Table        of contents

----

**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**Washington,      D. C. 20549**

**Form      10-Q**

**0-13763**

**TECHNOLOGY RESEARCH CORPORATION**

| **FLORIDA**                                                                                    | **59-2095002**                                                       |
|------------------------------------------------------------------------------------------------|----------------------------------------------------------------------|
| *(State                or other jurisdiction of incorporation or                organization)* | *(I.R.S.                employer identification                no.)* |

**5250-140th      Avenue      North Clearwater, Florida 33760**

**(727)      535-0572**

|  Large                accelerated filer o |  Accelerated                filer o |  Non-accelerated                filer þ |
|-----------------------------------------------------|-----------------------------------------------|--------------------------------------------------------|

----

**TECHNOLOGY            RESEARCH CORPORATION**

**FORM 10-Q**

**TABLE      OF CONTENTS**

| PART              I — FINANCIAL INFORMATION                                                                                                                                |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                             |
|                                                                                                                                                                             | Item              1.  Financial Statements |
|                                                                                                                                                                             |    Condensed              Consolidated Balance Sheets |
|                                                                                                                                                                             |    Condensed              Consolidated Statements of              Operations |
|                                                                                                                                                                             |    Condensed              Consolidated Statements of Cash              Flows |
|                                                                                                                                                                             |    Notes              to the Condensed Consolidated Financial              Statements |
|                                                                                                                                                                             | Item              2.  Management’s Discussion and Analysis of              Financial Condition and Results of Operations |
|                                                                                                                                                                             | Item              3.  Quantitative and Qualitative Disclosures              About Market Risk  |
|                                                                                                                                                                             | Item              4.  Controls and              Procedures |
|                                                                                                                                                                             |
| PART              II — OTHER INFORMATION                                                                                                                                   |
|                                                                                                                                                                             |
|                                                                                                                                                                             | Item              1.  Legal Proceedings |
|                                                                                                                                                                             | Item              1A.  Risk Factors  |
|                                                                                                                                                                             | Item              2.  Unregistered Sales of Equity Securities and              Use of Proceeds |
|                                                                                                                                                                             | Item              3.  Defaults Upon Senior              Securities |
|                                                                                                                                                                             | Item              4.  Submission of Matters to a Vote of Security              Holders |
|                                                                                                                                                                             | Item              5.  Other Information |
|                                                                                                                                                                             | Item              6.  Exhibits |
|                                                                                                                                                                             |   |
| SIGNATURES                                                                                                                                                                  |
|                                                                                                                                                                             |
| Exhibit              31.1 — Certification of Chief              Executive Officer pursuant to section 302 of the Sarbanes-Oxley Act              of              2002 |
|                                                                                                                                                                             |
| Exhibit              31.2 — Certification of Chief              Financial Officer pursuant to section 302 of the Sarbanes-Oxley Act              of              2002 |
|                                                                                                                                                                             |
| Exhibit              32.1 — Certification of Chief              Executive Officer pursuant to section 906 of the Sarbanes-Oxley Act              of              2002 |
|                                                                                                                                                                             |
| Exhibit              32.2 — Certification of Chief              Financial Officer pursuant to section 906 of the Sarbanes-Oxley Act              of              2002 |
|                                                                                                                                                                             |
|                                                                                                                                                                             |

----

**P**
**ART        I — FINANCIAL        INFORMATION**

**Item      1.  Financial Statements**

**TECHNOLOGY      RESEARCH CORPORATION AND SUBSIDIARY**

|                                                                                                                          | **September 30,                  2006** |   | **March 31,                  2006** |
|-------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------|--------|------------------------------------------|
|              **ASSETS**                                      |                                         |   |                                     |
| Current                assets:                                                                                                |                                         |   |                                     |   |   |   |   |   |  |
|    Cash                and cash equivalents                                                                    |                                         |   | $                                        | 1,023 |   |   |  | 2,607 |   |
|                   Short-term investments                                                                            |                                         |   |                                     | 510 |   |   |   | 500 |   |
|    Trade                and other accounts receivable, net of allowance for                                    |                                         |   |
|         doubtful                accounts of $113 and $78, respectively           |                                         |   |                                     | 7,704 |   |   |   | 10,730 |   |
|    Inventories                                                                                                 |                                         |   |                                     | 10,018 |   |   |   | 9,633 |   |
|                   Deferred income taxes                                                                             |                                         |   |                                     | 686 |   |   |   | 445 |   |
|    Prepaid                expenses and other current assets                                                    |                                         |   |                                     | 164 |   |   |   | 210 |   |
|      Total                current assets                                                             |                                         |   |                                     | 20,105 |   |   |   | 24,125 |   |
|                                                                                                                          |
| Property                and equipment, net of accumulated depreciation of $9,918 and $9,346,                respectively |                                         |   |                                     | 4,712 |   |   |   | 4,939 |   |
| Intangible                assets, net of accumulated amortization of $27 and $0,                respectively                  |                                         |   |                                     | 555 |   |   |   | - |   |
| Other                assets                                                                                                   |                                         |   |                                     | 68 |   |   |   | 70 |   |
|                       Total assets                                                              |                                         |   | $                                        | 25,440 |   |   |   | 29,134 |   |
|                                                                                                                          |                                         |   |                                     |  |   |   |   |  |   |

| **LIABILITIES                AND STOCKHOLDERS' EQUITY**                                                                                      |   |   |   |   |    |   |   |   |    |
|----------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|---------|--------|--------|--------|---------|
| Current              liabilities:                                                                                                            |   |   |   |   |    |   |   |   |    |
|                 Current portion of long-term debt                                                                             |   |   | $      | -      |    |   |   | 1,000  |    |
|    Trade              accounts payable                                                                                        |   |   |   | 3,658  |    |   |   | 4,850  |    |
|                 Accrued expenses                                                                                                   |   |   |   | 1,191  |    |   |   | 1,296  |    |
|    Accrued              dividends                                                                                             |   |   |   | 133    |    |   |   | 101    |    |
|                 Income taxes payable                                                                                               |   |   |   | 105    |    |   |   | 357    |    |
|      Total              current liabilities                                                                         |   |   |   | 5,087  |    |   |   | 7,604  |    |
|                                                                                                                                         |   |   |   |   |    |   |   |   |    |
| Long-term debt,              less current portion                                                                                       |   |   |   | 1,000  |    |   |   | 2,000  |    |
| Deferred              income taxes                                                                                                           |   |   |   | 211    |    |   |   | 244    |    |
|                     Total liabilities                                                                          |   |   |   | 6,298  |    |   |   | 9,848  |    |
|                                                                                                                                         |
| Stockholders'              equity:                                                                                                      |
|                 Common stock $0.51 par value; 10,000,000 shares authorized, 5,910,328              shares and                      |   |   |
|                     5,848,649 shares issued and 5,888,828 shares and 5,827,149 shares              outstanding |   |   |   | 3,014  |    |   |   | 2,983  |    |
|                 Additional paid-in capital                                                                                         |   |   |   | 9,192  |    |   |   | 8,770  |    |
|                 Retained earnings                                                                                                  |   |   |   | 6,976  |    |   |   | 7,573  |    |
|                 Common stock held in treasury, 21,500 shares, at cost                                                              |   |   |   | (40    | )  |   |   | (40    | )  |
|    Total              stockholders' equity                                                                                    |   |   |   | 19,142 |    |   |   | 19,286 |    |
|     Total              liabilities and stockholders' equity                                                              |   |   | $      | 25,440 |    |   |   | 29,134 |    |
|                                                                                                                                         |   |   |   |        |    |   |   |        |    |

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

----

**TECHNOLOGY        RESEARCH CORPORATION AND        SUBSIDIARY**

*(In        thousands, except share data)*

|                                                                                                      |                  | **Three                Months Ended September                30,**  | **Six                Months Ended September                30,**  |
|-----------------------------------------------------------------------------------------------------------|-----------------------|--------------------------------------------------------------------------|------------------------------------------------------------------------|
|                                                                                                      |                  |                                                                     | **2006**                                                               |   |   | **2005** |   |   | **2006** |   |   | **2005** |   |
| Revenues:                                                                                                 |                  |                                                                     |                                                                   |   |   |   |   |   |   |   |   |   |   |
|                 Commercial                                                                      | $                     |                                                                     | 7,227                                                                  |   |   | 5,539 |  |   | 15,181 |   |   | 13,466 |   |
|    Military                                                                                |                  |                                                                     | 2,478                                                                  |   |   | 3,123 |   |   | 5,140 |   |   | 5,772 |   |
|        Total                revenues                                   |                  | 9,705                                                                    |                                                                   | 8,662 |   | 20,321 |   | 19,238 |   |
| Cost              of sales                                                                      |                  |                                                                     | 7,739                                                                  |   |   | 6,883 |   |   | 15,925 |   |   | 15,166 |   |
|                          Gross profit                   |                  | 1,966                                                                    |                                                                   | 1,779 |   | 4,396 |   | 4,072 |   |
|                                                                                                      |                  |                                                                          |                                                                   |  |   |  |   |  |   |
| Operating              expenses:                                                                          |                  |                                                                     |                                                                   |   |   |   |   |   |   |   |   |   |   |
|                 Selling and marketing                                                           |                  |                                                                     | 724                                                                    |   |   | 567 |   |   | 1,445 |   |   | 1,207 |   |
|                 General and administrative                                                      |                  |                                                                     | 1,121                                                                  |   |   | 950 |   |   | 2,279 |   |   | 1,685 |   |
|    Research              and development                                                   |                  |                                                                     | 542                                                                    |   |   | 538 |   |   | 1,029 |   |   | 1,026 |   |
|                       Total operating expenses                         |                  | 2,387                                                                    |                                                                   | 2,055 |   | 4,753 |   | 3,918 |   |
|                           Income (loss) from operations |                  | (421                                                                     | )                                                                      | (276 | )  | (357 | )  | 154 |   |
|  Other                income (expense):                                                              |                  |                                                                          |                                                                   |  |   |  |   |  |   |
|                   Other income, net                                                             |                  |                                                                     | 8                                                                      |   |   | 10 |   |   | 15 |   |   | 20 |   |
|                 Interest expense                                                                |                  |                                                                     | (25                                                                    | ) |   | (64 | )  |   | (59 | )  |   | (114 | )  |
|                          Other expense, net             |                  | (17                                                                      | )                                                                 | (54 | )  | (44 | )  | (94 | )  |
|  Income                (loss) before income taxes                                               |                  | (438                                                                     | )                                                                      | (330 | )  | (401 | )  | 60 |   |
| Income              tax expense (benefit)                                                                 |                  |                                                                     | (22                                                                    | ) |   | (85 | )  |   | (12 | )  |   | 12 |   |
|                    Net income (loss)                                                  |                $ | (416                                                                     | )                                                                      | (245 | )  | (389 | )  | 48 |   |
|                                                                                                      |                  |                                                                          |                                                                   |  |   |  |   |  |   |
| Earnings              (loss) per share - basic                                                            | $                     |                                                                     | (0.07                                                                  | )  |   | (0.04 | )  |   | (0.07 | )  |   | 0.01 |   |
|                                                                                                      |                  |                                                                     |                                                                   |   |   |   |   |   |   |   |   |  |   |
| Earnings              (loss) per share - diluted                                                          | $                     |                                                                     | (0.07                                                                  | )  |   | (0.04 | )  |   | (0.07 | )  |   | 0.01 |   |
|                                                                                                      |                  |                                                                     |                                                                        |   |   |  |   |   |  |   |   |  |   |
| Shares              outstanding - basic                                                                   |                  |                                                                     | 5,888,828                                                              |   |   | 5,775,625 |   |   | 5,880,017 |   |   | 5,775,018 |   |
|                                                                                                      |                  |                                                                     |                                                                        |   |   |  |   |   |   |   |   |   |   |
| Shares              outstanding - diluted                                                                 |                  |                                                                     | 5,888,828                                                              |   |   | 5,775,625 |   |   | 5,880,017 |   |   | 5,836,472 |   |

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

----

**TECHNOLOGY        RESEARCH CORPORATION AND        SUBSIDIARY**

*(In        thousands)*

|                                                                                                                                                                        | **Six Months                  Ended September 30,** |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------|
|                                                                                                                                                                        |                                                               |
|                                                                                                                                                                        |                                                               |   |   | **2006** |   |   |   | **2005** |   |
| Cash                flows from operating activities:                                                                                                                        |                                                               |   |   |   |   |   |   |   |   |
|    Net                income (loss)                                                                                                                          |                                                               |   | $ | (389 | )  |   |   | 48 |   |
|                   Adjustments to reconcile net income (loss)                                                                                                      |                                                               |
|                      to net cash provided by operating                activities:                     |                                                               |
|    Accretion                of interest on short-term investments                                                                                       |                                                               |   |   | (9 | )  |   |   | - |   |
|    Change                in allowance for doubtful accounts                                                                                                  |                                                               |   |   | 35 |   |   |   | - |   |
|    Depreciation                                                                                                                                              |                                                               |   |   | 572 |   |   |   | 625 |   |
|    In-process                research and development                                                                                                        |                                                               |   |   | 17 |   |   |   | - |   |
|    Amortization                of intangible assets                                                                                                          |                                                               |   |   | 27 |   |   |   | - |   |
|                   Stock compensation expense                                                                                                                      |                                                               |   |   | 49 |   |   |   | 38 |   |
|                   Deferred income taxes                                                                                                                           |                                                               |   |   | (274 | )  |   |   | (51 | )  |
|    Changes                in operating assets and liabilities, net of effects of                acquisition:         |                                                               |   |
|       Trade                and other accounts receivable                                                                                      |                                                               |   |   | 2,991 |   |   |   | 6,389 |   |
|       Income                taxes receivable                                                                                                  |                                                               |   |   | - |   |   |   | (44 | )  |
|                      Inventories                                                                                                                   |                                                               |   |   | (306 | )  |   |   | (545 | )  |
|                      Prepaid expenses and other current assets                                                                                     |                                                               |   |   | 46 |   |   |   | 213 |   |
|                      Other assets                                                                                                                  |                                                               |   |   | 2 |   |   |   | 32 |   |
|       Trade                accounts payable                                                                                                   |                                                               |   |   | (1,192 | ) |   |   | (3,885 | )  |
|       Accrued                expenses                                                                                                         |                                                               |   |   | (105 | ) |   |   | (266 | )  |
|       Income                taxes payable                                                                                                     |                                                               |   |   | (252 | )  |   |   | (112 | )  |
|         Net                cash provided by operating activities                                                                    |                                                               |   |   | 1,212 |   |   |   | 2,442 |   |
| Cash                flows from investing activities:                                                                                                                        |                                                               |   |   |  |   |   |   |  |   |
|    Maturities of short-term                investments                                                                                             |                                                               |   |   | 499 |   |   |   | 486 |   |
|    Purchase                of short-term investments                                                                                                         |                                                               |   |   | (500 | )  |   |   | - |   |
|    Acquisition                of business                                                                                                                    |                                                               |   |   | (331 | )  |   |   | - |   |
|    Purchases                of property and equipment                                                                                                   |                                                               |   |   | (345 | )  |   |   | (510 | )  |
|         Net                cash used in investing activities                                                                   |                                                               |   |   | (677 | )  |   |   | (24 | )  |
| Cash                flows from financing activities:                                                                                                                   |                                                               |   |   |  |   |   |   |  |   |
|    Borrowings                of short-term debt                                                                                                              |                                                               |   |   | - |   |   |   | 10 |   |
|                   Repayments of short-term and long-term debt                                                                                                     |                                                               |   |   | (2,000 | )  |   |   | (800 | )  |
|    Proceeds                from the exercise of stock options                                                                                                |                                                               |   |   | 52 |   |   |   | 4 |   |
|                   Tax benefit of stock option exercised                                                                                                           |                                                               |   |   | 5 |   |   |   | - |   |
|    Cash                dividends paid                                                                                                                        |                                                               |   |   | (176 | )  |   |   | (173 | )  |
|         Net                cash used in financing activities                                                              |                                                               |   |   | (2,119 | )  |   |   | (959 | )  |
| Net                increase (decrease) in cash and cash equivalents                                                                                                    |                                                               |   |   | (1,584 | )  |   |   | 1,459 |   |
| Cash                and cash equivalents at beginning of period                                                                                                             |                                                               |   |   | 2,607 |   |   |   | 815 |   |
| Cash                  and cash equivalents at end of period                                                                                                            |                                                               |   | $ | 1,023 |   |   |   | 2,274 |   |
| Non-cash                investing in financing activities:                                                                                                             |                                                               |   |   |  |   |   |   |  |   |
|                   Common stock issued upon acquisition of recreational vehicle product                line                business                                |                                                               |   |  $ | 347 |   |   |   |   |   |

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

----

****TECHNOLOGY        RESEARCH CORPORATION AND        SUBSIDIARY****

****Notes        to        the Consolidated Financial        Statements****

**SEC**
**Company**
Form      10-K

*2.  Earnings      (Loss) Per Share:*

|                                                                        | **Three                months ended September                30,** | **Six                months ended September                30,** |
|-----------------------------------------------------------------------------|-------------------------------------------------------------------------|-----------------------------------------------------------------------|
|                                                                        |                                                                    |                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                        |                                                                    |                                                                  |   | **2006** |   |   | **2005** |   |   | **2006** |   |   | **2005** |   |
| Net              income (loss)                                              |                                                                    |                                                                  | $ | (416 | )  |   | (245 | )  |   | (389 | )  |   | 48 |   |
|                                                                        |                                                                    |                                                                  |   | ** **  |   |   | ** **  |   |   | ** **  |   |   | ** ** |   |
| Weighted              average shares outstanding - basic                    |                                                                    |                                                                  |   | 5,888,828 |   |   | 5,775,625 |   |   | 5,880,017 |   |   | 5,775,018 |  |
| Dilutive              common shares issuable upon exercise of stock options |                                                                    |                                                                  |   | - |   |   | - |   |   | - |   |   | 61,454 |   |
|                                                                        |                                                                    |                                                                  |   |    |   |   |    |   |   |    |   |   |    |   |
| Weighted              average shares outstanding - diluted                  |                                                                    |                                                                  |   | 5,888,828 |   |   | 5,775,625 |   |   | 5,880,017 |   |   | 5,836,472 |   |
|                                                                        |                                                                    |                                                                  |   |    |   |   |    |   |   |    |   |   |    |   |
| Earnings (loss) per share:                                                  |                                                                    |                                                                  |
| Basic                                                                       |                                                                    |                                                                  | $ | (0.07 | )  |   | (0.04 | )  |   | (0.07 | )  |   | 0.01 |   |
| Diluted                                                                     |                                                                    |                                                                  | $ | (0.07 | )  |   | (0.04 | )  |   | (0.07 | )  |   | 0.01 |   |

*3.  Short-term Investments: *

*held-to-maturity*

*4.       Inventories:*

|  **September                30, 2006** | ** ** | **March                31, 2006** |
|---------------------------------------------|------------|-----------------------------------|
|                                        |       |                              |   |
| Raw              materials                  |       |                              | $ | 6,808 |   |   |   | 6,618 |   |
| Work-in-process                             |       |                              |   | 504 |   |   |   | 449 |   |
| Finished              goods                 |       |                              |   | 2,706 |   |   |   | 2,566 |   |
|                                        |            |                              |  |
| Total                                       |       |                              | $ | 10,018 |   |   |   | 9,633 |   |
|                                        |            |                              |  |

*5.        Warranty: *

|                                             |          | **Three                months ended September 30,**  |  **Six                months ended September 30,**  |
|--------------------------------------------------|---------------|-----------------------------------------------------------|---------------------------------------------------------------|
|                                             |          |                                                      |                                                          |   |   |   |   |   |   |
|                                             |          |  **2006**                                            |                                                          |  **2005** |   |  **2006** |   |  **2005** |   |
| Beginning              balance                   |  $       | 130                                                       |                                                          | 342 |   | 111 |   | 310 |   |
|                  Warranty expense |          | 32                                                        |                                                          | 236 |   | 80 |   | 323 |   |
|                  Warranty claims  |          |  (30                                                 | )                                                        |  (308 | )  | (59 | )  |  (363 | )  |
|  Ending                balance              |   $ | 132                                                       |                                                          | 270 |   | 132 |   | 270 |   |
|                                             |          |                                                           |                                                          |  |   |  |   |  |   |

*6.  Debt: *

**LIBOR**

|                                                                                                       |       |       | **Common                            stock** |          | **Additional** |       |                                                      |       |                                                      |       | **Total**                         |       |
|------------------------------------------------------------------------------------------------------------|------------|------------|---------------------------------------------|---------------|----------------|------------|-----------------------------------------------------------|------------|-----------------------------------------------------------|------------|-----------------------------------|------------|
|                                                                                                       |       |       |                                        |          | **paid-in**    |       |  **Retained**                                        |       |  **Treasury**                                        |       | **stockholders'**                 |       |
| ** **                                                                                                 | ** ** | ** ** | **Shares**                                  | ** **    | **Amount**     | ** ** | **capital**                                               | ** ** | **earnings**                                              | ** ** | **stock**                         | ** ** | **equity** | ** ** |
| Balances                        as of March 31, 2006:                                                 |       |       | 5,827,149                                   |  $       |  2,983    |       |  8,770                                               |       |  7,573                                               |       | (40)                              |       | 19,286 |   |
|                                                                                                       |       |       |                                        |          |           |       |                                                      |       |                                                      |       |                              |       |   |   |
|                           Dividends - $0.035 per share                                           |       |       |  -                                     |          | -              |       |                                - |       |                             (208)               |       |   -                     |       |     (208) |   |
|                           Net loss                                                               |       |       |  -                                     |          |  -        |       |                                - |       |                             (389)               |       |                            - |       |                              (389) |   |
|                           Shares issued upon acquisition (note 9)                                |       |       | 51,679                                      |          | 26             |       |                             321                 |       |                                -      |       |   -                     |       |                              347 |   |
|                           Stock compensation expense                                             |       |       | -                                           |          | -              |       |                              49            |       |                                - |       |                            - |       |                               49 |   |
|                           Exercise of stock options                                              |       |       | 10,000                                      |          | 5              |       |                              47            |       |                                - |       |                            - |       |      52 |   |
|                           Tax benefit of stock option exercise                                   |       |       |                                        |          |           |       |                                5 |       |                                                      |       |                              |       |                                 5 |   |
|                                 Balances as of September 30, 2006: |       |       | 5,888,828                                   |   $ | 3,014          |       | 9,192                                                     |       | 6,976                                                     |       | (40)                              |       | 19,142 |   |
|                                                                                                       |       |       |                                             |          |                |       |                                                           |       |                                                           |       |                                   |       |  |   |

*Share-Based Payment, *
**SFAS 123R**
*Accounting for Stock issued to Employees *
**APB 25**
*Accounting for Stock-Based        Compensation *
**SFAS 123**
*Accounting for Stock-Based        Compensation-Transition and Disclosure.*

|                                                                                                                                     |  **Three                  months ended**       |  **Six                  months ended**   |
|------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------|-----------------------------------------------|
|                                                                                                                                     |   **September                  30, 2005** |  **September                  30, 2005** |
| Net                income (loss) - as reported                                                                                           |                                                |  $                                       | (245 | )  |   |   |  48 |   |
| Add:                 Total stock-based employee compensation expense                                                                |                                                |                                          |   |   |   |   |   |   |
|                         included in the determination of reported net income,                    |                                                |                                          |   |   |   |   |   |   |
|                           net of related income taxes of $8 and $8, respectively.                |                                                |                                          | 31 |   |   |   | 31 |   |
| Deduct:                 Total stock-based employee compensation expense                                                             |                                                |                                          |   |   |   |   |   |   |
|                             determined under fair value based method for all |                                                |                                          |   |   |   |   |   |   |
|                             awards, net of related income taxes of $12 and   |                                                |                                          |   |   |   |   |   |   |
|              $336,                respectively.                         |                                                |                                          | (35 | )  |   |   | (1,344 | )  |
| Net                loss - pro forma                                                                                                      |                                                |  $                                       | (249 | )  |   |   |  (1,265 | )  |
| Basic                earnings (loss) per share:                                                                                          |                                                |                                          |  |   |   |   |   |   |
|          As                reported                                                         |                                                |  $                                       | (0.04 | )  |   |   |  0.01 |   |
|                                                                                                                                     |                                                |                                          |  |   |   |   |   |   |
|                          Pro forma                                                     |                                                |  $                                       | (0.04 | )  |   |   |  (0.22 | )  |
| Diluted earnings                (loss) per share:                                                                              |                                                |                                          |    |   |   |   |   |   |
|                          As reported                                                        |                                                |  $                                       | (0.04 | )  |   |   |  0.01 |   |
|                                                                                                                                     |                                                |                                          |   |   |   |   |   |   |
|                          Pro forma                                                          |                                                |  $                                       | (0.04 | )  |   |   |  (0.22 | )  |
|                                                                                                                                     |                                                |                                          |   |   |   |   |   |   |

*Stock      Option Plans*

**Plans**

| ** **                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | ** ** | ** **                                                          | ** ** | ** **                                                                | ** ** | **Aggregate**(1)                     | ** ** | **Weighted**                                  | ** ** | **Weighted**                                         | ** ** |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|---------------------------------------------------------------------|------------|---------------------------------------------------------------------------|------------|--------------------------------------|------------|----------------------------------------------------|------------|------------------------------------------------------|------------|
| ** **                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | ** ** | **Shares**                                                          | ** ** | ** **                                                                | ** ** | **intrinsic**                        | ** ** | ****average****                                    | ** ** | **average**                                          | ** ** |
| ** **                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | ** ** | ** available**                                                 | ** ** | **Options**                                                               | ** ** | **value**                            | ** ** | **exercise**                                       | ** ** | **remaining**                                        | ** ** |
| ** **                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | ** ** | ** for                  grant**                                | ** ** | **outstanding**                                                           | ** ** | **(in                  thousands)**  | ** ** | **price**                                          | ** ** | **contractual                  life**                | ** ** |
| Balance as                of March 31, 2006                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |       | 603,850                                                             |       |  540,911                                                             |       | $                  745               |       | $                  7.86                            |       | 5.05                                                 |       |
|                   Options authorized                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |       |                           - |       |                            - |       |                            |       |                         - |       |                                       |       |
|                   Options expired                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |       | (150,000)                                                           |       | (210,976)                                                                 |       |                            |       | $                  5.13                            |       |     0                            |       |
|                   Options granted                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |       |   (10,000)                                                |       |   10,000                                                        |       |             |       | $                  6.04                            |       |                     9.61    |       |
|                   Options canceled                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |       |          -             |       |                    (25,000)                                          |       |                            |       | $                  9.47                            |       |                      0                |       |
|                   Options exercised                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |       |                           - |       |                    (10,000)                                          |       |        |       | $                  5.17                            |       |                      0                |       |
|  Balance                  as of September 30, 2006                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |       | 443,850                                                             |       |  304,935                                                             |       | $                    84    |       | $                  9.64                            |       | 7.63                                                 |       |
|  Exercisable as                  of September 30, 2006                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |       |                                                                |       |  264,935                                                             |       | $                    84         |       | $10.04                                             |       | 7.35                                                 |       |
|  _______________________________                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |       |                                                                |       |                                                                      |       |                                 |       |                                               |       |                                                 |       |
| Footnote:1                   The aggregate intrinsic value represents the total pretax                  intrinsic                  value, based on the Company’s closing stock price of $7.27 as of March 31,                  2006 and of $4.25 as of September 29, 2006 and on the dates                  options were granted or exercised, which would have been received                  by the                  option holders                  had all option holders exercised their options as of that                  date, including only those options that are                  in-the-money. |

|                                         |   | **Three                  months ended September 30,** |   | **Six                  months ended September 30,** |   |
|----------------------------------------------|--------|-------------------------------------------------------|--------|-----------------------------------------------------|--------|
|                                         |   |                                                  |   |                                                |   |   |   |   |   |
|                                         |   |  **2006**                                        |   |  **2005**                                      |   |  **2006** |   |  **2005** |   |
| Expected                dividend yield  |   |  N/A                                             |   |  N/A                                           |   |    1.12% |   |  N/A |   |
| Risk                free interest rate  |   |  N/A                                             |   |  N/A                                           |   |                     5.05% |   |  N/A |   |
| Expected                volatility      |   |  N/A                                             |   |  N/A                                           |   |  88.29% |   |  N/A |   |
| Expected                life            |   |  N/A                                             |   |  N/A                                           |   |  6.48                  years |   |  N/A |   |

**AEC**

| Cash                    paid to seller                          | $279                                 |
|-----------------------------------------------------------------|--------------------------------------|
| Cash                    paid for acquisition costs              |                         52 |
| Common                    stock issued to seller, 51,679 shares |  347                            |
|                          Total                   | $678                                 |
|                                                            |                                 |

|                                                                                                                                              |          |                              |  Estimated                    useful lives |
|---------------------------------------------------------------------------------------------------------------------------------------------------|---------------|-----------------------------------|-------------------------------------------------|
| Inventories                                                                                                                                  |  $       |    79              | N/A                                             |
| Intangible                  assets:                                                                                                          |          |                              |                                            |
|                     Developed technology                                                                                                |          |  417                         | 10                    years                     |
|                     Patents                                                                                                             |          |                      84      | 10 years                                   |
|                       Purchased customer relationships                                                                                  |          |                      67      |                      9 years          |
|                     Trademarks                                                                                                          |          |                       6 |  1                    year                 |
|                     Covenant not-to-compete                                                                                             |          |                       8 |   5                    years          |
| In-process                  research and development                                                                                              |          |  17                          | *                                               |
|         Total                                                                                                  |   $ | 678                               |                                            |
|                                                                                                                                              |          |                                   |                                            |
| *                   Written-off during the first quarter of fiscal 2007 and reported                  in research and development. |

|                                                     |    | **Three                    months ended September 30,** |        | **Six                    months ended September 30,** |        |
|----------------------------------------------------------|---------|---------------------------------------------------------|-------------|-------------------------------------------------------|-------------|
|                                                     |    |                                                    | **2006**    |                                                  | **2005**    |   |   |   | **2006** |   | **2005** |   |   |
| Revenues                                            |  $ |                                                    |  9,705 |                                                  |  8,791 |   |   |   |  20,372 |   |  19,470 |   |   |
| Net                  income (loss)                  |  $ |                                                    |  (416  | )                                                |  (239  | )  |   |   |  (387 | )  |  58 |   |   |
| Diluted                  earnings (loss) per share  |  $ |                                                    |  (0.07 | )                                                |  (0.04 | )  |   |   |  (0.07 | )  |  0.01 |   |   |

*Fire Shield*
*Fire Shield*

*Fire Shield*

**.  **

**FASB**
*Inventory Costs*
*Restatement and Revision of Accounting Research Bulletins*

*Accounting for Stock-Based          Compensation*
*Accounting for Stock issued to          Employees*

*Accounting Changes and Error              Corrections*
*Accounting Changes*
*Reporting Accounting              Changes in Interim Financial Statements*

*Accounting for Certain Hybrid Financial                  Instruments—an amendment of FASB Statements No. 133 and 140*
*Accounting for Derivative                  Instruments and Hedging Activities*
*Accounting for                  Transfers and Servicing of Financial Assets and Extinguishments                  of                  Liabilities*
*Application of Statement 133 to Beneficial                  Interests in Securitized Financial Assets*

*Considering the Effects of Prior Year Misstatements when                    Quantifying                    Misstatements in Current Year Financial Statements *

**EITF**
**EITF No. 06-03**

****Item        2.  Management’s Discussion and Analysis        of Financial Condition and Results of        Operations.****

**we**
**our**
**us**
**Company**
**TRC**

***DISCLOSURE        REGARDING FORWARD-LOOKING STATEMENTS***

**SEC**
Form          10-K

***OVERVIEW***

*Fire Shield*
*Surge Guard Plus*
**UL**
**RAC**
*Fire Shield*
**LCDI**

        -  to increase                profitability by improving operating efficiencies; 
        -  to                strengthen and expand its markets and distribution channels; 
        -  to                broaden the applications within target markets for its existing                products; 
        -  to                expand the scope of its product content; 
        -  to                expand its manufacturing capabilities; 
        -  to                maintain a conservative capital structure; and 
        -  to                pursue strategic acquisitions to the extent favorable opportunities                are                presented     

*Risk            Factors*

**RESULTS OF        OPERATIONS**

**    R*evenues***

***    Gross        profit***

***    Selling        and        marketing***

***    General        and        administrative***

***    Research        and        development***

***    Other income        (expense)***

***    Income        tax        expense (benefit)***
* *

***    Net income        (loss)***

**LIQUIDITY AND          CAPITAL RESOURCES**

**LIBOR**

**OFF-BALANCE        SHEET ARRANGEMENTS**

***NEW          ACCOUNTING STANDARDS***

**FASB**
*Inventory Costs*
*Restatement and Revision of Accounting Research Bulletins*

*Accounting for Stock-Based          Compensation*
*Accounting for Stock issued to          Employees*

*Accounting Changes and Error          Corrections*
*Accounting Changes*
*Reporting Accounting          Changes in Interim Financial Statements*

*Accounting for Certain Hybrid Financial              Instruments—an amendment of FASB Statements No. 133 and 140*
*Accounting for Derivative              Instruments and Hedging Activities*
*Accounting for              Transfers and Servicing of Financial Assets and Extinguishments of              Liabilities*
*Application of Statement 133 to Beneficial              Interests in Securitized Financial Assets*

*Considering the Effects of Prior Year Misstatements when Quantifying                Misstatements in Current Year Financial Statements *

**EITF**
**EITF No. 06-03**

***CRITICAL        ACCOUNTING POLICIES***

*Disclosure Regarding Forward-Looking Statements*
*Risk Factors*

***    Revenue                  Recognition/Allowance for Doubtful Accounts.***

***Inventories.***

***    Income                    Taxes*.**

***    Warranty*.**

***    Impairment                        of                        Long-Lived Assets.***
*Accounting for Impairment or Disposal of Long-Lived                        Assets*

****Item                3.  Quantitative** and Qualitative                Disclosures About Market                Risk.**

****Item                4.  Controls and                Procedures**.**

*Disclosure            Controls and Procedures*

**Certifying              Officers**

*Changes            in Internal Control over Financial Reporting*

----

**PART                II — OTHER                INFORMATION**

**Item      1.  Legal Proceedings.**

*Fire Shield*
*Fire Shield*

*Fire Shield*

**.  **

**Item        1A.  Risk Factors.**

Form          10-K

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

****Item      3.  Defaults Upon Senior      Securities.****

----

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

|   | Proposal              1; | The              following nominees were elected as directors to serve a one-year term              of              office: |
|--------|--------------------------|-----------------------------------------------------------------------------------------------------------------------------|

|                                       |  **Shares Voted FOR** |  **Shares                  WITHHELD** |
|--------------------------------------------|----------------------------|--------------------------------------------|
|  Robert                S. Wiggins     | 5,320,326                  |  148,926                              |
|  Raymond                B. Wood       | 5,290,204                  |  179,048                              |
|  Gerry                Chastelet       | 5,237,787                  |   231,465                        |
|  Patrick                M. Murphy     | 5,277,649                  |                    191,603            |
|  Edmund                F. Murphy, Jr. | 5,296,166                  |   173,086                        |
|  David                F. Walker       | 5,315,815                  |   153,437                        |

|   | Proposal              2; | The                appointment of KPMG LLP as the Company's independent registered                public accounting firm for the year ending March 31, 2007 was                ratified as such: |
|--------|--------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **Shares                Voted FOR** | **Shares                WITHHELD** | **Shares                ABSTAINED** |
|-------------------------------------|------------------------------------|-------------------------------------|
| 5,399,208                           | 43,346                             | 26,697                              |

****Item      5.  Other      information.****

**Item              6.  Exhibits.**

|   | Exhibit                  31.1 — Certification of the CEO pursuant to Rule 13a-14(a) or Rule                  15(d)-14(a).                                             |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |
|   | Exhibit                  31.2 — Certification of the CFO pursuant to Rule 13a-14(a) or Rule                  15(d)-14(a).                                             |
|   |
|   | Exhibit                  32.1 — Certification pursuant to 18 U.S.C. §1350 as adopted pursuant to                  Section 906 of the Sarbanes-Oxley Act of 2002. |
|   |
|   | Exhibit                  32.2 — Certification pursuant to 18 U.S.C. §1350 as adopted pursuant to                  Section 906 of the Sarbanes-Oxley Act of 2002. |
|   |

**SIGNATURES**

|                                      | TECHNOLOGY              RESEARCH CORPORATION                                                                                                                                                                                                                                                                             |
|-------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                      |
| November 14,              2006  | By:                    /s/ Robert S.              Wiggins                                                                  |
|                                      |              Robert              S. Wiggins                                                                                                                                                                                                             |
|                                      |                           Chairman, President and Chief Executive Officer                                                                                                                                                                                    |
|                                      |                           (Principal Executive Officer)                                                                                                                                                                                                      |
|                                      |
|                                      |
| November 14,              2006  | By:                    /s/ Barry              H. Black                                                 |
|                                      |              Barry              H. Black                                                                                                                                                                                                                |
|                                      |                           Chief Financial Officer                                                                                                                                                                                                            |
|                                      |                           (Principal Financial and Accounting              Officer)                                                                                                                                                                          |

----