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**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**WASHINGTON,      D.C. 20549**

**FORM      10-Q**

|   | ý | QUARTERLY                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE |   |
|--------|--------|------------------------------------------------------------------------|--------|

**June      30, 2006**

|   | o | TRANSITION                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE |   |
|--------|---|-------------------------------------------------------------------------|--------|

**1-6663**

**COLONIAL      COMMERCIAL CORP.**

| **New                  York**                                                   |   | **11-2037182**                                        |
|---------------------------------------------------------------------------------|--------|-------------------------------------------------------|
| (State                  or other jurisdiction of incorporation or organization) |   | (I.R.S.                  Employer Identification No.) |
|                                                                            |   |                                                  |
| **275                  Wagaraw Road, Hawthorne, New Jersey**                    |   | **07506**                                             |
| (Address                  of principal executive offices)                       |   | (Zip                  Code)                           |

**973-427-8224**

| Class                                                                |   | Outstanding                at August 1, 2006 |
|----------------------------------------------------------------------|--------|----------------------------------------------|
| Common                Stock, $.05 par value per share                |   | 4,592,256                shares              |
| Convertible                Preferred Stock, $.05 par value per share |   | 468,924                shares                |

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| **COLONIAL                COMMERCIAL CORP. AND                SUBSIDIARIES** |
|------------------------------------------------------------------------------|
|                                                                         |
| CONTENTS                                                                     |
|                                                                         |
| PART                I.                                                       | FINANCIAL                INFORMATION |   |   |
|                                                                         |   |   |   |
| Item                1.                                                       |   | Financial                Statements |   |   |
|                                                                         |   |   |   |   |
|                                                                         |   | Condensed                Consolidated Balance Sheets as of June 30, 2006                (Unaudited) and December 31, 2005 |   | 1 |
|                                                                         |   |   |   |   |
|                                                                         |   | Condensed                Consolidated Statements of Operations (Unaudited) for                the Three Months Ended June 30, 2006 and 2005 |   | 2 |
|                                                                         |   |   |   |   |
|                                                                         |   | Condensed                Consolidated Statements of Operations (Unaudited) for                the Six Months Ended June 30, 2006 and 2005 |   | 3 |
|                                                                         |   |   |   |   |
|                                                                         |   | Condensed                Consolidated Statements of Cash Flows (Unaudited) for                the Six Months Ended June 30, 2006 and 2005 |   | 4 |
|                                                                         |   |   |   |   |
|                                                                         |   | Notes                to Condensed Consolidated Financial Statements                (Unaudited) |   | 5 |
|                                                                         |   |   |   |   |
| Item                2.                                                       |   | Management's                Discussion and Analysis of Financial Condition                and Results of Operations |   | 11 |
|                                                                         |   |   |   |   |
| Item                3.                                                       |   | Quantitative                and Qualitative Disclosures About Market                Risk |   | 16 |
|                                                                         |   |   |   |   |
| Item                4.                                                       |   | Controls                and Procedures |   | 16 |
|                                                                         |   |   |   |   |
| PART                II.                                                      | OTHER                INFORMATION |   |   |
|                                                                         |   |   |   |
| Item                1.                                                       |   | Legal                Proceedings |   | 17 |
|                                                                         |   |   |   |   |
| Item                4.                                                       |   | Submission                of Matters to a Vote of Security                Holders |   | 17 |
|                                                                         |   |   |   |   |
| Item                6.                                                       |   | Exhibits |   | 17 |

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*Contents*

**PART      I. FINANCIAL INFORMATION**

**Item      1. Financial Statement****s**

|                                                                                                                                                                                                                                                                                    |   | June                30, |       | December                31, |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------|------------|-----------------------------|--------|
|                                                                                                                                                                                                                                                                                    |   | 2006                    |       | 2005                        |   |
|                                                                                                                                                                                                                                                                                    |   | (Unaudited)             |       |                        |   |
| Assets                                                                                                                                                                                                                                                                                  |   |                    |       |                        |   |
| Current                assets:                                                                                                                                                                                                                                                          |   |                    |       |                        |   |
| Cash                                                                                                                                                                                                                                                                                    |   | $                       | 970,012    |                        | $      | 613,456 |   |
| Accounts                receivable, net of allowance for doubtful accounts of $193,636 2006                and                $185,971 in 2005                                                                                                                                          |   |                    | 9,122,694  |                        |   | 8,489,717 |   |
| Inventory                                                                                                                                                                                                                                                                               |   |                    | 13,666,179 |                        |   | 12,214,261 |   |
| Prepaid                expenses and other current assets                                                                                                                                                                                                                                |   |                    | 993,110    |                        |   | 1,066,658 |   |
| Deferred                tax asset - current portion                                                                                                                                                                                                                                     |   |                    | 637,500    |                        |   | 637,500 |   |
| Total                current assets                                                                                                                                                                                                                                                     |   |                    | 25,389,495 |                        |   | 23,021,592 |   |
| Property                and equipment                                                                                                                                                                                                                                                   |   |                    | 1,642,971  |                        |   | 1,669,484 |   |
| Goodwill                                                                                                                                                                                                                                                                                |   |                    | 1,628,133  |                        |   | 1,628,133 |   |
| Other                intangibles                                                                                                                                                                                                                                                        |   |                    | 4,500      |                        |   | 11,334 |   |
| Other                assets - noncurrent                                                                                                                                                                                                                                                |   |                    | 132,679    |                        |   | 135,832 |   |
| Deferred                tax asset - noncurrent                                                                                                                                                                                                                                          |   |                    | 1,071,000  |                        |   | 1,071,000 |   |
|                                                                                                                                                                                                                                                                                    |   | $                       | 29,868,778 |                        | $      | 27,537,375 |   |
| Liabilities                and Stockholders' Equity                                                                                                                                                                                                                                     |   |                    |       |                        |   |   |   |
| Current                liabilities:                                                                                                                                                                                                                                                     |   |                    |       |                        |   |   |   |
| Trade                payables                                                                                                                                                                                                                                                           |   | $                       | 6,089,099  |                        | $      | 5,991,946 |   |
| Accrued                liabilities                                                                                                                                                                                                                                                      |   |                    | 2,020,377  |                        |   | 2,047,159 |   |
| Income                taxes payable                                                                                                                                                                                                                                                     |   |                    | 971        |                        |   | 12,772 |   |
| Borrowings                under credit facility - revolving credit                                                                                                                                                                                                                      |   |                    | 13,562,196 |                        |   | 11,183,008 |   |
| Borrowings                under credit facility - term loan/overadvance                                                                                                                                                                                                                 |   |                    | 562,977    |                        |   | 562,977 |   |
| Notes                payable - current portion; includes related party notes of $30,000                in 2006                and $60,389 in 2005                                                                                                                                       |   |                    | 133,395    |                        |   | 165,112 |   |
| Total                current liabilities                                                                                                                                                                                                                                                |   |                    | 22,369,015 |                        |   | 19,962,974 |   |
| Notes                payable, excluding current portion; includes related party notes                of                $1,010,000 in 2006 and $1,000,625 in 2005                                                                                                                        |   |                    | 1,399,452  |                        |   | 1,400,834 |   |
| Total                liabilities                                                                                                                                                                                                                                                        |   |                    | 23,768,467 |                        |   | 21,363,808 |   |
|                                                                                                                                                                                                                                                                                    |   |                    |       |                        |   |   |   |
| Commitments                and contingencies                                                                                                                                                                                                                                            |   |                    |       |                        |   |   |   |
| Stockholders'                equity:                                                                                                                                                                                                                                                    |   |                    |       |                        |   |   |   |
| Redeemable                convertible preferred stock, $.05 par value, 2,500,000 shares authorized,                468,924 in 2006 and 484,721 in 2005 shares issued and outstanding,                liquidation preference of $2,344,620 in 2006 and $2,423,605 in                2005 |   |                    | 23,446     |                        |   | 24,236 |   |
| Common                stock, $.05 par value, 20,000,000 shares authorized, 4,592,256 in                2006and                4,544,459 in 2005 shares issued and outstanding                                                                                                           |   |                    | 229,613    |                        |   | 227,223 |   |
| Additional                paid-in capital                                                                                                                                                                                                                                               |   |                    | 10,633,259 |                        |   | 10,626,859 |   |
| Accumulated                deficit                                                                                                                                                                                                                                                      |   |                    | (4,786,007 | )                           |   | (4,704,751 | ) |
| Total                stockholders' equity                                                                                                                                                                                                                                               |   |                    | 6,100,311  |                        |   | 6,173,567 |   |
|                                                                                                                                                                                                                                                                                    |   | $                       | 29,868,778 |                        | $      | 27,537,375 |   |

----

*Contents*

Condensed      Consolidated Statements of Operations

|                                                                                                                                                           |   | For                The Three Months Ended |       |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------|------------|
|                                                                                                                                                           |   | June                30,                   |       |
|                                                                                                                                                           |   | 2006                                      |       | 2005 |   |
| Sales                                                                                                                                                          |   | $                                         | 18,155,812 |   | $ | 17,501,842 |   |
| Cost                of sales                                                                                                                                   |   |                                      | 12,714,879 |   |   | 12,369,723 |   |
| Gross                profit                                                                                                                                    |   |                                      | 5,440,933  |   |   | 5,132,119 |   |
|                                                                                                                                                           |   |                                      |       |   |   |   |   |
| Selling,                general and administrative expenses, net                                                                                               |   |                                      | 4,793,206  |   |   | 4,368,437 |   |
| Operating                income                                                                                                                                |   |                                      | 647,727    |   |   | 763,682 |   |
|                                                                                                                                                           |   |                                      |       |   |   |   |   |
| Other                income                                                                                                                                    |   |                                      | 63,467     |   |   | 87,557 |   |
| Interest                expense, net; includes related party interest of $25,765 in 2006                and                $22,721 in                2005 |   |                                      | (336,240   | ) |   | (250,029 | ) |
| Income                before income taxes                                                                                                                      |   |                                      | 374,954    |   |   | 601,210 |   |
|                                                                                                                                                           |   |                                      |       |   |   |   |   |
| Income                tax expense                                                                                                                              |   |                                      | 33,121     |   |   | 81,028 |   |
| Net                income                                                                                                                                      |   | $                                         | 341,833    |   | $ | 520,182 |   |
|                                                                                                                                                           |   |                                      |       |   |   |   |   |
| Income                per common share:                                                                                                                        |   |                                      |       |   |   |   |   |
| Basic                                                                                                                                                          |   | $                                         | 0.07       |   | $ | 0.12 |   |
| Diluted                                                                                                                                                        |   | $                                         | 0.06       |   | $ | 0.10 |   |
|                                                                                                                                                           |   |                                      |       |   |   |   |   |
| Weighted                average shares outstanding:                                                                                                            |   |                                      |       |   |   |   |   |
| Basic                                                                                                                                                          |   |                                      | 4,579,846  |   |   | 4,185,505 |   |
| Diluted                                                                                                                                                        |   |                                      | 5,302,026  |   |   | 5,287,577 |   |

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*Contents*

Condensed      Consolidated Statements of Operations

|                                                                                                                                                           |   | For                The Six Months Ended |       |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------|------------|
|                                                                                                                                                           |   | June                30,                 |       |
|                                                                                                                                                           |   | 2006                                    |       | 2005 |   |
| Sales                                                                                                                                                          |   | $                                       | 33,040,025 |   | $ | 30,849,161 |   |
| Cost                of sales                                                                                                                                   |   |                                    | 23,012,325 |   |   | 21,463,971 |   |
| Gross                profit                                                                                                                                    |   |                                    | 10,027,700 |   |   | 9,385,190 |   |
|                                                                                                                                                           |   |                                    |       |   |   |   |   |
| Selling,                general and administrative expenses, net                                                                                               |   |                                    | 9,550,068  |   |   | 8,619,062 |   |
| Operating                income                                                                                                                                |   |                                    | 477,632    |   |   | 766,128 |   |
|                                                                                                                                                           |   |                                    |       |   |   |   |   |
| Other                income                                                                                                                                    |   |                                    | 129,256    |   |   | 149,435 |   |
| Interest                expense, net; includes related party interest of $51,393 in 2006                and                $44,541 in                2005 |   |                                    | (635,902   | ) |   | (493,590 | ) |
| (Loss)                income before income taxes                                                                                                               |   |                                    | (29,014    | ) |   | 421,973 |   |
|                                                                                                                                                           |   |                                    |       |   |   |   |   |
| Income                tax expense                                                                                                                              |   |                                    | 52,242     |   |   | 100,724 |   |
| Net                (loss) income                                                                                                                               |   | $                                       | (81,256    | ) | $ | 321,249 |   |
|                                                                                                                                                           |   |                                    |       |   |   |   |   |
| (Loss)                income per common share:                                                                                                                 |   |                                    |       |   |   |   |   |
| Basic                                                                                                                                                          |   | $                                       | (0.02      | ) | $ | 0.08 |   |
| Diluted                                                                                                                                                        |   | $                                       | (0.02      | ) | $ | 0.06 |   |
|                                                                                                                                                           |   |                                    |       |   |   |   |   |
| Weighted                average shares outstanding:                                                                                                            |   |                                    |       |   |   |   |   |
| Basic                                                                                                                                                          |   |                                    | 4,578,606  |   |   | 4,175,422 |   |
| Diluted                                                                                                                                                        |   |                                    | 4,578,606  |   |   | 5,287,377 |   |

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*Contents*

COLONIAL      COMMERCIAL CORP. AND SUBSIDIARIES

Condensed      Consolidated Statements of Cash Flows

|                                                                                                                                               |   | For                The Six Months Ended |       |
|----------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------|------------|
|                                                                                                                                               |   | 2006                                    |       | 2005 |   |
| Cash                flows from operating activities:                                                                                               |   |                                    |       |   |   |
| Net                (loss) income                                                                                                                   |   | $                                       | (81,256    | ) | $ | 321,249 |   |
| Adjustments                to reconcile net (loss) income to net cash (used in) provided by                operating                activities:    |   |                                    |       |   |   |   |   |
| Stock-based                compensation                                                                                                            |   |                                    | -          |   |   | (25,740 | ) |
| Provision                for doubtful accounts                                                                                                     |   |                                    | 84,310     |   |   | 30,587 |   |
| Depreciation                                                                                                                                       |   |                                    | 222,472    |   |   | 191,090 |   |
| Amortization                of intangibles                                                                                                         |   |                                    | 6,834      |   |   | 9,333 |   |
| Accretion                of debt discount                                                                                                          |   |                                    | 18,750     |   |   | 18,750 |   |
| Changes                in operating assets and liabilities                                                                                         |   |                                    |       |   |   |   |   |
| Accounts                receivable                                                                                                                 |   |                                    | (717,287   | ) |   | (1,020,982 | ) |
| Inventory                                                                                                                                          |   |                                    | (1,451,918 | ) |   | 104,505 |   |
| Prepaid                expenses and other current assets                                                                                           |   |                                    | 73,548     |   |   | (213,282 | ) |
| Other                assets - noncurrent                                                                                                           |   |                                    | 3,153      |   |   | 26,942 |   |
| Trade                payables                                                                                                                      |   |                                    | 97,153     |   |   | 452,130 |   |
| Accrued                liabilities                                                                                                                 |   |                                    | (26,782    | ) |   | 218,667 |   |
| Income                taxes payable                                                                                                                |   |                                    | (11,801    | ) |   | 56,263 |   |
| Net                cash (used in) provided by operating activities                                                                                 |   |                                    | (1,782,824 | ) |   | 169,512 |   |
|                                                                                                                                               |   |                                    |       |   |   |   |   |
| Cash                flows from investing activities:                                                                                               |   |                                    |       |   |   |   |   |
| Additions                to property and equipment                                                                                                 |   |                                    | (195,959   | ) |   | (141,040 | ) |
| Net                cash used in investing activities                                                                                               |   |                                    | (195,959   | ) |   | (141,040 | ) |
|                                                                                                                                               |   |                                    |       |   |   |   |   |
| Cash                flows from financing activities:                                                                                               |   |                                    |       |   |   |   |   |
| Issuance                of common stock and exercise of stock options                                                                              |   |                                    | 8,000      |   |   | 3,500 |   |
| Repayments                of notes payable: includes related party repayments of $30,389 in                2006,                and $0.00 in 2005. |   |                                    | (64,922    | ) |   | (26,950 | ) |
| Issuance                of notes payable                                                                                                           |   |                                    | 13,073     |   |   | - |   |
| Borrowings                (repayments) under credit facility - term loan/overadvance                                                               |   |                                    | 250,000    |   |   | (250,000 | ) |
| Borrowings                under credit facility - revolving credit                                                                                 |   |                                    | 2,129,188  |   |   | 428,317 |   |
| Net                cash provided by financing activities                                                                                           |   |                                    | 2,335,339  |   |   | 154,867 |   |
| Increase                in cash                                                                                                                    |   |                                    | 356,556    |   |   | 183,339 |   |
| Cash                - beginning of year                                                                                                            |   |                                    | 613,456    |   |   | 310,659 |   |
| Cash                - end of year                                                                                                                  |   | $                                       | 970,012    |   | $ | 493,998 |   |

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*Contents*

**COLONIAL      COMMERCIAL CORP. AND SUBSIDIARIES**

Notes      To      Condensed Consolidated Financial Statements

| 1. | Summary                of Significant Accounting Policies and                Practices |
|----|----------------------------------------------------------------------------------------|

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*Contents*

| Options                Outstanding and Exercisable |
|----------------------------------------------------|
|                                               |   |   |   |   |   |   |
| Range                of Exercise Prices            |   | Shares |   | Weighted                Average Remaining Contractual Life |   | Weighted                Average Exercise Price |
| $                .25                               |   | 74,000 |   | 5.54 |   | $                .25 |

|                                                                                            |   | For                    the Quarter Ended June 30, 2005 |    | For                    the Six Months Ended June 30, 2005 |   |
|-------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------|---------|-----------------------------------------------------------|--------|
|                                                                                            |   |                                                   |    |                                                      |   |
| Net                    income, as reported                                                      |   | $                                                      | 520,182 |                                                      | $      | 321,249 |   |
|                                                                                            |   |                                                   |    |                                                      |   |   |   |
| Add:                    Stock-based                    compensation related to option repricing |   |                                                   | (14,840 | )                                                         |   | (25,740 | ) |
|                                                                                            |   |                                                   |    |                                                      |   |   |   |
| Pro                    forma net income                                                         |   | $                                                      | 505,342 |                                                      | $      | 295,509 |   |
|                                                                                            |   |                                                   |    |                                                      |   |   |   |
| Basic                    income per share, as reported                                          |   |                                                   | 0.12    |                                                      |   | 0.08 |   |
| Basic                    income per share, pro forma                                            |   |                                                   | 0.12    |                                                      |   | 0.07 |   |
|                                                                                            |   |                                                   |    |                                                      |   |   |   |
| Diluted                    income per share, as reported                                        |   |                                                   | 0.10    |                                                      |   | 0.06 |   |
| Diluted                    income per share, pro forma                                          |   |                                                   | 0.10    |                                                      |   | 0.06 |   |

| 2. | Equity                Transactions  |
|----|------------------------------------------|

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*Contents*

| 3. | Supplemental                Cash Flow Information |
|----|---------------------------------------------------|

|                                            |   | For                the Six Months Ended     |    |
|-------------------------------------------------|--------|---------------------------------------------|---------|
|                                            |   | June                30,                2006 |    | June                30, 2005 |   |
| Cash                paid during the period for: |   |                                        |    |   |   |
|                                            |   |                                        |    |   |   |
| Interest                                        |   | $                                           | 598,810 |   | $ | 446,212 |   |
|                                            |   |                                        |    |   |   |   |   |
| Income                taxes                     |   | $                                           | 65,179  |   | $ | 156,206 |   |

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*Contents*

| 4. | Net                  Income (Loss) Per Common                  Share   |
|----|----------------------------------------------------------------------------------|

|                                                                                                                                                    |   | For                the Quarter Ended June 30, |      | For                the Six Months Ended June 30, |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------|-----------|--------------------------------------------------|--------|
|                                                                                                                                                    |   | 2006                                          |      | 2005                                             |   | 2006 |   | 2005 |   |
| Net                Income (Loss) (numerator)                                                                                                            |   | $                                             | 341,833   |                                             | $      | 520,182 |   | $ | (81,256 | ) | $ | 321,249 |   |
|                                                                                                                                                    |   |                                          |      |                                             |   |   |   |   |   |   |   |   |   |
| Weighted                average common shares (denominator for basic income per                share)                                                   |   |                                          | 4,579,846 |                                             |   | 4,185,505 |   |   | 4,578,606 |   |   | 4,175,422 |   |
|                                                                                                                                                    |   |                                          |      |                                             |   |   |   |   |   |   |   |   |   |
| Effect                of dilutive securities:                                                                                                           |   |                                          |      |                                             |   |   |   |   |   |   |   |   |   |
| Convertible                preferred stock                                                                                                              |   |                                          | 474,267   |                                             |   | 777,375 |   |   | - |   |   | 783,903 |   |
| Convertible                notes                                                                                                                        |   |                                          | 175,000   |                                             |   | 175,000 |   |   | - |   |   | 175,000 |   |
| Stock                options                                                                                                                            |   |                                          | 72,913    |                                             |   | 149,697 |   |   | - |   |   | 153,052 |   |
|                                                                                                                                                    |   |                                          |      |                                             |   |   |   |   |   |   |   |   |   |
| Weighted                average common and potential common shares outstanding (denominator                for                diluted income per share) |   |                                          | 5,302,026 |                                             |   | 5,287,577 |   |   | 4,578,606* |   |   | 5,287,377 |   |
|                                                                                                                                                    |   |                                          |      |                                             |   |   |   |   |   |   |   |   |   |
| Basic                net income (loss) per share                                                                                                        |   | $                                             | 0.07      |                                             | $      | 0.12 |   | $ | (0.02 | ) | $ | 0.08 |   |
|                                                                                                                                                    |   |                                          |      |                                             |   |   |   |   |   |   |   |   |   |
| Diluted                net income (loss) per share                                                                                                      |   | $                                             | 0.06      |                                             | $      | 0.10 |   | $ | (0.02 | ) | $ | 0.06 |   |

| 5. | Financing                Arrangements |
|----|---------------------------------------|

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*Contents*

| 6. | Litigation |
|----|------------|

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*Contents*

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*Contents*

| 7. | New                Accounting Pronouncements |
|----|----------------------------------------------|

*Accounting for Uncertainty        in Income Taxes- an interpretation FASB No. 109*

| 8. | Subsequent                Events |
|----|----------------------------------|

None

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

----

*Contents*

----

*Contents*

| Computer                hardware and software | 3-5                years |
|-----------------------------------------------|--------------------------|
|                                          |                     |
| Furniture                and fixtures         | 5                years   |
|                                          |                     |
| Automobiles                                   | 3-5                years |

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*Contents*

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*Contents*

|                                                        |   | For                the Quarter |   | For                the Six Months |   |
|-------------------------------------------------------------|--------|--------------------------------|--------|-----------------------------------|--------|
|                                                        |   | Ended                June 30,  |   | Ended                June 30,     |   |
|                                                        |   | 2006                           |   | 2005                              |   | 2006 |   | 2005 |   |
| Sales                                                       |   |                           | 100.0  | %                                 |   | 100.0 | % |   | 100.0 | % |   | 100.0 | % |
| Cost                of sales                                |   |                           | 70.0   |                              |   | 70.7 |   |   | 69.6 |   |   | 69.6 |   |
| Gross                profit                                 |   |                           | 30.0   |                              |   | 29.3 |   |   | 30.4 |   |   | 30.4 |   |
|                                                        |   |                           |   |                              |   |   |   |   |   |   |   |   |   |
| Selling,                general and administrative expenses |   |                           | 26.4   |                              |   | 25.0 |   |   | 28.9 |   |   | 27.9 |   |
| Operating                income                             |   |                           | 3.6    |                              |   | 4.3 |   |   | 1.5 |   |   | 2.5 |   |
|                                                        |   |                           |   |                              |   |   |   |   |   |   |   |   |   |
| Other                income                                 |   |                           | 0.4    |                              |   | 0.5 |   |   | 0.4 |   |   | 0.5 |   |
| Interest                expense, net                        |   |                           | (1.9   | )                                 |   | (1.4 | ) |   | (1.9 | ) |   | (1.6 | ) |
| Income                before taxes                          |   |                           | 2.1    |                              |   | 3.4 |   |   | 0.0 |   |   | 1.4 |   |
|                                                        |   |                           |   |                              |   |   |   |   |   |   |   |   |   |
| Income                taxes                                 |   |                           | (0.2   | )                                 |   | (0.4 | ) |   | (0.2 | ) |   | (0.4 | ) |
|                                                        |   |                           |   |                              |   |   |   |   |   |   |   |   |   |
| Net                income (loss)                            |   |                           | 1.9    | %                                 |   | 3.0 | % |   | (0.2 | )% |   | 1.0 | % |

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*Contents*

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

**Item      4. Controls and Procedures**

|   | a. | Evaluation                of Disclosure Controls and                Procedures |
|--------|----|--------------------------------------------------------------------------------|

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*Contents*

|   | b. |  Changes              in Internal Controls |
|--------|----|-------------------------------------------------|

**PART      II. OTHER INFORMATION**

**Item      1. Legal Proceedings**

**Items      1A, 2 and 3 are not applicable and have been omitted.**

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

|   | a. | An                Annual Meeting of Shareholders was held on June 13,                2006. |
|--------|----|--------------------------------------------------------------------------------------------|

|   | b. | On                June 13 2006, the common and preferred shareholders elected E. Bruce                Fredrikson, Melissa Goldman-Williams, Michael Goldman, Stuart H.                Lubow,                Ronald H. Miller, William Pagano and Phillip Siegel as Directors.                The                common and preferred shareholders voted in favor of a resolution                appointing Weiser, LLP as the independent public accountants for                the                Company for the fiscal year ending December 31,                2006. |
|--------|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **PROPOSAL**                                                                                                                                                                                                                                                      |   | **FOR** |      | **AGAINST** |   | **ABSTAINED** |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------|-----------|-------------|--------|---------------|--------|
|                                                                                                                                                                                                                                                              |   |    |      |        |   |          |   |
| For                the common and preferred shareholders to elect E. Bruce Fredrikson,                Melissa Goldman-Williams, Michael Goldman, Stuart H. Lubow, Ronald                H.                Miller, William Pagano and Phillip Siegel as Directors: |   |    |      |        |   |          |   |
|                                                                                                                                                                                                                                                              |   |    |      |        |   |          |   |
| E.                Bruce Fredrikson                                                                                                                                                                                                                                |   |    | 4,116,134 |        |   | -             |   |   | 13,725 |   |
| Melissa                Goldman-Williams                                                                                                                                                                                                                           |   |    | 4,057,295 |        |   | -             |   |   | 72,564 |   |
| Michael                Goldman                                                                                                                                                                                                                                    |   |    | 4,057,243 |        |   | -             |   |   | 72,616 |   |
| Stuart                H. Lubow                                                                                                                                                                                                                                    |   |    | 4,116,929 |        |   | -             |   |   | 12,930 |   |
| Ronald                H. Miller                                                                                                                                                                                                                                   |   |    | 4,116,311 |        |   |          |   |   | 13,548 |   |
| William                Pagano                                                                                                                                                                                                                                     |   |    | 4,057,561 |        |   | -             |   |   | 72,298 |   |
| Phillip                Siegel                                                                                                                                                                                                                                     |   |    | 4,116,929 |        |   | -             |   |   | 12,930 |   |
|                                                                                                                                                                                                                                                              |   |    |      |        |   |          |   |   |   |   |
| To                ratify the selection of Weiser, LLP as independent public accountants                of                the Company for the fiscal year ending December 31, 2006:                                                                                |   |    | 4,110,663 |        |   | 14,263        |   |   | 4,933 |   |

**Item      5 is not applicable and has been omitted.**

**Item      6. Exhibits**

| 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 Section 906 of the Sarbanes-Oxley                Act of 2002. |
|------|-----------------------------------------------------------------------------------------------------------------------------------|

| 32.2 | Certification                  of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley                  Act of 2002. |
|------|---------------------------------------------------------------------------------------------------------------------------------------|

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*Contents*

**SIGNATURES**

|                                  |   |                                     |   |
|---------------------------------------|--------|------------------------------------------|--------|
| Dated:                August 11, 2006 |   | COLONIAL                COMMERCIAL CORP. |   |
|                                  |   |                                     |   |
|                                  |   | /s/                William Pagano        |   |
|                                  |   | William                Pagano,           |   |
|                                  |   | Chief                Executive Officer   |   |
|                                  |   |                                     |   |
|                                  |   | /s/                William Salek         |   |
|                                  |   | William                Salek,            |   |
|                                  |   | Chief                Financial Officer   |   |

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