**UNITED
STATES** **SECURITIES AND EXCHANGE COMMISSION**





**Washington,
D.C. 20549**





**FORM
10-QSB**





**(Mark
One)**


**[X]
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE**


**SECURITIES
EXCHANGE ACT OF 1934**








For
the Quarterly Period Ended February 28, 2005





**OR**





**[
] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE**


**SECURITIES
EXCHANGE ACT OF 1934**





For
the period  to











**Commission
File Number: 000-32847**





**VENTURES-NATIONAL
INCORPORATED**


*(Exact
Name of Registrant as Specified in its Charter)*







**Utah                                                                                                  87-0433444**


*(State
or Other Jurisdiction
of                                                                  (I.R.S.
Employer*


*Incorporation
or
Organization)                                                               Identification
Number)*










**44358
Old Warm Springs Blvd.**


**Fremont,
California 94538-6148**


*(Address
of Principal Executive Offices, Including Zip Code)*











**Registrant’s
Telephone Number (including area code): (510) 824-1200**





Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (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. Yes [x] No [ ]





Indicate
by a check mark whether the registrant is an accelerated filer (as defined in
Rule 12b-2 of the Exchange Act)  Yes [ ] No [x]





Number of
shares of common stock, $0.001 par value, outstanding at April 1, 2005:
24,749,305 shares.









1







**VENTURES-NATIONAL
      INCORPORATED**
      **(dba
      TITAN GENERAL HOLDINGS, INC.)**
      **TABLE
      OF CONTENTS**Page**PART
      I.   FINANCIAL INFORMATION**
      Item
      1.  Condensed Consolidated Financial Statements
      Item
      2.  Management’s Discussion and Analysis of Financial Condition
      and Results of Operations
      Item
      3.  Controls and Procedures
    3
      11
      21**PART
      II.  OTHER INFORMATION**
      Item
      1.  Legal Proceedings
      Item
      2.  Unregistered sales of equity securities and use of
      proceeds
      Item
      3.  Defaults upon senior securities
      Item
      4.  Submission of matters to a vote of security
      holders
      Item
      5.  Other information
      Item
      6.  Exhibits
    22
      22
      22
      22
      22
      22Signatures
    23




















2










**VENTURES-NATIONAL
INCORPORATED**


**(dba
TITAN GENERAL HOLDINGS, INC.)**





**FORM
10-QSB**





**FOR
THE QUARTER ENDED**





**FEBRUARY
28, 2005**





**FORWARD-LOOKING
INFORMATION**





Statements in
this report concerning the future sales, expenses, profitability, financial
resources, product mix, market demand, product development and other statements
in this report concerning the future results of operations, financial condition
and business of Ventures-National Incorporated (the “Company”) are
“forward-looking” statements as defined in the Securities Act of 1933 and
Securities Exchange Act of 1934. Investors are cautioned that the Company’s
actual results in the future may differ materially from those projected in the
forward-looking statements due to risks and uncertainties that exist in the
Company’s operations and business environment, including competition, need for
increased acceptance of products, ability to continue to develop and extend our
brand identity, ability to anticipate and adapt to a competitive market, ability
to effectively manage rapidly expanding operations, amount and timing of
operating costs and capital expenditures relating to expansion of our business,
operations and infrastructure, ability to provide superior customer service,
dependence upon key personnel and the like. The Company’s most recent filings
with the Securities and Exchange Commission, including Form 10-KSB, contain
additional information concerning many of these risk factors, and copies of
these filings are available from the Company upon request and without
charge.



















3


**VENTURES-NATIONAL
INCORPORATED**
**(dba
TITAN GENERAL HOLDINGS, INC.)**
**CONDENSED
CONSOLIDATED BALANCE SHEET**
**FEBRUARY
28, 2005**
**(In
thousands)**
**(Unaudited)**





**ASSETS**


Current
      assets:Cash
      and cash equivalents
    
    $
    361Accounts
      receivable (net of reserves of $73)
    
    
    2,290Inventory,
      net
    
    
    560Prepaid
      expenses and other current assets
    
    
    86Total
      current assets
    
    
    3,937Equipment
      and improvements, net
    
    
    2,471Intangible
      , net
    
    
    13Capitalized
      loan fees, net
    
    
    255Other
      assets
    
    
    152Total
      assets
    
    $
    6,828





**LIABILITIES
AND STOCKHOLDERS’ EQUITY**


Current
      liabilities:Current
      portion of long term debt, net of discounts of $2,590
    
    $
    922Line
      of credit, net of discounts of $1,962
    
    
    251Short
      term debt
    
    
    868Accounts
      payable - trade
    
    
    1,390Accrued
      liabilities
    
    
    1,277Total
      current liabilities
    
    
    4,708Long-term
      liabilities
    
    
    -Total
      liabilities
    
    
    4,708Commitments
      and contingenciesStockholders’
      equity:Common
      stock, $0.001 par value, 950,000,000 sharesauthorized, 24,749,305 shares issued and outstanding
    
    
    25Additional
      paid-in capital
    
    
    20,789Deferred
      compensation
    
    
    (66)Accumulated
      deficit
    
    
    (18,628)Total
      stockholders’ equity
    
    
    2,120Total
      liabilities and stockholders’ equity
    
    $
    6,828





The
accompanying notes form an integral part of the condensed consolidated financial
statements.







4
 
   **VENTURES-NATIONAL
INCORPORATED**
 **(dba
TITAN GENERAL HOLDINGS, INC.)**
 **CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS**
  **(In
thousands, except share and per share data)**
 **(Unaudited)**
   **Three Months
      Ended                    Six
      Months Ended****02/28/05**
    ****
    ****
    **02/29/04**
    ****
    ****
    **02/28/05**
    ****
    ****
    **02/29/04**Sales
    
    $
    3,985
    
    $
    3,766
    
    $
    7,858
    
    $
    7,249Cost
      of sales
    
    
    3,534
    
    
    3,518
    
    
    7,490
    
    
    6,619Gross
      profit
    
    
    451
    
    
    248
    
    
    368
    
    
    630Operating
      expenses:Sales
      and marketing
    
    
    398
    
    
    352
    
    
    802
    
    
    695General
      and administrative expenses(Including
      non-cash of $53, $979, $131 and $1,727)
    
    
    496
    
    
    2,086
    
    
    1,118
    
    
    3,216Loss
      from operations
    
    
    (443)
    
    
    (2,190)
    
    
    (1,552)
    
    
    (3,281)Other
      income (expenses):Interest
      expense(Including
      non-cash of $832, $113, $1,225 and
$527)
    
    
    (967)
    
    
    (228)
    
    
    (1,467)
    
    
    (920)Miscellaneous
    
    
    1
    
    
    -
    
    
    2
    
    
    201Loss
      before income taxes
    
    
    (1,409)
    
    
    (2,418)
    
    
    (3,017)
    
    
    (4,000)Provision
      for income taxes
    
    
    -
    
    
    -
    
    
    -
    
    
    -Net
      loss
    
    $
    (1,409)
    
    $
    (2,418)
    
    $
    (3,017)
    
    $
    (4,000)Net
      loss per share:Basic
      and Diluted
    
    $
    (0.06)
    
    $
    (0.14)
    
    $
    (0.12)
    
    $
    (0.25)Weighted
      average numberof
      shares outstanding:Basic
      and Diluted
    
    
    24,749,305
    
    
    16,783,860
    
    
    24,742,951
    
    
    16,315,504


The
accompanying notes form an integral part of the condensed consolidated financial
statements.












5




**VENTURES-NATIONAL
INCORPORATED**
 **(dba
TITAN GENERAL HOLDINGS, INC.)**
 **CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS**
 **(In
thousands)**
 **(Unaudited)**


**Six
      Months Ended****02/28/05**
    ****
    ****
    **02/29/04**Cash
      flows from operating activities:Net
      loss
    
    $
    (3,017)
    
    $
    (4,000)Adjustments
      to reconcile net loss to net cashused
      in operating activities:Non-cash
      interest paid in common stock
    
    
    20
    
    
    -Amortization
      of deferred compensation
    
    
    131
    
    
    1,455Stock
      issued for services
    
    
    -
    
    
    272Non-cash
      interest expense relatedto
      amortization of debt discounts and bank fees
    
    
    1,205
    
    
    561Accrued
      expenses to be converted to notes payable
    
    
    -
    
    
    418Depreciation
      and amortization
    
    
    326
    
    
    330Gain
      on debt extinguishment
    
    
    -
    
    
    (349)Changes
      in operating assets and liabilities:Accounts
      receivable
    
    
    (34)
    
    
    (981)Inventory
    
    
    (24)
    
    
    (112)Prepaid
      expenses and other current assets
    
    
    8
    
    
    (58)Other
      assets
    
    
    39
    
    
    (1)Accounts
      payable
    
    
    355
    
    
    78Accrued
      liabilities
    
    
    524
    
    
    (67)Net
      cash used in operating activities
    
    
    (467)
    
    
    (2,454)Cash
      flows from investing activities:Capital
      expenditures
    
    
    (45)
    
    
    (173)Net
      cash used in investing activities
    
    
    (45)
    
    
    (173)Cash
      flows from financing activities:Borrowings/repayments
      on line of credit, net
    
    
    (109)
    
    
    2,336Borrowings
      on long-term debt, net of loan cost
    
    
    -
    
    
    1,993Proceeds
      from issuance of note payable to related parties
    
    
    583
    
    
    247Proceeds
      from issuance of common stock
    
    
    -
    
    
    667Payments
      of long-term debt
    
    
    (305)
    
    
    (468)Payments
      of short-term debt
    
    
    (93)
    
    
    (2)Payments
      of capital lease obligations
    
    
    -
    
    
    (85)Payments
      to related parties
    
    
    -
    
    
    (743)Payments
      on former lines of credit
    
    
    -
    
    
    (1,352)Net
      cash provided by financing activities
    
    
    76
    
    
    2,593Net
      decrease in cash
    
    
    (436)
    
    
    (34)Cash
      and cash equivalents at beginning of period
    
    
    797
    
    
    97Cash
      and cash equivalents at end of period
    
    $
    361
    
    $
    63Supplemental
      disclosure of cash flow information:Interest
      paid
    
    $
    242
    
    $
    220Income
      tax paid
    
    $
    -
    
    $
    -Non
      cash activities:Issuance
      of common stock to pay accrued interest
    
    $
    20
    
    $
    -Issuance
      of common stock for consulting fees
    
    $
    -
    
    $
    2,264Issuance
      of common stock for debt conversion
    
    $
    -
    
    $
    98Accounts
      payable converted to short term debt
    
    $
    51
    
    $
    -







The
accompanying notes form an integral part of the condensed consolidated financial
statements .











6


**VENTURES-NATIONAL
INCORPORATED**


**(dba
TITAN GENERAL HOLDINGS, INC.)**





**NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**


**(Amounts
in thousands, except share and per share amounts)**


**(Unaudited)**








***Note
1.*** **** ***Basis
of Presentation and Nature of Business Operations***





**Basis
of Presentation**





The
accompanying unaudited condensed consolidated financial statements have been
prepared by Ventures-National Incorporated, doing business as Titan General
Holdings, Inc. (“Titan” or the “Company”), without audit, pursuant to the rules
and regulations of the Securities and Exchange Commission. Certain information
and disclosures normally included in the consolidated financial statements
prepared in accordance with accounting principles generally accepted in the
United States have been condensed or omitted pursuant to such rules and
regulations. These unaudited condensed consolidated financial statements reflect
all adjustments, consisting only of normal recurring adjustments, which in the
opinion of management, are necessary to present fairly the financial position,
the results of operations and cash flows of Titan for the periods
presented.





These
unaudited condensed consolidated financial statements should be read in
conjunction with the consolidated financial statements and the notes thereto
included in the Company’s Annual Report to Shareholders on Form 10-KSB for the
fiscal year ended August 31, 2004 as filed with the Securities and Exchange
Commission on December 14, 2004. All significant intercompany accounts and
transactions have been eliminated in preparation of the condensed consolidated
financial statements.





The
accompanying consolidated financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and the satisfaction
of liabilities in the normal course of business. As of February 28, 2005, Titan
had a working capital deficit of $771 and an accumulated deficit of $18,628.
Through February 28, 2005, the Company has not been able to generate sufficient
sales from its operations to cover its costs and operating expenses. Although
the Company has been able to borrow and issue its common stock through private
placements to raise capital in order to fund its operations, it is not known
whether the Company will be able to continue this practice, or be able to obtain
other types of financing or if its sales will increase significantly to be able
to meet its cash operating expenses. This, in turn, raises substantial doubt
about the Company’s ability to continue as a going concern. Management believes
that the private equity financing and new product offerings will enable the
Company to generate positive operating cash flows and continue its operations.
However, no assurances can be given as to the success of these plans. The
financial statements do not include any adjustments that might result from the
outcome of these uncertainties.





On November
30, 2004, the Company’s Board of Directors formed a strategic committee to
investigate the possible sale or merger of the business and appointed Kenneth
Shirley as chairman of this committee. This committee is still in existence but
Ken Shirley is no longer chairman.





The results
of operations for the interim periods are not necessarily indicative of the
results to be expected for the full year.







7


****


**Nature
of Business**





We are a
fabrication service provider of time sensitive, high tech, prototype and
pre-production rigid and rigid flex printed circuit boards (“PCBs”) providing
time-critical printed circuit board manufacturing services to original equipment
manufacturers and electronic manufacturing services providers through our
wholly-owned subsidiaries Titan PCB West, Inc. and Titan PCB East, Inc. Our
prototype printed circuit boards serve as the foundation in many electronic
products used in telecommunications, medical devices, automotive, military
applications, aviation components, networking and computer
equipment.





Our time
sensitive and high quality manufacturing services enable our customers to
shorten the time it takes them to get their products from the research and
development phase to the production phase, thus increasing their competitive
position. Our focus is on high quality niche printed circuit boards consisting
of complex, multi-layered, fine-lines and high-performance materials with
delivery cycles between 24 hours and standard 14 day lead times at a competitive
price.





Beginning in
the year 2001, Titan began acquiring cutting edge technology equipment and
processes from competitors unable to remain in business due to a severe market
downturn and overwhelming debt.








***Note
2.*** **** ***Loss
Per Common Share***





In accordance
with SFAS No. 128, “Earnings Per Share,” the basic loss per common share is
calculated by dividing net loss available to common stockholders by the weighted
average number of common shares outstanding. Diluted loss per common share is
computed similarly to basic loss per common share, except that the denominator
is increased to include the number of additional common shares that would have
been outstanding if the potential common shares had been issued and if the
additional common shares were not antidilutive. Titan has excluded all
outstanding options and convertible debt from the calculation of diluted net
loss per share because these securities are anti-dilutive. As of February 28,
2005, Titan had common stock equivalents of approximately 5,140,000 shares
related to the options and warrants and approximately 20,005,000 shares related
to shares to be issued upon conversion on the convertible debt.





***Note
3.*** ****  ***Inventory***




Inventory consisted of the following:**02/28/05**Raw
      materials and finished subassemblies
    
    $
    337Work
      in process
    
    
    255Finished
      goods
    
    
    48640Less
      inventory reserves
    
    80Total
    
    $
    560




8


***Note
4.*** **** ***Note
Payable - Related Party***





****** On
November 30, 2004, the Company entered into a 10% $1,000 note agreement with Mr.
Frank Crivello (the “Crivello Note”); whereby, Mr. Crivello will loan the
Company up to a total of $1,000 convertible at $0.12/share with a maturity date
of January 31, 2005. This note can be extended with the approval of both
parties. On November 30, 2004, the Company received the first installment on
this note of $300 when the stock price was $0.30/share; therefore the Company
determined that there was a beneficial conversion feature in the amount of $300.
During the quarter ended February 28, 2005, the Company received further
installments totaling $283, net of a $50 repayment of a prior note payable to
Mr. Crivello (see Note 8), when the stock was at varying prices from $0.15 to
$0.22; therefore the Company determined that there were additional beneficial
conversion features totaling $202. All these beneficial conversion features were
recorded as additional paid in capital and a discount on the note payable. All
these beneficial conversion features were expensed during the quarter ended
February 28, 2005. Although the note came due on January 31, 2005, Mr. Crivello
has not requested repayment. The total amount outstanding at February 28, 2005
is $633.





***Note
5.*** **** ***Laurus
Note***





During the
quarter ended November 30, 2004, Laurus Master Fund LTD (“Laurus”) converted $20
of interest expense into 50,000 shares of common stock, waived the interest
ratchet for the Crivello Note and extended the Company’s principal payments on
its term loans for a period of six months until May 1, 2005 which may be further
extended by agreement of both parties. Laurus also opted not to waive the
Company’s default of its loan covenants requiring the Company to carry all of
its debt with Laurus as current.





***Note
6. Proforma Loss under FASB 148***





The Company
uses the intrinsic value method (APB Opinion 25) to account for its stock
options granted to officers, directors, and employees. Under this method,
compensation expense is recorded over the vesting period based on the difference
between the exercise price and quoted market price on the date the options are
granted. During the three and six month periods ended February 28, 2005 and
February 29, 2004, the Company recognized compensation expense of $11, $23, $19
and $28, respectively related to amortization of stock option grants to
employees





During the
three and six month periods ended February 28, 2005 and February 29, 2004,
compensation expense recognized under FAS 123 would have been $29, $57, $28, and
$58, respectively.




***Note
7. Litigation***





From time to
time, we may become involved in various lawsuits and legal proceedings which
arise in the ordinary course of business. However, litigation is subject to
inherent uncertainties, and an adverse result in this or other matters could
arise from time to time that may harm Titan’s business, financial condition and
results of operations.





***Note
8. Convertible Notes***





In the prior
fiscal year, the Company issued convertible notes to private parties for cash
infusions into the Company. These notes were issued as convertible notes with a
conversion price of $0.32 per share and carry an interest rate of 10% per annum
with an expiration date of December 31, 2004. During the quarter ended November
30, 2004, the Company received extensions from these lenders initially extending
the due date to March 31, 2005 and have received another 90 day extension until
June 30, 2005. A convertible note in the amount of $50 was repaid in the quarter
ended February 28, 2005 in conjunction with an advance under the Note Payable -
Related Party (see Note 4). The total amount due under these notes is $135 at
February 28, 2005.





******


9


**


***Note
9. Gain on Extinguishment of Debt***





During the
quarter ended November 30, 2003, the Company settled an unpaid capital lease
obligation with a gain of approximately $349 which is included in
miscellaneous income in the accompanying condensed consolidated statements of
operations.





***Note
10. Commitments***





Included in
the Company’s liabilities are unpaid payroll taxes to the State of California of
$37 and to the Internal Revenue Service of $210 for the calendar year 2004. The
Company is currently working with counsel on payment plans for these unpaid
payroll taxes.





***Note
11. Subsequent Event***





On November
20, 2003, the Company entered into loan and security agreement with Laurus
pursuant to which we are permitted to borrow up to $4,000 under a revolving line
of credit (the “Credit Agreement”). On April 4, 2005, the Company and Laurus
entered into an agreement to provide up to an additional $1,000 overadvance
pursuant to the terms of the Credit Agreement. Concurrently with such agreement,
Farwell Equity Partners, LLC, a Delaware limited liability company (“Farwell”),
pledged certain assets to secure the repayment of the overadvance. David Marks,
a principal stockholder and a director of the Company is the managing member of
Farwell. The Company also agreed to indemnify Farwell for any loss it may incur
as a result of the pledge of assets.







10





**Item
2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS**


**


*This
Management’s Discussion and Analysis of Financial Condition and Results of
Operations and Plan of Operations and other portions of this report contain
forward-looking information that involve risks and uncertainties. Our actual
results could differ materially from those anticipated by the forward-looking
information. Factors that may cause such differences include, but are not
limited to, availability and cost of financial resources, product demand, market
acceptance and other factors discussed in this report under the heading
“Business - Risk Factors.” This Management’s Discussion and Analysis of
Financial Condition and Results of Operations and Plan of Operations should be
read in conjunction with our consolidated financial statements and the related
notes included elsewhere in this report.*





**Overview**





We are a
fabrication service provider of time sensitive, high tech, prototype and
pre-production PCBs. We provide time-critical, PCB manufacturing services to
original equipment manufacturers and electronic manufacturing services
providers. Our prototype PCBs serve as the foundation in many electronic
products used in telecommunications, medical devices, automotive, military
applications, aviation components, networking and computer equipment. Our focus
is on niche PCBs consisting of complex, high layer count, fine-lines and
high-performance materials with capabilities to deliver in 24 hours, at premium
pricing, as compared to standard 14 day lead time.





Our
wholly-owned subsidiary Titan PCB West (“Titan”) was incorporated on March 27,
2001. On August 30, 2002, we acquired Titan through the merger of Titan EMS
Acquisition Corp. with and into Titan. In connection with the Merger, the
stockholders of Titan received shares of our common stock. For financial
reporting purposes, the Merger has been treated as a reverse-merger, where Titan
was the acquirer. Because the Merger is treated as a purchase of
Ventures-National Incorporated, the historical financial statements of Titan
became our historical financial statements after the Merger.





On August 6,
2002, Titan acquired all of the non-real estate assets and assumed all of the
non-term loan liabilities of SVPC in exchange for the issuance to SVPC of
800,000 shares of Titan common stock, pursuant to the terms and conditions of a
Contribution Agreement and Assignment and Assumption of Liabilities dated August
6, 2002.





Beginning in
2001, SVPC began acquiring cutting edge technology equipment, processes,
customer lists and orders from competitors unable to remain in business
principally due to a severe market downturn and excessive levels of
indebtedness. On July 16, 2001, SVPC acquired all of the assets of SVPC Circuit
Systems, Inc. and certain assets of CSI pursuant to a combined approved
bankruptcy court sale. After these acquisitions, Titan acquired certain system
integration division assets out of bankruptcy from creditors of Paragon
Electronic Systems, Inc.





On August 6,
2002, Titan acquired certain intangible assets contributed by Louis George, a
former executive officer and director, in exchange for 50,000 shares of Titan
common stock valued at $1.50 per share, pursuant to the terms and conditions of
a Contribution Agreement and Assignment and Assumption of Liabilities dated
August 6, 2002.







11


Effective
August 30, 2002, through our wholly-owned subsidiary Titan EMS Acquisition Corp.
(“AcquisitionCo”), a Delaware corporation, we acquired all of the capital stock
of Titan through an exchange of our common stock pursuant to an Agreement and
Plan of Merger. In connection with the Merger, our fiscal year was also changed
from June 30 in each year to August 31 in each year.





On February
27, 2003, through our wholly-owned subsidiary Titan PCB East, we acquired
certain assets of Eastern Manufacturing Corporation, for approximately $500,000
in a foreclosure sale from Eastern Manufacturing Corporation’s secured lender
Eastern Bank. The results from Eastern Manufacturing Corporation’s operations
have been reflected in our financial statements from the date of acquisition. No
goodwill resulted from this acquisition.





Effective
March 5, 2003, we purchased shares of common stock of Coesen representing 33.3%
of its issued and outstanding shares of common stock from Mr. Howard Doane, the
principal stockholder and an officer and director of Eastern Manufacturing
Corporation, in exchange for 30,000 shares of common stock and $5,000 in
cash.




**Plan
of Operations**





Our
business strategy is to:


·  target
potential customers and industries needing prototype boards with required
turnaround times of between 24 hours and the industry standard 14-days as well
as preproduction needs requiring numerous types of materials;
 · aggressively
market specialty manufacturing services for time sensitive, high-tech prototype
and pre-production PCBs to the high technology industry and cater to customers
who need time sensitive delivery of low to medium production runs with high
quality and superior design and customer service interface whether for
production or research and development;
 ·  expand
our services to include flexible circuits and rigid - flex combinations in order to diversify sources of sales;
 ·  expand
our sales through the marketing and manufacture of rigid-flex PCBs using the
patented HVR Flex process available;
 ·  acquire
and integrate strategic assets of companies producing time sensitive, high tech
prototype and pre-production PCBs with other unique customers, technology or
processes in order to accelerate entry into our target market; and
 ·  acquire
manufacturing facilities that have military certification and achieve military
certification for our current facilities.
 ·  develop
and continuously improve fabrication and sales processes in order to improve
margins and competitive pricing.


We plan to
add and are in the process of adding additional independent sales
representatives to extend our selling capacity. Commission costs therefore will
fluctuate depending on the origin of sales orders with our internal sales team
or our independent sales representative organization. We also plan to increase
our marketing expenditures. There are no assurances that additional independent
sales representatives or increased marketing expenditures will increase our
sales.





12


**Accounting
Principles; Anticipated Effect of Growth**





Below we
describe a number of basic accounting principles, which we employ in determining
our recognition of sales and expenses, as well as a brief description of the
effects that we believe that our anticipated growth will have on our sales and
expenses in the future.





*Sales*





We recognize
sales upon shipment to our customers. We record net sales as our gross sales
less an allowance for returns. At February 28, 2005, we had approximately 320
customers. We provide our customers a limited right of returns for defective
PCBs and record an allowance against gross sales for estimated returns at the
time of sale based on our historical results. Because our customers quickly test
the PCBs we manufacture for them, the majority of returns for defects occur
within the first 15 days following shipment. At February 28, 2005, we provided
an allowance against accounts receivable for returns of $10,000. Actual returns
may differ materially from our estimates, and revisions to the allowances may be
required from time to time.





We expect the
number and complexity of PCBs we sell to fluctuate with the changes in demand
from our customers and, the prices we charge our customers to fluctuate as a
result of intense competition in the PCB industry and the current economic
situation and its impact on the high technology market. Until industry
conditions improve and demand increases, we expect that decreased average
pricing will continue to negatively affect our sales.





We expect
sales to grow as we develop our reputation in our target market. Acquisitions
will also increase sales as well as cause disruption as facilities, employees,
and processes are integrated. We expect these fluctuations to be relatively
short lived while expecting the sales growth to be more permanent with the
variable of market demand as a condition.





Future demand
and product pricing will depend on many factors including product mix, levels of
advanced technology, capacity utilization, competitive pressure in the PCB
industry, and economic conditions affecting the markets we serve and the
electronics industry in general. The current uncertainty regarding the level and
timing of an economic recovery in our product markets and volatility in our
customer forecasts continue to make our forecasting less reliable than in prior
periods.





In each case,
our plan of operations anticipates that our internal growth, as well as
acquisitions of competitors, shall materially contribute to our ability to
increase our sales as described above.





Through the
time of our acquisition of EMC, the Company’s primary source of sales were from
rigid bare-board manufacturing that provides time sensitive, high technology,
and superior quality PCB’s to the electronics industry at a competitive price.
Following this acquisition, Titan receives sales from customers who need
rigid-flex and flex bare-board manufacturing that provide time sensitive, high
technology, and superior quality PCBs. In addition, after an initial inspection
and certification period, Titan intends to expand its sales focus to the
military market place, which includes those vendors supplying the U.S. military
with products in our target market.






13


*Cost
of Sales*





Cost of sales
consists of materials, labor, outside services and overhead expenses incurred in
the manufacture and testing of our products. Many factors affect our gross
margin, including, but not limited to, capacity utilization, production volume
and yield. We do not participate in any long-term supply contracts and we
believe there are a number of high quality suppliers for the raw materials we
use. Our cost of goods, as a percentage of sales, varies depending on the
complexity of the PCBs we manufacture in any given period.





Based upon
our plan of operations, we anticipate that our cost of sales will increase as
our sales increase, but that cost of sales as a percentage of net sales shall
generally decrease as our sales increase. We believe that the amount of the
decrease of this percentage over the next several fiscal periods will be
dependent in large part upon the source of the increase in sales. For example,
an increase in our penetration in the existing market for our goods and services
will permit us to increase sales at a low cost in part by causing us to utilize
a greater portion of our existing manufacturing capacity, an expense which we
already incur. On the other hand, an increase in our sales attributable to our
offering a greater portfolio of products including much more complex products
and services may result in less of a decrease in such percentage as such
activities may initially be less efficient than our existing
operations.




Included in
cost of sales is overhead which is relatively fixed. Materials and labor are
semi-variable and are influenced by the complexity of orders as well as the
quantity of orders. As our business is continually changing with regard to the
type of product produced, we plan to implement broader use of production systems
to control the overtime in production as well as the use of materials in
production. We anticipate that these systems will assist in the pricing of its
products with the objective to be more competitive and profitable in our target
market.





We intend to
continue to expand and upgrade our production capability as well as our
production systems and the financial systems interface in order to better manage
material, labor and overhead costs.





*Operating
Expenses*





Our operating
expenses for the three and six month periods ended February 28, 2005 and
February 29, 2004 are comprised of costs for sales and marketing, general and
administrative.





Sales and
marketing expenses consist primarily of salaries and commissions paid to our
internal sales team, commissions paid to independent sales representatives and
costs associated with advertising and marketing activities. We expect our
selling and marketing expenses to fluctuate as a percentage of sales as we add
new personnel, develop new independent sales representative channels and
advertise our products.





General and
administrative expenses include all corporate and administrative functions that
serve to support our current and future operations and provide an infrastructure
to support future growth. Major items in this category include management and
staff salaries and benefits, travel, network administration and systems/data
processing, training, rent/leases and professional services. We expect these
expenses to fluctuate as a percentage of sales as we expand our
business. **** We intend
to slightly expand our customer and sales support operation in order to support
the increased complexity and volume of our PCB business and our anticipated use
of indirect sales. We do not expect a material increase in sales and marketing
expense that is not consistent with an increase in sales.




14


*Interest
Expense*





Interest
expense, including finance charges, relates primarily to an accounts receivable
line of credit with Laurus, term loans with Laurus, and the associated
amortization of discounts on convertible debt with Laurus and others. We expect
interest expense to fluctuate based on the timing of borrowings under our lines
of credit.





**Results
of Operations**





The following
table sets forth statement of operations data for the three and six month
periods ended February 28, 2005 and February 29, 2004 and should be read in
conjunction with the “ Management’s
Discussion and Analysis of Financial Condition and Results of
Operations ” and our
condensed consolidated financial statements and the related notes appearing
elsewhere in this report .





Three
      Months Ended
    
    Six
      Months Ended02/28/05
    
    02/29/04
    
    02/28/05
    
    02/29/04Net
      sales
    
    100.0
    %
    100.0
    %
    100.0
    %
    100.0
    %Cost
      of sales
    
    88.7
    
    93.4
    
    95.3
    
    91.3Gross
      profit
    
    
    11.3
    
    
    6.6
    
    
    4.7
    
    
    8.7Operating
      expenses:Sales
      and marketing
    
    
    10.0
    
    
    9.4
    
    
    10.2
    
    
    9.6General
      and administrative
    
    
    12.4
    
    
    55.3
    
    
    14.2
    
    
    44.4Total
      operating expenses
    
    
    22.4
    
    
    64.7
    
    
    24.4
    
    
    54.0Operating
      loss
    
    
    (11.1
    )
    
    (58.1
    )
    
    (19.7
    )
    
    (45.3
    )Interest
      expense
    
    
    (24.3
    )
    
    (6.1
    )
    
    (18.7
    )
    
    (12.7
    )Miscellaneous
    
    
    0.0
    
    
    0.0
    
    
    0.0
    
    
    2.8Net
      loss
    
    
    (35.4
    )
    
    (64.2
    )
    
    (38.4
    )
    
    (55.2
    )


****


**Three
Months Ended February 28, 2005 Compared to the Three Months Ended February 29,
2004.**





*Net
Sales*





Net sales
increased by $219,000 or 5.8% from $3,766,000 in the three months ended February
29, 2004 to $3,985,000 in the three months ended February 28, 2005. This
increase resulted in sales from our West facility; whereas sales in our East
facility remained relatively unchanged. The Company’s East operation is
experiencing a leveling in sales as sales efforts are being spent on long-term
military contracts due to the new military P31032 specification. Military
contracts materialize slowly but when they materialize remain solid for a long
span of time and at which time are expected to greatly increase the sales in the
Company’s East operation.





*Cost
of Sales*





Cost of sales
remained relatively unchanged even though we achieved a 5.8% increase in sales.
As a percentage of sales, these costs decreased from 93.4% in the three months
ended February 29, 2004 to 88.7% in the three months ended February 28, 2005.
The improvement in the cost of sales was a result of improvements in
manufacturing efficiencies and reductions of manufacturing overhead
costs.





**


15





*Gross
Profit*





Gross profit
increased by $203,000 or 81.9%, from $248,000 in the three months ended February
29, 2004 to $451,000 in the three months ended February 28, 2005. The increase
in gross profit resulted primarily from the increase in sales in the West
operation as noted above and the Company’s efforts to achieve profitability in
the East operations as well as maintain the profitability in the West
operations.





*Operating
Expenses*





Sales and
marketing expenses increased $46,000 from $352,000 in the three months ended
February 29, 2004 to $398,000 in the three months ended February 28, 2005 and as
a percentage of sales increased from 9.4% of sales in the quarter ended February
29, 2004 to 10.0% of sales in the quarter ended February 28, 2005. The increase
in sales and marketing expense was due primarily to an increase in business
activities for orders that will be deliverable in the future.





General and
administrative expenses decreased by $1,590,000 or 76.2%, from $2,086,000 in the
three months ended February 29, 2004 to $496,000 in the three months ended
February 28, 2005. The decrease was due primarily to the lower amortization of
deferred compensation and stock issuances for professional fees issued in the
prior fiscal year as well as a reduction in consulting fees and other
professional fees incurred in the prior year.





*Interest
Expense*





Interest
expense increased by $736,000, or 324.1%, from interest expense of $228,000 in
the three months ended February 29, 2004 to $967,000 in the three months ended
February 28, 2005 and as a percentage of sales, interest expense increased from
6.1% in the three months ended February 29, 2004 to 24.3% in the three months
ended February 28, 2005. In the three months ended February 28, 2005, interest
expense related primarily to non-cash amortization of loan discounts associated
with the Crivello and Laurus notes.





**Six
Months Ended February 28, 2005 Compared to the Six Months Ended February 29,
2004.**





*Net
Sales*





Net sales
increased by $610,000 or 8.4% from $7,249,000 in the six months ended February
29, 2004 to $7,859,000 in the six months ended February 28, 2005. This increase
resulted primarily from the 20.6% additional sales achieved in our West
operation offset by the 9.5% decrease in sales in our East operation. The
Company’s East operation experienced a reduction in sales as sales efforts are
being spent on long-term military contracts due to the new military P31032
specification. Military contracts materialize slowly but when they materialize
remain solid for a long span of time and at which time are expected to greatly
increase the sales in the Company’s East operation.





*Cost
of Sales*





Cost of sales
increased $871,000, or 13.2%, from $6,619,000 in the six months ended February
29, 2004 to $7,490,000 in the six months ended February 28, 2005. As a
percentage of sales, these costs increased from 91.3% in the six months ended
February 29, 2004 to 95.3% in the six months ended February 28, 2005. The
increase in cost of sales percent resulted from: a greater number of
qualification boards built to the new military specifications which should
result in future orders; additional facility related costs as production is
increased; and additional costs of outside services utilized as our
manufacturing has become more difficult.





**


16


*Gross
Profit*





Gross profit
decreased by $261,000 or 41.4%, from $630,000 in the six months ended February
29, 2004 to $368,000 in the six months ended February 28, 2005. The decrease in
gross profit resulted primarily from the higher costs mentioned
above.





*Operating
Expenses*





Sales and
marketing expenses increased $107,000 from $695,000 in the six months ended
February 29, 2004 to $802,000 in the six months ended February 28, 2005 and as a
percentage of sales increased from 9.6% of sales in the six months ended
February 29, 2004 to 10.2% of sales in the six months ended February 28, 2005.
This was primarily due to the Company utilizing more outside representatives
with commissions being paid and an increase in the traveling of our current
sales staff.





General and
administrative expenses decreased by $2,098,000 or 65.2%, from $3,216,000 in the
six months ended February 29, 2004 to $1,118,000 in the six months ended
February 28, 2005. The decrease was due in major part to the lower amortization
of deferred compensation and stock issuances for professional fees issued in the
prior fiscal year as well as a reduction in consulting fees and other
professional fees incurred in the prior year.




*Interest
Expense*





Interest
expense increased by $547,000, or 59.5%, from interest expense of $920,000 in
the six months ended February 29, 2004 to $1,467,000 in the six months ended
February 28, 2005 and as a percentage of sales, interest expense increased from
12.7% in the three months ended February 29, 2004 to 18.7% in the six months
ended February 28, 2005. In the six months ended February 29, 2004, interest
expense related primarily to interest expense on a 60 day note which carried a
10% premium and the issuance of 600,000 shares of stock. In the six months ended
February 28, 2005, interest expense related mainly to the amortization of loan
discounts associated with our Crivello and Laurus convertible debt as well as
other convertible debt the Company has issued.





*Miscellaneous*





Miscellaneous
income decreased $199,000 from $201,000 in the six months ended February 29,
2004 to $2,000 in the six months ended February 28, 2005. In the six months
ended February 29, 2004, the Company paid off a capitalized lease obligation
that was on the books for $434,000 for $85,000 recording a $349,000 gain offset
by the penalties incurred upon the early payoff of various debt obligations upon
the closing of the Laurus transaction.





**Liquidity
and Capital Resources**





Our principal
sources of liquidity have been cash provided by Laurus and an infusion of
capital from Mr. Frank Crivello. Our principal uses of cash have been for
operations, to meet debt service requirements, and to finance capital
expenditures. We anticipate these uses will continue to be our principal uses of
cash in the future.





17


We will
require additional financing in order to implement our business plan. We
currently anticipate capital expenditures of at least $500,000 during the next
12 months. If the anticipated cash generated by our operations are insufficient
to fund requirements and losses, we will need to obtain additional funds through
third party financing in the form of equity, debt or bank financing.
Particularly in light of our limited operating history and losses incurred,
there can be no assurance that we will be able to obtain the necessary
additional capital on a timely basis or on acceptable terms, if at all. In any
of such events, our business, prospects, financial condition, and results of
operations would be materially and adversely affected. As a result of any such
financing, the holders of our common stock may experience substantial
dilution.





The following
factors, among others, could cause actual results to differ from those indicated
in the forward-looking statements included in this Form 10-QSB: pricing
pressures in the industry; the loss of any of our major customers; a continued
downturn in the economy in general or in the technology sector; a further
decrease in demand for electronic products or continued weak demand for these
products; our ability to attract new customers; our ability to reduce costs,
including those associated with our restructuring plan; an increase in
competition in the market for electronic interconnect solutions; and the ability
of some of our new customers to obtain financing. These factors or additional
risks and uncertainties not known to us or that we currently deem immaterial may
impair business operations and may cause our actual results to differ materially
from any forward-looking statement.





Although we
believe the expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, levels of activity, performance
or achievements. We are under no duty to update any of the forward-looking
statements after the date of this report to conform them to actual results or to
make changes in our expectations.





In the six
months ended February 28, 2005, net cash used by operations was $467,000 while
in the six months ended February 29, 2004 cash used in operating activities was
$2,454,000, a decrease of $1,987,000. In the three months ended February 28,
2005, the Company utilized $45,000 in operating activities as compared to
$422,000 in the three months ended November 30, 2004. This decrease was
primarily the result of our accounts receivable leveling off as well as the
extension of payables and accruals due to an immediate cash
shortage.





In the six
months ended February 28, 2005, the Company utilized $45,000 for the purchase of
fixed assets compared to $173,000 used for the purchase of fixed assets in the
six months ended February 28, 2005, a decrease of $128,000, or 74.0%. As the
Company achieves positive operating cash flow, we expect our spending on capital
expenditures to increase during the fourth quarter of this fiscal
year.





On November
30, 2004, the Company entered into a 10% Convertible Promissory Note with Mr.
Frank Crivello, a related party. This note is convertible into the Company’s
Common Stock at $0.12/share and expired on January 31, 2005, but Mr. Crivello
has not requested repayment. The Company initially borrowed $300,000 and during
the current quarter have borrowed an additional $282,500, net of repayment of a
prior note payable to Mr. Crivello which was convertible at $0.32/share, with
the ability to borrow up to $1,000,000. Since the fair market value of the
Company’s stock on the borrowing dates ranged from $0.15 to $0.30, the Company
has recorded beneficial conversion features of which some were limited to the
amount borrowed. These beneficial conversion features were recorded as
additional paid in capital and as a discount on the debt which have all been
amortized to interest expense.





18


On November
20, 2003, the Company entered into loan and security agreement with Laurus
pursuant to which we are permitted to borrow up to $4,000,000 under a revolving
line of credit (the “Credit Agreement”). On April 4, 2005, the Company and
Laurus entered into an agreement to provide up to an additional $1,000,000
overadvance pursuant to the terms of the Credit Agreement. Concurrently with
such agreement, Farwell Equity Partners, LLC, a Delaware limited liability
company (“Farwell”), pledged certain assets to secure the repayment of the
overadvance. David Marks, a principal stockholder and a director of the Company
is the managing member of Farwell. The Company also agreed to indemnify Farwell
for any loss it may incur as a result of the pledge of assets.





On November
30, 2004, the Company’s board of directors formed a strategic committee to
explore the sale or merger of the Company and appointed Kenneth Shirley the
chairman of this committee. This committee is still active but no longer has Mr.
Shirley as its chairman.


****


**Quantitative
And Qualitative Disclosures About Market Risk**





The Company’s
exposure to market risk for changes in interest rates relates primarily to the
Company’s long-term debt since the interest rate charged by Laurus is prime plus
3% but at the present we do not enter into interest rate swap agreements to
guard against any fluctuation in the prime rate.





The Company
also has interest rate risk that effects the increase or decrease in the amount
of interest income the Company can earn on our available funds for investment.
The Company ensures the safety and preservation of its invested principal funds
by limiting default risk, market risk and reinvestment risk. The Company
mitigates default risk by investing in high quality, short-term securities. The
Company does not believe that changes in interest rates will have a material
effect on our liquidity, financial condition or results of operations.





**Impact
of Inflation**





The Company
believes that its results of operations are not dependent upon moderate changes
in inflation rates as it expects it will be able to pass along component price
increases to its customers.





**Seasonality**





The Company
has experienced sales fluctuations due to customer business shut downs over
December holidays and the slow down of purchasing activities in the summer
during peak vacation months.





**Contractual
Obligations**





The following
table presents the Company’s contractual obligations as of February 28, 2005 for
the remaining of this fiscal year as well as over the next five fiscal years.
The Company does not have any contractual obligations that extend beyond five
fiscal years:




19





Payment
      by periodDuring
      currentContractual
      Obligations
    
    
    Amount
    
    
    fiscal
      year
    
    
    1
      - 3 years
    
    
    4
      - 5 yearsEmployment
      agreements
    
    $
    531,250
    
    $
    115,000
    
    $
    416,250
    
    $
    -Short-term
      debt
    
    
    868,417
    
    
    868,417
    
    
    -
    
    
    -Long-term
      debt
    
    
    3,511,899
    
    
    3,511,899
    
    
    -
    
    
    -Revolving
      line of credit
    
    
    2,213,023
    
    
    2,213,023
    
    
    -
    
    
    -Operating
      leases
    
    
    2,888,919
    
    
    482,514
    
    
    2,058,211
    
    
    348,194Other
    
    
    67,500
    
    
    67,500
    
    
    -
    
    
    -Total
      Contractual Obligations
    
    $
    10,081,008
    
    $
    7,258,353
    
    $
    2,474,461
    
    $
    348,194







*Critical
Accounting Policies* The U.S.
Securities and Exchange Commission (“SEC”) issued Financial Reporting Release
No. 60, “CAUTIONARY ADVICE REGARDING DISCLOSURE ABOUT CRITICAL ACCOUNTING
POLICIES” (“FRR 60”), suggesting companies provide additional disclosure and
commentary on their most critical accounting policies. In FRR 60, the SEC
defined the most critical accounting policies as the ones that are most
important to the portrayal of a company’s financial condition and operating
results, and require management to make its most difficult and subjective
judgments, often as a result of the need to make estimates of matters that are
inherently uncertain. Based on this definition, our most critical accounting
policies include: inventory valuation, which affects our cost of sales and gross
margin; allowance for doubtful accounts, which affects general and
administrative expenses; and stock-based compensation, which affects general and
administrative expenses. The methods, estimates and judgments we use in applying
these most critical accounting policies have a significant impact on the results
we report in our consolidated financial statements.





*Inventory
Valuation* Our
policy is to value raw material inventories at the lower of cost or market on a
part-by-part basis on a first in first out basis (“FIFO”) . We also value
work-in-process and finished goods at the lower of cost or market utilizing a
standard cost system which management believes approximates cost on a FIFO
basis. This policy requires us to make estimates regarding the market value of
our inventories, including an assessment of excess or obsolete inventories. We
determine excess and obsolete inventories based on an estimate of the future
demand for our products within a specified time horizon, generally 12 months.
The estimates we use for demand are also used for near-term capacity planning
and inventory purchasing and are consistent with our revenue forecasts. If our
demand forecast is greater than our actual demand we may be required to take
additional excess inventory charges, which will decrease gross margin and net
operating results in the future. In addition, as a result of the downturn in
demand for our products, we have excess capacity in our manufacturing
facilities. We are not capitalizing any inventory costs related to this excess
capacity.





*Allowance
for doubtful accounts* We
maintain an allowance for doubtful accounts for estimated losses resulting from
the inability of our customers to make required payments. Our allowance for
doubtful accounts is based on our assessment of the collectibility of specific
customer accounts, the aging of accounts receivable, our history of bad debts,
and the general condition of the industry. If a major customer’s credit
worthiness deteriorates, or our customers’ actual defaults exceed our historical
experience, our estimates could change and impact our reported
results.






20


*Stock-based
compensation.* We record
stock-based compensation to outside consultants at fair value in general and
administrative expense. We do not record expense relating to stock options
granted to employees with an exercise price greater than or equal to market
price at the time of grant. We report pro-forma net loss and loss per share in
accordance with the requirements of SFAS 148. This disclosure shows net loss and
loss per share as if we had accounted for our employee stock options under the
fair value method of those statement. Pro-forma information is calculated using
the Black-Scholes pricing method at the date of the grant. This option valuation
model requires input of highly subjective assumptions. Because our employee
stock options have characteristics significantly different from those of traded
options, and because changes in the subjective input assumption can materially
affect the fair value estimate, in management’s opinion, the existing model does
not necessarily provide a reliable single measure of fair value of our employee
stock options.





**ITEM 3. CONTROLS AND PROCEDURES**


*Evaluation
of Disclosure Controls and Procedures.* As of
February 28, 2005, the Company’s management carried out an evaluation, under the
supervision of the Company’s Chief Executive Officer and Chief Financial Officer
of the effectiveness of the design and operation of the Company’s system of
disclosure controls and procedures pursuant to the Securities and Exchange Act ,
Rule 13a-15(e) and 15d-15(e) under the Exchange Act).  Based upon that
evaluation, the Chief Executive Officer and Chief Financial Officer concluded
that the Company’s disclosure controls and procedures were effective, as of the
date of their evaluation, for the purposes of recording, processing, summarizing
and timely reporting material information required to be disclosed in reports
filed by the Company under the Securities Exchange Act of 1934.





*Change
in Internal Controls.* There
were no changes in internal controls over financial reporting, known to the
Chief Executive Officer or Chief Financial Officer that occurred during the
period covered by this report that has materially affected, or is likely to
materially effect, the Company’s internal control over financial
reporting.




















21







**PART
      II**
      
      **OTHER
      INFORMATION**





**ITEM 1. LEGAL PROCEEDINGS**





From time to
time, we may become involved in various lawsuits and legal proceedings which
arise in the ordinary course of business. However, litigation is subject to
inherent uncertainties, and an adverse result in these or other matters may
arise from time to time that may harm our business. We are currently not aware
of any such legal proceedings or claims that we believe will have, individually
or in the aggregate, a material adverse affect on our business, financial
condition or operating results.





**ITEM 2. CHANGES IN SECURITIES AND USE OF
PROCEEDS**





None.





**ITEM 3. DEFAULTS UPON SENIOR SECURITIES**





The Company
is in default of its loan covenants with Laurus and has classified all its
senior debt as a current liability. Laurus has cooperated with the Company and
has waived its principal payments on its senior debt for a period of six months
until May 1, 2005 and may be further extended by agreement by both parties
but will not waive the non-compliance with covenants.





**ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS**





None.





**ITEM 5. OTHER INFORMATION**





None.





**ITEM 6. EXHIBITS**





31.1
    Certification
      of Principal Executive Officer pursuant to Rule 13a-14 and Rule15d-14(a), promulgated under the Securities and
      Exchange Act of 1934, as amended


31.2
    Certification
      of Principal Financial Officer pursuant to Rule 13a-14 and Rule 15d14(a), promulgated under the Securities and Exchange
      Act of 1934, as amended




32.1
    Certification
      pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section906 of the Sarbanes-Oxley Act of 2002 (Chief Executive
      Officer)





32.2
    Certification
      pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section906 of the Sarbanes-Oxley Act of 2002 (Chief Financial
      Officer)











22





**S I G N A T U R E S**





Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.











**VENTURES-NATIONAL
      INCORPORATED**
      (Registrant)Date: April 14,
2005
    By:
    /s/ Curtis
  OkumuraCurtis OkumuraTitle President and
      CEO
      (Principal Executive
Officer)
 ****By:
    /s/ Daniel
  GuimondDaniel GuimondTitle Chief Financial
      Officer
      (Principal Financial
Officer)

















23