UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549

                                   FORM 10-QSB

(Mark One)

[X]   QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE ACT
      OF 1934

                   For the quarterly period ended May 31, 2006

|_|   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

              For the transition period from _________ to _________

                        Commission file number 001-04978


                             Solitron Devices, Inc.
        (Exact name of small business issuer as specified in its charter)


               Delaware                                22-1684144
               --------                                ----------
  (State or other jurisdiction of         (IRS Employer Identification Number)
  incorporation or organization)


              3301 Electronics Way, West Palm Beach, Florida 33407
              ----------------------------------------------------
                    (Address of principal executive offices)


                                 (561) 848-4311
                      (Issuer's telephone number, including
                                   area code)

                                      N/A
--------------------------------------------------------------------------------
              (Former name, former address and former fiscal year,
                         if changed since last report)

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 |_|

Indicate by check mark whether the  registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act)
Yes |_|  No |X|


                      APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of common
equity, as of June 23, 2006: 2,260,049

Transitional Small Business Disclosure Format (check one):
Yes |_| No |X|

                                       1
<PAGE>

                             SOLITRON DEVICES, INC.

                                      INDEX

PART 1 - FINANCIAL INFORMATION
------------------------------

                                                                        Page No.
                                                                        --------
Item 1.  Financial Statements (unaudited)

         Condensed Consolidated Balance Sheet                               3
         May 31, 2006

         Condensed Consolidated Statements of Income                        4
         Three Months Ended May 31, 2006 and 2005

         Condensed Consolidated Statements of Cash Flows                    5
         Three Months Ended May 31, 2006 and 2005

         Notes to Condensed Consolidated Financial Statements              6-11


Item 2.  Management's Discussion and Analysis of Financial Condition      12-15
         and Results of Operations

Item 3.  Controls and Procedures                                           15


PART II - OTHER INFORMATION
---------------------------

Item 6.  Exhibits                                                          16

Signatures                                                                 17

                                       2
<PAGE>

                         PART I - FINANCIAL INFORMATION
                         ------------------------------

ITEM 1. FINANCIAL STATEMENTS

                     SOLITRON DEVICES, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEET
                      ------------------------------------
                            (Unaudited, in thousands)

<TABLE>
<CAPTION>
                                                                                  May 31, 2006
                                                                                  ------------
<S>                                                                               <C>
ASSETS
     CURRENT ASSETS
       Cash and cash equivalents                                                  $      3,119
       Accounts receivable, less allowance for doubtful accounts of $1                     983
       Inventories, net                                                                  2,516
       Prepaid expenses and other current assets                                           192
                                                                                  ------------
          TOTAL CURRENT ASSETS                                                           6,810

    PROPERTY, PLANT AND EQUIPMENT, net                                                     569

    OTHER ASSETS                                                                            45
                                                                                  ------------

          TOTAL ASSETS                                                            $      7,424
                                                                                  ============

LIABILITIES AND STOCKHOLDERS' EQUITY
    CURRENT LIABILITIES
       Accounts payable - Post-petition                                           $        464
       Accounts payable - Pre-petition, current portion                                  1,163
       Accrued expenses and other current liabilities                                      654
                                                                                  ------------
            TOTAL CURRENT LIABILITIES                                                    2,281

    LONG TERM LIABILITIES, net of current portion                                           78
                                                                                  ------------

          TOTAL LIABILITIES                                                              2,359
                                                                                  ------------

STOCKHOLDERS' EQUITY
      Preferred stock, $.01 par value, authorized 500,000 shares, none issued              -0-
      Common stock, $.01 par value, authorized 10,000,000 shares, 2,260,049
      shares issued and outstanding, net of 173,287 shares of treasury stock                22
      Additional paid-in capital                                                         2,731
      Retained earnings                                                                  2,312
                                                                                  ------------

          TOTAL STOCKHOLDERS' EQUITY                                                     5,065
                                                                                  ------------

          TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                              $      7,424
                                                                                  ============
</TABLE>

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

                                       3
<PAGE>

                     SOLITRON DEVICES, INC. AND SUBSIDIARIES
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                           THREE MONTHS ENDED MAY 31,
                           --------------------------
        (Unaudited, in thousands except for share and per share amounts)

                                                       2006            2005
                                                    -----------    -----------

NET SALES                                           $     1,901    $     2,103
Cost of sales                                             1,697          1,614
                                                    -----------    -----------

Gross profit                                                204            489

Selling, general and administrative expenses                288            271
                                                    -----------    -----------

Operating (loss)/income                                     (84)           218
                                                    -----------    -----------

OTHER INCOME (EXPENSE)
    Other income, net                                        --             64
    Interest income                                          31             13
    Interest expense on unsecured creditors claim            --             (3)
                                                    -----------    -----------
Other income (expense), net                                  31             74
                                                    -----------    -----------

Net (loss)/income                                   $       (53)   $       292
                                                    ===========    ===========

(LOSS)/INCOME PER SHARE: Basic                      $     (0.02)   $      0.14
                                                    -----------    -----------
                       : Diluted:                   $     (0.02)   $      0.13
                                                    -----------    -----------

WEIGHTED AVERAGE
 SHARES OUTSTANDING: Basic                            2,194,126      2,076,053
                                                    ===========    ===========
                   : Diluted                          2,433,196      2,187,561
                                                    ===========    ===========


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

                                       4
<PAGE>

                     SOLITRON DEVICES, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                           THREE MONTHS ENDED MAY 31,
                           --------------------------
                            (Unaudited, in thousands)
<TABLE>
<CAPTION>
                                                                     2006       2005
                                                                   -------    -------
<S>                                                                <C>        <C>
CASH FLOWS FROM OPERATING ACTIVITIES
    Net (loss)/income                                              $   (53)   $   292
         Adjustments to reconcile net income to net cash
           provided by operating activities:
           Depreciation and amortization                                46         46
         Changes in operating assets and liabilities:
           (Increase) Decrease in:
           Accounts receivable                                           5         91
           Inventories                                                  54        (19)
           Prepaid expenses and other current assets                   (57)       (14)
           Other assets                                                 19
           Increase (Decrease) in:
           Accounts payable - Post-petition                            (49)        11
           Accounts payable - Pre-petition                              (7)       682
           Accrued  expenses and other current liabilities              25       (769)
           Other long-term liabilities                                  --        (13)
                                                                   -------    -------
           NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES         (17)       307
                                                                   -------    -------

      CASH FLOW FROM INVESTING ACTIVITIES:
           Purchases of property, plant and equipment                  (65)       (26)
                                                                   -------    -------
                     NET CASH (USED IN) INVESTING ACTIVITIES           (65)       (26)
                                                                   -------    -------

      CASH FLOW FROM FINANCING ACTIVITIES:
           Exercise of stock options                                    20         --
                                                                   -------    -------
                     NET CASH PROVIDED BY FINANCING ACTIVITIES          20         --
                                                                   -------    -------

      NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS             (62)       281

      CASH AND CASH EQUIVALENTS AT THE BEGINNING OF PERIOD           3,181      2,403
                                                                   -------    -------
      CASH AND CASH EQUIVALENTS AT THE END OF PERIOD               $ 3,119    $ 2,684
                                                                   =======    =======
</TABLE>


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


                                       5
<PAGE>


                     SOLITRON DEVICES, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
              ----------------------------------------------------
                                   (Unaudited)

1. GENERAL AND SIGNIFICANT ACCOUNTING POLICIES:

GENERAL:
--------

The  financial   information  included  herein  is  unaudited;   however,   such
information reflects all adjustments  (consisting  primarily of normal recurring
adjustments),  which are, in the  opinion of  management,  necessary  for a fair
statement of the results for the interim  period.  Certain  amounts in the prior
year's consolidated  financial  statements have been re-classified to conform to
the current year's presentation.

The accompanying  unaudited interim condensed  consolidated financial statements
have been prepared  pursuant to the rules and  regulations of the Securities and
Exchange  Commission  for  reporting on Form 10-QSB.  Pursuant to such rules and
regulations,  certain information and footnote  disclosures normally included in
financial statements prepared in accordance with accounting principles generally
accepted in the United States have been condensed or omitted.

The information contained in this Form 10-QSB should be read in conjunction with
the  Notes  to  Consolidated  Financial  Statements  appearing  in the  Solitron
Devices, Inc. and Subsidiaries' (the "Company") Annual Report on Form 10-KSB for
the year ended February 28, 2006.

The results of operations  for the three month period ended May 31, 2006 are not
necessarily  indicative of the results to be expected for the entire year ending
February 28, 2007.

SIGNIFICANT ACCOUNTING PRINCIPLES:
----------------------------------

Basis for Consolidation
The  condensed  consolidated  financial  statements  include the accounts of the
Company  and   subsidiaries.   All   significant   inter-company   balances  and
transactions have been eliminated in consolidation.

Earnings Per Common Share
Earnings per common share is presented in accordance with SFAS No. 128 "Earnings
per Share."  Basic  earnings  per common  share is computed  using the  weighted
average number of common shares outstanding during the period.  Diluted earnings
per common share  incorporate the  incremental  shares issuable upon the assumed
exercise  of stock  options to the extent they are not  anti-dilutive  using the
treasury stock method.

Shipping and Handling
Shipping and  handling  costs billed to customers by the Company are recorded in
net sales. Shipping costs incurred by the Company are recorded in cost of sales.

                                       6
<PAGE>

                     SOLITRON DEVICES, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
              ----------------------------------------------------
                                   (Unaudited)


Stock Based Compensation
In December  2002, the Financial  Accounting  Standards  Board  ("FASB")  issued
Statement of Financial  Accounting Standards No. 148, Accounting for Stock-Based
Compensation-Transition  and  Disclosure-an  amendment of FASB Statement No. 123
("SFAS No.  148").  This  statement  amends  Statement of  Financial  Accounting
Standards No. 123, Accounting for Stock-Based Compensation,  ("SFAS No. 123") to
provide  alternative  methods of transition  for a voluntary  change to the fair
value based method of accounting for  stock-based  employee  compensation.  This
statement  also amends the  disclosure  requirements  of SFAS No. 123 to require
prominent  disclosures in both annual and interim financial statements about the
method of accounting for stock-based employee compensation and the effect of the
method used on reported results. The transition guidance and disclosure requires
that companies that continue to account for  stock-based  employee  compensation
under Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to
Employees ("APB No. 25") include pro forma disclosure of net income and earnings
per  share as if the  fair  value  method  prescribed  by SFAS No.  123 had been
applied in accordance with SFAS No. 148.

The  Company  complies  with SFAS No.  123. As  permitted  by SFAS No. 123,  the
Company  continues to follow the  measurement  provisions of APB No. 25 and does
not  recognize  compensation  expense for its stock based  incentive  plan.  Had
compensation  expense been determined based on the fair value on the grant dates
consistent  with the  methodology  prescribed by SFAS No. 123, the Company's net
income and earnings per share would have been reduced to the  pro-forma  amounts
indicated below.


                                                  Three months ended May 31,
                                                  --------------------------
                                                      2006       2005
                                                     -------    -------
Net (loss)/income, as reported                       $   (53)   $   292
Less: total stock based employee
compensation expense, net of tax effects                  --         47
                                                     -------    -------
Pro-forma net (loss)/income                          $   (53)   $   245
                                                     =======    =======
Reported basic (loss)/earnings per common share      $  (0.2)   $  0.14
                                                     =======    =======
Pro-forma basic (loss)/earnings per common share     $  (0.2)   $  0.12
                                                     =======    =======
Reported diluted (loss)/earnings per common share    $  (0.2)   $  0.13
                                                     =======    =======
Pro-forma diluted (loss)/earnings per common share   $  (0.2)   $  0.11
                                                     =======    =======

The total fair value of the options  granted  during the three  months ended May
31, 2006 and 2005 was $0 and $33,000,  respectively,  determined  under the fair
value based method for all awards.

No employee  stock  options were  granted  during the three months ended May 31,
2006. The weighted  average  estimated  value of employee stock options  granted
during the three months  ended May 31, 2005 was $.70.  The fair value of options
granted  during the three months ended May 31, 2005 was estimated on the date of
the grant  using  the  Black-Scholes  option-pricing  model  with the  following
weighted average assumptions:

                        Three months ended May 31,
                        --------------------------
                            2006         2005
                           -----        -----
Dividend Yields              0.0%         0.0%
Expected Volatility            0%       109.8%
Risk-free Interest Rates       0%         4.1%
Expected Life (in years)       0         10.0

The  pro-forma  amounts may not be  indicative  of future  pro-forma  income and
earnings per share.

                                       7
<PAGE>

                     SOLITRON DEVICES, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
              ----------------------------------------------------
                                   (Unaudited)

2. ENVIRONMENTAL REGULATION:

While the Company believes that it has the  environmental  permits  necessary to
conduct its business and that its  operations  conform to present  environmental
regulations, increased public attention has been focused on the environmental
impact  of  semiconductor  operations.  The  Company,  in  the  conduct  of  its
manufacturing  operations,  has  handled  and  does  handle  materials  that are
considered  hazardous,  toxic or volatile under federal,  state,  and local laws
and,  therefore,  is subject  to  regulations  related  to their  use,  storage,
discharge,  and  disposal.  No assurance can be made that the risk of accidental
release  of such  materials  can be  completely  eliminated.  In the  event of a
violation of  environmental  laws,  the Company could be held liable for damages
and the  costs of  remediation  and,  along  with the rest of the  semiconductor
industry,  is subject to variable  interpretations  and governmental  priorities
concerning environmental laws and regulations.  Environmental statutes have been
interpreted  to provide for joint and  several  liability  and strict  liability
regardless of actual fault.  There can be no assurance that the Company will not
be required to incur costs to comply with, or that the operations,  business, or
financial condition of the Company will not be materially adversely affected by,
current or future environmental laws or regulations.

3. ENVIRONMENTAL LIABILITIES:

The Company entered into an Ability to Pay Multi-Site  Settlement Agreement with
the United States Environmental Protection Agency ("USEPA"),  effective February
24, 2006 ("Settlement Agreement"), to resolve the Company's alleged liability to
USEPA at the following sites:  Solitron Microwave  Superfund Site, Port Salerno,
Florida ("Port Salerno Site");  Petroleum Products  Corporation  Superfund Site,
Pembroke  Park,  Florida;  Casmalia  Resources  Superfund  Site,  Santa Barbara,
California ("Casmalia Site"); Solitron Devices Site, Riviera Beach, Florida (the
"Riviera Beach Site");  and City  Industries  Superfund Site,  Orlando,  Florida
(collectively,  the "Sites").  The Settlement  Agreement required the Company to
pay to USEPA the sum of $74,000 by  February  24,  2008;  the  Company  paid the
entire sum of $74,000 to USEPA on February 27, 2006. In addition, the Company is
required to pay to USEPA the sum of $10,000 or 5% of  Solitron's  net  after-tax
income over the first $500,000, if any, whichever is greater, for each year from
2008-2012. For payment to USEPA to be above $10,000 for any of these five years,
the  Company's  net income must exceed  $700,000  for such year,  which has only
happened twice in the past ten years (in fiscal year 2001 and fiscal year 2006).
The Company accrues $50,000 for its remaining  obligations  under the Settlement
Agreement.

In  consideration  of the  payments  made by the  Company  under the  Settlement
Agreement, USEPA agreed not to sue or take any administrative action against the
Company with regard to any of the Sites. The Company has also been notified by a
group of alleged  responsible parties formed at the Casmalia Site ("Casmalia PRP
Group")  that,  based on their review and lack of  objection  to the  Settlement
Agreement, the Casmalia PRP Group does not anticipate pursuing Solitron for cost
recovery at the Casmalia site.

On October 21,  1993,  a Consent  Final  Judgment  was entered  into between the
Company and the Florida Department of Environmental  Protection  ("FDEP") in the
Circuit Court of the  Nineteenth  Judicial  Circuit of Florida in and for Martin
County, Florida, in Case No. 92-1232 CA. The Consent Final Judgment required the
Company to  remediate  the Port Salerno and Riviera  Beach  Sites,  make monthly
payments  to escrow  accounts  for each Site until the sale of the Sites to fund
the remediation  work, take all reasonable steps to sell the two Sites and, upon
the  sale of the  Sites,  apply  the net  proceeds  from  the  sales to fund the
remediation  work.  Both Sites have been sold  pursuant to  purchase  agreements
approved by FDEP.

                                       8
<PAGE>

                     SOLITRON DEVICES, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
              ----------------------------------------------------
                                   (Unaudited)


Prior to the sale of the Port Salerno and Riviera  Beach Sites,  USEPA took over
from FDEP as the lead regulatory agency for the remediation of the Sites. At the
sale of each Site,  the net  proceeds of sale were  distributed  to USEPA and/or
FDEP or other parties, as directed by the agencies.  In addition,  upon the sale
of the Riviera Beach Site, the Riviera Beach Escrow  Account was  transferred to
USEPA,  as directed by the  agencies.  The current  balance in the Port  Salerno
Escrow Account is approximately  $59,000.  At present,  work at the Port Salerno
Site is being  performed  by  USEPA.  Work at the  Riviera  Beach  Site is being
performed by Honeywell,  Inc.,  pursuant to an  Administrative  Order on Consent
entered into between  Honeywell and USEPA. The Company has been notified by FDEP
that the  performance of remediation  work by USEPA at the Port Salerno Site and
by Honeywell at the Riviera Beach Site will be construed by FDEP as  discharging
the Company's remediation obligations under the Consent Final Judgment.

There remains a possibility  that FDEP will determine at some time in the future
that the final remedy approved by USEPA and  implemented at either,  or both of,
the Port  Salerno  and  Riviera  Beach  Sites  does not meet the  State  cleanup
requirements   imposed  by  the  Consent  Final   Judgment.   If  such  a  final
determination is made by FDEP, there is a possibility that FDEP will require the
Company to implement  additional remedial action at either, or both of, the Port
Salerno and Riviera Beach Sites. The likelihood of such  determination is deemed
to be remote by the  Company  and the amount of loss that may result from such a
remote event cannot reasonably be estimated at this time.

On August 7, 2002, the Company received a Request for Information from the State
of  New  York  Department  of  Environmental  Conservation  ("NYDEC"),   seeking
information  on whether  the  Company  had  disposed  of  certain  wastes at the
Clarkstown Landfill Site located in the Town of Clarkstown, Rockland County, New
York. By letter dated August 29, 2002, the Company  responded to the Request for
Information  and  advised  NYDEC  that the  Company's  former  Tappan,  New York
facility  closed in the  mid-1980's,  prior to the  initiation  of the Company's
bankruptcy proceedings described above. The Company contends that, to the extent
that NYDEC has a claim against the Company as a result of the Company's  alleged
disposal  of wastes  at the  Clarkstown  landfill  prior to the  closing  of the
Company's former Tappan facility in the mid-1980's,  the claim was discharged in
bankruptcy as a result of the Bankruptcy  Court's August 1993 Order.  At NYDEC's
request,  the Company  entered into a revised  Tolling  Agreement  with NYDEC on
February 18, 2006,  which  provides  for the tolling of  applicable  statutes of
limitation  through  the  earlier of  September  28,  2006 or the date the State
institutes a suit against Solitron for any claims associated with the Clarkstown
Landfill  Site.  It is not known at this time whether  NYDEC will pursue a claim
against the Company in connection with this Site. As of the date of this filing,
no such claim has been made.

4. EARNINGS PER SHARE:

The shares used in the computation of the Company's  basic and diluted  earnings
per common share were as follows:

                                            For the three months ended
                                                     May 31,
                                              ---------------------
                                                 2006       2005
                                              ---------   ---------
Weighted average common shares outstanding    2,194,126   2,076,053
Dilutive effect of employee stock options       239,070     111,508
                                              ---------   ---------
Weighted average common shares outstanding,
 assuming dilution                            2,433,196   2,187,561
                                              =========   =========

Weighted  average  common shares  outstanding,  assuming  dilution,  include the
incremental  shares  that would be issued  upon the  assumed  exercise  of stock
options.  For the three month period ended May 31, 2006,  none of the  Company's
stock options were excluded from the  calculation of diluted  earnings per share
because  the average  price of the common  shares is greater  than the  exercise
price of the options.  For the three month period ended May 31, 2005, 223,000 of
the  Company's  stock  options were  excluded  from the  calculation  of diluted
earning per share because the exercise  prices of the stock options were greater
than or equal to the average price of the common  shares,  and  therefore  their
inclusion would have been anti-dilutive.

                                       9
<PAGE>

                     SOLITRON DEVICES, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
              ----------------------------------------------------
                                   (Unaudited)

5. INVENTORIES:

As of May 31, 2006 net inventories consist of the following:

Raw Materials             $ 1,511,000
Work-In-Process             1,509,000
Finished Goods                432,000
                          -----------
      Gross Inventories     3,452,000
Reserve                      (936,000)
                          -----------
      Net Inventories     $ 2,516,000
                          ===========

6. INCOME TAXES:

At  May  31,  2006,  the  Company  has  net  operating  loss   carryforwards  of
approximately  $15,748,000  that expire through 2022. Such net operating  losses
are available to offset future  taxable  income,  if any. As the  utilization of
such net  operating  losses for tax  purposes is not  assured,  the deferred tax
asset  has  been  fully  reserved  through  the  recording  of a 100%  valuation
allowance.  Should a cumulative  change in the  ownership of more than 50% occur
within a three-year  period,  there could be an annual  limitation on the use of
the net operating loss carryforwards.

A  reconciliation  of the  provision  for income taxes to the amount  calculated
using the  statutory  federal  rate (34%) for the period  ended May 31,  2006 as
follows:

Income Tax Provision at                            5/31/06
                                                 ----------
U.S. Statutory Rate                              $       --
State Taxes, Net of Federal Benefit                      --
Alternative Minimum Tax                                  --
Utilization of Net Operating Loss Carryforward           --
                                                 ----------
Income Tax Provision                             $       --
                                                 ==========

No change in the valuation allowance on deferred tax assets was recorded for the
period ended May 31, 2006.

7. OTHER INCOME:

The $31,000 of other income reflected in the condensed  consolidated  statements
of income for the  quarter  ended May 31,  2006  consists of $31,000 of interest
income on cash and cash  equivalents.  During the fiscal  quarter  ended May 31,
2005,  the  Company  settled  approximately  $341,000  of  debt  obligations  to
unsecured creditors at a discount. The Company recognized  approximately $69,000
of other income as a result of these  settlements.  This $69,000 of other income
is shown net of $5,000 of other expense in the Condensed Consolidated Statements
of Income for the quarter ended May 31, 2005.

8. ACCRUED EXPENSES:

As of May 31,  2006  accrued  expenses  and  other  liabilities  consist  of the
following:

Payroll and related employee benefits   $532,000
Property taxes                            17,000
Other liabilities                        105,000
                                        --------
                                        $654,000
                                        ========

                                       10
<PAGE>

                     SOLITRON DEVICES, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
              ----------------------------------------------------
                                   (Unaudited)


9. COMMITMENTS AND CONTINGENCIES:

For  a  discussion  of  the  Company's   accrual  for  losses   associated  with
environmental  remediation  obligations,   see  Note  3.  With  respect  to  the
Settlement  Agreement  discussed in Note 3, the Company currently estimates that
it will pay $10,000 per year for years three to seven from the effective date of
the Settlement Agreement.

10. EXPORT SALES AND MAJOR CUSTOMERS:

Revenues  from  domestic  and  export  sales to  unaffiliated  customers  are as
follows:

                             Three months ended May 31,
                             --------------------------
                                 2006         2005
                              ----------   ----------
Export sales:
   Europe                     $  159,000   $  159,000
   Canada and Latin America       11,000      134,000
   Far East and Middle East       10,000       38,000
United States                  1,721,000    1,772,000
                              ----------   ----------
                              $1,901,000   $2,103,000
                              ==========   ==========

Sales to the Company's top two customers  accounted for approximately 59% of net
sales for the  quarter  ended May 31,  2006 as  compared  to 54% for the quarter
ended May 31, 2005. Sales to Raytheon Company accounted for approximately 52% of
net sales for the quarter  ended May 31, 2006 as compared to 46% for the quarter
ended May 31, 2005.  During the quarter  ended May 31, 2006,  the US  Government
represented  approximately  7% of net sales as  compared  to 8% for the  quarter
ended May 31, 2005.

                                       11
<PAGE>

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

Overview:

Solitron  Devices,  Inc., a Delaware  corporation (the "Company" or "Solitron"),
designs, develops, manufactures and markets solid-state semiconductor components
and related  devices  primarily  for the military  and  aerospace  markets.  The
Company  manufactures  a large variety of bipolar and metal oxide  semiconductor
("MOS") power  transistors,  power and control  hybrids,  junction and power MOS
field effect  transistors  and other  related  products.  Most of the  Company's
products are custom made pursuant to contracts with customers whose end products
are  sold to the  United  States  government.  Other  products,  such  as  Joint
Army/Navy transistors, diodes and Standard Military Drawings voltage regulators,
are sold as standard or catalog items.

The  following  discussion  and  analysis  of factors  which have  affected  the
Company's  financial  position and operating results during the periods included
in the accompanying  condensed  consolidated financial statements should be read
in conjunction with the Consolidated  Financial Statements and the related Notes
to Consolidated Financial Statements and Management's Discussion and Analysis of
Financial  Condition and Results of Operations  included in the Company's Annual
Report on Form 10-KSB for the year ended  February  28,  2006 and the  Condensed
Consolidated   Financial   Statements   and  the  related   Notes  to  Condensed
Consolidated Financial Statements included in Item 1 of this Quarterly Report on
Form 10-QSB.

Critical Accounting Policies:

The discussion and analysis of our financial condition and results of operations
are  based  upon  the  condensed   consolidated  financial  statements  included
elsewhere in this Form 10-QSB which are prepared in accordance  with  accounting
principles  generally  accepted  in  the  United  States.   Preparing  financial
statements requires management to make estimates and assumptions that affect the
reported amounts of assets, liabilities,  revenue, and expenses. These estimates
and assumptions are affected by management's application of accounting policies.
Our  critical  accounting  policies  include  inventories,  valuation  of plant,
equipment and intangible assets,  revenue  recognition and accounting for income
taxes. A discussion of all of these critical accounting policies can be found in
Note 1 of the "Notes to the consolidated  financial statements" in Item 7 of our
Annual Report on Form 10-KSB for the fiscal year ended February 28, 2006.

Trends and Uncertainties:

During the three months ended May 31, 2006, the Company's book-to-bill ratio was
approximately  .98 as compared to 1.08 for the three  months ended May 31, 2005,
reflecting  a decrease  in the volume of orders  booked.  The  Company  does not
believe that the quarter-to-quarter change in the book-to-bill ratio indicates a
specific trend in the demand for the Company's products.  Generally,  the intake
of orders over the last twenty four months has varied greatly as a result of the
fluctuations in the general economy,  variations in defense spending on programs
the Company  supports,  and the timing of contract  awards by the  Department of
Defense and subsequently by its prime contractors, which is expected to continue
over the next twelve  months.  The Company plans to identify  means  intended to
reduce its variable  manufacturing  costs to offset the potential  impact of low
volume of orders to be shipped  should a significant  slow down in the intake of
orders  occur.  However,  should order intake fall  drastically  below the level
experienced in the last twelve to eighteen months, the Company might be required
to implement  further cost cutting or other downsizing  measures to continue its
business operations.

Results of  Operations-Three  Months Ended May 31, 2006 Compared to Three Months
Ended May 31, 2005:

Net sales for the three months ended May 31, 2006 decreased 10% to $1,901,000 as
compared to  $2,103,000  for the three months ended May 31, 2005.  This decrease
was  primarily  attributable  to a lower  level of  scheduled  orders  that were
shipped in accordance with customer requirements.

                                       12
<PAGE>

Cost of sales for the three  months ended May 31, 2006  increased to  $1,697,000
from $1,614,000 for the comparable period in 2005.  Expressed as a percentage of
sales,  cost of sales increased to 89% from 77% for the same period in 2005. The
change was due  primarily to higher costs of raw  materials,  outside  services,
labor,  and an  increase  in the cost of scrap  material as compared to the same
period last year.

Gross profit for the three months ended May 31, 2006  decreased to $204,000 from
$489,000 for the three months ended May 31, 2005. Accordingly,  gross margins on
the Company's  sales decreased to  approximately  11% for the three months ended
May 31, 2006 in comparison to  approximately  23% for the three months ended May
31,  2005.  This  change was due  primarily  to higher  costs of raw  materials,
outside  services,  labor, and an increase in the cost of scrap material as well
as a lower level of sales.

For the three  months ended May 31, 2006,  the Company  shipped  58,448 units as
compared to 180,155 units  shipped  during the same period of the prior year. It
should be noted that since the Company  manufactures  a wide variety of products
with an average sales price ranging from less than one dollar to several hundred
dollars,  such  periodic  variations  in the  Company's  volume of units shipped
should not be regarded as a reliable indicator of the Company's performance.

The Company's  backlog of open orders decreased 1%, from 6,042,000 to 6,004,000,
for the  three  months  ended  May 31,  2006,  as  compared  to an  increase  of
approximately  4% for the three months  ended May 31,  2005.  Changes in backlog
resulted from changes in the intake of orders and in the delivery dates required
by customers as well as timing  differences  in the awarding of contracts by the
Department of Defense and its prime contractors.

The Company has experienced a decrease in the level of bookings of approximately
19% for the  quarter  ended May 31,  2006 as compared to the same period for the
previous year  principally as a result of timing  differences in the awarding of
contracts by the Department of Defense and its prime contractors.

Selling,  general,  and  administrative  expenses  increased to $288,000 for the
three months ended May 31, 2006 from $271,000 for the comparable period in 2005.
During the three months ended May 31, 2006, selling, general, and administrative
expenses as a percentage of net sales  increased to 15% as compared with 13% for
the three  months  ended May 31,  2005.  Included  in the  increase  in selling,
general and  administrative  expenses for the three month period was an increase
in wages of $18,000 and an increase in sales  commissions  of $8,000 as compared
with the same period in 2005, offset by variances in other expenses.

Operating  (loss)/income  for the three months ended May 31, 2006 decreased to a
loss of $84,000 from income of $218,000 for the three months ended May 31, 2005.
This  decrease is due mainly to a lower sales volume and higher cost of sales as
described above.

The Company  recorded net other income of $31,000 for the three months ended May
31, 2006 versus net other  income of $74,000 for the three  months ended May 31,
2005. Other income decreased because income from debt forgiveness was recognized
in the three  months ended May 31, 2005 while none was  recognized  in the three
months  ended May 31, 2006.  Interest  income for the three months ended May 31,
2006  increased to $31,000 from $8,000 for the same period in 2005 due to higher
interest rates earned and higher cash and cash equivalents account balances.

Net (loss)/income for the three months ended May 31, 2006 decreased to a loss of
$53,000 from income of $292,000 for the same period in 2005.  This  decrease was
due primarily to lower sales volume and higher cost of sales as described above.

                                       13
<PAGE>

Liquidity and Capital Resources:

The Company's  sole source of cash is revenue  generated by ongoing  operations.
The Company's  liquidity is expected to be adversely  affected in the short term
due to the anticipated lower level of revenue in the next six to nine months due
to customers'  delivery  requirements.  The Company liquidity is not expected to
improve  until the  Company's  revenues  increase to a level above its breakeven
point.

Furthermore,  the Company's  liquidity continues to be adversely affected by the
Company's 1993 bankruptcy  petition  obligations and the Company's  inability to
obtain additional working capital through the sale of debt or equity securities.
For a more  complete  discussion of the Company's  bankruptcy  obligations,  see
"Business -  Bankruptcy  Proceedings"  in the  Company's  Annual  Report on Form
10-KSB filed for the period ended February 28, 2006.

The  Company is  required to make  quarterly  payments  to holders of  unsecured
claims until they receive 35 percent (35%) of their  pre-petition  claims. As of
May 31,  2006,  the Company  has paid  approximately  $685,000 to its  unsecured
creditors.  The Company's  remaining  obligation is approximately  $1,163,000 to
holders of allowed unsecured claims to be paid in quarterly installments.

The Company reported a net loss of $53,000 and operating loss of $84,000 for the
three months ended May 31, 2006. The Company has significant obligations arising
from settlements  related to its bankruptcy  proceeding which require it to make
substantial  cash payments,  which cannot be supported by the Company's  current
level of operations.

At May 31, 2006,  February  28, 2006 and May 31,  2005,  the Company had cash of
approximately $3,119,000,  $3,181,000 and $2,684,000 respectively.  Purchases of
replacement  capital  manufacturing  equipment  contributed  $65,000 to the last
three months' negative cash flow generated by ongoing operations.

At May 31, 2006, the Company had working  capital of $4,529,000 as compared with
a working  capital at May 31, 2005 of  $2,715,000.  At February  28,  2006,  the
Company had a working capital of $4,562,000.  The $33,000 decrease for the three
months  ended  May 31,  2006 was due  mainly  to  $65,000  of new  manufacturing
equipment purchases, offset by a decrease in current liabilities.

Off-Balance Sheet Arrangements:

The Company is not involved in any off-balance sheet arrangements.

FORWARD-LOOKING STATEMENTS

Information  in this Form 10-QSB,  including  any  information  incorporated  by
reference herein,  includes "forward looking  statements"  within the meaning of
Section 27A of the  Securities  Act of 1933, as amended,  and Section 21E of the
Securities Act of 1934, as amended, and is subject to the safe-harbor created by
such sections.  The Company's actual results may differ  significantly  from the
results discussed in such forward-looking statements.

Specifically,   this  quarterly  report  contains   forward-looking   statements
regarding:

o     the Company's  expectations  regarding  liquidity,  including  sources and
      availability;
o     the Company's  expectations  regarding a lower level of revenue during the
      next six to nine months;
o     the Company's  beliefs  regarding its ability to generate  sufficient cash
      flow from operations to sustain operations;
o     the  Company's  beliefs  regarding  the  quarter-to-quarter  change in the
      book-to-bill ratio;
o     the Company's ability to implement effectively  cost-cutting or downsizing
      measures;
o     the   Company's   compliance   with   environmental   laws,   orders   and
      investigations and the future cost of such compliance;
o     implementation of the Plan of Reorganization  and the Company's ability to
      make payments required under the Plan of Reorganization;
o     expectations of being released from certain environmental  liabilities and
      the Company's ability to satisfy such liabilities; and

                                       14
<PAGE>

o     the  Company's  estimates  that it will pay $10,000 per year during  years
      three to seven from the effective date of the Settlement Agreement.

These  statements are based upon assumptions and analyses made by the Company in
light of current  conditions,  future developments and other factors the Company
believes are  appropriate in the  circumstances,  or  information  obtained from
third  parties  and  are  subject  to  a  number  of   assumptions,   risks  and
uncertainties.  Readers are cautioned  that  forward-looking  statements are not
guarantees of future performance and that actual results might differ materially
from those  suggested or projected in the  forward-looking  statements.  Factors
that may cause actual future events to differ significantly from those predicted
or assumed include, but are not limited to:

o     the loss of certification  or  qualification of the Company's  products or
      the inability of the Company to capitalize on such  certifications  and/or
      qualifications;
o     unexpected rapid technological change;
o     a  misinterpretation  of the  Company's  capital  needs  and  sources  and
      availability of liquidity;
o     a change in government  regulations which hinders the Company's ability to
      perform government contracts;
o     a shift in or misinterpretation of industry trends;
o     unforeseen  factors which impair or delay the development of any or all of
      its products;
o     inability to sustain or grow bookings and sales;
o     inability to capitalize on competitive strengths or a misinterpretation of
      those strengths;
o     the emergence of improved, patented technology by competitors;
o     inability to protect the Company's proprietary technologies;
o     a  misinterpretation  of the  nature  of the  competition,  the  Company's
      competitive strengths or its reputation in the industry;
o     inability to respond quickly to customers'  needs and to deliver  products
      in a timely manner resulting from unforeseen circumstances;
o     inability to generate sufficient cash to sustain operations;
o     inability to adequately respond to continued pricing pressure;
o     failure to successfully  implement  cost-cutting  or downsizing  measures,
      strategic plans or the insufficiency of such  measures and plans;
o     changes in military or defense appropriations;
o     inability   to  make  or   renegotiate   payments   under   the   Plan  of
      Reorganization;
o     inability to move into new markets or develop new products;
o     unexpected impediments affecting the Company's ability to fill backlog;
o     inability to be released from certain environmental liabilities;
o     an increase in the expected cost of environmental compliance;
o     changes in law or industry regulation;
o     unexpected growth or stagnation of the business;
o     any  changes  that render the  Company's  headquarters  and  manufacturing
      facilities unsuitable or inadequate to meet the Company's current needs;
o     significant  fluctuations  in the  price  and  volume  of  trading  in the
      Company's  common  stock;
o     unforeseen effects of inflation; and
o     the impact of  hurricanes,  tornadoes and other weather  conditions on our
      business.


ITEM 3. CONTROLS AND PROCEDURES

Based on the evaluation of the Company's  disclosure  controls and procedures as
of May 31, 2006, Shevach Saraf,  Chairman,  President,  Chief Executive Officer,
Treasurer and Chief  Financial  Officer of the Company,  has concluded  that the
Company's disclosure controls and procedures were effective as of May 31, 2006.

There were no changes in the Company's internal control over financial reporting
during the quarter  ended May 31,  2006,  that have  materially  affected or are
reasonably  likely to  materially  affect the  Company's  internal  control over
financial reporting.


                                       15
<PAGE>

ITEM 6. EXHIBITS:

Exhibits

31    Certification  of Chief  Executive  Officer  and Chief  Financial  Officer
      pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32    Certification  of Chief  Executive  Officer  and Chief  Financial  Officer
      pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


                                       16
<PAGE>

                                   SIGNATURES
                                   ----------

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




                                             SOLITRON DEVICES, INC.



Date: June 27, 2006                          By:     /s/ Shevach Saraf
                                                -------------------------------
                                             Name:   Shevach Saraf
                                             Title:  Chairman, President,
                                                     Chief Executive Officer
                                                     and Chief Financial Officer



                                       17
<PAGE>


                                  EXHIBIT INDEX


EXHIBIT NUMBER              DESCRIPTION
--------------              -----------

31                Certification  of Chief Executive  Officer and Chief Financial
                  Officer pursuant to Section 302 of the  Sarbanes-Oxley  Act of
                  2002.

32                Certification  of Chief Executive  Officer and Chief Financial
                  Officer pursuant to Section 906 of the  Sarbanes-Oxley  Act of
                  2002.


                                       18