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 APRIL 2, 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 May 5, 2006 there were 93,715,000 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 April 2, 2006 (Unaudited)                                     3 - 4
Condensed Consolidated Statements of Operations for the three and nine months ended April 2, 2006        5 - 6
and the period from September 15, 2004, (Date of Capitalization) through April 3, 2005 and for the
three months ended  April 3, 2005 (Unaudited)
Condensed Consolidated Statements of Cash Flows for the nine months ended April 2, 2006 and the              7
period from  September 15, 2004, (Date of Capitalization) through April 3, 2005 (Unaudited)
Notes to Condensed Consolidated Financial Statements (unaudited)                                        8 - 17
Item 2. Management's Discussion and Analysis or Plan of Operation                                      17 - 23
Item 3. Controls and Procedures                                                                        23 - 25

PART II - OTHER INFORMATION
Item 1. Legal Proceedings                                                                                   25
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds                                         25
Item 3. Defaults Upon Senior Securities                                                                25 - 29
Item 4. Submission of Matters to a Vote of Security Holders                                                 29
Item 5. Other Information                                                                                   29
Item 6. Exhibits                                                                                       29 - 31

SIGNATURES                                                                                                  31
</TABLE>





                                       2
<PAGE>

                         PART 1 - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                     SAGAMORE HOLDINGS, INC. AND SUBSIDIARY
                      CONDENSED CONSOLIDATED BALANCE SHEET
                                  APRIL 2, 2006
                                   (UNAUDITED)

<TABLE>
<CAPTION>
ASSETS
Current assets:
<S>                                                                         <C>
  Cash                                                                      $   174,888
  Accounts receivable, net of allowance for doubtful accounts of $222,500     1,811,677
  Inventories, net of allowance for obsolescence of $688,500                  2,284,623
  Prepaid expenses and other current assets                                     133,663
                                                                            -----------
    Total current assets                                                      4,404,851

Property and equipment, net                                                   1,975,423

Identifiable intangible assets, net                                           1,091,077
Deferred costs relating to registration rights agreement                        149,667
Deferred loan origination fees, net                                              72,917

                                                                            -----------

    Total Assets                                                            $ 7,693,935
                                                                            ===========

LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current liabilities:
  Revolving credit facility borrowings                                      $ 2,196,306
  Term loan                                                                     840,000
  Note payable to former parent of subsidiary                                 2,750,000
  Liability for equipment purchases                                             388,703
  Secured convertible debenture                                               1,029,383
  Registration rights agreement liability                                       176,445
  Accounts payable                                                            2,928,648
  Accrued expenses and other current liabilities                                780,844
                                                                            -----------
    Total current liabilities                                                11,090,329

  Accrued cumulative dividends on Series A preferred shares                     462,000
                                                                            -----------

Total Liabilities                                                            11,552,329

Commitments and contingencies
</TABLE>



                                       3
<PAGE>

                      CONDENSED CONSOLIDATED BALANCE SHEET
                                  APRIL 2, 2006
                                   (UNAUDITED)
                                   (CONTINUED)

Stockholder's 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; 102,540,000 shares issued and outstanding                102,540
Additional paid-in capital                                           6,452,360
Accumulated deficit                                                (10,419,294)
                                                                  ------------
  Total stockholders' deficiency                                    (3,858,394)
                                                                  ------------

  Total Liabilities and Stockholders' Deficiency                  $  7,693,935
                                                                  ============

            See Notes to Condensed Consolidated Financial Statements.




                                       4
<PAGE>

                     SAGAMORE HOLDINGS, INC. AND SUBSIDIARY
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                    FOR THE THREE MONTHS ENDED APRIL 2, 2006
                                AND APRIL 3, 2005
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                       THREE MONTHS     THREE MONTHS
                                                                      ENDED APRIL 2,   ENDED APRIL 3,
                                                                           2006              2005
                                                                     --------------    --------------
<S>                                                                  <C>               <C>
Net Sales                                                            $   3,922,447     $   6,005,298

Cost of Sales                                                            3,830,054         5,919,713
                                                                     --------------    --------------
Gross Profit                                                                92,393            85,585
                                                                     --------------    --------------
Operating expenses:
  General and administrative                                               477,136           656,850
  Selling                                                                  157,433           154,550
                                                                     --------------    --------------
    Totals                                                                 634,569           811,400
                                                                     --------------    --------------
Loss from operations                                                      (542,176)         (725,815)

Interest expense                                                           194,323           110,008
                                                                     --------------    --------------
Net loss                                                                  (736,499)         (835,823)

Cumulative preferred stock dividends on Series A preferred shares           75,000                 0
                                                                     --------------    --------------
Net loss applicable to common shares                                 $    (811,499)    $    (835,823)
                                                                     ==============    ==============
Loss per common share - basic and diluted                            $       (0.01)    $       (0.01)
                                                                     ==============    ==============
Weighted average common shares (including Series B preferred
shares) outstanding                                                    102,056,484       109,313,360
                                                                     ==============    ==============
</TABLE>






            See Notes to Condensed Consolidated Financial Statements.


                                       5
<PAGE>

                     SAGAMORE HOLDINGS, INC. AND SUBSIDIARY
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                     FOR THE NINE MONTHS ENDED APRIL 2, 2006
         AND THE PERIOD FROM SEPTEMBER 15, 2004 (DATE OF CAPITALIZATION)
                             THROUGH APRIL 3, 2005
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                        PERIOD FROM
                                                                       NINE MONTHS     SEPT. 15, 2004
                                                                      ENDED APRIL 2,       THROUGH
                                                                           2006         APRIL 3, 2005
                                                                     ---------------   ---------------
<S>                                                                  <C>               <C>
Net Sales                                                            $  12,296,370     $  11,765,192

Cost of Sales                                                           12,679,011        11,368,012
                                                                     ---------------   ---------------
Gross Profit (loss)                                                       (382,641)          397,180
                                                                     ---------------   ---------------
Operating expenses:
  General and administrative                                             1,535,504         3,019,946
  Selling                                                                  373,377           357,577
  Impairment of goodwill                                                   105,500                 0
                                                                     ---------------   ---------------
    Totals                                                               2,014,381         3,377,523
                                                                     ---------------   ---------------
Loss from operations                                                    (2,397,022)       (2,980,343)

Interest expense                                                           465,323           209,946
                                                                     ---------------   ---------------
Net loss                                                                (2,862,345)       (3,190,289)

Cumulative preferred stock dividends on Series A preferred shares          225,000                 0
                                                                     ---------------   ---------------
Net loss applicable to common shares                                 $  (3,087,345)    $  (3,190,289)
                                                                     ===============   ===============
Loss per common share - basic and diluted                            $       (0.03)    $       (0.03)
                                                                     ===============   ===============
Weighted average common shares (including Series B preferred
Shares through November 11, 2005) outstanding                          106,656,350       109,313,360
                                                                     ===============   ===============
</TABLE>







            See Notes to Condensed Consolidated Financial Statements.

                                       6
<PAGE>

                     SAGAMORE HOLDINGS, INC. AND SUBSIDIARY
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                     FOR THE NINE MONTHS ENDED APRIL 2, 2006
       AND FOR THE PERIOD FROM SEPTEMBER 15, 2004 (DATE OF CAPITALIZATION)
                              THROUGH APRIL 3, 2005
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                NINE                     PERIOD FROM
                                                                                MONTHS                  SEPT. 15, 2004
                                                                                ENDED                      THROUGH
                                                                            APRIL 2, 2006               APRIL 3, 2005
                                                                           -----------------          -----------------
<S>                                                                        <C>                        <C>
Operating activities:
  Net loss                                                                 $   (2,862,345)            $     (3,190,289)
  Adjustments to reconcile net loss to net cash provided by (used               2,769,490                    3,702,500
in) operating activities
                                                                           -----------------          -----------------
        Net cash provided by (used in) operating activities                       (92,855)                     512,211
                                                                           -----------------          -----------------
Investing activities:
  Purchase of net assets of Nexus Custom Electronics, Inc.,
    net of cash received of $92,335                                                                         (5,233,919)
  Purchases of property and equipment                                            (177,986)                    (175,173)
                                                                           -----------------          -----------------
        Net cash used in investing activities                                    (177,986)                  (5,409,092)
                                                                           -----------------          -----------------
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                   (563,117)                      22,422
  Term loan principal payments                                                   (180,000)                    (120,000)
  Proceeds from secured convertible debentures                                  1,154,383
  Payment for senior convertible debentures origination fee                      (125,000)
                                                                           -----------------          -----------------
        Net cash provided by financing activities                                 286,266                    4,909,627
                                                                           -----------------          -----------------
Net increase in cash                                                               15,425                       12,746
Cash, beginning of period                                                         159,463                            0
                                                                           -----------------          -----------------
Cash, end of period                                                        $      174,888             $         12,746
                                                                           =================         ==================
Supplemental disclosure of cash flow information:
  Interest paid                                                            $      218,785             $        161,105
                                                                           =================         ==================
Supplemental disclosure of noncash investing and financing activities:
   Equipment purchases                                                     $      389,398             $              -
                                                                           =================         ==================
   Preferred stock dividends accrued                                       $      225,000             $              -
                                                                           =================         ==================
   Earn out provision relating to acquisition of Nexus                     $      105,500             $              -
                                                                           =================         ==================
Credit facility obligations incurred in connection with acquisition        $            -             $      4,076,254
                                                                           =================         ==================
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             $              -
                                                                           =================         ==================
</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 April 2, 2006 and their results of operations and
         cash flows for the three and nine months ended April 2, 2006 and the
         period from September 15, 2004 (date of capitalization) through April
         3, 2005. The results of operations for the three and nine months ended
         April 2, 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 April 3, 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.

         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 $2,862,345 for the
         nine months ended April 2, 2006 and $10,419,294 from its inception
         through April 2, 2006 and had a net working capital deficiency of
         $6,685,478 at April 2, 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
         $3,036,306 under the credit facility ($2,196,306 under the revolver and
         $840,000 under the term loan) and the outstanding balance of $2,750,000
         under the Jaco note agreement were in default as of April 2, 2006 and
         classified in current liabilities in the unaudited condensed
         consolidated balance sheet.

                                       8
<PAGE>

         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.

         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 April 2, 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.

         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 of April 2, 2006, an additional $286,098 has been advanced under the
         agreement by the new investor. As a result of the default, the
         outstanding balance as of April 2, 2006 of $1,029,383 has been
         classified as a current liability. The Company has received a verbal
         commitment from the Series A preferred stockholder that it will
         increase the amount of funding under the Secured Convertible Debentures
         to $1,750,000.

                                       9
<PAGE>

         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 were 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 April 2, 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 52,175,322 and 8,500,000 at April 2, 2006 and
         April 3, 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
         April 2, 2006:

         Raw materials                        $1,828,934
         Work-in-process                         440,090
         Finished goods                           15,599
                                              ----------

         Total Inventories                    $2,284,623
                                              ==========

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 nine months ended April 2, 2006, the Company had initially
         recorded an earn out provision totaling $105,500 which was allocated to
         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 nine months ended April 3,
         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.

                                                              Nine Months Ended
                                                                April 3, 2005
                                                                 (Unaudited)
                                                              ------------------

         Net sales                                              $  17,802,432
                                                              ==================
         Net loss                                               ($  3,511,137)
                                                              ==================
         Weighted average number of common shares outstanding     110,000,000
                                                              ==================
         Loss per common share - basic and diluted              ($       0.03)
                                                              ==================


                                       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 May 3, 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 April 2, 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 $2,196,306 and the balance of the term loan was
         reduced to $840,000 as of April 2, 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 9.25% at
         April 2, 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
         8.75% at April 2, 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 April 2, 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 April 2, 2006 was classified as a current liability.

         Comerica may force immediate repayment of amounts due under the credit
         facility and invoke penalty interest (up to three percentage points or
         approximately $92,000 annually based on the outstanding balance as of
         April 2, 2006) 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 April 2, 2006.

                                       12
<PAGE>

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 April 2, 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 May 3, 2006, the Company had 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
         April 2, 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. 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 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 April
         2, 2006, no dividends have been declared and undeclared cumulated
         dividends in arrears, which have been accrued, were approximately
         $462,000.

         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.

         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.

                                       13
<PAGE>

         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 April 2, 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
         52,175,322 as of April 2, 2006. The value of these shares is immaterial
         and has not been reflected in these financial statements.

                                       14
<PAGE>

Note 8.  Sale of Securities 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 April 2, 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 $176,445 based on the fair value of the
         embedded instrument as of April 2, 2006. The increase in the fair value
         of the liability (during the quarter ended April 2, 2006) of $10,468
         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. As of April 2, 2006, an additional $286,098 had
         been advanced under the agreement by the new investor.

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.

         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.

                                       17
<PAGE>

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.

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 nine months ended
         April 2, 2006 incurred a net loss of $736,499 and $2,862,345 and had a
         net working capital deficiency of $6,685,478 at April 2, 2006. It also
         did not meet certain covenants under its credit facility with Comerica
         Bank ("Comerica") and a promissory note with Jaco and the SPA.
         Accordingly, the outstanding balance of $3,036,306 under the credit
         facility, the outstanding balance of $2,750,000 under the Jaco note
         agreement as well as $1,029,383 under the SPA, were in default as of
         April 2, 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.

                                       18
<PAGE>

         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 $92,000 annually based on the outstanding balance at
         April 2, 2006) 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 April 2, 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.

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

         Three months ended April 2, 2006 and April 3, 2005

         The Company's revenues for the three months ended April 2, 2006 were
         $3,922,447 compared to revenues of $6,005,298 for the three months
         ended April 3, 2005. The decrease in revenue is primarily attributable
         to loss of certain customers to Asian markets.

         Selling, general and administrative expenses for the three months ended
         April 2, 2006 were $634,569 compared to $811,400 for the three months
         ended April 3, 2005, a decrease of $176,831. Selling, general and
         administrative expenses for the three months ended April 2, 2006
         consists primarily of salaries and related benefits, professional fees,
         rent and other expenses necessary for the operation of the Company.

                                       19
<PAGE>

         Interest expense was $194,323 for the three months ended April 2, 2006
         and $110,008 for the three months ended April 3, 2005. Interest expense
         is primarily a result of the debt incurred for the acquisition of Nexus
         Custom Electronics, Inc.

         Nine months ended April 2, 2006 and the period from September 15, 2004
         (date of capitalization) through April 3, 2005


         The Company's revenues for the nine months ended April 2, 2006 were
         $12,296,370. The Company's operations for the period from September 15,
         2004 (date of capitalization) through April 3, 2005 reflect revenues of
         $11,765,192 which only include the results of operations of Nexus from
         October 4, 2004 through April 3, 2005.

         The Company recorded a gross loss of $382,641 for the nine months ended
         April 2, 2006 compared to a gross profit of $397,180 for the period
         from September 15, 2004 (date of capitalization) through April 3, 2005,
         which only include the results of operations of Nexus from October 4,
         2004 through April 3, 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 nine months ended
         April 2, 2006 were $1,908,881 compared to $3,377,523 for the period
         from September 15, 2004 (date of capitalization) through April 3, 2005,
         which only include the results of operations of Nexus from October 4,
         2004 through April 3, 2005, a decrease of $1,468,642. Included in
         selling, general and administrative expenses for the three months ended
         April 3, 2005 were $811,400 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 nine months ended
         April 2, 2006 consists primarily of salaries and related benefits,
         professional fees, rent and other expenses necessary for the operation
         of the Company.

         Interest expense was $465,323 for the nine months ended April 2, 2006
         and $209,946 for the period from September 15, 2004 (date of
         capitalization) through April 3, 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 used in operating activities amounted to $92,855 for the nine
         months ending April 2, 2006. Investing activities used cash of $177,986
         for the purchase of plant equipment. Financing activities provided cash
         of $286,266 which was comprised of proceeds from secured convertible
         debentures totaling $1,154,383, offset by the payment of $125,000 for
         loan origination fees, net repayments on the credit facility borrowings
         of $563,117 and $180,000 principal payments on the term loan.

                                       20
<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
         April 2, 2005, 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
         9.25% at April 2, 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 8.75% at April 2, 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 $3,036,306 of
         which $2,196,306 relates to the revolver and $840,000 to the term loan.

         As of April 2, 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 April 2, 2006, the
         outstanding balance under the credit facility is in default and the
         balance of the term loan totaling $840,000 at April 2, 2006, included
         in the credit facility, has been classified in current liabilities in
         the 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 ($3,036,306 at April 2, 2006), and invoke
         penalty interest (up to three percentage points or approximately
         $92,000 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 April 2, 2006.

         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.

                                       21
<PAGE>

         The Company also has a promissory note with an outstanding balance of
         $2,750,000 at April 2, 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. The Company
         disputes the amount due Jaco under the purchase agreement. In addition,
         the Company intends to pursue its claims and remedies against Jaco. 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 April 2, 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 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 May
         3, 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 Company has received a verbal commitment from the
         new investor to increase the amount of funding under the Secured
         Convertible Debentures to $1,750,000.

         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.

                                       22
<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 April 2, 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 April 2, 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 April 2, 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.

                                       23
<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 April 2, 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 April 2, 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 April 2, 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.

         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.

                                       24
<PAGE>

                           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 9.25% at April 2, 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 8.75% at April
         2, 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 9.25% at April 2, 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 8.75% at April 2, 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 April 2, 2006
         totaled $3,036,306 of which $2,196,306 relates to the revolver and
         $840,000 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.

                                       25
<PAGE>

         As of May 3, 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 May 3, 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
         April 2, 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 April
         2, 2006, no dividends have been declared and undeclared cumulated
         dividends in arrears, which have been accrued, were approximately
         $462,000.

         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 April 2, 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.

                                       26
<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 April 2, 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 April 2, 2006, the damages payable pursuant to this
         provision was approximately $177,408.

         Secured Convertible Debentures

         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 May
         3, 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.

                                       27
<PAGE>

         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).

                                       28
<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 April 2, 2006 would be approximately $6,863.

         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. As of April 2, 2006, an additional $286,098 had
         been advanced under the agreement by the new investor. The Company has
         received a verbal commitment from the Series A preferred stockholder to
         increase the amount of funding under the Secured Convertible Debentures
         to $1,750,000.

ITEMS 4 AND 5.  Not Applicable


ITEM 6.  Exhibits

                                       29