UNITED
      STATES


**SECURITIES
      AND EXCHANGE COMMISSION**


Washington,
      D.C. 20549







**FORM
      10-QSB**





**x**
              QUARTERLY
                  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
                  1934
 For
        the
        quarterly period ended September 30, 2005
 
 -OR-
 
 o
              TRANSITION
                  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
                  1934


For
      the transition period from ________ to
      ________







**Commission
      file number 000-51433**








**CENTERGISTIC
      SOLUTIONS, INC.**


(Name
      of
      small business issuer as specified in its charter)




**CALIFORNIA**
              
              **95-2873122**(State
                  or other jurisdiction of incorporation or organization)
              
              (IRS
                  Employer identification No.)




**2045
      West Orangewood Avenue, Orange, California 92868-1944**


(Address
      of principal executive offices)








**(714)
      935-9000**


(Issuer's
      telephone number)









Check
      whether the issuer (1) filed all reports required to be filed by Section 13
      or
      15(d) of the Exchange Act during the preceding twelve months ( or for such
      shorter period that the issuer was required to file such reports), and (2)
      has
      been subject to such filing requirements for the past 90 days.





Yes x  No
o




**As
      of October 31, 2005, there were 10,699,312 shares of the issuer’s Common Stock
      outstanding.**




**Traditional
      Small Business Disclosure Format. Yes o** ****  **No
      x**

















CENTERGISTIC
      SOLUTIONS, INC.


QUARTERLY
      REPORT ON FORM 10-QSB


FOR
      THE PERIOD ENDED SEPTEMBER 30, 2005





TABLE
      OF CONTENTS


**Page**Part
                I. FINANCIAL INFORMATIONItem
                1. Financial Statements:Condensed
                Consolidated Balance Sheet at September 30, 2005
                (Unaudited)
            3Condensed
                Consolidated Statements of OperationsFor
                the Three Months Ended September 30, 2005 and 2004
                (Unaudited)
            4Condensed
                Consolidated Statements of Cash FlowsFor
                the Three Months Ended September 30, 2005 and 2004
                (Unaudited)
            5Notes
                to Unaudited Condensed Consolidated Financial Statements
            6Item
                2. Management's Discussion and Analysis of Financial Condition and
                Results
                of Operations
            17Item
              3. Controls and Procedures
            28Part
                II. OTHER INFORMATIONItem
                1. Legal Proceedings
            29Item
                2. Unregistered Sales of Equity Securities and Use of
                Proceeds
            29Item
                3. Defaults Upon Senior Securities
            29Item
                4. Submission of Matters to a Vote of Security Holders
            29Item
                5. Other Information
            29Item
                6. Exhibits
            29SIGNATURES
            30EXHIBIT
                INDEX
            31







-2-


CENTERGISTIC
        SOLUTIONS, INC.
 Condensed
        Consolidated Balance Sheet at September 30, 2005 (Unaudited)


September
                  30,2005(Unaudited)**ASSETS****Current**Cash
                  and cash equivalents
              
              $
              943Trade
                  receivables, less allowance for doubtful accounts of $35,500
              
              
              635,169Inventories
              
              
              158,697Prepaid
                  expenses
              
              
              82,120Miscellaneous
                  receivables
              
              
              35,328Total
                  current assets
              
              
              912,257**Property,
                  equipment, and leasehold****improvements**,
                  net of accumulated depreciation of $692,696
              
              
              106,311**Capitalized
                  software development costs**,net
                  of accumulated amortization of $1,761,511
              
              
              91,640**Other
                  assets**Deferred
                  offering costs
              
              
              559,835Other
              
              
              27,939Total
                  other assets
              
              
              587,774$
              1,697,982


**LIABILITIES
                    AND STOCKHOLDERS’ EQUITY (DEFICIT)****Current
                    liabilities**Notes
                    payables - related parties
                
                $
                45,247Accounts
                    payable
                
                
                521,461Accrued
                    expenses
                
                
                114,296Deferred
                    income
                
                
                249,379Total
                    current liabilities
                
                
                930,383**Long
                    term liabilities**Line
                    of credit - related party
                
                
                362,000Total
                    liabilities
                
                
                1,292,383**Commitments
                    and contingencies**(Notes
                    4 through 7)**Stockholders’
                    equity (deficit)**Common
                    stock, 80,000,000 shares authorized;10,699,312
                    shares issued and outstanding
                
                
                3,058,510Additional
                    paid-in capital
                
                
                291,462Accumulated
                    deficit
                
                
                (2,906,824
                )Unearned
                    stock compensation
                
                
                (11,791
                )Common
                    stock to be redeemed
                
                
                (25,758
                )Total
                    stockholders’ equity (deficit)
                
                
                405,599Total
                    liabilities and stockholders’equity
                    (deficit)
                
                $
                1,697,982
   -3-
 CENTERGISTIC
          SOLUTIONS, INC.
 Condensed
          Consolidated Statements of Operations
 For
        the
        Three Months Ended September 30, 2005 and 2004 (Unaudited)




**2005**
                
                **2004****Revenues:**
                
                **(Unaudited)**Software
                    and service revenues
                
                $
                520,926
                
                $
                725,008Professional
                    services
                
                
                9,000
                
                
                16,560Hardware
                    sales
                
                
                137,400
                
                
                77,783Total
                    revenues
                
                
                667,326
                
                
                819,351**Cost
                    of revenues:**Software
                    and service costs
                
                
                112,689
                
                
                104,808Professional
                    services
                
                
                —
                
                
                4,780Hardware
                    costs
                
                
                101,561
                
                
                72,672Total
                    cost of revenues
                
                
                214,250
                
                
                182,260Gross
                    profit
                
                
                453,076
                
                
                637,091**Operating
                    expenses:**Selling
                    and marketing
                
                
                140,914
                
                
                182,326Research
                    and development
                
                
                82,872
                
                
                104,643General
                    and administrative
                
                
                371,163
                
                
                465,692Total
                    operating expenses
                
                
                594,949
                
                
                752,661**Operating
                    loss**
                
                
                (141,873
                )
                
                (115,570
                )**Other
                    expense**
                
                
                (857
                )
                
                (2,158
                )**Interest
                    expense**
                
                
                (9,929
                )
                
                (737
                )**Net
                    loss**
                
                $
                (152,659
                )
                $
                (118,465
                )Basis
                    and diluted net loss per share
                
                $
                (0.01
                )
                $
                (0.01
                )Weighted-average
                    number ofcommon
                    shares outstanding
                
                
                10,699,312
                
                
                10,128,315








-4-


CENTERGISTIC
      SOLUTIONS, INC.


Condensed
      Consolidated Statements of Cash Flows


For
      the
      Three Months Ended September 30, 2005 and 2004 (Unaudited)




**2005**
                
                **2004****(Unaudited)****Cash
                    flows from operating activities**Net
                    loss
                
                $
                (152,659
                )
                $
                (118,465
                )Adjustments
                    to reconcile net loss tonet
                    cash used by operating activities:Depreciation
                    and amortization
                
                
                38,711
                
                
                66,126Provision
                    for doubtful accounts
                
                
                5,000
                
                
                (6,052
                )Stock
                    compensation
                
                
                1,863
                
                
                1,863Increase
                    (decrease) from changesin
                    assets and liabilities:Trade
                    receivables
                
                
                (81,254
                )
                
                134,637Inventories
                
                
                (3,561
                )
                
                (22,979
                )Prepaid
                    expenses
                
                
                (18,442
                )
                
                (12,853
                )Miscellaneous
                    receivables
                
                
                (2,578
                )
                
                1,342Accounts
                    payable
                
                
                47,784
                
                
                (22,391
                )Accrued
                    expenses
                
                
                (14,907
                )
                
                (43,456
                )Deferred
                    income
                
                
                67,762
                
                
                (11,271
                )Net
                    cash used by operating activities
                
                
                (112,281
                )
                
                (33,499
                )**Cash
                    flows from investing activities**Purchase
                    of equipment
                
                
                (4,761
                )
                
                (8,713
                )Net
                    cash used by investing activities
                
                
                (4,761
                )
                
                (8,713
                )


**Cash
                      flows from financing activities**Deferred
                      offering costs
                  
                  
                  (5,501
                  )
                  
                  (38,773
                  )Borrowings
                      on long-term debt
                  
                  
                  43,000
                  
                  
                  —Repurchase
                      of common stock
                  
                  
                  —
                  
                  
                  (8,061
                  )Payments
                      received on note receivable
                  
                  
                  —
                  
                  
                  724Net
                      cash provided (used) byfinancing
                      activities
                  
                  
                  37,499
                  
                  
                  (46,110
                  )**Net
                      decrease in cash and cash equivalents**
                  
                  
                  (79,543
                  )
                  
                  (88,322
                  )**Cash
                      and cash equivalents,**beginning
                      of period
                  
                  
                  80,486
                  
                  
                  149,846**Cash
                      and cash equivalents,**end
                      of period
                  
                  $
                  943
                  
                  $
                  61,524*Supplemental
                      Disclosures of Cash Flow**Information:*Cash
                      payments for:Interest
                  
                  $
                  9,353
                  
                  $
                  8,862
  -5-
 **CENTERGISTIC
          SOLUTIONS, INC.**


**Notes
        to Condensed Consolidated Financial Statements**
 *(Information
        with Respect to the Three Months Ended*
 *September
        30, 2005 and 2004 is Unaudited)*




**1.**
              **Organization
                  and Nature of Business**
 
 Centergistic
        Solutions, Inc. (the “Company”) was incorporated in the State of California on
        March 10, 1972.
 
 The
        Company provides integrated information distribution and reporting systems,
        serving both general business and contact center environments. The products
        provide critical information throughout the enterprise to help companies
        improve
        performance and increase personnel productivity.
 
 Affinitec
        Corporation, a wholly owned subsidiary, manufactures and distributes software
        that enables automatic call distribution management system users to obtain
        sophisticated reporting and communications tools to help manage their work
        force, forecast staffing requirements, and schedule their agents.
 
 Substantially
        all of the remaining operations are conducted by the Company’s Mexican
        subsidiary, Centergistic Solutions, S. DE R.L. DE D.V. (formerly known as
        AAC de
        Latin America). The Mexican operations distribute products of its parent,
        as
        well as other telecommunications products from third parties.
 
 
 **2.**
              **Summary
                  of Significant Accounting
                  Policies**
 
 *Basis
        of Presentation*
 
 The
        accompanying unaudited condensed consolidated financial statements as of
        September 30, 2005 and for the three month periods ended September
        30, 2005
        and 2004 have been prepared in accordance with accounting principles generally
        accepted in the United States of America for interim financial information
        and
        in accordance with the instructions per Item 310(b) of Regulation SB.
        Accordingly, they do not include all of the information and footnotes required
        by accounting principles generally accepted in the United States of America
        for
        complete financial statements. In the opinion of management, all adjustments,
        consisting of normal recurring adjustments, considered necessary for a fair
        presentation have been included. Operating results for the three month period
        ended September 30, 2005 are not necessarily indicative of the results that
        may
        be expected for the year ending June 30, 2006. These condensed consolidated
  -6-
 **CENTERGISTIC
              SOLUTIONS, INC.**
 
 **Notes
              to Condensed Consolidated Financial Statements (continued)**
 *(Information
              with Respect to the Three Months Ended*
 *September
              30, 2005 and 2004 is Unaudited)*
   **2.** **Summary
        of Significant Accounting Policies (continued)**
 
 *Basis
        of Presentation (continued)*
 
 financial
        statements and notes thereto should be read with the consolidated financial
        statements for the year ended June 30, 2005 included in the Company’s Form
        10-KSB filed with the Securities and Exchange Commission.
 
 *Principles
        of Consolidation*
 
 The
        accompanying condensed consolidated financial statements as of September
        30,
        2005 and for the three months ended September 30, 2005 and 2004 include the
        accounts of the Company and its wholly owned subsidiaries, Affinitec Corporation
        (“Affinitec”) and Centergistic Solutions, S. DE R.L. DE D.V. (“Centergistic
        Solutions - Mexico”). All significant intercompany accounts and transactions
        have been eliminated.
 
 *Management’s
        Plans / Liquidity*
 
 During
        the three months ended September 30, 2005, the Company incurred a net loss
        of
        $152,659 and an operating loss of $141,873, which includes depreciation and
        amortization of $38,711, and, as of September 30, 2005, the Company had a
        working capital deficit of $18,126. The Company demonstrated costs reductions
        during the three months ended September 30, 2005, as operating expenses fell
        to
        $594,949 from $752,661 in the prior period. This was achieved primarily through
        headcount reductions and wage concessions. The Company will continue to reduce
        operating expenses while working to improve sales and revenue. The Company
        anticipates revenue growth through targeted sales and marketing efforts and
        the
        addition of strategically placed sales personnel. The Company expects an
        increasing software sales trend through the remainder of this fiscal year,
        which
        should begin to produce operating profits in subsequent quarters of this
        fiscal
        year.
 
 Additionally,
        the Company has signed a letter of intent with an underwriter for the purpose
        of
        a private placement debt/equity conversion offering of $3,000,000, which
        is
        anticipated to commence in the second quarter of fiscal year 2006. While
        there
        is no assurance such an offering will be successful, the Company has seen
        interest in the offering in the marketplace and anticipates the proceeds
        will be
        raised. However, the Company has created several different cost cutting measures
        and will reduce expenses as necessary should the offering not be successful
        and
        operating conditions necessitate such actions.
  -7-
 **CENTERGISTIC
              SOLUTIONS, INC.**
 
 **Notes
              to Condensed Consolidated Financial Statements (continued)**
 *(Information
              with Respect to the Three Months Ended*
 *September
              30, 2005 and 2004 is Unaudited)*
  **2.** **Summary
        of Significant Accounting Policies (continued)**
 
 *Management’s
        Plans / Liquidity (continued)*
 
 On
        November 30, 2004, the Company entered into a line of credit agreement with
        Venture Communications Corporation, a shareholder and related party. The
        terms
        of the agreement call for a maximum advance of $300,000 secured by a lien
        on all
        the assets of the Company. The maximum amount under the line was subsequently
        increased to $400,000 on March 31, 2005. The Company believes that this line
        of
        credit will provide sufficient working capital to sustain operations through
        the
        remainder of the fiscal year. The expiration date of this line of credit
        is July
        1, 2007.
 
 *Segment
        Reporting*
 
 The
        Company adopted Statement of Financial Accounting Standard (“SFAS”) No. 131,
“Disclosures About Segment of an Enterprise and Related Information,” beginning
        July 2003. SFAS No. 131 establishes standards for the way to report information
        about operating segments and related disclosures about products and services,
        geographic areas, and major customers in financial statements. As of and
        for the
        three months ended September 30, 2005, the Company views its operations and
        manages its business in two segments: Centergistic Solutions and Centergistic
        Solutions - Mexico.
 
 The
        following represents the total assets by segment:
 
 September
                  30, 2005Centergistic
                  Solutions
              
              $
              4,196,307Centergistic
                  Solutions - Mexico
              
              
              585,0934,781,400Eliminations
              
              
              (3,083,418
              )Total
                  consolidated assets
              
              $
              1,697,982
 
 The
        following represents the revenues, gross profit and net income (loss) by
        segment:
 
 Three
                  Months EndedSeptember
                  30,2005
              
              2004Centergistic
                  SolutionsRevenues
              
              $
              412,311
              
              $
              566,060Gross
                  profit
              
              $
              310,750
              
              $
              488,609Net
                  income (loss)
              
              $
              (113,402
              )
              $
              (134,887
              )
  -8-
 **CENTERGISTIC
                SOLUTIONS, INC.**
 
 **Notes
                to Condensed Consolidated Financial Statements (continued)**
 *(Information
                with Respect to the Three Months Ended*
 *September
                30, 2005 and 2004 is Unaudited)*
 2.Summary
          of Significant Accounting Policies (continued)
 
 *Segment
        Reporting (continued)*
  Centergistic
          Solutions - Mexico
 Revenues
                
                $
                255,015
                
                $
                253,291Gross
                    profit
                
                $
                142,326
                
                $
                148,482Net
                    income (loss)
                
                $
                (39,257
                )
                $
                16,422
 
 *Net
        Loss Per Share*
 
 In
        accordance with the provisions of SFAS No. 128, “Earnings Per Share,” the
        Company is required to disclose basic and diluted earnings (loss) per share.
        Basic earnings (loss) per share is computed by dividing net income (loss),
        by
        the weighted average number of common shares outstanding during each period.
        Diluted earnings (loss) per share is similar to basic earnings (loss) per
        share,
        except that the weighted average number of common shares outstanding is
        increased to reflect the dilutive effect of potential common shares, such
        as
        those issuable upon the exercise of stock or warrants, as if they had been
        issued.
 
 For
        all
        periods presented, there is no difference between basic and diluted loss
        per
        common share, as the effects of stock options or warrants are anti-dilutive,
        given the net loss applicable to common shares for each period.
 
 *Concentrations*
 
 Financial
        instruments that potentially subject the Company to concentrations of credit
        risk consist principally of temporary cash investments and trade accounts
        receivable.
 
 The
        Company maintains its cash balances at financial institutions that management
        believes possess high-credit quality, and related cash balances are insured
        by
        the Federal Deposit Insurance Corporation up to $100,000 and the Securities
        Investor Protection Corporation up to $500,000. At September 30, 2005, the
        Company did not have any amounts held in the bank in excess of federally
        insured
        limits.
 
 Management
        believes that concentrations of credit, with respect to trade receivables,
        are
        minimized by the Company’s customer base. As of September 30, 2005, the
        Company’s largest customer accounted for 18% of total trade receivables. For
        each of the three months ended September 30, 2005 and 2004, the Company’s
        largest customer accounted for 25% and 24% of total Company net revenues,
        respectively. There were no other customers that exceeded 10% of such amounts
        as
        of each respective period-end.
  -9-
 **CENTERGISTIC
              SOLUTIONS, INC.**
 
 **Notes
              to Condensed Consolidated Financial Statements (continued)**
 *(Information
              with Respect to the Three Months Ended*
 *September
              30, 2005 and 2004 is Unaudited)*
  
 **2.** **Summary
        of Significant Accounting Policies (continued)**
 
 *Concentrations
        (continued)*
 
 As
        of
        September 30, 2005, customers of the Company’s Mexican subsidiary accounted for
        53% of total trade receivables. For each of the three months ended
        September 30, 2005 and 2004 sales to customers of the Company’s Mexican
        subsidiary account for 38% and 31%, respectively, of total Company net revenues.
 
 *Deferred
        Offering Costs*
 
 The
        Company has engaged the services of investment bankers to assist with the
        potential funding of future operations through private investors. As of
        September 30, 2005, the Company capitalized a net amount of $559,835 for
        these
        services and such are included in the accompanying condensed consolidated
        balance sheets as deferred offering costs. These capitalized deferred offering
        costs relate to a pending equity transaction. There can be no assurance that
        the
        Company will receive funding from private investors. If the Company is able
        to
        receive private funding, the deferred offering costs will be offset against
        the
        proceeds received; otherwise, such will be expensed when the offering efforts
        are terminated.
 
 *Accounting
        for Stock-based Compensation*
 
 The
        Company has adopted SFAS No. 123, “Accounting for Stock-based Compensation,” as
        amended by SFAS No. 148, “Accounting for Stock-based Compensation-Transition and
        Disclosure,” which establishes financial accounting and reporting standards for
        stock-based compensation. SFAS No. 123 generally suggests, but does not require,
        stock-based employee compensation transactions be accounted for based on
        the
        fair value of the consideration received, or the fair value of the equity
        instruments issued, whichever is more reliably measurable. Companies that
        do not
        elect to change their accounting for stock-based employee compensation are
        required to disclose the effect on net income as if the provisions of SFAS
        No.
        123 were followed. The Company has decided to retain the provisions of APB
        Opinion No. 25, and related interpretations thereof, for recognizing stock-based
        employee compensation expense, which includes members of the board of directors.
        Non-employee stock compensation is recorded at fair value in accordance with
        SFAS No. 123.
 
 In
        accordance with APB Opinion No. 25, the Company has incurred compensation
        cost aggregating $71,295 through September 30, 2005 for stock option grants,
        of
        which $1,863 was recognized during the three-month periods ended September
        30,
        2005 and 2004. Had compensation cost for the stock-based compensation plan
        been
        determined based on the fair value of awards (the method described in SFAS
        No.
        123), the reported net loss would have been as shown below:
  -10-
 **CENTERGISTIC
              SOLUTIONS, INC.**
 
 **Notes
              to Condensed Consolidated Financial Statements (continued)**
 *(Information
              with Respect to the Three Months Ended*
 *September
              30, 2005 and 2004 is Unaudited)*
  
 **2.** **Summary
        of Significant Accounting Policies (continued)**
 
 *Accounting
        for Stock-based Compensation (continued)*
 
 Three
                  MonthsEnded
                  September 30,2005
              
              2004Net
                  loss, as reported
              
              $
              (152,659
              )
              $
              (118,465
              )Add:
                  Stock compensation expense recorded in accordance with APB Opinion
                  No.
                  25
              
              
              1,863
              
              
              1,863Deduct:
                  Total stock-based employee compensation expense determined under
                  fair
                  value based method for all stock options, net of related tax
                  effects
              
              
              (4,318
              )
              
              (9,811
              )Pro
                  forma net loss
              
              $
              (155,114
              )
              $
              (126,413
              )Pro
                  forma net loss per share
              
              $
              (0.01
              )
              $
              (0.01
              )
 
 The
        fair
        value of each grant is estimated at the grant date using the following
        assumptions: no stock price volatility; no dividends for all years; risk-free
        interest rates of 4.75% and 2.75% for the three month periods ended September
        30, 2005 and 2004, respectively, and expected lives of ten years for all
        grants.
 
 *Revenue
        Recognition*
 
 The
        Company typically provides bundled software and services through a distributor
        network. Each component of a bundled solution is separately identified based
        upon vendor specific objective evidence. The components of revenue are
        recognized as follows:
 
 §
              Software
                  license fees for site licenses and master license agreements are
                  recognized as revenue upon delivery of the software, and when remaining
                  obligations are not significant. The Company’s software licensing
                  agreement provides the customer with a 90-day warranty and return
                  provision, including a limited time to test the software. If the
                  customer
                  can prove that the software is not functioning, the Company has
                  the
                  opportunity to remedy the problem and, if not resolved, the customer
                  may
                  return the software. The Company considers the need for a reserve
                  for
                  warranty and returns on a quarterly basis; however, such occurrences
                  have
                  historically not been
                  significant.
  -11-
 **CENTERGISTIC
              SOLUTIONS, INC.**
 
 **Notes
              to Condensed Consolidated Financial Statements (continued)**
 *(Information
              with Respect to the Three Months Ended*
 *September
              30, 2005 and 2004 is Unaudited)*
  
 **2.** **Summary
        of Significant Accounting Policies (continued)**
 
 *Revenue
        Recognition (continued)*
 
 §
              Advance
                  contract payments for software services, consisting primarily of
                  software
                  maintenance and support, are recorded as deferred income until
                  the
                  services are provided. After the expiration of the software license
                  warranty period, the Company commences recognition of the contract
                  payments ratably over the term of the maintenance period. All subsequent
                  software maintenance and support is billed separately and recognized
                  ratably over the life of the maintenance period.
 
 §
              Revenues
                  from software sold to distributors are recognized upon delivery
                  since
                  title passes upon delivery. The distributor is subject to a restocking
                  fee
                  of 10%-25% if an order is returned; however, historically, such
                  returns
                  have been insignificant. Special orders are
                  non-cancelable.
 
 §
              Software
                  and service revenues include services related to maintenance, time
                  and
                  materials contracts, installation and training. Such revenues are
                  recognized as the services are
                  rendered.
 
 §
              Revenues
                  from the sale of computer and display hardware are recognized upon
                  shipment, which is generally concurrent with the passage of
                  title.
 
 §
              Professional
                  services revenues are derived from the services provided by the
                  Company’s
                  consulting business. Such revenues are recognized as the services
                  are
                  rendered.
 
 **3.**
              **Capitalized
                  Software Development Costs**
 
 Research
        and development, which includes design, development, and testing of new
        software, software maintenance, and enhancement costs, is expensed as incurred
        until technological feasibility has been established for the product.
        Technological feasibility is defined as a completion of detail program design.
        Thereafter, certain costs, such as coding and testing, are capitalized until
        the
        product is available for general release to customers.
 
 Software
        costs are amortized on a product-by-product basis using the straight-line
        method
        over the remaining estimated economic life of the software product, which
        is
        typically three to five years. Actual future sales and remaining economic
        life
        of the product could differ significantly from these estimates. Amortization
        of
        software costs for the three months ended September 30, 2005 and 2004 was
        $22,000 and $24,000, respectively, and is included general and administrative
        expenses in the accompanying condensed consolidated statements of operations.
 -12-
 **CENTERGISTIC
              SOLUTIONS, INC.**
 
 **Notes
              to Condensed Consolidated Financial Statements (continued)**
 *(Information
              with Respect to the Three Months Ended*
 *September
              30, 2005 and 2004 is Unaudited)*
  
 **3.**
              **Capitalized
                  Software Development Costs
                  (continued)**
 
 The
        following describes the components of capitalized software development costs
        as
        of September 30, 2005 and the related estimated lives:
 Date
                    TechnologicalFeasibility
                
                EstimatedEstablished
                
                LifeCenterStats
                
                
                December
                    2001
                
                
                5
                    yearsAgentView
                
                
                June
                    1999
                
                
                5
                    years
 
 The
        following summarizes the costs capitalized by product as of September 30,
        2005:
  CenterStats
              
              $
              398,998AgentView
                  (fully amortized)
              
              
              307,476Fully
                  amortized products
              
              
              1,146,6771,853,151Accumulated
                  amortization
              
              
              (1,761,511
              )$
              91,640
 
 **4.**
              **Related
                  Party Borrowings**
 
 On
        November 30, 2004, as amended on March 31, 2005, the Company entered into
        a line
        of credit agreement with Venture Communications Corporation, a shareholder
        and
        related party. The terms of the agreement call for a maximum advance of $400,000
        secured by a lien on all the assets of the Company. Interest on the advances
        are
        payable monthly at 10% per annum. Advances and unpaid interest on the line
        are
        due on July 1, 2007. Advances on the line are personally guaranteed in equal
        amounts by the President/CEO and Vice President/COO/CFO of the Company. The
        balance of the line at September 30, 2005 is $362,000.
 
 On
        December 31, 2002, the Company entered into two notes payable to two of its
        officers for an aggregate $24,975. Such notes bear interest at 6% and the
        principal and interest are due and payable on demand. These notes are secured
        by
        all of the assets of the Company.
 
 In
        April
        2004, the Company entered into a note payable with an employee of the Company
        for $5,000. The note bears interest at 6% and the principal and interest
        are due
        on demand. The note is secured by all of the assets of the Company.
 
 -13-
 **CENTERGISTIC
              SOLUTIONS, INC.**
 
 **Notes
              to Condensed Consolidated Financial Statements (continued)**
 *(Information
              with Respect to the Three Months Ended*
 *September
              30, 2005 and 2004 is Unaudited)*
   **4.**
                **Related
                    Party Borrowings
                    (continued)**
 
 In
          July
          2003, the Company agreed to purchase 148,328 shares of Company common stock
          from
          a former employee for $44,220 and issued a secured promissory note payable
          in
          such amount. The note bears interest at 5% per annum, and monthly payments
          in
          the amount of $2,750 are due and payable on the note commencing after September
          30, 2003. As each payment is made, the Company cancels and retires 8,728
          shares.
          Payment of the note is secured by substantially all of the Company’s assets. The
          balance of the note at September 30, 2005 is $12,574.
 
 **5.**
              **Commitments
                  and Contingencies**
 
 *Consulting
        Agreement*
 
 As
        of
        October 1, 2003, the Company entered into an Independent Consulting Agreement
        (the “Agreement”) with a firm whereby the firm is to assist the Company in the
        listing of its shares on a stock exchange, the sale of its business or other
        debt or equity financings. Pursuant to the Agreement, the Company is obligated
        to pay a success fee of up to $37,500 in stock upon receipt by the Company
        of up
        to $3,000,000 in aggregate financing under the terms of the Agreement.
 
 *Off-Balance
        Sheet Arrangement*
 
 The
        Company provides indemnifications of varying scope and size to certain customers
        against claims of intellectual property infringement made by third parties
        arising from the use of the Company’s products. Management evaluates estimated
        losses for such indemnifications under SFAS No. 5, “Accounting for
        Contingencies,” as interpreted by FASB Interpretation No. 45, “Guarantor’s
        Accounting and Disclosure Requirements for Guarantees.” Management considers
        such factors as the degree of probability of an unfavorable outcome and the
        ability to make a reasonable estimate of the amount of the loss. As of September
        30, 2005, the Company has not encountered material costs as a result of such
        obligations and has not accrued any liabilities related to such indemnifications
        in the accompanying condensed consolidated financial statements.
 
 **6.**
              **Stockholders’
                  Equity**
 
 *Stock
        Option Plans*
 
 The
        stockholders of the Company have approved the Centergistic Solutions, Inc.
        Incentive Stock Option Plan (the “Plan”), which provides for the issuance of up
        to 2,800,000 shares of its common stock. Options granted under the Plan are
        not
        exercisable until two years after they are issued and expire ten years after
        the
        date of issue. The options vest at a rate of 25% per year over a four-year
        period. At September 30, 2005, 471,000 shares were available for grant under
        the
        terms of this Plan.
  -14-
 **CENTERGISTIC
              SOLUTIONS, INC.**
 
 **Notes
              to Condensed Consolidated Financial Statements (continued)**
 *(Information
              with Respect to the Three Months Ended*
 *September
              30, 2005 and 2004 is Unaudited)*
  **6.** **Stockholders’
        Equity (continued)**
 
 *Stock
        Option Plans (continued)*
 
 In
        January 1998, the stockholders of the Company approved a nonqualified stock
        option plan for the directors of the Company. The plan provides for issuance
        of
        up to 800,000 shares of its common stock to directors. Options are granted
        based
        on attendance at board meetings. At September 30, 2005, 496,000 shares were
        available for grant under the terms of this plan.
 
 A
        summary
        of the status of the plans, and changes during the three months ended
        September 30, 2005 is as follows:
 
 Fixed
                  Options
              
              Shares
              
              Weighted
                  Average Exercise
                PriceOutstanding
                  at beginningof
                  period
              
              
              2,623,400
              
              $
              0.53Expired
              
              
              —
              
              
              —Granted
              
              
              9,600
              
              
              0.36Outstanding
                  at end of period
              
              
              2,633,000
              
              $
              0.53Exercisable
                  at end of period
              
              
              1,641,000
              
              $
              0.60Weighted
                  average fair value of options granted during the period
              
              
              
              
              $
              0.13
 
 A
        summary
        of stock options outstanding at September 30, 2005 is as follows:
 
 Options
                  Outstanding
              
              Options
                  ExercisableFixed
                  Options
              
              Number
                Outstanding
              
              Weighted
                  Average Remaining Contractual Life
              
              Weighted
                  Average Exercise Price
              
              NumberExercisable
              
              Weighted
                  Average ExercisePrice$0.30
                  to $0.47
              
              
              1,420,200
              
              
              7.72
              
              $
              0.39
              
              
              428,200
              
              $
              0.37$0.52
                  to $0.79
              
              
              1,212,800
              
              
              2.45
              
              
              0.69
              
              
              1,212,800
              
              
              0.692,633,000
              
              
              
              
              $
              0.53
              
              
              1,641,000
              
              $
              0.60
 
 
  -15-
 **CENTERGISTIC
              SOLUTIONS, INC.**
 
 **Notes
              to Condensed Consolidated Financial Statements (continued)**
 *(Information
              with Respect to the Three Months Ended*
 *September
              30, 2005 and 2004 is Unaudited)*
  **6.** **Stockholders’
        Equity (continued)**
 
 *Common
        Stock Purchase Warrants*
 
 In
        conjunction with a subordinated debt financing with a related party in 1998,
        the
        Company issued warrants to purchase 480,000 shares of common stock at $0.676
        per
        share, which are exercisable at any time prior to September 2005. All of
        these
        warrants expired in September 2005. In connection with the agreement to sell
        the
        rights to the proceeds from an outstanding lawsuit in fiscal year 2001, the
        Company issued warrants (the “Fiscal 2001 Warrants”) to purchase 4,528,000
        shares of common stock at $0.4375 per share, which were exercisable at any
        time
        prior to September 2005. Pursuant to the terms of the Fiscal 2001 Warrants,
        should the Company issue a warrant or stock option to any person or entity
        who
        is not an employee, director or consultant of the Company providing for an
        exercise price of less than $0.654 per share, then the exercise price of
        the
        Fiscal 2001 Warrants shall be reduced to 110% of the lowest such exercise
        price
        (the “Anti-dilution Provision”). In accordance with the provisions of SFAS No.
        123, the value of the lawsuit warrants was estimated to be $101,332. All
        of
        these warrants expired in September 2005.
 
 In
        connection with the line of credit agreement (Note 4), the Company issued
        warrants to its President/CEO and Vice President/COO/CFO to purchase 111,110
        shares of common stock at $0.36 per share, which are exercisable any time
        prior
        to January 2010. All of these warrants were outstanding as of September 30,
        2005.




-16-





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





**A
      NOTE ABOUT FORWARD-LOOKING STATEMENTS**





The
      statements, other than statements of historical fact, included in this report
      are forward-looking statements.  Forward-looking statements generally
      can
      be identified by the use of forward-looking terminology such as
“may,”“will,”“expect,”“intend,”“estimate,”“anticipate,”“plan,”“seek,” or
“believe.”  We believe that the expectations reflected in such
      forward-looking statements are accurate.  However, we cannot assure
      you
      that such expectations will occur.  Our actual future performance could
      differ materially from such statements. These forward-looking statements are
      subject to risks and uncertainties that could cause actual results and events
      to
      differ materially. For a detailed discussion of these risks and uncertainties
      please see the “Factors That May Affect Future Results” section of this report.
      You should not unduly rely on these forward-looking statements, which speak
      only
      as of the date of this report.  Except as required by law, we are not
      obligated to release publicly any revisions to these forward-looking statements
      to reflect events or circumstances occurring after the date of this report
      or to
      reflect the occurrence of unanticipated events.




**General**




We
      are a provider of business performance and intelligence management software
      that
      enables companies to translate data into critical and meaningful metrics
      allowing for improved financial and operational performance. Our software
      provides managers with customizable reporting and analysis tools. These tools
      allow for real-time monitoring of and reporting against crucial benchmarks
      in an
      organization. This enables constant monitoring of a company’s progress against
      financial and operational goals, and helps achieve optimal operational
      performance.




Business
      performance and intelligence management software uses historical and real-time
      data and metrics to provide managers with visibility on the business operations
      in real-time. We provide call/contact center managers with powerful reporting
      and analytic tools allowing the constant monitoring of the operational
      effectiveness and efficiency. While our current market focus is on the
      call/contact center, we offer software to all operational areas of the
      enterprise to gauge performance and profitable improvement. We also offer
      consulting, training, technical support and programming services for our
      customers and partners.




Our
      company operates through its domestic headquarters and our wholly-owned Mexican
      subsidiary located in Mexico City, Mexico. Our domestic operation sells
      AgentView, CenterStats, the related hardware necessary to run these applications
      or display statistics derived from these applications, training and educational
      services, installation, custom programming and support services.




Centergistic
      Solutions, Inc., Inc. was incorporated in Los Angeles, California on
      March 13, 1972. Centergistic Solutions, Inc. Latina America S. de R.L.
      de
      C.V., a limited liability partnership, was formed in Mexico City, Mexico on
      May 19, 2000. This partnership was a successor to Centergistic Solutions,
      Inc. Latina America S.A. de C.V., a Mexican corporation originally formed
      July 1, 1993.




Our
      Mexican subsidiary acts as a distribution company selling our AgentView and
      CenterStats products along with other vendor sourced products to a variety
      of
      distributors and end-users in Latin and South America. They also sell training
      and educational services, installation and product support packages.





In
      2001, we completed development on our main product, CenterStats. During fiscal
      year (“FY”) 2002 and 2003, we devoted what little internally generated capital
      was available (approximately $100,000 in each of these fiscal years) to actively
      promote, market, and sell CenterStats. The money was spent on a salesperson
      focusing on selling CenterStats, and various marketing initiatives intended
      to
      promote market awareness of CenterStats. However, due to limited resources,
      we
      have never conducted a formal product launch and kickoff for CenterStats. In
      addition, during FY 2002 and 2003, there has been a global economic slowdown,
      and particularly, a decrease in corporate spending on infrastructure and
      technology. These factors have had an adverse impact on our ability to market
      and sell CenterStats, as well as the results of our operations.




We
      face several significant challenges common in our industry: continued revenue
      growth; market segment risk; technological changes; and liquidity and capital
      resources.




We
      face challenges in growing our revenues because our CenterStats product has
      not
      been installed in a large number of clients to date, and has not achieved wide
      customer acceptance due to limited marketing and sales activities. We are
      dependent upon the sale of CenterStats to substantially grow our revenues.
      We
      have developed a sales and marketing plan to achieve this revenue growth, but
      need capital necessary to implement the plan.




We
      currently sell our products and services into the call/contact center market.
      We
      generally sell in two different types of environments. In one instance, our
      products are part of a bundled sale at the time of a new call/contact center
      purchase and installation. We are dependent on our distributors for a majority
      of these types of sales. In the other instance, we sell to established
      call/contact centers that perceive a lack of data, statistics, and metrics
      to
      effectively manage and monitor the performance of their centers. We generate
      revenue in this arena through both direct end-user sales and distribution
      channel sales. We face challenges that our distributors could find new sources
      of this type product or even internally develop their own product. We also
      face
      challenges that the call/contact center market undergoes significant changes,
      restructuring, contraction, or evolution into different technologies.







-17-




We
      are subject to a rapidly changing technological environment. Our ability to
      keep
      current with the demands of technology is critical to our success. Each time
      the
      data flow of a particular application in the call/contact center changes or
      new
      applications are created, we must be able to retrieve that data. Our products
      must be changed also so that we may retrieve that data. If we cannot continue
      to
      stay atop the technology curve, we will not be able to compete effectively
      in
      this market space. To combat this challenge, we have developed technology
      partnerships with many of the industry application providers such as Avaya,
      Cisco, Concerto, Genesys, Microsoft, and Nortel to name a few. These
      partnerships allow us the environment to test our products and certify that
      our
      products work with a specific vendor application and to get updates as their
      technology changes.




**Current
      Conditions**




In
      May 2003 we opened a development center in Delhi, India. We hired three
      developers and currently have a staff of five. India was chosen as the site
      of
      our center because of its available base of skilled and technological competent
      developers and a lower cost structure. We plan to increase the staffing level
      to
      ten upon a successful raise of capital. Primarily, these developers will develop
      interfaces to enable our products to work with “best of breed” call/contact
      center applications. Best-of-Breed (BOB) software can be defined as the use
      of a
      specific software program or package for each specific application or
      requirement. Many companies prefer, as policy, to incorporate a Best-of-Breed
      software approach to make sure they are using the most highly developed and
      tested solution for each application. The India development center currently
      costs approximately $5,000 to $6,000 per month to maintain.




We
      derive a substantial portion of our revenues from sales to customers in Mexico,
      Latin America and South America. For the three month periods ended
      September 30, 2005 and 2004, these customers represented approximately
      38%
      and 31%, respectively, of our total net revenues.







Our
      revenues in these countries are derived from our subsidiary, Centergistic
      Solutions, Inc. Latin America S. R. L. de C.V., a limited liability partnership.
      Its office is located in Mexico City and houses 18 employees. This company
      acts
      primarily as a distributor, selling our AgentView and CenterStats products
      along
      with others sourced from third party vendors such as PC call accounting,
      voicemail products, data collection devices, and LED display boards. This
      company sells its products primarily to companies such as Avaya, Siemens and
      Alcatel.




On
      September 30, 2003, we completed a private funding round of convertible
      promissory notes. The gross proceeds generated from this raise was $490,000,
      the
      net cash received was $460,000. The proceeds were used to begin to implement
      our
      sales and marketing plan for bringing CenterStats to the market and to pay
      the
      fees and costs associated with the preparation and processing of a registration
      statement filed with the SEC relating to a selling stockholder offering. We
      used
      $100,000 towards the implementation of our sales and marketing strategy. The
      remaining $360,000 was used as follows: $100,000 for accounting fees and related
      services, $100,000 for consulting and advisory fees, $65,000 for principal
      payments of notes payable, $55,000 for legal fees, $20,000 for printing expenses
      (including EDGARizing expenses) and $20,000 for general working capital.







On November 30, 2004, we entered into a line of credit agreement with Venture
      Communications Corporation, a shareholder and related party. The terms of the
      agreement call for a maximum advance of $300,000 secured by a lien on all the
      assets of the Company. On March 31, 2005, the maximum amount under this line
      was
      increased to $400,000. The due date of the line is July 1, 2007. Advances on
      the
      line are personally guaranteed in equal amounts by the President/CEO and Vice
      President/COO/CFO of the Company. We believe that this line of credit will
      provide sufficient working capital to sustain operations through the remainder
      of the fiscal year.







We
      intend
      to raise up to an additional $3,000,000 in a private offering. If this raise
      is
      successful, as to which there is no assurance, those proceeds will be used
      to
      more fully implement our sales and marketing strategy. We intend to begin the
      capital raise in our second quarter of fiscal year 2006. This capital raise
      is
      critical to the implementation of our sales and marketing strategy described
      in
      this report. If the raise is not successful, management has created several
      cost
      cutting strategies and will implement them as business conditions necessitate.







We
      must have capital to successfully implement our sales and marketing strategy.
      We
      are not likely to see significant revenue growth without the sales and marketing
      activities we intend to initiate with the proceeds of our intended capital
      raise.




**Critical
      Accounting Policies**




The
      preparation of financial statements in conformity with accounting principles
      generally accepted in the United States requires management to make estimates
      and assumptions that affect the reported amounts of assets, liabilities and
      equity and disclosure of contingent assets and liabilities at the date of the
      financial statements and the reported amounts of revenue and expenses during
      the
      reported period. Actual results may differ from these estimates under different
      assumptions or conditions.







-18-


******


***Revenue
      Recognition***




Our
      revenue recognition policy is significant because revenue is a key component
      of
      our results of operations. We derive our revenue primarily from sales of our
      various products. As described below, significant management judgments and
      estimates must be made and used in connection with revenue recognized in any
      accounting period. If our management makes different judgments or uses different
      estimates, material differences may result in the amount and timing of our
      revenue for any period. We recognize revenue from the sale of our products
      when:




•
            
            we
                have persuasive evidence that an arrangement exists. For all sales,
                we use
                a binding purchase order and sales order confirmation as evidence
                of an
                arrangement. Sales through certain of our distributors are evidenced
                by a
                master agreement governing the relationship, together with binding
                purchase orders on a transaction by transaction basis;•
            
            the
                product is delivered to the customer under the terms of the arrangement
                and title passes. Passage of title generally occurs when the product
                is
                delivered to a common carrier, but in some cases occurs when the
                customer
                receives the product;•
            
            the
                revenue is fixed and determinable. At the time of the transaction,
                we
                assess whether the fee associated with our revenue transactions is
                fixed
                and determinable based on the payment terms associated with the
                transaction. If a significant portion of a fee is due after our normal
                payment terms, which are 30 to 75 days from invoice date,
                then we
                account for the fee as not being fixed and determinable. In these
                cases,
                we recognize revenue as the fees become due; and•
            
            collection
                of the resulting receivable is reasonably assured. We assess collection
                based on a number of factors, including past transaction history
                with the
                customer and the credit-worthiness of the customer. We do not request
                collateral from our customers. If we determine that collection of
                a fee is
                not reasonably assured, then we defer the fee and recognize revenue
                at the
                time collection becomes reasonably assured, which generally is upon
                receipt of cash.




We
      derive revenues from licensing our software products, selling computer and
      display hardware, and providing customer support, training, installation, and
      consulting services. Software license fees for site licenses and master license
      agreements are recognized as revenue upon delivery of the software, and when
      remaining obligations are not significant. Sales to distributors are recognized
      upon delivery as our distributors generally have customer orders in hand before
      ordering from us. Should orders be cancelled, our distributors are subject
      to
      restocking charges of 10%-25% except for custom orders which are
      non-cancellable.




Our
      software licensing agreement provides the customer with certain warranty
      provisions, including a limited time to test the software. If the customer
      can
      prove the software is not functioning, we have the opportunity to remedy the
      problem, and if not resolved, the customer can return the software.
      Historically, returns and warranty costs have not been significant.





Advance
      contract payments for services, consisting primarily of software customer
      support, are recorded as deferred income until after the expiration of the
      software warranty period, at which time the revenue is recognized ratably over
      the term of the maintenance period. All subsequent software support is billed
      separately and recognized ratably over the life of the support period.




Revenue
      from computer and display hardware is recognized upon shipment, and consulting
      service revenue is recognized as services are rendered.




***Allowance
      for Doubtful Accounts***




Our
      management estimates the uncollectability of our accounts receivable for losses
      that may result from the inability of our customers to make required payments.
      Management specifically analyzes accounts receivable and historical bad debts,
      customer concentrations, customer credit-worthiness, current economic trends
      and
      changes in customer payment terms when evaluating the adequacy of the allowance
      for doubtful accounts. If our customers’ financial condition deteriorates such
      that it impairs their ability to make payments to us, additional allowances
      may
      be required. As of September 30, 2005 and June 30, 2005, our accounts
      receivable balances were $635,000 and $559,000, respectively, net of our
      estimated allowances for doubtful accounts of $36,000 and $31,000, respectively.







The
      accounts receivable balance increased during the three month period ended
      September 30, 2005. The Company achieved lower revenue volumes during
      this
      period but several customers with large invoices stretched payments. We do
      expect the accounts receivable balance to grow as we increase our sales of
      CenterStats. The payment cycle on these types of sales will stretch to
      75-90 days from our typical experience of 45-60 days.







We
      have taken steps to address this trend by requiring staged payments on these
      contracts when milestones are completed. We now typically require 25% of the
      contract amount due upon signing, 50 to 65% upon delivery, and the remaining
      balance due 30 days thereafter. We do not expect this trend to
      significantly impact us as we believe revenues will continue to grow
      sufficiently to enable us to generate enough cash flow to sustain operations.




-19-


******


***Capitalized
      Software Development Costs***




We
      account for software development costs in accordance with Statement of Financial
      Accounting Standards (“SFAS”) No. 86, “Accounting for the Costs of Computer
      Software to be Sold, Leased, or Otherwise Marketed.” SFAS No. 86 specifies
      that software development costs incurred internally should be expensed as
      incurred until technological feasibility has been established. Once
      technological feasibility has been established, all software development costs
      should be capitalized until the product is available for general release to
      customers. Technological feasibility is defined as a completion of detail
      program design. There was no capitalization of software costs during the three
      months ended September 30, 2005. Amortization of capitalized software costs
      totaled $22,000 and $24,000 for the three month periods ended September 30,
      2005 and 2004, respectively.







***Long-Lived
      Assets***


**




We
      account for the impairment and disposition of long-lived assets in accordance
      with SFAS No. 144, “Accounting for the Impairment of Disposal of Long-Lived
      Assets.” In accordance with SFAS No. 144, long-lived assets are to be reviewed
      whenever events or changes in circumstances indicate that their carrying value
      may not be recoverable. We review the carrying value of long-lived assets to
      determine whether or not an impairment to such value has occurred. Based on
      our
      analysis at September 30, 2005, there were no indicators of impairment of
      long-lived assets.







***Stock-Based
      Compensation***


**




From
      time to time, we provide compensation in the form of shares of our common stock
      as well as options or warrants to acquire shares of our common stock.







We
      derive the value of rights to acquire our common stock granted to non-employees,
      such as options or warrants, from pricing models that consider current market
      and contractual prices for our stock, as well as time value and yield curve
      or
      volatility factors. Pricing models and their underlying assumptions impact
      the
      amount and timing of unrealized gains and losses we recognize, and use of
      different pricing models or assumptions could produce different financial
      results.







Options
      granted to employees are valued using the intrinsic value method which bases
      compensation on the difference between the market value of the underlying shares
      of common stock and the exercise price at the date of grant.




On
      December 16, 2004, the Financial Accounting Standards Board (FASB) issued FASB
      Statement No. 123 (revised 2004), Share-Based Payment, which is a revision
      of
      FASB Statement No. 123, *Accounting
      for Stock-Based Compensation* .
      Statement 123(R) supersedes APB Opinion No. 25, *Accounting
      for Stock Issued to Employees* ,
      and
      amends FASB Statement No. 95, *Statement
      of Cash Flows* .
      Generally, the approach in Statement 123(R) is similar to the approach described
      in Statement 123. However, Statement 123(R) requires all share-based payments
      to
      employees, including grants of employee stock options, to be recognized in
      the
      income statements based on their fair values beginning with fiscal years
      beginning after December 15, 2005, with early adoption encouraged. The pro
      forma
      disclosures previously permitted under SFAS No. 123 no longer will be an
      alternative to financial statement recognition. Under SFAS No. 123(R), the
      company must determine the appropriate fair value model to be used for valuing
      share-based payments, the amortization method for compensation cost and the
      transition method to be used at date of adoption. The permitted transition
      methods include either retrospective or prospective adoption. Under the
      retrospective option, prior periods may be restated either as of the beginning
      of the year of adoption or for all periods presented. The prospective method
      requires that compensation expense be recorded for all unvested stock options
      at
      the beginning of the first quarter of adoption of SFAS No. 123(R), while the
      retrospective methods would record compensation expense for all unvested stock
      options beginning with the first period presented. The company is currently
      evaluating the requirements of SFAS No. 123(R) and expects that adoption of
      SFAS
      No. 123(R) will have a material impact on the company’s consolidated financial
      position and consolidated results of operations. The company has not yet
      determined the method of adoption or the effect of adopting SFAS No. 123(R),
      and
      it has not determined whether the adoption will result in amounts that are
      similar to the current pro forma disclosures under SFAS No. 123.






**Results
      of Operations for the Three Months Ended September 30, 2005 as Compared to
      the
      Three Months Ended September 30, 2004**






We
      believe there is some relative weakness in the economy in general and corporate
      infrastructure technology spending in specific. We saw decreases in revenue
      in
      almost all lines of business this past quarter, but expect to see improvement
      in
      our revenue as long as corporate infrastructure technology spending remains
      consistent. Our biggest risks continue to be revenue growth, and the capital
      raise necessary to implement our sales and marketing strategy.







-20-


******


***Revenues***




**Three
                  Month Period Ended September 30,****(In
                  thousands)**2005
              
              %
              
              2004
              
              %Centergistic
                  (U.S.)
              
              $
              412
              
              
              61.8
              
              $
              566
              
              
              69.1Mexico
                  and Latin America
              
              $
              255
              
              
              38.2
              
              $
              253
              
              
              30.9Total
              
              $
              667
              
              
              100.0
              
              $
              819
              
              
              100.0




Total
      net revenues decreased by $152,000 or 19% for the three month period ended
      September 30, 2005 (“PE 2005”) as compared to the three month period ended
      September 30, 2004 (“PE 2004”). Revenues from U.S. based operations
      decreased by $154,000 or 27% from the PE 2004. Revenues from Mexico increased
      by
      $2,000 or 1% during PE 2005.




In
      the U.S. based operations, direct sales of AgentView decreased $75,000 or 64%
      compared to PE 2004. The decrease is due to continued weakness in corporate
      infrastructure spending. We are starting to see increased sales activity from
      customers requiring multiple data sources and a high number of agents. This
      will
      help our revenue in the future as one of our AgentView products is priced on
      a
“per agent” basis. We also charge additional amounts for multiple data sources.
      As corporate infrastructure technology spending begins to increase, we will
      expect our revenue to increase.




Distribution
      revenue in the U.S. dropped by $84,000 or 28% from PE 2004. Revenue from our
      largest distributor, Dacon, fell by $33,000 or 17% from PE 2004. We expect
      business from Dacon to increase during the next nine months as we hope to see
      increased volume as an upgrade program will soon be introduced to the British
      Telecom installed base, and an expected roll out of our CenterStats product
      to
      that base as well.







Installation
      and training revenues decreased by $15,000 or 50% from PE 2004 due to the
      decreased sales of AgentView and CenterStats. We expect these revenues to
      increase as more Agent View and CenterStats products are sold.







Mexico
      and Latin America revenues increased by $2,000 or 1% as compared to PE 2004.
      We
      expect to see our revenues begin to steadily improve through the remainder
      of
      our fiscal year, with an improving trend as the Mexican and South American
      economies improve.







**Cost
      of Revenues**






Cost
      of revenues increased to $214,000 or 32% of revenues as compared to $182,000
      or
      22% of revenues in PE 2004. Costs associated with hardware sales increased
      by
      $59,000, accounting for all of the increase. As a more substantial portion
      of
      our revenue over this past three months ended September 30, 2005 was
      derived from hardware sales, our costs related to hardware sales increased
      accordingly. We are at risk of hardware and third party vendors passing on
      price
      increases that will affect our profitability.




****


**Gross
      Profit**







Gross
      profit declined to 68% of revenues in PY 2005, or $453,000, as compared to
      78%,
      or $637,000, in PY 2004. The decline in gross profit percentage is attributable
      to the mix of revenue toward hardware and third-party sourced products from
      software products. We expect to reverse this trend in upcoming quarters as
      we
      sell more AgentView and CenterStats to direct end-users.




**Operating
      Expenses**




*Sales
      and Marketing*







Sales
      and marketing expenses decreased $41,000 or 23% as compared to PE 2004. We
      spent
      less on salaries due to the reduced level of staffing. Salaries were lower
      by
      $30,000 due to the lower staffing levels, and advertising expenses were lower
      by
      $12,000. We face the risk of not having the necessary capital ($3,000,000)
      to
      fully implement our sales and marketing strategy in this and our next fiscal
      year. If we do not receive the capital, we will scale back our implementation
      of
      the sales and marketing strategy, and this will adversely affect our revenue
      and
      profitability in our future fiscal periods.







Our
      strategy will continue to slowly fund our sales and marketing programs by
      investing any cash generated by operations. Absent any outside funding, we
      will
      continue this process for the foreseeable future. However, we are planning
      to
      raise capital through the financing contemplated to begin in the second quarter
      of our fiscal year 2006, and will use the funds to hire sales and marketing
      professionals, development staff, and implement marketing programs for
      CenterStats. We plan to hire up to 10 sales professionals and up to 10
      developers. If we are not successful in raising the capital, we will reduce
      our
      planned hires to the level that can be sustained from our existing operational
      cash flow.




-21-




*General
      and Administrative*





General
      and administrative expenses decreased by $95,000 or 20% as compared to PE 2004.
      We decreased salaries through voluntary wage concession and staffing reductions.
      These savings amounted to $42,000, and we experienced decreased depreciation
      and
      amortization of $30,000. We decreased insurance expenses by $25,000
      by
      changing our employee medical plan to a higher deductible plan. Payroll tax
      expense also decresed by $10,000 due to lower salary expense.







We
      anticipate general and administrative expenses to increase as we add staff
      (mainly employee benefit and related costs). We will eventually have to add
      administrative staff, but do not plan to do so in fiscal year 2006. As we have
      obtained approval for stock trading, our directors and officers insurance
      premiums will rise by $30,000.







*Research
      and Development*







Research
      and development expenses decreased by $22,000 or 21% over the same period as
      last year primarily due to reduced headcount. Salaries decreased by $22,000
      from
      PE 2004.







We
      plan to increase the staffing level to ten upon a successful raise of additional
      capital. Primarily, these developers will develop interfaces to enable our
      products to work with “best of breed” call/contact center applications.




**Other
      (Expense) Income**




The
      interest expense during PE 2005 was related to borrowings on the line of credit.
      We had minimal interest expense during PE 2004.




**Net
      Income (Loss)**




Net
      loss increased to $153,000 as compared to $118,000 in PE 2004, a $35,000 or
      30%
      decline. The decline was primarily due to a decrease in revenue and gross profit
      offset by lower operating expense levels achieved in the quarter.




We
      anticipated generating an operating loss given that we planned to invest any
      excess cash flow back into operations through increased sales and marketing
      and
      development expenditures.




**Liquidity
      and Capital Resources**




Net
      cash used in operating activities was $112,000 and $33,000 in PE 2005 and 2004,
      respectively. The net cash used for operations in PE 2005 was comprised
      primarily the net loss, depreciation and amortization of $39,000, and a net
      decrease in assets and liabilities of $5,000. The net cash used for operations
      in PE 2004 was comprised primarily of the net loss, depreciation and
      amortization of $66,000, and a net increase in assets and liabilities of
      $24,000.




Net
      cash from investing activities used $5,000 in PE 2005 and $9,000 in PE 2004.
      The
      cash used in both period ends were primarily due to purchase of fixed assets.




Net
      cash provided by financing activities was $37,000 in PE 2005 as compared to
      a
      use of $46,000 in PE 2004. The cash provided in PE 2005 came primarily from
      borrowings on long-term debt. The PE 2004 use was primarily due to additions
      to
      deferred offering costs of $39,000.




In
      March 2002, we received two loans from our officers and directors, Ricardo
      Brutocao and David Cunningham. The total of these two loans is $24,975. The
      loans are payable on demand and bear interest at 6%. As of September 30,
      2005, the balance of these loans is $24,975.




In
      July 2003, we agreed to purchase 148,328 shares of our common stock from Al
      Wild, a former employee, for $44,220 and issued our secured promissory note
      payable to Mr. Wild in such amount. Our note bears interest at the rate
      of
      5% per annum, and monthly payments of principal and interest in the amount
      of
      $2,700 are due and payable on the note commencing September 30, 2003.
      As
      each monthly payment is made on our note, we may cancel and retire 8,728 of
      the
      shares. Mr. Wild may cancel our note at any time and elect to receive
      the
      remainder of the shares we purchased from him that have not been cancelled
      and
      retired by us in accordance with our agreement. Payment of our note to Mr.
      Wild
      is secured by all of our assets. We are currently in default under the terms
      of
      this note.




-22-




In
      November 2004, we entered into a line of credit agreement with Venture
      Communications Corporation, a shareholder and related party. The agreement
      calls
      for a maximum advance of $300,000 secured by a lien on all the assets of the
      Company. On March 31, 2005, the maximum amount of borrowings under the line
      was
      increased to $400,000. The due date of the line is July 1, 2007. The balance
      of
      this line at September 30, 2005 was $362,000.




As
      of September 30, 2005, including the results of operations for the three
      months then ended, our working capital was a deficit of $18,000. We believe
      that
      we will be able to convert our accounts receivable into the cash necessary
      to
      continue operations for the balance of fiscal year 2006.




We intend to raise up to an additional $3,000,000 in a private offering
      tentatively commencing in the second quarter of our fiscal year 2006. If this
      raise is successful, as to which there is no assurance, we intend to use the
      proceeds to add sales management and staff, conduct a marketing launch of
      CenterStats, form strategic partnerships with consulting organizations such
      as
      Accenture, EDS, IBM Global Services and Perot Systems, and heavily advertise
      and
      promote our products and services during our next two fiscal years. As of the
      date of this filing, we have not entered into any agreement or had any material
      discussions with any such consulting organizations regarding the formation
      of a
      strategic partnership.




We
      face the risk that we will not be able to raise the necessary capital to fully
      fund our sales and marketing plan. If we are not successful on our $3,000,000
      capital raise, we will have to scale back our plans for the future. This will
      impact our future revenue growth and profitability.







If
      the capital raise is not successful, we will reduce our planned hires to the
      level that can be sustained from our existing operational cash flow. We will
      also scale back our future product launch and marketing of CenterStats to the
      level that they will be funded by operational cash flow. We will also implement,
      necessitated on business conditions, several cost cutting strategies identified
      by management.





We
      have entered into consulting agreements with Hanover Capital and The Bosphorous
      Group. These consultants were hired to act as financial advisors. Hanover
      received 350,000 shares of our common stock for achieving certain milestones.
      The Bosphorous Group agreement calls payment of a success fee upon completion
      of
      certain financing transactions.







We
      currently have not entered into any agreements nor are we currently in
      discussions with any potential merger or acquisition candidate. However, we
      intend to pursue an acquisition strategy upon successful completion of a capital
      raise. As we believe our current market space has a number of relatively small
      companies, our strategy will be to increase market share, customer base, and
      technology by acquiring these companies. We also believe that acquiring certain
      key distributors, thereby securing our sales channels, makes sound business
      sense. We may possibly seek to acquire one or more distributors in the future.




**Factors
      That May Affect Future Results**







**We
      have experienced losses in the past, anticipate losses for the foreseeable
      future and may never achieve profitability.**







We
      incurred a net loss of $153,000 during the three months ended September 30,
      2005, and as of such date our accumulated deficit was $2,907,000. We expect
      that
      our operating expenses will increase significantly as we continue to expand
      our
      business. As a result, we will need to generate significantly more revenues
      from
      sales of our CenterStats product to achieve profitability. We have a limited
      operating history with our CenterStats product and we are not able to estimate
      when, if ever, our revenues will increase sufficiently to cover these expenses.
      We cannot assure you that our revenue will grow in the future or that additional
      capital will be made available to us. If revenues grow slower than we
      anticipate, or if operating expenses exceed our expectations or cannot be
      reduced accordingly, or if we cannot obtain additional capital, our business,
      operating results and financial condition will be materially and adversely
      affected, which could cause our investors to lose all or part of their
      investment in our common stock.


****





-23-




We
      have not generated any significant
      revenues from the sale of our CenterStats product and if we are unable to
      increase sales, our business, operating results and financial condition will
      be
      materially adversely affected.




We
      began
      marketing our CenterStats product in March 2002. Our marketing efforts to date
      have been very limited because we lack sufficient capital to implement our
      sales
      and marketing strategy. Revenues for the three month periods ended
      September 30, 2005 and 2004 were $667,000 and $819,000, respectively.




Our
      future revenues will depend significantly on our ability to penetrate the
      call/contact center or business intelligence software market space. We have
      developed a sales and marketing strategy to achieve revenue growth, but we
      need
      additional capital to implement it. If we are not successful in selling our
      products in our targeted market due to insufficient additional capital or other
      factors including competitive pressures or technological advances by others,
      our
      business, operating results and financial condition will be materially and
      adversely affected.




**We
      need additional capital to implement our current business strategy, which may
      not be available to us, and if we raise additional capital, it may dilute our
      investor’s, ownership in us.**







We
      believe that the proceeds of our anticipated private placement offering,
      together with cash generated from operations, will be sufficient to meet our
      anticipated needs for business expansion, capital expenditures, working capital
      and general corporate purposes for the foreseeable future, but no less than
      a
      period of 12 months after the date of this report. Thereafter, we may need
      to
      raise additional funds.





If
      additional funds are raised through the issuance of equity or convertible debt
      securities, the percentage ownership of our shareholders will be reduced,
      shareholders may experience additional dilution and such securities may have
      rights, preferences and privileges senior to those of the Common Stock and
      may
      have covenants which impose restrictions on our operations. There can be no
      assurance that any necessary additional financing will be available on terms
      favorable to us or at all. If adequate funds are not available or are not
      available on acceptable terms, we may not be able to fund our marketing needs
      or
      expansion, to take advantage of unanticipated acquisition opportunities, to
      develop or enhance services or products or to respond to competitive pressures.
      This inability could have a material adverse effect on our value, prospects,
      business, results of operations and financial condition.




**Our
      quarterly operating results, revenues and expenses may fluctuate significantly
      which could have an adverse effect on the market price of our common stock.**







Our
      operating results, revenues and expenses may fluctuate significantly from
      quarter to quarter due to a variety of factors including:




•
            
            market
                acceptance of our CenterStats product,•
            
            the
                timing, size and execution of orders and shipments,•
            
            lengthy
                and unpredictable sales cycles,•
            
            the
                timing of introduction and market acceptance of new products or product
                enhancements by us or our competitors,•
            
            product
                and price competition,•
            
            the
                relative proportions of revenues derived from license fees and services,•
            
            changes
                in our operating expenses,•
            
            our
                success in increasing our direct sales force,•
            
            our
                success in maintaining relationships with our third-party distributors
                and
                adding new ones, and•
            
            fluctuations
                in general economic conditions.




We
      believe that period-to period comparisons of our results of operations are
      not a
      good indication of future performance. There can be no assurance that future
      revenues and results of operations will not vary substantially. It is also
      possible that in future quarters, our operating results will be below the
      expectations of public market analysts and investors. In that event, the trading
      price of our common stock may fall.




**The
      loss of Dacon PLC as a customer would materially adversely affect our business,
      operating results and financial condition.**




We
      sell a substantial portion of our products to Dacon PLC, which is based in
      the
      United Kingdom and has been a distributor of our products for the past
      12 years. For the three month periods ended September 30, 2005
      and
      2004, Dacon accounted for 25% and 24%, respectively, of net revenues, and 18%
      of
      total trade receivables as of September 30, 2005. The loss of Dacon
      PLC as
      a customer would have a material adverse effect on our business, operating
      results and financial condition.






-24-




**We
      face risks associated with operations in Mexico, Latin America and South America
      which could adversely affect our business, operating results and financial
      condition.**




We
      derive a substantial portion of our revenues from sales to customers in Mexico,
      Latin America and South America. For the three month periods ended
      September 30, 2005 and 2004, these customers represented approximately
      38%
      and 31%, respectively, of our total net revenues.







We
      face certain risks inherent in conducting business internationally, and such
      specific risks in Mexico, Latin America and South America as languages and
      cultural differences, legal and governmental regulatory requirements and
      potential political and economic unrest. Any of these factors could seriously
      harm our ability to generate future revenues from these customers, and,
      consequently, our business, operating results and financial condition.




**We
      operate in a competitive business environment and if we cannot compete
      effectively, we may face price reductions and decreased demand for our products.**







The
      market for our products and services is intensely competitive and subject to
      technological change. Competitors vary in size and in the scope and breadth
      of
      the products and services they offer. We encounter competition from a number
      of
      sources, all of which offer performance management reporting systems to the
      call/contact center market. We expect additional competition from other
      established and emerging companies as the market for performance management
      reporting solutions and complementary products continues to develop and expand.
      We encounter competition in the United States from a number of sources,
      including Symon and Innova, all of which offer performance management reporting
      systems to the call/contact center market. Some of our current, and many of
      our
      potential competitors have longer operating histories, greater name recognition,
      larger client bases and significantly greater financial, engineering, technical,
      marketing and other resources than we do. As a result, these companies may
      be
      able to respond more quickly to new or emerging technologies and changes in
      customer demands or to devote greater resources to the development, promotion
      and sale of their products than we can.




In
      addition, current potential competitors have established or may establish
      cooperative relationships among themselves or with third parties to increase
      the
      ability of their products to address the needs of our prospective customers.
      Accordingly, it is possible that new competitors or alliances among competitors
      may emerge and acquire significant market share. We expect that the call/contact
      center market will continue to attract new competitors and new technologies,
      possibly involving alternative technologies that are more sophisticated and
      cost-effective than our technology. New product introductions by our competitors
      could cause a decline in sales, a reduction in the sales price, or a loss of
      market acceptance of our existing products. There can be no assurance that
      we
      will be able to compete successfully against current or future competitors
      or
      that competitive pressures faced by us will not materially adversely affect
      our
      business, financial condition and results of operations.




**We
      rely in part, on third-party distributors to market and distribute our products,
      and their failure to do so successfully could significantly harm our ability
      to
      maintain and expand our customer base, which would adversely affect our
      operating results and financial condition.**







Our
      sales and marketing strategy includes channels of third party distributors.
      We
      have developed a number of these relationships and intend to develop new ones.
      Our inability to attract new distributors or their inability to penetrate their
      respective market segments or the loss of any of our third-party distributors
      as
      a result of competitive products offered by other companies, or products similar
      to ours that are developed internally by them or otherwise, could harm our
      ability to maintain and expand our customer base. Our ability to achieve revenue
      growth in the future will depend in part on our success in developing and
      maintaining successful relationships with these third-party distributors. If
      we
      are unable to develop or maintain our relationships with these third-party
      distributors, our operating results and financial condition will suffer.







**We
      must increase our direct sales force to sell our products, and if we are unable
      to hire and train new sales personnel, our future growth will be impaired.**







Our
      direct sales force currently consists of three persons. Our sales and marketing
      strategy includes increasing the level of direct sales. Our ability to achieve
      revenue growth in the future will depend on our ability to recruit, train,
      and
      retain qualified direct sales personnel. If we are not able to obtain additional
      capital, we will not be able to increase the size of our direct sales force.
      Even if we are successful in obtaining additional capital, there is no assurance
      that we will be successful in recruiting and retaining qualified sales
      personnel. Our inability to increase the size and productivity of our direct
      sales force could impair our growth and adversely affect our operating results
      and financial condition.





-25-


**If
        we fail to keep pace with rapid technological changes in our industry, we
        could
        lose existing customers and be unable to attract new business.**


Our
      market is characterized by rapidly changing technologies, frequent new product
      and service introductions and evolving industry standards. The introduction
      of
      products embodying new technologies and the emergence of new industry standards
      can render our existing products obsolete and unmarketable in short periods
      of
      time. We expect new products and services, and enhancements to existing products
      and services to continue to be developed and introduced by others, which will
      compete with, and reduce the demand for, our products and services. Our future
      success will depend, in part, on our ability to enhance the performance features
      and reliability of our current products and introduce new products that keep
      pace with technological developments and emerging industry standards and to
      address the increasingly sophisticated needs of our customers. We may have
      to
      raise additional capital to successfully improve the features and reliability
      of
      our products and services. We may not be able to obtain the capital or obtain
      it
      on terms acceptable to us. There can be no assurance that we will be successful
      in developing, marketing and selling new products or product enhancements that
      meet these changing demands, that we will not experience difficulties that
      could
      delay or prevent the successful development, introduction and marketing of
      these
      products or that our new products and product enhancements will adequately
      meet
      the demands of the marketplace and achieve market acceptance.







**We
      may lose sales, or sales may be delayed, due to the long sales cycle for our
      products, which would reduce our revenues.**







Our
      customers generally involve many people in the decision to purchase our products
      and consulting and other services. As a result, we may wait many months before
      a
      sale can actually be completed. During this long sales cycle, events may occur
      that affect the size or timing of the order or even cause it to be canceled.
      For
      example, our competitors may introduce new products, or the customer’s own
      budget and purchasing priorities may change. If these events were to occur,
      sales of our products may be cancelled or delayed, which would reduce our
      revenues.


****


**If
      we do not retain our senior management and other key employees, we may not
      be
      able to successfully implement our business strategy.**




Our
      future success depends to a significant extent on the continued services of
      our
      senior management, particularly, Ricardo Brutocao, Chief Executive Officer,
      and
      David Cunningham, Chief Operating and Financial Officer, and other key
      personnel, particularly, Rama Iyer, Vice President, Technology and Product
      Management. The loss of the services of any of these persons could have a
      material adverse effect on our business, results of operations and financial
      condition. We have no employment agreement with Mr. Iyer. We do not
      maintain “key person” life insurance for any of our personnel at this time but
      may decide to in the future. Competition for qualified personnel in our industry
      is intense and we compete for these personnel with other companies that have
      greater financial and other resources than we do. Our future success will depend
      in large part upon on our ability to attract, retain and motivate highly
      qualified personnel, and there can be no assurance that we will be able to
      do
      so. If we have any difficulty in hiring needed qualified personnel, our
      business, financial condition and results of operations could be materially
      adversely affected.




**Our
      success depends on growth in the telecommunications industry.**




While
      the Company as a whole is not dependent upon the telecommunications industry,
      our AgentView legacy products are substantially positioned in the sector. Our
      business would be adversely affected to the extent that the telecommunications
      industry continues to contract through consolidation and advances in technology,
      or does not achieve sustainable growth particularly usage by companies who
      use
      multiple software applications. A number of factors may inhibit the
      telecommunications industry’s growth, including:




•
            
            financial
                difficulties;•
            
            competitive
                concerns centered around large-scale price cutting;•
            
            reluctance
                of industry companies to place purchase orders for capital expenditures;
                and•
            
            lack
                of increasing customer demand for premium and high-speed services.




If
      these conditions continue to occur in the future, the telecommunications
      industry, as well as the purchase of our products by it, could grow more slowly
      or decline.







**Our
      limited ability to protect our proprietary technology and other rights may
      adversely affect our ability to compete.**







We
      rely on a combination of trademarks, copyrights, trade secret laws and
      contractual provisions to protect our intellectual rights. We also have a patent
      pending for an information management system. We cannot assure our investors
      that our patent application will result in any patent being issued to us or,
      if
      issued, that any patent claims will be of sufficient scope or strength to
      provide any meaningful protection or any competitive advantage to us. There
      can
      be no assurance that these protections will be adequate to prevent our
      competitors from misappropriating our technology, or that our competitors will
      not independently develop technologies that are substantially equivalent or
      superior to our technology. To protect our trade secrets and other proprietary
      information, we require employees, consultants and others to enter into
      confidentiality agreements. We cannot assure our investors that these agreements
      will provide meaningful protection for our trade secrets, know-how or other
      proprietary information in the event of any unauthorized use, misappropriation
      or disclosure of such trade secrets, know-how or other proprietary information.





-26-




**If
      we are found to infringe the proprietary rights of others, we could be required
      to redesign our products, pay royalties or enter into license agreements with
      third parties.**





Although
      we have never been the subject of a material intellectual property dispute,
      there can be no assurance that a third party will not assert that our technology
      violates its intellectual property rights in the future. As the number of
      software products in our target market increases and the functionality of these
      products further overlap, we believe that software developers may become
      increasingly subject to infringement claims. Any claims, whether with or without
      merit, could:




•
            
            be
                expensive and time consuming to defend,•
            
            cause
                us to cease making, licensing or using products that incorporate
                the
                challenged intellectual property,•
            
            require
                us to redesign our products, if feasible,•
            
            divert
                management’s attention and resources, and•
            
            require
                us to enter into royalty or licensing agreements in order to obtain
                the
                right to use necessary technologies.




There
      can be no assurance that third parties will not assert infringement claims
      against us in the future with respect to our current or future products or
      that
      any such assertion will not require us to enter into royalty arrangements (if
      available) or litigation that could be costly to us.




**A
      large percentage of our stock is owned by relatively few people, including
      officers and directors, and their interest may be different from and conflict
      with yours.**




As
      of September 30, 2005 our officers and directors beneficially owned
      a total
      of 11,847,318 shares (including shares issuable upon exercise of options,
      warrants or convertible securities beneficially owned by them that are
      exercisable or convertible within 60 days after September 30,
      2005),
      or approximately 71% of our outstanding common stock. You may be subject to
      certain risks due to the concentrated ownership of our common stock. For
      example, these stockholders, if acting together, would be able to influence
      or
      control matters requiring approval by our stockholders, including the election
      of directors and the approval of mergers, acquisitions or other extraordinary
      transactions. They may also have interests that differ from yours and may vote
      in a way with which you disagree and which may be adverse to your interests.
      The
      concentration of ownership may have the effect of delaying, preventing or
      deterring a change of control of our company, could deprive our stockholders
      of
      an opportunity to receive a premium for their common stock as part of a sale
      of
      our company and might ultimately affect the market price of our common stock.







**Future
      sales of shares of our common stock which are eligible for sale by our
      stockholders may decrease the price of our common stock.**







We
      had 10,699,312 shares of common stock outstanding on September 30,
      2005. An additional 7,870,638 shares underlying options, and warrants
      outstanding on September 30, 2005 will be restricted securities if and
      when
      they are issued. Restricted securities may be sold only if they are registered
      under the Securities Act or if an exemption from the registration requirements
      of the Securities Act is available. Generally, stockholders may sell restricted
      securities without registration after holding them for one year and subject
      to
      certain volume limitations. Actual sales, or the prospect of sales by our
      present stockholders or by future holders of restricted securities, pursuant
      to
      a registration statement, under Rule 144, or otherwise, may, in the
      future,
      have a depressive effect on the market price of our common stock. A decline
      in
      the price of shares of our common stock might impede our ability to raise
      capital through the issuance of additional shares of our common stock or other
      equity securities.






**There
      is a limited market for our common stock and we cannot assure you that a market
      will be sustained.**






Our
      common stock has begun trading in the over-the-counter market on the OTC
      Electronic Bulletin Board. If an active trading market does not develop or
      is
      not sustained, it may be difficult for you to sell your shares of common stock
      at an attractive price or at all. We cannot predict the prices at which our
      common stock will trade. It is possible that in future quarters our operating
      results may be below the expectations of public market analysts and investors
      and, as a result of these and other factors, the price of our common stock
      may
      decline.




**No
      dividends anticipated to be paid** .






We
      have never paid any cash dividends on our common stock and we do not anticipate
      paying cash dividends on our common stock in the future. The future payment
      of
      dividends is directly dependent upon our future earnings, capital requirements,
      financial requirements and other factors to be determined by our Board of
      Directors. It is anticipated that future earnings, if any, which may be
      generated from our operations will be used to finance our growth, and that
      cash
      dividends will not be paid to our stockholders.







**We
      are in default on a note payable.**







We
      are in
      default under a note payable to a former employee in connection with a stock
      repurchase agreement that requires monthly payments of $2,750. The current
      balance of the note is $15,272 and our last payment on the note was made in
      August 2004. The note is secured by substantially all of our
      assets.




-27-
  **ITEM
      3. CONTROLS AND PROCEDURES**







As
      of the
      last day 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 Operating Officer who is also the Company’s Chief
      Financial Officer, of the effectiveness of the design, and operation of the
      Company’s disclosure controls and procedures pursuant to Rule 13a-14 of the
      Securities Exchange Act of 1934 (the “Exchange Act”). Based upon that
      evaluation, the Chief Operating Officer concluded that the Company’s disclosure
      controls and procedures are effective in timely alerting him to material
      information relating to the Company (including its consolidated subsidiary)
      required to be included in the Company’s Exchange Act filings.







There
      has
      not been any change in the Company’s internal controls over financial reporting
      during the quarter covered by this report that has materially affected, or
      is
      reasonably likely to materially affect, the Company’s internal control over
      financial reporting.





Under
      current SEC guidelines, the requirements of Section 404 of the Sarbanes-Oxley
      Act of 2002 (the “Act”) will be effective for the Company’s year ending June 30,
      2008. In order to comply with the Act, the Company must undertake a
      comprehensive effort, which includes documentation and testing of the design
      and
      operation of its internal control using the guidelines establishes by *Internal
      Control-Integrated Framework* issued
      by the Committee of Sponsoring Organizations of the Treadway Commission. During
      the course of these activities, the Company may identify certain internal
      control matters that management believes should be improved. These improvements,
      if necessary, will likely include further formalization of existing policies
      and
      procedures, improved segregation of duties, additional information technology
      system controls and additional monitoring controls. Although management does
      not
      believe that any of these matters will result in material weaknesses being
      identified in the Company’s internal control as defined by the Public Company
      Oversight Board (United States), no assurances can be given regarding the
      outcome of these efforts at the present time.





-28-





**PART
      II. OTHER INFORMATION**




On
      October 18, 2005, the Board of Directors accepted the President/CEO's voluntary
      reduction in compensation from $18,500 per month to $13,500.  The Board
      also allowed the President/CEO to perform any outside consulting activity to
      supplement his salary reduction, as long as the consulting does not directly
      compete with Centergistic Solutions, Inc.




**ITEM
      1. LEGAL PROCEEDINGS**





None.





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





None.





**ITEM
      3. DEFAULTS UPON SENIOR SECURITIES**





The
      Company has a note payable to a former employee in connection with a stock
      repurchase agreement that requires monthly payments of $2,750 pursuant to
      contractual terms. The current balance of the note payable is $15,272 and the
      Company’s most recent payment under the note agreement was in August 2004. The
      note is secured by substantially all of the Company’s assets.





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





None.





**ITEM
      5. OTHER INFORMATION**





None.





**ITEM
      6. EXHIBITS**





None.





-29-








**SIGNATURES**





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






**CENTERGISTIC
                SOLUTIONS, INC.**Date:
                November 14, 2005
              By:
              /s/ Ricardo
                G. BrutocaoRicardo
                  G. Brutocao,
                President
  Date:
                November 14, 2005
              By:
              /s/ David
                M. CunninghamDavid
                    M. Cunningham,
                  Chief
                    Operating Officer and Chief FinancialOfficer
                    (Principal Accounting Officer)





-30-


**EXHIBIT
        INDEX**


No.
              
              Description31.1
              
              Certification
                  of CEO - Rule 13a - 14(a) or 15d - 14(a)*31.2
              
              Certification
                  of CFO - Rule 13a - 14(a) or 15d - 14(a)*32
              
              Certification
                  pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section
                  906 of
                  the Sarbanes-Oxley Act of
                  2002+





*  Filed
      herewith


+  Furnished
      herewith




-31-