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

                                   FORM 10-QSB

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

For the quarterly period ended SEPTEMBER 30, 2006 Commission File Number:
0-10707

                              THERMODYNETICS, INC.
--------------------------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)


            DELAWARE                                    06-1042505
-----------------------------------       --------------------------------------
  (State or other Jurisdiction of         (I.R.S. Employer Identification No.)
   Incorporation or Organization)


651 DAY HILL ROAD, WINDSOR, CT                   06095              860-683-2005
--------------------------------------------------------------------------------
(Address of Principal Executive Offices)       (Zip Code)     (Telephone Number)


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




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

              CLASS                            OUTSTANDING AT SEPTEMBER 30, 2006
--------------------------------               ---------------------------------
  Common stock $.01 Par Value                       4,027,361 Shares





Transitional Small Business Disclosure Format     Yes (  )   No (x)




<PAGE>



                      THERMODYNETICS, INC. AND SUBSIDIARIES

                                      INDEX
<TABLE>
<CAPTION>
                                                                              PAGE NUMBER
                                                                              -----------
<S>              <C>                                                                 <C>
 PART I          FINANCIAL INFORMATION

       Item 1.   Financial Statements

                 Consolidated Balance Sheets
                    September 30, 2006 and March 31, 2006.........................      3

                 Consolidated Statements of Income
                    Three Months Ended September 30,
                    2006 and 2005.................................................      4

                 Consolidated Statements of Income
                    Six Months Ended September 30,
                    2006 and 2005.................................................      5

                 Consolidated Statements of Cash Flows
                    Six Months Ended September 30,
                    2006 and 2005.................................................      6

                 Notes to Consolidated Financial Statements.......................   7-10

       Item 2.   Management's Discussion and Analysis or
                                    Plan of Operation ............................  11-13

       Item 3.   Controls and Procedures .........................................     13


 PART II         OTHER INFORMATION

       Item 1.   Legal Proceedings................................................     14

       Item 2.   Unregistered Sales of Equity Securities and Use of Proceeds......     14

       Item 3.   Defaults Upon Senior Securities..................................     14

       Item 4.   Submission of Matters to a Vote of Security Holders..............     14

       Item 5.   Other Information................................................     14

       Item 6.   Exhibits and Reports on Form 8-K.................................     14

SIGNATURE PAGE ...................................................................     15
</TABLE>



<PAGE>



                          PART I: FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS.
         --------------------

                      THERMODYNETICS, INC. AND SUBSIDIARIES
                     CONSOLIDATED BALANCE SHEETS (in 000's)
                                     ASSETS
<TABLE>
<CAPTION>
                                                               SEPTEMBER 30, 2006        MARCH 31, 2006
                                                               ------------------        --------------
                                                                   (Unaudited)              (Audited)
<S>                                                                  <C>                   <C>
CURRENT ASSETS
  Cash                                                               $  1,245              $      0
  Accounts Receivable, Net                                              2,501                 2,050
  Inventories                                                           3,653                 3,001
  Prepaid Expenses and Other Current Assets                               529                   470
                                                                     --------              --------
    Total Current Assets                                                7,928                 5,521
                                                                     --------              --------

PROPERTY, PLANT AND EQUIPMENT
  Property, Plant and Equipment - At Cost                              14,425                14,163
  Less: Accumulated Depreciation                                        7,204                 7,008
                                                                     --------              --------
   Property, Plant, and Equipment - Net                                 7,221                 7,155
                                                                     --------              --------

OTHER ASSETS
  Intangible Assets - Net of Amortization                                  93                    93
  Officers' Life Insurance Receivable                                       0                     2
  Investment in Unaffiliated Company                                       95                    95
  Deferred Income Taxes                                                 1,760                   895
  Deposits and Other                                                       40                    49
                                                                     --------              --------
    Total Other Assets                                                  1,988                 1,134
                                                                     --------              --------

TOTAL ASSETS                                                         $ 17,137              $ 13,810
                                                                     ========              ========

                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES

  Accounts Payable                                                   $ 2,308                $ 2,259
  Accrued Taxes and Expenses                                             311                    336
  Current Portion of Long-Term Debt                                      270                    449
  Notes Payable - Bank                                                   197                  2,610
  Notes Payable - Other                                                    0                    300
  Current Liabilities of Discontinued Operations                          71                  1,243
                                                                     -------                -------
    Total Current Liabilities                                          3,157                  7,197
                                                                     -------                -------

DEFERRED INCOME TAXES                                                    908                      0
LONG-TERM DEBT                                                         1,884                  2,829
LONG-TERM LIABILITIES OF DISCONTINUED OPERATIONS                       3,364                  2,998
MINORITY INTEREST IN SUBSIDIARY                                        2,784                      0
STOCKHOLDERS' EQUITY
  Common Stock, Par Value $.01/Share,
    Authorized 25,000,000 shares, issued 4,027,361 shares at
    6/30/06 and 3,989,782 shares at 3/31/06                               40                     40
  Additional Paid-in Capital                                           7,237                  5,783
  Retained Earnings (Deficit)                                         (2,237)                (5,037)
                                                                     -------                -------
    Total Stockholders' Equity                                         5,040                    786
                                                                     -------                -------
TOTAL LIABILITIES AND
  STOCKHOLDERS' EQUITY                                               $17,137                $13,810
                                                                     =======                =======
</TABLE>
              The accompanying notes are an integral part of these
                        consolidated financial statements


                                   Page - 3 -
<PAGE>

                      THERMODYNETICS, INC. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                    FOR THE THREE MONTHS ENDED SEPTEMBER 30,
                                   (UNAUDITED)
                        IN (000's) EXCEPT PER SHARE DATA
<TABLE>
<CAPTION>
                                                             2006          2005
                                                             ----          ----

<S>                                                      <C>            <C>
Net Sales                                                $     5,865    $     4,532

Cost of Goods Sold                                             4,785          3,319
                                                         -----------    -----------

Gross Profit                                                   1,080          1,213

Selling, General & Administrative Expenses                       809            800
                                                         -----------    -----------

Income From Operations                                           271            413
                                                         -----------    -----------

Other Income (Expense)
    Interest Expense, Net                                        (64)          (113)
    Other - Net                                                   31              0
                                                         -----------    -----------
     Total Other Income (Expense)                                (33)          (113)
                                                         -----------    -----------
Minority Interest in Subsidiary                                   86              0
                                                         -----------    -----------
Income Before Income Taxes                                       152            300

Provision for Income Taxes                                        73            115
                                                         -----------    -----------
Income From Continuing Operations                                 79            185

Discontinued Operations:
Loss from Discontinued Operations Before Income Taxes              0         (2,003)
Income Tax Benefit                                                 0         (1,030)
                                                         -----------    -----------
Loss From Discontinued Operations                                  0           (973)
                                                         -----------    -----------

Net Income  (Loss)                                       $        79    $      (788)
                                                         ===========    ===========

Earnings (Loss) per Share- Basic
Earnings (Loss) per Share From Continuing Operations     $       .02    $       .05
Earnings (Loss) per Share From Discontinued Operations             0           (.25)
                                                         -----------    -----------
Total Earnings (Loss) per Share - Basic                  $       .02    $      (.20)
                                                         ===========    ===========
  Earnings (Loss) per Share- Diluted
  Earnings (Loss) per Share From Continuing Operations
  Earnings (Loss) per Share From Discontinued Operations
  Total Earnings (Loss) per Share - Diluted              $       .05    $       .02
                                                                (.25)             0
                                                         -----------    -----------
                                                         $      (.20)   $       .02
                                                         ===========    ===========

Weighted Average Shares Outstanding- Basic                 4,027,361      3,968,782
                                                         ===========    ===========
Weighted Average Shares Outstanding- Diluted               4,027,361      3,968,782
                                                         ===========    ===========
</TABLE>
              The accompanying notes are an integral part of these
                        consolidated financial statements


                                   Page - 4 -
<PAGE>

                      THERMODYNETICS, INC. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                     FOR THE SIX MONTHS ENDED SEPTEMBER 30,
                                   (UNAUDITED)
                        IN (000's) EXCEPT PER SHARE DATA
<TABLE>
<CAPTION>
                                                                 2006           2005
                                                                 ----           ----

<S>                                                          <C>            <C>
Net Sales                                                    $    11,545    $     9,066

Cost of Goods Sold                                                 9,106          6,753
                                                             -----------    -----------

Gross Profit                                                       2,439          2,312

Selling, General & Administrative Expenses                         1,773          1,589
                                                             -----------    -----------

Income From Operations                                               666            723
                                                             -----------    -----------

Other Income (Expense)
    Interest Expense, Net                                           (144)          (230)
    Gain on Sale of Subsidiary Stock                               2,666              0
    Other - Net                                                      (15)             0
                                                             -----------    -----------
     Total Other Income (Expense)                                  2,507           (230)
                                                             -----------    -----------

Minority Interest in Subsidiary                                      128              0
                                                             -----------    -----------
Income Before Income Taxes                                         3,045            493

Provision for Income Taxes                                           215            155
                                                             -----------    -----------
Income From Continuing Operations                                  2,830            338

Discontinued Operations:
Loss from Discontinued Operations Before Income Taxes                  9         (2,099)
Income Tax Benefit                                                     0         (1,030)
                                                             -----------    -----------
Loss From Discontinued Operations                                      9         (1,069)

Net Income (Loss)                                            $     2,821    $      (731)
                                                             ===========    ===========

Earnings (Loss) per Share - Basic
Earnings (Loss) per Share From Continuing Operations         $       .70    $       .09
Earnings (Loss) per Share From Discontinued Operations                 0           (.27)
                                                             -----------    -----------
Total Earnings (Loss) per Share - Basic                      $       .70    $      (.18)
                                                             ===========    ===========
Earnings (Loss) per Share - Diluted
Earnings (Loss) per Share From Continuing Operations
Earnings (Loss) per Share From Discontinued Operations
Total Earnings (Loss) per Share - Diluted                    $       .70    $       .09
                                                                       0           (.27)
                                                             -----------    -----------
                                                             $       .70    $      (.18)
                                                             ===========    ===========

    Weighted Average Shares Outstanding - Basic                4,021,201      3,961,282
                                                             ===========    ===========
    Weighted Average Shares Outstanding - Diluted              4,021,201      3,961,282
                                                             ===========    ===========
</TABLE>
              The accompanying notes are an integral part of these
                        consolidated financial statements


                                   Page - 5 -
<PAGE>


                      THERMODYNETICS, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                     FOR THE SIX MONTHS ENDED SEPTEMBER 30,
                                   (UNAUDITED)
                                   IN (000'S)
<TABLE>
<CAPTION>
                                                                      2006             2005
                                                                      ----             ----
<S>                                                                 <C>              <C>
OPERATING ACTIVITIES:
  Net income (loss)                                                 $ 2,821          $  (731)
         Adjustments to reconcile net income to net cash
          provided by (used in) operating activities:

  Depreciation and amortization                                         196              204
  Gain on sale of stock of subsidiary                                (2,666)             -0-
  Minority interest in earnings of subsidiary                           128              -0-
  Deferred tax provision                                                 43             (875)
  Changes in operating assets and liabilities:
    Increase (decrease) in accounts payable                              49              335
    Decrease (increase) in prepaid expenses and other assets            (48)            (247)
    Decrease (increase) in accounts receivable                         (451)            (160)
    Decrease (increase) in inventories                                 (652)            (239)
    Increase (decrease) in accrued taxes and expenses                   (25)            (139)
  Cash provided from discontinued  operations                             9            1,320
                                                                    -------          -------

NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
                                                                       (596)            (532)
                                                                    -------          -------

INVESTING ACTIVITIES;
  Purchases of property, plant and equipment, net                      (262)            (132)
  Proceeds from sale of stock of subsidiary                           6,755              -0-
  Loss on disposal of fixed assets of discontinued business               0              658
  Proceeds from sale of assets of discontinued business                   0              265
                                                                    -------          -------
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES                   6,493              791
                                                                    -------          -------

FINANCING ACTIVITIES
  Net proceeds (payments) on revolving and term debt                    287              984
  Principal payments on long-term debt                                 (320)            (245)
  Proceeds from stock sale used to repay debt                        (4,619)             -0-
  Cash used in financing activities of discontinued operations          -0-             (996)
                                                                    -------          -------

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES                  (4,652)            (257)
                                                                    -------          -------

INCREASE (DECREASE) IN CASH                                           1,245                2
CASH AT BEGINNING OF PERIOD                                             -0-              -0-
                                                                    -------          -------
CASH AT END OF PERIOD                                               $ 1,245          $     2
                                                                    =======          =======
</TABLE>
              The accompanying notes are an integral part of these
                        consolidated financial statements


                                   Page - 6 -
<PAGE>



                      THERMODYNETICS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
         FOR THE THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2006 AND 2005
                                   (UNAUDITED)

NOTE 1: BASIS OF PRESENTATION

The financial information included herein is unaudited; however, such
information reflects all adjustments (consisting solely of normal recurring
adjustments), which are, in the opinion of management, necessary for a fair
statement of results for the interim period. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with accounting principles generally accepted in the United States of America
have been condensed or omitted. The results of operations for the three and six
months ended September 30, 2006 and September 30, 2005 are not necessarily
indicative of the results to be expected for the full year.

NOTE 2: SALE OF MINORITY INTEREST IN SUBSIDIARY

On May 8, 2006, Thermodynetics ("Company") completed the sale of a minority
interest of its subsidiary, Turbotec Products Plc, (the "Plc"), whereby
approximately 43.68% of that company was sold to institutional investors
pursuant to an offering on the AIM Market of the London Stock Exchange. Prior to
the offering, Turbotec Products Plc was formed in the United Kingdom and the Plc
owns 100% of its operating subsidiary, Turbotec Products, Inc. Pursuant to the
offering, the Company and Turbotec Products Plc each sold 2,797,183 shares (a
total of 5,594,366 ordinary shares of the Plc) at the price of 85 pence per
ordinary share, resulting in gross proceeds of 4,755,211 British Pounds. Under
the terms of the offering the two companies shared equally in the net proceeds
after fees and expenses. From the net proceeds received, an aggregate of
approximately $4,334,000 was used to repay bank debt.

The Company and its Board of Directors (the "Board") pursuant to a Relationship
Agreement (RA) have undertaken, inter alia, not to exercise its voting rights in
the shares of the Plc, except with the consent of the nominated advisor and Plc
(on the authority of its non-executive Directors) to vote in favor of any
resolution to give the Board authority under British law to allot shares in the
Company, or under British law to vote to remove or reduce any pre-emption rights
that shareholders may have. The RA contains further provisions restricting the
ability of the Company to dispose of its interest in the ordinary Shares into
the United States in a manner that would require registration of any such
disposition under the US Securities Act.

LOAN MODIFICATIONS:

The Company, certain of its subsidiaries, and their bank entered into certain
loan modification agreements to provide for the separation of the credit
facilities between the Company and Turbotec Products, Inc., and the release of
certain cross collateral guarantees. Principally, the Company's remaining
indebtedness with its principal bank are: a secured mortgage term loan in the
original principal amount of $2,025,000 secured by the real estate and building
at 651 Day Hill Road, Windsor, CT. and a term loan of the original principal
amount of $183,000, secured by all of the assets of the Company. On October 6,
the $183,000 note was repaid and $37,000 of the escrowed sum was released. The
Company remains indebted on its mortgage secured by the real estate and building
at 50 Baker Hollow Road, Windsor, CT through a second bank. The Company has also
pledged $337,000 as cash collateral at its principal bank to secure certain
obligations. Turbotec Products, Inc. remains indebted on an equipment term note
and a revolving line of credit.

                                   Page - 7 -
<PAGE>

NOTE 3: DISCONTINUED OPERATIONS

On July 5, 2005, the Company and its Vulcan Industries, Inc. subsidiary
(Vulcan), received a notice of default from an equipment finance institution on
a term loan secured by equipment. On July 6, 2005, the Company received a notice
from its bank stating that it was in default of the bank's term loan.

On July 18, 2005, the Company consummated an agreement with a major customer and
its bank whereby the customer purchased certain Vulcan manufacturing equipment
by paying the balance on the related outstanding debt due the equipment finance
institution plus half of the balance due on a term loan to the City of Sturgis,
Michigan (Sturgis). The equipment finance institution and Sturgis each released
the Company and Vulcan from any further obligation.

On July 27, 2005, the Company and its bank (as the only remaining secured
creditor) entered into an agreement whereby the bank waived the existing
defaults on all debt instruments (except those relating to the Vulcan debt which
continued) and modified a financial covenant to exclude Vulcan from the
compliance calculation.

In August 2005, the Company discontinued the operations of Vulcan and began
liquidating its remaining assets and paid all sums received to the bank. At
September 30, 2005 all operating assets of Vulcan had been liquidated and the
Company and the bank restructured the balance of the secured debt resulting from
the Vulcan closure.

NOTE 4: INVENTORIES

Inventories consist of the following at (in 000's):

                              SEPTEMBER 30, 2006       MARCH 31, 2006
                              ------------------       --------------
     Raw materials                 $ 1,912                 $ 1,329
     Work-in-process                   131                     102
     Finished goods                  1,645                   1,605
     Less: Reserves                     35                      35
                                   -------                 -------
                                   $ 3,653                 $ 3,001
                                   =======                 =======

Inventories are valued at the lower of cost or market, with cost determined on a
standard cost basis which approximates a first-in, first-out basis.

NOTE 5: EARNINGS PER SHARE

The Company has adopted Statement of Accounting Standards No. 128, "Earnings per
Share" (SFAS 128). Earnings per share for the three months ended September 30,
2006 and September 30, 2005 have been computed in accordance with this
pronouncement, based on the weighted average of outstanding shares during the
periods.

The weighted average numbers of shares outstanding used in the calculations are
as follows:
<TABLE>
<CAPTION>
                                      Three Months Ended Sept. 30      Six Months Ended Sept 30
                                           2006          2005              2006         2005
                                          ----           ----              ----         ----
<S>                                     <C>           <C>               <C>           <C>
Weighted Average Shares - (Basic)       4,027,361     3,968,782         4,021,201     3,961,282
Assumed Conversion of Stock Options           -0-           -0-               -0-           -0-
                                        ---------     ---------         ---------     ---------
Weighted Average Shares - (Diluted)     4,027,361     3,968,782         4,021,201     3,961,282
                                        =========     =========         =========     =========
</TABLE>


                                   Page - 8 -
<PAGE>

NOTE 6: INCOME TAXES

In accordance with "Statement of Accounting Standards No. 109, Accounting for
Income Taxes" (SFAS 109), the primary components of the Company's deferred tax
assets and liabilities and the related valuation allowance are as follows (in
000's):

                                            SEPTEMBER 30, 2006    MARCH 31, 2006
                                            ------------------    --------------

     Assets:
      Uniform capitalization adjustment           $     9             $     4
      Net operating loss carryforward               1,698               1,749
      Investment tax credits                          144                 144
      Research and development credit                 120                  10
      Capital loss                                    162                 162
             Other                                     57                  46
                                                  -------             -------
                                                    2,190               2,115
                                                  -------             -------
    Liabilities:
      Accelerated depreciation                     (1,269)             (1,220)
      Valuation reserve                               (69)                -0-
                                                  -------             -------
                                                   (1,338)             (1,220)
                                                  -------             -------
    Net deferred tax asset                        $   852             $   895
                                                  =======             =======

At September 30, 2006, the Company had net operating loss carryforwards of
approximately $1,700,000 expiring from 2007 to 2012.


NOTE 7: INVESTMENT / LOAN

In September 2006, the Company advanced $300,000 to an unaffiliated company and
received a note due March 7, 2007 in the amount of $342,858. The note is
convertible into common stock at the option of the holder at the rate of $0.439
per share and bears interest at a rate of 25% per annum. The borrower is
presently planning an initial public offering of its stock ("IPO") and the
expectation is that either (a) the loan will be repaid from the proceeds of the
IPO, (b) the note will be converted into shares of stock and sold at the same
time the borrower sells its shares via the IPO, or (c) if the underwriter of the
IPO refuses to allow the holder to sell its shares in the IPO, the borrower will
buy the shares from the Company at the IPO price. The Company also received
208,001 warrants in the borrower that are exercisable at $0.439 and expire on
September 7, 2010.

NOTE 8: CASH FLOW INFORMATION AND NON CASH INVESTING ACTIVITIES

The following supplemental information is disclosed pursuant to the requirements
of Financial Accounting Standards Board's ("FASB") "Statement of Accounting
Standards No 95, Statement of Cash Flows".

                                              6 MONTHS ENDED SEPT 30, (in 000's)
                                              -----------------------
                                               2006             2005
                                               ----             ----
    Cash payments for interest                 $ 80             $230

NOTE 9: FINANCIAL ACCOUNTING STANDARDS

In July 2002, the Public Company Accounting Reform and Investor Protection Act
of 2002 (the Sarbanes-Oxley Act) was enacted. Section 404 stipulates that public
companies must take responsibility for maintaining an effective system of
internal control. The Act requires public companies to report on the
effectiveness of their control over financial reporting and obtain an



                                   Page - 9 -
<PAGE>

attest report from their independent registered public accountant about
management's report. The Company is not required to comply with section 404 of
the Act until the fiscal year ending March 31, 2008.

In November 2004, the FASB issued SFAS No. 151, "Inventory Costs - an amendment
of ARB No. 43, Chapter 4". This statement clarifies the accounting for abnormal
amounts of idle facility expense, freight handling costs and wasted material
(spoilage). This statement requires that these types of costs be recognized as
current period charges. The Company implemented SFAS No. 151 for inventory costs
incurred during fiscal years beginning after September 15, 2005, with earlier
application permitted for such costs incurred during fiscal years beginning
after November 24, 2004. SFAS No. 151 did not have a material impact on the
Company's financial statements.

NOTE 10: SUBSEQUENT EVENT - SETTLEMENT OF DEBT

In October 2006, the Company reached agreement with the holders of promissory
notes aggregating $581,500 wherein threatened litigation allowed the Company to
pay $10,000 in exchange for full releases and cancellation of the debt. This
transaction resulted in a gain on the extinguishment of the debt which will be
recognized during the quarter ended December 31, 2006.













                                  Page - 10 -
<PAGE>


                      THERMODYNETICS, INC. AND SUBSIDIARIES
ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

         RESULTS OF OPERATIONS

         The Company recorded record net sales of $5,865,000 and $11,545,000 for
the three and six months ended  September  30, 2006  representing  a 29% and 27%
increase over the prior year period.  A majority of the sales increase  resulted
from the pass through of material cost increases incurred.

         The  increase in sales is due largely to sales of  condenser/evaporator
coils for the housing  market  augmented by increased  sales of enhanced  tubing
used in specialty commercial boiler applications.  Despite reported weakening in
residential  construction during the past few months, the overall demand for the
coils has remained at higher levels than previously.  Enhanced surface tubing in
titanium is unique to the  swimming  pool  heater  market and it has enabled the
capture  of a large part of this  market  niche  while  other  applications  for
surface enhanced titanium tubing are being investigated.

         Cost of sales  approximated  82% and 79% of net  sales  in the  current
quarter  and six months of this  fiscal  year  compared to 73% and 74% in fiscal
2006.  The cost of  copper  rose  sharply  between  March and May 2006 to record
levels and has moderated since;  nickel  continued to rise  unabatedly.  The net
impact has been a significant  reduction in gross margin and a higher  inventory
carrying  value (20%  higher  than at March 31,  2006).  A  training  program to
improve  efficiencies on the production floor and pricing  initiatives have been
initiated.

         Staff  additions and other  investments  have been made and are planned
for the balance of the fiscal year to expand product development  activities for
heat reclamation,  to pursue titanium based heat exchanger  applications and for
general sales  programs.  On a consolidated  basis,  operating  expenses for the
current  three and six months  increased  by $9,000 and  $184,000,  respectively
compared to the prior periods.

         The Company recorded a net gain of $2,666,000 on the sale of a minority
interest  of  Turbotec  Products,  Plc in May  2006.  Net  cash  received  after
transaction  related  expenses  was $6.8  million.  Interest  expense  decreased
significantly  as  approximately  $4.6 million of the  proceeds  from the London
offering  was used to retire  debt.  Minority  shareholder  interest  in the net
earnings of Turbotec was $86,000 and $128,000,  respectively,  for the three and
six month periods ended September 30, 2006.

         Income from  continuing  operations for the current year to date period
was  $2,830,000  compared to $338,000 for the prior year period.  Excluding  the
gain  from the sale of  equity  in  Turbotec,  income  before  income  taxes and
minority interest increased by $14,000 or 3% over the prior year. The operations
of a  former  manufacturing  subsidiary,  Vulcan  Industries,  Inc.,  ceased  in
September  2005.  Accordingly,  Vulcan  has  been  reflected  as a  discontinued
operation in both the prior and current year financial  statements.  Turbotec is
primarily  engaged in the  design  and  manufacture  of heat  transfer  and heat
reclamation  products.  Segment  reporting is no longer applicable as operations
are now concentrated in heat transfer product related applications.

         Significant risk factors and economic  considerations  include the cost
of energy and incentives  provided by producers,  sellers and  municipalities to
encourage the use of more efficient equipment; interest rates that can stimulate
or depress  purchasing  demand;  the cost and  availability of materials used in
production;   and  regulatory   directives   relating  to  energy   consumption,
conservation and environmental issues.

         ACQUISITION SEARCH

         The Company has initiated a search for a suitable  acquisition  and has
begun to circulate its ideal acquisition criteria which include a) a business in
metals  manufacturing,  b) having a proprietary product or service,  engineering
oriented,  c) with net revenues of $6 - $60 million and positive  cash flow,  d)
continuing  management and established  sales force, and e) an OEM customer base
with growing market, international preferred.


                                  Page - 11 -
<PAGE>

         LIQUIDITY AND CAPITAL RESOURCES

         In May 2006 the Company  completed the sale of a 43.68% interest in its
newly formed United Kingdom subsidiary Turbotec Products, Plc (Turbotec) through
a public offering of Turbotec's securities on the AIM market, part of the London
Stock Exchange.

         At  September  30, 2006  consolidated  working  capital was  $4,771,000
compared to a negative  $1,676,000 at March 31, 2006.  Aggregate debt related to
continuing  operations  at  September  30,  2006 was  $2,351,000  as compared to
$6,188,000 at March 31, 2006. Of these  amounts,  long-term  debt was $1,884,000
and  $2,829,000,  respectively.  These  improvements  are a direct result of the
London  equity  offering of shares of  Turbotec  in May 2006.  The Company had a
consolidated cash position of $1,245,000 at September 30, 2006.

         Capital  expenditures  aggregated  $262,000 for the first six months of
fiscal 2007 compared to $132,000 in the same period of the prior year. A portion
of the  proceeds  from  the  offering  is  planned  to be  used to  upgrade  the
infrastructure of the primary manufacturing plant as well as improvements in the
product development laboratory and for production equipment. Capital investments
will also be  required  to  support  the new  markets  of heat  reclamation  and
titanium based heat exchangers.

         The  Company's  access to  credit  is  expected  to be  adequate.  Cash
reserves  currently  exist and  Turbotec  has a revolving  line of credit  which
currently has over $3 million of availability. A separate line of credit to fund
capital  expenditure  programs  and  the  refinancing  of  the  mortgage  on the
Company's  primary  facility is expected to be  consummated  during the next few
months.

         Increases in operating costs continue to play a more  significant  role
in day-to-day  operations as competitive  pricing  pressures have restricted the
ability to fully  recover  all added  expenses.  Improvements  in  manufacturing
processes  and  procedures  have  enabled  the  Company  to offset a portion  of
increasing costs while continuing internal  refinements are expected to generate
further  cost  reductions.  A portion of the cost  increases in metals have been
passed on to the customer  base which has had a significant  negative  impact on
gross  margins  while also  increasing  the  carrying  value of  inventories.  A
shortage of experienced  technical  support,  engineering  staff and skilled and
semi-skilled  employees is being experienced.  Employment related costs continue
to escalate and the impact on future periods is unknown  although  opportunities
to reduce these expenses are currently being explored.

FORWARD LOOKING STATEMENTS

         This report contains certain  forward-looking  statements regarding the
Company,  its business  prospects and results of operations  that are subject to
certain  risks and  uncertainties  posed by many  factors  and events that could
cause the  Company's  actual  business,  prospects  and results of operations to
differ  materially  from those that may be anticipated  by such  forward-looking
statements.  Factors that may affect such  forward-looking  statements  include,
without limitation: the Company's ability to successfully and timely develop and
finance new projects,  the impact of competition on the Company's revenues,  and
changes in unit prices,  supply and demand for the Company's tubing product line
especially in applications  serving the  commercial,  industrial and residential
construction industries.

         When  used,  words  such  as  "believes,"   "anticipates,"   "expects,"
"continue",  "may", "plan", "predict",  "should",  "will", "intends" and similar
expressions are intended to identify forward-looking statements, but are not the
exclusive means of identifying forward-looking statements. Readers are cautioned
not to place undue  reliance on these  forward-looking  statements,  which speak
only as of the date of this report.  The Company  undertakes  no  obligation  to
revise  any   forward-looking   statements   in  order  to  reflect   events  or
circumstances that may subsequently arise. Readers are urged to carefully review
and consider the various  disclosures  made by the Company in this report,  news
releases,  and other reports filed with the Securities  and Exchange  Commission
that  attempt to advise  interested  parties of the risks and  factors  that may
affect the Company's business.


                                  Page - 12 -
<PAGE>

ITEM 3  CONTROLS AND PROCEDURES

(a) EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES -

         Management   believes  that  the  Company's   disclosure  controls  and
procedures,  as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934
(the  "Exchange  Act"),  as of the end of the  reported  period are  designed to
ensure that the material  information required to be disclosed by the Company in
reports that it files or submits under the Exchange Act are recorded, processed,
summarized  and  reported on a timely  basis.  No  significant  deficiencies  or
material weaknesses requiring corrective actions were uncovered.

(b) CHANGES IN INTERNAL CONTROLS -

         There were no significant  changes made and no corrective actions taken
in the Company's internal controls over financial  reporting or in other factors
that has materially affected,  or is reasonably likely to materially affect, the
Company's  internal  control over financial  reporting that occurred  during the
quarter ended for this report.



                      THERMODYNETICS, INC. AND SUBSIDIARIES

                           PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS.

         There are no material legal proceedings known or threatened against the
Company.

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

         There were no unregistered sales of equity securities of the Company
during the three month period covered by this Form 10-Q SB report.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.

         There have been no defaults of any terms of the Company's securities.

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

         No matters were submitted to a vote of the Securities Holders of the
Company during the quarterly period for which this report is filed.

ITEM 5.  OTHER INFORMATION.

         None

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

     (a) EXHIBITS:

         Rule 13a-14(a) / 15d-14(a) Certifications:


                                  Page - 13 -
<PAGE>

     o   Exhibit 31(a)     Certification of Chief Executive Officer.
     o   Exhibit 31(b)     Certification of Chief Financial Officer.

    Section 1350 Certifications:

     o   Exhibit 32(a)     Certification of Chief Executive Officer.
     o   Exhibit 32(b)     Certification of Chief Financial Officer.














                                  Page - 14 -
<PAGE>





                      THERMODYNETICS, INC. AND SUBSIDIARIES


                                 SIGNATURE PAGE






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.






                                   THERMODYNETICS, INC.



Date: November 10, 2006            By:    /s/  ROBERT A. LERMAN
                                        ----------------------------------------
                                        Robert A. Lerman
                                        President and Chief Executive Officer

Date: November 10, 2006            By:    /s/  JOHN F. FERRARO
                                        ----------------------------------------
                                        John F. Ferraro
                                        Treasurer and Chief Financial Officer