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**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**




**FORM
      10-Q**




x
            Quarterly
                Report Pursuant to Section 13 or 15 (d) of the Securities Exchange
                Act of
                1934.
              
              For
                the quarterly period ended March 31, 2006
                or




o
            Transition
                Report Pursuant to Section 13 or 15(d) of the Securities Exchange
                Act of
                1934.
              
              For
                the transition period from _________ to
                _________.




Commission
      File Number 01912




**SONOMAWEST
      HOLDINGS, INC.**




(Exact
      name of registrant as specified in its charter)


**Delaware**
            **94-1069729**(State
                of incorporation)
            (IRS
                Employer Identification #)





**2064
                Highway 116 North, Sebastopol, CA**
            **95472-2662**(Address
                of principal executive offices)
            (Zip
                Code)




Registrant's
      telephone number, including area code : **707-824-2534**










(Former
      Name, Former Address and Former Fiscal Year, if Changed Since Last
      Report)




Indicate
      by check mark whether the registrant (1) has filed all reports required to
      be
      filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
      the
      preceding 12 months (or for such shorter period that the registrant was required
      to file such reports), and (2) has been subject to such filing requirements
      for
      the past 90 days.




YES:
      x NO:
o




Indicate
        by check mark whether the registrant is a large accelerated filer, an
        accelerated filer, or a non-accelerated filer. See definition of “accelerated
        filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check
        one):
  Large
        Accelerated Filer o  Accelerated
        Filer
o  Non-accelerated
        Filer
x




Indicate
      by check mark whether the registrant is a shell company (as defined in
      Rule 12b-2 of the Exchange Act).




YES:
      o NO:
x




As
      of May
      12, 2006, there were 1,124,257 shares of common stock, no par value,
      outstanding.









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**SONOMAWEST
      HOLDINGS, INC.**




**TABLE
      OF CONTENTS**




PART
                I. FINANCIAL INFORMATION
            PageItem
                1.
            Financial
                StatementsBalance
                Sheets at March 31, 2006 and June 30, 2005
                (unaudited)
            3Statements
                of Operations - Three and nine months ended March
                31, 2006 and 2005 (unaudited)
            4Statement
                of Changes in Shareholders’ Equity - Nine months
                ended March 31, 2006 (unaudited)
            5Statements
                of Cash Flows - Nine months ended March 31, 2006 and
                2005(unaudited)
            6Notes
                to Financial Statements
                (unaudited)
            7Item
                2.
            Management's
                Discussion and Analysis of Financial Condition
                and Results of Operations
            13Item
                3.
            Quantitative
                and Qualitative Disclosures About Market
                Risk
            17Item
                4.
            Controls
                and ProceduresPART
                II. OTHER INFORMATIONItem
                1.
            Legal
                Proceedings
            18Item
                2.
            Unregistered
                Sales of Equity Securities and Use of
                Proceeds
            18Item
                3.
            Defaults
                Upon Senior Securities
            18Item
                4.
            Submission
                of Matters to a Vote of Security
                Holders
            18Item
                5.
            Other
                Information
            18Item
                6.
            Exhibits
            19Signature
            20EXHIBIT
                INDEX
            21EXHIBITS






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**PART
      I. FINANCIAL INFORMATION**


**Item
      1. Financial Statements**




**SONOMAWEST
      HOLDINGS, INC.**


**BALANCE
      SHEETS**


**(AMOUNTS
      IN THOUSANDS)**


**(unaudited)**


ASSETS
            
            March
                31, 2006
            
            June
                30, 2005CURRENT
                ASSETS:Cash
            
            $
            3,730
            
            $
            1,879Accounts
                receivable
            
            
            169
            
            
            123Other
                receivables
            
            
            4
            
            
            13Prepaid
                income taxes
            
            
            70
            
            
            —Prepaid
                expenses and other assets
            
            
            19
            
            
            129Current
                deferred income taxes, net
            
            
            —
            
            
            298Total
                current assets
            
            
            3,992
            
            
            2,442RENTAL
                PROPERTY, net
            
            
            1,466
            
            
            1,553INVESTMENT,
                at cost
            
            
            2,401
            
            
            3,001DEFERRED
                INCOME TAXES
            
            
            182
            
            
            159PREPAID
                COMMISSIONS AND OTHER ASSETS
            
            
            178
            
            
            117Total
                assets
            
            
            8,219
            
            $
            7,272LIABILITIES
                AND SHAREHOLDERS’ EQUITYCURRENT
                LIABILITIES:Current
                maturities of long-term debt
            
            $
            80
            
            $
            1,620Accounts
                payable
            
            
            90
            
            
            121Accrued
                payroll and related liabilities
            
            
            17
            
            
            31Accrued
                expenses and other current liabilities
            
            
            186
            
            
            76Unearned
                rents and deposits
            
            
            459
            
            
            364Current
                deferred tax liability
            
            
            8
            
            
            —Total
                current liabilities
            
            
            840
            
            
            2,212LONG-TERM
                DEBT, net of current maturities
            
            
            1,493
            
            
            —OTHER
                LONG-TERM LIABILITIES
            
            
            —
            
            
            131Total
                liabilities
            
            
            2,333
            
            
            2,343SHAREHOLDERS’
                EQUITY:Preferred
                stock: 2,500 shares authorized; no shares outstanding
            
            
            —
            
            
            —Common
                stock: 5,000 shares authorized, no par value; 1,124 and 1,114 shares
                outstanding on March 31, 2006and
                June 30, 2005, respectively
            
            
            2,913
            
            
            2,770Retained
                earnings
            
            
            2,973
            
            
            2,159Total
                shareholders’ equity
            
            
            5,886
            
            
            4,929Total
                liabilities and shareholders’ equity
            
            $
            8,219
            
            $
            7,272




The
      accompanying notes are an integral part of these statements .




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**SONOMAWEST
      HOLDINGS, INC.**


**STATEMENTS
      OF OPERATIONS**


**FOR
      THE NINE AND THREE MONTHS ENDED MARCH 31, 2006 AND 2005**


**(UNAUDITED)**


**(AMOUNTS
      IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)**


Nine
                Months
              Ended
                March 31
            
            Three
                Months
              Ended
                March 312006
            
            2005
            
            2006
            
            2005RENTAL
                REVENUE -NET
            
            $
            1,540
            
            $
            1,371
            
            $
            544
            
            $
            463TENANT
                REIMBURSEMENTS
            
            
            386
            
            
            333
            
            
            112
            
            
            79TOTAL
                REVENUE
            
            
            1,926
            
            
            1,704
            
            
            656
            
            
            542OPERATING
                COSTS
            
            
            1,771
            
            
            1,436
            
            
            583
            
            
            423OPERATING
                COSTS -- RELATED PARTY EXPENSES
            
            
            52
            
            
            298
            
            
            13
            
            
            68TOTAL
                OPERATING COSTS
            
            
            1,823
            
            
            1,734
            
            
            596
            
            
            491OPERATING
                INCOME (LOSS)
            
            
            103
            
            
            (30
            )
            
            60
            
            
            51INTEREST
                EXPENSE
            
            
            (87
            )
            
            (65
            )
            
            (30
            )
            
            (24
            )INTEREST
                INCOME
            
            
            89
            
            
            24
            
            
            42
            
            
            10DIVIDEND
                INCOME
            
            
            122
            
            
            —
            
            
            —
            
            
            —GAIN
                ON SALE OF INVESTMENTS
            
            
            1,090
            
            
            —
            
            
            —
            
            
            —OTHER
                INCOME
            
            
            7
            
            
            21
            
            
            1
            
            
            2INCOME
                (LOSS) BEFORE INCOME TAXES
            
            
            1,324
            
            
            (50
            )
            
            73
            
            
            39INCOME
                TAX PROVISION (BENEFIT)
            
            
            510
            
            
            (15
            )
            
            29
            
            
            18NET
                INCOME (LOSS )
            
            $
            814
            
            $
            (35
            )
            $
            44
            
            $
            21WEIGHTED
                AVERAGE COMMON SHARES AND EQUIVALENTS:Basic
            
            
            1,123
            
            
            1,114
            
            
            1,124
            
            
            1,114Diluted
            
            
            1,155
            
            
            1,114
            
            
            1,164
            
            
            1,156INCOME
                (LOSS) PER COMMON SHARE:Basic
            
            $
            0.73
            
            $
            (0.03
            )
            $
            0.04
            
            $
            0.02Diluted
            
            $
            0.70
            
            $
            (0.03
            )
            $
            0.04
            
            $
            0.02





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




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**SONOMAWEST
      HOLDINGS, INC.**


**STATEMENT
      OF CHANGES IN SHAREHOLDERS’ EQUITY**


**(UNAUDITED)**


**FOR
      THE NINE MONTHS ENDED MARCH 31, 2006**


**(AMOUNTS
      IN THOUSANDS)**


*Common
                Stock*
            
            
            
            *Total**Number*
            
            
            
            *Retained*
            
            *Shareholders’**of
                Shares*
            
            *Amount*
            
            *Earnings*
            
            *Equity*BALANCE,
                JUNE 30, 2005
            
            
            1,114
            
            $
            2,770
            
            $
            2,159
            
            $
            4,929Net
                income
            
            
            
            
            
            
            
            
            814
            
            
            814Non-cash
                stock compensation charge
            
            
            
            
            
            81
            
            
            
            
            
            81Exercise
                of stock options
            
            
            10
            
            
            62
            
            
            
            
            
            62BALANCE,
                MARCH 31, 2006
            
            
            1,124
            
            $
            2,913
            
            $
            2,973
            
            $
            5,886








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




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**SONOMAWEST
      HOLDINGS, INC.**


**STATEMENTS
      OF CASH FLOWS**


**(UNAUDITED)**


**FOR
      THE NINE MONTHS ENDED MARCH 31, 2006 AND 2005**


**(AMOUNTS
      IN THOUSANDS)**


2006
            
            2005CASH
                FLOWS FROM OPERATING ACTIVITIES:Net
                income (loss)
            
            $
            814
            
            $
            (35
            )Adjustments
                to reconcile net income (loss) to net cash provided by operating
                activities:Gain
                on sale of investments
            
            
            (1,090
            )
            
            —Dividends
                received from investments
            
            
            (122
            )
            
            —Non-cash
                stock compensation charge
            
            
            81
            
            
            10Depreciation
                and amortization expense
            
            
            162
            
            
            161Changes
                in assets and liabilities:Accounts
                receivable
            
            
            (46
            )
            
            8Other
                receivables
            
            
            9
            
            
            25Related
                party interest receivable
            
            
            —
            
            
            3Prepaid
                income taxes
            
            
            (70
            )
            
            —Prepaid
                expenses and other assets
            
            
            110
            
            
            97Deferred
                income tax provision (benefit)
            
            
            283
            
            
            (16
            )


Prepaid
                commissions and other assets
            
            
            (61
            )
            
            35Accounts
                payable
            
            
            (31
            )
            
            (142
            )Accrued
                expenses and other current liabilities
            
            
            110
            
            
            —Accrued
                payroll and related liabilities
            
            
            (14
            )
            
            (18
            )Unearned
                rents and deposits
            
            
            95
            
            
            78Other
                long-term liabilities
            
            
            (131
            )
            
            —(715
            )
            
            241Net
                cash provided by operating activities
            
            
            99
            
            
            206CASH
                FLOWS FROM INVESTING ACTIVITIES:Capital
                expenditures
            
            
            (76
            )
            
            (69
            )Proceeds
                from sale of investments
            
            
            1,691
            
            
            —Dividends
                received from investments
            
            
            122
            
            
            —Net
                cash provided by (used in) investing activities
            
            
            1,737
            
            
            (69
            )CASH
                FLOWS FROM FINANCING ACTIVITIES:Proceeds
                from debt refinancing
            
            
            1,606
            
            
            —Principal
                payments of long term debt
            
            
            (1,653
            )
            
            (42
            )Exercise
                of stock options
            
            
            62
            
            
            400Net
                cash provided by financing activities
            
            
            15
            
            
            358NET
                INCREASE IN CASH
            
            
            1,851
            
            
            495CASH
                AT BEGINNING OF PERIOD
            
            
            1,879
            
            
            1,348CASH
                AT END OF PERIOD
            
            $
            3,730
            
            $
            1,843





Supplemental
      Cash Flow Information


2006
            
            2005Interest
                paid
            
            $
            85
            
            $
            65Taxes
                paid
            
            $
            1
            
            $
            1




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




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**SONOMAWEST
      HOLDINGS, INC. AND SUBSIDIARY**


**NOTES
      TO FINANCIAL STATEMENTS**


**NINE
      MONTHS ENDED MARCH 31, 2006**







**Note
      1 - Basis of Presentation**




The
      accompanying unaudited interim statements have been prepared pursuant to the
      rules of the Securities and Exchange Commission. Certain information and
      disclosures normally included in annual financial statements prepared in
      accordance with accounting principles generally accepted in the United States
      of
      America have been condensed or omitted pursuant to such rules and regulations,
      although the Company believes these disclosures are adequate to make the
      information not misleading. In the opinion of management, all adjustments
      necessary for a fair presentation for the periods presented have been reflected
      and are of a normal recurring nature. These interim financial statements should
      be read in conjunction with the financial statements and notes thereto for
      each
      of the three years in the period ended June 30, 2005. The results of operations
      for the nine-month period ended March 31, 2006 are not necessarily indicative
      of
      the results that will be achieved for the entire year ending June 30,
      2006.




**Revenue
      Recognition**




Revenue
      is recognized on a monthly basis, based upon the dollar amount specified in
      the
      related lease. The Company requires that all tenants be covered by a lease.
      Lease incentives and construction allowances provided by the Company to certain
      of its tenants are amortized as an offset to revenue on a straight-line basis
      over the term of the respective lease. The Company does not have leases that
      include provisions that require the lessee to pay the lessor any additional
      rent
      based upon the lessee’s sales or any other financial performance levels.
      Reimbursements of certain costs received from tenants are recognized as tenant
      reimbursement revenues.




**Note
      2 - Investment**




*Background* .
      The
      Company holds an investment in MetroPCS Communications ,
      Inc.
      (“ ***MetroPCS*** ”),
      a
      privately held telecommunications company. As of March 31, 2006, the Company
      had
      a $2.4 million minority investment in the Series D Preferred Stock of MetroPCS.
      The Company owns less than one percent of the total outstanding shares of Series
      D Preferred Stock and less than one percent of the total outstanding capital
      stock of MetroPCS on an as-converted basis. The Company accounts for its
      investment in MetroPCS under the cost method.




The
      Board
      of Directors of SonomaWest Holdings continues to monitor this
      investment.  The
      Company has no relationships with MetroPCS other than its investment. However,
      Craig Stapleton, the Company’s largest stockholder and the father of Walker
      R. Stapleton, the President, Chief Executive Officer and Chief Financial
      Officer of the Company, is a shareholder of MetroPCS. Additionally, a director
      of the Company has a small indirect beneficial ownership interest in MetroPCS
      stock.




On
      September 26, 2005, the Company tendered approximately 20% of the shares of
      MetroPCS Series D Preferred Stock that it held in response to a tender offer
      by
      certain third parties to purchase shares of MetroPCS Series D Preferred Stock
      and common stock. The price per share offered in the tender offer was
      approximately three times the original investment amount per share paid by
      the
      Company for its MetroPCS shares, including the cumulative unpaid dividends
      as of
      December 31, 2005. All shares tendered by the Company were accepted. The gross
      proceeds to the Company from the tender offer of $1.8 million were received
      November 1, 2005, resulting in a net gain of $1,090,000 on sale of investments,
      and dividend income of $122,000. The Company’s existing net operating loss
      carryforwards will offset much of the gain recognized for federal and state
      tax
      purposes from the sale of the MetroPCS shares.




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The
      Company accounts for its investment in MetroPCS under the cost method, which
      amounted to $2,401,000 as of March 31, 2006. The Company continues to monitor
      the financial condition, cash flow, operational performance and other relevant
      information about MetroPCS Communications, for purposes of reflecting the
      investment on the Company’s financial statements. This process is based
      primarily on such information as we may request and that MetroPCS may provide
      to
      us. The Company also tracks MetroPCS information available to the general
      public. Since MetroPCS is no longer subject to public disclosure requirements,
      the basis for our evaluation is subject to the timing, accuracy and disclosure
      of the data received. If the Company had, in September 2005, tendered the
      remaining MetroPCS shares that it currently holds, the Company would have
      received gross proceeds of approximately $7.2 million from the tender of such
      shares (in addition to the proceeds from the shares actually tendered). There
      can be no assurance that the Company will be able to achieve liquidity for
      its
      remaining MetroPCS shares in the future at the price offered in the tender
      offer
      or at any other price.




**Note
      3 - Long-term debt**





As
      of
      March 31, 2006, long-term debt consists of the following:




Amounts
                in ThousandsCredit
                Agreement, bank, secured by a first deed of trust on the Company’s
                property located at 2064 Gravenstein Highway North, Sebastopol,
                California, payable in monthly installments of $7,000 plus interest
                at the
                bank’s prime rate plus .25% per annum (7.75% at March 31, 2006), final
                maturity October 1, 2010
            
            $
            1,5731,573Less
                current portion
            
            
            80$
            1,493




The
      credit agreement replaces the Company’s previous credit agreement with the bank
      and, in part, refinances approximately $1.6 million of indebtedness under the
      previous agreement. Under this credit agreement the Company is required to
      meet
      certain financial covenants. As of March 31, 2006 the Company was in compliance
      with such covenants.




In
      addition, the Company entered into a line of credit agreement with its bank
      which is available through September 1, 2010 and provides for advances not
      to
      exceed at any time an aggregate principal amount of $500,000. Advances under
      the
      line of credit may be used to provide funds for tenant improvements. As of
      March
      31, 2006 no amounts were outstanding under the line of credit.




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Principal
      payments for the years succeeding March 31, 2006, are as follows:




Year
                Ending June 30,
            
            Amounts
                in ThousandsBalance
                of 2006
            
            $
            202007
            
            
            802008
            
            
            802009
            
            
            802010
            
            
            80Thereafter
            
            
            1,233$
            1,573





**Note
      4 - Earnings Per Share**




Basic
      earnings per share (“EPS”) is computed as net income divided by the weighted
      average number of shares of common stock outstanding for the period. Diluted
      EPS
      is computed as net income divided by the weighted average number of shares
      outstanding of common stock and common stock equivalents for the period,
      including the dilutive effects of stock options and other potentially dilutive
      securities. Common stock equivalents result from dilutive stock options computed
      using the treasury stock method and the average share price for the reported
      period. The effect of dilutive options on the weighted average number of shares
      for the three and nine months ended March 31, 2005 was 42,000 and zero,
      respectively. The calculation of diluted earnings per share for the three and
      nine months ended March 31, 2006 excluded stock options to purchase zero and
      15,000 shares, respectively because the effect would have been anti-dilutive.
      The calculation of diluted earnings per share for the three and nine months
      ended March 31, 2005 excluded stock options to purchase of zero and 38,000
      shares, respectively, because the effect would have been anti-dilutive. The
      calculation of diluted earning per share for the three and nine months ended
      March 31, 2005 excluded stock options to purchase of zero and 38,000 shares,
      respectively, because the effect would have been anti-dilutive.




**Note
      5 - Stock-Based Compensation**




Effective
      July 1, 2005, the Company adopted Statement of Financial Accounting
      Standard (“SFAS”) No. 123(R), Share-Based Payment, using the modified
      prospective application transition method. Because the fair value recognition
      provisions of SFAS No. 123, Stock-Based Compensation, and SFAS
      No. 123(R) were materially consistent under our equity plans, and because
      all of the Company’s stock options were fully vested as of July 1, 2005, the
      adoption of SFAS No. 123(R) did not have an impact on our financial
      position or our results of operations. Prior to our adoption of SFAS
      No. 123(R), benefits of tax deductions in excess of recognized compensation
      costs were reported as operating cash flows. SFAS No. 123(R) requires
      excess tax benefits be reported as a financing cash inflow rather than as a
      reduction of taxes paid.




Our
      net
      income for the nine months ended March 31, 2006 includes $81,000 of stock based
      compensation expense, and $19,000 of income tax benefits related to our
      stock-based compensation arrangements. Our net income for the nine months ended
      March 31, 2005 included $10,000 of stock-based compensation expense and $4,000
      of income tax benefit related to our stock-based compensation arrangements.
      During the nine months ended March 31, 2006, outstanding options held by former
      directors of the Company and by the Company’s former chief financial officer,
      which in the aggregate are exercisable to purchase a total of 36,500 shares
      of
      common stock, were amended to extend the term of such options to a period of
      twelve months from the date of termination of service to the Company. Of the
      $81,000 of stock based compensation expense recorded during the nine months
      ended March 31, 2005, $34,000 related to these amendments.




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On
      July
      31, 2002, the Company's Board of Directors approved the SonomaWest Holdings,
      Inc. 2002 Stock Incentive Plan (the "2002 Plan"). The 2002 Plan is designed
      to
      benefit the Company and its shareholders by providing incentive based
      compensation to encourage officers, directors, consultants and other key
      employees of the Company and its affiliates to attain high performance and
      encourage stock ownership in the Company. The maximum number of shares of common
      stock issuable over the term of the 2002 Stock Option Plan is 150,000 shares.
      No
      participant in the 2002 Plan may be granted stock options, direct stock
      issuances and share right awards for more than 15,000 shares of common stock
      in
      total in any calendar year. The exercise price of all incentive stock options
      granted under the 2002 Plan must be at least equal to the fair market value
      of
      the Common Stock on the date of grant. The exercise price of non-statutory
      stock
      options must at least be equal to 85% of the fair market value of the Common
      Stock on the date of grant. The contractual life of the options is ten years.
      To
      date, all options issued under this plan have been issued fully vested.




Prior
      to
      adoption of the 2002 Plan, the Company administered the 1996 Stock Option Plan
      (the "1996 Plan"). As amended, the 1996 Plan provided for the issuance of
      options to employees and non-employee consultants exercisable for an aggregate
      of 275,000 shares of common stock. In connection with adoption of the 2002
      Plan,
      no future options will be granted under the 1996 Plan.




A
      summary
      of the status of the Company’s stock option plans at March 31, 2006 with changes
      during the nine months ended March 31, 2006 are presented in the table
      below:




*Options
                (in thousands)*
            
            *Weighted
                Average Exercise Price*
            
            Average
              Remaining
              Contractual
              Term (years)
            
            Aggregate
              Intrinsic
              Value
              (in thousands)Balance,
                June 30, 2005
            
            
            93
            
            $
            6.41Granted
            
            
            15
            
            $
            10.95Cancelled
            
            
            (2
            )
            $
            7.42Exercised
            
            
            (10
            )
            $
            6.24Balance,
                March 31, 2006
            
            
            96
            
            $
            7.12
            
            
            6.01
            
            $
            686Exercisable,
                March 31, 2006
            
            
            96
            
            $
            7.12
            
            
            6.01
            
            $
            686




The
      fair
      value of each option grant is estimated on the date of grant using the
      Black-Scholes option pricing model, with the following assumptions used for
      the
      fiscal 2006 grants: risk-free interest rate of 4.37 percent; expected dividend
      yield of 0 percent; expected life of two years for the plan options; and
      expected volatility of 49 percent. All outstanding options were fully vested
      as
      of March 31, 2006; and thus, there was no unrecognized compensation cost related
      to stock options.




Cash
      received from stock option exercises during the nine months ended March 31,
      2006
      was $62,000. We issue new shares to satisfy stock option exercises. The
      aggregate exercise price exceeded the market price at date of exercise and
      thus,
      had no intrinsic value.




During
      the nine months ended March 31, 2006, outstanding options held by former
      directors of the Company and by the Company’s former chief financial officer,
      which in the aggregate are exercisable to purchase a total of 36,500 shares
      of
      common stock, were amended to extend the term of such options to a period of
      twelve months from the date of termination of service to the Company. The
      Company recorded non-cash compensation expense of $34,000 for the quarter ended
      March 31, 2006, relating to these amendments.




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**Note
      6 - Related Parties**




On
      July
      1, 2005, Bugatto Investment Company (of which David J. Bugatto, a director
      of
      the Company, is the president) entered into a consulting agreement pursuant
      to
      which Bugatto Investment Company provides real estate consulting services to
      the
      Company for an hourly fee of $225. The agreement replaces a similar agreement
      entered into on July 1, 2004. Under the agreement, if either of the Company’s
      Sonoma County properties are sold during the term of the agreement, Bugatto
      Investment Company is entitled to receive a fee equal to 1.5% of the sales
      prices regardless of whether or not a broker is involved, and Bugatto Investment
      Company is entitled to receive a fee equal to the greater of 1.5% of the gross
      value of the real estate or $150,000 upon any transaction that would result
      in
      the Company becoming a private company.  The term of the agreement is
      through June 30, 2006, but the agreement can be terminated earlier upon the
      occurrence of certain events, including notice of termination by either party.
      During the nine months ended March 31, 2006, the Company incurred $25,000 for
      real estate consulting services from Bugatto Investment Company.  These
      expenses are included in Operating Costs - Related Party.  As of March 31,
      2006, the Company had a payable to Bugatto Investment Company of
      $4,353.




Effective
      August 1, 2005, the Company entered into a consulting agreement with Thomas
      Eakin, the Company’s former Chief Financial Officer. Under the agreement, Mr.
      Eakin provided financial management and accounting services to the Company
      at an
      hourly billing rate of $115 per hour, plus expenses. The term of the agreement
      was initially through July 31, 2006; however, in September 2005, Mr. Eakin
      delivered a notice of termination of the consulting agreement, effective October
      12, 2005. During the nine months ended March 31, 2006, the Company incurred
      $18,000 for services from Thomas R. Eakin. As of March 31, 2006, the Company
      did
      not have a payable to Mr. Eakin.  These expenses are included in Operating
      Costs - Related Party.




Gary
      L.
      Hess, a former director and former President and Chief Executive Officer,
      entered into an agreement with the Company to sell its remaining PermaPak
      inventory and equipment. During the fiscal year ended June 30, 2005 the Company
      received the final payment on the sale of the PermaPak inventory and equipment.
      Pursuant to the terms of the agreement with Mr. Hess, the Company paid $8,000
      in
      commissions to Mr. Hess as a result of this payment. These expenses were
      included under Operating Costs - Related Party. As of March 31, 2006, the
      Company did not owe Mr. Hess any commissions under this agreement.




Roger
      S.
      Mertz, former Chairman of the Board and a former director of the Company, is
      a
      partner of a law firm that served as the Company’s general counsel during fiscal
      2005. During the nine months ended March 31, 2006, the Company incurred $9,000
      for legal services provided by that firm. As of March 31, 2006, the Company
      had
      no payable to that firm.




Walker
      R. Stapleton, a director was elected President and Chief Executive Officer
      on June 16, 2005.





On
      December 23, 2005, the Compensation Committee of the Board of Directors
      (“Board”) of the Company approved compensation arrangements for directors of the
      Company for the 2006 fiscal year (the year ending June 30, 2006). Outside
      directors will receive the following compensation: $3,000 per quarter, plus
      reimbursement for reasonable out-of-pocket expenses incurred in connection
      with
      attendance at meetings; $1,500 for each Board and shareholder meeting attended;
      for service on the Audit Committee or the Compensation Committee, $1,000 per
      quarter for each such committee; and for service on special or other committees
      authorized by the Board, $1,000 per meeting of such committee. The committee
      also awarded options to purchase 2,500 shares of the Company’s common stock to
      each director who is not also an employee of the Company, and awarded options
      to
      purchase 10,000 shares of the Company’s common stock to Mr. Stapleton, the
      Company’s Chief Executive Officer and a director. The exercise price of all
      options is equal to the fair market value of the common stock on the date of
      grant.




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On
      March
      22, 2006, the Board of Directors approved compensation arrangements for
      directors of the Company for service after that date as members of the Special
      Committee of the Board that the Board established following the previously
      announced receipt by the Company of a letter from Mr. Stapleton, disclosing
      the
      desire to initiate a management-led buyout of the Company by an investment
      group
      that would include members of his family. Members will receive an initial
      payment of $20,000 and, if the Special Committee is still in existence and
      undertaking activities as of May 3, 2006, then each member will receive an
      additional $15,000. Under the Company’s previously adopted policies concerning
      compensation to directors, directors are generally entitled to receive $1,000
      for each meeting attended of a committee or subcommittee of the Board. In
      connection with the above arrangements, the Board determined that no further
      meeting fees would be payable in connection with meetings of the Special
      Committee.





**Note
      7 - Minimum Lease Income**




The
      Company leases warehouse space, generating rental revenues for the nine months
      ended March 31, 2006 and March 31, 2005 of $1,540,000 and $1,371,000,
      respectively. The leases have varying terms, which range from month-to-month
      to
      expiration dates through 2013. As of March 31, 2006, assuming that all current
      month-to-month leases continue unchanged throughout the periods presented in
      the
      table, and that there are no changes to the other leases other than expiration
      of the leases at the end of their stated terms and no additional space is
      leased, the following will be the future minimum lease income (in
      thousands):




*Year
                Ending*
              *June
                30*
            
            *Amounts
                in Thousands*Balance
                of 2006
            
            
            4132007
            
            
            1,3632008
            
            
            9472009
            
            
            4282010
            
            
            333Thereafter
            
            
            653Total
            
            $
            4,137






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




SonomaWest
      Holdings, Inc. (the "Company" or "Registrant") is including the following
      cautionary statement in this Quarterly Report to make applicable and take
      advantage of the safe harbor provisions of the Private Securities Litigation
      Reform Act of 1995 for any forward-looking statements made by, or on behalf
      of,
      the Company. The statements contained in this Report that are not historical
      facts are "forward-looking statements" (as such term is defined in Section
      27A
      of the Securities Act of 1933 and section 21E of the Securities Exchange Act
      of
      1934), which can be identified by the use of forward-looking terminology such
      as
      "estimated," "projects," "anticipated," "expects," "intends," "believes," or
      the
      negative thereof or other variations thereon or comparable terminology, or
      by
      discussions of strategy that involve risks and uncertainties. Forward-looking
      statements include statements concerning plans, objectives, goals, strategies,
      future events or performance and underlying assumptions. Forward-looking
      statements involve risks and uncertainties, which could cause actual results
      or
      outcomes to differ materially from those expressed in the forward-looking
      statements. All written and oral forward-looking statements made in connection
      with this Report which are attributable to the Company or persons acting on
      its
      behalf are expressly qualified in their entirety by the "Certain Factors" as
      set
      forth in our Annual Report on Form 10-K for the fiscal year ended June 30,
      2005
      and other cautionary statements set forth therein and in this Report under
      "Management's Discussion and Analysis of Financial Condition and Results of
      Operations.” There can be no assurance that management’s expectations, beliefs
      or projections will be achieved or accomplished, and the Company expressly
      disclaims any obligation to update any forward-looking statements.




The
      financial statements included herein are presented as of, and for the three
      and
      nine months ending March 31, 2006 and 2005 and reflect all the adjustments
      that
      in the opinion of management are necessary for the fair presentation of the
      financial position and results of operations for the periods then ended. All
      adjustments during the periods presented are of a normal and recurring
      nature.





Recent
      Developments





On
      March
      28, 2006, Sonoma County approved modifications to the existing land use
      entitlements on the North Property, located at 2064 Gravenstein Highway North,
      Sebastopol, California, subject to the satisfaction of certain conditions.
      These
      land use entitlement changes, among other things, approved a rezoning of the
      property from diverse agricultural to industrial park use and the approval
      of a
      master use permit. These land use approvals permit the Company to lease the
      property to a broader range of tenants and for a broader range of uses on the
      property. Additionally the approvals permit new buildings to be constructed
      to replace older buildings without having to reapply to the county for
      additional zoning approvals or waivers. In order for the Company to maintain
      the
      benefits of the land use approvals obtained, the Company is required to satisfy
      a number of conditions involving the property. The Company has began making
      the expenditures and taking the actions required to satisfy these
      conditions. Full satisfaction of the conditions is anticipated in advance of
      their respective deadlines (generally, six to 24 months).




On
      February 8, 2006, the Company issued a press release announcing that it had received
      from Walker R. Stapleton, the Company’s President and Chief Executive
      Officer, a letter expressing an interest in initiating a management-led buyout
      transaction of the Company by an investment group including Mr. Stapleton and
      members of his family, including Craig Stapleton, who is the Company’s largest
      stockholder. Based on the most recent Schedule 13D filed by Craig Stapleton
      and
      certain other persons, Craig Stapleton beneficially owns approximately 48%
      of
      the outstanding shares of the Company’s common stock. The letter indicated an
      interest in acquiring all of the Company’s outstanding shares not held by the
      investment group at a price of $11.03 per share. The letter did not propose
      a
      form of transaction. The letter indicated that the investment group was very
      confident in its ability to secure appropriate financing for the transaction.





The
      board
      of directors has appointed a special committee composed of Joe Milam and Fredric
      Selinger, both independent directors of the Company, to consider the expression
      of interest and, if the committee deems appropriate, enter into negotiations
      with the investment group or take other actions regarding the expression of
      interest or alternate transactions. The committee has the authority to retain
      independent financial advisors and independent legal counsel.




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The
      Special Committee has received two additional letters from Mr. Stapleton on
      behalf of the investment group, dated March 23, 2006 and April 11, 2006. The
      letters expressed continued interest in the kind of transaction described in
      the
      February 8, 2006 letter and indicated that the exact structure of a transaction
      would depend on the ability of the investment group to reach an agreement with
      the Company as well as tax and securities law considerations. The letters stated
      that the investment group, which beneficially owns approximately 48% of the
      outstanding common stock, did not have any interest in selling its shares in
      the
      Company and therefore would not support an alternative transaction. The
      letters reserved the right of the investment group to withdraw its expression
      of
      interest at any time.




There
      can
      be no assurance that any definitive offer will be made, that any agreement
      will
      be executed or that any transaction with this investment group or any other
      person or entity will be initiated or consummated.




CRITICAL
      ACCOUNTING POLICIES




The
      financial statements are prepared in accordance with accounting principles
      generally accepted in the United States, which require the Company to make
      estimates and assumptions. The Company believes that of its significant
      accounting policies, the following may involve a higher degree of judgment
      and
      complexity.




Valuation
      of investment in MetroPCS Communications, Inc.




The
      Company accounts for its investment in MetroPCS under the cost method, which
      amounted to $2,401,000 as of March 31, 2006. The Company continues to monitor
      the financial condition, cash flow, operational performance and other relevant
      information about MetroPCS Communications, for purposes of reflecting the
      investment on the Company’s financial statements. This process is based
      primarily on such information as we may request and that MetroPCS may provide
      to
      us. The Company also tracks MetroPCS information available to the general
      public. Since MetroPCS is no longer subject to public disclosure requirements,
      the basis for our evaluation is subject to the timing, accuracy and disclosure
      of the data received. If the Company had, in September 2005, tendered the
      remaining MetroPCS shares that it currently holds, the Company would have
      received gross proceeds of approximately $7.2 million from the tender of such
      shares (in addition to the proceeds from the shares actually tendered). There
      can be no assurance, however, that the Company will be able to achieve liquidity
      for its remaining MetroPCS shares in the future at the price offered in the
      tender offer or at any other price. See Note 2 above for further
      information.




The
      Company owns less than one percent of the total outstanding shares of MetroPCS’
Series D Preferred Stock and less than one percent of its total outstanding
      capital stock on an as-converted basis. If as a result of its review of
      information available to the Company regarding MetroPCS, the Company believes
      its investment should be reduced to a fair value below its cost, the reduction
      would be charged to “loss on investments” in the statements of
      operations.





Valuation
      Allowance on Deferred Taxes




The
      Company records deferred tax assets and/or liabilities based upon its estimate
      of the taxes payable in future years, taking into consideration any change
      in
      tax rates and other statutory provisions. The Company’s previous losses have
      generated federal tax net operating losses ("NOLs") some of which have been
      previously carried back to offset prior years’ taxable income. During fiscal
      2006, the Company expects to utilize all of its remaining NOLs as a result
      of a
      realized gain generated by the Company’s partial tender offer of its MetroPCS
      investment.




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OVERVIEW




The
      Company’s business consists of its real estate management and rental operations.
      The Company also owns a minority investment in the Series D Preferred Stock
      of a
      private telecommunications company, MetroPCS . In
      2000
      and 2001, the Company liquidated its fruit processing operations, but continued
      to hold its real estate and other assets. Thereafter, an opportunity was made
      available to the Company to invest in MetroPCS ,
      which
      has operations, in part, in Northern California.




The
      Company's rental operations include industrial/agricultural property, some
      of
      which was formerly used in its discontinued businesses. This commercial property
      is now being rented to third parties. The Company’s primary business revenue is
      generated from the leasing of its two properties, located in Sebastopol,
      California.




The
      properties are leased to multiple tenants with leases varying in length from
      month-to-month to ten years. Revenue from lease rental is recognized on a
      monthly basis, based upon the dollar amount specified in the related lease.
      Lease incentives and construction allowances provided by the Company to certain
      of its tenants are amortized as an offset to revenue on a straight-line basis
      over the term of the respective lease. The Company requires that all tenants
      be
      covered by a lease. The Company does not have leases that include provisions
      that require the lessee to pay the lessor any additional rent based upon the
      lessee’s sales or any other financial performance levels. The Company has no
      tenant related reimbursements that are not part of tenant lease
      agreements.




RESULTS
      OF OPERATIONS




Results
      of Operations





The
      Company leases warehouse, production, and office space as well as outside
      storage space at both of its properties. The two properties are located on
      82
      acres of land and have a combined leaseable area under roof of 375,000 square
      feet. Recently the Company has revised the method by which it calculates total
      leasable area under roof to reflect, among other things, the removal of square
      footage attributable to common areas, such as hallways and bathrooms, that
      are
      not leasable to specific tenants. As of March 31, 2006 and 2005 the Company
      had
      a total of 32 and 30 tenants, respectively. The tenants have varying original
      lease terms ranging from month-to-month to ten years with options to extend
      the
      leases. As of March 31, 2006, the tenants occupied approximately 336,000 square
      feet under roof, or 90% of the leasable area under roof. This compares to
      272,000 square feet under roof, or 70% of the leasable area under roof, as
      of
      March 31, 2005. In addition to the area under roof, the Company had 63,000
      and
      57,000 square feet of outside area under lease as of March 31, 2006 and March
      31, 2005, respectively.





Rental
      Revenue .
      For the
      nine months ended March 31, 2006 rental revenue increased $169,000 or 12% as
      compared to the corresponding period in the prior year. The increase in rental
      revenue was attributable to the increase in leased square footage. This increase
      was primarily a result of increased revenues from expansion by three existing
      tenants under short-term leases $79,000 and five new tenants $109,000. This
      increase in tenant demand was not anticipated and was primarily a result of
      an
      increase in a tenant’s business volume. These increases were offset by vacating
      tenants and Excessive Operating Expenses adjustments for 2005 resulting in
      a
      revenue reduction of $19,000 compared to the prior year.




For
      the
      three months ended March 31, 2006 rental revenue increased $81,000 or 17% as
      compared to the three months ended March 31, 2005. The increase in rental
      revenue was attributable to an increase in leased square footage.




Tenant
      Reimbursements .
      For the
      nine months ended March 31, 2006 tenant reimbursements increased $53,000 or
      16%
      as compared to the nine months ended March 31, 2005. Such reimbursements
      typically fluctuate based upon the increase or decrease in utilities rates
      and
      the amount of space occupied by tenants. The increase was primarily a result
      of
      increased utility rates and usage by tenants.




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For
      the
      three months ended March 31, 2006 tenant reimbursements increased $33,000 or
      42%
      as compared to the three months ended March 31, 2005. The increase in utilities
      during the quarter was primarily a result of increased activity by three
      manufacturing tenants.




Operating
      Costs .
      For the
      nine months ended March 31, 2006 total operating costs increased $89,000 or
      5%
      compared to the nine months ended March 31, 2005. Of this increase, operating
      costs—related party decreased $246,000 and operating costs increased $335,000.
      The decrease in related party expenses was the result of reduced legal expenses
      related to the firm of which a former director of the Company is a partner
      of
      $222,000, due primarily to the use of another firm for services, along with
      a
      combined reduction of $19,000 in accounting and real estate consulting fees
      and
      $5,000 reduction in related party commission. The increase of $335,000 in
      operating costs was a result of non-related party legal expenses of $107,000,
      increased non-cash stock compensation of $72,000 related to stock option
      issuances and extensions, salary and compensation arrangements of $87,000 for
      Mr. Stapleton who became the President and Chief Executive Officer of the
      Company in June 2005, an increase in Board of Director fees of $63,000 ($50,000
      of which was directly related to the payments to board members for their
      services on the Special Committee), utility cost increases of $57,000 due
      primarily to the increase in utility rates, and increases of $87,000 compared
      to
      2005 in several other items. These increases were offset by decreases in repairs
      and maintenance of $118,000 due to the significant painting, roof repairs and
      storm damage maintenance in Fiscal 2005, development costs of $20,000 and
      insurance $7,000. The Company continues to closely scrutinize all discretionary
      spending. Efforts to reduce and/or maintain expenses continue to be an important
      focus of the Company. Total operating expenses are expected to remain relatively
      consistent over the remainder of fiscal 2006, although the level of operating
      expenses may be affected by expenses relating to the proposed buyout transaction
      described above under the heading “Recent Developments”. For the three months
      ended March 31, 2006 total operating costs increased $105,000 or 21% compared
      to
      the comparable quarter of 2005. Of this increase, operating costs—related party
      decreased $55,000 and operating costs increased $160,000 which was primarily
      a
      result of increases, with the amount of the increase shown in parenthesis,
      in
      Board of Director fees ($63,000), utilities ($35,000), salary and compensation
      arrangements for Mr. Stapleton ($28,000) and legal expense ($21,000).




Interest
      Income .
      For the
      nine months ended March 31, 2006, the Company generated
      $89,000 of interest income on its
      cash balances as compared to $24,000 in the nine months ended March 31, 2005.
      The sale of a portion of the Company’s MetroPCS stock in October 2005 has
      increased the invested cash accounts.




For
      the
      three months ended March 31, 2006, the Company generated $42,000 of interest
      income on its cash balances, compared to $10,000 in the three months ended
      March
      31, 2005. Again, the increase was primarily due to increased cash generated
      by
      the sale of Metro PCS shares in October 2005.




Interest
      Expense. Interest
      expense consists solely of interest expense on mortgage debt. Interest expense
      increased to $87,000 for the nine months ended March 31, 2006, compared to
      $65,000 for the corresponding period in the prior year due primarily to
      increased interest rates on the Company’s outstanding debt.




For
      the
      three months ended March 31, 2006, the Company had $30,000 of interest expense,
      compared to $24,000 in the three months ended March 31, 2005, primarly due
      to
      interest rate increases on the outstanding debt.




Gain
      on Sale of Investment and Dividends .
      For the
      nine months ended March 31, 2006, the Company received $1,813,000 for the tender
      of 20% of its shares in MetroPCS, resulting in a gain on sale of investments
      of
      $1,090,000 and dividend income of $122,000.




Other
      Income and
      Expense .
      For the
      nine months ended March 31, 2006, the Company incurred
      a net increase in other income of $ 7,000
      which includes $5,000 from  the
      sale
      of a dust collection system and other equipment.




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Income
      Taxes .
      The
      effective tax rate for the nine months ended March 31, 2006 increased to a
      provision of 38.5% from a benefit of 30% for the nine months ended March 31,
      2005. As of March 31, 2006, the Company had no operating loss carryforwards.
      Though the Company had reported taxable losses until 2005, as of the end of
      fiscal 2005 management believed that the pending initial public offering of
      MetroPCS was expected to result in significant realized investment gains as
      the
      Company planned to sell a portion of its investment upon completion of the
      aforementioned initial public offering. Consequently, management believed that
      it was more likely than not that the Company would generate sufficient taxable
      income in the
      foreseeable future, allowing for the expected utilization of 100% of its
      deferred tax assets. As a result,
      the valuation allowance was reversed in the fourth quarter of fiscal 2005.
      Although the initial public offering was later withdrawn, the Company completed
      a tender offer with MetroPCS in October 2005 that will allow for utilization
      of
      all of the Company’s remaining net operating loss carryforwards during fiscal
      2006.




Liquidity
      and Capital Resources




The
      Company had cash of $3.7 million at March 31, 2006, and current maturities
      of
      long-term debt of $80,000. The increase in cash and cash equivalents of
      $1,851,000 since June 30, 2005 was primarily a result of the cash proceeds
      of
      $1,813,000 from the sale of 20% of the Company’s MetroPCS holdings, cash
      received from the exercise of stock options of $62,000 and cash provided by
      operating activities of $99,000, which were partially offset by principal
      payment on long-term debt of $47,000 and capital expenditures of
      $76,000.




In
      October 2005, the Company, entered into a credit agreement with Wells Fargo
      Bank, National Association. The credit agreement replaces the Company’s previous
      credit agreement with the bank and, in part, refinances approximately $1.6
      million of indebtedness under the previous agreement. The credit agreement
      provides for a line of credit, which is available through September 1, 2010.
      The
      line of credit provides for advances not to exceed at any time an aggregate
      principal amount of $500,000, and advances under the line of credit may be
      used
      to provide funds for tenant improvements. The term note bears interest at the
      bank’s prime rate plus .25% (or, at the Company’s election, the LIBOR rate, as
      defined, plus 3.25%), with monthly principal payments of approximately $7,000
      beginning November 1, 2005. Unpaid principal and interest is due on the maturity
      date of October 1, 2010. The note is secured by a first deed of trust on the
      Company’s property located at 2064 Gravenstein Highway North,
      Sebastopol, California .
      Under
      this credit agreement the Company is required to meet certain financial
      covenants; as of March 31, 2006 the Company was in compliance with such
      covenants.




Cash
      flows from operating activities are expected to remain positive and relatively
      consistent given current tenant occupancy and rental agreements in
      place.




The
      Company believes that its existing resources, together with anticipated cash
      from operating activities, will be sufficient to satisfy its current and
      projected cash requirements for at least the next twelve months. The Company
      holds certain cash and cash equivalents for non-trading purposes that are
      sensitive to changes in the interest rate market. The Company does not believe
      that changes in the interest rate market affecting these financial instruments
      will have a material impact, either favorable or unfavorable, on its financial
      position or results of operations.




The
      Company does not have any off-balance sheet arrangements.




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





The
      Company currently has no derivative financial instruments that expose the
      Company to market risk. The Company is exposed to cash flow and fair value
      risk
      due to changes in interest rates with respect to its notes payable and in
      changes in the fair value of its investment in MetroPCS Communications, Inc.
      As
      of March 31, 2006, the Company believes that the carrying amounts for cash,
      accounts receivable and accounts payable approximate their fair value. The
      Company believes the note payable approximates fair market value as the term
      to
      maturity is short (October 1, 2010), and as a result of this short term
      maturity, the Company believes its exposure to market risk for significant
      changes in the variable interest rate (prime + .25%) will be immaterial. Based
      on the price per share offered in the October 2005 tender offer, the Company
      believes that the investment in MetroPCS Communications exceeds its carrying
      amount.




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**Item
      4. Controls and Procedures**




As
      of
      March 31, 2006, the Company carried out an evaluation, under the supervision
      and
      with the participation of the Company's management, including the Company's
      Chief Executive Officer and
      Chief
      Financial Officer, of the effectiveness of the design and operation of the
      Company's disclosure controls and procedures (as defined in Exchange Act Rule
      13a- 15(e)
      and
      Rule 15d-15(e )).
      Based
      upon that evaluation, the Company's Chief Executive Officer and
      Chief Financial Officer concluded that the Company's disclosure controls and
      procedures are effective at
      a
      reasonable level in
      timely
      alerting them to material information relating to the Company that is required
      to be included in the Company's periodic filings with the Securities and
      Exchange Commission. There has
      been
      no change in the
      Company's internal
      control over financial reporting that occurred during the Company's most recent fiscal quarter that
      has
      materially affected, or is reasonably likely to materially affect, the
      Company 's
      internal control over financial reporting.




The
      Company's management, including the Chief Executive and Chief Financial Officer,
      do not expect that the Company's disclosure controls or internal
      controls will prevent all error and all fraud. A control system, no matter
      how
      well conceived and operated, can provide only reasonable, not absolute,
      assurance that the objectives of the control system are met due to
      numerous factors, ranging from errors to conscious acts of an individual, or
      individuals acting together. In addition ,
      the
      design of a control system must reflect the fact that there are resource
      constraints, and the benefits of controls must be considered relative to their
      costs. Because of inherent
      limitations in a cost-effective control system, misstatements due to error
      and/or fraud may occur and not be detected.




**PART
      II. OTHER INFORMATION**




**Item
      1. Legal Proceedings**




None




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




None





**Item
      3.Defaults Upon Senior Securities.**




None





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




None




**Item
      5. Other Information**




None




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**Item
      6.**  **Exhibits**





31.1
            Chief
                Executive Officer and Chief Financial Officer Certification of Periodic
                Financial Report Pursuant to Section 302 of the Sarbanes-Oxley Act
                of
                2002*





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





*
            Filed
                herewith.


+
            Furnished
                herewith.





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SIGNATURES




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







Date:  May
      15,
      2006




/s/
      Walker R. Stapleton


Walker
      R.
      Stapleton, Chief Financial Officer




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EXHIBIT
                INDEXExhibit
                No.
            
            Document
                Description31.1
            
            Chief
                Executive Officer and Chief Financial Officer Certification of Periodic
                Financial Report Pursuant to Section 302 of the Sarbanes-Oxley Act
                of
                2002*32.1
            
            Chief
                Executive Officer and Chief Financial Officer Certification Pursuant
                to 18
                U.S.C. Section 1350, as adopted pursuant to section 906 of the
                Sarbanes-Oxley Act of 2002. +


*
              Filed
                  herewith.
 +
              Furnished
                  herewith.


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