SECURITIES AND EXCHANGE COMMISSION
                    Washington, DC 20549


                          FORM 10-Q

 (Mark One)

XX  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
---  ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2006

    TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
---  ACT OF 1934 FOR THE TRANSITION PERIOD FROM _______ TO ______.


    Commission file number        000-24991
                             ____________________


                         ALLSTATES WORLDCARGO, INC.
     -------------------------------------------------------------------
     (Exact name of small business issuer as specified in its charter)


          New Jersey                            22-3487471
        --------------                 -------------------------------
  (State or other jurisdiction        (IRS Employer Identification No.)
     of incorporation)


           4 Lakeside Drive South, Forked River, New Jersey, 08731
          ----------------------------------------------------------
                 (Address of principal executive offices)


                             609-693-5950
            --------------------------------------------------
            (Registrant's telephone number, including area code)


Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Exchange Act 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  XX      No
    ----         ----

Indicate by check mark whether the registrant is an accelerated filer
(as defined in Rule 12b-2 of the Exchange Act).

Yes          No   XX
    ----         ----

The Company had 32,509,872 shares of common stock, par value
$.0001 per share, outstanding as of May 15, 2006.

                               -1-
<PAGE>




         ALLSTATES WORLDCARGO, INC. AND SUBSIDIARIES

                            INDEX

PART 1.           FINANCIAL INFORMATION

  ITEM 1.    FINANCIAL STATEMENTS

        Financial Statements with Supplemental Information
        For the Period Ending March 31, 2006 and 2005

      Financial Statements:

         Condensed Consolidated Balance Sheet                 3

         Condensed Consolidated Statement of Operations       4

         Condensed Consolidated Statements of Stockholders'
            Equity                                            5

         Condensed Consolidated Statement of Cash Flows       6

      Notes to the Financial Statements                       7


  ITEM 2.       MANAGEMENT'S DISCUSSION AND ANALYSIS          8

  ITEM 3.       CONTROLS AND PROCEDURES                       13

PART II.   OTHER INFORMATION                                  13

  ITEM 1.  LEGAL PROCEEDINGS                                  13

  ITEM 2   CHANGES IN SECURITIES AND USE OF PROCEEDS          18

  ITEM 3   DEFAULTS ON SENIOR SECURITIES                      18

  ITEM 4   SUBMISSION OF MATTERS TO A VOTE OF SECURITY
           HOLDERS                                            18

  ITEM 5   OTHER INFORMATION                                  18

  ITEM 6   EXHIBITS AND REPORTS ON FORM 8-K                   18

           SIGNATURES                                         19


                              2

<PAGE>

         ALLSTATES WORLDCARGO, INC. AND SUBSIDIARIES

            CONDENSED CONSOLIDATED BALANCE SHEET

                           ASSETS

                                March 31,      September 30,
                                  2006            2005
                               (Unaudited)          *
                               ----------       ----------
  Current Assets
    Cash                      $   134,553      $   180,317
    Accounts receivable        10,992,864       10,681,589
    Prepaid expenses and
     other current assets         314,709          317,991
    Deferred tax asset -
     current                      184,982          184,982
                               ----------       ----------
  Total current assets         11,627,108       11,364,879

  Property, plant and
   equipment                    1,917,308        1,598,231
  Less:  Accumulated
   depreciation                 1,077,642          999,189
                               ----------       ----------
  Net property, plant and
   equipment                      839,666          599,042

  Goodwill, including
   acquisition cost, net          535,108          535,108
  Other assets                    160,998          199,773
                               ----------       ----------
  Total assets                $13,162,880      $12,698,802
                               ==========       ==========
            LIABILITIES AND STOCKHOLDERS' EQUITY

  Current Liabilities

    Accounts payable          $ 6,844,242      $ 6,420,955
    Accrued expenses            1,242,653        1,767,391
    Short-term bank
     borrowings                 2,011,360        1,599,500
    Notes/leases payable
     current portion               90,581           49,888
                               ----------       ----------
  Total current liabilities    10,188,836        9,837,734

  Deferred tax liability -
   non current                    102,368          102,368
  Long term portion of
   notes/leases payable         2,440,259        2,385,015

    Stockholders' equity
    Common stock                    3,251            3,251
    Retained earnings             428,166          370,434
                               ----------       ----------
  Total stockholders' equity      431,417          373,685

  Total liabilities and
   stockholders' equity       $13,162,880      $12,698,802
                               ==========       ==========


 *  Condensed from audited financial statements.

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




<PAGE>
                              3


         ALLSTATES WORLDCARGO, INC. AND SUBSIDIARIES

       CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
                         (Unaudited)

                             Three Months Ended         Six Months Ended
                                 March 31,                 March 31,
                            2006         2005          2006         2005

Revenue                   $16,902,604  $15,386,968  $36,394,423  $31,839,722

Cost of transportation     12,092,054   10,520,256   26,400,760   22,241,828
                           ----------   ----------   ----------   ----------
Net revenue                 4,810,550    4,866,712    9,993,663    9,597,894

Selling, general and
 administrative expenses    4,860,043    4,558,275    9,838,536    9,133,884
                           ----------   ----------   ----------   ----------
Income/(loss) from
 operations                   (49,493)     308,437      155,127      464,010

Other income (expense):
   Interest, net              (74,379)     (58,389)    (144,422)    (114,411)
   Gain/(loss) on sale of
    assets
   Other income/(expense)                                98,223
                           ----------   ----------   ----------   ----------
Income/(loss) before
 income tax provision        (123,872)     250,048      108,928      349,599

Provision for income
 taxes                        (58,220)     127,659       51,196      162,659
                           ----------   ----------   ----------   ----------
Net income/(loss)             (65,652)     122,389       57,732      186,940
                           ==========   ==========   ==========   ==========
Weighted average common
 shares - basic            32,509,872   32,509,872   32,509,872   32,509,872

Net income per common
share - basic                $    .00     $    .00     $    .00     $    .00

Weighted average common
shares - diluted           32,509,872   32,509,872   32,509,872   32,509,872

Net income per common
share - diluted               $    .00     $    .00     $    .00     $    .00


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




                              4

<PAGE>

         ALLSTATES WORLDCARGO, INC. AND SUBSIDIARIES

  CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                         (Unaudited)

                       Common Stock
                  ----------------------
                                                           Total
                        Number      Par     Retained    Stockholder's
                          of       Value    Earning        Equity
                        Shares
                     ----------   -------   --------      ---------
 Balance at
 September 30, 2005  32,509,872  $ 3,251   $ 370,434      $373,685

 Consolidated net
 profit for the
 six months ended                             57,732        57,732
 March 31, 2006      ----------   -------   --------      ---------

 Balance at
 March 31, 2006      32,509,872  $ 3,251   $ 428,166      $431,417
                     ==========   =======   ========      =========










                              5


<PAGE>

         ALLSTATES WORLDCARGO, INC. AND SUBSIDIARIES

       CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                         (Unaudited)

                                            Six Months Ended
                                                March 31,
                                             2006       2005
                                       -----------  -----------
  Cash flows from operating
   activities:
  Net income                          $     57,732   $  186,940
  Adjustments to reconcile net
   income to net cash used for/
    provided by operating activities:
      Depreciation                          78,452       65,502
      Provision for doubtful
       accounts                            145,203       67,429
      Deferred income taxes                             161,000
      (Increase) decrease in assets:
          Accounts receivable             (456,477)     275,762
          Prepaid expenses and other
           assets                           14,558     (122,523)
       Increase (decrease) in
        liabilities:
          Accounts payable and
           accrued expenses               (101,448)    (148,047)
                                       -----------  -----------
  Net cash (used for) / provided by
   operating activities                   (261,980)     486,063

  Cash flows from investing
  activities:
     Purchase of equipment                (319,077)     (11,089)
     Loan to licensee                                  (250,000)
     Collection of loan principal           37,881        2,945
     Deposits                              (10,385)         144
                                       -----------  -----------
  Net cash used for investing
   activities                             (291,581)    (258,000)

  Cash flows from financing
   activities:
     Repayments under capital leases       (24,130)
     Borrowing under capital leases        120,067
     Repayments under short-term
      bank borrowings                     (200,000)    (800,000)
     Borrowing under short-term bank
      borrowings                           611,860      700,000
                                       -----------  -----------
  Net cash provided by/(used for)
   financing activities                    507,797     (100,000)

  Net increase (decrease) in cash          (45,764)     128,063
  Cash at beginning of year                180,317      114,363
                                       -----------  -----------
  Cash, end of period                  $   134,553   $  242,426
                                       ===========  ===========


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



                              6

<PAGE>

         ALLSTATES WORLDCARGO, INC. AND SUBSIDIARIES

         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                       March 31, 2006

1.   The accompanying unaudited condensed consolidated
  financial statements have been prepared by Allstates
  WorldCargo, Inc. (the "Company") in accordance with the
  rules and regulations of the Securities and Exchange
  Commission (the "SEC") for interim financial statements and
  accordingly do not include all information and footnotes
  required under generally accepted accounting principles for
  complete financial statements.  The financial statements
  have been prepared in conformity with the accounting
  principles and practices disclosed in, and should be read in
  conjunction with, the annual financial statements of the
  Company included in the Company's Fiscal year 2005 Form 10-K
  filing dated December 29, 2005 (File No. 000-24991).  In the
  opinion of management, these interim financial statements
  contain all adjustments necessary for a fair presentation of
  the Company's financial position at March 31, 2006 and
  September 30, 2005 and the results of operations for the six
  months ended March 31, 2006 and 2005, respectively.

2.   Net income per common share appearing in the statements
  of operations for the six months ended March 31, 2006 and
  2005, respectively have been prepared in accordance with
  Statement of Financial Accounting Standards No. 128 ("SFAS
  No. 128").  SFAS No. 128 establishes standards for computing
  and presenting earnings per share ("EPS") and requires the
  presentation of both basic and diluted EPS.  As a result
  primary and fully diluted EPS have been replaced by basic
  and diluted EPS.  Such amounts have been computed based on
  the profit or (loss) for the respective periods divided by
  the weighted average number of common shares outstanding
  during the related periods.








                              7
<PAGE>
ITEM 2.  Management's Discussion and Analysis of Financial
Condition and Results of Operations.

General Overview

     Allstates WorldCargo, Inc. (the "Company" or
Allstates") is a New Jersey Corporation formed on January
14, 1997 as Audiogenesis Systems, Inc. (Audiogenesis"),
pursuant to a corporate reorganization of Genesis Safety
Systems, Inc.  On August 24, 1999, Audiogenesis acquired 100
percent of the common stock of Allstates Air Cargo, Inc. in
a reverse acquisition, and on November 30, 1999, changed its
name to Allstates WorldCargo, Inc.  Allstates is principally
engaged in the business of providing global freight
forwarding and other transportation and logistics services
for its customers.  Allstates is headquartered in Forked
River, New Jersey.

     The freight forwarding business of Allstates opened its
first terminal in Newark, New Jersey in 1961.  Allstates
provides domestic and international freight forwarding
services to over 1,700 customers utilizing ground
transportation, commercial air carriers, and ocean vessels.
Allstates supplements its freight forwarding services to
include truck brokerage, warehousing and distribution, and
other logistics services.  Allstates operates 22 offices
throughout the United States, including corporate
facilities, and as of March 31, 2006 employed 94 people
full time and 14 people part time.

     Allstates has agreements with domestic and
international strategic partners and a network of agents
throughout the world, and continues to pursue opportunities
to forge additional strategic alliances in order to increase
its global market share.  The Company is a party to several
site licensing agreements in which those licensees have
contracted with Allstates to provide exclusive freight
forwarding services, including sales and operating
functions, under the Allstates name.  Of the 22 offices,
15 are licensee operations, while 7 are company owned
and staffed operations.


Results of Operations

     The   following  table  sets  forth  for  the   periods
indicated  certain financial information  derived  from  the
Company's consolidated statement of operations expressed  as
a percentage of net sales:

                                 Three months ended           Six months ended
                                    March 31,                    March 31,
                                 2006         2005             2006       2005
Revenues                        100.0%         100.0%          100.0%     100.0%
Cost of transportation           71.5           68.4            72.5       69.9
                                -----          -----           -----      -----
Gross profit                     28.5           31.6            27.5       30.1

Operating expenses:
  Personnel costs                11.4           10.9            10.3       10.5
  License commissions
    and royalties                10.6           12.4            10.5       11.9
  Other selling, general and
   administrative expenses        6.8            6.3             6.3        6.2
                                -----          -----           -----      -----
Total operating expenses         28.8           29.6            27.1       28.6

Operating income                 (0.3)           2.0             0.4        1.5
Interest expense, net            (0.4)          (0.4)           (0.4)      (0.4)
Other expense                    (0.0)          (0.0)            0.3       (0.0)
                                -----          -----           -----      -----
Net income before
  tax provision                  (0.7)           1.6             0.3        1.1

Tax provision                     0.3           (0.8)           (0.1)      (0.5)
                                -----          -----           -----      -----
Net income                       (0.4)%          0.8%            0.2%       0.6%
                                =====          =====           =====      =====

                              8

<PAGE>
Revenues

     Revenues  of  the Company represents gross consolidated
sales  less  customer  discounts.  Total  revenues  for  the
quarter ended March 31, 2006 increased by approximately $1.5
million,  or  9.9%, to $16,903,000, over the  quarter  ended
March 31, 2005, reflecting a higher volume of shipments  and
total  weight  of cargo shipped.  Sales for  the  six  month
period ended March 31, 2006 increased by approximately  $4.6
million, or 14.3%, to $36,394,000 compared to the six  month
period  ended  March 31, 2005, for the  same  reasons.   The
revenue  increase  for the three and six  month  comparative
periods reflect incremental growth at our existing operating
stations.  Although no single customer accounted for 10 % of
revenues  for  either  period,  the  increase  in  sales  is
significantly  driven by two customers  that  accounted  for
approximately  $1.2 million and $3.5 million in  incremental
sales during the three and six month comparative periods.

     Domestic  revenues  increased  by  approximately   $1.3
million  or  11.0%,  to $13,283,000 during  the  three-month
period ended March 31, 2006 in comparison to the same period
in  the previous year, reflecting higher shipping volume for
the  reasons  mentioned above. During the six  months  ended
March 31, 2006, domestic revenues increased by approximately
$3.4  million or 13.1%, to $29,054,000 compared to the  same
period  in the prior year.  International revenues increased
by approximately $200,000 or 5.8%, to $3,619,000, during the
three months ended March 31, 2006 in comparison to the prior
year  period.  During the six months ended March  31,  2006,
international sales increased comparatively by approximately
$1,180,000 or 19.2%.


Net Revenues

     Net  revenues  represents the difference between  gross
sales   and  the  cost  of  transportation.   The  cost   of
transportation is composed primarily of amounts paid by  the
Company to carriers and cartage agents for the transport  of
cargo.   Cost of transportation as a percentage of  revenues
increased  by  3.2%,  to 71.5%, for the three  months  ended
March 31, 2006, and increased by 2.7%, to 72.5% for the  six
months  then ended, in comparison to the same period in  the
previous   year.    This  higher  cost   of   transportation
percentage  is  primarily  due to the  continued  growth  of
significant  lower  margin business that the  Company  first
attained during fiscal 2004. The increases in fuel costs  as
they  affect  carrier  rates and  an  increase  in  deferred
shipments versus priority are additional factors that affect
the cost of transportation.  In absolute terms, the cost  of
transportation  increased by approximately $1.6  million  or
14.9%,  to  $12,092,000 during the three months ended  March
31,  2006  over  the previous year period.  During  the  six
months   ended   March  31,  2006,  cost  of  transportation
increased by approximately $4.2 million or 18.7% versus  the
comparative  period  in  the  prior  year,  reflecting   the
increased  sales volume.  Gross margins decreased  to  28.5%
during  the quarter ended March 31, 2006 from 31.6%  in  the
same quarter of the previous fiscal year, and decreased  for
the  six  month comparative period then ended to 27.5%  from
30.1%  in  the prior year period.  Net revenue decreased  by
approximately ($56,000) to $4,811,000 for the  three  months
ended  March  31, 2006 versus the same three months  of  the
prior year, and increased by approximately $396,000 for  the
six month comparative period then ended.


Selling, General and Administrative Expenses

     As  a percentage of sales, operating expenses decreased
by 0.8% for the three months ended March 31, 2006, to 28.8%,
in  comparison  to the three months ended  March  31,  2005,
primarily  due to the lower rate of licensee commissions  in
relation  to sales, as well as the reduction in legal  fees.
The  overall  decrease was offset by personnel  costs  which
increased  as  a  percentage of  sales  during  the  period.
During  the  six  months  ended March  31,  2006,  operating
expenses decreased by 1.7% in comparison to the same  period
of  the  previous  year, to 27.0% of  sales,  for  the  same
reason.  In absolute terms, operating expenses increased  by
approximately $302,000 or 6.6% during the three-month period
ended March 31, 2006 as compared to


                              9
<PAGE>
the  same  period  in  the  prior  fiscal  year.   Operating
expenses increased by approximately $705,000, or 7.7% during
the  six  months  ended March 31, 2006 over the  prior  year
period.   The increases in SG&A expenses for the  three  and
six  month  comparative  periods were  primarily  driven  by
higher personnel costs.

     Personnel  expenses increased for  the  three  and  six
month periods ended March 31, 2006 by approximately $261,000
and   $413,000,   respectively,  over  the   previous   year
comparative periods.  The higher costs were driven  in  part
by  an  increase  in headcount of operations  and  corporate
personnel,  necessary  to sustain  the  growth  in  business
volume.   Corporate  salary expense was  also  higher  as  a
result  of  new  employment agreements  that  were  ratified
during  the  third  quarter of fiscal  2005.   In  addition,
pursuant  to  the new employment agreements,  the  executive
bonus    accrual   increased   by   $50,000   and   $103,000
respectively, for the three and six month periods  over  the
amount accrued in the comparative periods of fiscal 2005.

     Allstates pays commissions to licensees as compensation
for generating profits to the Company.  Licensee commissions
and royalties paid pursuant to licensee agreements decreased
by  approximately $113,000 for the three-month period  ended
March  31,  2006  in comparison to the same  period  in  the
previous  year, and increased for the six months then  ended
over the previous year period by approximately $58,000.  The
variances  in licensee commissions and royalties during  the
three and six month comparative periods are reflective of
variances in net revenues at our licensee operations  during
the respective periods.

     Legal  fees,  which had increased significantly  during
the  three and six months ended March 31, 2005, as a  result
of  Allstates  defense and settlement effort related  to  an
action  commenced  by  a  majority shareholder  against  the
Company,  decreased during the three and  six  months  ended
March 31, 2006 in comparison to that period by approximately
$104,000 and $178,000 respectively.

     Expenses  related to business travel and  entertainment
increased by approximately $46,000 during the quarter  ended
March  31, 2006 and by approximately $90,000 during the  six
months  then ended, in comparison to the same period of  the
prior  year,  reflecting the overall  increase  in  business
volume.  Fees accrued on behalf of the Company's three newly
appointed  Directors amounted to approximately  $19,000  for
the  three  months  ended  March 31,  2006,and  amounted  to
$56,000  for  the  six  months then  ended,  which  included
compensation for the fourth quarter of fiscal 2005.

     Bad  debt expense increased for the three months  ended
March  31,  2006 by approximately $50,000, and increased  by
approximately  $78,000 for the six months then  ended.   The
comparative  increase in expense is due to a combination  of
higher  sales  in  fiscal 2006 versus 2005  and  a  downward
adjustment  made during the second quarter  of  fiscal  2005
which had reduced the expense during that period.  MIS  fees
increased  by approximately $35,000 and $57,000 respectively
for  the  three  and  six months ended  March  31,  2006  in
comparison to the prior year periods, reflecting the use  of
two  computer systems during the transition from  our  older
system  to  the  new system.  Such costs  include  fees  for
training and system enhancement on the new Air-Trak computer
system  in  addition to costs associated with the upkeep  of
our current system.

     SG&A  expenses  presented for the  three  months  ended
March  31,  2006  and 2005 are inclusive of expenditures  to
related    parties   totaling   $520,809    and    $412,112,
respectively.   SG&A expenses presented for the  six  months
ended  March 31, 2006 and 2005 are inclusive of expenditures
to   related  parties  totaling  $1,026,204  and   $784,685,
respectively.



                             10
<PAGE>

Income/Loss  from Operations

     Operating  income  decreased during  the  three  months
ended  March  31,  2006  by approximately  $358,000,  to  an
operating  loss  of ($49,000), compared to  the  same  three
month period in the previous year, for the reasons indicated
above.   During the six month period ended March  31,  2006,
operating  income  decreased by approximately  $309,000,  to
$155,000 compared to the same six month period in the  prior
year.   The operating margin decreased for the three  months
ended March 31, 2006 by 2.3%, to (0.3%) of sales compared to
the   prior  fiscal  year  period.   In  comparison  to  the
respective period ended March 31, 2005, the operating margin
for  the six month period ended March 31, 2006 decreased  by
1.1%, to 0.4% of sales.


Interest Expense, net

      Interest  expense  increased  for the  three  and  six
months  ended  March 31, 2006 by approximately  $16,000  and
$30,000 respectively, as compared to the same periods in the
previous  year, reflecting higher interest rates  on  higher
average borrowing levels.


Other income

     Other income represents funds received during the
period from the final distribution settlement of the Q
Logistics Chapter 11 filing from February 2001.

Net Income/(Loss)

     Income  before  income taxes decreased  to  a  loss  of
approximately ($124,000) during the quarter ended March  31,
2006, versus net income of approximately $250,000 during the
same  period in the prior year.  The Company recorded a  tax
benefit  of $58,000 for the quarter ended March 31, 2006  as
compared  to  a tax provision of $128,000 for quarter  ended
March  31  31,  2005.  The net loss after  tax  amounted  to
approximately  ($66,000) or (0.4%) of  revenues  during  the
second quarter of Fiscal 2006 versus net income of $122,000)
or 0.8% of revenues in the second quarter of Fiscal 2005.

     Income before income taxes decreased to $109,000 during
the  six months ended March 31, 2006,  from $350,000  during
the  same period in the prior year.  The Company recorded  a
tax  provision of $51,000 for the six months ended March 31,
2006  as  compared  to a tax provision of $163,000  for  six
months  ended March 31 2005.  Net income after tax  amounted
to  approximately  $58,000 or 0.2% of  revenues  during  the
first two quarters of Fiscal 2006 versus $187,000 or 0.6% of
revenues during the first two quarters of Fiscal 2005.


Liquidity and Capital Resources

       Net   cash   used   for  operating   activities   was
approximately  $262,000 for the six months ended  March  31,
2006  compared  to  net  cash  provided  by  operations   of
approximately  $486,000 for the six months ended  March  31,
2005.   For  the six months ended March 31, 2006,  cash  was
used   to   finance  the  $456,000   increase  in   accounts
receivable,  and  also  reflects the  decrease  in  accounts
payable and accrued expenses of $101,000.   Net income,  net
of  non-cash charges totaled $281,000.  For the  six  months
ended March 31, 2005, cash was provided by net income net of
non-cash  charges of $481,000 as well as a net  decrease  in
accounts receivable of $276,000, offset by the a decrease in
accounts payable of $148,000.





                             11
<PAGE>
     At March 31, 2006, the Company had cash of $135,000 and
net  working  capital of $1,438,000, compared with  cash  of
$242,000 and net working capital of $1,158,000 respectively,
at  March 31, 2005.  The change in working capital at  March
31,  2006  over March 31, 2005 is primarily attributable  to
the Company's net income during the preceding twelve months,
offset primarily by expenditures made toward the purchase of
a new computer system.

     The  Company's  investing  activities  during  the  six
months  ended  March  31, 2006 were primarily  comprised  of
expenditures  for capital equipment, primarily  representing
purchases of computer hardware for the new computer  system.
For   the   six   months  ended  March  31,  2006,   capital
expenditures  amounted to approximately $319,000,  of  which
approximately $120,000 is financed by a three  year  leasing
arrangement.  Capital expenditures amounted to approximately
$11,000 for the six months ended March 31, 2005.

      During March 2005, Allstates extended a $250,000  loan
to  a  licensee to finance their expansion effort.  The loan
is  being  paid back with weekly payments over  three  years
including interest, at the same rate the Company pays on its
line  of credit with the bank.  The loan is secured  by  the
personal  guarantees  of the licensee  principals.   Through
March  31,  2006,   Allstates  has  collected  $79,454.   of
principal on the loan.
      The  Company  has a commercial line of credit  with  a
bank,  pursuant  to  which  the Company  may  borrow  up  to
$3,000,000,  based on a maximum of 70% of eligible  accounts
receivable.   Per the agreement, which extends  to  February
28,  2007, interest on outstanding borrowings accrues at the
Bank's  prime  rate of interest (7.75% at March  31,  2006).
Outstanding  borrowings on the line of credit at  March  31,
2006 and 2005 were $2,000,000 and $1,000,000, respectively.




Forward Looking Statements

      The  Company  is  making this statement  in  order  to
satisfy  the  "safe  harbor"  provisions  contained  in  the
Private  Securities  Litigation Reform  Act  of  1995.   The
statements   contained  in  all  parts  of   this   document
(including  the portion, if any, appended to the Form  10-K)
including,  but  not  limited  to,  those  relating  to  the
availability  of  cargo  space;  the  Company's  plans  for,
effects,  results and expansion of international  operations
and agreements for international cargo; future international
revenue   and  international  market  growth;   the   future
expansion  and  results of the Company's  terminal  network;
plans  for  local  delivery services  and  truck  brokerage;
future improvements in the Company's information systems and
logistic  systems and services; technological  advancements;
future  marketing results; the effect of litigation;  future
costs  of transportation; future operating expenses;  future
margins;  any seasonality of the Company's business;  future
acquisitions  and the effects, benefits, results,  terms  or
other  aspects  of  any  acquisition;  Ocean  Transportation
Intermediary  License;  ability  to  continue   growth   and
implement  growth  and  business strategy;  the  ability  of
expected sources of liquidity to support working capital and
capital  expenditure requirements; future expectations;  and
any  other  statements regarding future growth, future  cash
needs,  future terminals, future operations, business plans,
future  financial results, financial targets and goals;  and
any  other  statements  which are not historical  facts  are
forward-looking statements. When used in this document,  the
words  "anticipate," "estimate," "expect,"  "may,"  "plans,"
"project" and similar expressions are intended to  be  among
the  statements  that  identify forward-looking  statements.
Such  statements involve risks and uncertainties, including,
but   not  limited  to,  those  relating  to  the  Company's
dependence  on  its  ability to attract and  retain  skilled
managers and other personnel; the intense competition within
the  freight  industry;  the uncertainty  of  the  Company's
ability to manage and continue its growth and implement  its
business   strategy;  the  Company's   dependence   on   the
availability of cargo space to serve its
customers; the effects of regulation; results of litigation;
the Company's vulnerability to general economic
conditions;   the   control  by  the   Company's   principal
shareholder;   risks  of  international  operations;   risks
relating to acquisitions; the Company's future financial and
operating  results, cash needs and demand for its  services;
and  the  Company's  ability to  maintain  and  comply  with
permits and licenses, as well as other


                             12
<PAGE>
factors  detailed in this document and the  Company's  other
filings with the Securities and Exchange Commission.  Should
one or more of these risks or uncertainties materialize,  or
should   underlying  assumptions  prove  incorrect,   actual
outcomes  may  vary  materially from  those  indicated.  The
Company  undertakes no responsibility to update for  changes
related  to  these  or  any other  factors  that  may  occur
subsequent to this filing.



ITEM 3         CONTROLS AND PROCEDURES

(a)   Evaluation of Disclosure Controls and Procedures.  The
Company's   principal   executive  officer   and   principal
financial  officer,  based  on  their  evaluation   of   the
Company's disclosure controls and procedures (as defined  in
Exchange Act Rules 13a-14 and 15d-14) as of a date within 90
days  prior to the filing of this Quarterly Report  on  Form
10Q,  concluded that the Company's disclosure  controls  and
procedures  are adequate and effective for the purposes  set
forth in the definition in the Exchange Act rules.

(b)  Changes in Internal Controls. There were no significant
changes  in  the  Company's internal controls  or  in  other
factors   that  could  significantly  affect  the  Company's
internal controls subsequent to the date of the evaluation.



 PART II

 OTHER INFORMATION


 ITEM 1         LEGAL PROCEEDINGS

Joseph M. Guido v. Allstates WorldCargo, Inc., Sam
DiGiralomo, Barton C. Theile, and Craig D. Stratton.

On October 14, 2004, Joseph M. Guido, the majority
shareholder of the Company, who is also employed by the
Company as its Chairman, commenced an action against the
Company and three of the Company's directors, entitled
"Joseph M. Guido v. Allstates WorldCargo, Inc., Sam
DiGiralomo, Barton C. Theile, and Craig D. Stratton," in the
Superior Court of New Jersey, Chancery Division, Ocean
County (the "First Action").  Messrs. DiGiralomo, Theile and
Stratton are also employed by the Company as its President
and Chief Executive Officer, Executive Vice President and
Chief Operating Officer, and Chief Financial Officer,
respectively.

Mr. Guido alleged that on August 16, 2004, he delivered to the
Company's Secretary (1) an executed Written Consent in Lieu
of a Special Meeting of the Stockholders of Allstates
WorldCargo, Inc. dated August 16, 2004 (the "Guido
Consent"), (2) Amended and Restated Bylaws of the Company
adopted pursuant to the Guido Consent, and (3) a draft
Information Statement pursuant to Section 14(c) of the
Securities Exchange Act of 1934 (the "1934 Act").  Mr. Guido
alleged that, pursuant to the Guido Consent, he had amended
the Company's bylaws to (among other things) expand its
Board of Directors from four to seven members, and had
appointed three persons (alleged to be independent) to fill the
newly created seats.  He alleged that the Company was
required by law to comply with his demand to notify its
shareholders of his action.  He also alleged that the three
individual defendants, both as directors and officers, owed the
Company and its shareholders certain fiduciary duties to direct
that appropriate steps be taken by the Company to allegedly
comply with applicable law in response to the Guido Consent.
Mr. Guido demanded relief enjoining a scheduled special
Board of Directors meeting pending Company's performance
of acts allegedly required by New Jersey law and by the 1934
Act.  Mr. Guido also sought a permanent injunction requiring
the Company and its Secretary to prepare and distribute to the
Company's shareholders all notices allegedly required by state
and federal law in connection with the Guido Consent. Finally,
he sought entry

                             13
<PAGE>


of an order requiring the Company to file and serve upon him,
within seven days after entry of a permanent injunction, a
written report setting forth the manner and form in which the
Company complied with the injunctions.

The Company (and the three individual defendants) opposed
the application for relief upon the grounds that subsequent to
his execution of the Guido Consent, Mr. Guido advised one of
the individual defendants that he had decided not to proceed
with his amendment of the Bylaws or his expansion of the
Board of Directors.  The Defendants also alleged that Mr.
Guido's actions were not in the best interest of the Company,
and motivated by self-interest, that because of such concerns,
the Company needed time to determine its obligations under
the law, and that the purpose of the Special Board Meeting
(among others) was to consider issues pertaining to the request
by Mr. Guido to file the Schedule 14C presented to the
Secretary of the Corporation.

On October 28, 2004, Mr. Guido, by his counsel, filed a
Notice of Voluntary Dismissal Without Prejudice, dismissing
the First Action.  The parties agreed, subject to the terms of
definitive settlement agreements, to settle the issue raised in
the First Action upon the following terms: (1) the Company's
Board of Directors would not be expanded except by
unanimous consent, (2) Mr. Guido and the individual
defendants would enter into a voting agreement pursuant to
which each would agree to vote his respective shares in the
Company for the others as directors of the Company, (3) the
Company would enter into new employment agreements with
the individual defendants (the existing employment
agreements being due to expire on December 31, 2004), (4)
the parties would exchange general releases and (5) the
Company would, to the extent lawfully required by Mr.
Guido's existing employment agreement, reimburse him for
the attorneys fees he incurred in connection with the action.  It
was anticipated that the complete terms of a settlement would
be agreed upon, and that formal settlement documents would
be prepared and executed.  Such formal documentation was
prepared and delivered to Mr. Guido's counsel on December
27, 2004.

Mr. Guido refused to execute formal settlement
documentation, and commenced a second action, in the same
court and entitled in the same style, seeking the same relief
(the "Second Action").  The Defendants answered, denying
the allegations, and asserting counterclaims against Mr. Guido
and his wife, Teresa Guido.

On April 5, 2005, the parties agreed to a full and final
settlement of the Second Action, the terms of which were
placed on the record in court, and the parties acknowledged to
the court, under oath, their obligation to be bound thereby.
The material terms of that agreement (referred to as the
"Settlement Agreement") were:

(1) the Company's Board of Directors would be expanded
from four to seven members, and the Court would appoint the
three new directors, (2) vacancies thereafter would be filled by
vote of the remaining Board members, and in the event of a tie
or deadlock in filling any vacancy, the vacancy would be filled
by an arbitrator chosen by the Board, (3) Mr. Guido and the
individual defendants would enter into a voting agreement
pursuant to which each would agree to vote his respective
shares of the Company for the others as directors of the
Company, (4) the Company would enter into new employment
agreements with Mr. Guido and the individual defendants, (5)
the parties would exchange general releases and (6) the
Company would, to the extent lawfully required by Mr.
Guido's previous employment agreement, reimburse him for
the attorneys fees he incurred in connection with the action.
On May 27, 2005, a final judgment was ordered, granted and
entered by the court in accordance with the settlement terms
agreed to by the parties on April 5, 2005.  Finally, on June 6,
2005, Court declared the new employment agreements, the
voting agreement, and the mutual general release to be
effective as of April 5, 2005, notwithstanding any lack of
signatures.  Pursuant to the mutual general release, the
Company and each of Mr. Guido, his wife, and Messrs.
DiGiralomo, Theile and Stratton each released and forever
discharged each and all of the others from any and all causes
of actions, known and unknown, then existing.

                             14
<PAGE>

Pursuant to the terms of the settlement, on June 6, 2005, the
Company and Messrs. Guido, DiGiralomo, Theile and Stratton
(collectively, for purposes of this section, the "Voters")
entered into a Voting Agreement whereby each of the Voters
agreed to vote all of the capital stock of the Company that
each Voter is entitled to vote, for each other as directors of the
Company. Further, pursuant to the terms of the Voting
Agreement, any action taken to expand or in any way modify
the composition of the Board of Directors of the Company
from its present constitution shall require the unanimous
consent of all of the Voters.  Additionally, in the event that
shareholder action is taken to alter or amend the Certificate of
Incorporation or Bylaws of the Company, the Voters agree to
vote all of their shares unanimously in the same manner.  If
the Voters are unable to reach a unanimous decision, then the
proposed change shall be rejected.  The Voting Agreement
terminates when each of Messrs. Guido, DiGiralomo, Theile
and Stratton no longer own, control or hold any shares of
capital stock of the Company.

For so long as the Voting Agreement remains in effect, the
Voters also agreed, with a certain agreed-to exception, not to
transfer any of the shares of capital stock of the Company they
hold without the prior written consent of all of the Voters,
unless the other party to any such transaction agrees in writing
to join and be bound by all of the terms of the Voting
Agreement.  To that end, the Voters agreed to the placement
of an additional restrictive legend on all of their shares
(including subsequently acquired shares), which restrictive
legend shall read:

"THE SECURITIES REPRESENTED BY THIS
CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON
TRANSFER, VOTING AND OTHER RESTRICTIONS
PURSUANT TO A VOTING AGREEMENT ENTERED
INTO BY THE COMPANY, THE HOLDER OF THIS
CERTIFICATE AND CERTAIN OTHER STOCKHOLDERS
OF THE COMPANY, A COPY OF WHICH IS AVAILABLE
FOR INSPECTION AT THE OFFICES OF THE
SECRETARY OF THE COMPANY."

Finally, during the term of the Voting Agreement, the Voters
agreed not to enter into any agreements that would be
inconsistent with any of the provisions therein.

Also pursuant to the terms of the settlement, on June 6, 2005
the Company and Allstates Air Cargo, Inc., its wholly owned
subsidiary, (together, the Employer) entered into individual
employment agreements with each of Messrs. DiGiralomo (as
President and Chief Executive Officer), Guido (as Chairman),
Theile (as Executive Vice President and Chief Operating
Officer) and Stratton (as Chief Financial Officer).  Messrs.
DiGiralomo, Guido, Theile and Stratton are collectively
referred to herein as Executives.  Each of the employment
agreements is effective as of April 5, 2005, and expires on
December 31, 2009, but may be extended if agreed to in
writing by the parties.  Per each of the employment
agreements, Mr. DiGiralomo's annual salary shall be
$250,000; Mr. Guido's annual salary shall be $370,000; Mr.
Theile's annual salary shall be $250,000; and Mr. Stratton's
annual salary shall be $185,000.  Each of these salaries is
subject to an annual increase at the discretion of the
Company's Board of Directors.  Additionally, each of Messrs.
DiGiralomo, Guido and Theile shall receive an annual bonus
payment equal to 3% of the increase of the net profits of the
Employer from the fiscal year end 2003 to the fiscal year end
2004.  Each of Messrs. DiGiralomo, Guido, Theile and
Stratton remains eligible to participate in the Employer's stock
option plan, 401(k) retirement plan and insurance plans.

Excluding the above-described salary and bonus information,
the material terms of each of the Executives' employment
agreements are substantially the same.  In the event any
Executive dies during the term of his respective employment
agreement, then for the longer of the remaining term of the
employment agreement or three years, the Employer shall
continue to pay the Executive's then current base salary to the
Executive's designated beneficiary or estate and will also pay
for insurance for any Executive's surviving immediate family.
If, within twenty-four months following a "Change of
Control" of the Employer, as defined in each of the
employment agreements, the Executive voluntarily resigns or
retires, the Employer shall pay to the Executive all
compensation and benefits due to him up to the date of his
termination, including, but not limited to, base salary and any
expense reimbursement, and within one month of termination,
a lump-sum payment equal to 299% of the Executive's then
current base salary, bonus for the fiscal year end 2004, and of
the amount reimbursed to the Executive for business-related
expenses for the


                             15
<PAGE>

calendar year preceding the termination.  Additionally, any
options and/or restricted stock granted to the Executive shall
become fully vested and registered as of the date of the
termination.  The Executive shall have the right to exercise all
of his options for a period of five years from the date of the
termination.  Additionally, all then-existing life and health
insurance benefits shall continue for the Executive and his
immediate family for a period of five years from the date of
termination.  In the event of a "For Cause" termination, as
defined in each of the employment agreements, the Employer
shall pay to the Executive all compensation and benefits due
to him up to the date of his termination, including but not
limited to base salary and expense reimbursement. At any time
after 180 days have elapsed from the date of his respective
employment agreement, each Executive shall have the right to
terminate his employment agreement on 90 days written
notice to the Employer.  In the event of such termination, the
Executive shall be entitled to such compensation that is equal
to the "For Cause" termination compensation described above.
A termination that is neither a Change of Control termination,
a For Cause termination, is due to the Executive's death, nor a
termination by the Executive as provided above, is a "Without
Cause" Termination.  In the event of a Without Cause
termination, the Executive shall be entitled to such
compensation that is equal to the Change of Control
termination compensation described above.  Finally, if the
Employer breaches any material term of each respective
employment agreement or reduces the Executive's respective
title or responsibilities, the Executive may, at his option, elect
to leave the Employer, in which case he shall be entitled to all
of the Change of Control termination compensation described
above, except that the lump sum payment to be paid to the
Executive would be limited to 100% of the Executive's base
salary and bonus (if applicable).

On July 6, 2005, to effectuate part of the settlement of the
Second Action, the Court entered an Order (the "July 6
Order") that expanded the Company's Board of Directors,
effective immediately, from four members to seven.  The July
6 Order also appointed, effective immediately, Messrs. Joseph
Buckelew, Alan E. Meyer, and Charles F. Starkey, to the
Board.

On August 24, 2005, upon the Company's Motion for
Reconsideration, the Court entered and order amending the
July 6 Order (the "First August 24 Order").  Instead of
declaring the Board expanded, and appointing Messrs.
Buckelew, Meyer, and Starkey to the Board, the July 6 Order
was amended to show that the parties agreed that a Unanimous
Written Consent of the Directors of Allstates WorldCargo,
Inc. (attached to the First August 24 Order, and referred to as
the "Directors' Consent") was consistent with the Settlement
Agreement, and shall be deemed signed by Messrs.
DiGiralomo, Theile, Stratton, and Guido.

Pursuant to the Directors' Consent, the Board of Directors
amended Section 3.02 of the Bylaws to provide that the Board
of Directors shall consist of seven members.  Prior to the
amendment, Section 3.02 of the Bylaws provided that the
Board of Directors shall consist of not less than one nor more
than ten Directors.  The precise number of Directors within
this range was to be fixed by the Board each year before the
annual meeting of shareholders.  The number of Directors
prior to the amendment was four.

Pursuant to the Directors' Consent, the Board of Directors
appointed Joseph Buckelew, Alan E. Meyer, C.P.A., and
Charles F. Starkey, Esq. to fill the vacancies created by the
expansion of the Board, to serve in accordance with the
Settlement Agreement.

Pursuant to the Directors' Consent, the Board of Directors also
amended Sections 3.12(b) and 3.12(c) of the Bylaws.  Prior to
the amendment described herein, Section 3.12(b) provided that
vacancies in the Board may be filled by the affirmative vote of
a majority of the remaining Directors then in office, even if
their number is insufficient to constitute a quorum.  A director
so elected was to hold office until a successor is elected and
qualified at the next annual meeting of the shareholder.  As
amended, Section 3.12(b) provides that any vacancy shall be
filled in the manner provided therein, and that in the event of a
deadlock, or a three-to-three vote, with respect to filling any
vacancy, an independent arbitrator appointed by the Board
shall select the person to fill the vacancy.  The amended
Bylaw also provides that any director so appointed pursuant to
Section 3.12(b) shall also hold office in accordance with the
Settlement Agreement.Prior to the amendment described
herein, Section 3.12(c) provided that if a director resigns from
the Board effective at some future date, the future vacancy
may be filled by the affirmative vote of a majority of the
directors then


                             16
<PAGE>
in office, including the director who has resigned, even if their
number is insufficient to constitute a quorum.  The term of the
newly elected director would begin when the resignation
becomes effective.  A director so elected was to hold office
from the effective date of the predecessor's resignation until a
successor is elected and qualified at the next annual or special
meeting of the shareholders.  As amended, Section 3.12(c)
provides that any future vacancy shall be filled in the manner
provided therein, and that in the event of a deadlock, or a
three-to-three vote, with respect to filling any vacancy, an
independent arbitrator appointed by the Board shall select the
person to fill the vacancy.  The amended By-Law also
provides that any director so appointed pursuant to Section
3.12(c) shall also hold office in accordance with the
Settlement Agreement.

In order to ensure that Messrs. Buckelew, Meyer, and Starkey
(or their successors duly appointed pursuant to the Bylaws)
continue to serve pursuant to the terms of the Settlement
Agreement, and not at the pleasure of the majority
shareholder, the Court entered a second order on August 24,
2005 (the "Second August 24 Order"), which provides that the
parties are required by the Settlement Agreement to nominate
and vote for, as Directors, Messrs. Buckelew, Starkey, and
Meyer (or their duly appointed successors) at future meetings
of the Company's shareholders at which directors are to be
chosen.

On November 7, 2005, the Court entered a Consent Order
pursuant to which Mr. and Mrs. Guido waived their right to
pursue reimbursement from the defendants of any and all
counsel fees paid or incurred in connection with the matter.
Accordingly, there are no issues left outstanding in the matter,
and it has been finally concluded.
Liberty Mutual Insurance Company v. Lightning Freight Inc.,
GTD Logistics, Inc., and Gilberto Cordova.

The Company's subsidiary, GTD Logistics, Inc. ("GTD") is a
defendant in an action pending in Los Angeles Superior Court,
Docket No. 326868, brought by Liberty Mutual Insurance
Company ("Liberty"), regarding freight brokerage services
that GTD provided for a shipment that was allegedly stolen.
The tractor trailer hauling the shipment allegedy contained
several million dollars of hard disk drives.  After the truck and
trailer were allegedly stolen, the owner of the contents of the
trailer made a claim against UPS Supply Chain Solutions, the
shipper, who then made a claim against its insurance
company, Liberty.  Liberty is seeking to recover from GTD
and also the carrier and truck driver the amount that is
expended to cover the loss suffered by its insured, the owner
of the contents of the trailer.  The Complaint requests damages
of not less than $1,400,000.

Liberty alleges that when GTD agreed to provide brokerage
services for the shipment of the cargo, GTD also promised to
select a motor carrier with no less than $1 million in cargo
insurance coverage, and to select a carrier that would follow
certain asset protection rules.  Liberty alleges breach of
contract and negligence against GTD for failure to comply
with these alleged promises.  GTD and Lightning Freight, Inc.
the carrier, filed Cross-Complains against each other and
Gilberto Cordova, the truck driver.  Gilberto Cordova never
appeared in the matter and the Court entered a default against
him.

The parties have reached a settlement of the action, pursuant
to which GTD will pay the sum of ten thousand dollars
($10,000) in full and complete settlement of all claims.  On
March 6, 2006 the Court granted the parties' Application for
Determination of Good Faith Settlement Pursuant California
Code of Civil Procedure, which would bars any other joint
tortfeasor or co-obligor from any further claims against GTD
arising out of the transaction.  The entry of that March 6 Order
finalized the settlement of the action, and on March 8 GTD
submitted the settlement payment, thus completing its
obligations under the settlement.

Jeffrey H. Mims, Chapter 7 Trustee v. Allstates WorldCargo,
Inc.

On or about May 25, 2005, the Company was made a
defendant in an Adversary Proceeding brought by the
bankruptcy trustee of Mosaic Group US., Inc, to recover an
alleged preferential transfer under 11 U.S.C. Sec. 547 in the
sum of approximately $191,000, and a post-petition transwer
under 11 U.S.C. Sec. 549, in the sum of approximately
$18,000.  The parties reached a settlement in April 2006,
pursuant to which the bankruptcy trustee agreed to accept the
$45,000 in full settlement of all claims.  The settlement is
subject to the approval of the Bankruptcy Court, and a motion
seeking such approval was filed on or about April 26, 2006.
No hearing will be conducted on the motion unless written
objections are filed by the close of business on May 15, 2006,
in which case a hearing will be held on May 19, 2006; if there
are no written objections, the relief requested shall be deemed
unopposed, and an order granting the requested relief will be
entered.  As of the date hereof, there have been no written
objections filed.  The Company has already made the
settlement payment, which payment is being held in escrow by
the trustee's attorney.

                             17
<PAGE>

Masterbrush, LLC and B&G Plastics, Inc. v. Allstates
Logistics, Inc. and T.H. Weiss, Inc.

On or about December 5, 2005, Masterbrush, LLC
("Masterbrush") and B&G Plastics, Inc. ("B&G") commenced
an action against the Company's wholly-owned subsidiary
Allstates Logistics, Inc. ("ALI") and T.H. Weiss, Inc.
("Weiss"), alleging various causes of action arising
out of the importation by Masterbrush
of a quantity of natural bristle paintbrushes produced in China
(the "Brushes").

The Complaint alleges that plaintiffs retained ALI to expedite
the importation of the Brushes into the United States, that ALI
wrongfully failed to advise plaintiffs that the Brushes were
subject to federal antidumping duties of 351.92 percent (the
"Antidumping Duty") in addition to the 4 percent normal duty,
and that by reason of ALI's (alleged) failure to so advise
plaintiffs, plaintiffs were required by U.S. Customs to pay the
Antidumping Duty, in the amount of $422,281.64.  The
plaintiffs seek to recover compensatory and consequential
damages.

In March 2006, Weiss filed a Motion for Summary Judgment
seeking to dismiss the action, alleging that plaintiffs failed to
exhaust their administrative remedies with the United States
Bureau of Customs and Border Patrol.  On or about May 5,
2006, the Court denied that motion.

The action is in its initial discovery stage.





 ITEM 2   CHANGES IN SECURITIES AND USE OF PROCEEDS

 NONE


 ITEM 3   DEFAULTS ON SENIOR SECURITIES

 NONE


 ITEM 4   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

 NONE


ITEM 5    OTHER INFORMATION

 NONE


 ITEM 6   EXHIBITS AND REPORTS ON FORM 8-K

          (a)  Exhibits
               None

          (b)  Reports on Form 8-K
               None











                             18
<PAGE>


 SIGNATURES

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

 ALLSTATES WORLDCARGO, INC.

 BY:       /s/ SAM DIGIRALOMO                   DATED:    May 15, 2006
            Sam DiGiralomo, President and CEO


 BY:      /s/ Craig D. Stratton                 DATED:     May 15, 2006
            Craig D. Stratton, CFO, Secretary,
            Treasurer and Principal Financial Officer





                             19