | 4,966 |   |
|                                                         |   |                                                                              |      |                                                                            |   |                                                |   |                               |      |                                          |   |                               |   |   |   |   |   |   |   |
| Common                    stock subject to conversion        |   | $                                                                                 | 5,752     |                                                                            | $      | 5,752                                               |   | $                                  | 5,752     |                                          | $      | 5,752                              |   | $ | 5,851 |   | $ | 5,851 |   |
|                                                         |   |                                                                              |      |                                                                            |   |                                                |   |                               |      |                                          |   |                               |   |   |   |   |   |   |   |
| Stockholders'                    equity                      |   | $                                                                                 | 24,049    |                                                                            | $      | 18,750                                              |   | $                                  | 24,049    |                                          | $      | 18,750                             |   | $ | 24,145 |   | $ | 19,398 |   |
|                                                         |   |                                                                              |      |                                                                            |   |                                                |   |                               |      |                                          |   |                               |   |   |   |   |   |   |   |
| Warranty                    liability income (expense)       |   | $                                                                                 | -         |                                                                            | $      | 3,422                                               |   | $                                  | -         |                                          | $      | 1,877                              |   | $ | - |   | $ | 2,429 |   |
|                                                         |   |                                                                              |      |                                                                            |   |                                                |   |                               |      |                                          |   |                               |   |   |   |   |   |   |   |
| Pre-tax                    income (loss)                     |   | $                                                                                 | 81        |                                                                            | $      | 3,503                                               |   | $                                  | 94        |                                          | $      | 1,971                              |   | $ | 297 |   | $ | 2,726 |   |
|                                                         |   |                                                                              |      |                                                                            |   |                                                |   |                               |      |                                          |   |                               |   |   |   |   |   |   |   |
| Provision                    for income taxes                |   | $                                                                                 | 40        |                                                                            | $      | 40                                                  |   | $                                  | 43        |                                          | $      | 43                                 |   | $ | 123 |   | $ | 123 |   |
|                                                         |   |                                                                              |      |                                                                            |   |                                                |   |                               |      |                                          |   |                               |   |   |   |   |   |   |   |
| Net                    income (loss)                         |   | $                                                                                 | 41        |                                                                            | $      | 3,463                                               |   | $                                  | 51        |                                          | $      | 1,928                              |   | $ | 174 |   | $ | 2,603 |   |
|                                                         |   |                                                                              |      |                                                                            |   |                                                |   |                               |      |                                          |   |                               |   |   |   |   |   |   |   |
| **Weighted                    average shares:**              |   |                                                                              |      |                                                                            |   |                                                |   |                               |      |                                          |   |                               |   |   |   |   |   |   |   |
| Basic                                                        |   |                                                                              | 6,520,000 |                                                                            |   | 6,520,000                                           |   |                               | 5,056,133 |                                          |   | 5,056,133                          |   |   | 5,794,082 |   |   | 5,794,082 |   |
| Diluted                                                      |   |                                                                              | 6,520,000 |                                                                            |   | 17,560,000                                          |   |                               | 5,056,133 |                                          |   | 13,168,398                         |   |   | 5,794,082 |   |   | 15,382,247 |   |
|                                                         |   |                                                                              |      |                                                                            |   |                                                |   |                               |      |                                          |   |                               |   |   |   |   |   |   |   |
| **Earnings                    (loss) per share**             |   |                                                                              |      |                                                                            |   |                                                |   |                               |      |                                          |   |                               |   |   |   |   |   |   |   |
| Basic                                                        |   | $                                                                                 | 0.01      |                                                                            | $      | 0.53                                                |   | $                                  | 0.01      |                                          | $      | 0.38                               |   | $ | 0.03 |   | $ | 0.45 |   |
| Diluted                                                      |   | $                                                                                 | 0.01      |                                                                            | $      | -                                                   |   | $                                  | 0.01      |                                          | $      | -                                  |   | $ | 0.03 |   | $ | 0.01 |   |

**Plan        of Operation:**

**Adoption        of EITF No. 00-19:**

*“Accounting        for Derivative Financial Instruments Indexed to, and Potentially Settled        in, a        Company’s Own Stock”*

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**Results        of Operations:**

**Liquidity        and Capital Resources:**

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**Recent        Developments:**

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**Item        3. Controls and Procedures**

**PART        II. OTHER INFORMATION**

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

**Item        6: Exhibits and Reports on Form 8-K**

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|         |                                   |                                                |
|--------------|----------------------------------------|-----------------------------------------------------|
|         |                                   | COASTAL BANCSHARES ACQUISITION                CORP. |
|    |                              |                                           |
|         |                              | /s/                Cary                M. Grossman  |
|         | Cary                M. Grossman        |
|         | Chief                Executive Officer |

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**EXHIBIT        INDEX**

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