**UNITED
        STATES**
 **SECURITIES
        AND EXCHANGE COMMISSION**
 **Washington,
        D.C. 20549**
  **FORM
        10-QSB**
  **ý**
              
              **QUARTERLY
                  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
                  OF
                  1934****For
                  the quarterly period ended August 31, 2005****o**
              
              **TRANSITION
                  REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE
                  ACT****For
                  the transition period from
                                      
                  to****Commission
                  file number: 33-98682**
  **American
        Commerce Solutions, Inc.**
 (Exact
        name of small business issuer as specified in its charter)
  **Delaware**
              
              **05-0460102**(State
                  or other jurisdiction of incorporation or organization)
              
              (IRS
                  Employer Identification No.)**1400
                  Chamber Dr., Bartow, Florida 33830**(Address
                  of principal executive offices)**(863)
                  533-0326**(Issuer’s
                  telephone number)**N/A**(Former
                  name, former address and former fiscal year, if changed since last
                  report)
  Check
        whether the issuer (1) filed all reports required to be filed by Section
        13 or
        15(d) of the Securities Exchange Act during the past 12 months (or for such
        shorter period that the Registrant was required to file such reports), and
        (2)
        has been subject to such filing requirements for the past 90
        days. ý YES o NO
  There
        were 224,400,415 shares of the Registrant’s $.002 par value common stock
        outstanding as of August 31, 2005
  Transitional
        Small Business Disclosure Format (Check one): Yes o No ý
  Page
              1
  **American
        Commerce Solutions, Inc.**
   **Contents**
   Part
                  I - Financial InformationItem
                  1.
              Consolidated
                  Financial StatementsItem
                  2.
              Management’s
                  Discussion & AnalysisItem
                  3.
              Controls
                  and ProceduresPart
                  II - Other InformationItem
                  1.
              Legal
                  ProceedingsItem
                  2.
              Changes
                  in SecuritiesItem
                  3.
              Defaults
                  Upon Senior SecuritiesItem
                  4.
              Submission
                  of Matters to a Vote of Security HoldersItem
                  5.
              Other
                  InformationItem
                  6.
              Exhibits
                  and Reports on Form 8-KSignatures
   Page 2
  **PART
        I****-
        FINANCIAL INFORMATION**
  **Item
        1.****Consolidated Financial Statements**
   ***Consolidated
        Financial Statements***
  ***American
        Commerce Solutions, Inc. and Subsidiaries***
  *As
        of
        August 31, 2005 and for the*
 *Three
        and Six Months Ended August 31, 2005 and 2004*
 *(unaudited)*
    Page 3
   American
        Commerce Solutions, Inc. and Subsidiaries
  Consolidated
        Financial Statements
  As
        of
        August 31, 2005 and for the
 Three
        Months and Six Months Ended August 31, 2005 and 2004
 *(unaudited)*
   **Contents**
   Consolidated
                  Financial Statements:Consolidated
                  Balance SheetConsolidated
                  Statements of OperationsConsolidated
                  Statements of Cash FlowsNotes
                  to Consolidated Financial
                  Statements
 
  Page 4
  American
        Commerce Solutions, Inc. and Subsidiaries
 
 Consolidated
        Balance Sheet
 
 August
        31, 2005
 *(unaudited)*
 **Assets**Current
                  assets:Cash
              
              $
              37,903Accounts
                  receivable, net of allowance of $19,212
              
              60,460Accounts
                  receivable, factored
              
              54,283Inventory
              
              144,011Other
                  receivables
              
              118,042Other
                  current assets
              
              122,656Total
                  current assets
              
              537,355Property
                  and equipment, net of accumulated depreciation of
                  $1,726,100
              
              5,357,841Other
                  assets:Prepaid
                  loan costs
              
              2,912Intangible
                  assets, net of accumulated amortization
              
              118,222Real
                  property held for resale
              
              243,150Total
                  other assets
              
              364,284$
              6,259,480**Liabilities
                  and Stockholders’ Equity**Current
                  liabilities:Checks
                  drawn in excess of bank balance
              $
              $
              15,282Current
                  portion of notes payable
              
              
              1,360,890Current
                  portion of notes payable, related parties
              
              
              156,525Accounts
                  payable
              
              232,697Accrued
                  expenses
              
              159,843Accrued
                  interest
              
              142,343Due
                  to stockholders
              
              487,110Deferred
                  revenue
              
              19,247Total
                  current liabilities
              
              2,573,937Notes
                  payable, related parties, net of current portion
              
              16,847Stockholders’
                  equity:Preferred
                  stock, total authorized 5,000,000 shares:Series
                  A; cumulative and convertible; $.001 par value;
                600
                  shares authorized; 102 shares issued and outstanding;
                  liquidating
                preference
                  $376,125Series
                  B; cumulative and convertible; $.001 par value;
                3,950
                  shares authorized; 3,944 shares issued and outstanding;
                liquidating
                  preference $3,944,617
              
              3Common
                  stock; $.002 par value; 350,000,000 shares authorized; 224,922,415
                  shares
                  issued;
                224,400,415
                  shares outstanding
              
              449,846Additional
                  paid-in capital
              
              18,790,396Stock
                  subscription receivable
              
              (10,000)Treasury
                  stock, at cost
              
              (265,526)Accumulated
                  deficit
              
              (15,268,874)Loan
                  costs from issuance of common stock
              
              (27,149)Total
                  stockholders’ equity
              
              3,668,696$
              6,259,480
 *The
        accompanying notes are an integral part of the consolidated financial
        statements.*
  
   Page 5
      American
        Commerce Solutions, Inc. and
        Subsidiaries
 Consolidated
        Statements of Operations
 *(unaudited)*
  **Three
                  Months Ended**
                **August
                  31,**
              
              **Six
                  Months Ended**
                **August
                  31,****2005**
              
              **2004**
              
              **2005**
              
              **2004**Net
                  sales
              
              $
              665,450
              
              $
              756,705
              
              $
              1,320,349
              
              $
              1,409,051Cost
                  of goods sold
              
              433,656
              
              522,302
              
              892,877
              
              944,754Gross
                  profit
              
              231,794
              
              234,403
              
              427,472
              
              464,297Selling,
                  general and administrative expenses
              
              625,137
              
              556,390
              
              1,168,708
              
              1,111,222Loss
                  from operations
              
              (393,343
              )
              (321,987
              )
              (741,236
              )
              (646,925
              )Other
                  income (expense)
              
              280,448
              
              (28,030)
              
              296,643
              
              (9,048)Gain
                  on forgiveness of debt
              
              20,020
              
              
              
              98,310Interest
                  expense
              
              (43,914
              )
              (41,560)
              
              (80,641
              )
              (77,114
              )Total
                  other income (expense)
              
              256,544
              
              (69,590
              )
              314,312
              
              (86,162
              )Net
                  loss
              
              $
              (136,789
              )
              $
              (391,577
              )
              $
                  (426,924
              )
              $
              (733,087
              )Net
                  loss per common share
              
              $
              (.00
              )
              $
              (.00
              )
              $
              (.00
              )
              $
              (.00
              )Weighted
                  average number of common shares outstanding
              
              _222,737,372
              
              150,687,683
              
              212,811,259
              
              148,288,362
  *The
        accompanying notes are an integral part of the consolidated financial
        statements*
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Page 6
  American
        Commerce Solutions, Inc. and Subsidiaries
 Consolidated
        Statements of Cash Flows
 *(unaudited)*
 **Six
                  Months Ended**
                **August
                  31,****2005**
              
              **2004****Operating
                  activities:**Net
                  loss
              
              $
              (426,924
              )
              $
              (733,087
              )Adjustments
                  to reconcile net loss to net cash (used) by operating
                  activities:Depreciation
                  and amortization
              
              219,199
              
              205,002Stock
                  issued for services
              
              27,000Options
                  issued to consultants and employees
              
              21,000
              
              38,442Gain
                  on forgiveness of debt
              
              (98,310)Gain
                  on write down of debt
              
              (15,000)Loss
                  on involuntary conversion of assets
              
              
              
              32,898Increase
                  in allowance for doubtful accounts
              
              12,621
              
              3,786Decrease
                  (increase) in:Accounts
                  receivables
              
              9,778
              
              58,321Inventory
              
              (2,704
              )
              (17,365
              )Other
                  receivables and other assets
              
              226,835
              
              (154,435
              )Increase
                  (decrease) in:Accounts
                  payable and accrued expenses
              
              (106,773)
              
              278,477Deferred
                  income
              
              1,628
              
              19,671Total
                  adjustments
              
              295,274
              
              464,797Net
                  cash (used) by operating activities
              
              (131,650)
              
              (268,290)**Investing
                  activities:**Decrease
                  in other receivables
              
              
              
              83,225Acquisition
                  of property and equipment
              
              (40,937
              )
              (56,241
              )Net
                  cash (used) provided by investing activities
              
              (40,937)
              
              26,984**Financing
                  activities:**(Decrease)
                  increase in bank overdraft
              
              15,282Increase
                  in due from factor
              
              (21,332)
              
              (6,788)Proceeds
                  from notes payable and long-term debt
              
              57,741
              
              56,190Principal
                  payments on notes payable and capital leases
              
              (106,394
              )
              (133,553
              )Proceeds
                  from advances from stockholders
              
              165,400
              
              12,300Proceeds
                  from issuance of common stock
              
              
              
              39,860Exercise
                  of stock options and warrants
              
              36,287
              
              249,782Net
                  cash provided by financing activities
              
              146,984
              
              217,791**Net
                  decrease in cash**
              
              (25,603
              )
              (23,515)**Cash,
                  beginning of period**
              
              63,506
              
              79,363**Cash,
                  end of period**
              
              $
              37,903
              
              $
              55,848**Supplemental
                  disclosures of cash flow information and noncash investing and
                  financing
                  activities:**Cash
                  paid during the period for interest
              
              $
              158,860
              
              $
              51,446
  During
        the six months ended August 31, 2005 and 2004, the Company increased notes
        payable by $12,577 and $14,089, respectively for an accrual of interest.
 
 During
        the six months ended August 31, 2005, the Company assigned $252,756 of debt
        and
        related accrued interest to a related party in exchange for 12,637,772 shares
        of
        common stock. Also, the Company converted $330,148 of debt and related accrued
        interest to a related party for 16,507,417 shares of common stock.
 
 During
        the six months ended August 31, 2005, the Company issued 5,000,000 shares
        of
        common stock in exchange for a prepaid consulting agreement valued at $100,000
        which is being amortized at approximately $5,000 per month. The Company issued
        a
        note receivable of $34,000 upon the exercise of 2,000,000 options by a
        consultant.
 
 *The
        accompanying notes are an integral part of the consolidated financial
        statements.*
    Page 7
  
 American
        Commerce Solutions, Inc. and Subsidiaries
  Notes
        to
        Consolidated Financial Statements
  As
        of
        August 31, 2005 and for the
 Three ** and
        Six
        Months Ended August 31, 2005 and 2004
 *(unaudited)*
  **1.        
        Background Information**
  American
        Commerce Solutions, Inc. was incorporated in Rhode Island in 1991 under the
        name
        Jaque Dubois, Inc., and was re-incorporated in Delaware in 1994. In July
        1995,
        Jaque Dubois, Inc. changed its name to JD American Workwear, Inc. In December
        2000, the stockholders voted at the annual stockholders meeting to change
        the
        name of JD American Workwear, Inc. to American Commerce Solutions, Inc. (the
        “Company”).
  The
        Company is primarily a holding company with two wholly owned subsidiaries;
        International Machine and Welding, Inc. is engaged in the machining and
        fabrication of parts used in industry, and parts sales and service for heavy
        construction equipment; Chariot Manufacturing Company, Inc., which was acquired
        on October 11, 2003 from a related party, manufactures motorcycle trailers
        with
        fiberglass bodies.
 
 **2.        
        Stock Based Compensation**
 
 At
        August
        31, 2005, the Company has two stock-based employee compensation plans, all
        of
        which have been approved by the shareholders.  The Company accounts
        for
        those plans under the recognition and measurement principles of Accounting
        Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees” and
        related Interpretations. The Company recognized $6,000 , $15,000, $30,600
        and
        $30,600 for the three and six month periods ended August 31, 2005 and 2004,
        respectively, in stock-based employee compensation cost which is reflected
        in
        net loss.  The following table illustrates the effect on net income
        and
        earnings per share if the Company had applied the fair value recognition
        provisions of FASB Statement 123, “Accounting for Stock-Based Compensation”, to
        stock-based employee compensation. The lack of additional stock based employee
        compensation expense under the fair value based method of accounting is a
        direct
        result of the options being exercised immediately.
 
 **Three
                  Months Ended**
              
              **Six
                  Months Ended****August
                  31,**
                **2005**
              
              **August
                  31,**
                **2004**
              
              **August
                  31,**
                **2005**
              
              **August
                  31,**
                **2004**Net
                  loss, as reported
              
              $
              (136,789
              )
              $
              (391,577
              )
              $
              (426,924
              )
              $
              (733,087
              )Deduct:
                   Additional stock based employee compensation expense determined
                  under fair value based methods for all awards, net of
                  taxes
              
              (0
              )
              (0
              )
              (0
              )
              (0
              )Pro
                  forma net loss
              
              $
              (136,789
              )
              $
              (391,577
              )
              $
              (426,924
              )
              $
              (733,087
              )Net
                  loss per share:As
                  reported
              
              $
              (.00
              )
              $
              (.00
              )
              $
              (.00
              )
              $
              (.01
              )Pro
                  forma
              
              $
              (.00
              )
              $
              (.00
              )
              $
              (.00
              )
              $
              (.01
              )
 
 **3.        
        Going Concern**
 
 The
        Company has incurred substantial operating losses since inception and has
        used
        $105,560 of cash in operations for the six months ended August 31, 2005.
        The
        Company recorded losses from continuing operations of $136,789 and $426,924
        for
        the three and six months ended August 31, 2005. Current liabilities exceed
        current assets by $2,036,582 at August 31, 2005. Additionally, the Company
        is in
        default on several notes payable. The ability of the Company to continue
        as a
        going concern is dependent upon its ability to reverse negative operating
        trends, raise additional capital, and obtain debt financing.
 
 Management
        has revised its business strategy to include expansion into other lines of
        business through the acquisition of other companies in exchange for the
        Company's stock. Management is currently negotiating new debt financing,
        the
        proceeds from which would be used to settle outstanding debts at more favorable
        terms, to finance operations, and to complete additional business acquisitions.
        However, there can be no assurance that the Company will be able to raise
        capital, obtain debt financing, or improve operating results sufficiently
        to
        continue as a going concern.
 
 The
        accompanying consolidated financial statements do not include any adjustments
        relating to the recoverability and classification of recorded assets, or
        the
        amounts and classification of liabilities that might be necessary if the
        Company
        is unable to continue as a going concern.
 
 **4.        
        Basis of Presentation**
 
 In
        the
        opinion of management, all adjustments consisting only of normal recurring
        adjustments necessary for a fair statement of (a) the results of operations
        for
        the three and six month periods ended August 31, 2005 and 2004, (b) the
        financial position at August 31, 2005, and (c) cash flows for the six month
        periods ended August 31, 2005 and 2004, have been made.
 
 The
        unaudited consolidated financial statements and notes are presented as permitted
        by Form 10-QSB. Accordingly, certain information and note disclosures normally
        included in condensed financial statements prepared in accordance with
        accounting principles generally accepted in the United States of America
        have
        been omitted. The accompanying consolidated financial statements and notes
        should be read in conjunction with the audited consolidated financial statements
        and notes of the Company for the fiscal year ended February 28, 2005. The
        results of operations for the three and six month periods ended August 31,
        2005
        are not necessarily indicative of those to be expected for the entire
        year.
 
 **5.       
        Accounts Receivable, Factored**
 
 During
        the six months ended August 31, 2005, the Company factored receivables of
        $476,144. In connection with the factoring agreement, the Company incurred
        fees
        of approximately $15,400 and $25,400 during the three and six months ended
        August 31, 2005. As of August 31, 2005, certain vendors had remitted $52,093
        to
        the Company on factored receivables; the Company recorded this amount as
        due to
        the factor and it is included in accrued expenses on the accompanying
        consolidated balance sheet. Any and all of the Company’s indebtedness and
        obligations to the Factoring Company is guaranteed by two directors and
        collateralized by the Company’s inventory and fixed assets.
 
 Page
            8
   **6.       
        Common Stock and Stock Options**
 
 During
        the six months ended August 31, 2005 the Company issued 5,000,000 shares
        of
        common stock in exchange for a  prepaid consulting
        agreement valued at $100,000 which is being amortized at approximately
        $5,000 per month. The Company also issued 12,637,772 shares of common
        stock
        in exchange for the assignment of debt and related accrued interest valued
        at
        $252,756 and 16,507,417 shares of common stock to convert related party debt
        and
        interest of $330,148. Also during the six months ended August 31, 2005, the
        Company issued 1,000,000 shares of common stock to a related party for services
        rendered valued at $17,000.
 
 Stock-based
        compensation to non-employees is valued using the Black-Scholes option pricing
        model. During the six months ended August 31, 2005 the Company recorded a
        note
        receivable for the exercise price of $34,000 when 2,000,000 options to purchase
        common stock were issued to and exercised by consultants. Total compensation
        expense recognized in conjunction with the issuance was $6,000. During the
        six
        months ended August 31, 2004, there were 7,000,000 options issued and exercised
        by non-employees.
 
 During
        the period ended August 31, 2005 and 2004, the Company granted 5,000,000
        and
        6,800,000 options, respectively, to employees in conjunction with the Employee
        Stock Incentive Plan, all of which were exercised immediately.
 
 **7.      
        Segment Information**
 
 The
        Company has two reportable segments during 2005 and 2004; manufacturing and
        fiberglass.  Although both of these segments are in the manufacturing
        industry, they provide different types of products and services and each
        segment
        is subject to different marketing, production and technology strategies. 
        Therefore, for the three and six months ended August 31, 2005 and 2004 the
        Company has included segment reporting.
  For
        the
        three months ended August 31, 2005, information regarding operations by segment
        is as follows:
  **Manufacturing**
              
              
              
              
              **Fiberglass**
              
              **Other**
              
              
              **Total**Revenue
              
              $
              619,119
              
              
              
              
              $
              46,331
              
              
              
              
              $
              665,450Interest
                  expense, net
              
              $
              32,184
              
              
              
              
              $
              4,486
              
              $
              7,244
              
              $
              43,914Depreciation
                  and amortization
              
              $
              74,779
              
              
              
              
              $
              26,006
              
              $
              172
              
              $
              100,957Net
                  Income (loss)
              
              $
              252,632
              
              
              
              
              $
              (69,924
              )
              $
              (319,497
              )
              $
              (136,789
              )
 
 For
        the
        three months ended August 31, 2004, information regarding operations by segment
        is as follows:
  **Manufacturing**
              
              **Fiberglass**
              
              **Other**
              
              **Total**Revenue
              
              $
              640,577
              
              $
              116,128
              
              0
              
              $
              756,705Interest
                  expense
              
              $
              25,887
              
              $
              0
              
              $
              15,673
              
              $
              41,560Depreciation
                  and amortization
              
              $
              81,478
              
              $
              27,559
              
              $
              172
              
              $
              109,209Net
                  (loss)
              
              $
              (92,204)
              
              $
              (85,785)
              
              $
              (213,588)
              
              $
              (391,577)
 
 For
        the
        six months ended August 31, 2005, information regarding operations by segment
        is
        as follows:
 
 **Manufacturing**
              
              **Fiberglass**
              
              **Other**
              
              **Total**Revenue
              
              $
              1,176,053
              
              $
              144,296
              
              
              
              $
              1,320,349Interest
                  expense
              
              $
              59,234
              
              $
              4,486
              
              $
              16,921
              
              $
              80,641Depreciation
                  and amortization
              
              $
              148,781
              
              $
              51,073
              
              $
              345
              
              $
              200,199Net
                  (loss)
              
              $
              190,072
              
              $
              (142,444)
              
              $
              (474,552)
              
              $
              (426,924)Property
                  and equipment, net of accumulated depreciation
              
              $
              4,500,515
              
              $
              855,199
              
              $
              2,127
              
              $
              5,357,841Segment
                  assets
              
              $
              5,043,974
              
              $
              1,023,645
              
              $
              191,861
              
              $
              6,259,480
 
 For
        the
        six months ended August 31, 2004, information regarding operations by segment
        is
        as follows:
 
 **Manufacturing**
              
              **Fiberglass**
              
              **Other**
              
              **Total**Revenue
              
              $
              1,176,141
              
              $
              232,910
              
              0
              
              $
              1,409,051Interest
                  expense
              
              $
              50,881
              
              $
              0
              
              $
              26,233
              
              $
              77,114Depreciation
                  and amortization
              
              $
              163,107
              
              $
              41,550
              
              $
              345
              
              $
              205,002Net
                  (loss)
              
              $
              (156,163)
              
              $
              (127,196)
              
              $
              (449,728)
              
              $
              (733,087)Property
                  and equipment, net of accumulated depreciation
              
              $
              4,760,511
              
              $
              924,778
              
              $
              2,818
              
              $
              5,688,107Segment
                  assets
              
              $
              5,417,947
              
              $
              1,124,367
              
              $
              125,302
              
              $
              6,667,616
 
 
 Segment
        1, manufacturing, consists of International Machine and Welding, Inc. and
        derives its revenues from machining operations, sale of parts and service. 
        Segment 2, fiberglass, consists of Chariot Manufacturing Company, Inc. and
        derives its revenues from the manufacture, sale and service of fiberglass
        trailers, boats and cars.
  
 Page
            9
 
 PART
        I -
        FINANCIAL INFORMATION
  ITEM
        2.
        MANAGEMENT'S DISCUSSION & ANALYSIS
 
 This
        FILING contains forward-looking statements. The words "anticipated," “believe,"
        "expect," "plan," "intend," "seek," "estimate," "project," "will," "could,"
        "may," and similar expressions are intended to identify forward-looking
        statements. These statements include, among others, information regarding
        future
        operations, future capital expenditures, and future net cash flow. Such
        statements reflect the Company's current views with respect to future events
        and
        financial performance and involve risks and uncertainties, including, without
        limitation, general economic and business conditions, changes in foreign,
        political, social, and economic conditions, regulatory initiatives and
        compliance with governmental regulations, the ability to achieve further
        market
        penetration and additional customers, and various other matters, many of
        which
        are beyond the Company's control. Should one or more of these risks or
        uncertainties occur, or should underlying assumptions prove to be incorrect,
        actual results may vary materially and adversely from those ANTICIPATED,
        believed, estimated, or otherwise indicated. Consequently, all of the
        forward-looking statements made in this FILING are qualified by these cautionary
        statements and there can be no assurance of the actual results or
        developments.
 
 The
        Company cautions readers that in addition to important factors described
        elsewhere, the following important facts, among others, sometimes have affected,
        and in the future could affect, the Company's actual results, and could cause
        the Company's actual results during 2006 and beyond, to differ materially
        from
        those expressed in any forward-looking statements made by, or on behalf of,
        the
        Company.
 
 This
        Management's Discussion and Analysis or Plan of Operation presents a review
        of
        the consolidated operating results and financial condition of the Company
        for
        the three and six month periods ended August 31, 2005 and 2004. This discussion
        and analysis is intended to assist in understanding the financial condition
        and
        results of operation of the Company and its subsidiaries. This section should
        be
        read in conjunction with the consolidated financial statements and the related
        notes.
  RESULTS
        OF OPERATIONS
 
 The
        Company owns two subsidiaries that operated in the manufacturing segment
        and the
        fiberglass segment during the three and six months ended August 31, 2005
        and
        2004. To facilitate the readers understanding of the Company's financial
        performance, this discussion and analysis is presented on a segment
        basis.
 
 MANUFACTURING
        SUBSIDIARY
 
 The
        manufacturing subsidiary, International Machine and Welding, Inc., generates
        its
        revenues from three divisions. Division 1 provides specialized machining
        and
        repair services to heavy industry and original equipment manufacturers. Division
        2 provides repair and rebuild services on heavy equipment used in construction
        and mining as well as sales of used equipment. Division 3 provides parts
        sales
        for heavy equipment directly to the customer. The primary market of this
        segment
        is the majority of central and south Florida with parts sales expanding its
        market internationally. The current operations can be significantly expanded
        using the 38,000 square foot structure owned by International Machine and
        Welding, Inc.
 
 FIBERGLASS
        SUBSIDIARY
 
 Chariot
        Manufacturing Company, Inc. manufactures a variety of fiberglass parts, as
        well
        as, motorcycle trailers with fiberglass bodies. These trailers are sold both
        on
        the retail and dealer levels. The company also provides non warranty repairs
        and
        modification of existing Chariot Trailers.
  **COMPARISON
        OF THE RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED AUGUST 31, 2005 AND
        2004.**
  General
 
 The
        Company's consolidated net sales decreased to $665,450 for the three months
        ended August 31, 2005, a decrease of $91,255 or 12%, from $756,705 for the
        three
        months ended August 31, 2004. The decrease in net sales was due to a Chariot
        Manufacturing closing the plant for production while it completed some
        additional molds.
 Gross
        profit for the consolidated operations decreased to $231,794 for the three
        months ended August 31, 2005 from $234,403 for the three months ended August
        31,
        2004. Gross profit as a percentage of sales was 35% and 31% for the three
        month
        periods ended August 31, 2005 and 2004, respectively. The increase in gross
        profit margin was due to the change in the mix between machining and sales
        of
        parts and services.
 
 Consolidated
        interest expense, net for the three months ended August 31, 2005 was $43,914
        as
        compared to $41,560 for same period in 2004 for a decrease of $2,354 or 6%.
        The
        decrease in interest expenses is due to the forgiveness of debt.
 
 Selling,
        general and administrative expenses increased to $625,137 for the three months
        ended August 31, 2005 as compared to $556,390 for the three months ended
        August
        31, 2004, an increase of $68,747 or 12%. The increase was primarily due to
        the
        increase in management salary of $109,500, net of the loss of two employees
        of
        approximately $30,400.
 
 The
        Company incurred a net consolidated loss of $136,789 for the three months
        ended
        August 31, 2005 compared to a loss of $391,577 for the three months ended
        August
        31, 2004. The decrease in the consolidated net loss is primarily due to the
        $296,166 gain on the settlement related to the hurricane losses, which is
        included in other income in the Statement of Operations. As a result of the
        continued losses, the Independent Auditors have questioned the Company's
        continuation as a going concern.
 
 Manufacturing
        Subsidiary
  The
        manufacturing operation, International Machine and Welding, Inc. provided
        net
        sales of $619,119 for the three months ended August 31, 2005 compared to
        $640,577 for the three months ended August 31, 2004. The machining operations
        provided $280,338 or 45% of net sales with parts and service providing $338,781
        or 55% of net sales for the three months ended August 31, 2005 as compared
        to
        machining operations contributing $250,230 or 39% of net sales with parts
        and
        service providing $390,347 or 61% of net sales for the three months ended
        August
        31, 2004. The overall decrease in net sales is due to the merger of three
        of our
        customers which impacted our total retail sales.
 
 Gross
        profit from the International Machine and Welding, Inc. was $226,280 for
        the
        three months ended August 31, 2005 compared to $208,142 for the same period
        in
        2004 providing gross profit margins of 36% and 32%, respectively. The increase
        in gross profit margin was due to the change in the mix between machining
        and
        sales of parts and services.
 
 Selling,
        general and administrative expenses for International Machine and Welding,
        Inc.
        were $239,930 for the three months ended August 31, 2005 compared to $243,063
        for the three months ended August 31, 2004.
 
 Interest
        expense, net was $32,184 for the three months ended August 31, 2005 compared
        to
        $25,887 for the same period ended 2004. The increase in interest expense,
        net is
        due to the Company’s additional debt taken on during the first quarter of
        2005.
 
 The
        Company does not have discrete financial information on each of the three
        manufacturing divisions, nor does the Company make decisions on the divisions
        separately; therefore they are not reported as segments.
 
 Fiberglass
        Subsidiary
 
 The
        fiberglass manufacturing operation, Chariot Manufacturing Company, Inc. provided
        net sales of $46,331 for the three months ended August 31, 2005 as compared
        to
        $116,128 for the same period in 2004. The decrease in net sales is due to
        reduced production of finished goods while retooling was being
        accomplished.
 
 Gross
        profit from Chariot was $5,646 for the three months ended August 31, 2005
        providing a gross profit margin of 12% as compared to $26,261 providing a
        gross
        profit margin of 23% for the same period in 2004. The decrease in gross profit
        and the related gross profit margin was due to reduced sales with static
        or
        increased cost of goods sold.
 
 Selling,
        general and administrative expenses were $76,770 for the three months ended
        August 31, 2005 as compared to $112,124 for the same period in 2004. The
        decrease in selling, general and administrative expenses was due to the
        elimination of 2 key employees which amounted to approximately
        $30,400.
 
 Page
            10
  **COMPARISON
        OF THE RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED AUGUST 31, 2005 AND
        2004.**
  General
 
 The
        Company's consolidated net sales decreased to $1,320,349 for the six months
        ended August 31, 2005, a decrease of $88,702 or .6%, from $1,409,051 for
        the six
        months ended August 31, 2004.
 
 Gross
        profit for the consolidated operations decreased to $427,472 for the six
        months
        ended August 31, 2005 from $464,297 for the six months ended August 31, 2004.
        Gross profit as a percentage of sales was 32% and 33% for the six month periods
        ended August 31, 2005 and 2004, respectively. The decrease in gross profit
        was  due
        to
        Chariot Manufacturing closing the plant for production while it completed
        some
        additional molds.
 
 Consolidated
        interest expense, net for the six months ended August 31, 2005 was $80,641as
        compared to  $77,114 for same period in 2004 for a increase
        of $3,527
        or 5%.
 
 Selling,
        general and administrative expenses increased to $1,168,708 for the six months
        ended August 31, 2005 as compared to $1,111,222 for the six months ended
        August
        31, 2004, an increase of $57,486 or 5%. The increase was primarily due to
        the
        increase in management salary of $109,500, net of the loss of two employees
        of
        approximately $30,400.
 
 The
        Company incurred a net consolidated loss of $426,924 for the six months ended
        August 31, 2005 compared to a loss of $733,087 for the six months ended August
        31, 2004. The decrease in the consolidated net loss is primarily due to the
        gain
        on the forgiveness of debt and the income from the insurance settlement on
        the
        hurricane damages.
 
 Manufacturing
        Subsidiary
  The
        manufacturing operation, International Machine and Welding, Inc. provided
        net
        sales of $1,176,053 for the six months ended August 31, 2005 compared to
        $1,176,141 for the six months ended August 31, 2004. The machining operations
        provided $526,830 or 45% of net sales with parts and service providing $649,223
        or 55% of net sales for the six months ended August 31, 2005 as compared
        to
        machining operations contributing $421,396 or 36% of net sales with parts
        and
        service providing $754,745 or 64% of net sales for the six months ended August
        31, 2004.
 
 Gross
        profit from the International Machine and Welding, Inc. was $407,519 for
        the six
        months ended August 31, 2005 compared to $411,267 for the same period in
        2004
        providing gross profit margins of 35% and 35%, respectively.
 
 Selling,
        general and administrative expenses for International Machine and Welding,
        Inc.
        were $456,810 for the six months ended August 31, 2005 compared to $485,844
        for
        the six months ended August 31, 2004. The decrease in selling, general and
        administrative expenses is due to increased controls over spending by
        management.
 
 Interest
        expense, net was $59,234 for the six months ended August 31, 2005 compared
        to
        $50,881 for the same period ended 2004. The increase in interest expense,
        net is
        due to the Company’s additional debt taken on during the first quarter of
        2005.
 
 The
        Company does not have discrete financial information on each of the three
        manufacturing divisions, nor does the Company make decisions on the divisions
        separately; therefore they are not reported as segments.
 
 Fiberglass
        Subsidiary
 
 The
        fiberglass manufacturing operation, Chariot Manufacturing Company, Inc. provided
        net sales of $144,296 for the six months ended August 31, 2005 as compared
        to
        $232,910 for the same period in 2004. The decrease in net sales is due to
        reduced production of finished goods while retooling was being
        accomplished.
 
 Gross
        profit from Chariot was $19,953 for the six months ended August 31, 2005
        providing a gross profit margin of 14% as compared to $53,030 providing a
        gross
        profit margin of 23% for the same period in 2004. The decrease in gross profit
        and the related gross profit margin was due to reduced sales with static
        or
        increased cost of goods sold.
 
 Selling,
        general and administrative expenses were $164,792 for the six months ended
        August 31, 2005 as compared to $180,540 for the same period in 2004.  The
        decrease in selling, general and administrative expenses was due to the
        elimination of 2 key employees which amounted to approximately
        $30,400.
 
 LIQUIDITY
        AND CAPITAL RESOURCES
 
 During
        the six months ended August 31, 2005 and 2004, the Company used net cash
        from
        operating activities of $105,560 and $268,290, respectively. This decrease
        in
        cash used by operating activities is primarily due to a decrease in other
        receivables and other assets during the six months ended August 31, 2005
        as
        compared to the same period in 2004.
 
 During
        the six months ended August 31, 2005 and 2004, the Company used cash for
        investing activities of $40,937 and provided cash of $26,984, respectively.
        The
        increase in net cash used for investing activities is primarily due to the
        increase in acquisition of property and equipment and other receivables during
        2004 that did not occur during the same period in 2005.
  During
        the six months ended August 31, 2005 and 2004, the Company provided cash
        from
        financing activities of $146,984 and $217,791, respectively. The decrease
        in net
        cash provided from financing activities is due to the decrease in exercise
        of
        stock options and warrants during 2005.
  Cash
        flows from operations and loans or the sale of equity provided for working
        capital needs and principal payments on long-term debt through August 31,
        2005.
        As of August 31, 2005, working capital deficit was $2,036,582. To the extent
        that the cash flows from operations are insufficient to finance the Company's
        anticipated growth, or its other liquidity and capital requirements during
        the
        next twelve months, the Company will seek additional financing from alternative
        sources including bank loans or other bank financing arrangements, other
        debt
        financing, the sale of equity securities (including those issuable pursuant
        to
        the exercise of outstanding warrants and options), or other financing
        arrangements. However, there can be no assurance that any such financing
        will be
        available and, if available, that it will be available on terms favorable
        or
        acceptable to the Company.
 
 Management
        has revised its business strategy to include expansion into other lines of
        business through the acquisition of other companies in exchange for the
        Company's stock. Although management has reduced debt, new financing to finance
        operations and to complete additional business acquisitions is still being
        sought. However, there can be no assurance that the Company will be able
        to
        raise capital, obtain debt financing, or improve operating results sufficiently
        to continue as a going concern.
    
 Page
            11
   **Seasonality**
 
 The
        diversity of operations in the Manufacturing Segment protects it from seasonal
        trends except in the sales of agricultural processing equipment whereby the
        majority of the revenue is generated while the processors await the next
        harvest.
 
 CRITICAL
        ACCOUNTING POLICIES AND ESTIMATES
 
 The
        Company has prepared the accompanying unaudited consolidated financial
        statements in conformity with accounting principles generally accepted in
        the
        United States for interim financial information. All intercompany transactions
        have been eliminated in consolidation.  The preparation of consolidated
        unaudited financial statements requires management to make estimates and
        assumptions that affect the reported amount of assets and liabilities and
        disclosure of contingent assets and liabilities at the date of the consolidated
        unaudited financial statements and the reported amounts of revenues and expenses
        during the reporting period. The Company reviews its estimates, including
        but
        not limited to, recoverability of long-lived assets, recoverability of prepaid
        expenses and allowance for doubtful accounts, on a regular basis and makes
        adjustments based on historical experiences and existing and expected future
        conditions. These evaluations are performed and adjustments are made as
        information is available. Management believes that these estimates are
        reasonable; however, actual results could differ from these
        estimates.
  We
        believe that the following critical policies affect our more significant
        judgments and estimates used in preparation of our consolidated unaudited
        financial statements.
  We
        maintain allowances for doubtful accounts for estimated losses resulting
        from
        the inability of our customers to make required payments.  We base
        our
        estimate on an analysis of the Company’s prior collection experience, customer
        credit worthiness, and current economic trends.  If the financial
        condition
        of our customers were to deteriorate, additional allowances may be
        required.
  We
        value
        our inventories at the lower of cost or market.  Cost is determined
        on a
        standard cost basis that approximates the first-in, first-out method; market
        is
        determined based on net realizable value.  We write down inventory
        balances
        for estimated obsolescence or unmarketable inventory equal to the difference
        between the cost of the inventory and the estimated market value based upon
        assumptions about future demand and market conditions.  If actual
        market
        conditions are less favorable than those projected by management, additional
        inventory write-downs may be required.
  We
        value
        our property and equipment at cost.  Amortization and depreciation
        are
        calculated using the straight-line and accelerated methods of accounting
        over
        the estimated useful lives of the assets.  Maintenance and repairs
        are
        charged to operations when incurred.  Betterments and renewal are
        capitalized. When property and equipment are sold or otherwise disposed of,
        the
        asset account and related accumulated depreciation account are relieved,
        and any
        gain or loss is included in operations.
  Fair
        value estimates used in preparation of the consolidated unaudited financial
        statements are based upon certain market assumptions and pertinent information
        available to management. The respective carrying value of certain
        on-balance-sheet financial instruments approximated their fair values. These
        financial instruments include cash, accounts receivable, accounts payable,
        and
        accrued expenses. Fair values were assumed to approximate carrying values
        for
        these financial instruments since they are short-term in nature and their
        carrying amounts approximate fair values or they are receivable or payable
        on
        demand. The fair value of the Company’s notes payable is estimated based upon
        the quoted market prices for the same or similar issues or on the current
        rates
        offered to the Company for debt of the same remaining maturities.
 
 Deferred
        tax assets and liabilities are recognized for the estimated future tax
        consequences attributable to differences between the consolidated unaudited
        financial statements carrying amounts of existing assets and liabilities
        and
        their respective income tax bases. Deferred tax assets and liabilities are
        measured using enacted tax rates expected to apply to taxable income in the
        years in which those temporary differences are expected to be recovered or
        settled. The effect on deferred tax assets and liabilities of a change in
        tax
        rates is recognized as income in the period that included the enactment date.
  ITEM
        3.
        CONTROLS AND PROCEDURES
  Under
        the
        supervision and with the participation of our Management, including our
        principal executive officer and principal financial officer, we conducted
        an
        evaluation of the effectiveness of the design and operations of our disclosure
        controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under
        the
        Securities Exchange Act of 1934, as of August 31, 2005. Based on this
        evaluation, our principal executive officer and principal financial officer
        concluded that our disclosure controls and procedures were effective such
        that
        the material information required to be included in our Securities and Exchange
        Commission (“SEC”) reports is recorded, processed, summarized and reported
        within the time periods specified in SEC rules and forms relating to American
        Commerce Solutions, Inc., and was made known to them by others within those
        entities, particularly during the period when this report was being
        prepared.
  There
        were no significant changes in the Company’s Internal Controls or in other
        factors that have materially affected, or are reasonably likely to affect,
        Internal Controls over financial reporting during the most recent fiscal
        year.
 
 Page
            12
   EXHIBITS
 
 Exhibits
        included herewith are:
 
 31.1
              Certification
                  of the Chief Financial Officer dated October 14,
                  2005
 
 31.2  Certification
        of the Chief Executive Officer dated October 14, 2005
 
 32  Certification
        Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section
 906
        of
        the Sarbanes-Oxley Act of 2002
 
 PART
        II -
        OTHER INFORMATION
  ITEM
        1.
        LEGAL PROCEEDINGS
 
 None.
  ITEM
        2.
        CHANGES IN SECURITIES
 
 During
        the six months ended August 31, 2005, there was no modification of any
        instruments defining the rights of holders of the Company's common stock
        and no
        limitation or qualification of the rights evidenced by the Company's common
        stock as a result of the issuance of any other class of securities or the
        modification thereof.
 
 On
        March
        4, 2005, 3,000,000 shares of common stock were issued to employees in conversion
        of options at 85% of fair value on the date the options were issued ($0.02).
 
 On
        March
        15, 2005, 5,000,000 shares of common stock were issued in exchange for a
        prepaid
        consulting agreement valued at $100,000 which is being amortized at
        approximately $5,000 per month.
 
 On
        April
        21, 2005, 12,637,772 shares of common stock were issued to a related party
        in
        exchange for the assignment of debt and related accrued interest valued at
        $252,756.
 
 On
        April
        21, 2005, 16,507,417 shares of common stock were issued to a related party
        in
        conversion of debt and related accrued interest valued at $330,148.
 
 On
        May 9,
        2005, 2,000,000 shares of common stock were issued to a consultant in conversion
        of options at 85% of fair value on the date the options were issued
        ($0.02).
 
 On
        July
        18, 2005, 1,000,000 shares of common stock were issued to an employee for
        services valued at $17,000.
 
 On
        July
        24, 2005, 2,000,000 shares of common stock were issued to employees in
        conversion of options at 85% of fair value at the date the options were issued
        ($0.02).
 
 ITEM
        3.
        DEFAULTS UPON SENIOR SECURITIES
 
 The
        Company has defaulted on a total of $462,159 of notes payable. The amount
        of
        principal payments in arrears was $327,126, with an additional amount of
        $135,033 of interest due at August 31, 2005. These defaults are the result
        of a
        failure to pay in accordance with the terms agreed.
  ITEM
        4.
        SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
 
 During
        the six month period ended August 31, 2005, the Company did not submit any
        matters to a vote of its security holders.
  ITEM
        5.
        OTHER MATTERS
 
 None
  ITEM
        6.
        EXHIBITS AND REPORTS ON FORM 8-K
  (a)
        Exhibits - None
 
 (b)
        Reports on Form 8-K -- None
 
 (c)
        S-8
        Filings included by reference
 
 (d)
        Employee Stock Option Plan and Non Employee Directors and Consultants Retainer
        Plan for 2004 included by reference
  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.
 
 AMERICAN
        COMMERCE SOLUTIONS, INC.
 
 
 Date:
        October 14, 2005  By:
        /s/
        Daniel L. Hefner
 ------------------------------------
 Daniel
        L.
        Hefner, President
 
 Date:
        October 14, 2005  By:
        /s/
        Frank D. Puissegur
 ------------------------------------
 Frank
        D.
        Puissegur, CFO and Chief
 Accounting
        Officer
  Page
              13