**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      DC 20549**





**FORM
      10-QSB**





x **Quarterly
      Report Pursuant to Section 13 or 15(** **d** **)
      of the Securities Exchange Act of 1934.**





**For
      the Quarterly Period Ended March 31, 2006**





**or**





**oTransition
      Report
      Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
      1934.**


**For
      the Transition Period
      From            To**





**Commission
      File Number: 000-30781**








**MANGOSOFT,
      INC.**


(Exact
      name of small business issuer as specified in its charter)











**Nevada**
            **87-0543565****(State
                or other jurisdiction**
            **(IRS
                Employer Identification No.)****of
                incorporation or organization)****12
                Technology Way****Nashua,
                NH**
            **03062****(Address
                of principal executive offices)**
            **(Zip
                code)**





**Issuer’s
      telephone number: (603) 324-0400**





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. Yes x No o





State
      the
      number of shares outstanding of each of the issuer's classes of common equity,
      as of the latest practicable date:




**Common
                Stock**
            **1,013,038
                Shares****$0.001
                Par Value**
            **(Outstanding
                on May 12, 2006)**





Transitional
      Small Business Disclosure Format (check one) Yes o No x







**MANGOSOFT,
      INC. AND SUBSIDIARY**





**INDEX
      TO FORM 10-QSB**





PagePART
                I.                  
                FINANCIAL
                INFORMATIONITEM
                1 - Condensed Consolidated Financial Statements
                (unaudited):Balance
                Sheets as of March 31, 2006 and December 31, 2005
            3Statements
                of Operations for the Three Months Ended March 31, 2006 and
                2005
            4Statements
                of Cash Flows for the Three Months Ended March 31, 2006 and
                2005
            5Notes
                to Unaudited Condensed Consolidated Financial Statements
            6ITEM
                2 - Management’s Discussion and Analysis of Financial Condition and
                Results of Operations
            8ITEM
                3 - Controls and Procedures
            14PART
                II.                 
                OTHER
                INFORMATIONITEM
                1 - Legal Proceedings.
            15ITEM
                6 - Exhibits and Reports on Form 8-K.
            16Signature
            17Officer
                Certification
            18





2


**MANGOSOFT,
      INC. AND SUBSIDIARY**





**CONDENSED
      CONSOLIDATED BALANCE SHEETS**





**March
                31,**
            
            **December
                31,****2006**
            
            **2005****(Unaudited)****ASSETS**Current
                Assets:Cash
                and cash equivalents
            
            $
            393,557
            
            $
            480,662Short-term
                investments
            
            
            -
            
            
            3,538Accounts
                receivable
            
            
            14,571
            
            
            17,407Total
                assets
            
            
            408,128
            
            
            501,607**LIABILITIES
                AND STOCKHOLDERS’ DEFICIT**Current
                Liabilities:Accounts
                payable
            
            $
            729,741
            
            $
            736,037Accrued
                compensation
            
            
            3,894
            
            
            7,788Other
                accrued expenses and current liabilities
            
            
            101,543
            
            
            101,054Total
                current liabilities
            
            
            835,178
            
            
            844,879Commitments
                and contingenciesStockholders’
                Deficit:Preferred
                stock- $.001 par value; authorized, 5,000,000
              shares;
                issued and outstanding, 20,000
            
            
            20
            
            
            20Common
                stock
            
            
            1,013
            
            
            1,013Additional
                paid-in capital
            
            
            88,725,694
            
            
            88,725,694Accumulated
                deficit
            
            
            (89,153,777
            )
            
            (89,069,999
            )Total
                stockholders’ deficit
            
            
            (427,050
            )
            
            (343,272
            )Total
                liability and stockholders' deficit
            
            $
            408,128
            
            $
            501,607





See
      notes
      to the unaudited condensed consolidated financial statements.


3


**MANGOSOFT,
      INC. AND SUBSIDIARY**





**CONDENSED
      CONSOLIDATED STATEMENTS OF OPERATIONS**





**Three
                Months Ended March 31,****2006**
            
            **2005****(Unaudited)**Service
                revenues
            
            $
            70,507
            
            $
            99,379Costs
                and expenses:General
                and administrative (1)
            
            
            90,719
            
            
            107,790Stock-based
                compensation expense
            
            
            -
            
            
            428Interest
                income
            
            
            3,190
            
            
            7,315Net
                loss
            
            $
            (83,778
            )
            $
            (68,242
            )Net
                loss per share - - basic and diluted
            
            $
            (0.08
            )
            $
            (0.06
            )Weighted
                average shares outstanding - basic and diluted
            
            
            1,013,038
            
            
            1,013,038(1)
                Excludes stock-based compensation expense as follows:General
                and administrative
            
            $
            -
            
            $
            428





See
      notes
      to the unaudited condensed consolidated financial statements.




4


**MANGOSOFT,
      INC. AND SUBSIDIARY**





**CONSOLIDATED
      STATEMENTS OF CASH FLOWS**





**Three
                Months Ended March 31,****2006**
            
            **2005****(Unaudited)**CASH
                FLOWS FROM OPERATING ACTIVITIES:Net
                loss
            
            $
            (83,778
            )
            $
            (68,242
            )Adjustments
                to reconcile net loss to net cash used byoperating
                activities:Stock-based
                compensation
            
            
            -
            
            
            428Increase
                (decrease) in cash from the change in:Accounts
                receivable
            
            
            2,836
            
            
            (88
            )Accounts
                payable
            
            
            (6,296
            )
            
            847Accrued
                compensation
            
            
            (3,894
            )
            
            (6,044
            )Other
                accrued expenses
            
            
            489
            
            
            10,447Deferred
                revenue
            
            
            -
            
            
            (15,792
            )Net
                cash used in operating activities
            
            
            (90,643
            )
            
            (78,444
            )CASH
                FLOWS FROM INVESTING ACTIVITIES:Investment
                maturities
            
            
            2,403
            
            
            235,908Interest
                receivable
            
            
            1,135
            
            
            20,889Net
                cash provided by investing activities
            
            
            3,538
            
            
            256,797NET
                INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
            
            
            (87,105
            )
            
            178,353CASH
                AND CASH EQUIVALENTS, BEGINNING OFPERIOD
            
            
            480,662
            
            
            458,032CASH
                AND CASH EQUIVALENTS, END OF PERIOD
            
            $
            393,557
            
            $
            636,385





See
      notes
      to the unaudited condensed consolidated financial statements.




5


**MANGOSOFT,
      INC. AND SUBSIDIARY**





**NOTES
      TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**





**1.**
            **NATURE
                OF BUSINESS AND BASIS OF
                PRESENTATION**





MangoSoft,
      Inc. and subsidiary (the "Company") markets, sells and supports Internet
      business software and services that improve the utility and effectiveness of
      Internet-based business applications. The Company’s software solutions address
      the networking needs of small businesses, workgroups and large enterprises.
      The
      Company is engaged in a single operating segment of the computer software
      industry.




The
      accompanying unaudited condensed consolidated financial statements have been
      prepared on the same basis as the annual financial statements. In the opinion
      of
      management, all significant adjustments, which are normal, recurring in nature
      and necessary for a fair presentation of the financial position, cash flows
      and
      results of the operations of the Company, have been consistently recorded.
      The
      operating results for the interim periods presented are not necessarily
      indicative of expected performance for the entire year. Certain amounts from
      the
      prior year have been reclassified to conform to the current year
      presentation.





The
      unaudited information should be read in conjunction with the audited financial
      statements of the Company and the notes thereto for the year ended December
      31,
      2005 included in the Company’s Annual Report on Form 10-KSB filed with the
      Securities and Exchange Commission.





As
      shown
      in the unaudited condensed consolidated financial statements, during the three
      months ended March 31, 2006 and 2005, the Company incurred net losses of
      $(83,778) and $(68,242), respectively. Cash used in operations during the three
      months ended March 31, 2006 and 2005 was $90,643 and $78,444, respectively.
      These factors, among others, raise significant doubt about the Company’s ability
      to continue as a going concern. The unaudited condensed consolidated financial
      statements do not include any adjustments relating to the recoverability and
      classification of assets or the amounts and classification of liabilities that
      might be necessary should the Company be unable to continue as a going concern.
      The Company’s continuation as a going concern is dependent upon its ability to
      generate sufficient cash flow and meet its obligations on a timely basis and
      ultimately attain profitability.





**2.**
              **NET
                  LOSS PER SHARE**





Basic
      net
      loss per share is computed by dividing net loss by the weighted average number
      of common shares outstanding for the period. Diluted net loss per share
      reflects, in addition to the weighted average number of common shares, the
      potential dilution if stock options and warrants outstanding were exercised
      and/or converted into common stock, unless the effect of such equivalent shares
      was antidilutive.





For
      the
      three months ended March 31, 2006 and 2005, the effect of stock options and
      other potentially dilutive shares were excluded from the calculation of diluted
      net loss per common share as their inclusion would have been antidilutive.





**3.**
            **REVENUE
                RECOGNITION**





The
      Company records revenue upon delivery if pervasive evidence of an arrangement
      exists, the price is fixed and determinable, delivery has occurred and
      collection is probable. Revenue for sales to distributors is recognized upon
      sales to end users. Service revenue is recognized as services are
      performed.





In
      December 2003, the Securities and Exchange Commission issued Staff Accounting
      Bulletin (“SAB”) No. 104, “Revenue Recognition,” which superceded SAB 101,
“Revenue Recognition in Financial Statements” and Emerging Issues Task Force
      Extract No. 00-21, “Revenue Arrangements with Multiple Deliverables.” The
      adoption of SAB No. 104 did not have a material impact on the Company’s results
      of operations or financial position.





6


**4.**
            **STOCK-BASED
                COMPENSATION**





The
      Company currently has one stock-based compensation plan, which is described
      more
      fully in Note 8 in the Company’s Annual Report on Form 10-KSB for the period
      ended December 31, 2005, as filed on March 31, 2006. As amended, this plan
      provides for the issuance of up to 296,297 shares of common stock to employees,
      officers, directors and consultants in the form of nonqualified and incentive
      stock options, restricted stock grants or other stock-based awards, including
      stock appreciation rights. The stock options are exercisable as specified at
      the
      date of grant and expire no later than ten years from the date of grant. As
      of
      March 31, 2006, there were 179,652 remaining options available under this plan.




Effective
      January 1, 2006, the Company adopted the fair value recognition provisions
      of Statement of Financial Accounting Standards (“SFAS”)
      No. 123(R), *Share-Based Payment* (“SFAS
      123R”), using the modified-prospective-transition method. Under this transition
      method, compensation cost to be recognized for the first three months of 2006
      would include: (a) compensation cost for all stock-based payments granted,
      but not yet vested as of January 1, 2006, based on the grant-date fair
      value estimated in accordance with the original provisions of SFAS No. 123, *Accounting
      for Stock Based Compensation* ,
      and
      (b) compensation cost for all stock-based payments granted subsequent to
      January 1, 2006, based on the grant-date fair value estimated in accordance
      with the provisions of SFAS 123R. Results
      for prior periods have not been restated. There were no unvested stock based
      payments at January 1, 2006 and there were no stock based payments granted
      during the three months ended March 31, 2006





The
      following table illustrates the effect on net loss and net loss per share if
      the
      Company applied the fair value recognition provision of SFAS No. 123 to
      stock-based employee compensation for the three months ended March 31,
      2005:





Net
                loss as reported
            
            $
            (68,242
            )Add
                back: stock-based compensation included in the
              determination
                of net loss as reported
            
            
            428Less:
                stock-based compensation had all options been recorded
              At
                fair value
            
            
            (1,243
            )Adjusted
                net loss
            
            $
            (69,057
            )Weighted
                average shares outstanding, basic and diluted
            
            
            1,013,038Net
                loss per share, basic and diluted, as reported
            
            $
            (0.06
            )Adjusted
                net loss per share, basic and diluted
            
            $
            (0.07
            )




7








**ITEM
              2.**
            **MANAGEMENT'S
                DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS**





This
      Quarterly Report on Form 10-QSB contains forward-looking statements within
      the
      safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
      Any statements in this Quarterly Report that are not statements of historical
      facts are forward-looking statements, which involve risks and uncertainties.
      Without limiting the foregoing, the words “believes,” “anticipates,” “plans,”
“expects,” and similar expressions are intended to identify forward-looking
      statements. Our actual results may differ materially from those indicated in
      the
      forward-looking statements as a result of the factors set forth elsewhere in
      this Quarterly Report on Form 10-QSB, including under “Risk Factors.” You should
      read the following discussion and analysis together with our condensed
      consolidated financial statements for the periods specified and the related
      notes included herein. Further reference should be made to our Annual Report
      on
      Form 10-KSB for the period ended December 31, 2005 filed with the Securities
      and
      Exchange Commission.





**Overview**





We
      market, sell and support Internet business software and services that improve
      the utility and effectiveness of Internet-based business applications. Our
      software solutions address the networking needs of small businesses, workgroups
      and large enterprises. Our products and services enhance the performance of
      PC
      networks and deliver improved service utilizing existing equipment. We no longer
      develop new software products or services.




Mangomind SM is a
      multi-user, business-oriented, peer-to-peer file sharing system, allowing
      individual users to collaborate over the Internet across organizational
      boundaries in a safe and secure manner. The architecture is a blend of the
      manageability of client/server with the autonomy, clustering, and caching
      optimizations of peer-to-peer. The user experience is one of easy file sharing
      with colleagues through what looks like an ordinary LAN shared drive.
      Mangomind SM provides
      the secure file sharing benefits of a VPN without additional hardware and
      configuration complexities. Mangomind SM is sold
      as both a service and a standalone software product.





FileTRUST SM is an
      online data storage service we purchased from Bank of America (formerly
      FleetBoston) in February 2002 for approximately $427,000, of which $175,000
      was
      paid in cash and the balance in our common stock and warrants to purchase our
      common stock at $14.31 per share. FileTRUST SM users
      can access their stored files from any Internet-connected system. The
      fileTRUST SM service
      complements our Mangomind SM service
      by providing customers with a lower cost online storage system. In conjunction
      with our purchase of fileTRUST SM ,
      we
      executed a two-year enterprise license agreement with Bank of America (formerly
      FleetBoston) for the internal use of fileTRUST SM by Bank
      of America (formerly FleetBoston), which expired in February 2004. Bank of
      America (formerly FleetBoston) terminated its license agreement with us in
      September 2004. We are actively seeking new business opportunities to replace
      this lost revenue. If we are unable to replace this revenue, our operations
      may
      be adversely affected. We have instituted cost reductions to lessen the adverse
      effects of this loss of revenue, including restructuring our business
      relationships with key vendors such as Built Right Networks.




8




**Critical
      Accounting Policies**





Our
      accounting policies are described in our Annual Report on Form 10-KSB for the
      period ended December 31, 2005 filed with the Securities and Exchange
      Commission. The following describes the application of accounting principles
      that have a significant impact on our consolidated financial
      statements:





*Going
      Concern Assumption* - The
      consolidated financial statements do not include any adjustments relating to
      the
      recoverability and classification of assets or the amounts and classification
      of
      liabilities that might be necessary should we be unable to continue as a going
      concern. If the consolidated financial statements were prepared on liquidation
      basis, the carrying value of our assets and liabilities would be adjusted to
      net
      realizable amounts. In addition, the classification of the assets and
      liabilities would be adjusted to reflect the liquidation basis of
      accounting.





*Revenue
      Recognition* - We
      recognize revenue generated from product sales when persuasive evidence of
      an
      arrangement exists, the price is fixed and determinable, delivery has occurred
      and collection is probable. We recognize revenue generated from the sale of
      the
      Mangomind SM and
      fileTRUST SM services
      as the service is provided. We recognize revenue generated from the sale of
      the
      Mangomind SM product
      over the period of the first year’s maintenance agreement when persuasive
      evidence of the arrangement exists, the price is fixed and determinable,
      delivery and any required installation has been completed and collection is
      probable.





*Stock-based
      Compensation* - As
      part of our compensation programs offered to our employees, we grant stock
      options. In addition, we have engaged third-party consultants and advisors
      and
      have compensated them in the form of stock options. Through December 31, 2005
      compensation for stock options issued to employees was generally measured as
      the
      difference between the exercise price of the options granted and the fair value
      of our common stock on the date of grant. Effective January 1, 2006, the
      Company adopted the fair value recognition provisions of Statement of Financial
      Accounting Standards (“SFAS”) No. 123(R), *Share-Based Payment* (“SFAS
      123R”), using the modified-prospective-transition method. Under this transition
      method, compensation cost to be recognized for the first three months of 2006
      would include: (a) compensation cost for all stock-based payments granted,
      but not yet vested as of January 1, 2006, based on the grant-date fair
      value estimated in accordance with the original provisions of SFAS No. 123, *Accounting
      for Stock Based Compensation* ,
      and
      (b) compensation cost for all stock-based payments granted subsequent to
      January 1, 2006, based on the grant-date fair value estimated in accordance
      with the provisions of SFAS 123R.





Compensation
      for stock options issued to third-party consultants and advisors is measured
      at
      the fair value on the date of grant, determined using the Black-Scholes
      valuation model. Because of the cashless exercise feature of the stock options
      granted in 1999 and the repricing of options granted in 2000 and 2003, we are
      required to remeasure the compensation related to these awards at each reporting
      date. As the quoted market price of our common stock fluctuates, our reported
      operating expenses will continue to fluctuate. These fluctuations can be
      significant.





*Deferred
      Taxation* -
      Because of the significant operating losses incurred and projected future
      operating losses, we have provided a full valuation allowance against the
      deferred tax assets created by our net operating loss
      carryforwards.








**Costs
      and Expenses**





*Cost
      of services* - Cost
      of services consist solely of the expenses we incur to administer and service
      the Mangomind SM and
      fileTRUST SM services. These expenses consist primarily of salaries and related personnel
      costs, the cost of our outsourced data center, the license royalties we pay
      to
      our e-security software provider for the encryption used in the
      Mangomind SM service
      and the fees we pay to Built Right Networks to manage our billable services
      infrastructure.





9


*Other
      Operating Expenses* --
      Selling and marketing expenses consist primarily of costs incurred to market
      our
      products and services such as the costs of attending and presenting at trade
      shows. General and administrative expenses consist primarily of salaries and
      related personnel costs and other general corporate costs such as facility
      costs, commercial and general liability insurance, accounting and legal expenses
      and other costs typical of a publicly held corporation. At March 31, 2006,
      there
      were no full time employees performing selling and marketing activities.
      Effective on April 1, 2005, we have outsourced our general and administrative
      personnel activities to Built Right Networks. Our remaining one employee is
      performing some general and administrative activities.





*Reduction
      in Force* - We
      have reduced our work force on four occasions since April 23, 2001 due to
      adverse economic conditions and our need to conserve capital. At March
      31, 2006, we had one employee working in a general and administrative
      capacity.





**Results
      of Operations - Three Months Ended March 31, 2006 and 2005**





Revenues
      for the three months ended March 31, 2006 decreased $28,872 or approximately
      29%
      to $70,507 from $99,379 for the comparable period in 2005. The decrease in
      our
      revenues was primarily due to a $24,917 decrease in software license revenue.
      No
      customer accounted for more than 10% of our revenues for the period ended March
      31, 2006.





We
      recognized $66,042 from the sale of our Mangomind SM service
      and $4,465 from the sale of our fileTRUST SM service
      during the three months ended March 31, 2006. During the comparable period
      in
      2005, we recognized $91,103 from the sale of our Mangomind SM service,
      $8,276 from the sale of our fileTRUST SM service.





Cost
      of
      services for the three months ended March 31, 2006 has effectively remained
      the
      same ($38 increased) at $66,756 compared to $66,718 for the comparable period
      in
      2005. The cost of delivering our services was primarily a result of our
      continued reductions and our switch to a lower cost data center, Built Right
      Networks.





For
      the
      three-month period ended March 31, 2006, general and administrative expenses
      decreased $17,071 or approximately 16% to $90,719 compared with $107,790 for
      the
      comparable period in 2005. The decrease in operating expenses was due primarily
      to our reduced spending in the areas of marketing and sales consultants, public
      relations, legal and other corporate consultants and facility rent in addition
      to reductions in our marketing, selling and general and administrative personnel
      associated with our work force reductions. During the three-month period ended
      March 31, 2006, we had one (1) full-time employee working in a general and
      administrative capacity.





There
      was
      no stock-based compensation expense recorded for the three-month period ended
      March 31, 2006 compared to $428 for the comparable period in 2005.





Our
      loss
      from operations increased $11,411 to $86,968 for the three-month period ended
      March 31, 2006 compared with a loss from operations of $75,557 for the
      comparable period in 2005 as a result of the above factors.





Interest
      income decreased $4,125 to $3,190 for the three months ended March 31, 2006
      compared to $7,315 for the three months ended March 31, 2005.





10


**Financial
      Condition, Liquidity and Capital Resources**





We
      were
      formed in June 1995 and since our formation have raised approximately
      $74,250,000 in financing from private placements of debt and equity securities.
      In addition to the financing we received through the sale of our securities,
      we
      have, at times, depended on loans from stockholders and directors and credit
      from suppliers to meet our interim financing needs. Borrowings from stockholders
      and directors have generally been refinanced with new debt instruments or
      converted into additional equity. At March 31, 2006, approximately $835,000
      in
      additional financing was provided through accounts payable, accrued expenses
      and
      other trade credit, a significant portion of which is past due.








At
      March
      31, 2006,  we
      had a
      cash balance of approximately $393,000 and a working capital deficiency of
      approximately $427,000. We do not have any commercial commitments or off balance
      sheet financing. Our commitments under our operating leases are described in
      Note 10 to our consolidated financial statements filed on Form 10-KSB for the
      period ended December 31, 2005, as reported to the Securities and Exchange
      Commission.





We
      did
      not make any capital expenditures during the three months ended March 31,
      2006.





We
      have
      significantly modified our operations and reduced our work force on four
      separate occasions since April 2001. We currently have one (1) employee working
      in a general and administrative capacity. We outsource the management of our
      billable services infrastructure, software code base, customer support and
      reseller channel management to Built Right Networks for approximately $21,000
      per month, under a September 30, 2002 agreement, which can be cancelled with
      a
      ninety (90) day notice.





Unless
      we
      can generate significant on-going revenue, we will need additional sources
      of
      equity or debt financing. Although we have been successful in raising past
      financing, there can be no assurances that additional financing will be
      available to us on commercially reasonable terms, or at all.




As
      shown
      in the unaudited condensed consolidated financial statements, during the three
      months ended March 31, 2006 and 2005, we incurred net losses of $83,778 and
      $68,242 , respectively. Cash used in operations during the three months ended
      March 31, 2006 and 2005 was $90,643 and $78,444 , respectively. The factors,
      among others, raise significant doubt about our ability to continue as a going
      concern. Our continuation as a going concern is dependent upon our ability
      to
      generate sufficient cash flow and meet our obligations on a timely basis and
      ultimately attain profitability.





**OFF-BALANCE
      SHEET ARRANGEMENTS**





We
      do not
      have any commercial commitments or off-balance sheet financing. Our commitments
      under our operating leases are described in Note 10 to our consolidated
      financial statements filed on Form 10-KSB for the period ended December 31,
      2005, as reported to the Securities and Exchange Commission.




**Risk
      Factors**





*We
      Have A Limited Operating History And A History Of Substantial Operating Losses.*





We
      have a
      history of substantial operating losses and an accumulated deficit of
      $89,153,777 as of March 31, 2006. For the three months ended March 31, 2006
      and
      the year ended December 31, 2005, our losses from operations were $86,968 and
      $364,389, respectively. We have historically experienced cash flow difficulties
      primarily because our expenses have exceeded our revenues. We expect to incur
      additional operating losses. These factors, among others, raise significant
      doubt about our ability to continue as a going concern. If we are unable to
      generate sufficient revenue from our operations to pay expenses or we are unable
      to obtain additional financing on commercially reasonable terms, our business,
      financial condition and results of operations will be materially and adversely
      affected.





11


*We
      Will Need Additional Financing.*





We
      may
      require additional capital to finance our future operations. We can provide
      no
      assurance that we will obtain additional financing sufficient to meet our future
      needs on commercially reasonable terms or otherwise. Also, Bank of America
      (formerly FleetBoston) terminated its license agreement with us in September
      2004. While we are seeking new business opportunities to replace the resulting
      loss of revenue, we cannot be certain we will find a replacement for such
      revenue. If we are unable to obtain the necessary financing, our business,
      operating results and financial condition will be materially and adversely
      affected.





*Our
      Success Depends On Our Outsourced Services Agreement.*





Effective
      September 30, 2002, we outsourced the management of our internal information
      systems, billable services infrastructure, software code base, customer support
      and reseller channel management to Built Right Networks under our September
      30,
      2002 Information Management Services Agreement (the “Outsourced Services
      Agreement”). The principals of Built Right Networks are all former MangoSoft
      employees. Our contract represents a large majority of Built Right Networks’
revenue. We can provide no assurance that Built Right Networks will remain
      solvent or can retain their key personnel. Built Right Network’s inability to
      retain key personnel or to remain solvent would have a material and adverse
      effect on our business, financial condition and results of
      operations.





*Our
      Performance Depends On Market Acceptance Of Our Products.*





We
      expect
      to derive a substantial portion of our future revenues from the sales of
      Mangomind SM and
      fileTRUST SM .
      Due to
      our small size and need to conserve capital, our selling and marketing
      activities for these products and services is limited. If markets for our
      products fail to develop, develop more slowly than expected, are subject to
      substantial competition or react negatively to Bank of America’s (formerly
      FleetBoston) termination of its February 2002 enterprise license agreement
      with
      us, our business, financial condition and results of operations will be
      materially and adversely affected.








*We
      Depend On Strategic Marketing Relationships.*





We
      expect
      our future marketing efforts will focus in part on developing business
      relationships with technology companies that seek to augment their businesses
      by
      offering our products to their customers. Our inability to enter into and retain
      strategic relationships, or the inability of such technology companies to
      effectively market our products, could materially and adversely affect our
      business, operating results and financial condition.





*There
      May Be Limited Liquidity In Our Common Stock And Its Price May Be Subject to
      Fluctuation.*





Our
      common stock is currently traded on the OTC Bulletin Board and there is only
      a
      limited market for our common stock. We can provide no assurances that we will
      be able to have our common stock listed on an exchange or quoted on Nasdaq
      or
      that it will continue to be quoted on the OTC Bulletin Board. If there is no
      trading market for our common stock, the market price of our common stock will
      be materially and adversely affected.





*SEC
      Rules Concerning Sales Of Low-Priced Securities May Hinder Re-Sales Of Our
      Common Stock*





Because
      our common stock has a market price that is less than ten dollars per share,
      our
      common stock is not listed on an exchange or quoted on Nasdaq and is traded
      on
      the OTC Bulletin Board. Brokers and dealers who handle trades in our common
      stock are subject to certain SEC disclosure rules when effecting trades in
      our
      common stock, including disclosure of the following: the bid and offer prices
      of
      our common stock, the compensation of the brokerage firm and the salesperson
      handling a trade and legal remedies available to the buyer. These requirements
      may hinder re-sales of our common stock and may adversely affect the market
      price of our common stock.





12


*Rapidly
      Changing Technology And Substantial Competition May Adversely Affect Our
      Business.*





Our
      business is subject to rapid changes in technology. We can provide no assurances
      that research and development by competitors will not render our technology
      obsolete or uncompetitive. We compete with a number of computer hardware and
      software design companies that have technologies and products similar to those
      offered by us and have greater resources, including more extensive research
      and
      development, marketing and capital than us. We can provide no assurances that
      we
      will be successful in marketing our existing products and developing and
      marketing new products in such a manner as to be effective against our
      competition. If our technology is rendered obsolete or we are unable to compete
      effectively, our business, operating results and financial condition will be
      materially and adversely affected.




*Litigation
      Concerning Intellectual Property Could Adversely Affect Our
      Business.*




We
      rely
      on a combination of trade secrets, copyright and trademark law, contractual
      provisions, confidentiality agreements and certain technology and security
      measures to protect our trademarks, patents, proprietary technology and
      know-how. However, we can provide no assurance that our rights in our
      intellectual property will not be infringed upon by competitors or that
      competitors will not similarly make claims against us for infringement. If
      we
      are required to be involved in litigation involving intellectual property
      rights, our business, operating results and financial condition will be
      materially and adversely affected.





*Defects
      In Our Software Products May Adversely Affect Our Business.*




Complex
      software such as the software developed by MangoSoft may contain defects when
      introduced and also when updates and new versions are released. Our introduction
      of software with defects or quality problems may result in adverse publicity,
      product returns, reduced orders, uncollectible or delayed accounts receivable,
      product redevelopment costs, loss of or delay in market acceptance of our
      products or claims by customers or others against us. Such problems or claims
      may have a material and adverse effect on our business, financial condition
      and
      results of operations.





*We
      Have Limitations On The Effectiveness Of Our Internal
      Controls.*





We
      have
      one full-time employee engaged in general and administrative capacities. A
      complete set of internal controls is not possible in an organization of this
      size. Management does not expect that its disclosure controls or its internal
      controls will prevent all errors and intentional misrepresentations. A control
      system, no matter how well conceived and operated, can provide only reasonable,
      not absolute, assurance that the objectives of the control system are met.
      Further, the design of a control system must reflect the fact that there are
      resource constraints and the benefits of controls must be considered relative
      to
      their costs. Because of the inherent limitations in all control systems, no
      evaluation of controls can provide absolute assurance that all control issues,
      if any, within the organization have been detected.




13





**ITEM
              3.**
            **CONTROLS
                AND PROCEDURES**





We
      have
      significantly reduced our work force on several occasions during 2001 and 2002.
      At March 31, 2006 we had one (1) employee, Mr. Dale Vincent, our President,
      Chief Executive Officer and sole director. A complete set of internal controls
      including segregation of duties is not possible in an organization of this
      size.
      However, we have implemented control procedures surrounding the maintenance
      of
      our accounting and financial systems and the safeguarding of our assets.
      Further, all transactions entered into outside the normal course of our
      day-to-day operations must be approved by Mr. Vincent.





Our
      principal executive and financial officer has evaluated the effectiveness of
      our
      disclosure controls and procedures (as defined in Rules 13a-15(e) and
      15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange
      Act”)), as of the end of the period covered by this Quarterly Report on
      Form 10-QSB. Based on such evaluation, our principal executive and
      financial officer has concluded that as of such date, our disclosure controls
      and procedures were designed to ensure that information required to be disclosed
      by us in reports that we file or submit under the Exchange Act is recorded,
      processed, summarized and reported within the time periods specified in
      applicable SEC rules and forms and were effective.





There
      was
      no change in our internal control over financial reporting (as defined in
      Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during
      the quarter ended March 31, 2005 that has materially affected, or is
      reasonably likely to materially affect, our internal control over financial
      reporting.





14





**PART
      II - OTHER INFORMATION**





**ITEM
      1. LEGAL PROCEEDINGS**





On
      November 22, 2002, the Company filed a complaint in the United States District
      Court of New Hampshire, against Oracle Corporation for infringement of U.S.
      Patent No. 6,148,377 and U.S. Patent No. 5,918,229. The complaint seeks
      unspecified monetary damages and injunctive relief and awards for interest,
      costs and attorneys’ fees.





On
      May
      15, 2003, Oracle Corporation filed a complaint in the United States District
      Court, Northern District of California, against the Company and Built Right
      Networks for infringement of a patent held by Oracle Corporation. The complaint
      seeks unspecified monetary damages and injunctive relief and awards for
      interest, costs and attorneys’ fees.





On
      July
      2, 2003, the Company filed a complaint in the United States District Court,
      Northern District of California, against Oracle Corporation, Sun Microsystems,
      Inc., Dell Computer Corporation and Electronic Arts, Inc. for infringement
      of
      U.S. Patent No. 6,148,377 and U.S. Patent No. 5,918,229. The complaint seeks
      unspecified monetary damages and injunctive relief and awards for interest,
      costs and attorneys’ fees.




On
      March
      14, 2006, the U,S., District Court in New Hampshire ruled in favor of Oracle’s
      motion for summary judgment that did it did not infringe U.S. Patent No.
      6,148,377 held by Mangosoft, Inc. Mangosoft had sued Oracle in 2002, claiming
      infringement of its patent on shared memory technology as described above.





Other
      than the matters listed above, there are no material pending legal proceedings,
      other than the routine litigation occurring in the normal course of operations,
      to which we are party or of which any of our properties are
      subject.








15


**ITEM
              6.**
            **EXHIBITS
                AND REPORTS ON FORM 8-K**





**(a)**
            **Exhibits:**





**Number**
            **Description
                of Exhibit**2.1
            
            Agreement
                and Plan of Merger by and among First American Clock Co., MangoSoft
                Corporation and MangoMerger Corp., dated as of August 27,1999.
                (1)3.1
            
            Articles
                of Incorporation, as amended. (2)3.2
            
            By-laws.
                (2)4.1
            
            Rights
                Plan. (6)10
            
            Lease
                of Westborough Office Park, Building Five, dated November 10, 1995.
                (3)14
            
            Code
                of Ethics. (7)21
            
            Subsidiary
                of the Registrant. (2)31.1
            
            Certification
                of Principal Executive Officer required by Rule 13a 14(a) or Rule
                15-d14
                (a) of the Securities Exchange Act of 1934, as adopted pursuant to
                Section
                302 of the Sarbanes-Oxley Act of 2002.32.1
            
            Certification
                of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as
                adopted
                pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.99.1
            
            1999
                Incentive Compensation Plan, as amended and restated on May 1, 2000.
                (1)99.2
            
            Form
                of Subscription Agreement for purchase of common stock, dated as
                of March
                20, 2000. (1)99.3
            
            Form
                of Warrant Agreement. (1)99.4
            
            Asset
                Purchase Agreement, dated February 11, 2002, between MangoSoft, Inc.
                and
                Fleet National Bank. (4)99.5
            
            Warrant
                Agreement, dated February 11, 2002, between MangoSoft, Inc. and Fleet
                National Bank. (4)99.6
            
            Information
                Management Services Agreement, dated September
              30,
                2002, between MangoSoft, Inc. and Built Right Networks LLC.
                (5)99.7
            
            Rights
                Agreement, dated March 14, 2003, between MangoSoft, Inc. and Interwest
                Transfer Co., Inc. (6)


(1)
            Filed
                as an exhibit to our Current Report on Form 8-K for an event dated
                September 7, 1999 and hereby incorporated by reference
                thereto.


(2)
            Filed
                as an exhibit to our Registration Statement on Form 10-SB, filed
                June 9,
                2000, and hereby incorporated by reference
                thereto.


(3)
            Filed
                as an exhibit to our Quarterly Report filed November 9, 1999 for
                the
                quarter ended September 30, 1999 and hereby incorporated by reference
                thereto.


(4)
            Filed
                as an exhibit to our Quarterly Report filed August 14, 2002 for the
                quarter ended June 30, 2002 and hereby incorporated by reference
                thereto.


(5)
            Filed
                as an exhibit to our Current Report on Form 8-K for an event dated
                September 30, 2002 and hereby incorporated by reference
                thereto.


(6)
            Filed
                as an exhibit to our Current Report on Form 8-K for an event dated
                March
                21, 2003, as amended on July 25, 2003, and hereby incorporated by
                reference thereto.


(7)
      Filed
      as an exhibit to our Annual Report filed on March 26, 2004 for the year ended
      December 31, 2003 and hereby incorporated by reference thereto.


**(b)**
            **Reports
                on Form 8-K:**


There
      were no notifications filed on Form 8-K during the three months ended March
      31,
      2006.




16


**SIGNATURE**





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





May
                12, 2006
            MANGOSOFT,
                INC./S/*Dale
                Vincent*Dale
                VincentChief
                Executive Officer(Principal
                Financial and Accounting Officer)




17