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

                                   FORM 10-QSB

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

                 FOR THE QUARTERLY PERIOD ENDED JANUARY 1, 2006

                        COMMISSION FILE NUMBER 333-122822

                                   -----------

                             SAGAMORE HOLDINGS, INC.
               (Exact Name of registrant as specified in charter)

                      FLORIDA                      20-1600519
         (State or other jurisdiction of         (IRS Employer
          incorporation or organization)     Identification number)

                               402 Prospect Street
                             BRANDON, VERMONT 05733
                    (Address of principal executive offices)
                                   (Zip Code)

                                  802-247-6811
              (Registrant's telephone number, including area code)

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

                                 Yes |X| No |_|

      Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act). Yes |_| No |X|


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

      As of April 4, 2006, there were 101,540,000 shares of the Company's common
stock, par value $.01 per share outstanding.






<PAGE>

                             SAGAMORE HOLDINGS, INC.

                                FORM 10-QSB INDEX

<TABLE>
<CAPTION>



                                                                                                         Page
                                                                                                         ----
                                                                                                        Number
                                                                                                        ------
<S>                                                                                                    <C>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed consolidated balance Sheet as of January 1, 2006 (Unaudited)                                   3 - 4
Condensed consolidated statements of Operations for the three and six months ended January 1, 2006       5 - 6
and the period from  September 15, 2004, (Date of Capitalization) through January 2, 2005 and for
the three months ended January 2, 2005 (Unaudited)
Condensed consolidated statements of Cash Flows for the six months ended January 1, 2006 and the             7
period from  September 15, 2004, (Date of Capitalization) through January 2, 2005 (Unaudited)
Notes to Condensed Consolidated Financial Statements (unaudited)                                        8 - 17
Item 2. Management's Discussion and Analysis or Plan of Operation                                      17 - 24
Item 3. Controls and Procedures                                                                        24 - 25

PART II - OTHER INFORMATION
Item 1. Legal Proceedings                                                                                   26
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds                                         26
Item 3. Defaults Upon Senior Securities                                                                26 - 30
Item 4. Submission of Matters to a Vote of Security Holders                                                 30
Item 5. Other Information                                                                                   30
Item 6. Exhibits                                                                                       31 - 33

SIGNATURES                                                                                                  34
</TABLE>






                                       2
<PAGE>

                         PART 1 - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                     SAGAMORE HOLDINGS, INC. AND SUBSIDIARY
                      CONDENSED CONSOLIDATED BALANCE SHEET
                                 JANUARY 1, 2006
                                   (UNAUDITED)

<TABLE>
<CAPTION>
ASSETS
Current assets:
<S>                                                                             <C>
  Cash                                                                          $           160,745
  Accounts receivable, net of allowance for doubtful accounts of $75,063                  1,798,790
  Inventories, net of allowance for obsolescence of $688,500                              2,612,579
  Prepaid expenses and other current assets                                                 201,610
                                                                                -------------------
    Total current assets                                                                  4,773,724

Property and equipment, net                                                               2,098,228

Identifiable intangible assets, net                                                       1,129,775
Deferred costs related to registration rights agreement                                     156,470
Deferred loan origination fees, net                                                         104,166
                                                                                -------------------


    Total Assets                                                                $         8,262,363
                                                                                ===================

LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current liabilities:
  Revolving credit facility borrowings                                          $         2,571,062
  Term loan                                                                                 900,000
  Note payable to former parent of subsidiary                                             2,750,000
  Liability for equipment purchases                                                         389,398
  Secured convertible debentures                                                            519,238
  Registration rights agreement liability                                                   165,977
  Accounts payable                                                                        2,811,669
  Accrued expenses and other current liabilities                                            824,914
                                                                                -------------------
    Total current liabilities                                                            10,932,258

  Accrued cumulative dividends on Series A preferred shares                                 387,000
                                                                                -------------------

Total Liabilities                                                                        11,319,258
                                                                                -------------------

Commitments and contingencies
</TABLE>



                                       3
<PAGE>

                     SAGAMORE HOLDINGS, INC. AND SUBSIDIARY
                      CONDENSED CONSOLIDATED BALANCE SHEET
                                 JANUARY 1, 2006
                                   (UNAUDITED)
                                   (CONTINUED)

<TABLE>
<CAPTION>

<S>                                                                                      <C>
Stockholders' Deficiency:
  Preferred stock, 100,000,000 shares authorized:
    Series A redeemable convertible preferred stock, $.001
      par value; 6,000,000 shares issued and outstanding
      (liquidation preference $6,000,000)                                                     6,000
    Series B convertible preferred stock, no par value;
      -0- shares issued and outstanding                                                           0
  Common stock, $.001 par value; 2,000,000,000 shares
    authorized; 101,540,000 shares issued and outstanding                                   101,540
  Additional paid-in capital                                                              6,518,360
  Accumulated deficit                                                                   (9,682,795)
                                                                                -------------------
    Total stockholders' deficiency                                                      (3,056,895)
                                                                                -------------------
    Total Liabilities and Stockholders' Equity                                  $         8,262,363
                                                                                ===================
</TABLE>



            See Notes to Condensed Consolidated Financial Statements.






                                       4
<PAGE>

                     SAGAMORE HOLDINGS, INC. AND SUBSIDIARY
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                   FOR THE THREE MONTHS ENDED JANUARY 1, 2006
                               AND JANUARY 2, 2005
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                THREE              THREE
                                                                               MONTHS             MONTHS
                                                                                ENDED              ENDED
                                                                          JANUARY 1, 2006     JANUARY 2, 2005
                                                                          ---------------     ---------------
<S>                                                                       <C>                 <C>
Net Sales                                                                 $   4,062,978       $   5,759,583

Cost of Sales                                                                 4,119,831           5,456,956
                                                                          -------------       -------------
Gross Profit (loss)                                                            (56,853)             302,627
                                                                          -------------       -------------

Operating expenses:
  General and administrative                                                    566,083             582,800
  Selling                                                                       125,367             203,026
                                                                          -------------       -------------
    Totals                                                                      691,450             785,826
                                                                          -------------       -------------

Loss from operations                                                          (748,303)           (483,199)

Interest expense                                                                155,110              99,938
                                                                          -------------       -------------

Net loss                                                                      (903,413)           (583,137)

Preferred stock dividends on Series A preferred shares                           75,000                   0
                                                                          -------------       -------------

Net loss applicable to common shares                                      $   (978,413)      $    (583,137)
                                                                          =============       =============

Loss per common share - basic and diluted                                 $      (0.01)      $       (0.01)
                                                                          =============       =============

Weighted average common shares (including Series B preferred shares)
outstanding                                                                 105,935,604         110,000,000
                                                                          =============       =============
</TABLE>




           See Notes to Condensed Consolidated Financial Statements.



                                       5
<PAGE>

                     SAGAMORE HOLDINGS, INC. AND SUBSIDIARY
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                    FOR THE SIX MONTHS ENDED JANUARY 1, 2006
         AND THE PERIOD FROM SEPTEMBER 15, 2004 (DATE OF CAPITALIZATION)
                             THROUGH JANUARY 2, 2005
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                SIX                   PERIOD FROM
                                                                               MONTHS                SEPT. 15, 2004
                                                                                ENDED                   THROUGH
                                                                           JANUARY 1, 2006           JANUARY 2, 2005
                                                                       -----------------------     -------------------
<S>                                                                    <C>                         <C>
Net Sales                                                              $            8,373,924      $        5,759,583

Cost of Sales                                                                       8,848,958               5,456,956
                                                                       -----------------------     -------------------
Gross Profit (loss)                                                                 (475,034)                 302,627
                                                                       -----------------------     -------------------

Operating expenses:
  General and administrative                                                        1,058,368               2,330,300
  Selling                                                                             215,944                 203,026
  Impairment of goodwill                                                              105,500                       0
                                                                       -----------------------     -------------------
    Totals                                                                          1,379,812               2,533,326
                                                                       -----------------------     -------------------

Loss from operations                                                              (1,854,846)             (2,230,699)

Interest expense                                                                      271,000                  99,938
                                                                       -----------------------     -------------------

Net loss                                                                          (2,125,846)             (2,330,637)

Cumulative preferred stock dividends on Series A preferred shares                     150,000                       0
                                                                       -----------------------     -------------------

Net loss applicable to common shares                                   $          (2,275,846)      $      (2,330,637)
                                                                       =======================     ===================

Loss per common share - basic and diluted                              $               (0.02)      $           (0.02)
                                                                       =======================     ===================

Weighted average common shares (including Series B preferred shares)
outstanding                                                                       108,783,243             110,000,000
                                                                       =======================     ===================
</TABLE>

            See Notes to Condensed Consolidated Financial Statements.




                                       6
<PAGE>

                     SAGAMORE HOLDINGS, INC. AND SUBSIDIARY
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                    FOR THE SIX MONTHS ENDED JANUARY 1, 2006
       AND FOR THE PERIOD FROM SEPTEMBER 15, 2004 (DATE OF CAPITALIZATION)
                             THROUGH JANUARY 2, 2005
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                      SIX                   PERIOD FROM
                                                                                     MONTHS                SEPT. 15, 2004
                                                                                     ENDED                    THROUGH
                                                                                JANUARY 1, 2006           JANUARY 2, 2005
                                                                                ---------------           ---------------
<S>                                                                                <C>                       <C>
Operating activities:
  Net loss                                                                         $(2,125,846)              $(2,330,637)
  Adjustments to reconcile net loss to net cash provided by                           2,213,344                 2,555,552
operating activities
                                                                                   ------------              ------------
        Net cash provided by operating activities                                        87,498                   224,915
                                                                                   ------------              ------------
Investing activities:
  Purchase of net assets of Nexus Custom Electronics, Inc.,
    net of cash received of $92,335                                                                           (5,311,600)
  Purchases of property and equipment                                                 (172,093)                 (152,719)
                                                                                   ------------              ------------
        Net cash used in investing activities                                         (172,093)               (5,464,319)
                                                                                   ------------              ------------
Financing activities:
  Proceeds from sale of Series A shares                                                                         5,250,000
  Repayment of capital lease obligations                                                                        (242,795)
  Net proceeds from (repayments on) credit facility borrowings                        (248,361)                   329,243
  Term loan principal payments                                                         (60,000)                  (60,000)
  Proceeds from secured convertible debentures                                          519,238
  Payment for senior convertible debentures origination fee                           (125,000)
                                                                                   ------------              ------------
        Net cash provided by financing activities                                        85,877                 5,276,448
                                                                                   ------------              ------------
Net increase in cash                                                                      1,282                    37,044
Cash, beginning of period                                                               159,463                         0
                                                                                   ------------              ------------
Cash, end of period                                                                 $   160,745               $    37,044
                                                                                   ============              ============

Supplemental disclosure of cash flow information:
  Interest paid                                                                     $    71,419               $   161,105
                                                                                   ============              ============
Supplemental disclosure of noncash investing and financing activities:
   Equipment purchases                                                              $   389,398               $        --
                                                                                   ============              ============
   Preferred stock dividends accrued                                                $   150,000               $        --
                                                                                   ============              ============
   Earn out provision relating to acquisition of Nexus                              $   105,500               $        --
                                                                                   ============              ============
Credit facility obligations incurred in connection with acquisition                 $        --               $ 4,000,000
                                                                                   ============              ============
Liabilities assumed in connection with acquisition                                  $        --               $ 2,966,987
                                                                                   ============              ============
Note payable issued to former parent of subsidiary in connection
with acquisition                                                                    $        --               $ 2,750,000
                                                                                   ============              ============
    Fair value of registration rights agreement liability                           $   163,273               $        --
                                                                                   ============              ============
    Issuance of 2,500,000 common shares to finder on sale of                        $        --               $     2,500
preferred stock                                                                    ============              ============
</TABLE>




            See Notes to Condensed Consolidated Financial Statements.


                                       7
<PAGE>

                     SAGAMORE HOLDINGS, INC. AND SUBSIDIARY
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

Note 1. BASIS OF PRESENTATION

      In the opinion of management, the accompanying unaudited condensed
      consolidated financial statements contain all adjustments (consisting of
      normal recurring adjustments) necessary to present fairly the financial
      position of Sagamore Holdings, Inc, ("Sagamore Holdings") and "Subsidiary"
      as of January 1, 2006 and their results of operations and cash flows for
      the three and six months ended January 1, 2006 and the period from
      September 15, 2004 (date of capitalization) through January 2, 2005. The
      results of operations for the three and six months ended January 1, 2006
      are not necessarily indicative of the results to be expected for the full
      year ending June 30, 2006.

      As used herein, the "Company" refers to Sagamore Holdings or Sagamore
      Holdings together with its subsidiary. The Company's fiscal year ends on
      June 30th. The interim fiscal quarters consist of thirteen weeks ending on
      a Sunday.

      Certain information and footnote disclosures normally included in
      financial statements prepared in accordance with accounting principles
      generally accepted in the United States of America have been omitted in
      accordance with the published rules and regulations of the Securities and
      Exchange Commission for interim financial statements. The unaudited
      condensed consolidated financial statements and the notes thereto in this
      report should be read in conjunction with the audited consolidated
      financial statements and notes thereto included in the Company's Annual
      Report on Form 10-KSB for the fiscal year ended June 30, 2005 (the
      "10-KSB").

      Sagamore Holdings, Inc. was formed and incorporated in the State of
      Florida on August 30, 2004 to acquire substantially all of the net assets
      and the business of Nexus Custom Electronics, Inc. ("Nexus"). It was
      initially capitalized on September 15, 2004, and it acquired Nexus from
      Jaco Electronics, Inc. ("Jaco") on September 20, 2004.

      The acquisition was accounted for pursuant to the purchase method of
      accounting as if the acquisition was completed on October 3, 2004, the end
      of the interim period closest to the actual date of the acquisition.
      Accordingly, (i) the assets (including the identifiable intangible assets)
      and the liabilities of Nexus were recorded as of that date at their
      estimated fair values and (ii) the unaudited condensed consolidated
      statement of operations for the period from September 15, 2004 (date of
      capitalization) through January 2, 2005 does not include any amounts
      related to the results of operations of Nexus through October 3, 2004
      (under the purchase method, the Company was required to include such
      results of operations only for periods subsequent to October 3, 2004). The
      Company's other activities during the period from September 15, 2004 (date
      of capitalization) through October 3, 2004 were limited to its formation
      and obtaining financing for and to consummating the acquisition of Nexus.

                                       8
<PAGE>

      The accompanying unaudited condensed consolidated financial statements
      have been prepared assuming that the Company will continue as a going
      concern. However, the Company incurred a net loss of $2,125,846 for the
      six months ended January 1, 2006 and $9,682,795 from its inception through
      January 1, 2006 and had a net working capital deficiency of $6,158,534 at
      January 1, 2006. It also did not meet certain covenants under its credit
      facility with Comerica Bank ("Comerica") for a revolving credit facility
      (the "revolver") and a term loan, and its promissory note with Jaco and,
      accordingly, the outstanding balance of $3,471,062 under the credit
      facility ($2,571,062 under the revolver and $900,000 under the term loan)
      and the outstanding balance of $2,750,000 under the Jaco note agreement
      were in default as of January 1, 2006 and classified in current
      liabilities in the unaudited condensed consolidated balance sheet.

      The Company entered into a forbearance agreement with Comerica on July 15,
      2005, effective July 1, 2005 through August 1, 2005, which essentially
      provided for an extension of the revolver under the credit facility which
      expired July 1, 2005, and also provided that Comerica would not exercise
      its right to call for acceleration of all amounts due under the term loan
      and the revolver under the credit facility, if the Company met certain
      conditions. Effective August 1, 2005, the Company and Comerica agreed to
      extend the maturity date of the revolver under the credit facility to
      September 1, 2005. However, the maturity date has not been further
      extended and the loan balances remain in default. The Company and Comerica
      have been negotiating an extension of the forbearance agreement from
      September 1, 2005 through June 30, 2006. If an extension is agreed upon,
      management of the Company intends to attempt to negotiate an amendment to
      the credit facility in order to further extend the facility under terms
      the Company can comply with going forward. However, there can be no
      assurance that the Company will get an extension of the forbearance
      agreement and/or amendments to the credit facility.

      Comerica may force immediate repayment of amounts due under the credit
      facility and invoke penalty interest (up to three percentage points or
      approximately $114,000 annually) at the lender's discretion. Since the
      Company had not been notified that it would be charged penalty interest,
      it was not required to accrue any as of January 1, 2006.

      Unless the Company can negotiate an extension of the forbearance agreement
      and/or amendments to the credit facility as discussed above, and it can
      resolve its default under the promissory note with Jaco, the Company's
      operating results and cash flows will not be adequate to enable it to pay
      the balance due at or subsequent to January 1, 2006 unless it can obtain
      an alternate credit facility and/or additional financing. Management
      cannot assure that the Company will be able to obtain such an extension,
      amendment or resolution. These matters raise substantial doubt about the
      Company's ability to continue as a going concern. The unaudited condensed
      consolidated financial statements do not include any adjustments related
      to the recoverability and classification of assets or the amount and
      classification of liabilities that might result from the outcome of this
      uncertainty.

                                       9
<PAGE>

      As further explained in Note 8 herein, on November 10, 2005, Sagamore
      Holdings entered into a Securities Purchase Agreement (the "SPA"), which
      provides for the sale of up to $1,250,000 of Secured Convertible
      Debentures to a new investor subject to certain conditions. As of March
      10, 2006, Sagamore Holdings had sold $743,285 of Secured Convertible
      Debentures to the new investor. However, as of that date, the Company was
      in default under the terms of the Secured Convertible Debentures and the
      Company may not be able to obtain any additional funding under the SPA.
      The Company has no other agreements in place other than the SPA providing
      for additional debt or equity financing for the Company. As a result of
      the default, the outstanding balance as of January 1, 2006 of $519,238 has
      been classified as a current liability.

      If the Company cannot complete the above mentioned actions related to the
      credit facility, resolve its default under the promissory note and obtain
      additional proceeds under the SPA, it would have to examine other
      strategic alternatives, including raising capital in the debt or equity
      markets, or a possible sale or liquidation of its business.

Note 2. Loss Per Common Share and Stock-Based Compensation

      LOSS PER COMMON SHARE

      Basic net loss per common share is computed by dividing the net loss
      applicable to common stockholders by the weighted average number of common
      shares outstanding during the period, including the outstanding shares of
      Series B Convertible preferred stock which are substantially equivalent to
      shares of common stock during the period from September 17, 2004 to
      November 11, 2005.

      Diluted net loss per common share is computed by dividing the net loss by
      the weighted average number of common shares outstanding adjusted for the
      dilutive effects of the assumed issuance of potentially dilutive
      securities. The Company's basic and diluted loss per common share amounts
      are the same since the Company had a net loss in each period and the
      assumed exercise of stock options and the conversion of the Series A
      convertible preferred stock and secured convertible debentures outstanding
      as of January 1, 2006 would be anti-dilutive. The number of shares
      issuable upon the exercise of outstanding options and the conversion of
      the outstanding Series A convertible preferred stock and secured
      convertible debentures that could dilute earnings per share in future
      periods was 31,769,520 and 8,500,000 at January 1, 2006 and January 2,
      2005, respectively.

      STOCK BASED COMPENSATION

      Statement of Financial Accounting Standards No. 123, "Accounting for
      Stock-Based Compensation" ("SFAS 123"), provides for the use of a fair
      value-based method of accounting for employee stock compensation. However,
      SFAS 123 also allows an entity to continue to measure compensation cost
      for stock options granted to employees using the intrinsic value method of
      accounting prescribed by Accounting Principles Board Opinion No. 25,
      "Accounting for Stock Issued to Employees" ("APB 25"), which only requires
      charges to compensation expense for the excess, if any, of the fair value
      of the underlying stock at the date a stock option is granted (or at an
      appropriate subsequent measurement date) over the amount the employee must
      pay to acquire the stock. The Company has elected to account for employee
      stock options using the intrinsic value method under APB 25. By making
      that election, it is required by SFAS 123 and SFAS 148, "Accounting for
      Stock-Based Compensation - Transition and Disclosure" ("SFAS 148"), to
      provide pro forma disclosures of net income (loss) and income (loss) per
      common share as if a fair value-based method of accounting had been
      applied. As of June 30, 2005, all stock options had vested, and
      accordingly, the Company had no pro forma adjustments to make to employee
      compensation or loss per common share amounts for those options, all of
      which were granted between January 3, 2005 and June 30, 2005.

                                       10
<PAGE>

Note 3. Inventories

      Inventories include costs of materials, labor and overhead, and are stated
      at the lower of cost or market, with cost being determined using the
      first-in, first-out method. The Company has provided for an allowance for
      obsolescence based on historical experience, on hand quantities, usage and
      backlog. Following is the inventory detail as of January 1, 2006:

      Raw materials                        $1,946,820
      Work-in-process                         643,826
      Finished goods                           21,933
                                           ----------

      Total Inventories                    $2,612,579
                                           ==========

Note 4. Acquisition of Nexus

      In connection with the acquisition of Nexus, the Company is required to
      pay to Jaco additional consideration under an earn out provision
      calculated at 5% of the net sales of Nexus in excess of $20,000,000 for
      each of the succeeding six years from the date of acquisition (September
      20, 2004) limited to total payments of $1,000,000.

      For the six months ended January 1, 2006, the Company had initially
      recorded an earn out provision totaling $105,500 which was allocated as
      goodwill. Based on the Company's results of operations and management's
      estimates of future discounted cash flows, the Company recognized an
      impairment loss in the amount of $105,500 in the condensed consolidated
      statement of operations.

      The following unaudited pro forma financial information presents the
      consolidated results of operations for the six months ended January 2,
      2005, as if the acquisition had occurred on July 1, 2004, after giving
      effect to certain adjustments. The pro forma information does not
      necessarily reflect the results of operations that would have occurred had
      the entities been a single company during this period.

                                                        Six Months Ended January
                                                                 2, 2005
                                                        ------------------------
                                                               (Unaudited)
                                                        ------------------------

      Net sales                                                      $11,797,133
                                                        ========================
      Net loss                                                      ($2,573,493)
                                                        ========================
      Weighted average number of common shares
      outstanding                                                    110,000,000
                                                        ========================
      Loss per common share - basic and diluted                          ($0.02)
                                                        ========================

                                       11
<PAGE>

      The consideration to be paid to Jaco is required to be adjusted either up
      or down on a dollar-for-dollar basis up to $500,000 if the net working
      capital of Nexus as of September 20, 2004 was more or less than a target
      net working capital of $7,331,000. On November 19, 2004, Nexus received a
      statement from Jaco claiming that there should be an adjustment to
      increase the purchase price by $500,000 and Nexus informed Jaco that it
      believes there should be an adjustment to decrease the purchase price by
      $500,000. This dispute is being negotiated. However, it is likely that
      arbitration before an agreeable accounting firm will occur. There is a
      chance that the Company may be unsuccessful. If the Company is
      unsuccessful on the merits, this would have a material adverse effect on
      our working capital.

      The target net working capital adjustment related to the acquisition
      described above remained in dispute as of April 11, 2006. The Company
      disputes the amount due Jaco under the purchase agreement. In addition,
      the Company intends to pursue its claims and remedies against Jaco.

Note 5. Credit Facility

      Nexus obtained a $5,000,000 credit facility with Comerica, which is
      collateralized by all of its assets. The credit facility includes a
      $1,200,000 term loan and a $3,800,000 revolver. During the period from
      September 15, 2004 (date of capitalization), through January 1, 2006,
      Nexus borrowed a total of $4,319,049 under the credit facility. $1,200,000
      was advanced under the term loan and $3,119,049 was advanced under the
      revolver. As a result of repayments, the balance of the revolver was
      reduced to $2,571,062 and the balance of the term loan was reduced to
      $900,000 as of January 1, 2006.

      The term loan is payable in monthly principal payments of $20,000 through
      November 1, 2009. Interest at prime plus 1.5% is payable monthly
      commencing on October 1, 2004 (an effective rate of 8.75% at January 1,
      2006). The revolver matured on July 1, 2005 but was effectively extended
      until September 1, 2005 under the forbearance agreement. The borrowings
      under the revolver bear interest at prime plus 1%, or alternatively at
      LIBOR plus 3.75% (an effective rate of 8.25% at January 1, 2006).
      Borrowings under the revolver are limited to credit available based on
      eligible accounts receivable and inventory as defined in the credit
      facility. The credit facility contains restrictive covenants that, among
      other things, restrict the payment of dividends, additional indebtedness,
      lease financing, capital expenditures and investments. The covenants also
      require Nexus to meet certain financial ratios and maintain minimum levels
      of tangible net worth.

      As of January 1, 2006, the Company did not meet the requirements of four
      covenants: minimum working capital ratio; debt service ratio ("EBITDA"),
      as defined, divided by interest and principal payment requirements);
      leverage ratio (liabilities to tangible net worth ratio) and minimum
      tangible net worth (tangible net worth includes subordinated debt but
      excludes intangible assets), and therefore, the loans were in default. Due
      to the default, $660,000 initially scheduled to be paid after January 1,
      2006 was classified as a current liability.

                                       12
<PAGE>

      Comerica may force immediate repayment of amounts due under the credit
      facility and invoke penalty interest (up to three percentage points or
      approximately $114,000 annually) at the lender's discretion. Since the
      Company had not been notified that it would be charged penalty interest,
      it was not required to accrue any as of January 1, 2006.

Note 6. Note payable to former parent of subsidiary:

      In connection with the acquisition of Nexus, consideration totaling
      $2,750,000 is payable through a five-year promissory note issued to Jaco,
      the former parent of Nexus. Interest is payable quarterly from December 1,
      2004 until September 1, 2009 at the lesser of a specified prime rate or
      7%. The promissory note is payable in principal payments on the following
      dates: $500,000 on September 1, 2006, $156,250 per quarter commencing on
      December 1, 2006 through September 1, 2008 and $250,000 per quarter
      commencing on December 1, 2008 through September 1, 2009. As of January 1,
      2006, the Company was in default under the terms of the promissory note
      because it had not paid interest on the promissory note since February
      2005. The change in control in November 2005 was also an event of default
      under the promissory note as described in Note 8.

      As of April 11, 2006, the Company has not made any more interest payments
      and it had not negotiated any waivers related to either of the events of
      default. As of April 11, 2006, the note holder had not given notice that
      it would declare the note immediately due and payable, although it has the
      right to do so. As a result of these events of default as of January 1,
      2006, the outstanding balance of $2,750,000 under the note agreement has
      been classified as a current obligation. Defaults under other loan
      agreements, on loan amounts exceeding $5,000,000 could also result in an
      event of default under the terms of the promissory note agreement.

Note 7. Stockholders' Deficiency

      As explained in Note 6 in the 10-KSB, on September 15, 2004, the Company
      sold 6,000,000 Series A preferred shares and received net proceeds of
      $5,250,000. In addition, the Company issued 2,500,000 shares of its common
      stock to a third party as a commitment fee. Each Series A preferred share
      entitles the holder to receive a cumulative 5% dividend when declared by
      the Company's Board of Directors. As of January 1, 2006, no dividends have
      been declared and undeclared cumulated dividends in arrears, which have
      been accrued, were approximately $387,000.

      Each share of Series A preferred stock can be converted into shares of the
      Company's common stock at the option of the holder as determined by
      dividing (a) the sum of (i) the amount due to the Series A holder upon
      liquidation, plus (ii) all accrued but unpaid dividends, by (b) the
      conversion price, which is equal to the lesser of (a) $1.00 per share
      (adjusted in the event of a subdivision or combination of shares), or (b)
      80% of the average of the lowest closing bid price of the common stock
      during the five trading days immediately preceding the date of conversion,
      assuming a public market exists for shares of common stock.

                                       13
<PAGE>

      In accordance with the consensus for EITF Issue No. 98-5 and EITF Issue
      No. 00-27, the intrinsic value of the common shares issuable upon the
      assumed conversion of the Series A preferred shares as of the commitment
      date exceeded the proceeds from the issuance of the Series A preferred
      shares by approximately $1,600,000, which represents a contingent
      beneficial conversion feature that is analogous to a dividend on the
      Series A preferred shares and, therefore, would be reflected as a decrease
      in the net income or an increase in the net loss applicable to common
      stockholders if and when a public market exists for the shares of the
      Company's common stock.

      The Company has the right to redeem any outstanding shares of the Series A
      preferred stock at an amount equal to 120% of the liquidation amount. In
      the event that the Company exercises a right of redemption, the holder
      would receive a warrant to purchase 50,000 shares of the Company's common
      stock for every $100,000 of the liquidation amount redeemed.

      As a result of the issuance of the registration rights agreement described
      below that containS a liquidated damages clause which could cause the
      Company to issue a number of shares of common stock as a result of its
      failure to register the Series A preferred stock on a timely basis that
      could exceed the number of common shares authorized, the Company is
      required to follow EITF Issue No. 00-19, "Accounting for Derivative
      Financial Instruments Indexed to, and Potentially Settled in, a Company's
      Own Stock by the Company" ("EITF 00-19") in determining whether the Series
      A preferred shares can be included in stockholders' equity. Since
      management of the Company controls well in excess of 51% of the Company's
      voting stock, it can control the number of shares authorized and in
      accordance with the provisions of EITF 00-19, the proceeds of the issuance
      of the Series A preferred shares are reflected as equity in the
      accompanying unaudited condensed consolidated balance sheet as of January
      1, 2006.

      The shares of common stock issuable by the Company upon conversion of
      shares of the Series A preferred shares will not be registered initially
      under the Securities Act of 1933. To provide for the registration of such
      underlying shares, the Company and the holder of the Series A preferred
      shares entered into a registration rights agreement, dated September 15,
      2004, requiring the Company to prepare and file a registration statement
      covering the resale of the shares of common stock underlying the Series A
      preferred shares and maintain its effectiveness. The registration rights
      agreement required the Company to use its best efforts to cause such
      registration statement to be declared effective no later than 210 days
      following September 15, 2004 (the closing of the sale of the Series A
      preferred shares).

      The registration rights agreement also contains a liquidated damages
      provision which calls for the holder to receive from the Company a
      specified amount of shares if: (i) The Company fails to file a
      registration statement covering the underlying shares of common stock
      within 60 days of September 15, 2004, and, (ii) the registration statement
      is not declared effective within 210 days following September 15, 2004. In
      the event that one of the aforementioned failures occurs, the registration
      rights agreement calls for the Company to pay the holder common stock
      equal to 2% of the liquidated amount, as defined, of that portion of the
      Series A preferred shares which has not been converted into common stock
      as of the occurrence of such failure, with such amount to be paid by the
      Company to the holder on a monthly basis after the occurrence of such
      failure. The holder is entitled to receive the aforementioned damages
      until such time as the registration statement is declared effective. Since
      the registration statement registering the underlying shares of common
      stock was not filed within 60 days or declared effective within 210 days
      from September 15, 2004, the holder became entitled to receive such
      damages payable in common stock. The aggregate shares computed under this
      provision totaled 31,769,520 as of January 1, 2006. The value of these
      shares is immaterial and has not been reflected in these financial
      statements.

                                       14
<PAGE>

Note 8. Sale of Securities, Registration Rights Agreement and Change in Control

      Sagamore Holdings entered into the SPA on November 10, 2005 with CSI
      Business Finance, Inc. ("CSI Finance"), a new investor, which provides for
      the sale of up to $1,250,000 of Secured Convertible Debentures that will
      be convertible into common shares of Sagamore Holdings. The SPA will
      expire on October 31, 2006. The Company paid $125,000 of loan origination
      fees which are being amortized through October 31, 2006. In addition to
      the SPA, Sagamore Holdings and CSI Finance entered into ancillary
      agreements covering CSI's registration rights for the underlying common
      stock, and the security for any amount loaned. All assets of Sagamore
      Holdings are pledged under this agreement. At the date of the agreement
      the only assets owned by Sagamore Holdings were its shares of Nexus, its
      wholly-owned operating subsidiary and, accordingly, the assets of Nexus
      are the primary security for any amount loaned. However, the holder's lien
      on such assets is subordinated to the lien held by Comerica.

      The following are the principal terms of the Secured Convertible
      Debentures:

o     They mature on October 31, 2006.

o     Interest is payable monthly at 12% annual rate.

o     Monthly principal payments begin on the earlier of (a) one month from the
      date the registration of the underlying common shares is declared
      effective, or (b) five months from the date of sale.

o     Monthly payments are equal to the outstanding balance divided by the
      remaining number of months to the maturity date.

o     They are convertible into common shares at the option of the holder at a
      conversion rate of $ 0.025 per share.

o     They are redeemable at the option of Sagamore Holdings at face value plus
      a 20% premium above the market value of the underlying shares of common
      stock if the market value is greater than the conversion price.

o     The Company must seek the consent of the holder if it wishes to sell any
      additional shares of capital stock or grant any additional security
      interests in its assets.

      The shares of common stock issuable by the Company to the investor upon
      conversion of shares of the Secured Convertible Debentures will not be
      registered initially under the Securities Act of 1933. To provide for the
      registration of such underlying shares, the Company and the investor
      entered into a registration rights agreement, dated November 10, 2005,
      requiring the Company to prepare and file a registration statement
      covering the resale of the shares of common stock underlying the Secured
      Convertible Debentures. The registration rights agreement required the
      Company to use its best efforts to cause such registration statement to be
      declared effective no later than 150 days following November 10, 2005 (the
      date of the Registration Rights Agreement).

                                       15
<PAGE>

      The Registration Rights Agreement also contains a liquidated damages
      provision which calls for the holder to receive from the Company a
      specified amount of cash or shares if: (i) the Company fails to file a
      registration statement covering the underlying shares of common stock
      within 30 days of November 10, 2005, and, (ii) the registration statement
      is not declared effective within 150 days following November 10, 2005. In
      the event that one of the aforementioned failures occurs, the Registration
      Rights Agreement calls for the Company to pay, at the option of the
      holder, a cash amount or shares of common stock equal to 2% of the
      liquidated amount, as defined, of that portion of the Secured Convertible
      Debentures which has not been converted into common stock as of the
      occurrence of such failure, with such amount to be paid by the Company to
      the holder on a monthly basis after the occurrence of such failure. The
      holder is entitled to receive the aforementioned damages until such time
      as the registration statement is declared effective. Since a registration
      statement registering the underlying shares of common stock was not filed
      within 30 days after the date of the registration rights agreement, nor is
      it likely that the registration rights agreement will be declared
      effective within 150 days from November 10, 2005, the Company was required
      to record charges for the penalty beginning December 10, 2005.

      Subsequent to the commencement of the SPA, the ancillary agreements and
      the sale of the Secured Convertible Debentures discussed above, the
      Company has not complied with several provisions of these agreements and
      was thus in default as of January 1, 2006. The Company has not paid
      interest, it has not timely filed the registration statement for the
      underlying securities, it is not current in its filing of its tax returns
      and it remains in default under the terms of its bank credit facility.
      Accordingly, the holder could force the immediate repayment of the Secured
      Convertible Debentures.

      The Company accounts for the fair value of the conversion feature of its
      Secured Convertible Debentures in accordance with SFAS No. 133 "Accounting
      For Derivative Instruments And Hedging Activities" ("SFAS 133") and EITF
      00-19 which require the Company to bifurcate and separately account for
      the conversion feature as an embedded derivative contained in the Secured
      Convertible Debentures, which is the host instrument. Pursuant to SFAS
      133, the Company bifurcated the fair value of the conversion feature which
      was determined to not be clearly and closely related to the debt host. In
      addition, since the effective registration of the securities underlying
      the conversion feature is an event outside of the Company's control of the
      Company, pursuant to EITF 00-19, the Company recorded the fair value of
      the conversion feature as a short-term liability as of the date of
      issuance as it was assumed that the Company may be required to net-cash
      settle the underlying securities. The Company is required to carry the
      derivative on its condensed consolidated balance sheet at fair value and
      record the unrealized changes in the fair value of the embedded derivative
      in the condensed consolidated statement of operations as interest expense.
      The Company recorded the fair value of the embedded derivative as a
      registration rights agreement liability of $163,273 on December 10, 2005,
      the date of the first default, and increased the registration rights
      agreement liability to $165,977 based on the fair value of the embedded
      instrument as of January 1, 2006. The increase in the fair value of the
      liability of $2,704 was charged to interest expense. The fair value of the
      embedded derivative on December 10, 2005 was also recorded as deferred
      costs related to the registration rights agreement which is being
      amortized over 24 months.

                                       16
<PAGE>

      On November 11, 2005, Corporate Strategies Inc. ("Corporate Strategies")
      entered into a stock purchase agreement pursuant to which it purchased
      70,600,000 shares of Sagamore Holdings' common stock from previous holders
      who were also officers of the Company. As a result, Corporate Strategies
      acquired approximately 70% of the total shares of Sagamore Holdings'
      common stock outstanding as of the date of said agreement, which resulted
      in a change in control of Sagamore Holdings and an event of default as
      defined in the loan agreements with Comerica (see Notes 5 and 6 herein).
      Mr. Timothy J. Connolly is the Chief Executive Officer of CSI Finance and
      Corporate Strategies.

      In connection with the acquisition of the control of Sagamore Holdings by
      Corporate Strategies, the previous holders of the common shares
      simultaneously resigned from their positions as executive officers and
      members of the Board of Directors of Sagamore Holdings; agreed to the
      cancellation of their 10,000,000 shares of the Series B preferred stock;
      and agreed to the cancellation of their respective employment agreements.

      On March 10, 2006, CSI Finance assigned its interest in the Secured
      Convertible Debentures to the Series A preferred stockholder. As of March
      10, 2006, CSI Finance had acquired $743,285 of such debentures pursuant to
      the SPA.

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


                 FORWARD-LOOKING STATEMENTS AND ASSOCIATED RISKS

      Information included or incorporated by reference in this filing may
      contain forward-looking statements within the meaning of Section 27A of
      the Securities Act and Section 21E of the Exchange Act. This information
      may involve known and unknown risks, uncertainties and other factors which
      may cause our actual results, performance or achievements to be materially
      different from the future results, performance or achievements expressed
      or implied by any forward-looking statements. Forward-looking statements,
      which involve assumptions and describe our future plans, strategies and
      expectations, are generally identifiable by use of the words "may,"
      "will," "should," "expect," "anticipate," "estimate," "believe," "intend"
      or "project" or the negative of these words or other variations on these
      words or comparable terminology.

                                       17
<PAGE>

      This filing contains forward-looking statements, including statements
      regarding, among other things, (a) our projected sales and profitability,
      (b) our Company's growth strategies, (c) our Company's future financing
      plans and (d) our Company's anticipated needs for working capital. These
      statements may be found under "Management's Discussion and Analysis of
      Financial Condition and Results of Operations" and "Business," as well as
      in this prospectus generally. Actual events or results may differ
      materially from those discussed in forward-looking statements as a result
      of various factors, including, without limitation, the risks outlined
      under "Risk Factors" and matters described in this filing generally. In
      light of these risks and uncertainties, there can be no assurance that the
      forward-looking statements contained in this filing will in fact occur.

      The following discussion should be read in conjunction with the unaudited
      condensed consolidated financial statements of Sagamore Holdings, Inc.
      ("Sagamore Holdings" or the "Company"), and the related notes thereto
      included elsewhere herein.


OVERVIEW

      Sagamore Holdings, Inc. ("Sagamore Holdings") was formed and incorporated
      in the State of Florida on August 30, 2004 to acquire substantially all of
      the net assets and the business of Nexus ("Nexus"), a wholly-owned
      subsidiary of Jaco Electronics, Inc. ("Jaco"). Sagamore Holdings was
      initially capitalized on September 15, 2004, and it acquired Nexus on
      September 20, 2004. As used herein, the "Company" refers to Sagamore
      Holdings, or Sagamore Holdings together with its subsidiary.

      The acquisition was accounted for pursuant to the purchase method of
      accounting as if the acquisition was completed, effectively, on October 3,
      2004, the end of the interim period closest to the actual date of the
      acquisition and accordingly, (i) the assets (including the identifiable
      intangible assets) and the liabilities of Nexus were recorded as of that
      date at their estimated fair values and (ii) the unaudited condensed
      consolidated statement of operations for the period from September 15,
      2004 (date of capitalization) through October 3, 2004 do not include any
      amounts related to the operations of Nexus prior to October 3, 2004. The
      Company's other activities during the period from September 15, 2004 (date
      of capitalization) through October 3, 2004 were limited to its formation
      and obtaining financing for and to consummate the acquisition.

      The Company provides contract-manufacturing services to industrial
      original equipment manufacturers ("OEMs") customers. Our subsidiary's core
      customer base consists primarily of small and medium-sized manufacturers
      that produce electronic equipment used in a wide variety of industries.
      Sales from our business are recognized at the time products are shipped to
      customers and may vary depending on the time of customers' orders, product
      mix and availability of component parts. Substantially all of our business
      is performed on a turnkey basis, which involves the procurement of
      specified components and raw materials from our network of suppliers and
      other suppliers, assembly of components on printed circuit boards and
      post-assembly testing. OEMs then incorporate the printed circuit boards
      into finished products. In assembling printed circuit boards, Nexus is
      capable of employing both conventional pin-through-hole interconnection
      technology, as well as advanced surface mount technology. Pin-through-hole
      interconnection technology is a method of assembling printed circuit
      boards in which component leads are inserted and soldered into plated
      holes in the board. Surface mount technology is a method of assembling
      printed circuit boards in which components are fixed directly to the
      surface of the board, rather than being inserted into holes. The gross
      profit margin for such materials is generally lower than the gross profit
      associated with the manufacturing process and other value-added services.

                                       18
<PAGE>

GOING CONCERN

      The unaudited condensed consolidated financial statements have been
      prepared assuming that the Company will continue as a going concern.
      However, the Company for the three months and the six months ended January
      1, 2006 incurred a net loss of $903,413 and $2,125,846 and had a net
      working capital deficiency of $6,158,534 at January 1, 2006. It also did
      not meet certain covenants under its credit facility with Comerica Bank
      ("Comerica") and a promissory note with Jaco and, accordingly, the
      outstanding balance of $3,471,062 under the credit facility ($2,571,062
      under the revolver and $900,000 under the term loan) and the outstanding
      balance of $2,750,000 under the Jaco note agreement were in default as of
      January 1, 2006 and classified in current liabilities in the unaudited
      condensed consolidated balance sheet. Accordingly, there is substantial
      doubt as to the ability of Sagamore Holdings and its subsidiary to
      continue as a going concern.

      The Company entered into a forbearance agreement with Comerica on July 15,
      2005, effective July 1, 2005 through August 1, 2005, which essentially
      provides for an extension of the revolver under the credit facility which
      expired July 1, 2005, and also provided that Comerica would not exercise
      its right to call for acceleration of all amounts due under the term loan
      and the revolver under the credit facility, if the Company met certain
      conditions. Effective August 1, 2005, the Company and Comerica agreed to
      extend the maturity date of the revolver under the credit facility to
      September 1, 2005. However, the maturity date has not been further
      extended and the loan balances remain in default. The Company and Comerica
      have been negotiating an extension of the forbearance agreement from
      September 1, 2005 through June 30, 2006. If an extension is agreed upon,
      management of the Company intends to attempt to negotiate an amendment to
      the credit facility in order to further extend the facility under terms
      which the Company can comply with going forward. However, there can be no
      assurance that the Company will get an extension of the forbearance
      agreement and/or amendments to the credit facility.

      Comerica may force immediate repayment of amounts due under the credit
      facility and invoke penalty interest (up to three percentage points or
      approximately $114,000 annually) at the lender's discretion. Since the
      Company had not been notified that it would be charged penalty interest,
      it was not required to accrue any as of January 1, 2006.

      Unless the Company can negotiate an extension of the forbearance agreement
      and/or amendments to the credit facility as discussed above, and it can
      resolve its default under the promissory note with Jaco, the Company's
      operating results and cash flows will not be adequate to enable it to pay
      the balance due at or subsequent to October 2, 2005 unless it can obtain
      an alternate credit facility and/or additional financing. Management
      cannot assure that the Company will be able to obtain such an extension,
      amendment or resolution. These matters raise substantial doubt about the
      Company's ability to continue as a going concern. The unaudited condensed
      consolidated financial statements do not include any adjustments related
      to the recoverability and classification of assets or the amount and
      classification of liabilities that might result from the outcome of this
      uncertainty.

                                       19
<PAGE>

RESULTS OF OPERATIONS
---------------------

      Three months ended January 1, 2006 and January 2, 2005

      The Company's revenues for the three months ended January 1, 2006 were
      $4,062,978 compared to revenues of $5,759,583 for the three months ended
      January 2, 2005. The decrease in revenue is primarily attributable to loss
      of certain customers to Asian markets.

      The Company recorded a gross loss of $56,853 for the three months ended
      January 1, 2006 compared to a gross profit of $302,627 for the three
      months ended January 2, 2005. The gross loss was due to a reduction in
      margin from competitive price pressure, an increase in wages as a percent
      of sales, higher manufacturing overhead and higher employee benefit costs.

      Selling, general and administrative expenses for the three months ended
      January 1, 2006 were $658,441compared to $785,826 for the three months
      ended January 2, 2005, a decrease of $127,385. Selling, general and
      administrative expenses for the three months ended January 1, 2006
      consists primarily of salaries and related benefits, professional fees,
      rent and other expenses necessary for the operation of the Company.

      In November 2005, management decided to downsize the Company's
      manufacturing facility in Woburn, Massachusetts and operate it as a
      satellite operation instead of a full service facility due to a slowdown
      in the electronics industry and the loss of business because of customers
      moving the manufacturing of certain products to Asian sources. In
      connection therewith, the Company incurred approximately $33,009 in
      severance costs relating to the termination of 50 employees.

      Interest expense was $155,110 for the three months ended January 1, 2006
      and $99,938 for the three months ended January 2, 2005. Interest expense
      is primarily a result of the debt incurred for the acquisition of Nexus
      Custom Electronics, Inc.

RESULTS OF OPERATIONS
---------------------

      Six months ended January 1, 2006 and for the period from September 15,
      2004 (date of capitalization) through January 2, 2005


      The Company's revenues for the six months ended January 1, 2006 were
      $8,373,924. The Company's operations for the period from September 15,
      2004 (date of capitalization) through January 2, 2005 reflect revenues of
      $5,759,583 which only include the results of operations of Nexus from
      October 4, 2004 through January 2, 2005.

                                       20
<PAGE>

      The Company recorded a gross loss of $475,034 for the six months ended
      January 1, 2006 compared to a gross profit of $302,627 for the period from
      September 15, 2004 (date of capitalization) through January 2, 2005, which
      only include the results of operations of Nexus from October 4, 2004
      through January 2, 2005. The gross loss was due to a reduction in margin
      from competitive price pressure, an increase in wages as a percent of
      sales, higher manufacturing overhead and higher employee benefit costs.

      Selling, general and administrative expenses for the six months ended
      January 1, 2006 were $1,274,312 compared to $2,533,326 for the period
      September 15, 2004 (date of capitalization) through January 2, 2005, which
      only include the results of operations of Nexus from October 4, 2004
      through January 2, 2005, a decrease of $1,259,014. Included in selling,
      general and administrative expenses for the three months ended January 2,
      2005 were $1,747,500 of expenses relating to the formation of the Company.
      These expenses include 88,250,000 shares of common stock valued at $0.01
      per share and 10,000,000 shares of Series B convertible preferred stock
      valued at $0.07 per share issued to officers and founders of the Company,
      7,500,000 shares of common stock issued to a consultant valued at $0.01
      per share and 1,750,000 shares of common stock valued issued in connection
      to the standby equity distribution agreement, which was subsequently
      terminated, at $0.01 per share, and for stock options granted to an
      employee to purchase 2,500,000 shares of the Company's common stock valued
      at $0.01 per share.

      Selling, general and administrative expenses for the six months ended
      January 1, 2006 consists primarily of salaries and related benefits,
      professional fees, rent and other expenses necessary for the operation of
      the Company.

      In November 2005, management decided to downsize the Company's
      manufacturing facility in Woburn, Massachusetts and operate it as a
      satellite operation instead of a full service facility due to a slowdown
      in the electronics industry and the loss of business because of customers
      moving the manufacturing of certain products to Asian sources. In
      connection therewith, the Company incurred approximately $33,000 in
      severance costs relating to the termination of 50 employees.

      Interest expense was $271,000 for the six months ended January 1, 2006 and
      $99,938 for the period September 15, 2004 (date of capitalization) through
      January 2, 2005. Interest expense is primarily a result of the debt
      incurred for the acquisition of Nexus Custom Electronics, Inc.

LIQUIDITY AND CAPITAL RESOURCES

      Net cash provided by operating activities amounted to $87,498 for the six
      months ending January 1, 2006. Investing activities used cash of $172,093
      for the purchase of plant equipment. Financing activities provided cash of
      $85,877 which was comprised of proceeds from secured convertible
      debentures totaling $519,238, offset by the payment of $125,000 for loan
      origination fees, net repayments on the credit facility borrowings of
      $248,361 and $60,000 principal payments on the term loan.

                                       21
<PAGE>

      The Company currently has a $5,000,000 credit facility with Comerica
      obtained by Nexus is collateralized by all of its assets. The credit
      facility includes a $1,200,000 term loan and a $3,800,000 revolver. For
      the period from September 15, 2004 (date of capitalization) through
      January 1, 2006, Nexus borrowed a total of $4,319,049 from the credit
      facility. $1,200,000 was received from the term loan and $3,119,049 was
      advanced from the revolver. The Company used $4,000,000 borrowed under the
      credit facility to pay part of the purchase price and the remaining
      $319,049 was used to pay transaction costs and repay an existing capital
      lease obligation of Nexus. The term loan is payable in monthly principal
      payments of $20,000 commencing November 1, 2004 and continuing through
      November 1, 2009. Interest at prime plus 1.5% is payable monthly
      commencing on October 1, 2004 (an effective rate of 8.75% at January 1,
      2006). The revolver matured on July 1, 2005 and borrowings bear interest
      at prime plus 1%, or alternatively at LIBOR plus 3.75% (an effective rate
      of 8.25% at January 1, 2006). Borrowings under the revolver are limited to
      credit available based on eligible accounts receivable and inventory as
      defined in the credit facility.

      The outstanding balance of the credit facility totaled $3,471,062 of which
      $2,571,062 relates to the revolver and $900,000 to the term loan.

      As of January 1, 2006, Nexus did not meet certain covenants under its
      credit facility agreement and, accordingly, it was in default. The Company
      was in violation of the following four covenants:

      (1) Minimum working capital ratio; (2) minimum debt service ratio
      ("EBITDA") which is earnings before interest, taxes, depreciation and
      amortization, as defined divided by interest and principal payment
      requirements), (3) leverage ratio (liabilities to tangible net worth (net
      worth including subordinated debt but excluding intangible assets); and,
      (4) minimum tangible net worth.

      As a result of the covenant violations as of January 1, 2006, the
      outstanding balance under the credit facility is in default and the
      balance of the term loan totaling $900,000 at January 1, 2006, included in
      the credit facility, has been classified in current liabilities in the
      unaudited condensed consolidated balance sheet. During the period while
      the Company is in default under its credit agreement, the lender may force
      immediate repayment of amounts due ($3,471,062 at January 1, 2006), and
      invoke penalty interest (up to three percentage points or approximately
      $114,000 annually) at the lender's discretion. Since the Company has not
      been notified that it will be charged penalty interest, it has not accrued
      any as of January 1, 2006. On July 15, 2005, the Company entered into a
      forbearance agreement with Comerica Bank to extend the maturity date of
      the revolver under the credit facility from July 1, 2005 to August 1,
      2005.

      The Company entered into a forbearance agreement with Comerica on July 15,
      2005, effective July 1, 2005 through August 1, 2005, which essentially
      provides for an extension of the revolver under the credit facility which
      expired July 1, 2005, and also provided that Comerica would not exercise
      its right to call for acceleration of all amounts due under the term loan
      and the revolver under the credit facility, if the Company met certain
      conditions. Effective August 1, 2005, the Company and Comerica agreed to
      extend the maturity date of the revolver under the credit facility to
      September 1, 2005. However, the maturity date has not been further
      extended and the loan balances remain in default. The Company and Comerica
      have been negotiating an extension of the forbearance agreement from
      September 1, 2005 through June 30, 2006. If an extension is agreed upon,
      management of the Company intends to attempt to negotiate an amendment to
      the credit facility in order to further extend the facility under terms
      which the Company can comply with going forward. However, there can be no
      assurance that the Company will get an extension of the forbearance
      agreement and/or amendments to the credit facility.

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<PAGE>

      The Company also has a promissory note with an outstanding balance of
      $2,750,000 at January 1, 2006 that it issued to Jaco as partial
      consideration for Nexus. The Company has not paid interest since February,
      2005 and has incurred a change in control in November, 2005, as defined in
      the promissory note, both events of which constitute events of default.
      The note holder has not given notice that it will immediately accelerate
      the maturity, and declare the note immediately due and payable, although
      it has the right to do so. As a result of these events of default, the
      note has been classified as a current obligation. Defaults under other
      loan agreements, on loan amounts exceeding $5,000,000, could also result
      in an event of default under this promissory note agreement.

      Unless the Company can negotiate an extension of the forbearance agreement
      and/or amendments to the credit facility as discussed above, and it can
      resolve its default under the promissory note with Jaco, the Company's
      operating results and cash flows will not be adequate to enable it to pay
      the balance due at or subsequent to October 2, 2005 unless it can obtain
      an alternate credit facility and/or additional financing. Management
      cannot assure that the Company will be able to obtain such an extension,
      amendment or resolution. These matters raise substantial doubt about the
      Company's ability to continue as a going concern. The unaudited condensed
      consolidated financial statements do not include any adjustments related
      to the recoverability and classification of assets or the amount and
      classification of liabilities that might result from the outcome of this
      uncertainty.

      On November 10, 2005, Sagamore Holdings entered into a Security Purchase
      Agreement ("SPA") with CSI Business Finance, Inc. ("CSI Finance"), a new
      investor, which provides for the sale of up to $1,250,000 of Secured
      Convertible Debentures that will be convertible into common shares of
      Sagamore Holdings. The SPA will expire on October 31, 2006. The Company
      paid $125,000 for loan origination fees which are being amortized through
      October 31, 2006. In addition to the SPA, Sagamore Holdings and CSI
      Finance entered into ancillary agreements covering CSI's registration
      rights for the underlying common stock, and the security for any amount
      loaned. All assets of Sagamore Holdings are pledged under this agreement.
      At the date of the agreement, and at January 22, 2006, the only assets
      owned by Sagamore Holdings were its shares of Nexus, its wholly owned
      operating subsidiary and, accordingly, the assets of Nexus are the primary
      security for any amount loaned. However, CSI Finance's lien on such assets
      is subordinate to the lien held by Comerica.

      On November 11, 2005, Corporate Strategies Inc. ("Corporate Strategies")
      entered into a stock purchase agreement pursuant to which it purchased
      70,600,000 shares of Sagamore Holdings' common stock from previous holders
      who were also officers of the Company. As a result, Corporate Strategies
      acquired approximately 70% of the total shares of Sagamore Holdings'
      common stock outstanding as of the date of said agreement, which resulted
      in a change in control of Sagamore Holdings and an event of default as
      defined in the loan agreement with Comerica. Mr. Timothy J. Connolly is
      the Chief Executive Officer of CSI Finance and Corporate Strategies.

                                       23
<PAGE>

      There can be no assurances that the Company will be able to extend the
      forbearance agreement under the credit facility, amend the credit
      facility, obtain a waiver from Jaco of the promissory note, or complete
      its obligations to fully realize the potential funds available under the
      SPA, and if it does, the costs of the forbearance agreement, new credit
      facility or other capital may be higher than its current costs.

      If the Company cannot accomplish the above mentioned credit facility
      actions, resolve its default under the promissory note, and complete its
      closing obligations under the SPA, it would have to examine other
      strategic alternatives, including raising capital in the public equity
      markets, or a possible sale or liquidation of its business.

ITEM 3. CONTROLS AND PROCEDURES

      (A) Evaluation of Disclosure Controls and Procedures

      As of January 1, 2006, the Company's management carried out an evaluation,
      under the supervision of the Company's Chief Executive Officer (who is
      also the Chief Financial Officer) of the effectiveness of the design and
      operation of the Company's system of disclosure controls and procedures
      pursuant to the Securities and Exchange Act, Rule 13a-15(e) and 15d-15(e)
      under the Exchange Act). Based upon that evaluation, the Chief Executive
      Officer concluded that the Company's disclosure controls and procedures
      were not effective, as of the date of that evaluation, for the purposes of
      recording, processing, summarizing and timely reporting of material
      information required to be disclosed in reports filed by the Company under
      the Securities Exchange Act of 1934.

      (B) Changes in Internal Controls over Financial Reporting

      There were no changes in internal controls over financial reporting that
      occurred during the three months ended January 1, 2006 that have
      materially affected, or are reasonably likely to materially effect, our
      internal control over financial reporting.

      Material Weaknesses Identified

      During our preparation of our Form 10-QSB financial statements for the
period from July 1, 2005 through January 1, 2006, we identified certain material
weaknesses. As defined by the Public Company Accounting Oversight Board Auditing
Standard No. 2, a material weakness is a significant control deficiency or a
combination of significant control deficiencies that result in there being more
than a remote likelihood that a material misstatement in the annual or interim
financial statements will not be prevented or detected. These deficiencies and
issues include:

o     Accounting and Finance Personnel Weaknesses - The Company had insufficient
      resources to perform the accounting and financial reporting functions and
      such resources lacked the appropriate level of accounting knowledge,
      experience and training in the application of accounting principles
      generally accepted in the United States of America.

o     Financial reporting process including footnote disclosure requirements -
      Our independent registered public accounting firm identified that our Form
      10-QSB, was missing some of the disclosures required under generally
      accepted accounting principles. These deficiencies impacted the timeliness
      and accuracy of financial reporting. Management prior to the issuance of
      the Form 10-QSB corrected the effects of these deficiencies. Our
      disclosure control over financial reporting did not detect these matters
      and therefore was not effective at detecting these disclosure deficiencies
      in the financial statements.

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<PAGE>

o     Purchase Accounting - The Company did not have sufficient personnel with
      adequate knowledge regarding accounting for the acquisition, the purchase
      price valuation used to acquired intangible assets and the technical
      accounting and reporting issues related to purchase accounting matters.

o     Goodwill and Other Identifiable Intangible Assets. The Company did not
      have sufficient personnel with adequate knowledge regarding its assessment
      of the impairment of goodwill and other identifiable intangible assets.

o     Income Taxes - The Company did not have sufficient personnel with adequate
      knowledge regarding income taxes specifically the difference between the
      income tax basis and financial reporting basis of assets and liabilities.

      The material weaknesses noted above in financial reporting process and
closing process resulted in deficiencies in the processes and procedures within
our accounting and financial reporting function contributed to delays in the
completion and filing of our January 1, 2006 Form 10-QSB.

      The effects of the aforementioned weaknesses related to the closing and
preparation of the financial statements were corrected by management prior to
the issuance of the Form 10-QSB.

      Remediation Plan regarding the Material Weaknesses

      Management is actively engaged in remediation efforts to address the
material weaknesses identified in the Company's internal control over financial
reporting as of January 1, 2006. These on-going remediation efforts, outlined
below, are specifically designed to address the material weaknesses identified
by Management and to improve and strengthen the Company's overall control
environment.

      The Company has transformed from a small division in a larger public
company to a stand-alone public company. It did not have sufficient internal
resources to perform the accounting and financial reporting functions, nor did
it have the expertise in the application of generally accepted accounting
principles that are necessary as a public company. As a result of these
deficiencies, the Company's internally prepared financial statements were
missing some of the required generally accepted accounting principles
disclosures. These deficiencies impacted the timeliness and accuracy of
financial reporting. The effects of these deficiencies were corrected by
management prior to the issuance of the January 1, 2006 Form 10-QSB, but it
contributed to delays in the completion and filing of this Form 10- QSB.

      The Company did obtain third party contract services periodically to
supplement its internal resources, but even with continuing improvement, it is
necessary to either obtain appropriate internal resources, or contract
supplemental services on a regular ongoing basis.

                                       25
<PAGE>

      The Company continues its efforts to remediate control weaknesses and
further improve and strengthen its internal control over financial reporting
under the direction of the Chief Executive Officer, who is also the Chief
Financial Officer.

                           PART II - OTHER INFORMATION

ITEMS 1 AND 2. Not Applicable

ITEM 3. Defaults Upon Senior Securities

      The Company currently has a $5,000,000 credit facility with Comerica
      obtained by Nexus that is collateralized by all of its assets. The credit
      facility includes a $1,200,000 term loan and a $3,800,000 revolver. For
      the period from September 15, 2004 (date of capitalization) through
      October 3, 2004, Nexus borrowed a total of $4,319,049 from the credit
      facility. $1,200,000 was received from the term loan and $3,119,049 was
      advanced from the revolver. The Company used $4,000,000 borrowed under the
      credit facility to pay part of the purchase price and the remaining
      $319,049 was used to pay transaction costs and repay an existing capital
      lease obligation of Nexus. The term loan is payable in monthly principal
      payments of $20,000 commencing November 1, 2004 and continuing through
      November 1, 2009. Interest at prime plus 1.5% is payable monthly
      commencing on October 1, 2004 (an effective rate of 8.75% at January 1,
      2006). The revolver matured on July 1, 2005 but was effectively extended
      until September 1, 2005 under the forbearance agreement and borrowings
      bear interest at prime plus 1%, or alternatively at LIBOR plus 3.75% (an
      effective rate of 8.25% at January 1, 2006). Borrowings under the revolver
      are limited to credit available based on eligible accounts receivable and
      inventory as defined in the credit facility.

      The term loan is payable in monthly principal payments of $20,000
      commencing November 1, 2004 and continuing through November 1, 2009.
      Interest at prime plus 1.5% is payable monthly commencing on October 1,
      2004 (an effective rate of 8.75% at January 1, 2006). The revolver matured
      on July 1, 2005 but was effectively extended until September 1, 2005 under
      the forbearance agreement. The borrowings bear interest at prime plus 1%,
      or alternatively at LIBOR plus 3.75% (an effective rate of 8.25% at
      January 1, 2006). Borrowings under the revolver are limited to credit
      available based on eligible accounts receivable and inventory as defined
      in the credit facility.

      The outstanding balance of the credit facility as of January 1, 2006
      totaled $3,471,062 of which $2,571,062 relates to the revolver and
      $900,000 to the term loan.

      In connection with the acquisition of Nexus, consideration totaling
      $2,750,000 is payable through a five-year promissory note issued to Jaco,
      the former parent of Nexus. Interest is payable quarterly from December 1,
      2004 until September 1, 2009 at the lesser of a specified prime rate or
      7%. The promissory note is payable in principal payments on the following
      dates: $500,000 on September 1, 2006, $156,250 per quarter commencing on
      December 1, 2006 through September 1, 2008 and $250,000 per quarter
      commencing on December 1, 2008 through September 1, 2009. As of January 1,
      2006, the Company was in default under the terms of the promissory note
      because it had not paid interest on the promissory note since February
      2005. The change in control in November 2005 was also an event of default
      under the promissory note as described in Note 8.

                                       26
<PAGE>

      As of April 11, 2006, the Company has not made any more interest payments
      and it had not negotiated any waivers related to either of the events of
      default. As of April 11, 2006, the note holder had not given notice that
      it would declare the note immediately due and payable, although it has the
      right to do so. As a result of these events of default as of January 1,
      2006, the outstanding balance of $2,750,000 under the note agreement has
      been classified as a current obligation. Defaults under other loan
      agreements, on loan amounts exceeding $5,000,000 could also result in an
      event of default under the terms of the promissory note agreement.

      Series A redeemable convertible preferred stock:

      As explained in Note 6 in the 10-KSB, on September 15, 2004, the Company
      sold 6,000,000 Series A preferred shares and received net proceeds of
      $5,250,000. In addition, the Company issued 2,500,000 shares of its common
      stock to a third party as a commitment fee. Each Series A preferred share
      entitles the holder to receive a cumulative 5% dividend when declared by
      the Company's Board of Directors. As of January 1, 2006, no dividends have
      been declared and undeclared cumulated dividends in arrears, which have
      been accrued, were approximately $387,000.

      Each share of Series A preferred stock can be converted into shares of the
      Company's common stock at the option of the holder as determined by
      dividing (a) the sum of (i) the amount due to the Series A holder upon
      liquidation, plus (ii) all accrued but unpaid dividends, by (b) the
      conversion price, which is equal to the lesser of (a) $1.00 per share
      (adjusted in the event of a subdivision or combination of shares), or (b)
      80% of the average of the lowest closing bid price of the common stock
      during the five trading days immediately preceding the date of conversion,
      assuming a public market exists for shares of common stock.

      Each holder of our Series A Convertible Preferred Stock has the following
      rights and preferences:

      Dividends. Each share of Series A Convertible Preferred Stock accrues
      dividends at a rate of 5% per year. Such dividends are payable when and if
      declared by the board of directors. Dividends are payable in cash. The
      right to dividends is cumulative. As of January 1, 2006, no dividends have
      been declared on shares of Series A Convertible Preferred Stock.

      Liquidation Preference. Each share of Series A Convertible Preferred Stock
      is entitled to receive prior and in preference to any Distribution of any
      assets to the holders of any class of common stock or any series of
      preferred stock an amount equal to $1.00 for each share outstanding, plus
      all declared and unpaid dividends thereon.

      Conversion. Each share of Series A Convertible Preferred Stock, at the
      option of the holder, is convertible into such number of common stock as
      determined by dividing (a) the sum of (i) the amount due to the holder
      upon liquidation, plus (ii) all accrued but unpaid dividends thereon, by
      (b) the "Conversion Price" then in effect. The Conversion Price shall be
      equal to either (a) $1.00 per share (which shall be adjusted in the event
      of a subdivision or combination of shares), or (b) 80% of the average of
      the lowest closing bid price of the common stock during the five trading
      days immediately preceding the date of conversion, assuming a public
      market exists for shares of common stock, whichever is lower. A 4.99%
      beneficial ownership limitation limits conversion except if waived on 61
      days' notice. Cornell Capital Partners, LP possesses this waiver right.

                                       27
<PAGE>

      Redemption. After providing three days prior written notice, Sagamore
      Holdings has the right to redeem any outstanding shares of Series A
      Convertible Preferred Stock at an amount equal to 120% of the amount due
      to each holder upon liquidation, plus all declared and unpaid dividends
      thereon.

      Non-voting. The Series A Convertible Preferred Stock is non-voting.

      As of January 1, 2006, we had 6,000,000 shares of Series A Preferred Stock
      outstanding and 1 stockholder of record.

      Registration Rights Agreement

      The shares of common stock issuable by the Company to the investor upon
      conversion of shares of the Series A preferred stock will not be
      registered under the Securities Act of 1933. To provide for the
      registration of such underlying shares, the Company and the investor
      entered into a registration rights agreement, dated September 15, 2004,
      requiring the Company to prepare and file a registration statement
      covering the resale of the shares of common stock underlying the Series A
      preferred stock. The registration rights agreement required the Company to
      use its best efforts to cause such registration statement to be declared
      effective no later than 210 days following September 15, 2004 (the closing
      of the sale of the Series A preferred stock).

      The Registration Rights Agreement also contains a liquidated damages
      provision which calls for the investor to receive from the Company a
      specified amount if: (i) The Company fails to file a registration
      statement covering the underlying shares of common stock within 60 days of
      September 15, 2004, and, (ii) the registration statement is not declared
      effective no later than 210 days following September 15, 2004. In the
      event that one of the aforementioned events occurs, the registration
      rights agreement calls for the Company to pay the investor common stock
      equal to 2% of the liquidated amount, as defined above, of that portion of
      the Series A preferred stock which has not been converted into common
      stock as of the occurrence of such event, with such amount to be paid by
      the Company to the investor on a monthly basis after the occurrence of
      such event. The investor is entitled to receive the aforementioned damages
      until such time as the registration statement is declared effective. Since
      the registration statement registering the underlying shares of common
      stock was not filed within 60 days or declared effective within 210 days
      from September 15, 2004, the investor is currently entitled to receive
      such damages payable in common stock. As of January 1, 2006, the damages
      payable pursuant to this provision was approximately $113,000.

      Secured Convertible Debentures

                                       28
<PAGE>

      On November 10, 2005, Sagamore Holdings entered into a Securities Purchase
      Agreement (the "SPA") with CSI Business Finance, Inc. ("CSI Finance"), a
      new investor, which provides for the sale of up to $1,250,000 of Secured
      Convertible Debentures that will be convertible into common shares of
      Sagamore Holdings. The SPA will expire on October 31, 2006. The Company
      paid $125,000 for loan origination fees which are being amortized through
      October 31, 2006. In addition to the SPA, Sagamore Holdings and CSI
      Finance entered into ancillary agreements covering CSI's registration
      rights for the underlying common stock, and the security for any amount
      loaned. All assets of Sagamore Holdings are pledged under this agreement.
      At the date of the agreement, and at January 22, 2006, the only assets
      owned by Sagamore Holdings were its shares of Nexus, its wholly-owned
      operating subsidiary and, accordingly, the assets of Nexus are the primary
      security for any amount loaned. However, CSI Finance's lien on such assets
      is subordinate to the lien held by Comerica.

      The following are the principal terms of the Secured Convertible
      Debentures:

o     They mature on October 31, 2006.

o     Interest is payable monthly at 12% annual rate.

o     Monthly principal payments begin on the earlier of (a) one month from the
      date the registration of the underlying common shares is declared
      effective, or (b) five months from the date of sale.

o     Monthly payments are equal to the outstanding balance divided by the
      remaining number of months to the maturity date.

o     They are convertible into common shares at the option of CSI Finance at a
      conversion rate of $ 0.025 per share.

o     They are redeemable at the option of Sagamore Holdings at face value plus
      a 20% premium above the market value of the underlying shares common stock
      if the market value is greater than the conversion price.

o     The Company must seek the consent of the holder if it wishes to sell any
      additional shares of capital stock or grant any additional security
      interests in its assets.

      The shares of common stock issuable by the Company to the investor upon
      conversion of shares of the Secured Convertible Debentures will not be
      registered initially under the Securities Act of 1933. To provide for the
      registration of such underlying shares, the Company and the investor
      entered into a registration rights agreement, dated November 10, 2005,
      requiring the Company to prepare and file a registration statement
      covering the resale of the shares of common stock underlying the Secured
      Convertible Debentures. The registration rights agreement required the
      Company to use its best efforts to cause such registration statement to be
      declared effective no later than 150 days following November 10, 2005 (the
      date of the Registration Rights Agreement).

                                       29
<PAGE>

      The Registration Rights Agreement also contains a liquidated damages
      provision which calls for CSI Finance to receive from the Company a
      specified amount of cash or shares if: (i) the Company fails to file a
      registration statement covering the underlying shares of common stock
      within 30 days of November 10, 2005, and, (ii) the registration statement
      is not declared effective within 150 days following November 10, 2005. In
      the event that one of the aforementioned failures occurs, the Registration
      Rights Agreement calls for the Company to pay, at the option of CSI
      Finance, a cash amount or shares of common stock equal to 2% of the
      liquidated amount of that portion of the Secured Convertible Debentures
      which has not been converted into common stock as of the occurrence of
      such event, with such amount to be paid by the Company to CSI Finance on a
      monthly basis after the occurrence of such event. CSI Finance is entitled
      to receive the aforementioned damages until such time as the registration
      statement is declared effective. Since a registration statement
      registering the underlying shares of common stock was not filed within 30
      days after the date of the registration rights agreement, nor is it likely
      that the registration rights agreement will be declared effective within
      150 days from November 10, 2005, the Company will be required to record
      charges for the penalty beginning December 10, 2005. The amount of damages
      payable pursuant to this provision on March 10, 2006 would be
      approximately $1,700.

      On March 10, 2006, CSI Finance assigned its interest in the Secured
      Convertible Debentures to the Series A preferred stockholder. As of March
      10, 2006, CSI Finance had acquired $743,285 of such debentures pursuant to
      the SPA.

ITEMS 4 AND 5. Not Applicable

ITEM 6. Exhibits



                                       30