UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                       -----------------------------------

                                   FORM 10-QSB
                       -----------------------------------


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


                  For the Quarterly Period Ended June 30, 2006


                         Commission File Number: 0-21475


                               EMERGENT GROUP INC.
             (Exact name of registrant as specified in its charter)

                  Nevada                                93-1215401
                  ------                                ----------
 (State of jurisdiction of Incorporation) (I.R.S. Employer Identification No.)

                             932 Grand Central Ave.
                               Glendale, CA 91201
                    (Address of principal executive offices)
                                 (818) 240-8250
                         (Registrant's telephone number)
                                 Not Applicable
      (Former name, address and fiscal year, if changed since last report)
                       -----------------------------------

         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days.
Yes [X] No [  ]

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

     Indicate  by check mark  whether  the  registrant  is a shell  company  (as
defined in Rue 12b-2 of the Exchange Act). Yes [ ] No [X]



     As of August 14, 2006, the  registrant  had a total of 5,460,789  shares of
Common Stock outstanding.



<PAGE>



                               EMERGENT GROUP INC.

                          FORM 10-QSB Quarterly Report

                                Table of Contents
<TABLE>
<CAPTION>


                                                                                                         Page

PART I.  FINANCIAL INFORMATION

<S>                                                                                                        <C>
   Item 1.    Financial Statements

              Condensed Consolidated Balance Sheet as of June 30, 2006 (unaudited)                          3

              Condensed Consolidated Statements of Income for the Three and Six Months
                 Ended June 30, 2006 and 2005 (unaudited)                                                   4

              Condensed Consolidated Statements of Cash Flows for the Six Months
                 Ended June 30, 2006 and 2005 (unaudited)                                                   5

              Notes to Condensed Consolidated Financial Statements                                          6

   Item 2.    Management's Discussion and Analysis of Financial Condition
                 and Results of Operations                                                                 12

   Item 3.    Controls and Procedures                                                                      16

PART II.  OTHER INFORMATION

   Item 1.    Legal Proceedings                                                                            17

   Item 2.    Changes in Securities                                                                        17

   Item 3.    Defaults Upon Senior Securities                                                              17

   Item 4.    Submissions of Matters to a Vote of Security Holders                                         17

   Item 5.    Other Information                                                                            17

   Item 6.    Exhibits                                                                                     17


Signatures                                                                                                 19
</TABLE>

                                       2
<PAGE>

                          PART I. FINANCIAL INFORMATION

Item 1.  Financial Statements


                      Emergent Group Inc. and Subsidiaries
                      Condensed Consolidated Balance Sheet
                                   (unaudited)
<TABLE>
<CAPTION>
                                                                                June 30,
                                                                                 2006
                                                                           ---------------
                                  ASSETS

<S>                                                                                <C>
Current assets
     Cash                                                                  $       772,578
     Accounts receivable, net of allowance for doubtful
        accounts of $20,832                                                      2,005,749
     Inventory, net of reserves of $77,207                                         712,369
     Prepaid expenses                                                              228,196
                                                                           ---------------

           Total current assets                                                  3,718,892

Property and equipment, net of accumulated depreciation and
        amortization of $4,291,084                                               3,198,033
Deposits and other assets                                                          135,354
Goodwill                                                                         1,192,027
Other intangible assets, net of accumulated amortization of
        $85,921                                                                    180,365

                                                                           ---------------

Total assets                                                               $     8,424,671
                                                                           ===============

                   LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities
     Current portion of capital lease obligations                          $       668,475
     Current portion of notes payable                                              414,077
     Accounts payable                                                              860,706
     Accrued liabilities and expenses                                            1,518,158

                                                                           ---------------
           Total current liabilities                                             3,461,416

Capital lease obligations, net of current portion                                  982,936
Notes payable, net of current portion                                              187,500
                                                                           ---------------

           Total liabilities                                                     4,631,852

Minority interest                                                                  349,521

Shareholders' equity
     Preferred stock, $0.001 par value, non-voting 10,000,000
        shares authorized, no shares issued and outstanding                              -
     Common stock, $0.04 par value, 100,000,000 shares authorized
        5,460,789 shares issued and outstanding                                    218,392
     Additional paid-in capital                                                 14,877,448
     Deferred compensation, net of accumulated amortization of $71,215            (154,840)
     Accumulated deficit                                                       (11,497,702)
                                                                           ---------------

           Total shareholders' equity                                            3,443,298

                                                                           ---------------
 Total liabilities and shareholders' equity                                $     8,424,671
                                                                           ===============

</TABLE>

         The accompanying notes are an integral part of these condensed
                             financial statements.

                                       3
<PAGE>


                      Emergent Group Inc. and Subsidiaries
                   Condensed Consolidated Statements of Income
                                   (unaudited)
<TABLE>
<CAPTION>


                                                              Three Months Ended              Six Months Ended
                                                                   June 30,                       June 30,
                                                        ------------------------------  ----------------------------
                                                             2006             2005          2006            2005
                                                        -------------    -------------  -------------  -------------
<S>                                                           <C>              <C>            <C>            <C>
Revenue                                                 $   3,993,211    $   2,948,415  $   7,984,028  $   5,870,935
Cost of goods sold                                          2,362,269        1,930,905      4,801,949      3,899,853
                                                        -------------    -------------  -------------  -------------

Gross profit                                                1,630,942        1,017,510      3,182,079      1,971,082

Selling, general, and administrative expenses                 986,092          873,062      1,962,420      1,672,059
                                                        -------------    -------------  -------------  -------------

Income from operations                                        644,850          144,448      1,219,659        299,023

Other income (expense)
     Interest expense                                         (42,503)         (31,562)       (89,244)       (66,073)
     Gain on disposal of property and equipment                 1,390           39,544          2,690         48,945
     Other income, net                                         45,663           21,314         76,240         27,295
                                                        -------------    -------------  -------------  -------------

            Total other income (expense)                        4,550           29,296        (10,314)        10,167
                                                        -------------    -------------  -------------  -------------

Income before provision for income taxes
     and minority interest                                    649,400          173,744      1,209,345        309,190
Provision for income taxes                                     (9,972)               -        (33,836)             -
                                                        -------------    -------------  -------------  -------------

Income before minority interest                               639,428          173,744      1,175,509        309,190

Minority interest in income of consolidated
     limited liability companies                              (89,621)         (48,469)      (161,707)       (78,630)
                                                        -------------    -------------  -------------  -------------

Net income                                              $     549,807    $     125,275  $   1,013,802  $     230,560
                                                        =============    =============  =============  =============

Basic earnings per share                                $        0.10    $        0.03  $        0.19  $        0.05
                                                        =============    =============  =============  =============

Diluted earnings per share                              $        0.09    $        0.03  $        0.17  $        0.05
                                                        =============    =============  =============  =============

Basic weighted average shares outstanding                   5,459,200        4,817,752      5,456,127      4,781,641
                                                        =============    =============  =============  =============

Diluted weighted-average shares outstanding                 5,805,504        4,926,810      5,802,431      4,890,699
                                                        =============    =============  =============  =============
</TABLE>

         The accompanying notes are an integral part of these condensed
                             financial statements.

                                       4
<PAGE>
                      Emergent Group Inc. and Subsidiaries
                 Condensed Consolidated Statements of Cash Flows
                                   (unaudited)
<TABLE>
<CAPTION>

                                                               Six Months Ended June 30,
                                                            ------------------------------
                                                                 2006            2005
                                                            --------------  --------------

<S>                                                                <C>           <C>
Cash flows from operating activities
    Net income                                              $    1,013,802  $      230,560
    Adjustments to reconcile net income to net cash
    provided by operating activities:
       Depreciation and amortization                               507,445         588,320
       Amortization of finance fees                                 35,717               -
       (Gain) loss on disposal of property and equipment            (2,690)        (39,723)
       Provision for doubtful accounts                                 345          (2,095)
       Minority interest in income                                 161,707          78,630
       Other income - non-cash                                     (36,638)              -
       (Increase) decrease in
          Accounts receivable                                     (114,681)       (135,239)
          Inventory                                                (37,223)         (9,672)
          Prepaid expenses                                         (70,670)        (32,718)
          Deposits and other assets                               (124,851)        (29,061)
       Increase (decrease) in
          Accounts payable                                         222,410         103,392
          Accrued liabilities and expenses                         (46,425)         (9,233)
                                                            --------------  --------------

Net cash provided by operating activities                        1,508,248         743,161
                                                            --------------  --------------

Cash flows from investing activities
    Purchase of property and equipment                            (171,574)       (132,497)
    Cash paid to members of limited liability companies           (151,606)        (85,956)
    Proceeds from the sale of property and equipment                 6,440          57,289

                                                            --------------  --------------
Net cash used in investing activities                             (316,740)       (161,164)
                                                            --------------  --------------

Cash flows from financing activities
    Payments on capital lease obligations                         (280,575)       (139,554)
    Payment of dividends on common stock                          (512,861)              -
    Borrowings under line of credit                              8,043,826       1,177,496
    Repayments on line of credit                                (8,043,826)     (1,764,471)
    Payments on notes payable, net                                (210,871)       (110,216)

                                                            --------------  --------------
Net cash used in financing activities                           (1,004,307)       (836,745)
                                                            --------------  --------------

Net increase in cash                                               187,201        (254,748)

Cash, beginning of period                                          585,377         351,595
                                                            --------------  --------------

Cash, end of period                                         $      772,578  $       96,847
                                                            ==============  ==============

Supplemental disclosures of cash flow information:
    Interest paid                                           $       97,061  $       69,629
                                                            ==============  ==============

    Income taxes paid                                       $       12,000  $            -
                                                            ==============  ==============
</TABLE>

Supplemental schedule of noncash investing and financing activities:

 During the six months ended June 30, 2006, the Company incurred capital lease
    obligations of of $1,027,416 in connection with the purchase of equipment.



         The accompanying notes are an integral part of these condensed
                              financial statements.

                                       5
<PAGE>
                               EMERGENT GROUP INC
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.   BUSINESS

     Emergent  Group  Inc.  ("Emergent")  is the parent  company of PRI  Medical
     Technologies,  Inc.,  its wholly owned and only operating  subsidiary.  PRI
     Medical  Technologies,  Inc.  primarily  conducted its business through its
     wholly owned subsidiary  Physiologic Reps ("PRI") until March 2005 at which
     time PRI was merged into PRI Medical  Technologies,  Inc. ("PRI  Medical").
     Emergent and PRI Medical are referred to  collectively  hereinafter  as the
     "Company." PRI Medical provides mobile laser/surgical  services, along with
     technical  support,  on a per  procedure  basis to  hospitals,  out-patient
     surgery centers, and physicians' offices.

2.   BASIS OF PRESENTATION

     The accompanying  unaudited condensed  consolidated financial statements of
     Emergent have been  prepared  pursuant to the rules of the  Securities  and
     Exchange Commission ("SEC").  Certain information and footnote  disclosures
     normally  included in  financial  statements  prepared in  accordance  with
     accounting  principles  generally  accepted in the United  States have been
     condensed  or  omitted  pursuant  to  such  rules  and  regulations.  These
     unaudited  condensed  consolidated  financial  statements should be read in
     conjunction with the audited  consolidated  financial  statements and notes
     thereto included in the Company's Annual Report on Form 10-KSB for the year
     ended  December 31, 2005. In the opinion of  management,  the  accompanying
     unaudited   condensed   consolidated   financial   statements  reflect  all
     adjustments,  which are of a normal recurring nature,  necessary for a fair
     presentation of the results for the periods presented.

     The results of operations presented for the three and six months ended June
     30, 2006 are not  necessarily  indicative of the results to be expected for
     any other interim period or any future fiscal year.

     Principles of Consolidation
     ----------------------------

     The consolidated  financial statements include the accounts of Emergent and
     its wholly owned  subsidiaries.  Also,  in  accordance  with the  Financial
     Accounting Standards Board  Interpretation Nos. 46 and 46R,  "Consolidation
     of Variable  Interest  Entities"  the Company has  accounted for its equity
     investments   in  four   limited   liability   companies   under  the  full
     consolidation  method.  All  significant  inter-company   transactions  and
     balances have been eliminated through consolidation.

     Use of Estimates
     ----------------

     The  preparation  of the  condensed  consolidated  financial  statements in
     accordance  with  generally   accepted   accounting   principles   requires
     management  to make  estimates  and  assumptions  that affect the  reported
     amounts of assets and  liabilities,  disclosure  of  contingent  assets and
     liabilities  at the  date of the  financial  statements,  and the  reported
     amounts of income (loss) and expenses during the reporting  period.  Actual
     results could differ significantly from those estimates.

     Accounts  Receivable  and  Concentration  of Business  and Credit  Risks
     ------------------------------------------------------------------------

     We market our  services  primarily  to hospitals  and  out-patient  centers
     located in California,  Nevada, Utah,  Colorado,  Arizona and New York. Our
     equipment  rental and technician  services are subject to competition  from
     other  similar  businesses.  Our accounts  receivable  represent  financial
     instruments  with  potential  credit risk. We offer credit terms and credit
     limits  to most of our  customers  based  on the  creditworthiness  of such
     customers.  However,  we retain the right to place such customers on credit
     hold should their account become  delinquent.  We maintain an allowance for
     doubtful  accounts  for  estimated  losses  should  customers  fail to make
     required  payments.  In  addition,  we monitor the age of customer  account
     balances,  historical  bad  debt  experience,   customer  creditworthiness,
     customer specific information,  and changes in payment patterns when making
     estimates of the collectibility of trade receivables.  Accounts  receivable
     are written off when all collection attempts have failed. Our allowance for
     doubtful accounts will be increased if circumstances  warrant. Based on the
     information available, management believes that our net accounts receivable
     are collectible.

     Inventory
     ----------

     Inventory  consists of finished goods primarily used in connection with the
     delivery of our mobile  surgical  equipment  rental and services  business.
     Inventory  is  stated  at the  lower  of cost  or  market,  on a  first-in,
     first-out basis.

                                       6
<PAGE>
                               EMERGENT GROUP INC
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


     Stock-Based Compensation
     -------------------------

     In December  2004, the FASB issued SFAS No.  123(R),"Share-Based  Payment".
     SFAS 123(R) amends SFAS No. 123,"Accounting for Stock-Based  Compensation",
     and APB  Opinion  25,"Accounting  for  Stock  Issued  to  Employees."  SFAS
     No.123(R)  requires  that  the  cost of  share-based  payment  transactions
     (including  those with  employees and  non-employees)  be recognized in the
     financial  statements.  SFAS No. 123(R) applies to all share-based  payment
     transactions  in which an entity  acquires goods or services by issuing (or
     offering to issue) its shares,  share options,  or other equity instruments
     (except  for  those  held by an ESOP) or by  incurring  liabilities  (1) in
     amounts  based (even in part) on the price of the entity's  shares or other
     equity instruments,  or (2) that require (or may require) settlement by the
     issuance of an entity's shares or other equity instruments.  This statement
     is effective for public companies  qualifying as SEC small business issuers
     for the fiscal year beginning after December 15, 2005.


     Effective  January 1, 2006,  we adopted  Statement of Financial  Accounting
     Standards  ("SFAS")  No.  123R,  Share-Based  Payment,  using the  modified
     prospective method. Under this method,  compensation cost recognized during
     the three and six months ended June 30, 2006 includes compensation cost for
     all share-based payments granted prior to, but not yet vested as of January
     1, 2006,  based on the grant date fair value  estimated in accordance  with
     the  original  provisions  of SFAS No.  123  amortized  over the  remaining
     vesting period for such options.  There were no options  granted during the
     six months ended June 30, 2006.  The  implementation  of the  provisions of
     SFAS No. 123R on January 1, 2006 resulted in additional  compensation costs
     of $3,233 and $6,313 for the  quarter and six months  ended June 30,  2006,
     respectivley.  Basic and diluted  earnings per share of $0.10 and $0.09 for
     the quarter did not change as a result of  implementing  SFAS No. 123R.  In
     addition,  the  implementation  of SFAS No. 123R did not have a significant
     impact on our financial position, results of operations or cash flows.


                                       7
<PAGE>
     Prior to  January,  we  accounted  for  employee  stock  options  grants in
     accordance with APB No. 25, and had adopted only the disclosure  provisions
     of SFAS No. 123, Accounting for Stock-Based Compensation.  Accordingly,  no
     stock  based  compensation  expense  was  recognized  for the three and six
     months  ended June 30, 2005 as all options  were granted with a price based
     on the fair value of such options on the grant date.  For the three and six
     months  ended  June 30,  2005,  had we adopted  the fair value  recognition
     provisions  of SFAS No. 123 to account for our  employee  stock  options we
     would  have   recognized   compensation   expense  of  $1,342  and  $2,683,
     respectively,  which  assumes  that the  fair  value  of such  options,  as
     prescribed  by SFAS No.  123,  was  amortized  to expense  over the vesting
     period of such  options.  The total  fair value of 73,000  options  granted
     during March 2005 were  estimated at $26,831 at the date of grant using the
     Black-Scholes  valuation  model  assuming  volatility  of 150%, a risk free
     interest  rate of 3.5%,  no annual  dividends  and expected  lives of seven
     years.

     The 2002 Employee Benefit and Consulting  Services  Compensation  Plan (the
     "2002 Plan") was adopted in 2002 for the purpose of providing incentives to
     key  employees,  officers,  and  consultants  of the  Company  who  provide
     significant services to the Company. As of June 30, 2006, there are 650,000
     common shares  authorized for grant under the 2002 Plan.  However,  325,000
     shares of the  650,000  shares  represent  an  increase  authorized  by the
     Company's Board of Directors subject to shareholder approval.  Options will
     not be  granted  for a term of more than ten years  from the date of grant.
     Generally,  options  will vest evenly over a period of five years,  and the
     2002  Plan  expires  in March  2012.  Since  shareholder  approval  was not
     obtained on or before April 1, 2003,  all incentive  stock options  granted
     under the 2002 Plan have automatically  become non-statutory stock options,
     and the Board is limited to granting  non-statutory stock options under the
     2002 Plan.  As of June 30, 2006,  the number of shares  reserved for future
     awards was 225,138.

     A summary of the Company's outstanding options and activity is as follows:


                                                           Weighted Average
                                    Number of Shares        Exercise Price
                                    ----------------        ---------------

Outstanding at January 1, 2006               431,099        $          1.45

Options Granted                                    -        $             -
Options Canceled                              (2,487)       $          0.40
Options Exercised                             (3,750)       $          0.40
                                    ----------------

Outstanding at June 30, 2006                 424,862        $          1.35
                                    ================

Exercisable at June 30, 2006                 293,933        $          1.77
                                    ================

                                        8
<PAGE>
                               EMERGENT GROUP INC
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


     The weighted-average  remaining contractual life of the options outstanding
     at June  30,  2006 is 7.10  years.  The  exercise  prices  for the  options
     outstanding at June 30, 2006 ranged from $0.40 to $162.16,  and information
     relating to these  options is as follows:



<TABLE>
<CAPTION>
Stock Options    Stock Options     Weighted-Average    Weighted-Average   Weighted-Average
Outstanding      Exercisable          Remaining        Exercise Price     Exercise Price
                                   Contractual life    of Options         of Options
                                                       Outstanding        Exercisable
------------     --------------    -----------------   -----------------  -----------------
<S>                   <C>                <C>                 <C>                 <C>
     411,352            280,423      7.15  years         $   0.40           $   0.40
       4,000              4,000      6.51  years         $   5.00           $   5.00
       9,339              9,339      5.14  years         $  38.66           $  38.66
         171                171      0.38  years         $ 162.00           $ 162.00
------------     --------------

     424,862            293,933      7.10  years         $   1.35           $   1.77
============     ==============
</TABLE>

     As of June 30, 2006, the total  unrecognized  fair value  compensation cost
     related to unvested  stock  options was $44,142,  which is to be recognized
     over a remaining weighted average period of approximately 7.10 years.

     In addition to options  granted under the 2002 Plan, as of June 30, 2006 we
     have  110,000  restricted  awarded  shares  issued and  outstanding,  which
     generally  vest in equal  installments  over  five  years  from the date of
     issuance.  Such  award  shares are  issued  from time to time to  executive
     officers,  directors and employees of the Company.  Non-vested award shares
     are subject to forfeiture in the event that recipient is no longer employed
     by the  Company at the time of  vesting,  subject to the  Board's  right to
     waive the  forfeiture  provisions.  Compensation  expense  related  to such
     shares is determined as of the issuance date based on the fair value of the
     shares  issued  and  is  amortized   over  the  related   vesting   period.
     Compensation  expense related to award shares was $3,578 and $6,572 for the
     three and six months ended June 30, 2006, respectively.

     Earnings Per Share
     ------------------

     The Company utilizes SFAS No. 128, "Earnings per Share." Basic earnings per
     share are computed by dividing earnings available to common shareholders by
     the weighted-average number of common shares outstanding.  Diluted earnings
     per share is computed  similar to basic  earnings per share except that the
     denominator is increased to include the number of additional  common shares
     that would have been outstanding if the potential common share  equivalents
     had been issued and if the additional  common shares were dilutive.  Common
     equivalent  shares are  excluded  from the  computation  if their effect is
     anti-dilutive.

     Recent Accounting Pronounments
     ------------------------------

     In May 2005, the FASB issued  Statement of Financial  Accounting  Standards
     (SFAS) No. 154, "Accounting Changes and Error Corrections", an amendment to
     Accounting  Principles Bulletin (APB) Opinion No. 20, "Accounting Changes",
     and  SFAS  No.  3,  "Reporting  Accounting  Changes  in  Interim  Financial
     Statements". Though SFAS No. 154 carries forward the guidance in APB No. 20
     and SFAS No. 3 with respect to accounting for changes in estimates, changes
     in reporting entity, and the correction of errors, SFAS No. 154 establishes
     new standards on accounting for changes in accounting  principles,  whereby
     all such changes must be accounted for by retrospective  application to the
     financial  statements of prior periods unless it is impracticable to do so.
     SFAS No. 154 is effective for accounting changes and error corrections made
     in fiscal years  beginning  after  December 15, 2005,  with early  adoption
     permitted for changes and  corrections  made in years  beginning  after May
     2005.  The Company  implemented  SFAS No. 154,  effective  January 1, 2006,
     which did not have a material impact upon the Company's financial position,
     results of operations or cash flows.


                                        9
<PAGE>
                               EMERGENT GROUP INC
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

     In  February  2006,  the FASB  issued  Statement  of  Financial  Accounting
     Standards No. 155,  "Accounting for Certain Hybrid  Financial  Instruments"
     ("SFAS  155"),  which  amends SFAS No.  133,  "Accounting  for  Derivatives
     Instruments  and  Hedging  Activities"  ("SFAS  133")  and  SFAS  No.  140,
     "Accounting   for  Transfers   and   Servicing  of  Financial   Assets  and
     Extinguishment  of Liabilities"  ("SFAS 140").  SFAS 155 amends SFAS 133 to
     narrow the scope exception for interest-only and  principal-only  strips on
     debt instruments to include only such strips representing rights to receive
     a specified  portion of the  contractual  interest or principle cash flows.
     SFAS 155 also amends SFAS 140 to allow qualifying  special-purpose entities
     to hold a passive derivative financial instrument  pertaining to beneficial
     interests  that itself is a  derivative  instrument.  The Company  does not
     believe  that  SFAS  155  will  have a  material  impact  on the  Company's
     financial position, results of operations or cash flows.

3.   DEBT OBLIGATIONS

     On May 25, 2005, the Company  entered into a two-year  agreement with a new
     lender to provide a revolving  credit line (the  "Revolver")  and term note
     (the "Term Note") of up to $1,000,000 collateralized by accounts receivable
     and certain  fixed assets  (collectively  referred to herein as the "Credit
     Facility").  Advances  under the Revolver are based on 80% of each eligible
     receivable,  as defined.  Borrowings  under the Revolver and Term Note bear
     interest at the prime rate (8.25% as of June 30, 2006), plus 2%. The Credit
     Facility also provides for payment of a monthly  collateral  management fee
     equal to 20 basis points (0.02%) on the average daily outstanding  balances
     under the Credit Facility. In addition, the Credit Facility provides for an
     annual fee equal to 1% of the capital availability amount, as defined, upon
     closing and on each  anniversary of the closing date. The Company  incurred
     loan and closing costs of $26,785 in connection  with the  negotiation  and
     execution of the Credit  Facility  which is being  amortized  over the loan
     term of 24  months.  On May 27,  2005,  the  Company  borrowed  a total  of
     $805,218  under the  Credit  Facility  to pay off  amounts  owed  under the
     Company's  bank line of credit (the "Bank Line of Credit") of $654,184  and
     bank term loan (the "Bank Term Loan") of  $151,034,  both of which were due
     on or  before  May  31,  2005.  As  of  June  30,  2006,  total  borrowings
     outstanding  under the Credit Facility amounted to $97,479 all of which was
     outstanding  under the Term Note.  The  Company has  $902,521 of  borrowing
     availability under the Credit Facility as of June 30, 2006.

     The terms and conditions of the Credit Facility included limited guarantees
     from  three  executive  officers  and  one  director  of  the  Company.  In
     connection  with  providing  such  limited  guarantees  to the lender,  the
     guarantors  were issued an  aggregate  of 260,000  shares of the  Company's
     common  stock,  of which an  aggregate  of 196,000 are being  issued to the
     executive  officers,  and  64,000  shares  to  one  outside  director.  The
     guarantors  have each entered into an agreement  with the Company to return
     the shares that they received in consideration  of their limited  guarantee
     in the event the  guarantor  on his own  volition  breaches  (other  than a
     breach that is cured within the terms of the limited  guarantee  agreement)
     or terminates his own respective limited guarantee, prior to the payment in
     full of the Company's obligations to the lender or to the voluntary release
     from the limited  guarantee by the lender.  The Company  recorded  deferred
     compensation  costs of $104,000 in  connection  with the issuance of common
     stock for the limited guarantees,  which is being amortized to compensation
     expense over the loan term of 24 months.

     In June  2006,  the  Credit  Facility  was  amended,  whereby  the  minimum
     borrowing amount, monthly collateral management fee, early termination fees
     and limited guarantees were eliminated. The amended agreement also requires
     the Company to maintain a tangible  net worth of at least $1.5  million and
     requires  the lender to pay the  Company  interest on cash  collections  in
     excess of amounts  borrowed  under the  Revolver  at a rate of 3% below the
     prime rate.  The Company  will pay the lender a fee of $30,000,  payable in
     six equal monthly  installments  beginning July 1, 2006, in connection with
     the amended agreement.

     In May 2006 the Company  entered into a master lease  agreement with a bank
     to  provide  a lease  line of  credit  of  $500,000  for the  financing  of
     equipment purchases. Under the agreement, the Company may finance equipment
     purchases on an installment basis at a rate of interest  determined at each
     respective borrowing date. Such rates will generally approximate the bank's
     prime rate.  As of June 30,  2006,  we had $271,711  outstanding  under the
     credit  facility  payable in monthly  installments  over a term of 36 to 48
     months.

     As of June 30, 2006 we have certain  outstanding debt and lease obligations
     amounting to $191,597 and $44,167,  respectively,  which require additional
     principal payments of up to $187,500,  in the event of default.  As of June
     30, 2006 and the filing of this Quarterly  Report on Form 10-QSB we were in
     compliance with the terms and conditions of such debt and lease agreements.

     The Company  incurred net  interest  expense of $42,503 and $31,562 for the
     three  months ended June 30, 2006 and 2005,  respectively,  and $89,244 and
     $66,073 for the six months ended June 30, 2006 and 2005, respectively.

                                       10
<PAGE>
                               EMERGENT GROUP INC
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


4.   COMMITMENTS AND CONTINGENCIES

     Legal Matters
     -------------

     Byong Y.  Kwon,  Plaintiff  against  Daniel J. Yun,  Emergent  Group  Inc.,
     Emergent Capital Investment  Management,  LLC,  Metedeconk  Holdings,  LLC,
     Voyager  Advisors,  LLC,  Millennium  Tradition  Limited (f/k/a  Millennium
     Heritage,  Limited),  Emergent Management Company, LLC, Endurance Advisors,
     Limited,  SK Networks Co., Ltd. (f/k/a SK Global Co., Ltd.),  Hye Min Kang,
     John Does 1-2 and Richard Roes 1-2 (collectively the "Defendants").

     Plaintiff's  complaint  against  the  Defendants  named  above  is a  civil
     lawsuit,  which was signed by the clerk on February 2, 2005. This action is
     brought in the United States District Court,  Southern District of New York
     by Plaintiff against the Company, a former director,  Daniel Yun, and other
     parties  to  recover   money   damages   for   alleged   fraud,   negligent
     misrepresentations  and aiding and abetting  fraud.  The Amended  Complaint
     alleges that the factual  basis  involving  the action  against the Company
     involves alleged false  representations to Plaintiff to induce him to leave
     his then  employment  in 2001 and accept the  Company's  and another  named
     Defendant's  alleged  offer of  employment.  Plaintiff  seeks  compensatory
     damages and punitive damages each in the amount of not less than $2,100,000
     together  with  interest  thereon,  reasonable  attorneys'  fees and  other
     specific relief against  Defendants other than the Company.  Management has
     denied the  Plaintiff's  allegations  against  the  Company  and intends to
     vigorously  defend this  lawsuit.  During the quarter  ended June 30, 2006,
     there were no material developments in this matter.

     Equipment Agreement
     -------------------

     In  March  2006 we  entered  into an  agreement  with a  medical  equipment
     supplier to rent certain surgical equipment for evaluation purposes for the
     period from March 1, 2006 to June 30, 2006. The rental  agreement  provides
     an option to  purchase  such  equipment  on or before  June 30,  2006.  The
     agreement  requires  the  Company to make  deposits  of $75,000  during the
     evaluation period. Such deposits are subject to forfeiture should we decide
     not to exercise our right under the agreement to purchase  such  equipment.
     The deposits will be either  refunded or applied against the purchase price
     should we decide to exercise our right to purchase the  equipment.  In June
     2006,  PRI  Medical  exercised  its right to  acquire  the  equipment.  The
     equipment and related  payable are included in property and equipment,  and
     accrued liabilities,  respectively, in the accompanying balance sheet as of
     June 30, 2006.

5.   RELATED PARTY TRANSACTIONS

     Transactions with BJH Management
     --------------------------------

     The Company's  Chairman and Chief Executive  Officer  maintains his primary
     office in New York. In this regard,  the Company reimbursed BJH Management,
     LLC ("BJH"),  a company owned by the Company's Chairman and Chief Executive
     Officer,  for office rent and related  expenses  totaling $7,247 and $8,557
     for the three months ended June 30, 2006 and 2005,  and $16,705 and $16,856
     for the six months ended June 30, 2006 and 2005, respectively.

     Effective,  July 1, 2006, the services of the Company's  Chairman and Chief
     Executive Officer are contracted until June 2007 through BJH Management for
     a monthly fee of $15,167.  In June 2006,  the Company  agreed to extend Mr.
     Buther's employment contract for one year to June 2007.

6.   LIMITED LIABILITY COMPANIES

     In  connection  with  expanding  its  business  in certain  commercial  and
     geographic  areas, PRI Medical will at times help to form Limited Liability
     Companies  ("LLCs") in which it will acquire a minority  interest and offer
     the  remaining  interest to other  investors.  These LLCs  acquire  certain
     equipment for use in their respective  business  activities which generally
     focus on  surgical  procedures.  As of June  30,  2006  PRI  Medical  holds
     minority equity interests in four LLCs which conduct business in California
     and Colorado.  In accordance with the Financial  Accounting Standards Board
     Interpretation  No. 46R,  "Consolidation of Variable Interest Entities" the
     Company  accounted  for its equity  investments  in its LLCs under the full
     consolidation method whereby transactions between the Company and LLCs have
     been eliminated through consolidation.

                                       11
<PAGE>
Item 2. Management's  Discussion and Analysis of Financial Condition and Results
of Operations

Forward-Looking Statements

The information contained in this Form 10-QSB and documents  incorporated herein
by reference are intended to update the  information  contained in the Company's
Annual  Report on Form  10-KSB for the year  ended  December  31,  2005 and such
information  presumes  that  readers  have  access to,  and will have read,  the
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations," "Risk Factors" and other information  contained in such Form 10-KSB
and other Company filings with the Securities and Exchange Commission ("SEC").

This Quarterly Report on Form 10-QSB contains forward-looking  statements within
the  meaning of Section  27A of the  Securities  Act of 1933,  as  amended,  and
Section  21E  of  the  Securities  Exchange  Act  of  1934,  as  amended.  These
forward-looking  statements involve risks and uncertainties,  and actual results
could be  significantly  different  than those  discussed  in this Form  10-QSB.
Certain   statements   contained  in   Management's   Discussion  and  Analysis,
particularly  in "Liquidity and Capital  Resources,"  and elsewhere in this Form
10-QSB are forward-looking  statements.  These statements  discuss,  among other
things,  expected growth,  future revenues and future  performance.  Although we
believe the expectations expressed in such forward-looking  statements are based
on reasonable  assumptions within the bounds of our knowledge of our business, a
number of factors  could cause actual  results to differ  materially  from those
expressed in any forward-looking statements, whether oral or written, made by us
or on our  behalf.  The  forward-looking  statements  are  subject  to risks and
uncertainties  including,  without  limitation,  the  following:  (a) changes in
levels of competition  from current  competitors and potential new  competition,
(b) possible  loss of  significant  customer(s),  (c) the  Company's  ability to
effectively  integrate new and changing medical technologies into to its product
and  service  offerings,  (d) the  Company's  ability  to  meet  the  terms  and
conditions of its debt and lease obligations, and (e) changes in availability or
terms of working capital  financing from vendors and lending  institutions.  The
foregoing  should not be  construed  as an  exhaustive  list of all factors that
could  cause  actual  results  to differ  materially  from  those  expressed  in
forward-looking  statements made by us. All forward-looking  statements included
in this document are made as of the date hereof, based on information  available
to the Company on the date  thereof,  and the Company  assumes no  obligation to
update any forward-looking statements.

Overview

Emergent  Group  Inc.   ("Emergent")  is  the  parent  company  of  PRI  Medical
Technologies,  Inc., its wholly owned and only operating subsidiary. PRI Medical
Technologies,  Inc.  primarily  conducted its business  through its wholly owned
subsidiary  Physiologic  Reps  ("PRI")  until  March  2005 at which time PRI was
merged into PRI Medical  Technologies,  Inc. ("PRI  Medical").  Emergent and PRI
Medical are referred to  collectively  hereinafter as the "Company." PRI Medical
provides mobile laser/surgical  services,  along with technical support on a per
procedure  basis to hospitals,  out-patient  surgery  centers,  and  physicians'
offices.

Critical Accounting Policies

Our discussion and analysis of our financial condition and results of operations
are based upon our financial statements,  which have been prepared in accordance
with  generally  accepted  accounting  principles  in  the  United  States.  The
preparation  of financial  statements  requires  managers to make  estimates and
disclosures on the date of the financial  statements.  On an on-going  basis, we
evaluate our estimates  including,  but not limited to, those related to revenue
recognition,   inventory   valuation   and  property  and   equipment.   We  use
authoritative pronouncements, historical experience and other assumptions as the
basis for making judgments. Actual results could differ from those estimates. We
believe  that  the  following  critical  accounting  policies  affect  our  more
significant  judgments  and  estimates  in  the  preparation  of  our  financial
statements.

Revenue  Recognition.  Revenue is recognized when the services are performed and
billable.  We are required to make judgments based on historical  experience and
future expectations, as to the realizability of goods and services billed to our
customers.  These  judgments  are  required  to  assess  the  propriety  of  the
recognition  of revenue  based on Staff  Accounting  Bulletin  ("SAB")  No. 104,
"Revenue  Recognition," and related guidance.  We make such assessments based on
the following factors:  (a)  customer-specific  information,  and (b) historical
experience for issues not yet identified.

                                       12
<PAGE>
Inventory  Valuation.  We are  required to make  judgments  based on  historical
experience and future expectations as to the realizability of our inventory.  We
make these assessments based on the following  factors:  (a) existing orders and
usage, (b) age of the inventory, and (c) historical experience.

Property and Equipment.  We are required to make  judgments  based on historical
experience and future  expectations as to the  realizability of our property and
equipment.  We made these  assessments based on the following  factors:  (a) the
estimated  useful  lives  of  such  assets,  (b)  technological  changes  in our
industry, and (c) the changing needs of our customers.

Results of Operations

The following table sets forth certain selected unaudited condensed consolidated
statements  of  income  data  for the  periods  indicated  in  dollars  and as a
percentage of total revenues. The following discussion relates to our results of
operations  for the  periods  noted and are not  necessarily  indicative  of the
results  expected for any other  interim  period or any future  fiscal year.  In
addition, we note that the period-to-period  comparison may not be indicative of
future  performance.
<TABLE>
<CAPTION>

                                                     Three Months Ended                            Six Months Ended
                                                           June 30,                                     June 30,
                                             ------------------------------------        ------------------------------------
                                                  2006          %       2005        %        2006         %        2005         %
                                             ---------------   ---  -------------  ---   --------------   ---  --------------  ---
<S>                                                  <C>       <C>        <C>       <C>        <C>         <C>        <C>      <C>
Revenue                                      $     3,993,211   100% $   2,948,415  100%  $    7,984,028   100% $    5,870,935  100%
Cost of goods sold                                 2,362,269    59%     1,930,905   65%       4,801,949    60%      3,899,853   66%
                                             ---------------   ---  -------------  ---   --------------   ---  --------------  ---

Gross profit                                       1,630,942    41%     1,017,510   35%       3,182,079    40%     1,971,082    34%

Selling, general, and administrative expenses        986,092    25%       873,062   30%       1,962,420    49%     1,672,059    28%
                                             ---------------   ---  -------------  ---   --------------   ---  --------------  ---

Income from operations                               644,850    16%       144,448    5%       1,219,659    -9%       299,023     5%

Other income (expense)                                 4,550     0%        29,296    1%         (10,314)    0%        10,167     0%
                                             ---------------   ---  -------------  ---   --------------   ---  --------------  ---

Income before provision for income
    taxes and minority interest                      649,400    16%       173,744    6%       1,209,345    -9%       309,190     5%
Provision for income taxes                            (9,972)    0%             -    0%         (33,836)    0%            -      0%
                                             ---------------   ---  -------------  ---   --------------   ---  --------------  ---

Net income before minority interest                  639,428    16%       173,744    6%       1,175,509    -9%       309,190     5%

Minority interest in income of consolidated
    limited liability companies                      (89,621)   -2%       (48,469)  -2%        (161,707)   -2%        (78,630)  -1%
                                             ---------------   ---   ------------  ---   --------------   ---  --------------  ---
Net income                                   $       549,807    14%  $    125,275    4%  $    1,013,802    13% $      230,560    4%
                                             ===============   ===   ============  ===   ==============   ===  ==============  ===
</TABLE>

Comparison of the Three Months Ended June 30, 2006 to June 30, 2005

The Company  generated  revenues of $3,993,211 in 2006 compared to $2,948,415 in
2005.  The increase in revenues in 2006 of  $1,044,796,  or 35% is related to an
increase in revenues from our  higher-priced  surgical  procedures,  to revenues
generated from certain customers of an acquired competitor in November 2005, and
to the full impact of certain  price  increases  implemented  in early 2005.  In
November 2005 we acquired  certain  operating  assets and customer  lists from a
competitor which contributed to the increase in revenues for 2006. Revenues from
our surgical and cosmetic  procedures  represented  approximately  93% and 7% of
total revenues for 2006 and 88% and 12% for 2005, respectively.

Cost of  goods  sold  was  $2,362,269  in 2006 or 59% of  revenues  compared  to
$1,930,905 or 65% in 2005. Costs of good sold primarily consist of payroll costs
and related expenses for technicians,  cost of disposables  consumed,  insurance
costs and other operating costs incurred in rendering  mobile medical  equipment
and technician services.  The overall increase in cost of goods sold of $431,364
or 22% for 2006 is generally  due to increases in  disposable  costs and payroll
and related costs offset by a decrease in depreciation expense. Disposable costs
increased as a result of a change in the mix of surgical  procedures rendered to
customers whereby a greater number of higher priced procedures were performed in
2006  compared  to 2005 that  required  more  expensive  disposable  items while
payroll  costs  increased  as a result of the increase in the number of surgical
and cosmetic procedures performed in 2006. Depreciation and amortization expense
decreased  due to the fact that  certain  assets  became  fully  depreciated  in
mid-2005  and such  decreases  in  depreciation  were  not  entirely  offset  by
depreciation from newly acquired assets. The net change in other cost categories
included in cost of goods sold remained relatively unchanged in 2006 compared to
2005.

                                       13
<PAGE>
Gross profit from  operations  was  $1,630,942 in 2006 compared to $1,017,510 in
2005.  Gross profit as a percentage  of revenues was 41% in 2006 compared to 35%
for 2005. The improvement in our gross profit margin in 2006 is primarily due to
certain  per  procedure  price  increases  implemented  early  2005 for  various
surgical  and  cosmetic  procedures  and  to  the  mix  of  surgical  procedures
performed.  In 2006,  we performed a greater  number of higher  priced  surgical
procedures  compared to 2005,  which  resulted  in higher  overall  margins.  In
addition,  profit margins after disposable costs will vary depending on the type
of surgical procedure  performed due to the fact that certain procedures require
more  expensive  disposable  items.  Gross margin rates will vary from period to
period depending upon various factors including product and service mix, pricing
considerations, and equipment and technician utilization rates. The gross margin
for 2006 is not  necessarily  indicative  of the margins that may be realized in
future periods.

Selling,  general, and administrative  expenses were $986,092 or 25% of revenues
in 2006  compared to $873,062  or 30% of revenues in 2005.  Such costs  include,
among others, payroll and related expenses, insurance costs and occupancy costs.
The increase in selling, general and administrative expenses of $113,030 in 2006
is primarily  related to increases in incentive  compensation  and other payroll
related expenses.

Other income  (expense)  was $4,550 in 2006  compared to $29,296 in 2005.  Other
income  (expense)  includes  interest  expense,  gains and losses on disposal of
property and equipment,  and other  miscellaneous  income and expense items. The
net  decrease in other income  (expense)  of $24,746 is primarily  related to an
increase in net interest  expense and a decrease in gains from the  disposals of
property and equipment in 2006 compared to 2005.

The minority interest in net income of limited  liability  companies was $89,621
in 2006 compared to $48,469 in 2005.  Minority interest in income relates to the
consolidation of four entities in 2006 and two entities in 2005 in which we hold
an equity investment  interest.  As of June 30, 2006 and 2005 in accordance with
the  Financial  Accounting  Standards  Board  Interpretation  Nos.  46 and  46R,
"Consolidation  of Variable  Interest  Entities"  the Company  accounted for its
equity investments in these entities under the full consolidation method.

Net income was  $549,807 in 2006  compared to  $125,275 in 2005.  Provision  for
income  taxes was $9,972 in 2006  compared to $-0- in 2005.  The Company has net
operating  loss  carryforwards  for both  federal  and state tax  purposes.  The
provision  for income  taxes of $9,972 as of June 30, 2006  relates to estimated
Alternative  Minimum Taxes (AMT) and to minimum state taxes  payable.  Basic net
income  per share for 2006 and 2005 was $0.10  and  $0.03,  respectively,  while
fully  diluted  net  income  per share  for 2006 and 2005 was  $0.09 and  $0.03,
respectively. Basic and fully diluted shares outstanding for 2006 were 5,459,200
and 5,805,504, respectively, and 4,817,752 and 4,926,810 for 2005, respectively.

Comparison of the Six Months Ended June 30, 2006 to June 30, 2005

The Company  generated  revenues of $7,984,028 in 2006 compared to $5,870,935 in
2005.  The increase in revenues in 2006 of  $2,113,093,  or 36% is related to an
increase in revenues from our  higher-priced  surgical  procedures,  to revenues
generated from certain customers of an acquired competitor in November 2005, and
to the full impact of certain  price  increases  implemented  in early 2005.  In
November 2005 we acquired  certain  operating  assets and customer  lists from a
competitor which contributed to the increase in revenues for 2006. Revenues from
our surgical and cosmetic  procedures  represented  approximately  92% and 8% of
total revenues for 2006 and 88% and 12% for 2005, respectively.

Cost of  goods  sold  was  $4,801,949  in 2006 or 60% of  revenues  compared  to
$3,899,853 or 66% in 2005. Costs of good sold primarily consist of payroll costs
and related expenses for technicians,  cost of disposables  consumed,  insurance
costs and other operating costs incurred in rendering  mobile medical  equipment
and technician services.  The overall increase in cost of goods sold of $902,096
or 23% for 2006 is generally  due to increases in  disposable  costs and payroll
and related costs offset by a decrease in depreciation expense. Disposable costs
increased as a result of a change in the mix of surgical  procedures rendered to
customers whereby a greater number of procedures were performed in 2006 compared
to 2005 that  required  more  expensive  disposable  items while  payroll  costs
increased  as a result of the  increase in the number of surgical  and  cosmetic
procedures  performed in 2006.  Depreciation and amortization  expense decreased
due to the fact that certain  assets  became fully  depreciated  in mid-2005 and
such decreases in depreciation  were not entirely  offset by  depreciation  from
newly acquired assets. The net change in other cost categories  included in cost
of goods sold remained relatively unchanged in 2006 compared to 2005.

Gross profit from  operations  was  $3,182,079 in 2006 compared to $1,971,082 in
2005.  Gross profit as a percentage  of revenues was 40% in 2006 compared to 34%
for 2005. The improvement in our gross profit margin in 2006 is primarily due to


                                       14
<PAGE>
certain  per  procedure  price  increases  implemented  early  2005 for  various
surgical  and  cosmetic  procedures  and  to  the  mix  of  surgical  procedures
performed.  In 2006,  we performed a greater  number of higher  priced  surgical
procedures  compared to 2005, which resulted in higher overall  margins.  Profit
margins  after  disposable  costs will vary  depending  on the type of  surgical
procedure  performed  due to the  fact  that  certain  procedures  require  more
expensive  disposable  items.  In  addition,  gross  margin rates will vary from
period to period  depending upon various factors  including  product and service
mix, pricing considerations, and equipment and technician utilization rates. The
gross margin for 2006 is not  necessarily  indicative of the margins that may be
realized in future periods.

Selling, general, and administrative expenses were $1,962,420 or 49% of revenues
in 2006 compared to $1,672,059 or 28% of revenues in 2005.  Such costs  include,
among others, payroll and related expenses, insurance costs and occupancy costs.
The increase in selling, general and administrative expenses of $290,361 in 2006
is primarily  related to increases in incentive  compensation  and other payroll
related expenses.

Other income  (expense) was $(10,314) in 2006 compared to $10,167 in 2005. Other
income  (expense)  includes  interest  expense,  gains and losses on disposal of
property and equipment,  and other  miscellaneous  income and expense items. The
net  decrease in other income  (expense)  of $20,481 is primarily  related to an
increase in net interest  expense and a decrease in gains from the  disposals of
property and equipment in 2006 compared to 2005.

The minority interest in net income of limited liability  companies was $161,707
in 2006 compared to $78,630 in 2005.  Minority interest in income relates to the
consolidation of four entities in 2006 and two entities in 2005 in which we hold
an equity investment  interest.  As of June 30, 2006 and 2005 in accordance with
the  Financial  Accounting  Standards  Board  Interpretation  Nos.  46 and  46R,
"Consolidation  of Variable  Interest  Entities"  the Company  accounted for its
equity investments in these entities under the full consolidation method.

Net income was  $1,013,802 in 2006  compared to $230,560 in 2005.  Provision for
income taxes was $33,836 in 2006  compared to $-0- in 2005.  The Company has net
operating  loss  carryforwards  for both  federal  and state tax  purposes.  The
provision  for income  taxes of $33,836 as of June 30, 2006 relates to estimated
Alternative  Minimum Taxes (AMT) and to minimum state taxes  payable.  Basic net
income  per share for 2006 and 2005 was $0.19  and  $0.05,  respectively,  while
fully  diluted  net  income  per share  for 2006 and 2005 was  $0.17 and  $0.05,
respectively. Basic and fully diluted shares outstanding for 2006 were 5,456,127
and 5,802,431, respectively, and 4,781,641 and 4,890,699 for 2005, respectively.

Liquidity and Capital Resources

On May 25, 2005, the Company entered into a two-year agreement with a new lender
to provide a  revolving  credit line (the  "Revolver")  and term note (the "Term
Note") of up to $1,000,000  collateralized  by accounts  receivable  and certain
fixed  assets  (collectively  referred  to  herein  as the  "Credit  Facility").
Advances  under the Revolver are based on 80% of each  eligible  receivable,  as
defined.  Borrowings under the Revolver and Term Note bear interest at the prime
rate (8.25% as of June 30, 2006), plus 2%. The Credit Facility also provides for
payment of a monthly collateral  management fee equal to 20 basis points (0.02%)
on the  average  daily  outstanding  balances  under  the  Credit  Facility.  In
addition,  the  Credit  Facility  provides  for an annual fee equal to 1% of the
capital availability amount, as defined, upon closing and on each anniversary of
the closing  date.  The Company  incurred  loan and closing  costs of $26,785 in
connection  with the  negotiation  and execution of the Credit Facility which is
being  amortized  over the loan term of 24 months.  On May 27, 2005, the Company
borrowed a total of $805,218  under the Credit  Facility to pay off amounts owed
under the Company's  bank line of credit (the "Bank Line of Credit") of $654,184
and bank term loan (the "Bank Term Loan") of $151,034, both of which were due on
or before May 31, 2005. As of June 30, 2006, total borrowings  outstanding under
the Credit Facility  amounted to $97,479 all of which was outstanding  under the
Term Note. The Company has $902,521 of borrowing  availability  under the Credit
Facility as of June 30, 2006.

The terms and conditions of the Credit Facility included limited guarantees from
three  executive  officers and one director of the Company.  In connection  with
providing such limited  guarantees to the lender,  the guarantors were issued an
aggregate of 260,000 shares of the Company's common stock, of which an aggregate
of 196,000  were  issued to the  executive  officers,  and 64,000  shares to one
outside  director.  The guarantors  have each entered into an agreement with the
Company  to return the  shares  that they  received  in  consideration  of their
limited guarantee in the event the guarantor on his own volition breaches (other
than a breach that is cured within the terms of the limited guarantee agreement)
or terminates his own respective limited guarantee, prior to the payment in full


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<PAGE>
of the Company's  obligations to the lender or to the voluntary release from the
limited  guarantees by the lender.  The Company recorded  deferred  compensation
costs of  $104,000  in  connection  with the  issuance  of common  stock for the
limited  guarantees,  which is being amortized to compensation  expense over the
loan term of 24 months.

In June 2006,  the Credit  Facility was amended,  whereby the minimum  borrowing
amount,  monthly  collateral  management fee, early termination fees and limited
guarantees were eliminated.  The amended  agreement also requires the Company to
maintain a tangible  net worth of at least $1.5  million and requires the lender
to pay the Company  interest on cash  collections in excess of amounts  borrowed
under the  Revolver at a rate of 3% below the prime rate.  The Company  will pay
the lender a fee of $30,000, payable in six equal monthly installments beginning
July 1, 2006, in connection with the amended agreement.

In May 2006 the Company  entered  into a master lease  agreement  with a bank to
provide a lease  line of credit  of  $500,000  for the  financing  of  equipment
purchases.  Under the agreement,  the Company may finance equipment purchases on
an  installment  basis  at a rate of  interest  determined  at  each  respective
borrowing date. Such rates will generally  approximate the bank's prime rate. As
of June 30, 2006, we had $271,711  outstanding under the credit facility payable
in monthly installments over a term of 36 to 48 months.

As of June 30,  2006 we have  certain  outstanding  debt and  lease  obligations
amounting  to $191,597  and  $44,167,  respectively,  which  require  additional
principal  payments of up to $187,500,  in the event of default.  As of June 30,
2006  and the  filing  of  this  Quarterly  Report  on  Form  10-QSB  we were in
compliance with the terms and conditions of such debt and lease agreements.

The Company had cash and cash  equivalents  of $772,578 at June 30,  2006.  Cash
provided  by  operating  activities  for the six months  ended June 30, 2006 was
$1,508,248.  Cash generated from  operations  includes net income of $1,013,802,
depreciation  and amortization of $507,445,  minority  interest in net income of
$161,707,  and a net increase in accounts payable,  and accrued  liabilities and
expenses of  $175,985;  offset by an increase  in accounts  receivable,  prepaid
expenses,  inventory,  deposits  and  other  assets  of  $347,425.  Cash used in
investing  activities  was  $316,740  related to the  purchase of  property  and
equipment  of  $171,574  and to cash  distributions  of  $151,606  to members of
limited  liability  companies,  offset  by  net  proceeds  of  $6,440  from  the
disposition  of property and equipment.  Cash used for financing  activities was
$1,004,307 from payments on lease and debt obligations of $280,575 and $210,871,
respectively, and payment of dividends on common stock of $512,861. In addition,
during the six months  ended June 30,  2006 we  borrowed  and repaid  $8,043,826
under our line of credit.

The  Company had cash and cash  equivalents  of $96,847 at June 30,  2005.  Cash
provided  by  operating  activities  for the six months  ended June 30, 2005 was
$743,161.  Cash  generated  from  operations  includes  net income of  $230,560,
depreciation  and amortization of $588,320,  minority  interest in net income of
$78,630 and an increase in accounts  payable of $103,392;  offset by an increase
in  accounts  receivable  of $135,239  and an increase of $71,451 in  inventory,
prepaid  expenses,  and  deposits  and other  assets and  decrease  of $9,233 in
accrued liabilities and expenses. Cash used in investing activities was $161,164
related to the  purchase  of property  and  equipment  of  $132,497  and to cash
distributions of $85,956 to limited liability companies,  offset by net proceeds
of  $57,289  from the  disposition  of  property  and  equipment.  Cash used for
financing  activities  was  $836,745  from net  repayments  of  $586,975  on our
revolving  line of credit and from  payments  on lease and debt  obligations  of
$139,554 and $110,216, respectively.

We anticipate that our future liquidity requirements will arise from the need to
finance our accounts  receivable and inventories,  and from the need to fund our
current debt and lease obligations and capital expenditures. The primary sources
of  funding  for  such  requirements  will be cash  generated  from  operations,
borrowings  under debt  facilities and trade  payables,  and raising  additional
capital from the sale of equity or other  securities.  The Company believes that
it can generate  sufficient  cash flow from these sources to fund its operations
for at least the next twelve months.

Item 3. Controls and Procedures

The Company  maintains  disclosure  controls and procedures that are designed to
ensure that information  required to be disclosed in the Company's  Exchange Act
reports is recorded, processed,  summarized and reported within the time periods
specified in the SEC's rules and forms, and that such information is accumulated
and  communicated  to the Company's  management,  including its Chief  Executive
Officer and Chief Financial Officer,  as appropriate,  to allow timely decisions
regarding  required  disclosure  based closely on the  definition of "disclosure
controls and  procedures"  in Rule  13a-15(e).  In designing and  evaluating the
disclosure controls and procedures,  management recognized that any controls and
procedures,  no  matter  how  well  designed  and  operated,  can  provide  only
reasonable assurance of achieving the desired control objectives, and management
necessarily  was required to apply its judgment in evaluating  the  cost-benefit
relationship  of possible  controls and  procedures.  The Company carried out an
evaluation,  under the supervision and with the  participation  of the Company's
management,  including the Company's Chief  Executive  Officer and the Company's


                                       16
<PAGE>
Chief Financial Officer, of the effectiveness of the design and operation of the
Company's  disclosure  controls  and  procedures.  Based on the  foregoing,  the
Company's Chief Executive Officer and Chief Financial Officer concluded that the
Company's  disclosure  controls and procedures  were effective at the reasonable
assurance level at the end of our most recent quarter ended June 30, 2006. There
have been no changes in the Company's  disclosure  controls and procedures or in
other factors that could affect the disclosure  controls  subsequent to the date
the Company completed its evaluation.

Management has not yet completed, and is not yet required to have completed, its
assessment of the effectiveness of internal control over financial  reporting as
required by Section 404 of the Sarbanes-Oxley Act of 2002, as amended.


                           PART II. OTHER INFORMATION

Item 1.   Legal Proceedings

          See Note 4 to Notes to  Condensed  Consolidated  Financial  Statements
          included herein for a description of legal matters.


Item 2.   Changes in Securities

          (a) In the second  quarter  ended June 30, 2006 there were no sales of
          unregistered  securities.

          (b) Rule 463 of the Securities Act is not applicable to the Company.

          (c)  In  the  second  quarter  ended  June  30,  2006  there  were  no
          repurchases by the Company of its Common Stock.


Item 3.   Defaults Upon Senior Securities

          None.


Item 4.   Submissions of Matters to a Vote of Security Holders

          In the  second  quarter  ended  June 30,  2006  there  were no matters
          submitted to a vote of security holders.


Item 5.   Other Information

          None.


Item 6.   Exhibits

          Except for the exhibits  listed below,  other  required  exhibits have
          been  previously  filed with the  Securities  and Exchange  Commission
          under the Securities Exchange Act of 1934, as amended.

                                       17
<PAGE>
Number
Exhibit   Description
--------- ----------------------------------------------------------------------

10.1    Amendment to Accounts  Receivable  Purchase  Agreement  executed May 25,
        2005 by and among Access Capital, EGI and EGI's wholly-owned subsidiary,
        PRI Medical Technologies, Inc.*

10.2    June 2006 Amendment to Employment Contract of Bruce Haber**

10.3    June 2006 Amendment of Employment Contract of Louis Buther**

11.1    Statement  re:   computation  of  earnings  per  share.   See  condensed
        consolidated statement of operations and notes thereto.

31.1    Certification  of Chief  Executive  Officer  Pursuant to Rule  13a-14(a)
        under the  Securities  Exchange  Act of 1934,  as  adopted  pursuant  to
        Section 302 of the Sarbanes-Oxley Act of 2002*

31.2    Certification  of Chief  Financial  Officer  Pursuant to Rule  13a-14(a)
        under the  Securities  Exchange  Act of 1934,  as  adopted  pursuant  to
        Section 302 of the Sarbanes-Oxley Act of 2002*

32.1    Certification of Chief Executive  Officer pursuant to 18 U.S.C.  Section
        1350, as adopted  pursuant to Section 906 of the  Sarbanes-Oxley  Act of
        2002*

32.2    Certification of Chief Financial  Officer pursuant to 18 U.S.C.  Section
        1350, as adopted  pursuant to Section 906 of the  Sarbanes-Oxley  Act of
        2002*

99.1    Press Release

         ------------------------
         * Filed herewith.
         ** Previously filed with Form 8-K.

                                       18
<PAGE>
                                   SIGNATURES


Pursuant to the  requirements of Section 13 or 15(d) 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.


                                          EMERGENT GROUP INC.



Date: August 14, 2006                     By:  /s/ Bruce J. Haber
                                          ------------------------
                                          Bruce J. Haber,
                                          Chairman and Chief Executive Officer



Date: August 14, 2006                     By:  /s/ William M. McKay
                                          --------------------------
                                          William M. McKay,
                                          Chief Financial Officer and Secretary



                                       19