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

OR

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

For the transition period from ____________ to ____________

(Name of small business issuer as specified in its charter)

State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date:

Transitional Small Business Disclosure Format (check one): Yes No X .

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(Amounts in thousands, except for share and par value amounts)

Certain statements contained in this section and elsewhere in this Form 10-QSB constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve a number of known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, but are not limited to, changes in the markets for refrigerants (including unfavorable market conditions adversely affecting the demand for, and the price of refrigerants), the Company's ability to source refrigerants, regulatory and economic factors, seasonality, competition, litigation, the nature of supplier or customer arrangements which become available to the Company in the future, adverse weather conditions, possible technological obsolescence of existing products and services, possible reduction in the carrying value of long-lived assets, estimates of the useful life of its assets, potential environmental liability, customer concentration, the ability to obtain financing, and other risks detailed in the Company's other periodic reports filed with the Securities and Exchange Commission. The words "believe", "expect", "anticipate", "may", "plan", "should" and similar expressions identify forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made.

The Company's discussion and analysis of its financial condition and results of operations are based upon its consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. Several of the Company's accounting policies involve significant judgements, uncertainties and estimations. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions. To the extent that actual results differ from management's judgements and estimates, there could be a material adverse effect on the Company. On a continuous basis, the Company evaluates its estimates, including, but not limited to, those estimates related to its allowance for doubtful accounts, inventories and commitments and contingencies. With respect to accounts receivable, the Company estimates the necessary allowance for doubtful accounts based on both historical and anticipated trends of payment history and the ability of the customer to fulfill its obligations. For inventory, the Company evaluates both current and anticipated sales prices of its products to determine if a write down of inventory to net realizable value is necessary. The Company utilizes both internal and external sources to evaluate potential current and future liabilities for various commitments and contingencies. In the event that the assumptions or conditions change in the future, the estimated liabilities could differ from the original estimates.

Over the past few years, the Company has created and developed a service offering known as RefrigerantSide® Services. RefrigerantSide® Services are sold to contractors and end-users associated with refrigeration systems in commercial air conditioning and industrial processing industries. These services are offered in addition to refrigerant sales and the Company's refrigerant management services, which consist primarily of reclamation of refrigerants. The Company has created a network of service depots that provide a full range of the Company's RefrigerantSide® Services to facilitate the growth and development of its service offerings.

Management believes that its RefrigerantSide® Services represent the Company's long term growth potential. The Company is focusing its sales and marketing efforts on customers who the Company believes most readily appreciate and understand the value that is provided by the Company's RefrigerantSide® Services offering; rather than a mass market approach. In pursuing its sales and marketing strategy, the Company expects to focus its RefrigerantSide® Services on customers in the following industries; petrochemical, pharmaceutical, industrial power, manufacturing, commercial facility and property management and maritime. Moreover, to maintain its current ability to quickly respond to customer service requests throughout the United States as well as to expand its presence outside the United States, the Company has created a strategic alliance with the BOC Group, PLC and intends to pursue the creation of additional strategic alliances with companies that service larger customers in targeted industries, which would enable the Company to (i) co-locate its equipment with these strategic partners and (ii) utilize these partners' sales and marketing resources to offer their customers the Company's RefrigerantSide® Services. The Company may incur additional expenses as it develops RefrigerantSide® Services.

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Sales of refrigerants continue to represent a majority of the Company's revenues. Historically, most of the Company's refrigerant sales have been CFC based refrigerants, which are no longer manufactured. However, the demand for CFC based refrigerants has and will continue to decrease as equipment that utilize other chemical based refrigerants replace those units that utilize CFC based refrigerants, particularly in the automotive aftermarket segment of the refrigerant sales industry. The Company has begun to increase its revenues from non-CFC based refrigerants. To the extent that the Company is unable to source CFC and non-CFC based refrigerants on commercially reasonable terms or at all, or the demand for refrigerants decreases, the Company's financial condition and results of operations would be materially adversely affected.

Revenues for the three month period ended June 30, 2005 were $7,221,000, an increase of $2,790,000 or 63% from the $4,431,000 reported during the comparable 2004 period. The increase in revenues was primarily attributable to an increase in refrigerant revenues offset by a slight decrease in RefrigerantSide® Services revenues. The increase in refrigerant revenues of $2,849,000 is related to an increase in the volume and price of certain refrigerants sold. The decrease in RefrigerantSide® Services of $58,000 was primarily attributed to the size of jobs completed.

Cost of sales for the three month period ended June 30, 2005 was $4,101,000, an increase of $1,477,000 or 56% from the $2,624,000 reported during the comparable 2004 period. The increase in cost of sales was primarily due to the volume of refrigerants sold. As a percentage of sales, cost of sales were 57% of revenues for 2005, a decrease from the 59% reported for the comparable 2004 period. The decrease in cost of sales as a percentage of revenues was primarily attributable to an increase in the sales price of certain refrigerants.

Operating expenses for the three month period ended June 30, 2005 were $1,379,000, an increase of $164,000 or 14% from the $1,215,000 reported during the comparable 2004 period. The increase was primarily attributable to an increase in selling and general administrative payroll expense partially offset by a reduction in depreciation and amortization expense.

Other income (expense) for the three month period ended June 30, 2005 was $(71,000), compared to the $(78,000) reported during the comparable 2004 period. Other income (expense) includes interest expense of $71,000 and $87,000 for the 2005 and 2004 periods, respectively, partially offset by a gain on sale of assets of $9,000 for the 2004 period. The decrease in interest expense is primarily attributed to less borrowings in 2005.

No income taxes for the three months ended June 30, 2005 and 2004 were recognized. During the 2005 and 2004 periods no income taxes were recognized on the income before taxes of $1,670,000 and $514,000, respectively, due to the utilization of net operating loss carry forwards from prior periods. The Company recognized a reserve allowance against the deferred tax benefit for the 2003 and prior losses. The tax benefits associated with the Company's net operating loss carry forwards is recognized to the extent that the Company is expected to recognize net income. A portion of the Company's net operating loss carry forwards are subject to annual limitations.

Net income for the three month period ended June 30, 2005 was $1,670,000, an increase of $1,156,000 from the $514,000 reported during the comparable 2004 period. The increase in net income was primarily attributed to the increase in revenues and gross profit margins.

Revenues for the six months ended June 30, 2005 were $11,803,000, an increase of $3,627,000 or 44% from the $8,176,000 reported during the comparable 2004 period. The increase in revenues was primarily attributable to an increase in refrigerant revenues offset by a decrease in RefrigerantSide® Services revenues. The increase in refrigerant revenues is related to an increase in the volume and price of certain refrigerants sold. The decrease in RefrigerantSide® Services was primarily attributable to the number of jobs completed.

Cost of sales for the six months ended June 30, 2005 was $7,089,000, an increase of $1,751,000 or 33% from the $5,338,000 reported during the comparable 2004 period. The increase in cost of sales was primarily due to the volume of refrigerants sold. As a percentage of sales, cost of sales were 60% of revenues for 2005, a decrease from the 65% reported for the comparable 2004 period. The decrease in cost of sales as a percentage of revenues was primarily attributable to an increase in the sales price of certain refrigerants.

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Operating expenses for the six months ended June 30, 2005 were $2,684,000 an increase of $362,000 or 16% from the $2,322,000 reported during the comparable 2004 period. The increase was primarily attributable to an increase in selling and administrative payroll expense, partially offset by a reduction in depreciation and amortization expense.

Other income (expense) for the six months ended June 30, 2005 was ($137,000), compared to the ($101,000) reported during the comparable 2004 period. Other income (expense) includes interest expense of $137,000 and $177,000 for the comparable six month periods ended June 30, 2005 and 2004, respectively. The decrease in interest expense is primarily attributed to a reduction in outstanding indebtedness. During the 2004 period interest expense was partially offset by a $76,000 gain on sale of assets.

No income taxes for the six months ended June 30, 2005 and 2004 were recognized. During the 2005 and 2004 periods no income taxes were recognized on the income before taxes of $1,893,000 and $415,000 respectively due to the utilization of net operating loss carry forwards from prior periods. The Company recognized a reserve allowance against the deferred tax benefit for the 2003 and prior losses. The tax benefits associated with the Company's net operating loss carry forwards is recognized to the extent that the Company is expected to recognize net income. A portion of the Company's net operating loss carry forwards are subject to annual limitations.

Net income for the six months ended June 30, 2005 was $1,893,000 an increase of $1,478,000 from the $415,000 net income reported during the comparable 2004 period. The increase in net income was primarily attributable to an increase in revenues and gross profit margins.

At June 30, 2005, the Company had a working capital, which represents current assets less current liabilities, of approximately $3,103,000, an increase of $1,797,000 from the working capital of $1,306,000 at December 31, 2004. The increase in working capital is primarily attributable to operating results.

Principal components of current assets are inventory and trade receivables. At June 30, 2005, the Company had inventories of $2,735,000, an increase of $74,000 or 3% from the $2,661,000 at December 31, 2004. The increase in the inventory balance is due to the timing and availability of inventory purchases and the sale of refrigerants. The Company's ability to sell and replace its inventory on a timely basis and the prices at which it can be sold are subject to, among other things, current market conditions and the nature of supplier or customer arrangements and the Company's ability to source CFC refrigerants, which are no longer being manufactured, or non-CFC refrigerants (see "Reliance on Suppliers and Customers" and "Seasonality and Fluctuations in Operating Results"). At June 30, 2005, the Company had trade receivables, net of allowance for doubtful accounts, of $2,886,000, an increase of $1,147,000 or 66% from the $1,739,000 at December 31, 2004. The Company's trade receivables are concentrated with various wholesalers, brokers, contractors and end-users within the refrigeration industry that are primarily located in the continental United States.

The Company has historically financed its working capital requirements through cash flows from operations, the issuance of debt and equity securities and bank and related party borrowings.

Net cash provided by operating activities for the six month period ended June 30, 2005, was $1,421,000 compared with net cash used by operating activities of $354,000 for the comparable 2004 period. Net cash provided by operating activities was primarily attributable to the net profit for the 2005 period partially offset by an increase in trade accounts receivable.

Net cash used by investing activities for the six month period ended June 30, 2005, was $1,253,000 compared with net cash used by investing activities of $30,000 for the comparable 2004 period. The net cash used by investing activities for the 2005 period was primarily related to investment in property, plant and equipment, particularly the Company's purchase of the Champaign, Illinois facility for $999,000.

Net cash used by financing activities for the six month period ended June 30, 2005, was $106,000 compared with net cash used by financing activities of $7,000 for the comparable 2004 period. The net cash used by financing activities for the 2005 period was due to the repayment of debt.

At June 30, 2005, the Company had cash and cash equivalents of $677,000. The Company continues to assess its capital expenditure needs. The Company may, to the extent necessary, continue to utilize its cash balances to purchase equipment primarily associated with its reclamation facility, expansion of its RefrigerantSide® Services and with the alliance with the BOC Group. The Company estimates that capital expenditures during 2005 may range from approximately $1,400,000 to

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$1,600,000. The Company has expended approximately $1,169,000 through June 30, 2005 of which approximately $940,000 has been financed with additional debt.

On May 30, 2003, Hudson entered into a credit facility with Keltic Financial Partners, LLP ("Keltic") which provides for borrowings of up to $5,000,000. The facility consists of a revolving line of credit and a term loan and expires on May 30, 2006. Advances under the revolving line of credit may not exceed $4,600,000 and are limited to (i) 85% of eligible trade accounts receivable and (ii) 50% of eligible inventory. Advances available to Hudson under the term loan may not exceed $400,000. The facility bears interest at a rate equal to the greater of the prime rate plus 2.0 %, or 6.5%, and was 8.25% at June 30, 2005. Substantially all of Hudson's assets are pledged as collateral for its obligations to Keltic under the credit facility. In addition, among other things, the agreements restrict Hudson's ability to declare or pay any cash dividends on its capital stock. As of June 30, 2005, Hudson had in the aggregate $97,000 of borrowings outstanding and $3,335,000 available for borrowing under the revolving line of credit. In addition, the Company had $240,000 of borrowings outstanding under its term loan with Keltic.

Prior to March 31, 2004, the Company paid semi annual dividends on its Series A Preferred Stock. On March 30, 2004, the Company declared and paid, in-kind, the dividends on the outstanding Series A Preferred Stock and issued 4,455, additional shares of its Series A Preferred Stock in satisfaction of the dividends due. The March 30, 2004 dividend payment represents the final dividend payment on the outstanding Series A Preferred Stock.

On March 31, 2004, the holders of the Series A Preferred Stock converted all of their shares of the Series A Preferred Stock into Common Stock at a conversion price of $.79 per share. Upon conversion the holders of the Series A Preferred Stock received 16,397,468 shares of Common Stock.

In May 2005, the Company purchased the Champaign, Illinois facility from its then owner for a total purchase price of $999,999. The Company has financed the purchase with a 15 year amortizing loan with a balloon payment due on June 1, 2012. The note bears interest at 7% for the first five years and then adjusts annually based on prime plus 2%.

The Company believes that it will be able to satisfy its working capital requirements for the next twelve months from anticipated cash flows from operations and available funds under its credit facility with Keltic. Any unanticipated expenses, including, but not limited to, an increase in the cost of refrigerants purchased by the Company, an increase in operating expenses or failure to achieve expected revenues from the Company's RefrigerantSide® Services and/or refrigerant sales or additional expansion or acquisition costs that may arise in the future would adversely affect the Company's future capital needs. There can be no assurances that the Company's proposed or future plans will be successful, and as such, the Company may require additional capital sooner than anticipated, which capital may not be available.

Inflation has not historically had a material impact on the Company's operations.

Reliance on Suppliers and Customers

The Company's financial performance is in part dependent on its ability to obtain sufficient quantities of virgin, non CFC based, and reclaimable, primarily CFC based, refrigerants from manufacturers, wholesalers, distributors, bulk gas brokers, and from other sources within the air conditioning and refrigeration and automotive aftermarket industries, and on corresponding demand for refrigerants. Historically, most of the Company's refrigerant sales have been CFC based refrigerants, which are no longer manufactured. In addition, the Company's suppliers of R-134a, a non CFC based refrigerant, have notified the Company that the supply of this product will be limited to an annual allocation for 2005. To the extent that the Company is unable to obtain sufficient quantities of virgin or reclaimable refrigerants in the future, or resell refrigerants at a profit, the Company's future financial condition and results of operations would be materially adversely affected.

During the six month period ended June 30, 2005, one customer accounted for 17% and another customer accounted for 12% of the Company's revenues. During the six month period ended June 30, 2004, no customer accounted for at least 10% of the Company's revenues.

The loss of a principal customer or a decline in the economic prospects and purchases of the Company's products or services by any such customer could have a material adverse effect on the Company's financial position and results of operations.

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The Company's operating results vary from period to period as a result of weather conditions, requirements of potential customers, non-recurring refrigerant and service sales, availability and price of refrigerant products (virgin or reclaimable), changes in reclamation technology and regulations, timing in introduction and/or retrofit or replacement of CFC-based refrigeration equipment, the rate of expansion of the Company's operations, and by other factors. The Company's business is seasonal in nature with peak sales of refrigerants occurring in the first half of each year. During past years, the seasonal decrease in sales of refrigerants have resulted in losses during the second half of the year. Delays in securing adequate supplies of refrigerants at peak demand periods, lack of refrigerant demand, increased expenses, declining refrigerant prices and a loss of a principal customer could result in significant losses. There can be no assurance that the foregoing factors will not occur and result in a material adverse effect on the Company's financial position and significant losses. The Company believes that there is a similar seasonal element to RefrigerantSide® Service revenues as refrigerant sales and is continuing to assess this seasonal trend.

An evaluation was carried out under the supervision and with the participation of the Company's management, including the Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO"), of the effectiveness of the Company's disclosure controls and procedures as of the end of the quarter ended June 30, 2005. Based on that evaluation, the CEO and CFO have concluded that the Company's disclosure controls and procedures are effective to provide reasonable assurance that information required to be disclosed by the Company in reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms. During the quarter ended June 30, 2005, there were no changes in the Company's internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, its internal control over financial reporting.

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Between April 2004 and September 2004, Ramapo Land Company ("Ramapo"), the lessor of the Company's Hillburn, New York facility (the "Hillburn Facility"), advised the Company that it had incurred approximately $80,000 in legal and consulting fees relating to the April 1, 1999 release (the "1999 Release") at the Hillburn Facility of approximately 7,800 lbs. of R-11 refrigerant, and requested reimbursement from the Company for these costs and for future costs that may be incurred in this regard. In September 2004, Ramapo advised the Company that the value of the real property upon which the Hillburn Facility is situated has been diminished in value by an unspecified amount as a result of the 1999 Release. In July 2005, the Company received a summons with notice in connection with an action commenced by Ramapo against the Company in the Supreme Court of the State of New York, Rockland County, seeking damages in the amount of $2,000,000 for an alleged and unspecified breach of contract (the "Rockland County Action"). The Company has not received a formal complaint in the Rockland County Action. The Company has entered into a stipulation with Ramapo by which the Company's time to serve a Notice of Appearance and/or a Demand for a Complaint upon Ramapo has been extended until September 30, 2005 in order to provide the Company and Ramapo with an opportunity to attempt to settle the Rockland County Action. There can be no assurance that the Company will be able to reach a settlement with Ramapo or, if it does, that the terms of any such settlement will not have a material adverse effect on the Company's financial condition or results of operations. There can be no assurance that, in the event the Company is unable to reach a settlement with Ramapo, any claims asserted by Ramapo in the Rockland County Action will not have a material adverse effect on the Company's financial condition or results of operations.

The Company has exhausted all insurance proceeds available for the 1999 Release under all applicable policies.

For further information on the 1999 Release, refer to the Legal Proceedings Section in Part I, Item 3 of the Company's Form 10-KSB for the year ended December 31, 2004.

During the three months ended June 30, 2005, the Company granted options to purchase an aggregate of 90,625 shares of Common Stock to officers and employees pursuant to its Stock Option Plans. With respect to these option grants the Company relied on the exemption from registration provided by Section 4(2) under the Securities Act of 1933, the ("Act") as transactions by an issuer not involving a public offering and /or Section 2(a) (3) of the Act.

On June 28, 2005 the Company held an Annual Meeting of Shareholders at which the Company's security holders voted for the election of three directors whose class was set to expire in 2005 (Messrs. Vincent P. Abbatecola, Robert L. Burr and Otto C. Morch) to serve until the Annual Meeting of Shareholders of the Company to be held in 2007. The results of the vote were as follows:

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

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