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 DECEMBER 31, 2005 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.)

Indicate by check mark whether the registrant is a shell company (as defined by
Rule 12b-2 of the Exchange Act).                              Yes [ ] No [x]

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 [ ]

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 DECEMBER 31, 2005
--------------------------------            -----------------------------------
  Common stock $.01 Par Value                          3,983,782 Shares



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



                                   Page - 1 -

<PAGE>


                      THERMODYNETICS, INC. AND SUBSIDIARIES


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

       Item 1.  Financial Statements

                Consolidated Balance Sheets
                   December 31, 2005 and March 31, 2005.............................     3

                Consolidated Statements of Operations
                   Three Months Ended December 31,
                   2005 and 2004....................................................     4

                Consolidated Statements of Operations
                   Nine Months Ended December 31,
                   2005 and 2004....................................................     5

                Consolidated Statements of Cash Flows
                   Nine Months Ended December 31,
                   2005 and 2004....................................................     6

                Notes to Consolidated Financial Statements..........................   7-9

       Item 2.  Management's Discussion and Analysis or
                                   Plan of Operation ............................... 10-12

       Item 3.  Controls and Procedures ............................................    12


PART II         OTHER INFORMATION

       Item 1.  Legal Proceedings...................................................    13

       Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds.........    13

       Item 3.  Defaults Upon Senior Securities.....................................    13

       Item 4.  Submission of Matters to a Vote of Security Holders.................    13

       Item 5.  Other Information...................................................    13

       Item 6.  Exhibits and Reports on Form 8-K....................................    13


SIGNATURE PAGE .....................................................................    14
</TABLE>



                                   Page - 2 -

<PAGE>



                          PART I: FINANCIAL INFORMATION

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

                      THERMODYNETICS, INC. AND SUBSIDIARIES
            CONSOLIDATED BALANCE SHEETS (in 000's except share data)
<TABLE>
<CAPTION>
                                     ASSETS
                                     ------
                                                                DEC 31, 2005      MARCH 31, 2005
                                                                ------------      --------------
                                                                 (Unaudited)        (Audited)
<S>                                                                <C>               <C>
CURRENT ASSETS
  Cash                                                             $      2          $     0
  Accounts Receivable, Net                                            1,976            1,952
  Inventories                                                         2,565            2,357
  Prepaid Expenses and Other Current Assets                             394               94
  Assets of Discontinued Business                                       -0-            4,941
                                                                   --------          -------
    Total Current Assets                                              4,937            9,344
                                                                   --------          -------

PROPERTY, PLANT AND EQUIPMENT
  Property, Plant and Equipment - At Cost                            13,975           13,811
  Less: Accumulated Depreciation                                      6,914            6,632
                                                                   --------          -------
   Property, Plant, and Equipment - Net                               7,061            7,179
                                                                   --------          -------

OTHER ASSETS
  Intangible Assets - Net of Amortization                                93               93
  Officers' Life Insurance Receivable                                     0              148
  Investment in Unaffiliated Company                                     95               95
  Deposits and Other                                                    116              138
  Deferred Tax Benefit                                                  875                0
                                                                   --------          -------
    Total Other Assets                                                1,179              474
                                                                   --------          -------

TOTAL ASSETS                                                       $ 13,177          $16,997
                                                                   ========          =======

                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
  Accounts Payable                                                 $  1,671          $ 1,540
  Accrued Taxes and Expenses                                             20              240
  Current Portion of Long-Term Debt                                     503              829
  Notes Payable - Bank                                                2,690            2,166
  Notes Payable - Other                                                 300                0
  Liabilities of Discontinued Business                                  279            3,596
                                                                   --------          -------

    Total Current Liabilities                                         5,463            8,371
                                                                   --------          -------

LONG TERM DEBT                                                        2,919            2,785
LIABILITIES OF DISCONTINUED BUSINESS                                  3,996            4,370

STOCKHOLDERS' EQUITY

  Common Stock, Par Value $.01/Share,

     Authorized 25,000,000 shares, issued 3,983,782 shares at
      at 12/31/05 and 3,953,782 shares at 3/31/05                        40               40
    Additional Paid-in Capital                                        5,782            5,758
  Retained Earnings (Deficit)                                        (5,023)          (4,327)
                                                                   --------          -------
    Total Stockholders' Equity                                          799            1,471
                                                                   --------          -------
TOTAL LIABILITIES AND
  STOCKHOLDERS' EQUITY                                             $ 13,177          $16,997
                                                                   ========          =======
</TABLE>
        The accompanying notes are an integral part of these consolidated
                              financial statements.


                                   Page - 3 -
<PAGE>

                      THERMODYNETICS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                     FOR THE THREE MONTHS ENDED DECEMBER 31,
                                   (UNAUDITED)
                        IN (000's) EXCEPT PER SHARE DATA
<TABLE>
<CAPTION>
                                                                              2005        2004
                                                                              ----        ----

<S>                                                                          <C>         <C>
    Net Sales                                                                  $4,531       $3,287

    Cost of Goods Sold                                                          3,460        2,315


    Gross Profit                                                                1,069          972

    Selling, General & Administrative Expenses                                    772          699
                                                                            ---------    ---------

    Income From Operations                                                        297          273
                                                                            ---------    ---------

    Other Income (Expense)
         Interest Expense, Net                                                   (120)         (01)
         Other - Net                                                              -0-          -0-
                                                                            ---------    ---------
         Total Other Income (Expense)                                            (120)        (101)
                                                                            ---------    ---------

    Income From Continuing Operations Before Income Taxes                         177          172
    Provision for Income Taxes                                                    -0-           47
                                                                            ---------    ---------
    Income From Continuing Operations                                             177          125

    Discontinued Operations:
    Income (Loss) From Operations of Discontinued Business                       (142)           6
    Loss on Disposal of Assets of Discontinued Business                           -0-            0
                                                                            ---------    ---------
    Income (Loss) from Discontinued Operations Before Income Taxes               (142)           6
    Income Tax Benefit                                                            -0-            0
                                                                            ---------    ---------
    Loss From Discontinued Operations                                            (142)           6
                                                                            ---------    ---------

    Net Income (Loss)                                                             $35         $131
                                                                            =========    =========

    Earnings (Loss) per Share- Basic
    Earnings (Loss) per Share From Continuing Operations                         $.04         $.03
    Earnings (Loss) per Share From Discontinued Operations                       (.03)         .00
                                                                            ---------    ---------
    Total Earnings (Loss) per Share - Basic                                      $.01         $.03
                                                                            =========    =========

    Earnings (Loss) per Share- Diluted
    Earnings (Loss) per Share From Continuing Operations
    Earnings (Loss) per Share From Discontinued Operations                       $.04         $.03
    Total Earnings (Loss) per Share - Diluted                                    (.03)         .00
                                                                            ---------    ---------
                                                                                 $.01         $.03
                                                                            =========    =========


    Weighted Average Shares Outstanding- Basic                              3,983,782    3,946,219
                                                                            =========    =========
    Weighted Average Shares Outstanding- Diluted                            3,983,782    3,946,219
                                                                            =========    =========
</TABLE>
        The accompanying notes are an integral part of these consolidated
                              financial statements.


                                  Page - 4 -
<PAGE>


                      THERMODYNETICS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                     FOR THE NINE MONTHS ENDED DECEMBER 31,
                                   (UNAUDITED)
                        IN (000's) EXCEPT PER SHARE DATA
<TABLE>
<CAPTION>
                                                                               2005           2004
                                                                               ----           ----
<S>                                                                           <C>            <C>
    Net Sales                                                                 $13,596        $11,591

    Cost of Goods Sold                                                         10,215          8,336
                                                                            ---------      ---------

    Gross Profit                                                                3,381          3,255

    Selling, General & Administrative Expenses                                  2,361          2,116
                                                                            ---------      ---------

    Income From Operations                                                      1,020          1,139
                                                                            ---------      ---------

    Other Income (Expense)
         Interest Expense, Net                                                   (350)          (286)
         Other - Net                                                                0              0
                                                                            ---------      ---------
         Total Other Income (Expense)                                            (350)          (286)
                                                                            ---------      ---------

    Income From Continuing Operations Before Income Taxes                         670            853
    Provision for Income Taxes                                                    155            168
                                                                            ---------      ---------
    Income From Continuing Operations                                             515            685

    Discontinued Operations:
    Loss From Operations of Discontinued Business                              (1,583)          (138)
    Loss on Disposal of Assets of Discontinued Business                          (658)             0
                                                                            ---------      ---------
    Loss from Discontinued Operations Before Income Taxes                      (2,241)          (138)
    Income Tax Benefit                                                         (1,030)             0
                                                                            ---------      ---------
    Loss From Discontinued Operations                                          (1,211)          (138)
                                                                            ---------      ---------

    Net Income (Loss)                                                           $(696)          $547
                                                                            =========      =========

    Earnings (Loss) per Share- Basic
    Earnings (Loss) per Share From Continuing Operations                         $.13           $.17
    Earnings (Loss) per Share From Discontinued Operations                       (.30)          (.03)
                                                                            ---------      ---------
    Total Earnings (Loss) per Share - Basic                                     $(.17)          $.14
                                                                            =========      =========


    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                                    $.13           $.17
                                                                                 (.30)          (.03)
                                                                            ---------      ---------
                                                                                $(.17)          $.14
                                                                            =========      =========

    Weighted Average Shares Outstanding- Basic                              3,978,873      3,942,824
                                                                            =========      =========
    Weighted Average Shares Outstanding- Diluted                            3,978,873      3,942,824
                                                                            =========      =========
</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 NINE MONTHS ENDED DECEMBER 31,

                                   (UNAUDITED)
                                   IN (000'S)
<TABLE>
<CAPTION>
                                                                                2005       2004
                                                                                ----       ----
<S>                                                                           <C>          <C>
OPERATING ACTIVITIES:
  Net income (loss)                                                           $  (696)     $   547
         Adjustments to reconcile net income (loss) to net
         cash provided by (used in) operating activities:
  Depreciation and amortization                                                   305          279
  Deferred tax provision (benefit)                                               (875)         167
  Changes in operating assets and liabilities:
    Increase (decrease) in accounts payable                                       131          158
    Decrease (increase) in prepaid expenses                                      (303)        (170)
        and other assets
    Decrease (increase) in accounts receivable                                    (24)        (211)
    Decrease (increase) in inventories                                           (209)        (325)
    Increase (decrease) in accrued taxes and expenses                            (197)           7
    Cash provided from operating activities of discontinued
        business                                                                1,633          (24)
                                                                              -------      -------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
                                                                                 (235)         428
                                                                              -------      -------
INVESTING ACTIVITIES;
  Purchases of property, plant and equipment, net                                (164)        (530)
  Equipment purchases of discontinued business                                    -0-         (195)
  Loss on disposal of fixed assets of discontinued business                       658          -0-
  Proceeds from sale of assets of discontinued business                           265          -0-
                                                                              -------      -------
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES
                                                                                  759         (725)
                                                                              -------      -------

FINANCING ACTIVITIES
  Proceeds from short term borrowings and notes payable                           974          725
  Principal payments on long term debt                                           (192)         (45)
  Proceeds from subscriptions receivable                                          -0-           48
  Proceeds from issuance of stock                                                 -0-            7
  Cash used in financing activities of discontinued business                   (1,304)        (438)
                                                                              -------      -------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES

                                                                                 (522)         297
                                                                              -------      -------

INCREASE (DECREASE) IN CASH                                                         2          -0-
CASH AT BEGINNING OF PERIOD                                                       -0-            2
                                                                              -------      -------
CASH AT END OF PERIOD                                                         $     2      $     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
                   ------------------------------------------
                                   (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 nine months
         ended  December  31, 2005 and  December  31,  2004 are not  necessarily
         indicative of the results to be expected for the full year.

         NOTE 2:  DISCONTINUED OPERATIONS

         On July 5, 2005, the Company and its Vulcan Industries, Inc. subsidiary
         (Vulcan),  received  a notice  of  default  dated  July 1, 2005 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 as a result of,  among other
         reasons, the acceleration of the equipment term loan.

         On July 18, 2005,  the Company  consummated  an agreement  with a major
         customer whereby the customer purchased certain manufacturing equipment
         located in the Vulcan  facility  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 Company recognized an impairment loss on these long-lived assets of
         $367,052 at March 31, 2005.  The repayment of this debt was made during
         the grace period allowed by the bank. As these loans were paid in full,
         the equipment finance institution and Sturgis each released the Company
         and Vulcan from any further obligation.  As the manufacturing equipment
         sold to the customer was to be used to generate a  significant  portion
         of Vulcan's  future  operating  cash flows,  the Company  reviewed  the
         Vulcan  intangible assets and recorded an impairment loss of $1,742,770
         at March 31, 2005.

         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  continue)  and  modified a  financial  covenant  to
         exclude the operations of Vulcan from the compliance calculation.

         In mid-August,  the Company  discontinued  the operations of Vulcan and
         began  liquidating  its remaining  assets and paid all sums received to
         the bank.  At  December  31, 2005 all  operating  assets of Vulcan were
         liquidated and the Company and the bank have  restructured  the balance
         of the secured debt resulting from the Vulcan  closure.  The Company is
         exploring other avenues to reduce the obligations created by the Vulcan
         closing to improve the balance sheet of the Company.

                                   Page - 7 -
<PAGE>


         NOTE 3:  INVENTORIES

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

                                          DECEMBER 31, 2005     MARCH 31, 2005
                                          -----------------     --------------
                  Raw materials                $ 1,482              $   920
                  Work-in-process                  141                  158
                  Finished goods                   997                1,334
                     Less: Reserves                 55                   55
                                                ------               ------
                                               $ 2,565              $ 2,357
                                                ======               ======

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

         NOTE 4:  EARNINGS PER SHARE

         Earnings per share for the three and nine months ended December 31,
         2005 and December 31, 2004 have been computed based on the weighted
         average of outstanding shares during the periods.

         Effective April 18, 2005, the Company implemented a reverse stock split
         whereby each outstanding five shares of existing common stock were
         exchanged for one share of new common stock. The effect of this reverse
         stock split was to reduce the number of issued and outstanding common
         shares to approximately 3,954,000. The effects of this reverse split
         have been retroactively applied to all per share calculations.

         The weighted average numbers of shares outstanding are:
<TABLE>
<CAPTION>
                                    Three Months Ended Dec. 30      Nine Months Ended Dec 31
                                        2005          2004           2005           2004
                                        ----          ----           ----           ----
<S>                                  <C>            <C>            <C>            <C>
Weighted Average Shares - (Basic)    3,983,782      3,946,219      3,978,873      3,942,824
Conversion of Stock Options                -0-            -0-            -0-            -0-
                                     ---------      ---------      ---------      ---------
Weighted Average Shares- (Diluted)   3,983,782      3,946,219      3,978,873      3,942,824
                                     =========      =========      =========      =========
</TABLE>

         NOTE 5:  INCOME TAXES

         The primary components of the Company's deferred tax assets and
         liabilities and the related valuation allowance are (in 000's):

                                       DECEMBER 31, 2005    MARCH 31,  2005
                                       -----------------    ---------  ----
 Assets:
  Uniform capitalization adjustment         $    15            $    50
  Net operating loss carryforward             1,829                938
  Investment tax credits                        144                144
  Asset  impairment                             720                720
  Capital loss                                  162                149
  Valuation reserve                            (600)              (880)
  Other                                          64                 64
                                            -------            -------
                                              2,094              1,185
                                            -------            -------
Liabilities:
  Accelerated depreciation                   (1,219)            (1,185)
                                            -------            -------
                                             (1,219)            (1,185)
                                            -------            -------
Net deferred tax asset (liability)          $   875            $   -0-
                                            =======            =======




                                   Page - 8 -
<PAGE>

         At December 31, 2005, the Company had net operating loss  carryforwards
         of approximately $4,943,000 expiring from 2006 to 2012.


         NOTE 6:  CASH FLOW INFORMATION AND NON CASH INVESTING ACTIVITIES

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

                                                    9 MONTHS ENDED DECEMBER 31,
                                                            (IN 000'S)
                                                             --------
                                                       2005             2004
                                                      -----             ----
                Cash payments for interest            $ 350             $286


         NOTE 7: FINANCIAL ACCOUNTING STANDARDS

         Section  404 of the  Public  Company  Accounting  Reform  and  Investor
         Protection Act of 2002 (the  Sarbanes-Oxley Act) stipulates that public
         companies must take  responsibility for maintaining an effective system
         of internal  control.  The act further  requires  public  companies  to
         report on the  effectiveness of their control over financial  reporting
         and obtain an attest report from their  independent  registered  public
         accountant  confirming  the Company's  conclusions.  The Company is not
         required to comply with  Section 404 until the fiscal year ending March
         31, 2007.

         In November 2004,  the Financial  Accounting  Standards  Board ("FASB")
         issued SFAS No. 151,  "Inventory  Costs - an  amendment  of ARB No. 43,
         Chapter 4". SFAS No. 151 is effective prospectively for inventory costs
         incurred  during  fiscal  years  beginning  after  September  15, 2005.
         Management  does  not  expect  the  adoption  SFAS  No.  151 to  have a
         significant impact on the Company's financial statements.

         In December  2004,  the FASB issued  SFAS No.  153,  "Exchanges  of Non
         monetary Assets - an amendment of APB Opinion No. 29". The Company will
         adopt SFAS No. 153 in fiscal year 2006 and does not expect it to have a
         significant impact on the Company's consolidated financial statements.

         In December 2004, the FASB issued SFAS No. 123 (revised  2004),  "Share
         Based  Payment".  The revised  SFAS No. 123  requires  that the cost of
         share-based  payment  transactions  (including those with employees and
         non-employees)  be  recognized as  compensation  costs in the financial
         statements.  This  statement  applies to all new awards  granted during
         fiscal years  beginning after September 15, 2005 and to previous awards
         that are  modified or  cancelled  after such date.  The Company has not
         fully  evaluated  the  effect  of SFAS No.  123  (revised  2004) on the
         financial  statements  and has not determined the method of adoption it
         will use to implement revised SFAS No. 123.

NOTE 8: COMMITMENTS AND CONTINGENCIES:

         During the nine month  period  ended  December  31,  2005,  the Company
         incurred a loss from  discontinued  operations of $1,211,000  (net of a
         deferred tax benefit of $1,030,000), which relates solely to its Vulcan
         subsidiary.  Additionally,  as of  that  date,  the  Company's  current
         liabilities  exceeded its current  assets.  Management  has developed a
         plan to  restructure  debt with its secured  creditor and together with
         the  anticipated  cash flow from its  remaining  operations  provides a
         course of action they  believe  will allow the Company to deal with the
         adverse effects and conditions.


                                   Page - 9 -
<PAGE>


                      THERMODYNETICS, INC. AND SUBSIDIARIES

ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

          RESULTS OF OPERATIONS

         Net  sales  from  continuing  operations  for the  three  months  ended
December 31, 2005 increased by  $1,244,000,  or 38% over the prior year. For the
nine month period,  net sales were  $2,005,000  higher,  or 17% above the period
ended December 31, 2004.

         The Company formerly operated in two business  segments,  heat transfer
products and automotive  products. A major storm in Lower Michigan in early June
2005 caused a multi week  disruption  to operations  that severely  impacted the
ability  of  the  automotive   products   segment  to  meet  its   manufacturing
commitments.   The  revenue   shortfall   eventually  led  to  the  closure  and
discontinuance  of Vulcan's  operations  and the  liquidation of all of Vulcan's
assets;  the  proceeds of which were paid to the bank as secured  lender.  As of
December  31,  2005 all  operating  assets of Vulcan  had been  liquidated.  The
Company and the bank have  restructured the terms under which the balance of the
secured debt obligations are to be repaid. This subsidiary has been reflected as
a discontinued operation for the current period and all prior periods presented.
The  Company  now  operates  in  only  one  business  segment,  the  design  and
manufacture of heat transfer products.

         Significant  risk factors and economic  considerations  associated with
heat  transfer  products  include,  but  are  not  limited  to,  seasonality  of
purchasing  and  building  cycles,  the cost of energy,  incentives  provided by
producers,  sellers and  municipalities  to encourage the use of more  efficient
equipment,  interest  rate  changes  that may  stimulate  or depress  purchasing
demand,  the  cost  and  availability  of  materials  used in the  manufacturing
process, and regulatory directives relating to energy consumption,  conservation
and the environment.

         The  increase  in year to date sales is due  largely  to the  continued
strong  performance in the domestic  housing market and marine air  conditioning
applications.  During the current year the Company  increased  the  marketing of
heat  exchangers  containing high efficiency  special purpose  enhanced  surface
titanium  tubing.  This product is unique to the swimming pool and spa heat pump
market, an industry also exhibiting significant growth in FY2006. There has been
an  exceptionally  strong  favorable  response from this market and sales to OEM
manufacturers of these products have increased during the current three and nine
month periods compared to the prior year.

         Cost of sales was in the mid seventy  percent  range for both the three
and nine month periods of the current year,  compared to the low seventy percent
range for the same  periods in the prior year.  The cost of metals,  principally
copper,  copper alloys and titanium has risen sharply to their highest levels in
the past six years and it is  uncertain  when the market  will  experience  cost
relief. Nickel and carbon steel prices had also increased  significantly until a
few  months  ago but have now  exhibited  signs of  stabilization  and some cost
reductions.  Although  the  effects of metal cost  changes are shared to a large
degree with customers,  the impact is a net reduction of gross margin.  Further,
the pass through of a portion of such material  price  increases is a "catch up"
process as pricing is periodically adjusted as the market changes.  Accordingly,
pricing  adjustments  will be generated in the following three month period;  in
this case,  the  January-March  2006 period.  Aggregate  manufacturing  overhead
expenses were generally in line with the increased  production  requirements  in
the current year, however the Company did incur additional increases in employee
benefit  expenses and facility  occupancy  expenses  such as property  taxes and
utility costs.

         The increase in selling,  general and administrative  expenses over the
prior year was 10% and 11%, for the three and nine month periods,  respectively.
Personnel  were  added  in  customer  service,  engineering  and  other  support
functions in fiscal 2006 to both support the additional sales base and assist in
the development of future products. These added operating costs cannot be passed
on to customers until such time as overall price  increases are made.  Effective
with the new calendar year price increase have been  instituted and  improvement
in gross margin is expected for the January to March 2006  quarter.  The Company
plans on further  additions to its  marketing and  engineering  staff during the
balance of the year and into fiscal 2007 to support new  products  and  markets.
Interest expense  increased in fiscal 2006 from the prior year periods primarily
due to the rising  prime  rate.  At


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<PAGE>


December 31, 2005 the Company  recorded a significant  deferred tax benefit as a
result of the large operating losses and liquidation of its Vulcan subsidiary.

         Vulcan reported a pre-tax loss from discontinued operations of $142,000
compared to pre-tax income of $6,000 in fiscal 2005. For the nine month periods,
Vulcan's pre-tax loss from discontinued  operations was $2,241,000 and $138,000,
respectively.  Also during the  September  30 quarter of the current year Vulcan
recorded a loss on disposal of assets of $658,000.

         LIQUIDITY AND CAPITAL RESOURCES

          At  December  31,  2005  consolidated  working  capital was a negative
$526,000 compared to a positive $973,000 at March 31, 2005. The negative working
capital is attributable to cash advances made to and outside funds raised by the
Company  for  its  Vulcan  subsidiary  during  the  past  year.  Aggregate  debt
attributable  to ongoing  operations  at  December  31, 2005 was  $5,929,000  as
compared to $5,780,000 at March 31, 2005. Of these  amounts,  long-term debt was
$2,736,000 and $2,785,000, respectively.

         Capital  expenditures  aggregated  $164,000  for the nine months  ended
December  2005  compared to  $530,000 in the same period of the prior year.  The
expenditures  for the current year were funded from the revolving line of credit
further  increasing the company's  short term debt load. The Company  intends to
refinance a portion of this debt to better  match the  long-lived  nature of the
expenditures.

         The Company and its bank have  restructured  the balance of the secured
debt resulting from the Vulcan  closure.  The  restructured  debt  arrangements,
together with the  anticipated  cash flow from  remaining  operations  provide a
course of action  management  believes  will allow the  Company to deal with the
adverse effects and conditions  resulting from the  discontinuance of operations
at Vulcan. Term debt financing to fund future capital expenditure  programs will
be  explored  with the bank  during  the coming  months and the  Company is also
considering  other  avenues  to reduce  the  obligations  created  by the Vulcan
closing and bolster the financial  position of the Company.  After completion of
the above actions the  Company's  access to credit is expected to be adequate in
the coming year as increased  revenues from continuing  operations  coupled with
operating  efficiencies are projected to create  sufficient  availability in its
revolving line of credit.

          Increases in operating costs continue to play a more  significant role
in the Company's  day-to-day  operations as competitive  pricing  pressures have
restricted the Company's  ability to fully recover all added expenses.  However,
effective with the January-March period, both raw material adjustments and price
increases have been  instituted.  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  during the coming  year.  The  Company  has  embarked  on a training
program to integrate the principles of lean  manufacturing and six sigma quality
measurements  to improve  both its  efficiencies  and product  quality  over the
coming months. The regional labor markets for qualified skilled and semi-skilled
employees  is  weak  and  a  shortage  of  experienced   technical  support  and
engineering staff is expected to continue for the foreseeable future. Employment
related costs  continue to escalate and the impact on future  periods is unknown
at this time  although the Company is  continually  exploring  opportunities  to
reduce these expenses.

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,
changes in unit prices, and supply and demand for the Company's tubing

                                   Page - 11 -

<PAGE>

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.


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 the  Securities  Exchange Act of 1934 (the  "Exchange
Act"),  as of the end of the reported  period  provide the material  information
required to be disclosed in reports that the Company  files or submits under the
Exchange Act.

(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 and six month periods ended for this report.  No  significant
deficiencies or material  weaknesses in such disclosure  controls and procedures
requiring corrective actions were uncovered.










                                   Page - 10 -

<PAGE>


                      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.

         The Company has not made any sales of any securities covered by this
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:
             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 - 13 -
<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: February 13, 2006     By:   /s/  ROBERT A. LERMAN
                                         ---------------------------------------
                                         Robert A. Lerman
                                         President and Chief Executive Officer


         Date: February 13, 2006     By:   /s/  ROBERT I. LIEBERMAN
                                         ---------------------------------------
                                         Robert I. Lieberman
                                         Treasurer and Chief Financial Officer












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