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**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION **

**WASHINGTON,      D.C. 20549 **

**FORM      10-Q **

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

| o | **Transition                Report Pursuant to Section 13 or 15(d) of the Securities Exchange                Act of                1934** |
|---|-------------------------------------------------------------------------------------------------------------------------------------------|
|   | F**or              the transition period from to              .** |
|--------|-------------------------------------------------------------------|

**Commission      File Number: **
**000-51639**

**Argyle      Security Acquisition Corporation**

| **Delaware**                                                                                |   | **20-3101079**                                                    |
|---------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------|
| (State                or Other Jurisdiction ofIncorporation                or Organization) |   | (I.R.S.                EmployerIdentification                No.) |
|                                                                                        |   |                                                              |

**200      Concord Plaza Suite 700 San Antonio, TX 78216**

**(210)      828-1700**

| Large Accelerated Filer o | Accelerated Filer o | Non-Accelerated Filer ý |
|---------------------------|---------------------|------------------------------|
|                      |                |                         |

----

----

**Argyle      Security Acquisition Corporation Index to Form 10-Q **

| **Part                I.**  | **Financial                Information**                                                                                          |
|-----------------------------|-----------------------------------------------------------------------------------------------------------------------------------|
|                        |                                                                                                                              |
|                        | Item                1. Financial Statements (unaudited)                                                                           |
|                        |                                                                                                                              |
|                        | Balance                Sheet                                                                                                      |
|                        |                                                                                                                              |
|                        | Statements                of Operations                                                                                           |
|                        |                                                                                                                              |
|                        | Statement                of Stockholders’ Equity                                                                            |
|                        |                                                                                                                              |
|                        | Statement                of Cash Flows                                                                                            |
|                        |                                                                                                                              |
|                        | Notes                to Financial Statements                                                                                      |
|                        |                                                                                                                              |
|                        | Item                2. Management’s Discussion and Analysis of Financial Condition and Results                of Operations |
|                        |                                                                                                                              |
|                        | Item                3. Quantitative and Qualitative Disclosures About Market Risk                                                 |
|                        |                                                                                                                              |
|                        | Item                4. Controls and Procedures                                                                                    |
|                        |                                                                                                                              |
| **Part                II.** | **Other                Information**                                                                                              |
|                        |                                                                                                                              |
|                        | Item                1. Legal Proceedings                                                                                          |
|                        |                                                                                                                              |
|                        | Item                1A. Risk Factors                                                                                              |
|                        |                                                                                                                              |
|                        | Item                2. Unregistered Sales of Equity Securities and Use of                Proceeds                                 |
|                        |                                                                                                                              |
|                        | Item                3. Defaults Upon Senior Securities                                                                            |
|                        |                                                                                                                              |
|                        | Item                4. Submission of Matters to a Vote of Security Holders                                                        |
|                        |                                                                                                                              |
|                        | Item                5. Other Information                                                                                          |
|                        |                                                                                                                              |
|                        | Item                6. Exhibits                                                                                                   |
| SIGNATURES                  |
|                        |

----

**PART      I - FINANCIAL INFORMATION**

**ITEM      1 - FINANCIAL STATEMENTS (UNAUDITED)**

**Argyle      Security Acquisition Corporation**

**Balance      Sheet** 

|                                                                                                                                                                                                                                                                                                                        |   | March                31, 2006(unaudited) |       | December                31, 2005 |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------|------------|----------------------------------|--------|
| **ASSETS**                                                                                                                                                                                                                                                                                                                  |   |                                     |       |                             |   |
| **Current                assets**:                                                                                                                                                                                                                                                                                          |   |                                     |       |                             |   |
| Cash                                                                                                                                                                                                                                                                                                                        |   | $                                        | 654,356    |                             | $      | 9,608 |   |
| Cash                and cash equivalents, held in trust                                                                                                                                                                                                                                                                     |   |                                     | 28,938,267 |                             |   | - |   |
| Prepaid                expenses                                                                                                                                                                                                                                                                                             |   |                                     | 75,833     |                             |   | - |   |
| Other                assets, deferred offering costs                                                                                                                                                                                                                                                                        |   |                                     | -          |                             |   | 294,745 |   |
| **Total                current assets**                                                                                                                                                                                                                                                                                     |   |                                     | 29,668,456 |                             |   | 304,353 |   |
| Property                and equipment                                                                                                                                                                                                                                                                                       |   |                                     | 6,106      |                             |   | - |   |
| **Total                assets**                                                                                                                                                                                                                                                                                             |   | $                                        | 29,674,562 |                             | $      | 304,353 |   |
|                                                                                                                                                                                                                                                                                                                        |   |                                     |       |                             |   |   |   |
| **LIABILITIES                AND STOCKHOLDERS’ EQUITY**                                                                                                                                                                                                                                                               |   |                                     |       |                             |   |   |   |
|                                                                                                                                                                                                                                                                                                                        |   |                                     |       |                             |   |   |   |
| **Current                liabilities:**                                                                                                                                                                                                                                                                                     |   |                                     |       |                             |   |   |   |
| Accrued                expenses                                                                                                                                                                                                                                                                                             |   | $                                        | 63,127     |                             | $      | 132,096 |   |
| Note                payable - stockholders                                                                                                                                                                                                                                                                                  |   |                                     | -          |                             |   | 155,000 |   |
| Deferred                underwriting costs                                                                                                                                                                                                                                                                                  |   |                                     | 1,377,017  |                             |   | - |   |
| **Total                liabilities**                                                                                                                                                                                                                                                                                        |   |                                     | 1,440,144  |                             |   | 287,096 |   |
|                                                                                                                                                                                                                                                                                                                        |   |                                     |       |                             |   |   |   |
| Common                stock, subject to possible redemption - 764,627 shares at $7.14 per                share                and associated deferred interest of $43,359                                                                                                                                                   |   |                                     | 5,502,794  |                             |   | - |   |
|                                                                                                                                                                                                                                                                                                                        |   |                                     |       |                             |   |   |   |
| **Stockholders’                Equity:**                                                                                                                                                                                                                                                                              |   |                                     |       |                             |   |   |   |
| Preferred                stock — $.0001 par value; 1,000,000 shares authorized; 0 shares issued and                outstanding                                                                                                                                                                                        |   |                                     | -          |                             |   | - |   |
| Common                stock—$.0001 par value; 89,000,000 shares authorized; issued and                outstanding: 4,781,307 at March 31, 2006 (including 764,627 shares                of                common stock subject to possible redemption) and 937,500 at December                31,                2005 |   |                                     | 478        |                             |   | 94 |   |
| Additional                paid-in capital                                                                                                                                                                                                                                                                                   |   |                                     | 22,843,571 |                             |   | 24,906 |   |
| Deficit                accumulated during the development stage                                                                                                                                                                                                                                                             |   |                                     | (112,425   | )                                |   | (7,743 | ) |
| **Total                stockholders’ equity**                                                                                                                                                                                                                                                                         |   |                                     | 22,731,624 |                             |   | 17,257 |   |
|                                                                                                                                                                                                                                                                                                                        |   |                                     |       |                             |   |   |   |
| **Total                liabilities and stockholders’ equity**                                                                                                                                                                                                                                                         |   | $                                        | 29,674,562 |                             | $      | 304,353 |   |

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**Argyle      Security Acquisition Corporation**

**Unaudited      Statements of Operations**

|                                                                                                         |   | **January                1, 2006****Through****March                31, 2006** |     | **For                the period from****June                22, 2005****(inception)                through****March                31, 2006** |   |
|--------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------|----------|-----------------------------------------------------------------------------------------------------------------------------------------------|--------|
| **Operating                expenses**                                                                        |   |                                                                           |     |                                                                                                                                          |   |
| Consulting                and other professional fees                                                        |   | $                                                                              | 112,824  |                                                                                                                                          | $      | 112,824 |   |
| Franchise                taxes                                                                               |   |                                                                           | 27,949   |                                                                                                                                          |   | 27,949 |   |
| Rent                                                                                                         |   |                                                                           | 10,808   |                                                                                                                                          |   | 10,808 |   |
| Insurance                                                                                                    |   |                                                                           | 14,667   |                                                                                                                                          |   | 14,667 |   |
| Stock                compensation                                                                            |   |                                                                           | 130,632  |                                                                                                                                          |   | 130,632 |   |
| Other                operating expenses                                                                      |   |                                                                           | 24,826   |                                                                                                                                          |   | 29,858 |   |
| Loss                from operations                                                                          |   |                                                                           | 321,706  |                                                                                                                                          |   | 326,738 |   |
|                                                                                                         |   |                                                                           |     |                                                                                                                                          |   |   |   |
| **Other                income and expense**                                                                  |   |                                                                           |     |                                                                                                                                          |   |   |   |
| Bank                interest                                                                                 |   |                                                                           | 586      |                                                                                                                                          |   | 586 |   |
| Interest                on cash and cash equivalents held in trust                                           |   |                                                                           | 216,904  |                                                                                                                                          |   | 216,904 |   |
| Interest                expense                                                                              |   |                                                                           | (466     | )                                                                                                                                             |   | (3,177 | )  |
| Total                other income and expense                                                                |   |                                                                           | 217,024  |                                                                                                                                          |   | 214,313 |   |
|                                                                                                         |   |                                                                           |     |                                                                                                                                          |   |   |   |
| Loss                before provision for income taxes                                                        |   |                                                                           | (104,682 | )                                                                                                                                             |   | (112,425 | ) |
| Provision                for income taxes                                                                    |   |                                                                           | -        |                                                                                                                                          |   | - |   |
|                                                                                                         |   |                                                                           |     |                                                                                                                                          |   |   |   |
| **Net                loss**                                                                                  |   |                                                                           | (104,682 | )                                                                                                                                             |   | (112,425 | ) |
|                                                                                                         |   |                                                                           |     |                                                                                                                                          |   |   |   |
| Deferred                interest, attributable to common stock subject to possible                redemption |   |                                                                           | 43,359   |                                                                                                                                          |   | 43,359 |   |
|                                                                                                         |   |                                                                           |     |                                                                                                                                          |   |   |   |
| **Net                loss allocable to holders of non-redeemable common                stock**               |   | $                                                                              | (148,041 | )                                                                                                                                             | $      | (155,784 | ) |
|                                                                                                         |   |                                                                           |     |                                                                                                                                          |   |   |   |

| Net                loss per share - basic and diluted |   |   | (0.03  | )      |   | (0.06  | )      |
|-------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|
|                                                  |   |   |   |   |   |   |   |

| Weighted              average number of shares outstanding - basic and diluted |   |   | 3,550,663 |   |   |  1,771,488 |   |
|--------------------------------------------------------------------------------|--------|--------|-----------|--------|--------|-----------------|--------|

|                                                                                                                                                               |   |   |      |   |   |      |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-----------|--------|--------|-----------|--------|
| **Net                loss per share exclusive of shares and related interest subject to                possible redemption - basic and diluted**                   |   | $      | (0.05     | )      | $      | (0.10     | )      |
|                                                                                                                                                               |   |   |      |   |   |      |   |
| Weighted                average number of shares outstanding exclusive of shares subject                to                possible redemption -- basic and diluted |   |   | 3,032,416 |   |   | 1,606,090 |   |
|                                                                                                                                                               |   |   |      |   |   |      |   |

See      notes      to unaudited financial statements 

----

**Unaudited      Statements of Stockholders’ Equity** 

|                                                                  |   |   |                          |   |   |                     |   |   |                             |   |   | Deficit                         |   |   |                   |   |
|-----------------------------------------------------------------------|--------|--------|-------------------------------|--------|--------|--------------------------|--------|--------|----------------------------------|--------|--------|---------------------------------|--------|--------|------------------------|--------|
|                                                                  |   |   |                          |   |   |                     |   |   |                             |   |   | Accumulated                     |   |   |                   |   |
|                                                                  |   |   |                          |   |   |                     |   |   | Paid-in                  Capital |   |   | During                the  |   |   | Total                  |   |
|                                                                  |   |   | Common                  Stock |   |   | in                Excess |   |   | Development                      |   |   | Stockholders'                   |   |
|                                                                  |   |   | Shares                        |   |   | Amount                   |   |   | of                Par            |   |   | Stage                           |   |   | Equity                 |   |
|                                                                  |   |   |                          |   |   |                     |   |   |                             |   |   |                            |   |   |                   |   |
| Stock                issuance on June 23, 2005 at $.027               |   |   | 937,500                       |   | $      | 94                       |   | $      | 24,906                           |   |   |                                 |   | $      | 25,000                 |   |
| Net                loss                                               |   |   |                          |   |   |                     |   |   |                        |   | $      | (7,743                          | )      |   | (                7,743 | )      |
| **Balances**,                at December 31, 2005                     |   |   | 937,500                       |   | $      | 94                       |   | $      | 24,906                           |   | $      | (7,743                          | )      | $      | 17,257                 |   |
| Stock                issuance on January 24, 2006 at $8               |   |   | 125,000                       |   |   | 12                       |   |   | 999,988                          |   |   |                                 |   |   | 1,000,000              |   |
| Stock                issuance on January 30, 2006 at $8               |   |   | 3,625,000                     |   |   | 362                      |   |   | 28,999,638                       |   |   |                                 |   |   | 29,000,000             |   |
| Stock                issuance on January 30, 2006 at $8               |   |   | 75,046                        |   |   | 8                        |   |   | 600,360                          |   |   |                                 |   |   | 600,368                |   |
| Proceeds                from issuance of option to underwriters       |   |   |                               |   |   |                          |   |   | 100                              |   |   |                                 |   |   | 100                    |   |
| Expenses                of offerings                                  |   |   |                               |   |   |                          |   |   | (2,409,764                       | )      |   |                                 |   |   | (2,409,764             | )      |
| Less:                Proceeds subject to possible redemption of       |   |   |                               |   |   |                          |   |   |                                  |   |   |                                 |   |   |                        |   |
|                  764,627 shares and associated deferred interest |   |   |                               |   |   |                          |   |   | (5,502,794                       | )      |   |                                 |   |   | (5,502,794             | )      |
| Stock                based compensation                               |   |   |                               |   |   |                          |   |   | 130,632                          |   |   |                                 |   |   | 130,632                |   |
| Officer                and director option exercise                   |   |   | 18,761                        |   |   | 2                        |   |   | 505                              |   |   |                            |   |   | 507                    |   |
| Net                loss                                               |   |   |                          |   |   |                     |   |   |                             |   |   | (104,682                        | )      |   | (104,682               | )      |
| **Balances**,                at March 31, 2006                        |   |   | 4,781,307                     |   | $      | 478                      |   | $      | 22,843,571                       |   | $      | (112,425                        | )      | $      | 22,731,624             |   |

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**Argyle      Security Acquisition Corporation**

**Unaudited      Statement of Cash Flows** 

|                                                                       |   | January                1, 2006 through March 31, 2006 |             | For                the period from June 22, 2005 (inception) through March 31, 2006 |   |
|----------------------------------------------------------------------------|--------|-------------------------------------------------------|------------------|-------------------------------------------------------------------------------------|--------|
|                                                                       |   |                                                  |             |                                                                                |   |
| **Cash                flows from operating activities**                    |   |                                                  |             |                                                                                |   |
| Net                loss                                                    |   | $                                                     | (104,682         | )                                                                                   | $      | (112,425 | ) |
|                                                                       |   |                                                  |             |                                                                                |   |   |   |
| **Adjustment                to reconcile net loss to net cash**            |   |                                                  |             |                                                                                |   |   |   |
| **provided                by operating activities:**                       |   |                                                  |             |                                                                                |   |   |   |
| Stock                based compensation                               |   |                                                  | 130,632          |                                                                                |   | 130,632 |   |
| Increase                in prepaid expenses                                |   |                                                  | (75,833          | )                                                                                   |   | (75,833 | ) |
| Increase                in accrued expenses                                |   |                                                  | 59,032           |                                                                                |   | 63,127 |   |
| Interest              earned on cash and cash equivalents, held in trust   |   |                                                  | (216,904         | )                                                                              |   |  (216,904 | ) |
| Net                cash provided by operating activities                   |   |                                                  | (207,755         | )                                                                                   |   | (211,403 | )  |
|                                                                       |   |                                                  |             |                                                                                |   |   |   |
| **Cash                flows from investing activities:**                   |   |                                                  |             |                                                                                |   |   |   |
| Purchases                of investments held in trust                      |   |                                                  | (89,100,875      | )                                                                                   |   | (89,100,875 | ) |
| Maturity              of investments held in trust                         |   |                                                  |  60,379,512 |                                                                                |   | 60,379,512 |   |
| Purchase                of property and equipment                          |   |                                                  | (6,106           | )                                                                                   |   | (6,106 | ) |
| Net                cash used in investing activities                       |   |                                                  | (28,727,469      | )                                                                                   |   | (28,727,469 | ) |
|                                                                       |   |                                                  |             |                                                                                |   |   |   |
| **Cash                flows from financing activities**                    |   |                                                  |             |                                                                                |   |   |   |
| Gross                proceeds from public offering and private placement   |   |                                                  | 30,600,368       |                                                                                |   | 30,600,368 |   |
| Offering                costs                                              |   |                                                  | (866,003         | )                                                                                   |   | (1,032,747 | ) |
| Proceeds                from issuance and exercises of options             |   |                                                  | 607              |                                                                                |   | 607 |   |
| Repayment                of notes payable, stockholders                    |   |                                                  | (155,000         | )                                                                                   |   | (155,000 | ) |
| Proceeds                from notes payable, stockholders                   |   |                                                  | -                |                                                                                |   | 155,000 |   |
| Proceeds                from sale of common stock to founding stockholders |   |                                                  | -                |                                                                                |   | 25,000 |   |
| Net                cash provided by financing activities                   |   |                                                  | 29,579,972       |                                                                                |   | 29,593,228 |   |
|                                                                       |   |                                                  |             |                                                                                |   |   |   |
| **Net                increase in cash**                                    |   |                                                  | 644,748          |                                                                                |   | 654,356 |   |
| **Cash**,                beginning of period                               |   |                                                  | 9,608            |                                                                                |   | - |   |
| **Cash**,                end of period                                     |   | $                                                     | 654,356          |                                                                                |   | 654,356 |   |
|                                                                       |   |                                                  |             |                                                                                |   |   |   |
|                                                                       |   |                                                  |             |                                                                                |   |   |   |
| Supplemental                disclosure of cash flow information            |   |                                                  |             |                                                                                |   |   |   |
| Cash                paid for interest                                      |   | $                                                     | 3,177            |                                                                                |   | 3,177 |   |
| Supplemental                schedule of non-cash financing activities:     |   |                                                  |             |                                                                                |   |   |   |
| Accrual                of deferred underwriting fees                       |   | $                                                     | 1,377,017        |                                                                                |   | 1,377,017 |   |

----

**Argyle      Security Acquisition Corporation**

**Notes      to Unaudited Financial Statements**

**March      31, 2006**

**Note      **
**1      - Basis of Presentation**

**Note      2 - Organization, business operations and summary of significant accounting      policies**

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**Argyle          Security Acquisition Corporation**

**Notes          to Unaudited Financial Statements**

**March          31, 2006**

*Cash      and cash equivalents*

----

**Argyle          Security Acquisition Corporation**

**Notes          to Unaudited Financial Statements**

**March          31, 2006**

*Income      taxes*

*Recently      issued accounting pronouncements*

*Loss      per common share*

*Use      of estimates*

**Note      3 - Offerings**

*Public      Offering*

*Private      Placement*

----

**Argyle      Security Acquisition Corporation**

**Notes      to Unaudited Financial Statements**

**March      31, 2006**

**Note      4 - Notes Payable to Stockholders**

**Note      5 - Stockholders' Equity**

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**Argyle          Security Acquisition Corporation**

**Notes          to Unaudited Financial Statements**

**March          31, 2006**

**Note      6 - Common stock reserved for issuance**

**Note      7 - Preferred Stock**

----

**Argyle          Security Acquisition Corporation**

**Notes          to Unaudited Financial Statements**

**March          31, 2006**

**Note      8 - Income Taxes**

|                                     |   | January                1, 2006ThroughMarch                31, 2006 |    |
|------------------------------------------|--------|--------------------------------------------------------------------|---------|
| Current                benefit           |   | $                                                                  | 15,834  |   |
| Deferred                benefit          |   |                                                               | 34,223  |   |
| Less:                Valuation allowance |   |                                                               | (50,057 | ) |
|                                     |   | $                                                                  | 0       |   |

----

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

**Forward      Looking Statements **

**Critical      Accounting Policies**

**Overview      **

**Results      of Operations for the three month period ended March 31,      2006**

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**Liquidity      and Capital Resources**

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**Off-Balance      Sheet Arrangements**

**ITEM      3.**
**QUANTITATIVE      AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**

**ITEM      4. CONTROLS AND PROCEDURES**

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**PART      II - OTHER INFORMATION**

**ITEM      1. LEGAL PROCEEDINGS**

**ITEM      1A. RISK FACTORS**

**ITEM      2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF      PROCEEDS**

**ITEM      3. DEFAULTS UPON SENIOR SECURITIES**

**ITEM      4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS**

**ITEM      5. OTHER INFORMATION**

**ITEM      6. EXHIBITS**

|                           |   |                                                                                                                                                                                                           |
|--------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **Exhibit                No.** |   | **Description**                                                                                                                                                                                                |
| 31.1                           |   | Certification                of the Co-Chief Executive Officer (Principal Financial Officer) pursuant                to Rule 13a-14(a) of                the Securities Exchange Act, as amended     |
| 31.2                           |   | Certification                of the Co-Chief Executive Officer and (Principal Executive Officer)                pursuant to Rule 13a-14(a) of                the Securities Exchange Act, as amended |
| 32.1                           |   | Certification                of the Co-Chief Executive Officers pursuant to 18                U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley                Act of 2002 .          |

----

**SIGNATURES**

|                        |                                                                                                  |                             |
|-----------------------------|-------------------------------------------------------------------------------------------------------|----------------------------------|
|                        | ARGYLE                SECURITY ACQUISITION CORPORATION                                                |
|                   |                                                                                             |                        |
| May                15, 2006 | By:                                                                                         | /s/ Bob              Marbut |
|                        | Bob                Marbut                                                                             |
|                        | Co-Chief                Executive Officer (Principal Accounting and Financial                officer) |

|         |                                                                                  |                                 |
|--------------|---------------------------------------------------------------------------------------|--------------------------------------|
|    |                                                                             |                            |
|         | By:                                                                         | /s/ Ron              Chaimovski |
|         | Ron              Chaimovski                                                           |
|         | Co-Chief                Executive Officer (Principal Executive                Office) |

----