UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

FORM 10-Q

(Mark One)

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2005 or

o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to ________

Commission file number: 001-32428

TARPON INDUSTRIES, INC.

2420 Wills Street,
Marysville, Michigan
48040
(Address of principal executive offices)
(Zip Code)

(810) 364-7421
(Registrant’s telephone number, including area code)

N/A
(Former name, former address and former fiscal year, if changed since last report)

     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 o No þ

     Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

     The number of the registrant’s common shares outstanding as of May 23, 2005 was 4,640,130.

TARPON INDUSTRIES, INC.

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTER ENDED MARCH 31, 2005

TABLE OF CONTENTS

1

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

TARPON INDUSTRIES, INC.

INDEX TO FINANCIAL STATEMENTS

2

TARPON INDUSTRIES, INC. AND SUBSIDIARIES
(Formerly known as Wall St. Acquisitions, Inc.)

3

TARPON INDUSTRIES, INC. AND SUBSIDIARIES
(Formerly known as Wall St. Acquisitions, Inc.)

4

TARPON INDUSTRIES, INC. AND SUBSIDIARIES
(Formerly known as Wall St. Acquisitions, Inc.)

5

TARPON INDUSTRIES, INC. AND SUBSIDIARIES
(Formerly known as Wall St. Acquisitions, Inc.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

1. Financial Statement Presentation

     We prepared our unaudited interim financial statements pursuant to the Securities and Exchange Commission’s rules. Accordingly, they do not include all of the information and notes normally included in our annual financial statements prepared in accordance with generally accepted accounting principles. We believe, however, that the disclosures are adequate to make the information presented not misleading.

     The unaudited interim financial statements in this report reflect all adjustments which are, in our opinion, necessary to a fair statement of the results for the interim periods presented. All of these adjustments that are material are of a normal recurring nature. Our operating results for the three-month period ended March 31, 2005 do not necessarily indicate the results that should be expected for the year ending December 31, 2005. The unaudited interim financial statements should be read together with the financial statements and related notes for the year ended December 31, 2004 included in our Annual Report on Form 10-K/A for the year ended December 31, 2004.

2. Summary of Significant Accounting Policies

     A summary of the significant accounting policies in the preparation of the accompanying financial statements follows.

Company and Industry

     Tarpon Industries, Inc. (formerly known as Wall St. Acquisitions, Inc.) (the “Company”) was incorporated in Michigan on January 16, 2002. The Company completed two acquisitions in 2004. Eugene Welding Co., or “EWCO,” was acquired in April 2004, and Steelbank, Inc., or “Steelbank,” was acquired in May 2004. EWCO manufactures structural steel tubing and steel storage rack systems at two manufacturing facilities in Michigan, north of Detroit. Steelbank acts as a distributor and sales representative for the sale of structural and mechanical steel tubing. Steelbank is currently located near Toronto, Ontario, Canada. The Company completed the acquisition of the assets, other than the real estate, of the Haines Road facility of Bolton Steel Tube Co., Ltd., or “Haines Road” through Steelbank, Inc., in February 2005, and in May 2005 it completed the acquisition of the real estate assets. Haines Road manufactures primarily mechanical steel tubing at a manufacturing facility located near Toronto, Ontario, Canada. On April 6, 2005, Steelbank, Inc. changed its name to Steelbank Tubular, Inc. We intend to seek other acquisitions in the steel tubing, racking and related industries, although we currently have no agreement for any other such acquisition.

6

TARPON INDUSTRIES, INC. AND SUBSIDIARIES
(Formerly known as Wall St. Acquisitions, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Consolidation

     The consolidated financial statements as of March 31, 2005 and for the three months ended March 31, 2005 include the accounts of the Company and its wholly-owned subsidiaries, EWCO (acquired April 2004), Steelbank (acquired May 2004) and the assets of Haines Road from their February 2005 date of acquisition. The current Steelbank and the assets of Haines Road were combined into a ‘new’ Steelbank in February 2005. Steelbank changed its name to Steelbank Tubular, Inc. in April 2005. All significant inter-company transactions and balances have been eliminated, and the assets of the acquired subsidiaries have been adjusted to fair values as of the date of acquisition, and goodwill has been recognized for the difference between the purchase price and fair value of the assets acquired for the acquired subsidiaries. We consider the Company to operate in a single segment.

Accounts Receivable and Concentration of Credit Risk

     Periodically during the first quarter of 2005, the Company maintained a balance in one financial institution in excess of the federally insured limit of $100,000.

     The Company had two major customers in the first quarter of 2005 that accounted for approximately 30% of net sales in that period and approximately 18% of accounts receivable at March 31, 2005. The Company had four major suppliers in the first quarter of 2005 that accounted for approximately 40% of net purchases in that period.

Foreign Currency Risk

     At March 31, 2005, Steelbank Tubular, Inc.’s receivables include U.S. $432,463 and payables include U.S. $1,109,174.

3. Acquisitions

     In February 2005, Steelbank completed the acquisition of substantially all of the assets, other than the real estate, of the Haines Road facility from Bolton Steel Tube Co., Ltd. pursuant to an Asset Purchase Agreement originally entered into in July 2004, as amended. Haines Road manufactures primarily mechanical steel tubing at a manufacturing facility located near Toronto, Ontario, Canada. The aggregate purchase price including expenses related to the transaction was approximately $10,190,000 (Cdn.$12,489,000) consisting of (1) approximately $9,211,000 (Cdn.$11,289,000) payable in cash (2) approximately $979,000 (Cdn.$1,200,000) secured, subordinated promissory note, either payable 15 months after closing or by offsetting adjustments made after closing or for purchases by Bolton from Haines Road, (3) approximately $9,689,000 (Cdn.$11,875,000) for the assets acquired, (4) a $200,000 success fee in connection with the transaction, payable to Bainbridge Advisors over 24 months and (5) approximately $301,000 in expenses related to the transaction. We funded a portion of the purchase price with proceeds from our initial public Offering and from a term loan described in Note 7.

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TARPON INDUSTRIES, INC. AND SUBSIDIARIES
(Formerly known as Wall St. Acquisitions, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

     Pursuant to a Guarantee between Tarpon and Bolton, Tarpon guaranteed Steelbank Tubular, Inc.’s obligations under the secured subordinated promissory note executed by Steelbank Tubular, Inc. in favor of Bolton. As part of the transaction, we have agreed not to compete with Bolton with respect to hot-dipped galvanized products for a period of six months after closing. Bolton also agreed not to compete with Tarpon on the pre-galvanized tubing market for six months.

     On May 18, 2005, Steelbank Tubular, Inc. purchased the Haines Road real estate assets, including closing fees and expenses, for $4,638,000 (Cdn. $5,870,000), consisting of (1) approximately $530,000 (Cdn. $670,000) in cash, (2) approximately $2,765,000 (Cdn. $3,500,000) one year mortgage bridge financing, and (3) vendor financing of approximately $948,000 (Cdn. $1,200,000) and $395,000 (Cdn. $500,000) payable August 16, 2006 in second and third mortgage financing, respectively.

     We leased the Haines Road real estate during the period between the acquisition closing date and the real estate closing date at a monthly rent of approximately $62,300 (Cdn.$75,000).

     The following table summarizes the assets acquired and liabilities assumed in connection with the acquisition of the Haines Road facility:

     The following unaudited proforma consolidated information is provided as if the acquisition of the Haines Road facility of Steelbank Tubular, Inc. and EWCO had occurred as of the beginning of the applicable period. The unaudited proforma information does not reflect any benefits from synergies that might be achieved from combining operations and does not reflect the actual results that would have occurred, nor is it necessarily indicative of future results of operations of the combined companies. The unaudited pro forma amounts include adjustments that are based upon available information and various assumptions that the Company believes are reasonable.

8

TARPON INDUSTRIES, INC. AND SUBSIDIARIES
(Formerly known as Wall St. Acquisitions, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

4. Goodwill and Intangible Assets

The changes in goodwill and intangible assets for the first three months of 2005 are as follows:

     Steelbank Tubular, Inc. had accumulated amortization related to the customer lists of Steelbank and Haines Road as at March 31, 2005 of $25,944. Steelbank Tubular, Inc. also had accumulated amortization related to a covenant not to compete as of March 31, 2005 of $57,746. The covenant not to compete is being amortized on a straight-line basis over the life of the agreement which is six years. The customer bases are amortized in proportion to their expected future benefits. Annual estimated total amortization expense is as follows:

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TARPON INDUSTRIES, INC. AND SUBSIDIARIES
(Formerly known as Wall St. Acquisitions, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

5. Details of Balance Sheet

INVENTORIES:

     The Company has no inventory obsolescence reserve as of March 31, 2005.

PROPERTY, PLANT AND EQUIPMENT:

10

TARPON INDUSTRIES, INC. AND SUBSIDIARIES
(Formerly known as Wall St. Acquisitions, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

6. Short-Term Debt

     Short-term debt can be summarized as follows:

7. Long-Term Debt and Capital Leases

     Long-term debt and capital lease obligations can be summarized as follows:

Annual maturities of long-term debt and capital lease obligations are as follows:

11

TARPON INDUSTRIES, INC. AND SUBSIDIARIES
(Formerly known as Wall St. Acquisitions, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

     On February 17, 2005, Steelbank entered into a Loan Agreement with LaSalle Business Credit, a division of ABN AMRO Bank N.V., Canada Branch. The credit facility provides for a revolving credit line in the maximum principal amount of $8,000,000 Canadian dollars, subject to a borrowing base based on eligible inventory and receivables and subject to reserves, and a term loan in the principal amount of $2,100,000 Canadian dollars.

     Borrowings of Canadian dollars under the revolving credit facility bear interest at a floating rate equal to the Lender’s Canadian prime rate plus an applicable margin of between 0.75% and 1.25%. Borrowings of U.S. dollars under the revolving credit facility bear interest at a floating rate equal to the Lender’s U.S. prime rate. Under certain circumstances, Steelbank has the option to convert all or any part of its Canadian or United States borrowings to an interest rate equal to a Libor rate plus an applicable margin of between 2% and 2.75% or a BA rate plus an applicable margin of between 2% and 2.75%. Interest on the revolving credit facility is payable monthly in arrears. The full amount borrowed under the revolving credit facility will mature on February 17, 2008, subject to renewal by the Lender and Steelbank on terms yet to be determined.

     Principal on the term loan is payable in sixty equal monthly installments of $35,000 Canadian dollars beginning on April 1, 2005. The term loan bears interest, which is payable monthly in arrears, at a floating rate equal to the Lender’s Canadian prime rate plus an applicable margin of between .75% and 1.25%. The entire amount of the term loan facility will mature on March 1, 2010.

     The obligations under the Loan Agreement are unconditionally guaranteed by Tarpon, and are secured by a security interest in substantially all of the tangible and intangible assets of Steelbank and Tarpon, other than Tarpon’s common shares of Eugene Welding Company. Steelbank’s obligations under the Loan Agreement are also secured by a pledge of the capital stock of Steelbank pursuant to a share pledge agreement between Tarpon and the Lender.

     The Loan Agreement contains customary covenants that will limit the ability of Steelbank Tubular to, among other things, guarantee additional indebtedness, incur indebtedness, create liens, pay dividends, make certain types of investments, enter into transactions with affiliates, make capital expenditures in excess of $500,000 Canadian dollars in any fiscal year, sell assets, merge with other companies or enter into any transaction outside the ordinary course of business.

     The Loan Agreement also requires compliance with several financial covenants, including adjusted net worth of at least $7,480,200 (Cdn.$9,100,000) or 90% of Steelbank’s actual net worth, if higher. For quarters ending on or after June 30, 2005, the minimum adjusted net worth of the previous quarter will be increased by 75% of the Net Income for that quarter (ignoring quarters in which there is a loss). It also requires Steelbank Tubular to maintain debt service coverage ratio (generally net income adjusted for depreciation and amortization, non cash transactions, and capital expenditures divided by the total of all principal payments of long term debt, capital leases, subordinated debt and all payments in respect of any distribution), of at least 1.25 to 1.00. It also requires Steelbank Tubular to maintain interest coverage (generally net income adjusted for interest expense, bank fees and net costs under

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TARPON INDUSTRIES, INC. AND SUBSIDIARIES
(Formerly known as Wall St. Acquisitions, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

interest rate contracts, taxes, depreciation and amortization and non cash items divided by interest expense plus bank fees and net costs under interest rate contracts), of at least 1.50 to 1.00.

     As of March 31, 2005, Steelbank Tubular was not in compliance with the financial covenants. Steelbank Tubular has obtained a commitment from ABN AMRO Bank N.V., Canada Branch to adjust financial covenants and maintain compliance.

     Steelbank Tubular paid an $83,000 closing fee and must pay a 0.50% unused line of credit fee and an approximately $1,666 monthly administrative fee. As of May 13, 2005, $791,000 was borrowed under the revolving line of credit, approximately $1,631,000 was outstanding under the Term Loan, and approximately $1,606,000 was available for borrowing under the revolving credit facility without violating any of the existing debt covenants.

     Steelbank Tubular used the borrowings under the credit facility to provide partial funding for the acquisition of substantially all of the assets and business of the Haines Road facility and the cash portion of the Haines Road real estate, to pay transaction fees and expenses, to refinance Steelbank’s full-recourse factoring arrangement and for general working capital purposes of Steelbank.

     On May 18, 2005, Steelbank Tubular secured $2,765,000 (Cdn. $3,500,000) in a one-year mortgage financing jointly secured by the Haines Road real estate and Tarpon Industries with interest payable at 1.5% over Canadian prime rate . In addition, it secured second and third mortgages from the seller, Bolton Steel Tube Company, Ltd., totaling $948,000 (Cdn. $1,200,000) and $395,000 (Cdn.$500,000) with interest payable at 8% and 10% respectively.

     The proceeds of above mentioned loans were used to fund a portion of the purchase price for Haines Road.

     EWCO has a credit facility with Standard Federal Bank, N.A., including a revolving credit facility for up to $9,000,000, subject to a borrowing base based on eligible inventory and receivables, originally maturing August 31, 2007, and a $1,394,000 term loan. As of March 31, 2005, EWCO was not in compliance with the financial covenants. EWCO has obtained a non-binding commitment from Standard Federal Bank to adjust financial covenants and maintain compliance. As of May 16, 2005, approximately $5,283,000 was outstanding under the revolving credit facility, approximately $1,231,000 was outstanding under the term loan, and approximately $906,000 was available for borrowing under the revolving credit facility, assuming revision of existing financial covenants.

8. Comprehensive Loss

     Our comprehensive losses are as follows:

9. Stock Options

     As of October 22, 2004, our board of directors and shareholders adopted the Tarpon Industries, Inc. 2004 Stock Option Plan. The plan allows us to grant incentive stock options and non-qualified stock options to our directors, officers, employees, consultants and advisors to purchase up to an aggregate of 650,000 common shares.

     During the first quarter of 2005, we granted options under the plan to purchase 348,285 common shares to consultants, officers, employees and directors of the Company. The options are exercisable at $5.50 a share and vest immediately, for the consultant and director options, or in cumulative annual installments over three years for the officer and employee options. No

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TARPON INDUSTRIES, INC. AND SUBSIDIARIES
(Formerly known as Wall St. Acquisitions, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

     options were granted during the first quarter of 2004, and no options were exercised in the first quarter of 2005 or 2004.

     We have also agreed to grant the three former shareholders of Steelbank Inc. options to purchase a number of common shares equal to a combined total of approximately $138,889 per year divided by the fair market value of the common shares on the date of grant, which will be exercisable at 110% of the fair market value of the common shares on the date of grant. The options will be granted to each of them after the calendar years 2005, 2006, and 2007, if certain performance targets are met in those years, and will be immediately vested.

     Had compensation expense for stock options that vested in the first quarter of 2005 been determined based on the fair value of the options on the grant date pursuant to the methodology of SFAS No. 123, our results of operations, on a pro forma basis, would have been as follows: