**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**FORM      10-QSB**

**(Mark      One)**

**QUARTERLY      REPORT UNDER SECTION 13 OR 15(d) OF **

**THE      SECURITIES EXCHANGE ACT OF 1934**

**OR**

**TRANSITION      REPORT UNDER SECTION 13 OR 15(d) OF **

**THE      SECURITIES EXCHANGE ACT OF 1934**

**Commission      File No.: 001-32620**

**QSGI      INC.**

| **Delaware**(State                or other jurisdiction ofincorporation                or organization)** ** | **13-2599131**(I.R.S.                EmployerIdentification                No.) |
|-------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------|

**70      Lake Drive, Hightstown, NJ 08520**

**(609)      426-4666**

**Check      whether the issuer (1) filed all reports required to be filed by Section 13      or      15(d) of the Exchange Act during the past 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.**

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

| Class                of Common Equity       |   | Number                of Shares |
|---------------------------------------------|--------|---------------------------------|
| Common                Stock, par value $.01 |   | 29,109,171                      |

----

**QSGI      INC.**

|                                              |
|---------------------------------------------------|
|                                              |
| TABLE                OF CONTENTS                  |
|                                              |   |   |
| Item                                              | Description | Page |
|                                              |   |   |
| **PART                I - FINANCIAL INFORMATION** |   |
|                                              |   |   |
| 1.                                                | Financial                Statements *(all                unaudited)* |   |
|                                              | Condensed                Consolidated Balance Sheets - March                31, 2006 and December 31, 2005  | 1  |
|                                              | Condensed                Consolidated Statements of Operations                -Three                Months Ended March 31, 2006 and 2005  | 2  |
|                                              | Condensed                Consolidated Statement of Stockholders’ Equity                -Three                Months Ended March 31, 2006 | 3 |
|                                              | Condensed                Consolidated Statements of Cash Flows -                Three                Months Ended March 31, 2006 and 2005 | 4 |
|                                              | Notes                to Condensed Consolidated Financial Statements | 5 |
| 2.                                                | Management’s                Discussion and Analysis of Financial Condition                and                Results of Operations | 10 |
| 3.                                                | Controls                and Procedures | 17 |
|                                              |   |   |
| **PART                II - OTHER INFORMATION**    |   |
|                                              |   |   |
| 1.                                                | Legal                Proceedings | 18 |
| 2.                                                | Unregistered                Sales of Equity Securities and Use of                Proceeds | 18 |
| 3.                                                | Defaults                Upon Senior Securities | 18 |
| 4.                                                | Submission                of Matters to a Vote of Security                Holders | 18 |
| 5.                                                | Other                Information | 18 |
| 6.                                                | Exhibits | 18 |
|                                              |   |   |
| SIGNATURES                                        | 19 |
|                                              |   |
| EXHIBITS                                          | 20 |

----

**PART      I**
**FINANCIAL      INFORMATION**

**QSGI      INC.**

----

**CONDENSED      CONSOLIDATED BALANCE SHEETS**

**(Unaudited)**

|                                                                                              |   | **March                31,** |           | December                31, |   |
|---------------------------------------------------------------------------------------------------|--------|------------------------------|----------------|-----------------------------|--------|
|                                                                                              |   | **2006**                     |           | 2005                        |   |
| **Assets**                                                                                        |   |
| **Current                Assets**                                                                 |   |                         |           |                        |   |
| Cash                and cash equivalents                                                          |   | **$**                        | **125,262**    |                        | $      | 153,794 |   |
| Accounts                receivable, net of allowance of $552,534 in 2006 and $80,000 in 2005 |   |                         | **5,069,665**  |                        |   | 7,014,129 |   |
| Accounts                receivable - related party                                                |   |                         | **17,580**     |                        |   | - |   |
| Inventories                                                                                       |   |                         | **3,730,454**  |                        |   | 4,136,304 |   |
| Prepaid                expenses, income taxes and other assets                                    |   |                         | **373,192**    |                        |   | 227,352 |   |
| Deferred                income taxes                                                              |   |                         | **147,868**    |                        |   | 155,668 |   |
| **Total                Current Assets**                                                           |   |                         | **9,464,021**  |                        |   | 11,687,247 |   |
| **Property                and Equipment, Net**                                                    |   |                         | **560,640**    |                        |   | 605,887 |   |
| **Goodwill**                                                                                      |   |                         | **3,212,314**  |                        |   | 3,212,314 |   |
| **Intangibles,                Net**                                                               |   |                         | **2,793,076**  |                        |   | 2,872,240 |   |
| **Other                Assets**                                                                   |   |                         | **170,540**    |                        |   | 116,225 |   |
|                                                                                              |   |                         |           |                        |   |   |   |
|                                                                                              |   | **$**                        | **16,200,591** |                        | $      | 18,493,913 |   |
|                                                                                              |
| **Liabilities                And Stockholders’ Equity**                                     |
| **Current                Liabilities**                                                            |   |                         |           |                        |   |   |   |
|                        Revolving line of credit                |   | **$**                        | **900,500**    |                        | $      | 3,631,500 |   |
| Accounts                payable                                                                   |   |                         | **1,187,844**  |                        |   | 2,254,136 |   |
| Accrued                expenses                                                                   |   |                         | **200,817**    |                        |   | 279,090 |   |
| Deferred                revenue                                                                   |   |                         | **441,163**    |                        |   | 404,540 |   |
| Accrued                payroll and other liabilities                                              |   |                         | **145,854**    |                        |   | 293,500 |   |
| **Total                Current Liabilities**                                                      |   |                         | **2,876,178**  |                        |   | 6,862,766 |   |
|                                                                                              |   |                         |           |                        |   |   |   |
| **Deferred                Income Taxes**                                                          |   |                         | **52,142**     |                        |   | 280,318 |   |
| **Total                Liabilities**                                                              |   |                         | **2,928,320**  |                        |   | 7,143,084 |   |
|                                                                                              |   |                         |           |                        |   |   |   |
| **Redeemable                Convertible Preferred Stock**                                         |   |                         | **4,207,531**  |                        |   | 1,967,220 |   |
|                                                                                              |   |                         |           |                        |   |   |   |
| **Stockholders’                Equity**                                                     |   |                         |           |                        |   |   |   |
| Preferred                shares: Authorized 5,000,000 shares in 2006                              |   |                         |           |                        |   |   |   |
| and                2005, $0.01 par value, none issued                                             |   |                         | -              |                        |   | - |   |
| Common                shares: authorized 55,000,000 shares in 2006 and 2005,                      |   |                         |           |                        |   |   |   |
| $0.01                par value; 29,109,171 shares issued and outstanding in 2006                  |   |                         |           |                        |   |   |   |
| and                28,670,631 shares issued and outstanding in 2005                               |   |                         | **291,091**    |                        |   | 286,706 |   |
| Additional                paid-in capital                                                         |   |                         | **11,201,380** |                        |   | 11,093,881 |   |
| Retained                earnings (deficit)                                                        |   |                         | **(2,427,731** | **)**                       |   | (1,996,978 | ) |
| **Total                Stockholders’ Equity**                                               |   |                         | **9,064,740**  |                        |   | 9,383,609 |   |
|                                                                                              |   |                         |           |                        |   |   |   |
|                                                                                              |   | **$**                        | **16,200,591** |                        | $      | 18,493,913 |   |

----

**QSGI      INC.**

----

**CONDENSEDCONSOLIDATED      STATEMENTS OF      OPERATIONS**

**For      The Three Months Ended March 31, 2006 and 2005**

|                                                                                            |   | **Three                Months Ended****March                31,** |           |
|-------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------|----------------|
|                                                                                            |   | **2006**                                                          |           | 2005 |   |
|                                                                                            |   |                                                              |           |   |   |
| **Product                Revenue**                                                              |   | **$**                                                             | **8,122,226**  |   | $ | 6,556,923 |   |
| **Service                Revenue**                                                              |   |                                                              | **1,161,898**  |   |   | 759,767 |   |
| **Total                Revenue**                                                                |   |                                                              | **9,284,124**  |   |   | 7,316,690 |   |
|                                                                                            |   |                                                              |           |   |   |   |   |
| **Cost                Of Products Sold**                                                        |   |                                                              | **6,735,272**  |   |   | 5,601,666 |   |
| **Cost                Of Services Sold**                                                        |   |                                                              | **382,646**    |   |   | 306,999 |   |
| **Total                Cost Of Sales**                                                          |   |                                                              | **7,117,918**  |   |   | 5,908,665 |   |
|                                                                                            |   |                                                              |           |   |   |   |   |
| **Gross                Profit**                                                                 |   |                                                              | **2,166,206**  |   |   | 1,408,025 |   |
|                                                                                            |   |                                                              |           |   |   |   |   |
| **Selling,                General And Administrative Expenses**                                 |   |                                                              | **2,584,661**  |   |   | 2,167,718 |   |
|                                                                                            |   |                                                              |           |   |   |   |   |
| **Depreciation                And Amortization**                                                |   |                                                              | **170,073**    |   |   | 144,870 |   |
|                                                                                            |   |                                                              |           |   |   |   |   |
| **Interest                Expense, net**                                                        |   |                                                              | **52,317**     |   |   | 23,556 |   |
|                                                                                            |   |                                                              |           |   |   |   |   |
| **Loss                Before Benefit For Income Taxes**                                         |   |                                                              | **(640,845**   | **)** |   | (928,119 | ) |
|                                                                                            |   |                                                              |           |   |   |   |   |
| **Benefit                For Income Taxes**                                                     |   |                                                              | **(210,092**   | **)** |   | (321,840 | ) |
|                                                                                            |   |                                                              |           |   |   |   |   |
| **Net                Loss**                                                                     |   |                                                              | **(430,753**   | **)** |   | (606,279 | ) |
|                                                                                            |   |                                                              |           |   |   |   |   |
| **Preferred                Stock Dividends**                                                    |   |                                                              | **(61,874**    | **)** |   | - |   |
|                                                                                            |   |                                                              |           |   |   |   |   |
| **Accretion                To Redemption Value of Preferred Stock**                             |   |                                                              | **(4,009**     | **)** |   | - |   |
|                                                                                            |   |                                                              |           |   |   |   |   |
| **Net                Loss Available to Common Stockholders**                                    |   | **$**                                                             | **(496,636**   | **)** | $ | (606,279 | ) |
|                                                                                            |   |                                                              |           |   |   |   |   |
| **Net                Loss Per Common Share - Basic**                                            |   | $                                                                 | (**0.02**      | **)** | $ | (0.02 | ) |
| **Net                Loss Per Common Share - Diluted**                                          |   | $                                                                 | (**0.02**      | **)** | $ | (0.02 | ) |
|                                                                                            |   |                                                              |           |   |   |   |   |
| **Weighted                Average Number Of Common Shares Outstanding                -Basic**   |   |                                                              | **28,789,983** |   |   | 26,907,729 |   |
| **Weighted                Average Number Of Common Shares Outstanding                -Diluted** |   |                                                              | **28,789,983** |   |   | 26,907,729 |   |

----

**QSGI        INC.**

----

**CONDENSED      CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY **

**For      The Three Months Ended March 31, 2006**

|                                                                |   |                            |       | **Additional** |   | **Retained** |   | **Total**               |       |
|---------------------------------------------------------------------|--------|---------------------------------|------------|----------------|--------|--------------|--------|-------------------------|------------|
|                                                                |   | **Common                Stock** |       | **Paid-in**    |   | **Earnings** |   | **Stockholders’** |       |
|                                                                |   | **Number**                      |       | **Amount**     |   | **Capital**  |   | **(Deficit)**           |       | **Equity** |   |
|                                                                |   |                            |       |           |   |         |   |                    |       |   |   |
| **Balance                (Deficit) - December 31, 2005**            |   |                            | 28,670,631 |           | $      | 286,706      |   | $                       | 11,093,881 |   | $ | (1,996,978 | ) | $ | 9,383,609 |   |
|                                                                |   |                            |       |           |   |         |   |                    |       |   |   |   |   |   |   |   |
| **Options                Exercised**                                |   |                            | 350,000    |           |   | 3,500        |   |                    | 5,600      |   |   | - |   |   | 9,100 |   |
|                                                                |   |                            |       |           |   |         |   |                    |       |   |   |   |   |   |   |   |
| **Stock                Option Compensation**                        |   |                            | -          |           |   | -            |   |                    | 6,980      |   |   | - |   |   | 6,980 |   |
|                                                                |   |                            |       |           |   |         |   |                    |       |   |   |   |   |   |   |   |
|  **Shares                Issued For Services**                 |   |                            | 88,540     |           |   | 885          |   |                    | 160,802    |   |   | - |   |   | 161,687 |   |
|                                                                |   |                            |       |           |   |         |   |                    |       |   |   |   |   |   |   |   |
| **Preferred                Stock Dividends**                        |   |                            | -          |           |   | -            |   |                    | (61,874    | ) |   | - |   |   | (61,874 | ) |
|                                                                |   |                            |       |           |   |         |   |                    |       |   |   |   |   |   |   |   |
| **Accretion                To Redemption Value Of Preferred Stock** |   |                            | -          |           |   | -            |   |                    | (4,009     | ) |   | - |   |   | (4,009 | ) |
|                                                                |   |                            |       |           |   |         |   |                    |       |   |   |   |   |   |   |   |
| **Net                Loss**                                         |   |                            | -          |           |   | -            |   |                    | -          |   |   | (430,753 | ) |   | (430,753 | ) |
|                                                                |   |                            |       |           |   |         |   |                    |       |   |   |   |   |   |   |   |
| **Balance                (Deficit) - March 31, 2006**               |   |                            | 29,109,171 |           | $      | 291,091      |   | $                       | 11,201,380 |   | $ | (2,427,731 | ) | $ | 9,064,740 |   |

----

**QSGI        INC.**

----

**CONDENSED        CONSOLIDATED STATEMENTS OF CASH        FLOWS**

**For      The Three Months Ended March 31, 2006 and 2005**

|                                                                                                                     |   | **2006** |           | 2005   |   |
|--------------------------------------------------------------------------------------------------------------------------|--------|----------|----------------|--------|--------|
| **Cash                Flows From Operating Activities**                                                                  |   |     |           |   |   |
| Net                Loss                                                                                                  |   | **$**    | **(430,753**   | **)**  | $      | (606,279 | ) |
| Adjustments                to reconcile net loss to net cash provided by (used in ) operating                activities: |   |     |           |   |   |   |   |
| Depreciation                and amortization                                                                             |   |     | **170,073**    |   |   | 144,870 |   |
| Stock                option compensation expense                                                                         |   |     | **6,980**      |   |   | 6,333 |   |
| Deferred                income taxes                                                                                     |   |     | **(220,376**   | **)**  |   | - |   |
| Common                shares issued for services                                                                         |   |     | **161,687**    |   |   | - |   |
| Allowance                for doubtful accounts                                                                           |   |     | **472,534**    |   |   | - |   |
|                        Changes in assets and liabilities:                             |   |     |           |   |   |   |   |
| Accounts                receivable                                                                                       |   |     | **1,454,350**  |   |   | 76,946 |   |
| Inventories                                                                                                              |   |     | **405,850**    |   |   | (94,748 | ) |
| Prepaid                expenses and other current assets                                                                 |   |     | **(207,020**   | **)**  |   | (371,205 | ) |
| Accounts                payable and accrued expenses                                                                     |   |     | **(1,255,588** | **)**  |   | 492,595 |   |
| **Net                Cash Provided by (Used In) Operating Activities**                                                   |   |     | **557,737**    |   |   | (351,488 | ) |
|                                                                                                                     |   |     |           |   |   |   |   |
| **Cash                Used In Investing Activities**                                                                     |   |     |           |   |   |   |   |
| Purchases                of property and equipment                                                                       |   |     | **(38,797**    | **)**  |   | (100,628 | ) |
| **Net                Cash Used In Investing Activities**                                                                 |   |     | **(38,797**    | **)**  |   | (100,628 | ) |
|                                                                                                                     |   |     |           |   |   |   |   |
| **Cash                Flows From Financing Activities**                                                                  |   |     |           |   |   |   |   |
| Proceeds                from the issuance of redeemable convertible preferred                stock                  |   |     | **2,236,302**  |   |   | - |   |
| Proceeds                from the exercise of options and warrants                                                        |   |     | **9,100**      |   |   | 1,547,810 |   |
| Net                amounts paid on notes payable                                                                         |   |     | -              |   |   | (356,245 | ) |
| Net                amounts paid under revolving lines of credit                                                          |   |     | **(2,731,000** | **)**  |   | (1,155,500 | ) |
| Preferred                stock dividends                                                                                 |   |     | **(61,874**    | **)**  |   | - |   |
| **Net                Cash Provided By (Used In) Financing Activities**                                                   |   |     | **(547,472**   | **)**  |   | 36,065 |   |
|                                                                                                                     |   |     |           |   |   |   |   |
| **Net                Decrease In Cash And Cash Equivalents**                                                             |   |     | **(28,532**    | **)**  |   | (416,051 | ) |
|                                                                                                                     |   |     |           |   |   |   |   |
| **Cash                And Cash Equivalents - Beginning Of Period**                                                       |   |     | **153,794**    |   |   | 844,939 |   |
| **Cash                And Cash Equivalents - End of Period**                                                             |   | **$**    | **125,262**    |   | $      | 428,888 |   |
|                                                                                                                     |   |     |           |   |   |   |   |

----

**NOTESTO      CONSOLIDATED CONDENSED FINANCIAL      STATEMENTS**

**(Unaudited)**

| **1.** | **Basis                of Presentation** |
|--------|------------------------------------------|

| **2.           ** | **Summary                of Significant Accounting                Policies** |
|--------------------------------------------------------------------------|------------------------------------------------------------------------------|

**Business      Organization**

| **A.  ** | **Data                Security & Compliance** |
|--------------------|---------------------------------------------------|

----

**B.      Data Center Hardware**

**C.      Data Center Maintenance**

**Estimates**

**Earnings      (Loss) Per Share**

|                                      |   | Three                Months Ended March 31, |       |   |   |
|-------------------------------------------|--------|---------------------------------------------|------------|--------|--------|
|                                      |   | 2006                                        |       | 2005   |   |
| Basic                                     |   |                                        | 28,789,983 |   |   | 26,907,729 |   |
| Stock                options              |   |                                        | -          |   |   | - |   |
| Stock                warrants             |   |                                        | -          |   |   | - |   |
| Redeemable                preferred stock |   |                                        | -          |   |   | - |   |
| Diluted                                   |   |                                        | 28,789,983 |   |   | 26,907,729 |   |
|                                      |   |                                        |       |   |   |   |   |

----

**Stock-Based      Compensation**

*Share-Based      Payment.*

|                                           |   | Shares(in                millions) |   | Weighted                Average                Exercise                Price |   | Weighted                Average Remaining Contractual Term (years) |   | Aggregate                Intrinsic                Value                (in millions) |   |
|-------------------------------------------|--------|------------------------------------|--------|------------------------------------------------------------------------------|--------|--------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------|--------|
|                                      |   |                               |   |                                                                         |   |                                                               |   |                                                                                 |   |
| Balance,                December 31, 2005 |   |                               | 12,567 |                                                                         | $      | 1.92                                                               |   |                                                                                 | 8.2    |   | $ | 3,863 |   |
|     Granted           |   |                               | -      |                                                                         |   | -                                                                  |   |                                                                                 |   |   |   |   |   |
|     Exercised         |   |                               | (350   | )                                                                            |   | .026                                                               |   |                                                                                 |   |   |   |   |   |
|     Canceled          |   |                               | -      |                                                                         |   | -                                                                  |   |                                                                                 |   |   |   |   |   |
|     Forfeited         |   |                               | -      |                                                                         |   | -                                                                  |   |                                                                                 |   |   |   |   |   |
|                                      |   |                               |   |                                                                         |   |                                                               |   |                                                                                 |   |   |   |   |   |
| Balance,                March 31, 2006    |   |                               | 12,217 |                                                                         | $      | 1.97                                                               |   |                                                                                 | 8.0    |   | $ | 3,041 |   |

----

|                                                            |   | Three                Months EndedMarch                31, |    |
|-----------------------------------------------------------------|--------|-----------------------------------------------------------|---------|
|                                                            |   | 2006                                                      |    | 2005 |   |
| Total                intrinsic value of stock options exercised |   | $                                                         | 635,900 |   | $ | 2,641,890 |   |
|                                                            |   |                                                      |    |   |   |   |   |
|                                                            |   |                                                      |    |   |   |   |   |

|                                                                                                                                                                                                    |   | Three                Months Ended                March                31, |       |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------|------------|
|                                                                                                                                                                                                    |   | 2005                                                                      |       |
|                                                                                                                                                                                                    |   |                                                                      |       |
| Net                loss, as reported                                                                                                                                                                    |   | $                                                                         | (606,279   | ) |
| Add:                Stock-based employee compensation expense included in reported net                loss,                net of related tax effects                                                   |   |                                                                      | 3,863      |   |
| Deduct:                Total stock-based employee compensation expense determined under                fair                value based method for all awards, net of related tax                effects |   |                                                                      | (6,871,097 | ) |
| Pro                forma net loss                                                                                                                                                                       |   | $                                                                         | (7,473,513 | ) |
| Loss                per share:                                                                                                                                                                          |   |                                                                      |       |   |
| Basic                - as reported                                                                                                                                                                      |   | $                                                                         | (0.02      | ) |
| Diluted                - as reported                                                                                                                                                                    |   | $                                                                         | (0.02      | ) |
| Basic                - Pro forma                                                                                                                                                                        |   | $                                                                         | (0.28      | ) |
| Diluted                - Pro forma                                                                                                                                                                      |   | $                                                                         | (0.28      | ) |

|                                    |   |   |                   |
|-----------------------------------------|--------|--------|------------------------|
|                                    |   |   | 2005              |   |
| Risk-free                interest rate  |   |   | 4.2                    | % |
| Expected                option life     |   |   | 5                years |   |
| Expected                volatility      |   |   | 96.6                   | % |
| Expected                dividend yields |   |   | 0                      | % |

----

**3.      **
**Inventories**

|                                                 |   | 2006   |      | 2005   |   |
|------------------------------------------------------|--------|--------|-----------|--------|--------|
| Finished                goods                        |   | $      | 3,191,687 |   | $      | 3,144,515 |   |
| Inventory                in transit                  |   |   | 603,767   |   |   | 1,041,789 |   |
| Allowance                for excess and obsolescence |   |   | (65,000   | )      |   | (50,000 | ) |
|                                                 |   | $      | 3,730,454 |   | $      | 4,136,304 |   |
|                                                 |   |   |      |   |   |   |   |

**4.**
**Financing**

**5.**
**Acquisitions**

**6. **Segment      Information****

----

|                                                                                        |   |                                                              |          |
|---------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------|---------------|
|                                                                                        |   |                                                              |          |
|                                                                                        |   | **Three                Months Ended****March                31,** |          |
|                                                                                        |   | **2006**                                                          |          | 2005 |   |
|                                                                                        |   |                                                              |          |   |   |
| **Revenues**                                                                                |   |                                                              |          |   |   |
| ** **    Data                Security and Compliance               |   | **$**                                                             | **4,764,730** |   | $ | 2,298,696 |   |
| ** **    Data                Center Hardware                       |   |                                                              | **3,947,050** |   |   | 4,544,980 |   |
| ** **    Data                Center Maintenance                    |   |                                                              | **995,019**   |   |   | 736,273 |   |
|     Intersegment                Elimination                             |   |                                                              | **(422,675**  | **)** |   | (263,259 | ) |
|                                                                                        |   |                                                              |          |   |   |   |   |
| **Consolidated                Total**                                                       |   | **$**                                                             | **9,284,124** |   | $ | 7,316,690 |   |
|                                                                                        |   |                                                              |          |   |   |   |   |
|                                                                                        |   |                                                              |          |   |   |   |   |
| **Income                (loss) before Provision (Benefit) for Income                Taxes** |   |                                                              |          |   |   |   |   |
|     Data                Security and Compliance                         |   | **$**                                                             | **(751,872**  | **)** | $ | (1,132,862 | ) |
|     Data                Center Hardware                                 |   |                                                              | **(120,102**  | **)** |   | (1,436 | ) |
|     Data                Center Maintenance                              |   |                                                              | **231,129**   |   |   | 206,179 |   |
|                                                                                        |   |                                                              |          |   |   |   |   |
| **Consolidated                Total**                                                       |   | **$**                                                             | **(640,845**  | **)** | $ | (928,119 | ) |
|                                                                                        |   |                                                              |          |   |   |   |   |

**Item      2.**
**Management’s      Discussion And Analysis Of Financial Condition And Results Of      Operations**

|   | · | Our                growth strategies. |
|--------|--------|---------------------------------------|

|   | · | Anticipated                trends in our business and                demographics. |
|--------|--------|------------------------------------------------------------------------------------|

|   | · | Our                ability to successfully integrate the business operations of recently                acquired companies; and |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------|
|   | ·   | Regulatory, competitive or other economic              influences.  |
|--------|--------------------|--------------------------------------------------------------------------|

----

**Results      of Operations**

|                                                            |   | **Three                Months Ended****March                31,** |      |       |   |
|-----------------------------------------------------------------|--------|-------------------------------------------------------------------|-----------|------------|--------|
|                                                            |   |  **2006**                                                    |      |  2005 |   |
|                                                            |   |                                                              | **%**     |            |   | % |   |
| **Product                Revenue**                              |   |                                                              | **87.5**  |       |   | 89.6 |   |
| **Service                Revenue**                              |   |                                                              | **12.5**  |       |   | 10.4 |   |
| **Total                Revenue**                                |   |                                                              | **100.0** |       |   | 100.0 |   |
| **Cost                Of Products Sold**                        |   |                                                              | **72.6**  |       |   | 76.6 |   |
| **Cost                Of Services Sold**                        |   |                                                              | **4.1**   |       |   | 4.2 |   |
| **Cost                Of Products and Services Sold**           |   |                                                              | **76.7**  |       |   | 80.8 |   |
| **Gross                Profit**                                 |   |                                                              | **23.3**  |       |   | 19.2 |   |
| **Selling,                General And Administrative Expenses** |   |                                                              | **27.8**  |       |   | 29.6 |   |
| **Depreciation                And Amortization**                |   |                                                              | **1.8**   |       |   | 2.0 |   |
| **Interest                Expense, net**                        |   |                                                              | **0.6**   |       |   | 0.3 |   |
| **Loss                Before Benefit For Income Taxes**         |   |                                                              | **(6.9**  | **)**      |   | (12.7 | ) |
| **Benefit                For Income Taxes**                     |   |                                                              | **(2.3**  | **)**      |   | (4.4 | ) |
| **Net                Loss**                                     |   |                                                              | **(4.6**  | **)**      |   | (8.3 | ) |

***Quarter      Ended March 31, 2006 Compared to Quarter Ended March 31,      2005***

----

|                                       |   | Three                Months Ended |      | Three                Months Ended |   |
|--------------------------------------------|--------|-----------------------------------|-----------|-----------------------------------|--------|
|                                       |   | March                31, 2006     |      | March                31, 2005     |   |
| Revenue                                    |   |                              |      |                              |   |
|                    Products |   | $                                 | 8,122,226 |                              | $      | 6,556,923 |   |
|                    Services |   |                              | 1,161,898 |                              |   | 759,767 |   |
| Total                Revenue               |   | $                                 | 9,284,124 |                              | $      | 7,316,690 |   |
|                                       |   |                              |      |                              |   |   |   |

----

**Business      Segments**

**Data      Security & Compliance Segment **

|                                                                 |   | **Three                Months Ended****March                31,** |          |
|-----------------------------------------------------------------|--------|-------------------------------------------------------------------|---------------|
|                                                            |   | **2006**                                                     |          | 2005  |   |
|                                                            |   |                                                              |          |   |   |
| **Revenue**                                                     |   | **$**                                                             | **4,764,730** |   | $ | 2,298,696 |   |
| **Gross                Profit**                                 |   |                                                              | **823,049**   |   |   | 173,908 |   |
| **Selling,                General And Administrative Expenses** |   |                                                              | **1,466,000** |   |   | 1,256,767 |   |
| **Depreciation                And Amortization**                |   |                                                              | **55,867**    |   |   | 34,888 |   |
| **Loss                Before Benefit For Income Taxes**         |   |                                                              | **(751,872**  | **)** |   | (1,132,861 | ) |
|                                                            |   |                                                              |          |   |   |   |   |
| **Segment                Assets**                               |   |                                                              | **9,273,019** |   |   | 4,977,120 |   |
| **Goodwill**                                                    |   |                                                              | **-**         |   |   | - |   |
| **Expenditures                for Property and Equipment**      |   |                                                              | **33,163**    |   |   | 73,268 |   |
|                                                            |   |                                                              |          |   |   |   |   |

***Quarter      Ended March 31, 2006 Compared to Quarter Ended March 31,      2005***

----

**Data      Center Hardware Segment**

|                                                            |   | **Three                Months Ended****March                31,** |          |
|-----------------------------------------------------------------|--------|-------------------------------------------------------------------|---------------|
|                                                            |   | **2006**                                                     |          | 2005  |   |
|                                                            |   |                                                              |          |   |   |
| **Revenue**                                                     |   | **$**                                                             | **3,947,050** |   | $ | 4,544,980 |   |
| **Gross                Profit**                                 |   |                                                              | **675,691**   |   |   | 755,846 |   |
| **Selling,                General And Administrative Expenses** |   |                                                              | **697,997**   |   |   | 653,970 |   |
| **Depreciation                And Amortization**                |   |                                                              | **98,672**    |   |   | 94,871 |   |
| **Loss                Before Benefit For Income Taxes**         |   |                                                              | **(120,102**  | **)** |   | (1,437 | ) |
|                                                            |   |                                                              |          |   |   |   |   |
| **Segment                Assets**                               |   |                                                              | **6,012,958** |   |   | 6,792,902 |   |
| **Goodwill**                                                    |   |                                                              | **2,957,193** |   |   | 1,823,157 |   |
| **Expenditures                for Property and Equipment**      |   |                                                              | **1,847**     |   |   | 24,682 |   |

***Quarter      Ended March 31, 2006 Compared to Quarter Ended March 31,      2005***

----

**Data      Center Maintenance Segment**

|                                                                 |   | **Three                Months Ended****March                31,** |        |
|-----------------------------------------------------------------|--------|-------------------------------------------------------------------|-------------|
|                                                            |   | **2006**                                                     |        | 2005  |   |
|                                                            |   |                                                              |        |   |   |
| **Revenue**                                                     |   | **$**                                                             | **995,019** |   | $ | 736,273 |   |
| **Gross                Profit**                                 |   |                                                              | **667,466** |   |   | 478,272 |   |
| **Selling,                General And Administrative Expenses** |   |                                                              | **420,664** |   |   | 256,981 |   |
| **Depreciation                And Amortization**                |   |                                                              | **15,534**  |   |   | 15,111 |   |
| **Income                Before Provision For Income Taxes**     |   |                                                              | **231,129** |   |   | 206,179 |   |
|                                                            |   |                                                              |        |   |   |   |   |
| **Segment                Assets**                               |   |                                                              | **914,614** |   |   | 1,629,505 |   |
| **Goodwill**                                                    |   |                                                              | **255,121** |   |   | 157,286 |   |
| **Expenditures                for Property and Equipment**      |   |                                                              | **3,787**   |   |   | 2,677 |   |

***Quarter      Ended March 31, 2006 Compared to Quarter Ended March 31,      2005***

----

***Geographic      Areas***

**Liquidity      and Capital Resources**
*** ***

----

**Item      3**
**Controls      and Procedures**

***Evaluation      of disclosure controls and procedures***

----

**Changes      in internal control over financial reporting **

**Part      II - OTHER INFORMATION**

**Item      1.**
**Legal      Proceedings**

**Item      2.**
**Unregistered      sales of equity securities and Use of Proceeds**

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

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

**Item      5.**
**Other      Information**

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

|  Exhibits |
|----------------|
|           | See                List of Exhibits filed as part of this quarterly report on Form                10-QSB. |
|           |

----

**SIGNATURE**

|                                    | **WindsorTech,                Inc.**(Registrant) |
|-----------------------------------------|--------------------------------------------------|
| Dated: May                12, 2006 | By:                                              | /s/                Marc Sherman |
|                                    |                                             | Marc                Sherman |
|                                    |                                             | Chief                Executive Officer |
|                                    |                                             |   |
| Dated: May                12, 2006 | By:                                              | /s/                Edward L. Cummings |
|                                    |                                             | Edward                L. Cummings |
|                                    |                                             | Vice                President, Chief Financial Officer |
|                                    |                                             |   |

----

**List      Of Exhibits**

| Exhibit                Number | Description                                                                                                                                                                                                                                                                                                                 |
|-------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                          |                                                                                                                                                                                                                                                                                                                        |
| 2.1                      | Agreement                and plan of Merger by and among Windsortech, Inc., Qualtech International                Corporation and Qualtech Service Group, Inc. dated May 1,                2004.                                                                                                                       |
| 3.1                      | Certificate                of Amendment of Certificate of Incorporation of WindsorTech, Inc.                **                                                                                                                                                                                                         |
| 3.2                      | Amended                and Restated ByLaws of WindsorTech, Inc. (Incorporated herein reference                to                Exhibit 3.2 to the Registrant’s Quarterly Report on Form 10-QSB filed with                the Commission on August 19, 2002 (Commission file number                000-07539)).  |
| 3.3                      | Action                by Consent in Writing of a Majority of Stockholders dated May 19,                2004                concerning Amended and Restated By Laws.                                                                                                                                                    |
| 3.4                      | Action                by Consent in Writing of a Majority of Stockholders dated September                17,                2004 increasing the number of shares of the Corporation                                                                                                                                    |
| 4.1                      | Specimen                Common Stock Certificate of WindsorTech, Inc. (Incorporated herein                reference to Exhibit 4.1 to the Registrant’s Quarterly Report on Form                10-QSB filed with the Commission on August 19, 2002 (Commission file                number 000-07539)).           |
| 4.2***                   | Form                of Stock Purchase Agreements with Barron Partners,                L.P., Guerrilla Capital, and Odin Partners et al. dated May 26,                2004.                                                                                                                                             |
| 4.3***                   | Form                of Registration Rights Agreements with Barron                Partners, L.P., Guerrilla Capital, and Odin Partners et al. dated                May 26,                2004.                                                                                                                         |
| 4.4***                   | Form                of Common Stock Purchase Warrant at $1.50 per share                dated May 28, 2004.                                                                                                                                                                                                             |
| 4.5***                   | Form                of Common Stock Purchase Warrant at $3.60 per share                dated May 28, 2004                                                                                                                                                                                                              |
| 4.6                      | Form                of Registration Rights Agreement with Joel Owens and Jolene Owens                dated                May 1, 2004.                                                                                                                                                                                 |
| 10.1*                    | Employment                and Non-Compete Agreement - Edward L. Cummings **                                                                                                                                                                                                                                            |
| 10.2*                    | Employment                and Non-Compete Agreement - David A. Loppert **                                                                                                                                                                                                                                              |
| 10.3*                    | Employment                and Non-Compete Agreement - Carl C. Saracino **                                                                                                                                                                                                                                              |
| 10.4*                    | Employment                and Non-Compete Agreement - Michael P. Sheerr **                                                                                                                                                                                                                                             |
| 10.5*                    | Employment                and Non-Compete Agreement - Marc Sherman **                                                                                                                                                                                                                                                  |
| 10.6*                    | 2002                Flexible Stock Plan (Incorporated herein reference to Exhibit 10.6                to the                Registrant’s Quarterly Report on Form 10-QSB filed with the Commission on                April 16, 2002 (Commission file number 000-07539)).                                         |
| 10.7                     | Lease                Agreement (Incorporated herein reference to Exhibit 10.9 to the                Registrant’s Quarterly Report on Form 10-QSB filed with the Commission on                August 19, 2002 (Commission file number 000-07539)).                                                                |
| 10.8                     | Employment                and Non-Compete Agreement - Joel Owens                                                                                                                                                                                                                                                       |
| 10.9**                   | Employment                and Non-Compete Agreement - Seth A. Grossman                                                                                                                                                                                                                                                 |
| 10.10**                  | Credit                Agreement by and among Windsortech, Inc., Qualtech International                Corporation, Qualtech Services Corporation and Fifth Third                Bank.                                                                                                                                  |

----

| 16.1                                                                                                                                                                                                                                                              | Letter                from Milton Reece, CPA (“Reece”) concurring with the statements made by                the Registrant in the Current Report on Form 8-K reporting Reece’s                resignation as the Registrant’s principal accountant (incorporated herein                by reference to Exhibit 16 to the Registrant’s Current Report on Form 8-K                filed with the Commission on February 13, 2002 (Commission file number                000-07539)).  |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 31.1***                                                                                                                                                                                                                                                           | Chief                Executive Officer Certification Pursuant to                Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                                                                                                           |
| 31.2***                                                                                                                                                                                                                                                           | Chief                Financial Officer Certification Pursuant to                Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                                                                                                           |
| 32.1***                                                                                                                                                                                                                                                           | Certification                of Chief Executive Officer and Chief                Financial Officer Pursuant to 18 U.S.C. § 1350, as Adopted Pursuant to                Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                              |
| *                Management contract or compensatory plan.                                                                                                                                                                                                             |
| **                Incorporated herein by reference to the same numbered exhibit in                the                Registrant’s Transition Report on Form 10-KSB filed with the Commission on                April 1, 2002 (Commission file number 000-07539). |
| ***                Attached hereto.                                                                                                                                                                                                                                    |
|                                                                                                                                                                                                                                                                   |
| There                are no other documents required to be filed as an Exhibit as required                by                Item 601 of Regulation S-B.                                                                                                                |
|                                                                                                                                                                                                                                                                   |

----