**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**Washington,      D.C. 20549**

**Form      10-Q**

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

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

**MODTECH      HOLDINGS, INC.**

**(Exact      name of registrant as specified in its charter)**

| **Delaware**                                                                                        | **33                - 0825386**                                           |
|-----------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------|
| **(State                or other jurisdiction of****incorporation                or organization)** | **(I.R.S.                Employer****Identification                No.)** |
|                                                                                                |                                                                      |
| **2830                Barrett Avenue, Perris, CA**                                                  | **92571**                                                                 |
| **(Address                of principal executive office)**                                          | **(Zip                Code)**                                             |

**(951)      943-4014**

**(Registrant’s      telephone number including area code)**

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**Modtech      Holdings, Inc.**

**Index      to Form 10-Q**

|                                            |                                                                                                                          |                        |
|-------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------|-----------------------------|
| **PART                  I.**                    | **FINANCIAL                  INFORMATION**                                                                                    | **Page                  #** |
|                                            |                                                                                                                          |                        |
| Item 1.                                    | Financial                  Statements (Unaudited)                                                                             | 3                           |
|                                            |                                                                                                                          |                        |
|                                            | Condensed                  Consolidated Balance Sheets                                                                        |                        |
|                                            | As                  of September 30, 2007 and December 31, 2006                                                          | 4                           |
|                                            |                                                                                                                          |                        |
|                                            | Condensed                  Consolidated Statements of Operations                                                              |                        |
|                                            | For                  the Three and Nine Months Ended September 30, 2007 and                  2006                             | 5                           |
|                                            |                                                                                                                          |                        |
|                                            | Condensed                  Consolidated Statements of Cash Flows                                                              |                        |
|                                            | For                  the Nine Months Ended September 30, 2007 and 2006                                                        | 6                           |
|                                            |                                                                                                                          |                        |
|                                            | Notes                  to Unaudited Interim Condensed Consolidated Financial                  Statements                      | 7-13                        |
|                                            |                                                                                                                          |                        |
| Item 2.                                    | Management’s                  Discussion and Analysis of Financial Condition and Results of                  Operations | 14-20                       |
|                                            |                                                                                                                          |                        |
| Item 3.                                    | Quantitative                  and Qualitative Disclosures about Market Risk                                                   | 21                          |
|                                            |                                                                                                                          |                        |
| Item 4T.                                   | Controls                  and Procedures                                                                                      | 22                          |
|                                            |                                                                                                                          |                        |
|                                            |                                                                                                                          |                        |
| **PART                  II. OTHER INFORMATION** |                                                                                                                          |
|                                            |                                                                                                                          |                        |
| Item 1.                                    | Legal                  Proceedings                                                                                            | 23                          |
|                                            |                                                                                                                          |                        |
| Item                  1A.                       | Risk                  Factors                                                                                                 | 23                          |
|                                            |                                                                                                                          |                        |
| Item 2.                                    | Unregistered                  Sales of Equity Securities and Use of Proceeds                                                  | 23                          |
|                                            |                                                                                                                          |                        |
| Item 3.                                    | Defaults                  upon Senior Securities                                                                              | 23                          |
|                                            |                                                                                                                          |                        |
| Item 4.                                    | Submission                  of Matters to a Vote of Security Holders                                                          | 23                          |
|                                            |                                                                                                                          |                        |
| Item 5.                                    | Other                  Information                                                                                            | 23                          |
|                                            |                                                                                                                          |                        |
| Item 6.                                    | Exhibits                                                                                                                      | 24-27                       |
|                                            |                                                                                                                          |                        |
| Signatures                                      |                                                                                                                          | 28                          |
|                                            |                                                                                                                          |                        |
|                                            |                                                                                                                          |                        |
|                                            |                                                                                                                          |                        |

----

**MODTECH      HOLDINGS, INC.**

**FORM      10-Q**

**FOR      THE QUARTER ENDED SEPTEMBER 30, 2007**

**PART      I. FINANCIAL INFORMATION**

**Item      1. Financial Statements**

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| ** MODTECH HOLDINGS, INC. AND SUBSIDIARIES **                                                                      |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|  Condensed Consolidated Balance Sheets                                                                                  |   |
|  (Unaudited)                                                                                                                           |   |
|                                                                                                                                             |   |   |   |   |   |
|                                                                                                                                             |   | **September 30,** |   | **December 31,** |   |
|                                                                                                                                             |   | **2007** |   | **2006** |   |
|  Assets                                                                                                                                |   |   |   |   |   |
|  Current assets:                                                                                                                  |   |   |   |   |   |
|  Cash and cash equivalents                                                                                              |   | $ | 2,846,000 |   | $ | 6,292,000 |   |
|  Restricted cash                                                                                                                  |   |   | 3,348,000 |   |   | 9,139,000 |   |
|  Contracts receivable, less allowance for contract adjustments of $2,165,000 and          |   |   |   |   |   |   |   |
|      $2,358,000 in 2007 and 2006, respectively                                            |   |   | 17,567,000 |   |   | 27,910,000 |   |
|  Costs and estimated earnings in excess of billings on contracts                          |   |   | 11,744,000 |   |   | 16,144,000 |   |
|  Inventories                                                                                                                           |   |   | 5,839,000 |   |   | 6,282,000 |   |
|  Prepaid assets                                                                                                                   |   |   | 604,000 |   |   | 1,032,000 |   |
|  Insurance receivable                                                                                                             |   |   | 3,391,000 |   |   | 3,535,000 |   |
|  Other current assets                                                                                                        |   |   | 405,000 |   |   | 112,000 |   |
|                                                                                                                                             |   |   |   |   |   |   |   |
|  Total current assets                                                                                                        |   |   | 45,744,000 |   |   | 70,446,000 |   |
|                                                                                                                                             |   |   |   |   |   |   |   |
|  Property and equipment, net                                                                                            |   |   | 10,278,000 |   |   | 11,118,000 |   |
|  Goodwill                                                                                                                              |   |   | - |   |   | 38,303,000 |   |
|  Debt issuance costs, net                                                                                               |   |   | 862,000 |   |   | 1,369,000 |   |
|  Other assets                                                                                                                     |   |   | 1,953,000 |   |   | 1,574,000 |   |
|                                                                                                                                             |   |   |   |   |   |   |   |
|  Total assets                                                                                                                     |   | $ | 58,837,000 |   | $ | 122,810,000 |   |
|                                                                                                                                             |   |   |   |   |   |   |   |
|  Liabilities and Shareholders’ Equity                                                                             |   |   |   |   |   |   |   |
|  Current liabilities:                                                                                                             |   |   |   |   |   |   |   |
|  Accounts payable                                                                                                                 |   | $ | 13,208,000 |   | $ | 22,419,000 |   |
|  Accrued liabilities                                                                                                              |   |   | 7,328,000 |   |   | 16,190,000 |   |
|  Billings in excess of costs and estimated earnings on contracts                          |   |   | 2,702,000 |   |   | 2,009,000 |   |
|  Current maturities of long-term debt, net                                                                    |   |   | 2,646,000 |   |   | 3,508,000 |   |
|                                                                                                                                             |   |   |   |   |   |   |   |
|  Total current liabilities                                                                                                   |   |   | 25,884,000 |   |   | 44,126,000 |   |
|                                                                                                                                             |   |   |   |   |   |   |   |
|  Long-term debt, net, excluding current portion                                                               |   |   | 9,497,000 |   |   | 10,326,000 |   |
|  Other long-term liabilities                                                                                                 |   |   | 1,457,000 |   |   | 1,517,000 |   |
|                                                                                                                                             |   |   |   |   |   |   |   |
|  Total liabilities                                                                                                                |   |   | 36,838,000 |   |   | 55,969,000 |   |
|  Shareholders’ equity:                                                                                                      |   |   |   |   |   |   |   |
|  Series A preferred stock, $0.01 par value. Authorized 5,000,000 shares;                  |   |   |   |   |   |   |   |
|      no shares issued and outstanding in 2007 and 2006                     |   |   | - |   |   | - |   |
|  Common stock, $0.01 par value. Authorized 55,000,000 shares; issued and                  |   |   |   |   |   |   |   |
|      outstanding 21,419,415 and 21,008,855 in 2007 and 2006, respectively  |   |   | 214,000 |   |   | 210,000 |   |
|  Additional paid-in capital                                                                                                  |   |   | 136,288,000 |   |   | 133,571,000 |   |
|  Accumulated deficit                                                                                                              |   |   | (114,503,000 | ) |   | (66,940,000 | ) |
|                                                                                                                                             |   |   |   |   |   |   |   |
|  Total shareholders’ equity                                                                                            |   |   | 21,999,000 |   |   | 66,841,000 |   |
|                                                                                                                                             |   |   |   |   |   |   |   |
|  Total liabilities and shareholders’ equity                                                                  |   | $ | 58,837,000 |   | $ | 122,810,000 |   |

*See        notes to unaudited condensed consolidated financial        statements.*

----

|                                                                                  |   |    |   |                                         |       |                                        |   |                 |   |                 |        |
|---------------------------------------------------------------------------------------|--------|--------------|--------|----------------------------------------------|------------|---------------------------------------------|--------|----------------------|--------|----------------------|-------------|
|                                                                                  |   |    |   |                                         |       |                                        |   |                 |   |                 |        |
|  ** MODTECH HOLDINGS, INC. AND SUBSIDIARIES **     |   |
|   Condensed Consolidated Statements of Operations  |
|   (Unaudited)                                                          |   |
|                                                                        |   |         |   |                                         |
|                                                                                  |   |    |   | ** Three Months Ended ** |       | ** Nine Months Ended ** |   |
|                                                                                  |   |    |   | ** September 30, **           |       | ** September 30, **          |   |
|                                                                                  |   |    |   | ** 2007 **                         |       | ** 2006 **                        |   | ** 2007 ** |   | ** 2006 ** |        |
|                                                                                  |   |    |   |                                         |       |                                        |   |                 |   |                 |        |
|  Net sales                                                             |   |         |   | $                                            | 21,817,000 |                                        | $      | 45,583,000           |   | $                    | 73,348,000  |   | $ | 126,794,000 |   |
|  Cost of goods sold                                          |   |         |   |                                         | 23,024,000 |                                        |   | 42,668,000           |   |                 | 73,995,000  |   |   | 118,724,000 |   |
|                                                                                  |   |         |   |                                         |       |                                        |   |                 |   |                 |        |   |   |   |   |
|   Gross (loss) profit                                        |   |         |   |                                         | (1,207,000 | )                                           |   | 2,915,000            |   |                 | (647,000    | ) |   | 8,070,000 |   |
|                                                                                  |   |         |   |                                         |       |                                        |   |                 |   |                 |        |   |   |   |   |
|  Selling, general and administrative expenses           |   |         |   |                                         | 3,737,000  |                                        |   | 3,672,000            |   |                 | 11,118,000  |   |   | 10,526,000 |   |
|  Impairment loss on goodwill                                 |   |         |   |                                         | -          |                                        |   | -                    |   |                 | 38,303,000  |   |   | - |   |
|                                                                                  |   |         |   |                                         |       |                                        |   |                 |   |                 |        |   |   |   |   |
|   Loss from operations                                       |   |         |   |                                         | (4,944,000 | )                                           |   | (757,000             | )      |                 | (50,068,000 | ) |   | (2,456,000 | ) |
|                                                                                  |   |         |   |                                         |       |                                        |   |                 |   |                 |        |   |   |   |   |
|  Other (expense) income:                                          |   |         |   |                                         |       |                                        |   |                 |   |                 |        |   |   |   |   |
|   Interest expense                                                |   |         |   |                                         | (448,000   | )                                           |   | (379,000             | )      |                 | (1,506,000  | ) |   | (2,044,000 | ) |
|   Interest income                                                 |   |         |   |                                         | 61,000     |                                        |   | 60,000               |   |                 | 200,000     |   |   | 299,000 |   |
|   Loss on extinguishment of debt                   |   |         |   |                                         | -          |                                        |   | -                    |   |                 | -           |   |   | (2,057,000 | ) |
|   Gain on warrant and embedded derivatives    |   |         |   |                                         | 783,000    |                                        |   | 2,220,000            |   |                 | 6,552,000   |   |   | 6,698,000 |   |
|   Amortization of debt issuance costs              |   |         |   |                                         | (122,000   | )                                           |   | (146,000             | )      |                 | (507,000    | ) |   | (600,000 | ) |
|   Accretion of debt discount                            |   |         |   |                                         | (533,000   | )                                           |   | (569,000             | )      |                 | (2,321,000  | ) |   | (1,949,000 | ) |
|   Early debt conversion fee                             |   |         |   |                                         | -          |                                        |   | -                    |   |                 | -           |   |   | (1,864,000 | ) |
|   Other income, net                                          |   |         |   |                                         | 40,000     |                                        |   | 74,000               |   |                 | 87,000      |   |   | 278,000 |   |
|                                                                                  |   |         |   |                                         |       |                                        |   |                 |   |                 |        |   |   |   |   |
|                                                                                  |   |         |   |                                         | (219,000   | )                                           |   | 1,260,000            |   |                 | 2,505,000   |   |   | (1,239,000 | ) |
|                                                                                  |   |         |   |                                         |       |                                        |   |                 |   |                 |        |   |   |   |   |
|  (Loss) income before income taxes                      |   |         |   |                                         | (5,163,000 | )                                           |   | 503,000              |   |                 | (47,563,000 | ) |   | (3,695,000 | ) |
|  Income tax expense (benefit)                                |   |         |   |                                         | -          |                                        |   | -                    |   |                 | -           |   |   | - |   |
|                                                                                  |   |         |   |                                         |       |                                        |   |                 |   |                 |        |   |   |   |   |
|  Net (loss) income                                                |   |         |   | $                                            | (5,163,000 | )                                           | $      | 503,000              |   | $                    | (47,563,000 | ) | $ | (3,695,000 | ) |
|                                                                                  |   |         |   |                                         |       |                                        |   |                 |   |                 |        |   |   |   |   |
|  Basic (loss) income per common share              |   |              |   | $                                            | (0.24      | )                                           | $      | 0.03                 |   | $                    | (2.23       | ) | $ | (0.20 | ) |
|                                                                                  |   |         |   |                                         |       |                                        |   |                 |   |                 |        |   |   |   |   |
|  Basic weighted-average shares outstanding                   |   |         |   |                                         | 21,419,000 |                                        |   | 18,966,000           |   |                 | 21,334,000  |   |   | 18,044,000 |   |
|                                                                                  |   |         |   |                                         |       |                                        |   |                 |   |                 |        |   |   |   |   |
|  Diluted (loss) income per common share            |   |         |   | $                                            | (0.24      | )                                           | $      | 0.03                 |   | $                    | (2.23       | ) | $ | (0.20 | ) |
|                                                                                  |   |         |   |                                         |       |                                        |   |                 |   |                 |        |   |   |   |   |
|  Diluted weighted-average shares outstanding                 |   |         |   |                                         | 21,419,000 |                                        |   | 19,432,000           |   |                 | 21,334,000  |   |   | 18,044,000 |   |

*See        notes to unaudited condensed consolidated financial        statements.*

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|                                                                                                                                           |   |                                                    |        |     |   |
|------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------|-------------|----------|--------|
| ** MODTECH HOLDINGS, INC. AND SUBSIDIARIES **                                                                    |   |
|  Condensed Consolidated Statements of Cash Flows                                                            |   |
|  (Unaudited)                                                                                                                         |   |
|                                                                                                                                           |   |                                                    |        |     |   |
|                                                                                                                                           |   |                                                    |        |
|                                                                                                                                           |   | **Nine Months Ended September 30,** |        |
|                                                                                                                                           |   | **2007**                                                |        | **2006** |   |
|  Cash flows from operating activities:                                                                           |   |                                                    |        |     |   |
|  Net loss                                                                                                                       |   | $                                                       | (47,563,000 | )        | $      | (3,695,000 | ) |
|  Adjustments to reconcile net loss to net cash used in operating activities:  |   |                                                    |        |     |   |   |   |
|  Depreciation and amortization                                                                                             |   |                                                    | 1,708,000   |     |   | 1,905,000 |   |
|  Provision for contract adjustments                                                                                   |   |                                                    | 226,000     |     |   | - |   |
|  Loss on extinguishment of debt                                                                                  |   |                                                    | -           |     |   | 2,057,000 |   |
|  Gain on sale of equipment                                                                                       |   |                                                    | (55,000     | )        |   | - |   |
|  Stock compensation expense                                                                                                |   |                                                    | 1,256,000   |     |   | 773,000 |   |
|  Impairment loss on goodwill                                                                                          |   |                                                    | 38,303,000  |     |   | - |   |
|  Gain on derivative liability                                                                                         |   |                                                    | (6,552,000  | )        |   | (6,698,000 | ) |
|  Accretion of debt discount                                                                                           |   |                                                    | 2,321,000   |     |   | 1,948,000 |   |
|  Early debt conversion fees settled with shares of common stock                         |   |                                                    | -           |     |   | 1,864,000 |   |
|  Decrease (increase) in assets:                                                                                       |   |                                                    |        |     |   |   |   |
|  Restricted cash                                                                                                                |   |                                                    | 1,326,000   |     |   | - |   |
|  Contracts receivable                                                                                                           |   |                                                    | 10,117,000  |     |   | 11,058,000 |   |
|  Costs and estimated earnings in excess of billings                                               |   |                                                    | 4,400,000   |     |   | (5,171,000 | ) |
|  Inventories                                                                                                                         |   |                                                    | 443,000     |     |   | 4,083,000 |   |
|  Other current and non-current assets                                                                            |   |                                                    | (100,000    | )        |   | (2,672,000 | ) |
|  (Decrease) increase in liabilities:                                                                                  |   |                                                    |        |     |   |   |   |
|  Accounts payable                                                                                                               |   |                                                    | (9,211,000  | )        |   | 160,000 |   |
|  Accrued liabilities                                                                                                            |   |                                                    | (2,310,000  | )        |   | (5,240,000 | ) |
|  Billings in excess of costs                                                                                     |   |                                                    | 693,000     |     |   | (837,000 | ) |
|                                                                                                                                           |   |                                                    |        |     |   |   |   |
|  Net cash used in operating activities                                                                      |   |                                                    | (4,998,000  | )        |   | (465,000 | ) |
|                                                                                                                                           |   |                                                    |        |     |   |   |   |
|  Cash flows from investing activities:                                                                           |   |                                                    |        |     |   |   |   |
|  Purchase of property and equipment                                                                              |   |                                                    | (922,000    | )        |   | (1,266,000 | ) |
|  Proceeds from sale of property and equipment                                                          |   |                                                    | 556,000     |     |   | - |   |
|                                                                                                                                           |   |                                                    |        |     |   |   |   |
|  Net cash used in investing activities                                                                      |   |                                                    | (366,000    | )        |   | (1,266,000 | ) |
|                                                                                                                                           |   |                                                    |        |     |   |   |   |
|  Cash flows from financing activities:                                                                           |   |                                                    |        |     |   |   |   |
|  Net principal payments under revolving credit line                                                    |   |                                                    | -           |     |   | (1,519,000 | ) |
|  Principal payments on long-term debt                                                                            |   |                                                    | (2,547,000  | )        |   | (12,895,000 | ) |
|  Decrease in restricted cash                                                                                          |   |                                                    | 4,465,000   |     |   | 11,452,000 |   |
|  Payment of debt issuance costs                                                                                  |   |                                                    | -           |     |   | (523,000 | ) |
|  Net proceeds from issuance of common stock                                                            |   |                                                    | -           |     |   | 5,941,000 |   |
|                                                                                                                                           |   |                                                    |        |     |   |   |   |
|  Net cash provided by financing activities                                                                  |   |                                                    | 1,918,000   |     |   | 2,456,000 |   |
|                                                                                                                                           |   |                                                    |        |     |   |   |   |
|  Net (decrease) increase in cash and cash equivalents                                             |   |                                                    | (3,446,000  | )        |   | 725,000 |   |
|  Cash and cash equivalents at beginning of period                                                 |   |                                                    | 6,292,000   |     |   | 3,263,000 |   |
|                                                                                                                                           |   |                                                    |        |     |   |   |   |
|  Cash and cash equivalents at end of period                                                       |   | $                                                       | 2,846,000   |     | $      | 3,988,000 |   |
|                                                                                                                                           |   |                                                    |        |     |   |   |   |
|  Non-cash financing activity:                                                                                              |   |                                                    |        |     |   |   |   |
|  Conversion of convertible debt to common stock                                                        |   | $                                                       | 1,466,000   |     | $      | 8,333,000 |   |

*See        notes to unaudited condensed consolidated financial statements*

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**MODTECH        HOLDINGS, INC.**

Notes        to        Unaudited Interim Condensed Consolidated Financial        Statements

**1)               **
**Description        of Business and Basis of Presentation**

***Description        of Business***

***Basis        of Presentation***

----

***Reclassification***

***Reporting        of Taxes Included in Sales***

gross sales        basis.        For the        three months ended September 30, 2007 and 2006, such amounts totaled $200,000        and $485,000, respectively. For the nine months ended September 30, 2007        and        2006, such amounts totaled $1,033,000 and $1,268,000, respectively.

**2)               **
**Restricted        Cash**

**3)               **
**Inventories**

|                            |   | **September 30,****2007** |      | **December 31,****2006** |   |
|---------------------------------|--------|--------------------------------|-----------|-------------------------------|--------|
|  Raw materials   |   | $                              | 4,785,000 |                          | $      | 5,076,000 |   |
|  Work-in-process      |   |                           | 193,000   |                          |   | 829,000 |   |
|  Finished goods  |   |                           | 861,000   |                          |   | 377,000 |   |
|                            |   |                           |      |                          |   |   |   |
|                            |   | $                              | 5,839,000 |                          | $      | 6,282,000 |   |

**4)              **
**Goodwill**

----

**5)                   **
**Accrued            Liabilities**

|                                               |   | **September 30,** |      | **December 31,** |   |
|----------------------------------------------------|--------|------------------------|-----------|-----------------------|--------|
|                                               |   |  **2007**         |      | **2006**         |   |
|  Accrued compensation               |   | $                      | 1,461,000 |                  | $      | 1,613,000 |   |
|  Accrued insurance expense     |   |                   | 1,858,000 |                  |   | 2,945,000 |   |
|  Warrant derivative liability  |   |                   | 1,616,000 |                  |   | 8,169,000 |   |
|  Accrued warranty                   |   |                   | 1,030,000 |                  |   | 1,307,000 |   |
|  Sales tax payable             |   |                   | 480,000   |                  |   | 695,000 |   |
|  Other accrued liabilities     |   |                   | 883,000   |                  |   | 1,461,000 |   |
|                                               |   |                   |      |                  |   |   |   |
|                                               |   | $                      | 7,328,000 |                  | $      | 16,190,000 |   |

| **6)** | **Long-term                Debt** |
|--------|-----------------------------------|

|                                                            |   | **September                  30,** |       | **December                  31,** |   |
|-----------------------------------------------------------------|--------|------------------------------------|------------|-----------------------------------|--------|
|                                                            |   | **2007**                           |       | **2006**                          |   |
| 2006                  Convertible Note due in 2009              |   | $                                  | -          |                              | $      | 1,466,000 |   |
| Term                  Loans due in 2009                         |   |                               | 15,479,000 |                              |   | 18,000,000 |   |
|                                                            |   |                               |       |                              |   |   |   |
| Long-term                  debt                                 |   |                               | 15,479,000 |                              |   | 19,466,000 |   |
| Less:                  unamortized discount on Notes            |   |                               | (3,336,000 | )                                 |   | (5,632,000 | ) |
|                                                            |   |                               |       |                              |   |   |   |
| Long-term                  debt, net                            |   |                               | 12,143,000 |                              |   | 13,834,000 |   |
| Less:                  current portion of Term Loans, net       |   |                               | (2,646,000 | )                                 |   | (2,621,000 | ) |
| Less:                  current portion of Convertible Note, net |   |                               | -          |                              |   | (887,000 | ) |
|                                                            |   |                               |       |                              |   |   |   |
| Long-term                  debt                                 |   | $                                  | 9,497,000  |                              | $      | 10,326,000 |   |

***Long-term          Debt***

***Conversion          of Debt***

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***Registration        Rights Agreement***

**7)               **
**Income        Taxes**

----

**8)              **
**Warrants        and Warrant Derivative Liability**

**9)              **
**Basic        and Diluted Net Loss per Share**

|                                                                                                                         |   |   | **Three                      Months Ended**  |   |   | **Nine                      Months Ended**   |   |
|------------------------------------------------------------------------------------------------------------------------------|--------|--------|----------------------------------------------|--------|--------|----------------------------------------------|--------|
|                                                                                                                         |   |   |  **September                      30,** |   |   |  **September                      30,** |   |
|                                                                                                                         |   |   | **2007**                                     |   |   | **2006**                                     |   |   | **2007** |   |   | **2006** |   |
| Basic                      and diluted net income per share:                                                                 |   |   |                                         |   |   |                                         |   |   |   |   |   |   |   |
|  Numerator:                                                                                                             |   |   |                                         |   |   |                                         |   |   |   |   |   |   |   |
| Net                      (loss) income                                                                                       |   | $      | (5,163,000                                   | )      | $      | 503,000                                      |   | $ | (47,563,000 | ) | $ | (3,695,000 | ) |
|                                                                                                                         |   |   |                                         |   |   |                                         |   |   |   |   |   |   |   |
| Denominator:                                                                                                                 |   |   |                                         |   |   |                                         |   |   |   |   |   |   |   |
|                                                                                                                         |   |   |                                         |   |   |                                         |   |   |   |   |   |   |   |
| Weighted                        average common shares outstanding (denominator for basic                        calculation) |   |   | 21,419,000                                   |   |   | 18,966,000                                   |   |   | 21,334,000 |   |   | 18,044,000 |   |
|                                                                                                                         |   |   |                                         |   |   |                                         |   |   |   |   |   |   |   |
|                          Shares issuable through stock based compensation                      arrangements   |   |   | -                                            |   |   | 466,000                                      |   |   | - |   |   | - |   |
|                                                                                                                         |   |   |                                         |   |   |                                         |   |   |   |   |   |   |   |
|                           Denominator for diluted calculation                                            |   |   | 21,419,000                                   |   |   | 19,432,000                                   |   |   | 21,334,000 |   |   | 18,044,000 |   |
|                                                                                                                         |   |   |                                         |   |   |                                         |   |   |   |   |   |   |   |
|      Basic                      (loss) income per common share                                      |   | $      | (0.24                                        | )      | $      | 0.03                                         |   | $ | (2.23 | ) | $ | (0.20 | ) |
|                           Diluted (loss) income per common share                                         |   | $      | (0.24                                        | )      | $      | 0.03                                         |   | $ | (2.23 | ) | $ | (0.20 | ) |

----

**10)            **
**Stock-Based        Compensation**

***Stock        options***

The        per        share weighted-average fair value of stock options granted during the three        and        nine months ended September 30, 2007 were $0.88 and $1.23, respectively.        We use        the Black-Scholes-Merton (“BSM”) option pricing model to estimate the fair value        of stock-based awards, with the following weighted-average assumptions for        the        indicated periods:

|                                                         | **Three Months****Ended** |   | **Nine Months****Ended** |
|--------------------------------------------------------------|--------------------------------|--------|-------------------------------|
|                                                         | **September ****30,**     |   | **September 30,**        |
|                                                         | **2007**                       |   | **2007**                      |
| Expected dividend yield                            | 0%                             |   | 0%                            |
| Average risk-free interest rate               | 4.19%                          |   | 4.28%                         |
| Expected volatility                                     | 55.40%                         |   | 51.91%                        |
| Expected life of options (in years) | 5.75 years                |   | 5.75 years               |

|                                                               |   |   | Number                      of Shares  |   |   | **Weighted-Average                      Exercise Price**  |   |
|--------------------------------------------------------------------|--------|--------|---------------------------------------------|--------|--------|----------------------------------------------------------------|--------|
|                                                               |   |   |                                        |   |   |                                                           |   |
| Outstanding options at December 31, 2006  |   |   | 1,210,525                                   |   | $      | 7.04                                                           |   |
| Granted                                                            |   |   | 58,300                                      |   |   | 2.36                                                           |   |
| Exercised                                                          |   |   | -                                           |   |   | -                                                              |   |
| Forfeited                                                          |   |   | (46,750                                     | )      |   | 8.24                                                           |   |
|                                                               |   |   |                                        |   |   |                                                           |   |
| Outstanding options at September 30, 2007 |   |   | 1,222,075                                   |   | $      | 6.77                                                           |   |

----

***                  Restricted Stock Rights***

|                                                                                         |   |               |    | **Weighted-Average** |   |
|----------------------------------------------------------------------------------------------|--------|--------------------|---------|----------------------|--------|
|                                                                                         |   | **Number of** |    | **Grant-Date**       |   |
|                                                                                         |   | **Shares**         |    | **Fair Value**  |   |
| Outstanding restricted stock grants at December 31, 2006  |   |               | 422,467 |                 | $      | 7.56 |   |
| Granted                                                                                      |   |               | 97,371  |                 |   | 2.74 |   |
| Canceled                                                                                     |   |               | (12,751 | )                    |   | 7.56 |   |
|                                                                                         |   |               |    |                 |   |   |   |
| Outstanding restricted stock grants at September 30, 2007 |   |               | 507,087 |                 | $      | 6.63 |   |

**11)    ****Recent        Accounting        Pronouncements**
***       ***

*Uncertainty          in Income Taxes *

*Fair          Value Measurements*

*The          Fair Value Option for Financial Assets and Financial          Liabilities*

----

**Item            2. Management’s Discussion and Analysis of Financial Condition and Results of            Operations**

**Cautionary            Statement**

**Forward            Looking Statements**

**Use            of Estimates and Critical Accounting Policies**

***Allowances            for Contract Adjustments***

***Accrual            for Worker’s Compensation Reserve***

----

***Revenue            Recognition on Construction Contracts***

***Valuation            of Warrant Derivatives***

**New            Accounting Standards**

----

**Overview**

**Results            of Operations**

|                                                                         |                                                                                                                                                          |                                                                                                                                                          | **Percent of Net Sales**                                                                                                                       |                                                                                                                                                          | **Percent of Net Sales**                                                                                                                       |                                                                                                                                                          |
|------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                         |                                                                                                                                                          |                                                                                                                                                          | **Three Months Ended September 30,**                                                                                                      |                                                                                                                                                          | **Nine Months Ended September 30,**                                                                                                       |                                                                                                                                                          |
|                                                                         |                                                                                                                                                          |                                                                                                                                                          | **2007**                                                                                                                                                      |                                                                                                                                                          | **2006**                                                                                                                                                      |                                                                                                                                                          | **2007** |   | **2006** |   |
|  Net sales                                                    |                                                                                                                                                          |                   100.0                                        | %                                                                                                                                                             |                   100.0                                        | %                                                                                                                                                             |                   100.0                                        | % |                   100.0  | % |
|  Cost of goods sold                                 |                   105.5                                        |                                                                                                                                                          |                     93.6                             |                                                                                                                                                          |                   100.9                                        |                                                                                                                                                          |                     93.6  |   |
|                                                                         |  Gross (loss) profit                                                                                                                      |                     (5.5)                                 |                                                                                                                                                          |                       6.4                  |                                                                                                                                                          |                     (0.9)                                 |   |                       6.4  |   |
|  Selling, general and administrative expenses  |                     17.1                             |                                                                                                                                                          |                       8.1                  |                                                                                                                                                          |                     15.2                             |                                                                                                                                                          |                       8.3  |   |
|  Impairment loss on goodwill                        |                        -    |                                                                                                                                                          |                        -    |                                                                                                                                                          |                     52.2                             |                                                                                                                                                          |                        -    |   |
|                                                                         |  Loss from operations                                                                                                                     |                   (22.7)                                            |                                                                                                                                                          |                     (1.7)                                 |                                                                                                                                                          |                   (68.3)                                            |   |                     (1.9) |   |
|  Other (expense) income:                                 |                                                                                                                                                          |                                                                                                                                                          |                                                                                                                                                          |                                                                                                                                                          |                                                                                                                                                          |                                                                                                                                                          |   |   |
|                                                                         |  Interest expense                                                                                                                              |                     (2.1)                                 |                                                                                                                                                          |                     (0.8)                                 |                                                                                                                                                          |                     (2.1)                                 |   |                     (1.6) |   |
|                                                                         |  Interest income                                                                                                                               |                       0.3                  |                                                                                                                                                          |                       0.1                  |                                                                                                                                                          |                       0.3                  |   |                       0.2  |   |
|                                                                         |  Loss on extinguishment of debt                                                                                                 |                        -    |                                                                                                                                                          |                        -    |                                                                                                                                                          |                        -    |   |                     (1.6) |   |
|                                                                         |  Gain on warrant and embedded derivatives                                                                                  |                       3.6                  |                                                                                                                                                          |                       4.9                  |                                                                                                                                                          |                       8.9                  |   |                       5.3  |   |
|                                                                         |  Amortization of debt issuance costs                                                                                            |                     (0.6)                                 |                                                                                                                                                          |                     (0.3)                                 |                                                                                                                                                          |                     (0.7)                                 |   |                     (0.5) |   |
|                                                                         |  Accretion of debt discount                                                                                                          |                     (2.4)                                 |                                                                                                                                                          |                     (1.2)                                 |                                                                                                                                                          |                     (3.2)                                 |   |                     (1.5) |   |
|                                                                         |  Early debt conversion fee                                                                                                           |                        -    |                                                                                                                                                          |                        -    |                                                                                                                                                          |                        -    |   |                     (1.5) |   |
|                                                                         |  Other income, net                                                                                                                        |                       0.2                  |                                                                                                                                                          |                       0.2                  |                                                                                                                                                          |                       0.1                  |   |                       0.2  |   |
|                                                                         |                                                                                                                                                          |                                                                                                                                                          |                     (1.0)                                 |                                                                                                                                                          |                       2.8                  |                                                                                                                                                          |                       3.4  |   |                     (1.0) |   |
|                                                                         |                                                                                                                                                          |                                                                                                                                                          |                                                                                                                                                          |                                                                                                                                                          |                                                                                                                                                          |                                                                                                                                                          |   |   |   |   |
|                                                                         |                                                                                                                                                          |  (Loss) income before income taxes                                                                                              |                   (23.7)                                            |                                                                                                                                                          |                       1.1                  |                                                                                                                                                          |                   (64.8) |   |                     (2.9) |   |
|  Income tax expense (benefit)                       |                        -    |                                                                                                                                                          |                        -    |                                                                                                                                                          |                        -    |                                                                                                                                                          |                        -    |   |
|                                                                         |                                                                                                                                                          |  Net (loss) income                                                                                                                        |                   (23.7)                                            | %                                                                                                                                                             |                       1.1                  | %                                                                                                                                                             |                   (64.8) | % |                     (2.9) | % |

----

***Net      Sales***

***Gross      (Loss) Profit***

----

***Selling,      General and Administrative Expenses***

***Impairment      Loss on Goodwill***

***Loss      from Operations***

***Other      (Expense) Income***

----

***Income      Tax Expense (Benefit)***

**Liquidity      and Capital Resources**

----

----

**Item      3. Quantitative And Qualitative Disclosures About Market      Risk**

We      are      exposed to the risk of fair value derivative liability related to outstanding      warrants. The fair value of these derivative liabilities is primarily determined      by fluctuations in our stock price. As our stock price increases or decreases,      the fair value of these derivative liabilities increase or decrease, resulting      in a corresponding current period loss or gain to be recognized. Based on the      number of outstanding warrants, market interest rates and historical volatility      of our stock price as of September 30, 2007, a $1 increase or decrease in our      stock price results in a non-cash derivative loss of approximately $1.0 million.      For the three and nine months ended September 30, 2007, we experienced a $0.8      million and a $6.6 million non-cash gain on warrant derivatives, respectively,      due to the decrease in our stock price from $4.95 at December 31, 2006 to $1.85      at September 30, 2007.

----

**Item      4T. Controls And Procedures**

**       a.          **
**Evaluation      of Disclosure Controls and Procedures**

|   | · | We                continue to lack the necessary depth of personnel with sufficient                technical accounting expertise to ensure that the preparation of                interim                and annual financial statements are without material                misstatements. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Our                procedures associated with accounting for our long-term revenue contracts                continue to be insufficient to ensure that revenue and costs are                properly                reflected in our consolidated financial                statements. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**b.                **
**Changes      in Internal Control over Financial Reporting**

**c.                **
**Remediation      Plan for Material Weaknesses in Internal Control over Financial      Reporting**

|   | · | We                are utilizing outside consulting resources for documentation, testing                and                monitoring of key controls. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | We                are currently evaluating all finance personnel to ensure that appropriate                skills and training are maintained in all critical positions. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**Item      1. Legal Proceedings**

**Item      1A. Risk Factors**

**Item      2. Unregistered Sales of Equity Securities and Use of      Proceeds**

**Item      3. Defaults upon Senior Securities**

None

**Item      4. Submission of Matters to a Vote of Security Holders**

**Item      5. Other Information**

----

**Item      6. Exhibits**

| **Exhibit** |   |                                                                                                                                                                                                                                                                          |
|-------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **Number**  |   | **Name                      of Exhibit**                                                                                                                                                                                                                                      |
|        |   |                                                                                                                                                                                                                                                                          |
| 3.1(1)      |   | Certificate                      of Incorporation of the Company.                                                                                                                                                                                                             |
|        |   |                                                                                                                                                                                                                                                                          |
| 3.2(1.1)    |   | Bylaws                      of the Company.                                                                                                                                                                                                                                   |
|        |   |                                                                                                                                                                                                                                                                          |
| 10.1(2)     |   | Company’s                      1994 Stock Option Plan.                                                                                                                                                                                                                  |
|        |   |                                                                                                                                                                                                                                                                          |
| 10.2(2)     |   | Company’s                      1996 Stock Option Plan.                                                                                                                                                                                                                  |
|        |   |                                                                                                                                                                                                                                                                          |
| 10.3(2)     |   | Company’s                      1999 Stock Option Plan.                                                                                                                                                                                                                  |
|        |   |                                                                                                                                                                                                                                                                          |
| 10.4(2)     |   | Company’s                      2002 Stock Option Plan.                                                                                                                                                                                                                  |
|        |   |                                                                                                                                                                                                                                                                          |
| 10.5(3)     |   | Employment                      Agreement between the Company and Dennis L. Shogren.                                                                                                                                                                                          |
|        |   |                                                                                                                                                                                                                                                                          |
| 10.6(3.1)   |   | Employment                      Agreement between the Company and Ronald Savona.                                                                                                                                                                                              |
|        |   |                                                                                                                                                                                                                                                                          |
| 10.7(3.2)   |   | Employment                    Agreement                    between the Company and Kenneth S. Cragun.                                                                                                                                                                         |
|        |   |                                                                                                                                                                                                                                                                          |
| 10.8(2)     |   | Separation                      Agreement between the Company and Evan M. Gruber.                                                                                                                                                                                             |
|        |   |                                                                                                                                                                                                                                                                          |
| 10.9(2)     |   | Separation                      Agreement between the Company and Michael G. Rhodes.                                                                                                                                                                                          |
|        |   |                                                                                                                                                                                                                                                                          |
| 10.10(2)    |   | Employment                      Agreement between the Company and David M. Buckley                                                                                                                                                                                            |
|        |   |                                                                                                                                                                                                                                                                          |
| 10.11(4)    |   | Lease                      between the Company and Pacific Continental Modular Enterprises,                      relating                      to the Barrett property in Perris, California                                                                                  |
|        |   |                                                                                                                                                                                                                                                                          |
| 10.12(4)    |   | Lease                      between the Company and BMG, relating to the property in Lathrop,                      California                                                                                                                                                  |
|        |   |                                                                                                                                                                                                                                                                          |
| 10.13(5)    |   | Conversion                      and Repurchase Agreement, dated October 31, 2006                                                                                                                                                                                              |
|        |   |                                                                                                                                                                                                                                                                          |
| 10.14(6)    |   | Securities                      Purchase Agreement, dated December 31, 2004                                                                                                                                                                                                   |
|        |   |                                                                                                                                                                                                                                                                          |
| 10.15(6)    |   | Senior                      Subordinated Secured Convertible Note, dated December 31,                      2004                                                                                                                                                               |
|        |   |                                                                                                                                                                                                                                                                          |
| 10.16(6)    |   | Warrant                      to Purchase Common Stock issued December 31, 2004                                                                                                                                                                                                |
|        |   |                                                                                                                                                                                                                                                                          |
| 10.17(6)    |   | Registration                      Rights Agreement, dated December 31, 2004                                                                                                                                                                                                   |
|        |   |                                                                                                                                                                                                                                                                          |
| 10.18(6)    |   | Pledge                      and Security Agreement, dated December 31, 2004                                                                                                                                                                                                   |
|        |   |                                                                                                                                                                                                                                                                          |
| 10.19(6)    |   | Intercreditor                      Agreement, dated December 31, 2004                                                                                                                                                                                                         |
|        |   |                                                                                                                                                                                                                                                                          |
| 10.20(6)    |   | Amendment                      and Forbearance Agreement among the Company, Wells Fargo Bank,                      N.A., Union                      Bank of California, N.A. and Comerica Bank California, dated                      December 29,                      2004. |
|        |   |                                                                                                                                                                                                                                                                          |
| 10.21(7)    |   | Financing                      Agreement between the Company and Fortress Credit Corp. as                      administrative                      agent, dated February 25, 2005.                                                                                            |
|        |   |                                                                                                                                                                                                                                                                          |
| 10.22(8)    |   | Amendment                      Number 1 to Industrial Real Estate Lease between Modtech Holdings,                      Inc.                      and BMG2 Enterprises, dated July 29, 2005                                                                                    |
|        |   |                                                                                                                                                                                                                                                                          |
| 10.23(8)    |   | Sublease                      between Modtech Holdings, Inc. and Boise Building Solutions                      Distribution,                      L.L.C., dated July 29, 2005                                                                                                 |

----

|        |   |                                                                                                                                                             |
|-------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **Exhibit** |   |                                                                                                                                                             |
| **Number**  |   | **Name                of Exhibit**                                                                                                                               |
|        |   |                                                                                                                                                             |
| 10.24(9)    |   | Securities                Purchase Agreement with Peninsula Fund, L.P. and others, dated August                5,                2005                            |
|        |   |                                                                                                                                                             |
| 10.25(9)    |   | First                Amendment and Waiver of Financing Agreement between Fortress and                Modtech                Holdings, Inc., dated August 5, 2005 |
|        |   |                                                                                                                                                             |
| 10.26(9)    |   | First                Amendment and Restated Registration Rights Agreement, dated August                5,                2005                                    |
|        |   |                                                                                                                                                             |
| 10.27(9)    |   | Amended                and Restated Senior Subordinated Secured Convertible Note, dated                August 5,                2005                             |
|        |   |                                                                                                                                                             |
| 10.28(9)    |   | Consent,                Waiver, Amendment and Exchange Agreement, dated August 5, 2005                (“Waiver”)                                     |
|        |   |                                                                                                                                                             |
| 10.29(9)    |   | Form                of Voting Agreement executed pursuant to Waiver                                                                                              |
|        |   |                                                                                                                                                             |
| 10.30(9)    |   | Form                of Lock Up Letter executed pursuant to the Securities Purchase Agreement,                dated August 5, 2005                                |
|        |   |                                                                                                                                                             |
| 10.31(9)    |   | Form                of Warrant issued pursuant to the Securities Purchase Agreement,                dated                August 5, 2005                          |
|        |   |                                                                                                                                                             |
| 10.32(9)    |   | Warrant                for 8,276 shares of common stock, dated August 5, 2005                                                                                    |
|        |   |                                                                                                                                                             |
| 10.33(10)   |   | Second                Amendment of Financing Agreement between Fortress and Modtech Holdings,                Inc., dated September 19, 2005                      |
|        |   |                                                                                                                                                             |
| 10.34(11)   |   | Third                Amendment of Financing Agreement between Fortress and Modtech Holdings,                Inc., dated December 22, 2005                        |
|        |   |                                                                                                                                                             |
| 10.35(12)   |   | Intercreditor                Agreement with Bank of America, N.A., dated, March 31,                2006                                                          |
|        |   |                                                                                                                                                             |
| 10.36(12)   |   | Loan                and Security Agreement with Bank of America, N.A., dated March 31,                2006                                                       |
|        |   |                                                                                                                                                             |
| 10.37(12)   |   | Amendment                Agreement, dated March 31, 2006                                                                                                         |
|        |   |                                                                                                                                                             |
| 10.38(13)   |   | Amendment                to 2002 Stock Option Plan, dated June 13, 2006                                                                                          |
|        |   |                                                                                                                                                             |
| 10.39(14)   |   | Exchange                of Senior Subordinated Secured Convertible Notes, dated May 3,                2006                                                       |
|        |   |                                                                                                                                                             |
| 10.40(15)   |   | Securities                Purchase Agreement with Laurus Master Fund, Ltd. (and attached exhibits),                dated October 21, 2006                        |
|        |   |                                                                                                                                                             |
| 10.41(15)   |   | Intellectual                Property Security Agreement, dated October 31, 2006                                                                                  |
|        |   |                                                                                                                                                             |
| 10.42(15)   |   | Master                Security Agreement with Laurus Master Fund, Ltd., dated October 31,                2006                                                    |
|        |   |                                                                                                                                                             |
| 10.43(15)   |   | Registration                Rights Agreement with Laurus Master Fund, Ltd., dated October 31,                2006                                                |
|        |   |                                                                                                                                                             |
| 10.44(15)   |   | Sale                and Purchase Agreement and Joint Escrow Instructions with NL Ventures                V,                L.P. dated November 1, 2006           |
|        |   |                                                                                                                                                             |
| 10.45(15)   |   | Lease                Agreement with NL Ventures V Plant City, L.P. dated November 1,                2006                                                         |
|        |   |                                                                                                                                                             |
| 10.46(16)   |   | Registration                Rights Agreement with Amphora Limited, dated October 31,                2006                                                         |
|        |   |                                                                                                                                                             |
| 10.47(16)   |   | Conversion                and Repurchase Agreement, dated October 31, 2006                                                                                       |
|        |   |                                                                                                                                                             |
| 10.48(17)   |   | Amendment                and Waiver Agreement with Laurus Master Fund, Ltd., dated December                28,                2006                               |
|        |   |                                                                                                                                                             |
| 10.49(17)   |   | Securities                Purchase Agreement with Laurus Master Fund, Ltd., dated December                28,                2006                                |

----

|        |   |                                                                                                                                                                                                                  |
|-------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **Exhibit** |   |                                                                                                                                                                                                                  |
| **Number**  |   | **Name                  of Exhibit**                                                                                                                                                                                  |
|        |   |                                                                                                                                                                                                                  |
| 10.50(17)   |   | Secured                  Term Note issued to Laurus Master Fund, Ltd., dated December 28,                  2006                                                                                                       |
|        |   |                                                                                                                                                                                                                  |
| 10.51(17)   |   | Common                  Stock Purchase Warrant issued to Laurus Master Fund, Ltd., dated                  December                  28, 2006                                                                          |
|        |   |                                                                                                                                                                                                                  |
| 10.52(17)   |   | Amended                  and Restated Registration Rights Agreement with Laurus Master Fund,                  Ltd.,                  dated December 28, 2006                                                     |
|        |   |                                                                                                                                                                                                                  |
| 31.1        |   | Certification                  of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley                  Act of 2002                                                                                  |
|        |   |                                                                                                                                                                                                                  |
| 31.2        |   | Certification                  of Chief Financial Officer 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 |

|   | (1) | Incorporated                  by reference to Modtech Holdings, Inc.’s Registration Statement on Form                  S-4 filed with the Commission on October 27, 1998 (Commission File                  No.                  333-69033). |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | Incorporated                  by reference to Modtech Holdings, Inc.’s Form 10-Q filed with the                  Commission on November 12, 2004 (Commission File No.                  000-25161). |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3) | Incorporated                  by reference to Modtech Holdings, Inc.’s Form 8-K filed with the                  Commission on September 22, 2006 (Commission File No.                  000-25161). |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3.1) | Incorporated                  by reference to Modtech Holdings, Inc.’s Form 8-K filed with the                  Commission on February 13, 2006 (Commission File No.                  000-25161). |
|--------|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3.2) | Incorporated                  by reference to Modtech Holdings, Inc.’s Form 8-K filed with the                  Commission on June 25, 2007 (Commission File No.                  000-25161). |
|--------|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (4) | Incorporated                  by reference to Modtech, Inc.’s Registration Statement on Form S-1 filed                  with the Commission on June 6, 1990 (Commission File No.                  033-35239). |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (5) | Incorporated                  by reference to Modtech Holdings, Inc.’s Form 8-K filed with the                  Commission on November 1, 2002 (Commission File No.                  000-25161). |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (6) | Incorporated                  by reference to Modtech Holdings, Inc.’s Form 8-K filed with the                  Commission on January 3, 2005 (Commission File No.                  000-25161). |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (7) | Incorporated                  by reference to Modtech Holdings, Inc.’s Form 8-K filed with the                  Commission on March 2, 2005 (Commission File No.                  000-25161). |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (8) | Incorporated                  by reference to Modtech Holdings, Inc.’s Form 10-Q/A filed with the                  Commission on October 17, 2005 (Commission File No.                  000-25161). |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (9) | Incorporated                  by reference to Modtech Holdings, Inc.’s Form 8-K filed with the                  Commission on August 9, 2005 (Commission File No.                  000-25161). |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (10) | Incorporated                  by reference to Modtech Holdings, Inc.’s Form 8-K filed with the                  Commission on September 23, 2005 (Commission File No.                  000-25161). |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | (11) | Incorporated                  by reference to Modtech Holdings, Inc.’s Form 8-K filed with the                  Commission on December 29, 2005 (Commission File No.                  000-25161). |
|--------|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (12) | Incorporated                  by reference to Modtech Holdings, Inc.’s Form 10-K filed with the                  Commission on April 4, 2006 (Commission File No.                  000-25161). |
|--------|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |   |
|--------|--------|--------|

|   | (13) | Incorporated                  by reference to Modtech Holdings, Inc.’s Definitive Proxy Statement filed                  with the Commission on May 5, 2006 (Commission File No.                  000-25161). |
|--------|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (14) | Incorporated                  by reference to Modtech Holdings, Inc.’s Form 10-Q filed with the                  Commission on August 14, 2006 (Commission File No.                  000-25161). |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (15) | Incorporated                  by reference to Modtech Holdings, Inc.’s Form 10-Q filed with the                  Commission on November 14, 2006 |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (16) | Incorporated                  by reference to Modtech Holdings, Inc.’s Form 8-K filed with the                  Commission on November 1, 2006 (Commission File No.                  000-25161). |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (17) | Incorporated                  by reference to Modtech Holdings, Inc. Form 8-K filed with the                  Commission                  on January 4, 2007 (Commission File No.                  000-25161). |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**SIGNATURES**

|                                     |   | MODTECH                  HOLDINGS, INC. |
|------------------------------------------|--------|-----------------------------------------|
|                                     |   |                                    |   |
| Date:                  November 13, 2007 |   | by:                                     | /s/                  KENNETH S. CRAGUN |
|                                     |   |                                    |   | **Kenneth                  S. Cragun****Chief                  Financial Officer** **and                  Chief Accounting Officer** |
|                                     |   |                                    |   |
|                                     |   | by:                                     | /s/                  DENNIS L. SHOGREN |
|                                     |   |                                    |   | **Dennis                  L. Shogren****President                  and Chief Executive Officer** |

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