**UNITED
      STATES SECURITIES AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**




**FORM
      10-QSB**




x
            Quarterly
                Report pursuant to Section 13 or 15(d) of the Securities Exchange
                Act of
                1934




for
      the
      quarterly period ended July 29, 2006




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  0-50187




KUHLMAN
      COMPANY, INC.


(Exact
      name of issuer as specified in its charter)




Nevada
              (State
                or other jurisdiction of incorporation or organization)
            86-0883289
              (IRS
                Employer Identification No.)701
                North Third Street, Suite B-1,Minneapolis,
                Minnesota
              (Address
                of Principal Executive Offices)
            55401
              (Zip
                Code)




(612)
      338-5752


(Issuer’s
      telephone number)




Check
      whether the issuer: (1) filed all reports required to be filed by Section 13
      or
      15(d) of the Securities Exchange Act of 1934 during the past 12 months (or
      for
      such shorter period that the issuer was required to file such reports), and
      (2)
      has been subject to such filing requirements for the past 90 days.
      Yes x No o




As
      of
      September 18, 2006 there were 26,167,903 outstanding shares of common stock,
      par
      value $0.001 per share. As of September 18, 2006 there were no outstanding
      shares of Series A Convertible Preferred Stock, par value $0.001 per share.









TABLE
      OF CONTENTS




**Page****PART
                I**
            **Financial
                Information**Item
                1
            Financial
                Statements (Unaudited):Condensed
                Consolidated Balance Sheets as of July 29, 2006 and January 28,
                2006
            15Condensed
                Consolidated Statements of Operations for the thirteen and twenty
                six
                weeks ended July 29, 2006 and July 30, 2005
            16Condensed
                Consolidated Statements of Cash Flows for the twenty six weeks ended
                July
                29, 2006 and July 30, 2005
            17Notes
                to Condensed Consolidated Financial Statements at July 29, 2006 and
                July
                30, 2005
            18Item
                2
            Management’s
                Discussion and Analysis or Plan of Operation
            27Item
                3
            Controls
                and Procedures
            33**PART
                II**
            **Other
                Information**Item
                1
            Legal
                Proceedings
            35Item
                6
            Exhibits
            35CertificationsRule
                13a-14(a)/15d-14(a) Certification of Principal Executive
                Officer
              Rule
                13a-14(a)/15d-14(a) Certification of Principal Accounting
                Officer
              Section
                1350 Certification of Chief Executive Officer
              Section
                1350 Certification of Chief Financial Officer











**Kuhlman
        Company, Inc.**
 **Condensed
        Consolidated Balance Sheets**
 **(UNAUDITED)**




July
                29,2006
            
            January
                28,2006ASSETSCurrent
                assets:Cash
                and cash equivalents
            
            $
            547,880
            
            $
            3,604,075Accounts
                receivable - net of allowance for doubtful accounts of $0and
                $2,000, respectively
            
            
            -
            
            
            66,800Inventories
            
            
            3,581,893
            
            
            5,157,023Prepaid
                expenses
            
            
            162,627
            
            
            409,044Lease
                deposits, current portion
            
            
            33,000
            
            
            33,000Other
                current assets
            
            
            18,163
            
            
            94,732Total
                current assets
            
            
            4,343,563
            
            
            9,364,674Furniture,
                fixtures and leasehold improvements
            
            
            3,379,260
            
            
            2,690,575Less
                accumulated depreciation and amortization
            
            
            (612,001
            )
            
            (337,856
            )Furniture,
                fixtures and leasehold improvements - net
            
            
            2,767,259
            
            
            2,352,719Other
                assets - lease deposits, net of current portion
            
            
            279,256
            
            
            319,256Total
                assets
            
            $
            7,390,078
            
            $
            12,036,649LIABILITIES
                AND STOCKHOLDERS' EQUITYCurrent
                liabilities:Accounts
                payable
            
            $
            3,601,426
            
            $
            3,808,790Accrued
                expenses
            
            
            631,100
            
            
            522,840Line
                of credit
            
            
            400,000Notes
                payable
            
            
            145,652
            
            
            462,757Total
                current liabilities
            
            
            4,778,178
            
            
            4,794,387Deferred
                rent
            
            
            351,228
            
            
            310,750Total
                liabilities
            
            
            5,129,406
            
            
            5,105,137Stockholders'
                equity:Common
                stock ($0.001 par value: 50,000,000 shares authorized;26,167,903
                and 21,197,374 shares, respectively issued andoutstanding)
                and preferred stock ($0.001 par value: 22,000,000shares
                authorized; 0 and 3,741,528 shares, respectively, issuedand
                outstanding)
            
            
            26,169
            
            
            24,939Additional
                paid-in capital
            
            
            22,717,477
            
            
            18,614,537Accumulated
                deficit
            
            
            (20,482,974
            )
            
            (11,707,964
            )Total
                stockholders' equity
            
            
            2,260,672
            
            
            6,931,512Total
                liabilities and stockholders' equity
            
            $
            7,390,078
            
            $
            12,036,649





See
      notes
      to condensed consolidated financial statements









**Kuhlman
        Company, Inc.**


**Condensed
        Consolidated Statements of Operations**
 **For
        the Thirteen and Twenty Six Weeks ended July 29, 2006 and July 30,
        2005**
 **(UNAUDITED)**


Thirteen
                  Weeks Ending
              
              
              Twenty
                  Six Weeks EndingJuly
                  29, 2006
              
              
              July
                  30, 2005
              
              
              July
                  29, 2006
              
              
              July
                  30, 2005Sales
              
              $
              2,425,817
              
              $
              1,261,825
              
              $
              5,006,362
              
              $
              2,689,370Cost
                  of sales
              
              
              2,676,186
              
              
              706,628
              
              
              4,455,296
              
              
              1,437,515Gross
                  profit
              
              
              (250,369
              )
              
              555,197
              
              
              551,066
              
              
              1,251,855General,
                  administrative and store operatingexpenses
              
              
              3,883,120
              
              
              1,813,246
              
              
              8,822,450
              
              
              3,354,908Depreciation
                  and amortization
              
              
              154,947
              
              
              64,192
              
              
              288,781
              
              
              112,173Loss
                  from operations
              
              
              (4,288,436
              )
              
              (1,322,241
              )
              
              (8,560,165
              )
              
              (2,215,226
              )Loss
                  on disposal of property and equipment
              
              
              (219,387
              )
              
              
              
              
              (219,387
              )Interest
                  income (expense), net
              
              
              (6,049
              )
              
              (61,026
              )
              
              4,542
              
              
              (80,309
              )Net
                  loss
              
              $
              (4,513,872
              )
              $
              (1,383,267
              )
              $
              (8,775,010
              )
              $
              (2,295,535
              )Basic
                  and diluted loss per share
              
              $
              (0.17
              )
              $
              (0.08
              )
              $
              (0.34
              )
              $
              (0.16
              )Weighted
                  average number of sharesoutstanding
                  - basic and diluted
              
              
              26,166,496
              
              
              17,270,720
              
              
              25,951,326
              
              
              14,443,793




See
      notes
      to condensed and consolidated financial statements










**Kuhlman
        Company, Inc.**
 **Condensed
        Consolidated Statements of Cash Flows**
 **For
        the Twenty Six Weeks ended July 29, 2006 and July 30,
        2005**


**(UNAUDITED)**


July
                29, 2006
            
            July
                30, 2005Cash
                flows from operating activities:Net
                loss
            
            $
            (8,775,010
            )
            $
            (2,295,535
            )Adjustments
                to reconcile net loss to net cash used in operatingactivities:Stock
                based compensation
            
            
            1,529,324
            
            
            -Non-cash
                interest charges
            
            
            -
            
            
            34,658Warrants
                issued for services
            
            
            57,600
            
            
            48,400Loss
                on disposal of property and equipment
            
            
            219,387
            
            
            -Depreciation
                and amortization
            
            
            288,781
            
            
            112,173(Increase)
                decrease in:Accounts
                receivable, net
            
            
            66,800
            
            
            (53,709
            )Inventories
            
            
            1,575,130
            
            
            (2,170,409
            )Prepaid
                expenses
            
            
            246,417
            
            
            (988,911
            )Lease
                deposits
            
            
            40,000
            
            
            (160,758
            )Other
                current assets
            
            
            76,569
            
            
            (5,984
            )Increase
                (decrease) in:Accounts
                payable
            
            
            (207,364
            )
            
            360,136Accrued
                expenses
            
            
            108,260
            
            
            (146,996
            )Deferred
                rent
            
            
            40,478
            
            
            -Net
                cash used in operating activities
            
            
            (4,733,628
            )
            
            (5,266,935
            )Cash
                flows used in investing activities, purchase of propertyand
                equipment
            
            
            (922,708
            )
            
            (640,167
            )Cash
                flows from financing activities:Net
                proceeds from issuance of stock
            
            
            2,517,246
            
            
            11,080,465Net
                proceeds from line of credit
            
            
            400,000Net
                payments on notes payable
            
            
            (317,105
            )
            
            (115,341
            )Net
                cash provided by financing activities
            
            
            2,600,141
            
            
            10,965,124(Decrease)
                increase in cash
            
            
            (3,056,195
            )
            
            5,058,022Cash
                beginning of period
            
            
            3,604,075
            
            
            208,148Cash
                end of period
            
            $
            547,880
            
            $
            5,266,170Supplemental
                disclosure of non-cash financing activitiesWarrants
                issued for services
            
            $
            57,600
            
            $
            48,400Common
                stock and options issued to employees.
            
            $
            1,529,324
            
            $
            -





See
      notes
      to condensed consolidated financial statements









**KUHLMAN
      COMPANY, INC.**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**


**July
      29, 2006 and July 30, 2005**


**(UNAUDITED)**





**A.**
            **Summary
                of Significant Accounting
                Policies**





***Change
      in Fiscal Year End***





The
      Company has elected to change its fiscal year end from the Saturday closest
      to
      December 31 to the Saturday closest to January 31. We are presenting the
      unaudited condensed consolidated financial statements for the thirteen and
      twenty-six weeks ending July 29, 2006 and July 30, 2005. We presented the
      unaudited condensed consolidated financial statements for the four weeks ended
      January 28, 2006 and January 29, 2005, along with the unaudited condensed
      consolidated financial statements for the thirteen weeks ending April 29, 2006
      and April 30, 2005, with our first quarter Form 10-QSB. We will present the
      audited financial statements as of the four weeks ended January 28, 2006, with
      the Form 10-KSB for the period ending February 3, 2007.





***Basis
      of Presentation***





The
      accompanying unaudited financial statements have been prepared in accordance
      with accounting principles generally accepted in the United States of America
      for interim financial statements and the instructions to Form 10-QSB and Item
      310(b) of Regulation S-B. They do not include all of the information and
      footnotes required by accounting principles generally accepted in the United
      States of America for complete financial statements. Operating results for
      the
      twenty-six and thirteen weeks ended July 29, 2006 and July 30, 2005, are not
      necessarily indicative of the results that may be expected for the fiscal year
      ending February 3, 2007. The
      balance sheet at January 28, 2006, has been derived from the unaudited
      condensed consolidated financial statements at that date, but does not include
      all of the information and notes required by generally accepted accounting
      principles for complete financial statements. Certain information and note
      disclosures normally included in the Company's annual financial statements
      have
      been condensed or omitted. These condensed financial statements should be read
      in conjunction with the financial statements and notes thereto included in
      the
      Company's Form 10-KSB, filed with the Securities and Exchange Commission
      on March 31, 2006.  The Form 10-KSB provides additional financial
      information which in turn contains a more comprehensive description of the
      Company's businesses and operations.





In
      the
      opinion of management, the financial statements reflect all adjustments (which
      include only normal recurring adjustments) necessary for a fair presentation
      of
      the financial position, results of operations, and cash flows for the periods
      presented.





***Use
      of Estimates***





The
      preparation of financial statements in conformity with accounting principles
      generally accepted in the United States of America requires management to make
      estimates and assumptions that affect certain reported amounts of assets and
      liabilities and disclosure of contingent assets and liabilities at the date
      of
      the financial statements and the reported amounts of expenses during the
      reporting period. Actual results could differ from those estimates. The
      financial statements are presented on the accrual basis. Material estimates
      that
      are particularly susceptible to significant change relate to the determination
      of the inventory allowance.











***Change
      in Capitalization and Change in Reporting Entity***





Kuhlman
      Company, Inc., was previously known as SK2, Inc.





On
      June
      10, 2005, SK2, Inc. merged with Gaming Venture Corp., U.S.A., a Nevada
      corporation (sometimes referred to as “GVUS”), and its wholly owned Delaware
      subsidiary, GV Acquisition Co. (“GV Acquisition”). Immediately prior to the
      merger, GVUS changed its name to “Kuhlman Company, Inc.” Pursuant to the terms
      of the Merger Agreement (Merger), GV Acquisition merged with and into SK2,
      Inc.,
      with SK2, Inc.  remaining
      as the surviving corporation and a wholly owned subsidiary of Kuhlman Company,
      Inc. In the Merger, and in exchange for all of their shares of common stock
      in
      SK2, Inc., SK2, Inc. stockholders received a number of shares of Series A
      Preferred Stock, such that they held a majority of the outstanding shares of
      capital stock of Kuhlman Company, Inc. For accounting purposes this was
      accounted for as a reverse acquisition of a public shell and was reflected
      as a
      recapitalization of SK2, Inc., the operating company. The Company amended its
      articles of incorporation to increase the total number of shares authorized
      for
      issuance to 50,000,000 shares of common stock and 22,000,000 shares of Preferred
      Stock, and effected a reverse stock split on a 1-for-5 basis on outstanding
      common shares. **** Each
      share of Series A Preferred Stock will automatically convert into one share
      of
      Company common stock upon the earlier of the effectiveness of a registration
      statement under the Securities Act covering the conversion of the Series A
      Preferred Stock into Company common stock, or the expiration of the one-year
      period following the Merger. The Preferred Stock has no liquidation preference
      or senior rights typically associated with a preferred stock, other than voting
      rights on an as-if-converted basis.





For
      2005,
      the financial statements reflect the activity as though Kuhlman Company, Inc.
      was the 100% owner of SK2, Inc. and SK2, Inc. was the 100% owner of A3,
      LLC.





***Cash
      Concentrations***





Bank
      balances exceeded federally insured levels as of July 29, 2006. Generally,
      these
      balances may be redeemed upon demand and therefore bear minimal
      risk.





***Accounts
      Receivable, credit risk and allowance for doubtful
      accounts***





In
      addition to its retailing operations, the Company generates revenue by providing
      product design and contract manufacturing for department store retailers seeking
      to augment their in-house expertise, which results in trade receivables. The
      Company reviews customers' credit history before extending unsecured credit
      and
      may establish an allowance for doubtful accounts based upon factors surrounding
      the credit risk of specific customers and other information.





The
      Company does not accrue interest on past due accounts receivable. Unless
      specific arrangements have been made, accounts receivable over 30 days are
      considered past due. The Company writes off accounts receivable when they are
      deemed uncollectible. Accounts receivable are shown net of an allowance for
      doubtful accounts of $0 at July 29, 2006 and $2,000 at January 28, 2006. Due
      to
      uncertainties in the collection process, however, it is at least reasonably
      possible that management's estimate will change during the next
      year.










***Valuation
      of Inventories***





Our
      inventories are stated at the lower of cost or market. Cost is determined by
      the
      first-in, first-out ("FIFO") method. The Company's success is largely dependent
      upon its ability to forecast the tastes of its customers and to provide
      merchandise that satisfies customer demand in a timely manner. The Company's
      failure to anticipate, identify, or react appropriately to changes in fashion
      trends could lead to excess inventories and markdowns. Sudden or continuing
      changes in the Company's product markets could directly impact our gross profit
      performance and may cause variability in gross profit results from reporting
      period to reporting period.





Provisions
      to reduce inventories to the lower of cost or market are made based on a review
      of excess and obsolete inventories through an examination of historical
      inventory consumption, current market demands and shifting market trends.
      Significant assumptions with respect to market trends and customer product
      acceptance are utilized to formulate our provision methods. Sudden or continuing
      downward changes in the Company's product markets may cause us to record
      additional inventory revaluation charges in future periods.





The
      Company’s ending inventory was made up of the following components:




July
                29,2006
            
            
            January
                28,2006Finished
                goods
            
            $
            3,421,048
            
            $
            5,294,728Raw
                materials
            
            
            976,853
            
            
            485,848Inventory
                allowance
            
            
            (816,008
            )
            
            (623,553
            )Total
                inventories
            
            $
            3,581,893
            
            $
            5,157,023




***Revenue
      Recognition***





Retail
      revenue is recognized at the time of register receipt. The Company accrues
      for
      estimated returns in accordance with Statement of Financial Accounting
      Standards, (SFAS) No. 48, "Revenue Recognition When Right of Return Exists,"
      based on historical return levels. For private label sales, revenue is
      recognized upon transfer of title at time of shipment as long as there was
      evidence of an arrangement, the price was fixed or determinable, and
      collectibility was probable.





***Income
      Taxes***





Differences
      between accounting rules and tax laws cause differences between the basis of
      certain assets and liabilities for financial reporting purposes and tax
      purposes. The tax effects of these differences, to the extent they are
      temporary, are recorded as deferred tax assets and liabilities under Statement
      of Financial Accounting Standards (SFAS) No.109, Accounting for Income Taxes.
      Temporary differences relate primarily to: allowances for doubtful accounts;
      inventory valuation allowances; accumulated depreciation; and accrued expenses
      not currently deductible. No income tax expense is recorded in the statement
      of
      operations since the Company has fully reserved for all tax benefits relating
      to
      net operating loss carryforwards at this time, and will continue to assess
      its
      tax situation on a going forward basis.










***Segment
      Reporting***





A
      business segment is a distinguishable component of an enterprise that is engaged
      in providing an individual product or service or a group of related products
      or
      services and that is subject to risks and returns that are different from those
      of other business segments. The Company's segments have similar economic
      characteristics and are similar in the nature of the products sold, type of
      customers and methods used to distribute the Company's products. Management
      believes that the Company meets the criteria for aggregating its operating
      segments into a single reporting segment.





***Stock-Based
      Compensation***




On
      December 15, 2004, the FASB issued Statement of Financial Accounting Standards
      (“SFAS”) No. 123 (revised 2004) (“SFAS 123(R)”), *Share-Based
      Payment* ,
      which
      is a revision of SFAS No. 123, *Accounting
      for Stock-Based Compensation.* SFAS
      123(R) supersedes Accounting Principles Board (“APB”) Opinion No. 25, *Accounting
      for Stock Issued to Employees* ,
      and
      amends SFAS No. 95, *Statement
      of Cash Flows* .
      Generally, SFAS 123(R) requires all share-based payments to employees, including
      grants of employee stock options, to be recognized in the income statement
      based
      on their fair values determined at the date of grant. On April 14, 2005, the
      Securities and Exchange Commission adopted a new rule that amended the
      compliance dates for SFAS 123(R). The Company adopted SFAS 123(R) using the
      modified prospective method effective January 1, 2006.





In
      all
      periods prior to January 1, 2006, the Company accounted for stock-based
      compensation awards to employees using the intrinsic value method prescribed
      by
      APB Opinion No. 25 and, as such, generally recognized no compensation cost
      for
      employee stock options. The Company did recognize $249,200 in stock based
      compensation expense in the fourth quarter of 2005 as a result of accelerated
      vesting of stock options with a fair market value greater than the exercise
      price at the time of the acceleration. Accordingly, the adoption of SFAS
      123(R)’s fair value method affects the Company’s results of operations, although
      it does not affect the Company’s overall financial position. If the Company had
      been accounting for stock based compensation under SFAS 123(R) during the
      thirteen and twenty-six weeks ended July 30, 2005, the impact of that standard
      would have approximated the impact of SFAS 123 as described in the pro forma
      disclosure set forth below:


Thirteen
                  WeeksEnded
              
              
              Twenty-six
                  Weeks EndedJuly
                  30, 2005
              
              
              July
                  30, 2005As
                  reported
              
              $
              (1,383,267
              )
              $
              (2,295,535
              )Less:
                  Total stock-based employeecompensation
                  expense determined underfair
                  value based method for all awards,Net
                  of related tax effects
              
              $
              (274,760
              )
              $
              (274,760
              )Pro
                  forma
              
              $
              (1,658,027
              )
              $
              (2,570,295
              )Basic
                  and diluted as reported
              
              $
              (0.08
              )
              $
              (0.16
              )Basic
                  and diluted pro forma
              
              $
              (0.10
              )
              $
              (0.18
              )









During
      the twenty-six weeks ended July 29, 2006, the Company granted options for
      757,000 shares, granted 544,000 shares of restricted stock to employees and
      the
      Chairman sold stock at a discount to the CEO as part of his employment
      agreement. The fair values of the stock grants were computed based on the fair
      value of the stock on the grant date. The stock price on the grant dates ranged
      from $2.40 to $2.46. The vesting of the stock grants ranges from 0 to 2.5 years.
      The fair values of the options were calculated using the Black-Scholes option
      pricing model with the following assumptions: (a) no dividend yield, (b) 87.93%
      - 98.73% expected volatility, (c) expected life of five years and (d) a
      risk-free rate of return of 4.69% - 4.99%. On February 3, 2006, Scott Kuhlman,
      the Chairman of the Board, sold 500,000 shares of common stock to Luis Padilla,
      the CEO, for $1.00 per share. The $1.00 per share price was discounted to $0.92
      per share because the agreement between the CEO and the Chairman of the Board
      called for 5 equal interest free payments. The market price on that day was
      $2.75. The Company recognized the difference between the market price and the
      discounted sale price as expense, under fair value recognition provisions of
      SFAS 123(R) and SAB Topic 5-T, “Accounting for Expenses or Liabilities Paid by
      Principal Stockholders(s).” The Company recorded expense of $95,951 for the
      options granted, $518,373 for the stock grants and $915,000 for the discounted
      sale, for the twenty-six weeks ended July 29, 2006. For additional information
      on the stock option plan see Note D.





***Earnings
      per Share***




Basic
      and
      diluted loss per share is computed by dividing net loss by the weighted average
      number of common and preferred shares outstanding during the period. Diluted
      loss per share is computed the same as the basic loss per share due to the
      continuing operating loss which makes the impact of stock options and warrants
      anti-dilutive. Preferred shares are included in the calculation along with
      common shares since the preferred shares are similar to common shares and were
      convertible into one share of common stock each as a result of the Company’s
      filing of its Registration Statement on Form SB-2. In addition, all outstanding
      preferred shares automatically converted into common shares on June 10, 2006,
      the one-year anniversary of the Merger.





Following
      is a computation of basic and diluted earnings per share for the twenty-six
      weeks ended July 29, 2006, and July 30, 2005:


The
                  Twenty-sixWeeks Ended
              
              
              The
                  Twenty-sixWeeks EndedJuly
                  29, 2006
              
              
              July
                  30, 2005Net
                  loss
              
              $
              (8,775,010
              )
              $
              (2,295,535
              )Weighted
                  average shares outstanding
              
              
              25,951,326
              
              
              14,443,793Net
                  loss per share -- basic and diluted
              
              $
              (0.34
              )
              $
              (0.16
              )




Had
      operating losses not been continuing, the Company would have used the treasury
      method for calculating the dilutive effect of the stock options and warrants
      (using the average market price).










***Reclassifications***





The
      Company has elected to reclassify store occupancy and design and merchandise
      payroll and benefit costs from cost of goods sold to general, administrative
      and
      store operating expenses. The Company has made this change to make the reporting
      comparable to other retailers.





The
      following illustrates the primary costs classified in each major expense
      category:





Cost
                of sales
            General,
                Administrative, and Store Operating ExpensesMerchandise
            Store
                payroll and benefitsFreight
                - in
            OccupancyFreight
                - out
            Store
                operatingInventory
                shrinkage
            Design
                and merchandise payroll and benefitsOther
                administrative





This
      change has no impact on the net loss, the loss from operations, or the loss
      per
      share of the Company, but the change does impact how the gross profit is
      reported. The change decreases costs of sales and increases general,
      administrative and store operating expense by $2,188,036 and $478,055 for the
      twenty-six weeks ending July 29, 2006 and July 30, 2005, respectively.





The
      following illustrates the results of operations had we not made this
      change.




Proforma
                  - For the
              
              
              Proforma
                  - For theTwenty-sixWeeks
                  Ended
              
              
              Twenty-sixWeeks
                  EndedJuly
                  29, 2006
              
              
              July
                  30, 2005Sales
              
              $
              5,006,362
              
              $
              2,689,370Cost
                  of sales
              
              
              6,643,332
              
              
              1,915,570Gross
                  profit
              
              
              773,800
              
              
              (1,636,970
              )General,
                  administrative, store operating expenses,depreciation
                  and amortization
              
              
              6,923,195
              
              
              2,989,026Loss
                  from operations
              
              $
              (8,560,165
              )
              $
              (2,215,226
              )


**B.**
            **Notes
                Payable**





The
      Company entered into a Credit Agreement with Cananwill, Inc. on June 8, 2005.
      Under the Credit Agreement, the Company borrowed $111,999 at 7.5% interest.
      The
      loan called for nine equal monthly installments of $12,836. This loan was paid
      in full on February 10, 2006. The loan was secured by any sums payable under
      certain insurance policies.





On
      March
      2, 2006, The Company also obtained a $1.0 million line of revolving credit
      from
      Venture Bank, based in Minneapolis, MN. On March 2, 2006, Opportunity Finance,
      a
      company controlled by Jon Sabes, one of the Company’s directors, subordinated
      its security interest in the business assets of the Company to Venture Bank.
      This working capital line carries a rate at prime plus 1% and is secured by
      all
      of the Company’s business assets. The line is subject to the following
      covenants: Borrowing on the line of credit may not exceed 25% of the value
      of
      the Company’s inventory and the Company must maintain $6,000,000 in equity. As
      of July 29, 2006, the Company has borrowed $400,000 under the line of credit.
      Venture Bank is currently not allowing the Company to borrow additional funds
      under the line of credit because the company is not in compliance with the
      equity covenant of the line of credit agreement.










The
      Company entered into a Credit Agreement with AICCO, Inc. on March 31, 2006.
      Under the Credit Agreement the Company borrowed $127,369 at 7.34% interest.
      The
      loan calls for 11 monthly payments of $12,011. The balance as of July 29, 2006,
      was $82,029.





On
      June
      8, 2006, the Company entered into a finance agreement with Cananwill, Inc.
      Under
      this agreement the Company borrowed $69,725 at 9.11% interest. The loan calls
      for 11 equal payments of $6,631 per month. The balance as of July 29, 2006
      was
      $63,623.







**C.**
            **Commitments
                and Contingencies**





Legal
      Proceedings





None.




Leases





The
      Company closed nine underperforming stores during the month of July, 2006.
      As a
      result, we have recorded an estimated liability of $170,500 to settle these
      leases. The cost of closing the stores and relocating merchandise is included
      in
      general, administrative, and store operating expense.





During
      the twenty-six weeks ended July 29, 2006, the Company did not enter into any
      additional lease agreements for retail space. The base rent expense for all
      leases has been computed on a straight-line basis. Most of the leases require
      the Company to pay base rent, contingent rent based on sales, real estate taxes
      and common area expenses.





**D.**
            **Stock
                Options**





The
      board
      of directors and shareholders of SK2, Inc. adopted the SK2, Inc. Stock Option
      Plan for directors, employees and consultants in May 2005 (the “Stock Option
      Plan”). The Stock Option Plan was assumed by the Company upon the Merger.
      Currently, an aggregate of 3,500,000 shares of our common stock are
      reserved for issuance under the Stock Option Plan. The plan is administered
      by
      the compensation committee of the board of directors, which has the discretion
      to determine the number and purchase price of shares subject to stock options,
      the term of each option, and the time or times during its term when each option
      becomes exercisable.





On
      March
      15, 2006, the Company granted options for 450,000 shares to employees. On May
      25, 2006, the Company granted options for 200,000 shares to employees. On July
      26, 2006, the Company granted options for 107,000 shares to employees. The
      options have a life of 10 years and a vesting period of 3 years.










A
      summary
      of the status of the Company’s stock options as of July 29, 2006, is presented
      below:





Fixed
                Options
            
            Shares
            
            Weighted
                Average Exercise Price
            
            Weighted
                Average RemainingContractual Life
            
            AggregateIntrinsic
                ValueOutstanding
                at January 28, 2006
            
            
            557,500
            
            $
            1.87
            
            
            8.9
                yearsGranted
            
            
            757,000
            
            
            1.78
            
            
            9.1
                years
            
            $
            10,700Exercised
            
            
            0Forfeited
            
            
            (50,000)
            
            
            2.49
            
            
            9.6
                yearsOutstanding
                at July 29, 2006
            
            
            1,264,500
            
            $
            1.79
            
            
            9.4
                years
            
            $
            10,700Options
                exercisable at January 28, 2006
            
            
            557,500
            
            $
            1.87
            
            
            8.9
                yearsOptions
                exercisable at July 29, 2006
            
            
            557,500
            
            $
            1.87
            
            
            8.9
                years
            
            $
            -Weighted-average
                fair value of optionsgranted
                during the twenty-six weeks
            
            $
            1.78





The
      aggregate intrinsic value in the table above represents the total pretax
      intrinsic value (the difference between the closing price of the Company’s stock
      on July 29, 2006 and the exercise price, multiplied by the number of
      in-the-money options) that would have been received by the option holders had
      all option holders exercised their options on July 29, 2006. As of July 29,
      2006, there was approximately $766,000 of total unrecognized compensation cost
      related to unvested share-based compensation arrangements, of which $143,700
      is
      expected to be recognized during the remainder of the fiscal year ended February
      3, 2007, $287,300 in the fiscal year ended February 2, 2008, $287,300 in the
      fiscal year ended January 31, 2009 and $47,700 in the fiscal year ended January
      30, 2010.





**E.**
            **Equity
                Financing**





On
      June
      23, 2005, the Company closed on the sale in a private placement of 1,085,956
      shares of Preferred Stock for an aggregate purchase price of $2,092,209. A
      second closing was held on July 14, 2005, when the Company closed on a private
      placement of 3,455,267 shares of Preferred Stock for an aggregate purchase
      price
      of $6,392,244. The Company relied on the exemption from federal registration
      under Section 4(2) of the Securities Act, and/or Rule 506 promulgated hereunder.
      The Company relied on this exemption and/or the safe harbor rule thereunder
      based on the fact that (i) all of the investors were accredited investors and
      either alone or through a purchaser representative, had knowledge and experience
      in finance and business matters such that each was capable of evaluating the
      risks of the investment, and (ii) the Company has obtained subscription
      agreements from the investors indicating that the investors are purchasing
      for
      investment purposes only.





The
      offers and sales of the Preferred Stock made on June 23, 2005 and July 14,
      2005
      were not registered under the Securities Act at the time, however, on October
      11, 2005 the Company filed a Registration Statement on Form SB-2 with the
      Securities and Exchange Commission pursuant to which the common shares
      underlying the Preferred Stock were registered for resale.





In
      January of 2006, the Company closed on the sale of 1,950,000 shares of common
      stock at $2.25 per share. The purchasers also received warrants to purchase
      20%
      of the number of shares that they purchased with an exercise price of $2.75
      per
      share. Net proceeds of this transaction were $4,378,250.










In
      March
      of 2006, the Company closed on the sale of 1,125,000 shares of common stock
      at
      $2.25 per share. The
      purchasers also received warrants to purchase 20% of the number of shares that
      they purchased with an exercise price of $2.75 per share. Net proceeds from
      this
      transaction were $2,518,900.





**F.**
            **Subsequent
                Events**





On
      August
      31, 2006 the Company entered into a Credit Agreement with Opportunity Finance,
      a
      related party. Under the Credit Agreement the Company borrowed $100,000. The
      Credit Agreement calls for interest in an amount equal to $5,000. The principal
      and interest are due on September 30, 2006.





The
      Company closed six underperforming stores between July 30 and September 18,
      2006. The
      estimated costs to settle these leases will be $130,000. The cost of closing
      the
      stores and relocating merchandise will be included in general, administrative,
      and store operating expense.





**ITEM
      2.** **MANAGEMENT’S
      DISCUSSION AND ANALYSIS OR PLAN OF OPERATION**




**Overview:**





Kuhlman
      Company, Inc. is a specialty retailer and wholesale provider of exclusively
      designed, distinctive, high-quality apparel and accessories. We’re a personal
      guide for self expression, supporting individuality and originality by providing
      unique products, services and experiences.





Our
      merchandise is offered under the Kuhlman brand through our own retail stores
      and
      under private labels of large retailers. Since opening our first store in August
      2003, our dedicated and experienced management team has helped us increase
      our
      national presence. As of July 29, 2006, we have 38 locations in 18 states.
      As of
      September 18, 2006, we have 32 stores open in 13 states.





On
      April 14, 2005, we (then known as Gaming Venture Corp., U.S.A., a Nevada
      corporation) entered into an Agreement and Plan of Merger (the “Merger
      Agreement”) among SK2, Inc. (SK2), the Delaware corporation that owns the
      Kuhlman retail stores, and GV Acquisition Corp., a Delaware corporation and
      our
      wholly owned subsidiary formed solely for the purpose of engaging in the merger
      transaction contemplated by the Merger Agreement (such merger transaction is
      referred to herein as the “Merger”). We entered into the Merger Agreement in
      order to acquire the Kuhlman retail business then owned by SK2. At and after
      our
      inception in 1995, we were engaged in the business of publishing and
      distributing industry reports and newsletters to the gaming and hospitality
      industries as well as providing consulting and advisory services to the gaming
      and hospitality industries. Prior to the Merger, however, we wound down and
      ceased operating these businesses. The Merger was effected June 10, 2005. As
      a
      result of the Merger, SK2 became our wholly owned operating subsidiary.
      Immediately prior to the Merger we changed our name to Kuhlman Company, Inc.,
      and effected a reverse stock split on a one-for-five share basis, all pursuant
      to the terms of the Merger Agreement. Also prior to the Merger, our common
      stock
      was quoted on the over-the-counter bulletin board under the trading symbol
      “GVUS.OB.” After the merger, our common stock traded under the symbol “KHLM.OB.”
Effective March 27, 2006, our stock trades under the symbol “KUL” on the
      American Stock Exchange.





In
      the
      Merger and in exchange for all of their shares of SK2 common stock, the
      stockholders of SK2 received a number of shares of our capital stock such that
      they owned approximately 91% of the outstanding shares of our capital stock
      on a
      fully diluted basis immediately after the Merger. As of June 10, 2005, the
      Company had issued and outstanding 16,052,835 shares of capital stock, including
      14,749,950 shares of preferred stock issued to former holders of SK2 common
      stock in the Merger and 1,302,606 shares of our common stock that were
      outstanding prior to the Merger (adjusted for the one-for-five reverse stock
      split). For accounting purposes, the Merger was treated as the reverse
      acquisition of a public shell whereby SK2 was treated as the acquirer.





Management
      believes that focusing on the following key areas will lead to improved
      results:




·
            Expand
                and re-fixture those stores that are performing to increase productivity.


·
            Continue
                to counter source products for increased product
                margins.


·
            Improve
                existing retail productivity by establishing clear performance goals
                and
                objectives and providing related compensation
                incentives.


·
            Expansion
                of wholesale and design-assist
                business.


·
            Reduction
                in corporate expense.


·
            Exiting
                under-performing stores.










**Results
      of Operations:**





Revenue


For
      the
      twenty-six weeks ended July 29, 2006 and July 30, 2005, total Company’s revenues
      were $5,006,362 and $2,689,370, respectively. Wholesale revenue was 0% of total
      revenue for the twenty-six weeks ended July 29, 2006 compared to 10.0% of
      revenues for the twenty-six weeks ended July 30, 2005. Retail sales were
      $5,006,362 and $2,419,906 for the twenty-six weeks ended July 29, 2006 and
      July
      30, 2005, respectively, representing a 107% increase in retail sales. Kuhlman
      operated 38 and 29 stores at the end of the twenty-six weeks ended July 29,
      2006
      and July 30, 2005, respectively. During the twenty six weeks ending July 29,
      2006 the Company opened four and closed twelve stores.





The
      following illustrates the sales by type of store for the Twenty-six weeks ended
      July 29, 2006 and July 30, 2005, respectively.










Gross
      Profit


Gross
      profit represents net sales less cost of sales. The Company has elected to
      change the way cost of sales is presented in the financial statements in order
      to better reflect the true cost of the merchandise sold. Cost of sales includes
      cost of merchandise and freight from vendors, duty, costs incurred for shipping
      and handling, and inventory shrinkage. Overall gross profit as a percent of
      sales was 11.0% for the twenty-six weeks ended July 29, 2006, compared to 46.6%
      for the twenty-six weeks ended July 30, 2005.





The
      following chart shows the trend in gross profit since January 28,
      2006:

















We
      have
      also moved to a model of taking markdowns on a more frequent basis. Throughout
      the spring-summer season we reviewed markdowns weekly and began taking clearance
      markdowns in June. The Company had a valuation reserve for anticipated losses
      on
      merchandise of $816,008 and $623,553 as of July 29, 2006 and January 28, 2006,
      respectively.





We
      are
      actively counter sourcing products for increased product margins. This is being
      done in a way that will allow us to maintain our high quality standards and
      that
      will also allow us to generate higher initial gross profit and maintain gross
      profit if the goods are sold at clearance prices.





General,
      Administrative and Store Operating Costs


General,
      administrative and store operating costs were 176% and 125% of total revenue
      for
      the twenty-six weeks ended July 29, 2006 and July 30, 2005, respectively.
      General, administrative and store operating expenses include $1,529,324 in
      non-cash expense related to stock based compensation for the twenty-six weeks
      ended July 29, 2006, compared to $0 for the twenty-six weeks ended July 30,
      2005. The stock based compensation is made up of three components. $95,951
      is
      expense related to stock options under the new accounting rules, $518,373 is
      expense related to restricted stock grants to employees and $915,000 is related
      to a discounted sale of stock from Scott Kuhlman, the Chairman of the Board,
      to
      Luis Padilla, the CEO. The Company expects to expense an additional $143,700
      in
      stock based compensation expense for the remainder of the fiscal year ended
      February 3, 2007. The Company has adopted SFAS 123(R) using the prospective
      method effective January 1, 2006





Payroll
      and benefits make up 49% of the total general, administrative and store
      operating costs. 62% of the payroll and benefits without the stock based
      compensation expense is related to store operations. During the first quarter,
      we initiated a payroll process based on store productivity.





Lease
      expense makes up 23% of the total general, administrative and store operating
      costs or 41% of revenue. The corporate office and warehouse lease cost makes
      up
      4% of the total lease expense. The Company has recognized accelerated rent
      of
      $170,500 to estimate the cost of settling leases on closed stores. During the
      past twelve months the Company has opened stores in major metropolitan areas
      of
      New York, Washington D.C, Boston and Philadelphia. These cities typically have
      higher rent structures.










Professional
      fees for the twenty-six weeks ended July 29, 2006, were 15% of sales. These
      expenses included the December 31, 2005, audit, registration statements filed
      with the SEC, and the listing of the Company’s stock on the American Stock
      exchange.





Net
      Loss


The
      Company incurred a net loss of $8,775,010 which was 175% of revenues compared
      to
      $2,295,535 or 85% of revenues for the twenty-six weeks ended July 29, 2006
      and
      July 30, 2005, respectively.




**Liquidity
      and Capital Resources:**


Cash


The
      Company has experienced negative cash flows from operations of $4,733,628 for
      the twenty-six weeks ended July 29, 2006. The Company’s cash and cash
      equivalents were $547,880 at July 29, 2006, representing a decrease of 85%
      from
      the cash of $3,604,075 at January 28, 2006. As of September 11, 2006, the
      Company had cash and cash equivalents of $207,583. The Company is considering
      a
      number of action steps to deal with its limited cash reserves, including (a)
      obtaining third-party financing, (b) closing additional under-productive stores,
      and (c) lowering administrative costs.





As
      of the
      date of this filing in the event the Company is unable to obtain third-party
      financing within the next 10 to 14 days, the Company will have to consider
      a
      number of strategic options, including but not limited to liquidating some
      or
      all of the Company’s assets or discontinuing operations and bankruptcy. Even if
      we obtain third-party financing, the Company’s ability to continue operations
      for the short and long-term future are dependant on our ability to continue
      to
      raise working capital in the equity and or debt markets.





There
      can
      be no assurance that the Company will be successful in obtaining additional
      short-term financing or any additional financing on terms acceptable to the
      Company. The Company believes that any such short-term or long-term financing
      would be on terms that would be substantially dilutive to the Company’s existing
      shareholders.





Failure
      to obtain short-term or additional financing would have a material adverse
      effect on the Company, and the Company would have to consider liquidating all
      or
      part of the Company’s assets and potentially discontinuing operations.





As
      of
      July 29, 2006, we have funded our operations and satisfied capital expenditure
      requirements primarily through proceeds received from the sale of equity in
      private placements. In January and March of 2006, the Company raised a total
      of
      $6,897,150 in cash through a private placement of 3,075,000 shares of common
      stock. On March 2, 2006, the Company entered in a credit agreement with Venture
      Bank. This agreement provides for a $1,000,000 line of credit. We have borrowed
      $400,000 on the line of credit. As of September 6, 2006 the bank has not allowed
      any further borrowings on the line credit due to the fact that we are not in
      compliance with the equity covenants in the agreement





We
      are a
      Company with limited operating history upon which to evaluate our business
      model
      and prospects. As of December 31, 2003, we had five retail stores open.
      Currently, we have 32 stores. The Company has opened four and closed twelve
      stores in the twenty-six weeks ending July 29, 2006. Our limited operating
      history limits the ability to evaluate the long-term viability of our business
      and the success of our expansion. As a relatively new business, we are subject
      to all the risks inherent in commercial operations, including unforeseen
      difficulties and obstacles. There can be no assurance that we will be successful
      at developing a profitable chain of Kuhlman retail apparel stores.





We
      have a
      history of losses and expect to incur substantial expenses associated with
      increased store development and general and administrative expenses related
      to
      our expansion and operating as a public company. As a result, we expect to
      continue to incur net losses through at least fiscal year February 3, 2007.
      The
      Company’s ability to continue operations for the short and long-term future are
      dependant on our ability to continue to raise working capital in the equity
      and
      or debt markets.










Inventory


We
      began
      the twenty-six weeks ended July 29, 2006, with a net inventory value of
      $5,157,023. The cost of merchandise sold plus shrinkage totaled $4,262,841
      and
      the Company made purchases of $2,880,166 for the twenty-six weeks ended July
      29,
      2006. We ended the twenty-six week period with inventories of $4,397,901 and
      an
      inventory valuation allowance of $816,008 for net inventory of $3,581,893.
      The
      reserve represents expected discounts below our original cost that will be
      required to sell the inventory on hand as of July 29, 2006.





The
      inventory is made up of the following components.





December
                2005
            
            January
                2006
            
            April
                2006
            
            July
                2006Regular
                Stores
            
            
            3,760,075
            
            
            3,707,037
            
            
            2,875,634
            
            
            2,265,878Outlet
                Stores
            
            
            799,276
            
            
            653,380
            
            
            1,442,871
            
            
            953,470Warehouse
            
            
            1,386,018
            
            
            934,310
            
            
            859,806
            
            
            201,700Raw
                Materials
            
            
            304,953
            
            
            485,849
            
            
            653,188
            
            
            976,853Valuation
                Allowance
            
            
            (600,784
            )
            
            (623,553
            )
            
            (546,536
            )
            
            (816,008
            )Total
            
            
            5,649,538
            
            
            5,157,023
            
            
            5,284,963
            
            
            3,581,893




**Safe
      Harbor Statement:**





The
      Private Securities Litigation Reform Act of 1995 provides “safe harbor” for
      forward-looking statements. Certain information included in this Form 10-QSB
      and
      other materials filed or to be filed by the Company with the Securities and
      Exchange Commission (as well as information included in oral statements or
      other
      written statements made or to be made by the Company) contain statements that
      are forward-looking, such as statements relating to the Company’s ability to
      raise short and long term financing, anticipated business plans and strategies,
      projected or anticipated benefits or other consequences of market conditions
      and
      opportunities, business plans or strategies, projections involving anticipated
      sales and revenues, expenses, projected future earnings and other aspects of
      operational results. All phases of the Company’s operations are subject to a
      number of uncertainties, risks and other influences, most of which are outside
      the Company’s control, and any one or combination of which could materially and
      adversely affect the results of the Company’s operations, and also, could affect
      whether any such forward-looking statements contained in this Form 10-QSB
      ultimately prove to be accurate. Important factors that could cause actual
      results to differ materially from the Company’s expectations include, but are
      not limited to, the factors summarized below:





·
            Our
                continued viability depends on our ability to operate stores on a
                profitable basis and on management’s ability to maintain a senior
                management team, close underperforming stores, negotiate satisfactory
                termination of certain leases, and otherwise manage our expenses
                and
                accounts payable.





·
            Factors
                beyond our control may also affect our ability to increase same store
                revenues, including general economic and business conditions affecting
                consumer spending.





·
            Our
                attempts to become cash flow positive will place an increasing strain
                on
                our resources and we could experience difficulties relating to a
                variety
                of operational matters, including hiring, retaining, training and
                managing
                an increasing number of employees, obtaining sufficient quantities
                of
                merchandise from vendors, obtaining sufficient material and contract
                manufacturers to produce our products, expanding our distribution
                facility
                and enhancing our financial and operating systems.









·
            Our
                business is seasonal by nature, with the third and fourth quarters
                accounting for the largest percentage of annual net sales. It is
                therefore
                important that we successfully execute our business plan and operate
                our
                business during that time. Outside of the holiday season, monthly
                sales
                generally do not fluctuate widely within each store given our one
                price
                strategy. Nonetheless, our quarterly results of operations in the
                future
                may fluctuate significantly as a result of a variety of factors,
                including
                the timing of store openings, the amount of revenue contributed by
                new
                stores, changes in the mix of products sold, overstocking or
                under-stocking of merchandise, the timing and level of markdowns,
                the
                timing of store closings, expansions and relocations, competitive
                factors
                and general economic conditions.





·
            Substantially
                all of our merchandise is manufactured and sourced outside the United
                States, principally in Italy and Turkey. As a result, our operations
                are
                subject to the risks generally associated with doing business abroad,
                such
                as foreign government regulations, political instability, regulations
                relating to imports, the imposition of duties, taxes and other charges
                on
                imports, significant fluctuations in the value of the dollar against
                foreign currencies or restrictions on the transfer of
                funds.





·
            We
                have experienced delays in receipt of merchandise due to import
                regulations. The inability of a contract manufacturer to ship orders
                in a
                timely manner or the inability of us to receive orders in a timely
                manner
                could cause us to fail to meet the merchandise requirements of its
                stores
                for those items, which could result in lost sales and dissatisfied
                customers. Any significant interruption in our foreign sourcing would
                have
                a material adverse effect on our business, financial condition and
                results
                of operations.





**Off-Balance
      Sheet Arrangements**





We
      have
      not entered into any off-balance sheet arrangements.





**Critical
      Accounting Policies and Estimates**





Our
      discussion and analysis or plan of operation is based upon our financial
      statements, which have been prepared in accordance with accounting principles
      generally accepted in the United States of America. The preparation of these
      financial statements requires us to make estimates and assumptions that affect
      the reported amounts of assets and liabilities at the date of the financial
      statements, the reported amounts of revenues and expenses during the reporting
      period, and related disclosures of contingent assets and liabilities for the
      periods indicated. The notes to the financial statements contained herein
      describe our significant accounting policies used in the preparation of the
      financial statements. On an on-going basis, we evaluate our estimates,
      including, but not limited to, those related to our allowance for doubtful
      accounts, inventory valuations, the lives and continued usefulness of furniture,
      fixtures and leasehold improvements and contingencies. Due to uncertainties,
      however, it is at least reasonably possible that management's estimates will
      change during the next year, which cannot be estimated. We base our estimates
      on
      historical experience and on various other assumptions that we believe to be
      reasonable under the circumstances, the results of which form the basis for
      making judgments about the carrying values of assets and liabilities that are
      not readily apparent from other sources. Actual results could differ from these
      estimates under different assumptions or conditions.









Retail
      revenue is recognized at the time of register receipt. The Company accrues
      for
      estimated returns in accordance with statement of Financial Accounting
      Standards, (SFAS) No. 48, "Revenue Recognition When Right of Return Exists,"
      based on historical return levels. For private label sales, revenue is
      recognized upon transfer of title at time of shipment as long as there was
      evidence of an arrangement, the price was fixed or determinable, and
      collectibility was probable.





**ITEM
      3. CONTROLS AND
      PROCEDURES**





We
      maintain a system of disclosure controls and procedures that is designed to
      provide reasonable assurance that information, which is required to be
      disclosed, is accumulated and communicated to management on a timely basis.
      At
      the end of the period covered by this report, we carried out an evaluation
      under
      the supervision and with the participation of our management, including our
      Chief Executive Officer and Chief Financial Officer, of the effectiveness of
      the
      design and operation of our disclosure controls and procedures pursuant to
      Exchange Act Rule 13a-15. Based upon that evaluation, our Chief Executive
      Officer and our Chief Financial Officer concluded that the Company had a
      material weakness in the Corporation’s internal control over financial reporting
      because of ineffective controls related to the review of computations and
      methodology pertaining to one non-routine transaction which could potentially
      cause a material misstatement in financial reporting.





This
      deficiency in our internal controls related to improper recognition of expense
      related to the stock transaction between the Company’s Chairman of the Board and
      the new Chief Executive Officer. The accounting for such transactions required
      that the discount in the sale price be recognized as compensation expense on
      the
      books of the Company. This expense is also recorded as an increase in additional
      paid in capital. The improper expense recognition was detected in the review
      process and correcting adjustments were recorded to properly state our expenses
      and was disclosed to our Audit Committee and to our auditors. We are in the
      process of improving our internal controls over financial reporting regarding
      these non-routine transactions. The Company is implementing policies requiring
      that all equity transactions by officers and directors of the Company be
      reviewed by management including the CFO, discussed with the Board of Directors
      and Audit Committee, and that the management should document the financial
      effects of the transaction, whether or not there is any accounting effect.





During
      our most recent fiscal quarter, there have been no other changes in our internal
      controls over financial reporting (as defined in Rule 13a-15(f) or 15d-15(f)
      under the Exchange Act) that have materially affected, or that are reasonably
      likely to materially affect, our internal controls over financial reporting.










**PART
      II. OTHER INFORMATION**





**ITEM
      1. LEGAL
      PROCEEDINGS**





The
      Company is not currently involved in any legal proceedings.





**ITEM
      6. EXHIBITS**





The
      following exhibits are filed as part of this quarterly report:




**Exhibit
                No.**
            **Description**31.1
            Rule
                13a-14(a)/15d-14(a) certification of principal executive
                officer31.2
            Rule
                13a - 14(a)/15d-14(a) certification of principal accounting
                officer32.1
            Section
                1350 certification of Chief Executive Officer32.2
            Section
                1350 certification of
                Chief Financial Officer











**SIGNATURES**





Pursuant
      to the registration 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.




KUHLMAN
              COMPANY,
              INC.Date:
              September
              18, 2006
            By:
            /s/
              Luis
              PadillaTitle:Chief
              Executive Officer Date:
              September
              18, 2006
            By:
            /s/ Jon
              GangelhoffTitle:Chief
              Financial Officer(Principal
              Accounting Officer)