SECURITIES
      AND EXCHANGE COMMISSION


WASHINGTON,
      DC 20549





FORM
      10-QSB




QUARTERLY
      REPORT UNDER SECTION 13 OR 15(d)


OF
      THE
      SECURITIES EXCHANGE ACT OF 1934







For
                the quarter ended March 31, 2006
            
            Commission
                File No. 0-19944







M~WAVE,
                INC.(Exact
                name of registrant as specified in its
                charter)








DELAWARE
            
            36-3809819(State
                or other jurisdiction of Incorporation or organization)
            
            (I.R.S.
                Employer identification No.)








11533
                Franklin Ave. Franklin Park, Illinois
            
            60131(Address
                of principal executive offices)
            
            (Zip
                Code)








Registrant’s
                telephone number including area code:
            (630)
                562-5550




Indicate
      by check mark whether the registrant (1) has filed all reports required to
      be
      filed by Section 13 and 15(d) of the Securities Exchange Act of 1934 during
      the
      preceding 12 months (or for such shorter period that the registrant was required
      to file such reports) and (2) has been subject to such filing requirements
      for
      the past 90 days.





Yes x No o





Indicate
                by check mark whether the Registrant is an Accelerated
                filer (as defined by rule 12b-6 of the Act)
            Yes
              o
            No
              x




Indicate
                  by check mark whether the Registrant is a shell company (as defined
                  by
                  rule 12b-2 of the Exchange Act.)
              Yes
                o
              No
                x





The
      registrant has 6,202,601 shares of common stock outstanding at March 31,
      2006.


1


**M-WAVE,
      INC.**





**CONTENTS**




PART
      I.  FINANCIAL INFORMATION





Item
                1.
            Financial
                Statements:Consolidated
                Balance Sheets as of March 31, 2006 and
                December 31, 2005 (unaudited)
            Page
                3Consolidated
                Statements of Operations for the Three Months
                Ended March 31, 2006 and 2005 (unaudited)
            Page
                4Consolidated
                Statements of Cash Flows for the Three Months
                Ended March 31, 2006 and 2005 (unaudited)
            Page
                5Notes
                to Consolidated Financial Statements (unaudited)
            Pages
                6-15Item
                2.
            Management’s
                Discussion and Analysis of Financial
                Condition and Results of Operations
            Pages
                16-21Item
                3
            Controls
                and Procedures
            Page
                22PART
                II.OTHER
                INFORMATIONItem
                1.
            Legal
                Proceedings
            Page
                23Item
                6.
            Exhibits
            Page
                23Signatures
            Page
                24


2
 *Table
            of Contents*




**Part
      I - Financial Information**


**Item1:
      Financial Statements**




**M-Wave,
      Inc.**


**CONSOLIDATED
      BALANCE SHEETS**


**(unaudited)**





**March
                31,**
            
            **December
                31,****2006**
            
            **2005**ASSETSCURRENT
                ASSETS:Cash
                and cash equivalents
            
            $
            2,303,651
            
            $
            247,731Accounts
                receivable, net of allowance for doubtful accounts,2006-
                $168,000: 2005- $168,000
            
            $
            1,332,531
            
            $
            1,061,443Inventories,
                net
            
            $
            1,266,244
            
            $
            2,191,013Prepaid
                expenses and other assets
            
            $
            102,296
            
            $
            336,386Note
                receivable, net
            
            $
            68,333
            
            $
            88,833Total
                current assets
            
            $
            5,073,055
            
            $
            3,925,406EQUIPMENT:Equipment
            
            $
            349,208
            
            $
            392,708Less
                accumulated depreciation
            
            $
            (80,794
            )
            $
            (81,317
            )Equipment,
                net
            
            $
            268,414
            
            $
            311,391Land
                held for sale
            
            $
            177,238
            
            $
            177,238TOTAL
            
            $
            5,518,707
            
            $
            4,414,035LIABILITIES
                AND STOCKHOLDERS' EQUITY (DEFICIT)CURRENT
                LIABILITIES:Accounts
                payable
            
            $
            2,272,295
            
            $
            2,430,304Accrued
                expenses
            
            $
            262,822
            
            $
            343,732Note
                payable
            
            $
            0
            
            $
            1,599,208Total
                current liabilities
            
            $
            2,535,117
            
            $
            4,373,244COMMITTMENTS
                AND CONTINGENCIESLONG-TERM
                DEBT, net of unamortized discount 2006-$0: 2005-$356,787
            
            $
            0
            
            $
            2,043,213COMMON
                STOCK WARRANTS
            
            $
            0
            
            $
            239,017STOCKHOLDERS'
                EQUITY (DEFICIT):Preferred
                stock, $100 par value;Series
                A authorized, 30,000 shares; issued and outstanding:
            
            $
            656,800
            
            $
            656,8002006
                and 2005: 12,500 sharesSeries
                B authorized, 70,000 shares; issued and outstanding:2006-64,648
                shares: 2005-0 shares
            
            $
            6,342,797
            
            $
            0Common
                stock, $.005 par value; authorized, 20,000,000 shares;issued
                and outstanding 2006 and 2005 : 6,202,601 shares
            
            $
            39,692
            
            $
            39,692Additional
                paid-in capital
            
            $
            13,351,691
            
            $
            12,558,653Accumulated
                deficit
            
            $
            (15,122,220
            )
            $
            (13,211,414
            )Treasury
                stock, at cost, 2006 and 2005: 1,735,815 shares
            
            $
            (2,285,170
            )
            $
            (2,285,170
            )Total
                stockholders' equity (deficit)
            
            $
            2,983,590
            
            $
            (2,241,439
            )TOTAL
            
            $
            5,518,707
            
            $
            4,414,035





See
      notes
      to consolidated financial statements


3
 *Table
          of Contents*




**M-Wave,
      Inc.**


**CONSOLIDATED
      STATEMENTS OF OPERATIONS**


**(unaudited)**





Three
                Months Ended March 312006
            
            2005NET
                SALES
            
            $
            2,291,843
            
            $
            4,720,869COST
                OF GOODS SOLD
            
            
            1,689,841
            
            
            3,713,037Gross
                profit
            
            
            602,002
            
            
            1,007,832OPERATING
                EXPENSES:General
                and administrative
            
            
            1,577,116
            
            
            954,620Selling
                and marketing
            
            
            205,811
            
            
            284,938Total
                operating expenses
            
            
            1,782,927
            
            
            1,239,558Operating
                loss from continuing operations
            
            
            (1,180,925
            )
            
            (231,726
            )OTHER
                INCOME (EXPENSE):Interest
                income
            
            
            0
            
            
            4,301Interest
                expense
            
            
            (403,847
            )
            
            (65,214
            )Total
                other expense
            
            
            (403,847
            )
            
            (60,913
            )LOSS
                FROM CONTINUING OPERATIONS
            
            
            (1,584,772
            )
            
            (292,639
            )DISCONTINUED
                OPERATIONS (Note 11)Loss
                from discontinued operations, net of tax
            
            $
            (254,405
            )
            $
            (86,559
            )NET
                LOSS
            
            $
            (1,839,177
            )
            $
            (379,198
            )Preferred
                stock dividends
            
            $
            (71,629
            )
            $
            0Net
                loss attributable to common shareholders
            
            $
            (1,910,806
            )
            $
            (379,198
            )BASIC
                AND DILUTED LOSS PER COMMON SHAREContinuing
                operations
            
            $
            (0.26
            )
            $
            (0.06
            )Discontinued
                operations
            
            
            (0.04
            )
            
            (0.02
            )$
            (0.30
            )
            $
            (0.08
            )Weighted
                average shares outstanding
            
            
            6,202,601
            
            
            4,587,351





See
      notes
      to consolidated financial statements


4
 *Table
          of Contents*




**M-Wave,
      Inc.**


**CONSOLIDATED
      STATEMENTS OF CASH FLOWS**


**(unaudited)**





Three
                Months Ended March 312006
            
            2005**OPERATING
                ACTIVITIES:**Net
                loss
            
            $
            (1,839,177
            )
            $
            (379,198
            )Adjustments
                to reconcile net loss to net cash flows used in operating
                activities:Loss
                on disposal of property, plant, and equipment
            
            
            24,167
            
            
            -Depreciation
            
            
            20,310
            
            
            17,897Amortization
                of intangible assets
            
            
            -
            
            
            2,500Amortization
                of discount on note payable, bank
            
            
            -
            
            
            12,138Amortization
                of discount on long-term debt
            
            
            356,787
            
            
            8,793Stock
                compensation recognized on options and warrants
            
            
            569,179
            
            
            -Fair
                value adjustment to common stock warrants
            
            
            (15,158
            )
            
            -Changes
                in assets and liabilities, net of effects of acquired
                business:Accounts
                receivable
            
            
            (271,088
            )
            
            (683,572
            )Inventories
            
            
            924,769
            
            
            (339,675
            )Prepaid
                expenses and other assets
            
            
            234,090
            
            
            (292,343
            )Accounts
                payable
            
            
            (158,009
            )
            
            655,350Accrued
                expenses
            
            
            (60,310
            )
            
            82,256Net
                cash flows used in operating activities
            
            
            (214,440
            )
            
            (915,854
            )**INVESTING
                ACTIVITIES:**Purchase
                of equipment
            
            
            (6,500
            )
            
            (70,362
            )Proceeds
                from sale of property, plant and equipment
            
            
            5,000
            
            
            -Repayments
                on note receivable
            
            
            20,500
            
            
            -Acquisition
                of business
            
            
            -
            
            
            (1,432,994
            )Net
                cash flows provided by (used in) investing activities
            
            
            19,000
            
            
            (1,503,356
            )**FINANCING
                ACTIVITIES:**Net
                borrowings on note payable, bank
            
            
            545,000
            
            
            489,736Proceeds
                from preferred stock issuance, less issuance costs
            
            
            1,777,989
            
            
            -Payment
                of preferred dividends
            
            
            (71,629
            )
            
            -Borrowings
                on long-term debt
            
            
            -
            
            
            1,550,000Net
                cash flows provided by financing activities
            
            
            2,251,360
            
            
            2,039,736**NET
                INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS**
            
            
            2,055,920
            
            
            (379,474
            )CASH
                AND CASH EQUIVALENTS:Beginning
                of period
            
            
            247,731
            
            
            1,321,445End
                of period
            
            $
            2,303,651
            
            $
            941,971SUPPLEMENTAL
                SCHEDULES OF NONCASH INVESTING AND FINANCING ACTIVITIES:Reclassification
                of common stock warrants to stockholders' equity
            
            $
            270,163
            
            $
            0Conversion
                of long-term debt to stockholders' equity
            
            
            4,564,808
            
            
            -Accrued
                interest added to note payable balance
            
            
            20,601
            
            $
            0Stock
                warrants issued as discount on long-term debt and note
                payable
            
            
            -
            
            
            376,480Acquisition
                of Jayco Ventures, Inc:Purchase
                price:Cash
                purchase price
            
            $
            -
            
            $
            1,360,000Acquisition
                costs paid
            
            
            -
            
            
            72,994$
            -
            
            $
            1,432,994Assets
                acquired and liabilities assumed:Working
                Capital
            
            $
            -
            
            $
            700,000Property
                and equipment
            
            
            -
            
            
            100,000Goodwill
            
            
            -
            
            
            572,994Intangible
                assets
            
            
            -
            
            
            60,000$
            -
            
            $
            1,432,994





See
      notes
      to consolidated financial statements


5
 *Table
          of Contents*


**M-WAVE,
      Inc.**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


(Unaudited)





**1.  Basis
      of Presentation**





The
      accompanying unaudited consolidated financial statements have been prepared
      in
      accordance with generally accepted accounting principles in the United States
      of
      America for interim financial information and with the instructions to Form
      10-QSB. Accordingly, they do not include all of the information and footnotes
      required by generally accepted accounting principles for complete financial
      statements. In the opinion of management, all adjustments necessary for a fair
      presentation, consisting only of normal recurring adjustments, have been
      included.





Operating
      results for the three months ended March 31, 2006 are not necessarily indicative
      of the results that may be expected for the year ending December 31, 2006.
      For
      further information, refer to the financial statements and footnotes thereto
      included in the Company’s annual report on Form 10-KSB for the year ended
      December 31, 2005.




**2.** **Realization
      of Assets**





The
      Company continues its efforts to sell its vacant land located in Bensenville,
      Illinois as soon as practicable.





**3.** **Inventories**





Inventory
      is carried at the lower of cost (first-in, first-out) or market. Substantially
      all the Company’s inventories are in finished goods held for sales to customers
      supported by annual forecasts, firm purchase orders, and take-or-pay contracts.





**4.  Business
      Product Lines**





Sales
      by
      product line for the three months ended March 31, 2006 and 2005 consisted of
      the
      following:





2006
            
            2005Digital
            
            $
            2,162,749
            
            $
            2,373,950RF
            
            
            129,094
            
            
            2,346,919Total
                sales
            
            $
            2,291,843
            
            $
            4,720,869


6
 *Table
          of Contents*


Sales
      within the digital product line include ten key customers, which represented
      approximately 87% of sales in the first three months of 2006 versus
      approximately 47% of sales in the first three months of 2005. Sales levels
      for
      the first three months of 2005 included sales to two former customers that
      represented 38% of sales for the first three months of 2005. These customers
      were in the process of winding down programs during 2005 which contributed
      to
      their increased sales levels. Sales within our top ten digital customers were
      up
      62% above their previous year’s sales levels.





On
      October 21, 2005, the Company sold its RF customer list to ASC as described
      in
      Note 3. The
      Company follows the provisions of SFAS 144 to identify and account for
      discontinued operations. In
      accordance with SFAS 144, these activities do not constitute a discontinued
      operation, primarily because discreet financial information is not available
      or
      reasonably determinable for this division of the business. Upon the sale of
      the
      RF customer list, the Company’s continuing operations will consist primarily of
      the digital product line.





The
      loss
      of, or a substantial reduction in the orders from, the Company’s major customers
      could have a material effect on the financial statements.





**5. 
      Debt**





On
      March
      1, 2006 the Company entered into an agreement with M.A.G. Capital, LLC. to
      convert its debt of approximately $4,565,000 into Series B Convertible Preferred
      Stock.




On
      February 23, 2005 the Company issued $1,550,000 in aggregate principal amount
      of
      promissory notes and warrants to purchase an aggregate of 434,783 shares of
      common stock. The issuances were made to Mercator Momentum Fund, L.P., Monarch
      Pointe, Ltd., and M.A.G. Capital, LLC (formerly Mercator Advisory Group, LLC),
      all of which are related entities. The warrants have a term of three years
      with
      an exercise price of $1.15 per share. The value of the warrants was determined
      using the Black-Scholes pricing model which calculated a value of approximately
      $497,000 based on a fair value price of $1.14, assuming an expected life of
      3
      years, a risk-free interest rate of 3.63%, volatility of 260.7%, and no dividend
      yield. When combined with the face value of the notes, these warrants resulted
      in a debt discount with an allocated fair value of approximately $376,000.
      This
      debt discount will be expensed using the effective interest rate method. This
      debt discount, combined with the stated interest rate of 10%, resulted in an
      effective interest rate of approximately 30%.


7
 *Table
          of Contents*


On
      June
      16, 2005, the Company issued $2,400,000 in aggregate principal amount of
      promissory notes which amended the $1,550,000 in aggregate principal amount
      of
      promissory notes, dated February 23, 2005 in exchange for an additional
      aggregate principal amount of $850,000 (provided that the warrants issued in
      connection with the February 23, 2005 promissory notes were not cancelled and
      therefore remain outstanding). In connection with the issuance of notes, the
      Company issued 166,666 warrants to purchase our common stock. The
      issuances were made to Mercator Momentum Fund, L.P., Mercator Momentum Fund
      III,
      L.P., Monarch Pointe, Ltd., and M.A.G. Capital, LLC (formerly Mercator Advisory
      Group, LLC), all of which are related entities. The warrants have a term of
      three years with an exercise price of $1.02 per share. The Company granted
      registration rights to the holders of the warrants, which rights are exercisable
      as of February 1, 2006. The
      value
      of the warrants was determined using the Black-Scholes pricing model which
      calculated a value of approximately $166,000 based on a fair value price of
      $1.00, assuming an expected life of 3 years, a risk-free interest rate of 3.76%,
      volatility of 261.0%, and no dividend yield. When combined with the face value
      of the notes, these warrants result in a debt discount with an allocated fair
      value of approximately $139,000. The total debt discount of approximately
      $515,000 will be expensed using the effective interest rate method. This debt
      discount, combined with the stated interest rate of 10%, results in an effective
      interest rate of approximately 21%. At December 31, 2005, the remaining
      unamortized debt discount was $356,787.




On
      November 9, 2005, the Company announced that Mercator Momentum Fund III had
      purchased the revolving financing note from Silicon Valley Bank.




At
      December 31, 2005, the total amount outstanding on the promissory notes was
      $2,400,000. The promissory notes accrued interest at 10% per annum and were
      originally due in total on August 23, 2007, prior to the conversion to equity
      described above.





On
      January 25, 2006, the Company entered into an agreement with Mercator Momentum
      Fund III, amending the Loan Document Purchase Agreements Mercator purchased
      from
      Silicon Valley Bank on November 9, 2005. Provisions of this amendment include
      elimination of certain provisions and conditions of the loan originally between
      the Company and Silicon Valley Bank, including financial covenants that existed
      under the original agreement. As part of this amendment, all previous defaults
      that had existed under the original agreement were waived.





In
      connection with the loan purchase, the principal amount due was amended to
      include interest accrued between November 9 and December 31, 2005 of
      approximately $21,000. As of March 1, 2006, the balance due on the bank notes
      purchased by MAG Capital was approximately $1,620,000. During the first quarter
      of 2006, MAG Capital provided additional debt financing of approximately
      $545,000.





The
      amount of debt converted into the Series B Convertible Preferred Stock was
      comprised of the following amounts:





Promissory
                notes issued to MAG Capital
            
            $
            2,400,000Bank
                notes purchased by MAG Capital
            
            $
            1,619,808MAG
                debt financing first quarter
            
            $
            545,000Total
                debt converted to equity
            
            $
            4,564,808


8
 *Table
          of Contents*


Upon
      the
      conversion of debt to equity described above, the remaining unamortized debt
      discount was recognized as interest expense in the amount of approximately
      $357,000 for the period ended March 31, 2006.





**6. 
      Equity**





During
      the first quarter of 2006 the Company issued an aggregate of 45,648 share of
      Series B Convertible Preferred Stock which is convertible into shares of the
      Company’s common stock. The Series B Preferred was issued to Mercator Momentum
      Fund, LP, Mercator Momentum Fund III, LP, and Monarch Pointe Fund, Ltd. in
      exchange for cancellation of indebtedness owed to them by the
      Company.





The
      Company also issued an additional 19,000 shares of Series B Preferred Stock
      in
      exchange for $1,900,000 which will be held in a reserve account to be released
      by a majority of the independent directors as appropriate to fund expenses
      of
      the company.





The
      Company paid fees of approximately $122,000 in connection with the combination
      of debt to equity conversion and additional equity placement.





The
      Series B stock is non-voting and is entitled to receive monthly dividends at
      an
      annual rate of 15%, subject to reduction to 9% after the Registration Statement
      is declared effective by the Securities and Exchange Commission. The Company
      is
      to use its best efforts to file a registration statement covering the resale
      of
      the Conversion Shares, the shares of common stock underlying the Warrants and
      the Series A Preferred Stock issued by the Company to the Purchasers on June
      17,
      2004. For the period ended March 31, 2006, the Company paid dividends on the
      Series B shares in the amount of approximately $72,000.





During
      the first quarter of 2006, Mercator did not convert any shares of their Series
      A
      Preferred Stock into common shares. As of March 31, 2006 there are 12,500 Series
      A Preferred Shares outstanding. Below is a tabulation of the potentially
      dilutive securities:





For
                the three months ended March 31,2006
            
            2005Weighted
                average shares outstanding
            
            
            6,202,601
            
            
            5,601,271Options
                in the money, net
            
            
            24,323
            
            
            213,842Warrants
                in the money, net
            
            
            68,657
            
            
            30,470Preferred
                shares convertible to Common
            
            
            0
            
            
            1,530,612Total
                Potentially Dilutive shares
            
            
            6,295,581
            
            
            7,376,195


9
 *Table
          of Contents*


With
      respect to the preferred shares convertible to common shares, the numbers of
      Conversion Shares and Warrant Shares that any Purchaser may acquire at any
      time
      are subject to limitation in the Certificate of Designations and in the
      Warrants, respectively, so that the aggregate number of shares of Common Stock
      of which such Purchaser and all persons affiliated with such Purchaser have
      beneficial ownership (calculated pursuant to Rule 13d-3 of the Securities
      Exchange Act of 1934, as amended) does not at any time exceed 9.99% of the
      Company's then outstanding Common Stock.





The
      warrants to purchase a combined 601,449 shares had been previously recorded
      as a
      liability at the fair value of the warrants issued to M.A.G. Capital, LLC in
      conjunction with the promissory notes. At December 31, 2005, the fair value
      of
      these warrants was determined to be approximately $239,000. In accordance with
      SFAS 133 guidance, the Company is required to adjust the fair value of the
      warrants at each reporting period. For the quarter ended March 31, 2006, the
      Company reduced interest expense by approximately $15,000 for the reduction
      in
      the warrants fair value.





As
      of
      March 31, 2006, the Company received a waiver from M.A.G. Capital, LLC on all
      penalties and fees associated with these warrants. As a result, the Company
      reclassified the value of these warrants from liabilities to equity.





On
      March
      1, 2006, the Company re-priced all of their warrants issued to M.A.G. Capital,
      LLC and related entities. A total of 2,131,449 warrants were re-priced to $0.69
      per share, one cent above the closing market price on that date. The Company
      recorded approximately $237,000 of stock compensation expense during the first
      quarter of 2006 related to the re-pricing of these warrants. The fair value
      of
      the re-pricing was determined using the Black Scholes option pricing model.





**7. 
      Litigation**





The
      Company is not a party to any litigation whose outcome is expected to have
      a
      material adverse effect on the financial position or results of operations
      of
      the Company.





**8. 
      Adoption of Accounting Standard and Share-Based
      Compensation**





Under
      M-Wave’s share-based long-term incentive compensation plans (“incentive plans”)
      M-Wave grants non-qualified stock options to certain employees.




Shares
      available for future issuance to M-Wave’s employees under existing plans were
      137,277 shares at March 31, 2006.


10
 *Table
          of Contents*


Effective
      January 1, 2006, the Company adopted Financial Accounting Standards Board
      (“FASB”) Statement No. 123 (revised), “Share-Based Payment” (“SFAS 123R”). Among
      its provisions, SFAS 123R requires us to recognize compensation expense for
      equity awards over the vesting period based on their grant-date fair value.
      Prior to the adoption of SFAS 123R, we utilized the intrinsic-value based method
      of accounting under APB Opinion No. 25, “Accounting for Stock Issued to
      Employees” and related interpretations, and adopted the disclosure requirements
      of SFAS No. 123, “Accounting for Stock-Based Compensation” (“SFAS 123”). Under
      the intrinsic-value based method of accounting, compensation expense for stock
      options granted to our employees was measured as the excess of the quoted market
      price of M-Wave’s common stock at the grant date over the amount the employee
      must pay for the stock. M-Wave’s policy is to grant M-Wave stock options at fair
      value on the date of grant and as a result no compensation expense was
      historically recognized for stock options.





The
      Company adopted SFAS 123R in the first quarter of 2006 using the modified
      prospective approach. Under this transition method, the measurement and our
      method of amortization of costs for share-based payments granted prior to,
      but
      not vested as of January 1, 2006, would be based on the same estimate of the
      grant-date fair value and the same amortization method that was previously
      used
      in our SFAS 123 pro forma disclosure. Results for prior periods have not been
      restated as provided for under the modified prospective approach. For equity
      awards granted after the date of adoption, the Company will amortize share-based
      compensation expense on a straight-line basis over the vesting term.





Compensation
      expense is recognized only for share-based payments expected to vest. The
      Company estimates forfeitures at the date of grant based on our historical
      experience and future expectations. Prior to the adoption of SFAS 123R, the
      effect of forfeitures on the pro forma expense amounts was recognized based
      on
      estimated forfeitures.





The
      Company recognized share-based compensation expense of approximately $331,000
      in
      general and administrative expenses in the statement of operations for the
      three
      months ended March 31, 2006.





The
      following table shows the effect on net income for the three months ended March
      31, 2005 had compensation expense been recognized based upon the estimated
      fair
      value on the grant date of awards, in accordance with SFAS 123, as amended
      by
      SFAS No. 148 “Accounting for Stock-Based Compensation - Transition and
      Disclosure”:





Three
                months endedMarch
                31, 2005Net
                loss:As
                reported
            
            $
            (379,198
            )Add:
                Total share-based employee compensation included in reported net
                income,
                net of taxes
            
            
            0Less:
                Total share-based employee compensation determined under fair-value
                based
                method for all awards, net of taxes
            
            
            (61,470
            )Pro
                forma
            
            $
            (440,668
            )


11
 *Table
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Earnings
      per share as reported for basic and diluted was a loss of $0.07 per share.
      Pro
      forma Earnings per share for basic and diluted was a loss of $0.08 per
      share.





As
      of
      March 31, 2006, there was approximately $234,000 of total unrecognized
      compensation cost related to nonvested share-based compensation arrangements
      granted under the incentive plans. That cost is expected to be recognized over
      a
      weighted-average period of 0.75 years.





The
      fair
      value of M-Wave stock options was estimated at the date of grant using the
      Black-Scholes-Merton option-valuation model. The table below outlines the
      weighted average assumptions for options granted during the 3 months ended
      March
      31, 2006 and 2005:





Three
                months ended March 31,2006
            
            2005Risk-free
                interest rate
            
            
            4.50
            %
            
            3.71
            %Expected
                term (in years)
            
            
            5.0
            
            
            5.0Expected
                volatility
            
            
            275.5
            %
            
            309.5
            %Expected
                dividend yield
            
            
            0
            %
            
            0
            %Estimated
                fair value per option granted
            
            $
            0.62
            
            $
            1.23





The
      expected term of the options represents the estimated period of time until
      exercise and is based on historical experience of similar awards, giving
      consideration to the contractual terms, vesting schedules and expectations
      of
      future employee behavior. Expected stock price volatility is based on a
      combination of historical volatility of M-Wave’s stock and the implied
      volatility of M-Wave’s traded options. The risk-free interest rate is based on
      the implied yield available on U.S. Treasury Bill issues with an equivalent
      remaining term.





M-Wave
      stock options expire in 5 years and prior to the 2006 grant year were generally
      exercisable 50 percent in first year, and 25 percent in the next two years,
      fully vesting after three years. Beginning in 2006, new stock option grants
      will
      vest ratably over three years.





The
      following table summarizes M-Wave option activity during the three months ended
      March 31, 2006:





Options
            
            Shares
            
            Weighted
                Average Exercise Price per Share
            
            Weighted
                Average Remaining Contractual Term (years)
            
            Aggregate
                Intrinsic ValueOutstanding
                at January 1, 2006
            
            
            1,199,517
            
            $
            1.14Granted
            
            
            665,323
            
            
            0.68Exercised
            
            
            -
            
            
            0Forfeited
                or expired
            
            
            (17,650
            )
            
            7.19Outstanding
                at March 31, 2006
            
            
            1,847,190
            
            $
            0.91
            
            
            3.48
            
            $
            29,933Exercisable
                at March 31, 2006
            
            
            1,574,273
            
            $
            0.93
            
            
            3.48
            
            $
            24,783


12
 *Table
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The
      aggregate intrinsic value in the table above is before income taxes, based
      on
      M-Wave’s closing stock price of $0.69 as of the last business day of the period
      ended March 31, 2006.





**9.
      Taxes**





Management
      believes that the Company has adequate net operating loss carry forwards
      available that, if utilized, would offset any taxable income generated by the
      Company throughout the remainder of 2006.





**10.
      Reclassifications**





Certain
      items in the 2005 financials have been reclassified to conform to the 2006 Presentation
      which treats the DBS division as discontinued operations.





**11.
      Discontinued Operations**





On
      February 25, 2005 M-Wave, Inc. through its wholly owned subsidiary, M-Wave
      DBS,
      Inc., an Illinois corporation purchased substantially all of the assets of
      Jayco
      Ventures Inc. (JVI), for cash of approximately $1,360,000.





M-Wave
      DBS, Inc. was initially reconstituted a distributor, virtual manufacturer and
      global supplier to the Digital Broadcasting Satellite (DBS) industry that
      included a growing number of proprietary product lines including: TrunkLine
      Millenium® commercial SMATV head-end modules; JVI L-Band passive splitters and
      multi-switches; Treadclip plastic fasteners; Signaloc® meters used in measuring
      signal strength; and the Kompressor® universal RF connector line.





The
      purchase price was allocated to the assets acquired and liabilities assumed
      as
      of March 31, 2005, was as follows:





Working
                Capital
            
            $
            700,000Property
                and Equipment
            
            
            100,000Intangible
                assets
            
            
            60,000Goodwill
            
            
            572,994$
            1,432,994


13
 *Table
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Accounts
      receivable and inventories were recorded at the net realizable value. Equipment
      was recorded at an appraised value and was to be depreciated over an economic
      useful life of five years. Intangible assets consisted primarily of patents
      and
      customer lists which were recorded based on an appraised value and were to
      be
      amortized over an economic useful life of two years. Goodwill represents the
      excess of purchase price over the assets acquired of approximately $500,000,
      plus additional acquisition costs incurred by the Company for professional
      fees
      of approximately $73,000. During the balance of 2005, the Company recorded
      additional acquisition costs of approximately $285,000, which were recorded
      as
      increases to goodwill. The total purchase price as previously reported as of
      December 31, 2005 was approximately $1,718,000.





After
      attempts to finance and establish the business through July 2005, the Company
      determined the assets and business could not be re-established, and in December
      2005 determined to discontinue M-Wave DBS, Inc., formerly reported as the DBS
      segment. In connection with that change, substantially all employees of DBS
      were
      terminated in December 2005,  and
      the
      remaining assets located in warehouses in California and Florida will be
      liquidated in the ordinary course of business.





M-Wave
      DBS, Inc. operated as a wholly owned Illinois subsidiary. The Company's
      remaining core business continues to be printed circuit board and related custom
      component business is known informally as M-Wave EMG [Electro-Mechanical Group].
      Concurrently, Robert Duke serves as President-EMG division.





The
      Company follows the provisions of SFAS 144 to identify and account for
      discontinued operations. The Company carries assets and liabilities related
      to
      its discontinued DBS operations on its balance sheet as they continue efforts
      to
      liquidate these assets and satisfy these liabilities in an orderly manner.
      These
      assets are carried at their net book value which approximates its estimated
      net
      realizable value less estimated costs to sell these assets, and are included
      with assets from continuing operations in the accompany consolidated balance
      sheet. These liabilities are carried at their net book value which approximates
      the full amount of consideration necessary to settle these obligations. The
      approximate carrying value of these assets and liabilities at March 31, 2006
      and
      December 31, 2005 is below:





2006
            
            2005Accounts
                Receivable
            
            $
            501,000
            
            $
            308,000Inventory
            
            
            493,000
            
            
            1,832,000Prepaid
                Expenses
            
            
            60,000
            
            
            230,000Total
                assets
            
            $
            1,054,000
            
            $
            2,370,000Accounts
                Payable
            
            $
            844,000
            
            $
            1,232,000Accrued
                Expenses
            
            
            2,000
            
            
            6,000Total
                liabilities
            
            $
            846,000
            
            $
            1,238,000


14
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On
      January 9, 2006, the Company announced it had taken steps to liquidate its
      M-Wave DBS, Inc (DBS) assets it previously acquired in February 2005. In
      connection with that activity, the Company announced that it had terminated
      all
      but its logistics and warehousing personnel and discontinued active operations.
      Moreover, it stated that Jason Cohen, its former divisional president, had
      terminated, by mutual agreement with the Company, his employment contract.
      Cohen
      has since been retained as an independent consultant together with a small
      group
      of outside sales staff to liquidate the former DBS inventory for a commission
      approximating 5%.





The
      Company is actively pursuing collections of outstanding accounts receivable
      from
      its former DBS customers and is in the process of executing its strategic plans
      to complete its liquidation of the DBS inventory. The carrying value of DBS
      inventory as been reduced by approximately $700,000 to adjust to estimated
      net
      realizable value as described above. Together with cash from continuing
      operations, the Company plans to utilize deposits and prepayments to DBS vendors
      in settlement of the outstanding accounts payable.





The
      net
      loss from discontinued operations for the three months ended March 31, 2006
      and
      2005 are as follows:




2006
            
            2005Net
                sales
            
            $
            748,665
            
            $
            235,278Cost
                of goods sold
            
            
            941,830
            
            
            176,120Gross
                (loss)/profit
            
            
            (193,165
            )
            
            59,158Operating
                expenses
            
            
            61,240
            
            
            145,716Loss
                from discontinued operations
            
            $
            (254,405
            )
            $
            (86,558
            )





The
      loss
      from discontinued operations resulted in an increase to the basic and diluted
      loss per common share of approximately $0.04 and $0.02 for the three months
      ended March 31, 2006 and 2005 respectively.


15
 *Table
          of Contents*


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





We
      are a
      value added service provider of high performance printed circuit boards used
      in
      a variety of digital and high frequency communications applications for a
      variety of telecommunications and industrial electronics applications. This
      includes Original Equipment Manufacturers (OEM’s) and Contract Manufacturers
      (CM’s). We satisfy our customers’ requirements for telecommunications and
      industrial electronics printed circuit boards, either rigid, flexible or bonded,
      by directly booking orders, supervising and inspecting outsourced manufacture
      of
      such boards through our global base of production partners located in China,
      Taiwan, elsewhere in Southeast Asia, and domestically, through pre-screened
      production partners.





Our
      business model is referred to as Virtual Manufacturing. Through Virtual
      Manufacturing we contractually supply a wide range of printed circuit boards
      we
      manufacture through partners for our customers, creating a “conduit” between
      those customers and production that covers prototypes, pilot production, limit
      and mass production, offering one seamless source. We deliver products when
      our
      customers need them through consignment inventory, demand pull, just in time,
      in
      plant storehouses, supplier or vendor managed inventory and other supply-chain
      programs.





We
      began
      Virtual Manufacturing in 2000 by developing subcontracting relationships with
      predominately Asian global manufacturers, from our base in Singapore. In virtual
      manufacturing, we assume many of the pre and post-production services of a
      manufacturer, while outsourcing the physical processes either adjunct to our
      personnel or in relatively close proximity to assure the highest quality
      fulfillment.





Our
      manufacturing partners maintain most certificates for quality, environmental
      and
      safety, including ISO, QS, UL, CE and others. We and our manufacturing partners
      have a reputation for timely fulfillment of orders that are competitively
      priced, shipped from modern plants operating with the highest standards of
      worker and environmental safety both within and outside of the United
      States.





We
      market
      our products through our sales managers, who in turn manage independent sales
      organizations throughout the U.S. Our base of approximately 50 customers
      represents a highly sophisticated group of purchasers.


16
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          of Contents*


In
      2005,
      we extended our product lines to include custom or engineered electronic
      products and certain commodities sourced from Asia on behalf of existing
      accounts. These products are procured on a pan-Asian basis and cover a broad
      range of components that include LED’s, wire bonding services, harnesses,
      extruded housing products, plastics, metals, assemblies, and other customer
      specific products. This effort has been geared toward diversifying and
      increasing our overall margins. Initially, we solicited existing customers,
      but
      we also intend to solicit new accounts. Our niche focuses in higher mixed of
      products at lower volumes that larger scale distributors or brokers fail to
      address. Our customers tend to be smaller middle market Companies though midsize
      firms with little presence or capability in Asia elect us as their procurement
      partners.





**RESULTS
      FOR THE THREE MONTHS ENDED MARCH 31, 2006 COMPARED TO THE THREE MONTHS ENDED
      MARCH 31, 2005**





**Net
      Sales**





Net
      sales
      were approximately $2,292,000 for the quarter ended March 31, 2006, a decrease
      of approximately $2,429,000 or 51.5% from the first quarter of 2005. The sales
      within of our RF business was the primary factor in the sales decline, with
      RF
      sales down approximately $2,218,000 quarter over quarter due to the sale of
      the
      RF business in October 2005. The decrease in sales of the digital products
      of
      approximately $211,000 was the result of prior year sales to two former
      customers that were winding down programs. Prior year revenues for these two
      former customers were approximately $912,000. Sales to our remaining customer
      base increased by approximately $701,000 during the first quarter of 2006,
      or
      approximately 62% above prior year sales levels, with stronger sales reported
      across the board of our digital product line.





We
      plan
      to focus our efforts on growing our core business and customer base, primarily
      by concentrating efforts on expanding our customer base within our digital
      product line. In addition, we are expanding our global sourcing efforts beyond
      printed circuit boards into other product lines such as extrusions, wire
      harnesses, castings, spinning’s, etc. Sourcing of these additional product
      lines, initially to our existing customer base, we believe will improve our
      operating results by providing increased profits on these products than we
      had
      been experienced with our former RF product line.





**Gross
      Profit and Cost of Goods Sold**





The
      Company’s gross profit for the first quarter of 2006 was approximately $602,000,
      or 26.3% of net sales, compared to a gross profit of approximately $1,008,000,
      or 21.3% of net sales, for the first quarter of 2005. The sale of our RF
      business in October 2005 was the primary factor in the decline in gross profit
      dollars. It was also the reason profit margins increased year over year, as
      the
      RF business typically represented higher volume, lower margin mix when compared
      to the digital product line. Margins within our digital product line decreased
      by approximately 2% over prior year due to digital sales in the prior year
      to
      our two former customers where we experienced higher than normal margins as
      their programs were winding down during the beginning of 2005.


17
 *Table
          of Contents*


**Operating
      Expenses**





General
      and administrative expenses were approximately $1,577,000 or 68.8% of net sales
      in the first quarter of 2006 compared to approximately $955,000 or 20.2% of
      net
      sales in the first quarter of 2005, an increase of approximately $622,000.





General
      and administrative expenses consist primarily of salaries and benefits,
      professional services, depreciation of office, equipment and computer systems
      and occupancy expenses. In comparison to the first quarter of 2005, payroll
      related expenses decreased $124,000 to due lower headcount and salary reductions
      taken in the fourth quarter of 2005. We recorded stock compensation expense
      in
      the first quarter of 2006 of approximately $569,000 as a result of the adoption
      of SFAS 123(R). Approximately $331,000 related to grants to employees during
      the
      first quarter of 2006 and approximately $238,000 related to the re-pricing
      of
      existing warrants previously issued to M.A.G. Capital, LLC in connection with
      prior financing transactions. The re-pricing was done in conjunction with the
      issuance of our Series B Preferred Stock in March 2006. We did not record any
      stock compensation expense in the first quarter of 2005. Professional services,
      which include legal, auditing, and consulting fees, decreased approximately
      $61,000 in 2006 compared to prior year expenses. Non-recurring charges were
      approximately $384,000 in the first quarter of 2006 compared to approximately
      $53,000 during the first quarter of 2005. These costs include fees paid for
      professional and audit services of approximately $161,000 related to the audit
      of our Jayco Ventures acquisition in order to report required pro forma
      financial information in accordance with Nasdaq rules. We also paid fees of
      approximately $35,000 related to the appeal of our Nasdaq delisting. Corporate
      development costs were approximately $188,000 during the first quarter of 2006
      including fees paid to our Special Committee, professional fees related to
      fairness opinions, and legal fees related to corporate development activity
      as
      we continue to review strategic options including the sale or merger of all
      or
      part of the Company as described in previous filings. Public related costs
      such
      as investor relations and Sarbanes-Oxley expenses increased approximately
      $20,000 during the first quarter of 2006. Other operating expenses decreased
      approximately $110,000 during the first quarter of 2006 primarily related to
      lower operating costs in our new facility.


18
 *Table
          of Contents*


Selling
      and marketing expenses were approximately $206,000 or 9.0% of net sales in
      the
      first quarter of 2006 compared to approximately $285,000 or 6.0% of net sales
      in
      the first quarter of 2005. Selling and marketing expenses include the cost
      of
      salaries, advertising and promotion of the Company’s products, and commissions
      paid to independent sales organizations. In comparison to the first quarter
      of
      2005, commission paid to independent sales organizations decreased approximately
      $33,000; payroll-related expenses decreased approximately $67,000 due to
      headcount and pay reductions. Costs related to our Singapore office increased
      approximately $28,000 during the first quarter related to increased staffing
      levels and operational costs of the office that was established during the
      prior
      year. Other sales expenses, including travel related expenses decreased
      approximately $7,000 in the first quarter of 2006 versus 2005.





**Operating
      Loss**





Operating
      loss from continuing operations was approximately $1,181,000 in the first
      quarter of 2006 compared to an operating loss of approximately $232,000 in
      the
      first quarter of 2005. The increase in operating loss of approximately $949,000
      was primarily related to our expensing of employee options and re-pricing of
      warrants during 2006 as required under FAS 123R of approximately $569,000
      combined with non-recurring expenses of approximately $384,000 as described
      above.





**Interest
      Income**





We
      recorded no interest income during the first quarter of 2006. Interest income
      of
      approximately $4,000 was recorded in the first quarter of 2005 related to income
      received on our interest bearing bank accounts.





**Interest
      Expense**





Interest
      expense was approximately $404,000 in the first quarter of 2006, versus
      approximately $65,000 in the first quarter of 2005. Primary factor in the
      increase in interest expense related to our conversion of our debt to equity
      in
      March 2006, whereby we expensed the remaining unamortized debt discount as
      interest expense in the amount of approximately $357,000 for the period ended
      March 31, 2006. We paid approximately $62,000 in interest expenses related
      to
      interest on our promissory notes during the first quarter of 2006. We recorded
      a
      reduction of interest expense of approximately $15,000 related to the
      re-valuation of warrants during the first quarter of 2006. There was $21,000
      in
      non-cash interest expense recorded in the first quarter of 2005. The 2005
      expenses are related to the amortization on warrants issued to Silicon Valley
      Bank for approximately $12,000 related to the financing agreement, and
      approximately $9,000 related to the issuance of long-term debt during the first
      quarter of 2005 by M.A.G. Capital, LLC.


19
 *Table
          of Contents*


**Other
      Income**





The
      Company did not record any other income/expense in the first quarter of 2006
      or
      2005.





**Income
      Taxes**





During
      the first quarter of 2006 and 2005, the Company recorded no income tax expense.





**Liquidity
      and Capital Resources**





Net
      cash
      used by operations was approximately $214,000 for the first three months of
      2006
      compared to approximately $916,000 for the first three months of 2005.





Accounts
      Receivable increased by approximately $271,000 due increased receivables within
      our DBS division as we began liquidating the inventory during the first quarter.
      Inventories decreased approximately $925,000 primarily related to liquidation
      activity within our discontinued DBS business. Accounts Payable decreased
      approximately $158,000 primarily due to our discontinued DBS business.




Capital
      expenditures were approximately $7,000 in the first three months of 2006
      compared to approximately $70,000 in the first three months of 2005.





Net
      cash
      provided by investing activities was approximately $19,000 reflecting the sale
      of equipment and payments received on notes receivable during the first three
      months of 2006 compared to net cash used in investing activities of
      approximately $1,503,000 during the first three months of 2005. Prior year
      activity was primarily related to the acquisition of the Jayco business in
      February 2005.





Net
      cash
      provided by financing activities increased approximately $2,251,000 primarily
      related to borrowing from M.A.G. Capital, LLC and their additional equity
      placement, net of expenses paid, during the first quarter of 2006. Net cash
      provided by financing activities in 2005 was approximately $2,040,000 related
      to
      the issuance of long-term debt of $1,550,000 and increases in our former credit
      facility of approximately $490,000 during the first quarter of 2005.





Currently
      the Company is committed to growing its core business, as it relates to the
      continuing operations of its digital product line. The Company’s Special
      Committee of its Board of Directors is also reviewing strategic options
      including the sale or merger of all or part of the Company. However, if the
      Company is unable to secure adequate financing to grow its core business, or
      if
      the Special Committee does not approve a suitable strategic option, the Company
      may be forced to modify its present strategic growth plan.


20
 *Table
          of Contents*




Based
      upon the current level of operations and anticipated growth, restructuring
      of
      its business focusing on higher margin product lines, placement of equity
      financing, and elimination of debt during the past year, we believe that future
      cash flows from operations will be adequate to meet our anticipated liquidity
      requirements through this fiscal year.





**Inflation**





Management
      believes inflation has not had a material effect on the Company’s operations or
      on its financial position. However, expected supplier price increases that
      average approximately 4% may have a material effect on the Company’s operations
      and financial position in the remainder of 2006, if the Company is unable to
      pass through those increases under its present contracts.





The
      Company expects transportation and logistics costs will continue to escalate
      and
      in most cases, these costs will passed through to our customers. If we are
      unable to pass those costs on as occasional is the case, the effect may be
      material on the Company’s operating margins.





**Foreign
      Currency Transactions**





All
      of
      the Company’s foreign transactions are negotiated, invoiced and paid in United
      States dollars.





**Risk
      Factors Affecting Business and Results of Operations**





This
      report, as well as our other reports filed with the SEC, our press releases,
      and
      other communications contain forward-looking statements made pursuant to the
      safe harbor provisions of the Securities Litigation Reform Act of 1995.
      Forward-looking statements include all statements regarding our expected
      financial position, results of operations, cash flows, dividends, financing
      plans, strategy, budgets, capital and other expenditures, competitive positions,
      growth opportunities, benefits from new technology, plans and objectives of
      management, and markets for stock. These forward-looking statements are based
      largely on our expectations and, like any other business, are subject to a
      number of risks and uncertainties, many of which are beyond our control. The
      risks include those stated in the section entitled "Risk Factors Affecting
      Business and Results of Operations" at the end of Item 6 of our Annual Report
      on
      Form 10-KSB and economic, competitive and other factors affecting our
      operations, markets, products and services, expansion strategies and other
      factors discussed elsewhere in this report, our Annual Report on Form 10-KSB
      and
      the other documents we have filed with the Securities and Exchange Commission.
      In light of these risks and uncertainties, there can be no assurance that the
      forward-looking information contained in this report will in fact prove
      accurate, and our actual results may differ materially from the forward-looking
      statements.


21
 *Table
          of Contents*


**Item3.
      Controls and Procedures**





***a)
      Disclosure controls and procedures*** .
      As of
      the end of the period covered by this report, the Company carried out an
      evaluation, under the supervision and with the participation of the Company's
      management, including the Company's Chief Executive Officer and the Company's
      Principal Accounting Officer, of the effectiveness of the design and operation
      of the Company's disclosure controls and procedures (as defined in Rules
      13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as
      amended).





Based
      on
      this evaluation, our Chief Executive Officer and Principal Accounting Officer
      concluded that our disclosure controls and procedures were effective, except
      as
      discussed in the next paragraph below, in timely alerting them to material
      information relating to the Company required to be included in our periodic
      filings with the Securities and Exchange Commission. It should be noted that
      in
      designing and evaluating the disclosure controls and procedures, management
      recognized that any controls and procedures, no matter how well designed and
      operated, can provide only reasonable assurance of achieving the desired control
      objectives, and management necessarily was required to apply its judgment in
      evaluating the cost-benefit relationship of possible controls and procedures.
      The Company has designed its disclosure controls and procedures to reach a
      level
      of reasonable assurance of achieving desired control objectives and, based
      on
      the evaluation described above, the Company’s Chief Executive Officer and
      Principal Accounting Officer concluded that the Company’s disclosure controls
      and procedures were effective at reaching that level of reasonable assurance,
      except as discussed in the next paragraph below.





As
      previously reported in the Company’s annual report on Form 10-KSB for the year
      ended December 31, 2005, the Company has a material weakness within its internal
      control framework relating to the preparation and timeliness of financial
      reporting, in connection with the adequacy of segregation of duties. The Company
      attributes this material weakness to limited personnel resources. Though the
      Company has implemented levels of supervisory reviews and employs a temporary
      workforce from time to time, there can be no assurance that these measures
      can
      definitively prevent transactional errors from occurring or provide the
      necessary accounting and financial reporting support to the Company’s accounting
      and finance department.


22
 *Table
          of Contents*


**(b)** ***Changes
      in internal controls*** **.** There
      was no change in the Company’s internal control over financial reporting (as
      defined in Rules 13a-15(f) and 15d-15(f) under the Securities and Exchange
      Act
      of 1934, as amended) during the three months ended March 31, 2006 that has
      materially affected, or is reasonably likely to materially affect, its internal
      control over financial reporting.





**Part
      II - Other Information**





**Item1:
      Legal proceedings**





None






**Item
      6: Exhibits**




(a)
              Exhibits




31.1
              Certification
                  of the CEO pursuant to Section 302 of the Sarbanes-Oxley
                  Act.
 
 31.2
              Certification
                  of the CFO pursuant to Section 302 of the Sarbanes-Oxley
                  Act.
 
 32.1
              Certification
                  pursuant to 18 U.S.C. Section 135O, as adopted pursuant to section
                  906 of
                  the Sarbanes-Oxley Act of 2002.


23
 *Table
          of Contents*


**SIGNATURE**





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





**M~WAVE,
                Inc.**Date:
                May 15, 2006
            /s/
                Jeff FiglewiczJeff
                FiglewiczController
                and Principal Accounting Officer





**Exhibit
        Index**
 
 **Exhibit****No.**
              
              **Description**
              
              **Location**3.1
              
              Certificate
                  of Incorporation of the Company
              
              13.2
              
              Bylaws
                  of the Company
              
              13.3
              
              Certificate
                  of Designations for Series A Convertible Preferred Stock
              
              4
 24
 *Table
              of Contents*
  3.4
              
              Certificate
                  of Designations for Series B Convertible Preferred Stock
              
              104.1
              
              Specimen
                  Common Stock Certificate
              
              310.1
              
              2003
                  Stock Incentive Plan
              
              210.2
              
              Warrant
                  to Purchase Stock dated March 31, 2004 by and between the Company
                  and
                  Silicon Valley Bank
              
              210.3
              
              Employment
                  Agreement dated July 28, 2004 between the Company and Jim
                  Mayer
              
              310.4
              
              Employment
                  Agreement dated July 28, 2004 between the Company and Joe
                  Turek
              
              310.5
              
              Employment
                  Agreement dated May 1, 2004 between the Company and Robert
                  Duke
              
              310.6
              
              Subscription
                  Agreement date June 28, 2004 between the Company and Mercator Advisory
                  Group
              
              310.7
              
              Stock
                  Registration Rights Agreement date June 28, 2004 between the Company
                  and
                  Mercator Advisory Group
              
              310.8
              
              Non-statutory
                  Stock Option Agreement date July 28, 2004 between the Company and
                  Jim
                  Mayer
              
              310.9
              
              Asset
                  Purchase Agreement, dated February 25, 2005 by and between Jayco
                  Ventures,
                  Inc. and M-Wave DBS, Inc.
              
              510.10
              
              Employment
                  Agreement dated February 25, 2005 between M-Wave DBS, Inc. and
                  Joshua
                  Blake
              
              510.11
              
              Promissory
                  Note dated February 23, 2005 issued by M-Wave, Inc. to Mercator
                  Momentum
                  Fund, L.P.
              
              510.12
              
              Promissory
                  Note dated February 23, 2005, issued by M-Wave, Inc. to Monarch
                  Pointe
                  Fund, L.P.
              
              510.13
              
              Warrant
                  , dated February 23, 2005 issued by M-Wave, Inc. to Mercator Momentum
                  Fund, L.P.
              
              510.14
              
              Warrant
                  to dated February 23, 2005 issued by M-Wave, Inc, to Monarch Pointe
                  Fund,
                  L.P.
              
              5
 25
 *Table
              of Contents*
  10.15
              
              Warrant
                  dated February 23, 2005, issued by M-Wave, Inc. to M.A.G. Capital,
                  LLC
              
              510.16
              
              Non-statutory
                  Stock Option Agreement dated December 31, 2004 between Company
                  and Gordhan
                  Patel
              
              610.17
              
              Amendment
                  to 2003 Stock Incentive Plan
              
              710.18
              
              Sale
                  of real property located at 215 Park Street Bensenville,
                  Illinois
              
              810.19
              
              Asset
                  sale and transition agreement dated October 21, 2005 between the
                  Company
                  and American Standard Circuits
              
              810.20
              
              Agreement
                  with the Mercator Momentum Fund III amending Loan Document Purchase
                  Agreements it acquired from Silicon Valley Bank on November 9,
                  2005
              
              910.21
              
              Agreement
                  with Ocean Park Advisors, LLC for financial consulting services
                  and B.
                  Riley & Co. for service regarding financial fairness opinion of
                  potential merger candidates
              
              1131.1
              
              Certification
                  of the CEO Pursuant to Sections 302 of the Sarbanes-Oxley
                  Act
              
              Filed
                  Herewith31.2
              
              Certification
                  of the CFO Pursuant to Sections 302 of the Sarbanes-Oxley
                  Act
              
              Filed
                  Herewith32.1
              
              Certification
                  pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
                  906 of
                  the Sarbanes-Oxley Act
              
              Filed
                  Herewith(1)
              
              Incorporated
                  herein by reference to the applicable exhibit to Registrants Registration
                  Statement on Form S-1 (Registration No. 33-45499)(2)
              
              Incorporated
                  herein by reference to the applicable exhibit to the Registrant's
                  Annual
                  Report on Form 10K for the year ended December 31, 2003(3)
              
              Incorporated
                  herein by reference to the applicable exhibit to the Registrant's
                  Quarterly Report on Form 10-QSB for the quarter ended June 30,
                  2004
 26
 *Table
              of Contents*
  (4)
              
              Incorporated
                  herein by reference to Appendix B to the Registrant's Definitive
                  Proxy
                  Statement filed July 6, 2004(5)
              
              Incorporated
                  herein by reference to the applicable exhibit to the Registrant's
                  form 8-K
                  filed March 2, 2005(6)
              
              Incorporated
                  herein by reference to the applicable exhibit to the Registrant's
                  Annual
                  Report on Form 10-KSB for the year ended December 31, 2004(7)
              
              Incorporated
                  herein by reference to Appendix A to the Registrant's Proxy Statement
                  filed April 29, 2005(8)
              
              Incorporated
                  herein by reference to the applicable exhibit to the Registrant's
                  form 8-K
                  filed October 5, 2005(9)
              
              Incorporated
                  herein by reference to the applicable exhibit to the Registrant's
                  form 8-K
                  filed February 2, 2006(10)
              
              Incorporated
                  herein by reference to the applicable exhibit to the Registrant's
                  form 8-K
                  filed March 7, 2006(11)
              
              Incorporated
                  herein by reference to the applicable exhibit to the Registrant's
                  form 8-K
                  filed February 13, 2006
   27