**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**WASHINGTON,      D.C. 20549**

**____________**

**FORM      10-Q**

**(Mark      One)**

|  x | **QUARTERLY                REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE                ACT OF                1934**  |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------|

| **For                the quarterly period ended March 31, 2006**  |
|-----------------------------------------------------------------------------|
| **OR**                                                                 |

|  o | **TRANSITION                REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE                ACT OF                1934**  |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------|

**For      the transition period from _________to_________**

**Commission      File Number**

**1-11768**

**RELIV’      INTERNATIONAL, INC.**

|  Delaware                                                               |  371172197                                                             |
|------------------------------------------------------------------------------|-----------------------------------------------------------------------------|
|  (State                or other jurisdiction                of          |  (I.R.S.                Employer Identification                Number) |
|  incorporation                or                organization)           |                                                                        |
|                                                                         |                                                                        |
|  136                Chesterfield Industrial                Boulevard    |                                                                        |
|  Chesterfield,                Missouri                                  |  63005                                                                 |
|  (Address                of principal executive                offices) |   (Zip                Code)                                       |

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**INDEX**

|  PART I - FINANCIAL              INFORMATION                                                                                                                                                                                        |                                                                                                     |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                     |                                                                                                     |   |
|  Item No. 1                                                                                                                                                                                                                         | Financial              Statements                                                                        | 1      |
|  Item No. 2                                                                                                                                                                                                                         | Management’s Discussion and Analysis of              Financial Condition and Results of Operations | 1      |
|  Item No. 3                                                                                                                                                                                                                         | Quantitative and Qualitative Disclosures              Regarding Market Risk                              | 6      |
|  Item No. 4                                                                                                                                                                                                                         | Controls and Procedures                                                                                  | 6      |
|                                                                                                                                                                                                                                     |                                                                                                     |   |
|  PART II - OTHER INFORMATION                                                                                                                                                                                                        |                                                                                                     |   |
|                                                                                                                                                                                                                                     |                                                                                                     |   |
|  Item No. 1A                                                                                                                                                                                                                   | Risk Factors                                                                                             | 7      |
|  Item No. 6                                                                                                                                                                                                                         | Exhibits                                                                                                 | 7      |
|  Certification                of CEO Pursuant to Rule 13a-14(a)/15d-14(a) Certification                of CFO Pursuant to Rule 13a-14(a)/15d-14(a) Certification                of CEO and CFO Pursuant to 18 U.S.C. 1350 |                                                                                                     |

----

**FORWARD-LOOKING      STATEMENTS**

**PART      I - FINANCIAL INFORMATION**

**Item      No. 1 - Financial Statements**

**Item      No. 2 - Management’s Discussion and Analysis of      Financial**
**Condition      and Results of Operations**

*The      following discussion and analysis of our financial condition and results of      operations should be read in conjunction with our financial statements and      related notes included elsewhere in this Quarterly Report on Form 10-Q. The      following discussion and analysis discusses the financial condition and results      of our operations on a consolidated basis, unless otherwise indicated.*

**Overview      **

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**Components      of Net Sales and Expense **

----

**Results      of Operations **

|                                                 |   |   | **Three                months ended March 31,**  |   |
|------------------------------------------------------|--------|--------|-------------------------------------------------------|--------|
|                                                 |   |   | **2006**                                         |   |   | **2005**  |   |
|                                                 |   |   |                                                  |   |   |   |   |
| Net                sales                             |   |   | 100.0                                                 | %      |   | 100.0 | % |
| Costs                and expenses:                   |   |   |                                                  |   |   |   |   |
| Cost                of products sold                 |   |   | 16.3                                                  |   |   | 17.1 |   |
| Distributor                royalties and commissions |   |   | 40.5                                                  |   |   | 40.4 |   |
| Selling,                general and administrative   |   |   | 30.3                                                  |   |   | 30.9 |   |
|                                                 |   |   |                                                  |   |   |   |   |
| Income                from operations                |   |   | 12.9                                                  |   |   | 11.6 |   |
| Interest                expense                      |   |   | (0.1                                                  | )      |   | (0.3 | ) |
| Interest                and other income             |   |   | 0.5                                                   |   |   | 0.2 |   |
|                                                 |   |   |                                                  |   |   |   |   |
| Income                before income taxes            |   |   | 13.3                                                  |   |   | 11.5 |   |
| Provision                for income taxes            |   |   | 5.4                                                   |   |   | 4.4 |   |
|                                                 |   |   |                                                  |   |   |   |   |
| Net                income                            |   |   | 7.9                                                   | %      |   | 7.1 | % |

***Three      Months Ended March 31, 2006 Compared to Three Months Ended March 31, 2005***

*Net      Sales. *

|                                  | **Three                months ended March 31,** |   |                              |   |                                      |   |                              |   |       |
|---------------------------------------|-------------------------------------------------|--------|-----------------------------------|--------|-------------------------------------------|--------|-----------------------------------|--------|------------|
|                                  | **2006**                                        |   | **2005**                          |   | **Change                from prior year** |
|                                  | **Amount**                                      |   | **%                of Net Sales** |   | **Amount**                                |   | **%                of Net Sales** |   | **Amount** |   | **%** |
|                                  | **(dollars                in thousands)**       |
| United                States          |  $                                         | 28,530 |                              |   |                                      | 91.5   | %                                 |   |  $    | 25,969 |   |   |   | 89.6 | % |   |  $ | 2,561 |   |   |   | 9.9 | % |
| Australia/New                Zealand  |                                            | 579    |                              |   |                                      | 1.9    |                              |   |       | 576 |   |   |   | 2.0 |   |   |   | 3 |   |   |   |  0.5 |   |
| Canada                                |                                            | 409    |                              |   |                                      | 1.3    |                              |   |       | 451 |   |   |   | 1.6 |   |   |   | (42 | ) |   |   | (9.4 | ) |
| Mexico                                |                                            | 329    |                              |   |                                      | 1.0    |                              |   |       | 542 |   |   |   | 1.9 |   |   |   | (213 | ) |   |   |  (39.2 | ) |
| United                Kingdom/Ireland |                                            | 273    |                              |   |                                      | 0.9    |                              |   |       | 167 |   |   |   | 0.6 |   |   |   | 106 |   |   |   | 63.3 |   |
| Philippines                           |                                            | 493    |                              |   |                                      | 1.5    |                              |   |       | 802 |   |   |   | 2.8 |   |   |   | (309 | ) |   |   | (38.5 | ) |
| Malaysia/Singapore                    |                                            | 458    |                              |   |                                      | 1.5    |                              |   |       | 472 |   |   |   | 1.6 |   |   |   | (14 | ) |   |   | (3.1 | ) |
| Germany                               |                                            | 124    |                              |   |                                      | 0.4    |                              |   |       | — |   |   |   | — |   |   |   | 124 |   |   |   | — |   |
|                                  |                                            |   |                              |   |                                      |   |                              |   |       |   |   |   |   |   |   |   |   |   |   |   |   |    |   |
| Consolidated                total     |  $                                         | 31,195 |                              |   |                                      | 100.0  | %                                 |   |  $    | 28,979 |   |   |   | 100.0 | % |   |  $ | 2,216 |   |   |   | 7.7 | % |

----

|                                  | **March                31, 2006**      |   | **March                31, 2005**              |   | **%                Change**            |
|---------------------------------------|----------------------------------------|--------|------------------------------------------------|--------|----------------------------------------|
|                                  | **Active                Distributors** |   | **Master                Affiliates and Above** |   | **Active                Distributors** |   | **Master                Affiliates and Above** |   | **Active                Distributors** |   | **Master                Affiliates and Above** |
|                                  |                                   |   |                                           |   |                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| United                States          |                                   | 52,360 |                                           |   |                                   | 12,930 |   |   |   | 49,040 |   |   |   | 11,170 |   |   |   | 6.8 | % |   |   | 15.8 | % |
| Australia/New                Zealand  |                                   | 2,370  |                                           |   |                                   | 180 |   |   |   | 3,010 |   |   |   | 220 |   |   |   | (21.3 | ) |   |   | (18.2 | ) |
| Canada                                |                                   | 1,160  |                                           |   |                                   | 140 |   |   |   | 1,430 |   |   |   | 170 |   |   |   | (18.9 | ) |   |   | (17.6 | ) |
| Mexico                                |                                   | 1,230  |                                           |   |                                   | 200 |   |   |   | 7,900 |   |   |   | 470 |   |   |   | (84.4 | ) |   |   | (57.4 | ) |
| United                Kingdom/Ireland |                                   | 800    |                                           |   |                                   | 110 |   |   |   | 470 |   |   |   | 40 |   |   |   | 70.2 |   |   |   | 175.0 |   |
| Philippines                           |                                   | 3,500  |                                           |   |                                   | 270 |   |   |   | 6,360 |   |   |   | 500 |   |   |   | (45.0 | ) |   |   | (46.0 | ) |
| Malaysia/Singapore                    |                                   | 3,100  |                                           |   |                                   | 380 |   |   |   | 4,850 |   |   |   | 710 |   |   |   | (36.1 | ) |   |   | (46.5 | ) |
| Germany                               |                                   | 180    |                                           |   |                                   | 70 |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
|                                  |                                   |   |                                           |   |                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Consolidated                total     |                                   | 64,700 |                                           |   |                                   | 14,280 |   |   |   | 73,060 |   |   |   | 13,280 |   |   |   | (11.4 | )% |   |   | 7.5 | % |

*Cost      of Products Sold. *

*Distributor      Royalties and Commissions. *

----

*Selling,      General and Administrative Expenses. *

*Interest      Expense. *

*Income      Taxes. *

*Net      Income. *

**Financial      Condition, Liquidity and Capital Resources **

----

**Critical      Accounting Policies**

**Item      No. 3 - Quantitative and Qualitative Disclosures Regarding Market      Risk**

**Foreign      Currency Risk**

----

**Item      No. 4 - Controls and Procedures **

**PART      II - OTHER INFORMATION**

**Item      No. 1A - Risk Factors**

**Item      No. 6 - Exhibits**

| ExhibitNumber | Document                                                                                                                                                                                                                                    |
|---------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|          |                                                                                                                                                                                                                                        |
| 31.1          | Certification of Chief Executive Officer              pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities              Exchange Act, as amended (filed herewith).                                                               |
|          |                                                                                                                                                                                                                                        |
| 31.2          | Certification of Chief Financial Officer              pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities              Exchange Act, as amended (filed herewith).                                                               |
|          |                                                                                                                                                                                                                                        |
| 32            | Certification of Chief Executive Officer              and              Chief Financial Officer pursuant to 18 U.S.C. 1350,              as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002              (filed herewith). |

----

**SIGNATURES**

| **RELIV’              INTERNATIONAL, INC.** |
|---------------------------------------------------|

| By:   | /s/ Robert                L. Montgomery                                                                                                 |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------|
|                 |                                                                                                                                              |
|                 | Robert                L. Montgomery, Chairman of the Board of Directors, President and                Chief                Executive Officer |

| Date: May 10, 2006  |
|--------------------------|

| By:   | /s/ Steven                D. Albright                                                         |
|-----------------|----------------------------------------------------------------------------------------------------|
|                 |                                                                                                    |
|                 | Steven                D. Albright, Chief Financial Officer (and accounting                officer) |

| Date: May 10, 2006  |
|--------------------------|

----

| Reliv                International, Inc. and Subsidiaries                                                                                      |   |   |                            |   |   |                               |   |
|------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------------------------------|--------|--------|------------------------------------|--------|
|                                                                                                                                           |   |   |                            |   |   |                               |   |
| Consolidated                  Balance Sheets                                                                                                   |   |   |                            |   |   |                               |   |
|                                                                                                                                           |   |   | March                  31  |   |   | December                  31  |   |
|                                                                                                                                           |   |   | 2006                       |   |   | 2005                          |   |
|                                                                                                                                           |   |   | (unaudited)                |   |   |                               |   |
| Assets                                                                                                                                         |   |   |                            |   |   |                               |   |
|                                                                                                                                           |   |   |                            |   |   |                               |   |
|  Current                assets:                                                                                                           |   |   |                            |   |   |                               |   |
| Cash                  and cash equivalents                                                                                                     |   | $      | 8,998,864                       |   | $      | 5,653,594                          |   |
| Accounts                    and notes receivable, less allowances of $40,300 in 2006 and                    $39,700 in                    2005 |   |   | 766,686                         |   |   | 775,623                            |   |
| Accounts                  due from employees and distributors                                                                                  |   |   | 170,330                         |   |   | 152,760                            |   |
| Inventories                                                                                                                                    |   |   |                            |   |   |                               |   |
| Finished                  goods                                                                                                                |   |   | 3,357,581                       |   |   | 3,569,449                          |   |
| Raw                  materials                                                                                                                 |   |   | 1,313,667                       |   |   | 1,441,107                          |   |
| Sales                  aids and promotional materials                                                                                          |   |   | 516,776                         |   |   | 573,900                            |   |
| Total                  inventories                                                                                                             |   |   | 5,188,024                       |   |   | 5,584,456                          |   |
|                                                                                                                                           |   |   |                            |   |   |                               |   |
| Prepaid                  expenses and other current assets                                                                                     |   |   | 2,009,564                       |   |   | 1,240,138                          |   |
| Deferred                  income taxes                                                                                                         |   |   | 418,430                         |   |   | 452,430                            |   |
| Total                  current assets                                                                                                          |   |   | 17,551,898                      |   |   | 13,859,001                         |   |
|                                                                                                                                           |   |   |                            |   |   |                               |   |
| Other                  assets                                                                                                                  |   |   | 1,915,902                       |   |   | 1,626,330                          |   |
| Accounts                  due from employees and distributors                                                                                  |   |   | 300,083                         |   |   | 355,651                            |   |
|                                                                                                                                           |   |   |                            |   |   |                               |   |
| Property,                  plant and equipment:                                                                                                |   |   |                            |   |   |                               |   |
| Land                                                                                                                                           |   |   | 829,222                         |   |   | 829,222                            |   |
| Building                                                                                                                                       |   |   | 9,568,219                       |   |   | 9,553,311                          |   |
| Machinery                  & equipment                                                                                                     |   |   | 4,397,760                       |   |   | 4,736,274                          |   |
| Office                  equipment                                                                                                              |   |   | 1,409,032                       |   |   | 1,400,544                          |   |
| Computer                  equipment & software                                                                                             |   |   | 2,380,936                       |   |   | 2,536,415                          |   |
|                                                                                                                                           |   |   | 18,585,169                      |   |   | 19,055,766                         |   |
| Less:                  Accumulated depreciation                                                                                                |   |   | 8,630,656                       |   |   | 8,915,325                          |   |
| Net                  property, plant and equipment                                                                                             |   |   | 9,954,513                       |   |   | 10,140,441                         |   |
|                                                                                                                                           |   |   |                            |   |   |                               |   |
| Total                  assets                                                                                                                  |   | $      | 29,722,396                      |   | $      | 25,981,423                         |   |
|                                                                                                                                           |   |   |                            |   |   |                               |   |
| See                  notes to financial statements.                                                                                            |   |   |                            |   |   |                               |   |

----

| Reliv                  International, Inc. and Subsidiaries                                     |   |                      |         |                         |   |
|-------------------------------------------------------------------------------------------------|--------|---------------------------|--------------|------------------------------|--------|
|                                                                                            |   |                      |         |                         |   |
| Consolidated                  Balance Sheets                                                    |   |                      |         |                         |   |
|                                                                                            |   | March                  31 |         | December                  31 |   |
|                                                                                            |   | 2006                      |         | 2005                         |   |
|                                                                                            |   | (unaudited)               |         |                         |   |
| Liabilities                  and stockholders' equity                                           |   |                      |         |                         |   |
|                                                                                            |   |                      |         |                         |   |
| Current                  liabilities:                                                           |   |                      |         |                         |   |
| Accounts                  payable and accrued expenses:                                         |   |                      |         |                         |   |
| Trade                  accounts payable and other accrued expenses                              |   | $                         | 3,706,035    |                         | $      | 3,165,871 |   |
| Distributors                  commissions payable                                               |   |                      | 4,116,265    |                         |   | 3,578,405 |   |
| Sales                  taxes payable                                                            |   |                      | 558,893      |                         |   | 518,870 |   |
| Interest                  payable                                                               |   |                      | -            |                         |   | 31,000 |   |
| Payroll                  and payroll taxes payable                                              |   |                      | 1,051,209    |                         |   | 864,624 |   |
| Total                  accounts payable and accrued expenses                                    |   |                      | 9,432,402    |                         |   | 8,158,770 |   |
|                                                                                            |   |                      |         |                         |   |   |   |
| Income                  taxes payable                                                           |   |                      | 1,709,229    |                         |   | 820,246 |   |
| Current                  maturities of long-term debt                                           |   |                      | 916,013      |                         |   | 916,244 |   |
| Total                  current liabilities                                                      |   |                      | 12,057,644   |                         |   | 9,895,260 |   |
|                                                                                            |   |                      |         |                         |   |   |   |
| Noncurrent                  liabilities:                                                        |   |                      |         |                         |   |   |   |
| Long-term                  debt, less current maturities                                        |   |                      | 1,306,965    |                         |   | 2,211,065 |   |
| Deferred                  income taxes                                                          |   |                      | 66,000       |                         |   | 89,000 |   |
| Other                  non-current liabilities                                                  |   |                      | 1,235,349    |                         |   | 1,221,270 |   |
| Total                  noncurrent liabilities                                                   |   |                      | 2,608,314    |                         |   | 3,521,335 |   |
|                                                                                            |   |                      |         |                         |   |   |   |
| Stockholders'                  equity:                                                          |   |                      |         |                         |   |   |   |
| Preferred                  stock, par value $.001 per share;                  3,000,000         |   |                      |         |                         |   |   |   |
| shares                  authorized; -0- shares issued and outstanding                           |   |                      |         |                         |   |   |   |
| in                  2006 and 2005                                                               |   |                      | -            |                         |   | - |   |
| Common                  stock, par value $.001 per share; 30,000,000                            |   |                      |         |                         |   |   |   |
| authorized;                  15,622,590 shares issued and 15,572,508                            |   |                      |         |                         |   |   |   |
| shares                  outstanding as of 3/31/2006; 15,613,644 shares                          |   |                      |         |                         |   |   |   |
| issued                    and 15,563,562 shares outstanding as of                    12/31/2005 |   |                      | 15,623  |                         |   | 15,614  |   |
|                      Additional paid-in capital                                  |   |                      | 23,016,024   |                         |   | 22,972,463 |   |
|                      Accumulated deficit                                         |   |                      | (6,802,144   | )                            |   | (9,252,413 | ) |
|                      Accumulated other comprehensive loss:                       |   |                      |         |                         |   |   |   |
|                     Foreign currency translation adjustment                           |   |                      | (671,575     | )                            |   | (669,346 | ) |
|                      Treasury stock                                              |   |                      | (501,490     | )                            |   | (501,490 | ) |
|                                                                                            |   |                      |         |                         |   |   |   |
| Total                  stockholders' equity                                                     |   |                      | 15,056,438   |                         |   | 12,564,828 |   |
|                                                                                            |   |                      |         |                         |   |   |   |
| Total                  liabilities and stockholders' equity                                     |   | $                         | 29,722,396   |                         | $      | 25,981,423 |   |
|                                                                                            |   |                      |         |                         |   |   |   |
| See                  notes to financial statements.                                             |   |                      |         |                         |   |   |   |

----

| Reliv                  International, Inc. and Subsidiaries |   |                                         |       |   |   |
|-------------------------------------------------------------|--------|----------------------------------------------|------------|--------|--------|
|                                                        |   |                                         |       |   |   |
| Consolidated                  Statements of Income          |   |                                         |       |   |   |
| (unaudited)                                                 |   |                                         |       |   |   |
|                                                        |   | Three                  months ended March 31 |       |
|                                                        |   | 2006                                         |       | 2005   |   |
| Product                  sales                              |   | $                                            | 28,041,335 |   | $      | 26,114,493 |   |
| Handling                  & freight income              |   |                                         | 3,154,017  |   |   | 2,864,603 |   |
| Net                  sales                                  |   |                                         | 31,195,352 |   |   | 28,979,096 |   |
|                                                        |   |                                         |       |   |   |   |   |
| Costs                  and expenses:                        |   |                                         |       |   |   |   |   |
| Cost                  of products sold                      |   |                                         | 5,082,181  |   |   | 4,943,304 |   |
| Distributor                  royalties and commissions      |   |                                         | 12,627,032 |   |   | 11,711,716 |   |
| Selling,                  general and administrative        |   |                                         | 9,466,741  |   |   | 8,963,286 |   |
| Total                  costs and expenses                   |   |                                         | 27,175,954 |   |   | 25,618,306 |   |
|                                                        |   |                                         |       |   |   |   |   |
| Income                  from operations                     |   |                                         | 4,019,398  |   |   | 3,360,790 |   |
|                                                        |   |                                         |       |   |   |   |   |
| Other                  income (expense):                    |   |                                         |       |   |   |   |   |
| Interest                  income                            |   |                                         | 84,676     |   |   | 70,023 |   |
| Interest                  expense                           |   |                                         | (34,441    | )      |   | (85,490 | ) |
| Other                  income                               |   |                                         | 60,636     |   |   | 3,066 |   |
|                                                        |   |                                         |       |   |   |   |   |
| Income                  before income taxes                 |   |                                         | 4,130,269  |   |   | 3,348,389 |   |
| Provision                  for income taxes                 |   |                                         | 1,680,000  |   |   | 1,285,000 |   |
|                                                        |   |                                         |       |   |   |   |   |
| Net                  income                                 |   | $                                            | 2,450,269  |   | $      | 2,063,389 |   |
|                                                        |   |                                         |       |   |   |   |   |
| Earnings                  per common share - Basic          |   | $                                            | 0.16       |   | $      | 0.13 |   |
| Weighted                  average shares                    |   |                                         | 15,569,000 |   |   | 16,479,000 |   |
|                                                        |   |                                         |       |   |   |   |   |
| Earnings                  per common share - Diluted        |   | $                                            | 0.15       |   | $      | 0.12 |   |
| Weighted                  average shares                    |   |                                         | 15,981,000 |   |   | 17,162,000 |   |
|                                                        |   |                                         |       |   |   |   |   |
| Cash                  dividends declared per common share   |   | $                                            | -          |   | $      | - |   |
|                                                        |   |                                         |       |   |   |   |   |
|                                                        |   |                                         |       |   |   |   |   |
| See                  notes to financial statements.         |   |                                         |       |   |   |   |   |

----

| Reliv                    International, Inc. and Subsidiaries                                                           |   |                                           |      |   |   |
|-------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------|-----------|--------|--------|
|                                                                                                                    |   |                                           |      |   |   |
| Consolidated                    Statements of Cash Flows                                                                |   |                                           |      |   |   |
| (unaudited)                                                                                                             |   |                                           |      |   |   |
|                                                                                                                    |   | Three                    months ended March 31 |      |
|                                                                                                                    |   | 2006                                           |      | 2005   |   |
|                                                                                                                    |   |                                           |      |   |   |
| Operating                    activities:                                                                                |   |                                           |      |   |   |
| Net                    income                                                                                           |   | $                                              | 2,450,269 |   | $      | 2,063,389 |   |
| Adjustments                    to reconcile net income to net                    cash provided by operating activities: |   |                                           |      |   |   |   |   |
| Depreciation                    and amortization                                                                        |   |                                           | 315,325   |   |   | 325,333 |   |
| Stock-based                    compensation                                                                             |   |                                           | 29,060    |   |   | 16,725 |   |
| Tax                    benefit from exercise of options                                                                 |   |                                           | -         |   |   | 1,185,000 |   |
| Deferred                    income taxes                                                                                |   |                                           | 11,000    |   |   | - |   |
| Foreign                    currency transaction (gain)/loss                                                             |   |                                           | (10,304   | )      |   | 51,556 |   |
| (Increase)                    decrease in accounts and notes receivable                                                 |   |                                           | 45,105    |   |   | (160,575 | ) |
| (Increase)                    decrease in inventories                                                                   |   |                                           | 415,004   |   |   | 85,988 |   |
| (Increase)                    decrease in refundable income taxes                                                       |   |                                           | -         |   |   | 1,263,308 |   |
| (Increase)                      decrease in prepaid expenses and                      other current assets              |   |                                           | (764,700  | )      |   | (869,636 | ) |
| (Increase)                    decrease in other assets                                                                  |   |                                           | (298,705  | )      |   | (221,910 | ) |
| Increase                    (decrease) in accounts payable and accrued expenses                                         |   |                                           | 1,285,994 |   |   | 2,264,678 |   |
| Increase                    (decrease) in income taxes payable                                                          |   |                                           | 889,022   |   |   | 6,790 |   |
|                                                                                                                    |   |                                           |      |   |   |   |   |
| Net                    cash provided by operating activities                                                            |   |                                           | 4,367,070 |   |   | 6,010,646 |   |
|                                                                                                                    |   |                                           |      |   |   |   |   |
| Investing                    activities:                                                                                |   |                                           |      |   |   |   |   |
| Proceeds                    from the sale of property, plant and equipment                                              |   |                                           | 5,835     |   |   | - |   |
| Purchase                    of property, plant and equipment                                                            |   |                                           | (121,764  | )      |   | (279,821 | ) |
|                                                                                                                    |   |                                           |      |   |   |   |   |
| Net                    cash used in investing activities                                                                |   |                                           | (115,929  | )      |   | (279,821 | ) |
|                                                                                                                    |   |                                           |      |   |   |   |   |
| Financing                    activities:                                                                                |   |                                           |      |   |   |   |   |
| Principal                    payments on long-term borrowings                                                           |   |                                           | (904,339  | )      |   | (81,972 | ) |
| Proceeds                    from options and warrants exercised                                                         |   |                                           | 14,510    |   |   | 12,412 |   |
| Purchase                    of stock for treasury                                                                       |   |                                           | -         |   |   | (1,355,285 | ) |
|                                                                                                                    |   |                                           |      |   |   |   |   |
| Net                    cash used in financing activities                                                                |   |                                           | (889,829  | )      |   | (1,424,845 | ) |
|                                                                                                                    |   |                                           |      |   |   |   |   |
| Effect                    of exchange rate changes on cash and cash equivalents                                         |   |                                           | (16,042   | )      |   | (40,147 | ) |
|                                                                                                                    |   |                                           |      |   |   |   |   |
| Increase                    in cash and cash equivalents                                                                |   |                                           | 3,345,270 |   |   | 4,265,833 |   |
|                                                                                                                    |   |                                           |      |   |   |   |   |
| Cash                    and cash equivalents at beginning of period                                                     |   |                                           | 5,653,594 |   |   | 10,151,503 |   |
|                                                                                                                    |   |                                           |      |   |   |   |   |
| Cash                    and cash equivalents at end of period                                                           |   | $                                              | 8,998,864 |   | $      | 14,417,336 |   |
|                                                                                                                    |   |                                           |      |   |   |   |   |
| See                    notes to financial statements                                                                    |   |                                           |      |   |   |   |   |

----

| ** Note 1--** | **Basis of                    Presentation**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|               | The                      accompanying unaudited consolidated financial statements and                      notes thereto                      have been prepared in accordance with the instructions to Form                      10-Q and                      reflect all adjustments which management believes necessary                      (which                      primarily include normal recurring accruals) to present fairly                      the                      financial position, results of operations and cash flows. These                      statements, however, do not include all information and footnotes                      necessary for a complete presentation of financial position,                      results of                      operations and cash flows in conformity with accounting principles                      generally accepted in the United States. Interim results may                      not                      necessarily be indicative of results that may be expected for                      any other                      interim period or for the year as a whole. These financial                      statements                      should be read in conjunction with the audited consolidated                      financial                      statements and footnotes included in the annual report on Form                      10-K for                      the year ended December 31, 2005, filed March 16, 2006 with                      the Securities                      and Exchange Commission.  |
|               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|  **Note 2--** | **Reclassifications**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|               | In                      previous years, in addition to the required disclosure of "net                      sales," the                      Company reported "sales at suggested retail," representing                      the gross sales                      amount reflected on the Company's invoices to distributors                      before                      "distributor allowances." In the current year, the Company                      has                      reclassified the presentation of "net sales" by presenting "products                      sales" and "handling & freight income." Handling and freight income                      represents the amounts billed to distributors for shipping                      costs. Product                      sales represent the actual product purchase price typically                      paid by the                      Company's distributors, after giving effect to distributor                      allowances,                      which range from 20% to 40% of suggested retail prices. Subsequent                      to this                      classification, net sales represent sales and handling & freight                      income.                                                                                                                                                                                                                                                                                                                                                   |
|               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|  **Note 3--** | **Basic and Diluted Earnings                    per                    Share**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|               | Basic                    earnings per common share are computed using the weighted average                    number                    of common shares outstanding during the period. Diluted earnings                    per share                    are computed using the weighted average number of common shares                    and                    potential dilutive common shares that were outstanding during                    the period.                    Potential dilutive common shares consist of outstanding stock                    options,                    outstanding stock warrants, and convertible preferred stock.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|               | The                      following table sets forth the computation of basic and diluted                      earnings                      per share:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |

|   |                                                                                                                           |   |   | Three                        months ended March 31  |   |
|--------|--------------------------------------------------------------------------------------------------------------------------------|--------|--------|----------------------------------------------------------|--------|
|   |                                                                                                                           |   |   | 2006                                                |   |   | 2005  |   |
|   | Numerator:                                                                                                                     |   |   |                                                     |   |   |   |   |
|   | Net                        income                                                                                              |   | $      | 2,450,269                                                |   | $ | 2,063,389 |   |
|   |                                                                                                                           |   |   |                                                     |   |   |   |   |
|   | Denominator:                                                                                                                   |   |   |                                                     |   |   |   |   |
|   | Denominator                          for basic earnings per share--weighted average                          shares            |   |   | 15,569,000                                               |   |   | 16,479,000 |   |
|   | Dilutive                          effect of employee stock options and                          other warrants                 |   |   | 412,000                                                  |   |   | 683,000 |   |
|   |                                                                                                                           |   |   |                                                     |   |   |   |   |
|   | Denominator                          for diluted earnings per share--adjusted weighted average                          shares |   |   | 15,981,000                                               |   |   | 17,162,000 |   |
|   |                                                                                                                           |   |   |                                                     |   |   |   |   |
|   | Basic                        earnings per share                                                                                |   | $      | 0.16                                                     |   | $ | 0.13 |   |
|   | Diluted                        earnings per share                                                                              |   | $      | 0.15                                                     |   | $ | 0.12 |   |

----

| ** Note 4--** | **Comprehensive                      Income**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|               | Total                        comprehensive income was $2,448,041 and $2,079,062 for the                        three months                        ended March 31, 2006 and 2005, respectively. The Company's                        only component                        of other comprehensive income is the foreign currency translation                        adjustment.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|  **Note 5--** | **Stock-Based                      Compensation**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|               | *Stock                      Options*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|               | On                        January 1, 2006, the Company adopted Statement of Financial                        Accounting                        Standards No. 123(R), "Share-Based Payment" ("SFAS 123(R)").                        Prior to the                        adoption of SFAS 123(R), the Company had adopted the disclosure-only                        provisions of SFAS 123 and accounted for employee stock-based                        compensation                        under the intrinsic value method, and no expense related                        to stock options                        was recognized. The Company adopted the provisions of SFAS                        123(R) using                        the modified prospective transition method. Under this method,                        the                        Company's consolidated financial statements as of and for                        the three months                        ended March 31, 2006 reflect the impact of SFAS 123(R), while                        the                        consolidated financial statements for prior periods have                        not been restated                        to reflect, and do not include, the impact of SFAS 123(R).                        SFAS 123(R)                        amends SFAS No. 95, "Statement of Cash Flows," to require                        that excess tax                        benefits be reported as a financing cash flow rather than                        as an operating                        cash flow. Adoption of SFAS 123(R) did not have a material                        impact on the                        consolidated statements of cash flows for the three months                        ended March 31,                        2006.The                        Company sponsors a stock option plan (the "2003 Plan") allowing                        for                        incentive stock options and non-qualified stock options to                        be granted to                        employees and eligible directors. The 2003 Plan provides                        that 1,000,000                        shares may be issued under the 2003 Plan at an option price                        not less than                        the fair market value of the stock at the time the option                        is granted. The                        2003 Plan expires on March 20, 2013. In 2005, the Company                        issued grants of                        543,000 shares under the 2003 Plan. The 2005 option grants                        were issued                        with an exercise price equal to the fair value of the shares                        at the time                        of grant and were fully vested in the year of grant. Accordingly,                        no                        stock-based compensation expense has been recognized relating                        to the 2005                        option grants. As of March 31, 2006, 457,000 shares remain                        available for                        grant under the 2003 Plan. The                        fair value of the options granted in 2005 was estimated at                        the date of                        grant using a Black-Scholes option pricing model with the                        following                        weighted average assumptions: risk-free interest rates ranging                        from 4.02%                        to 4.31%; dividend yield ranging from 0.55% to 0.80%; volatility                        factor of                        the expected price of the Company's stock ranging from 0.448                        to 0.516; and                        a weighted average expected life of 7.0 years. The weighted                        average fair                        value of options granted during 2005 was $4.19 per share.There                        were no options granted during the three months ended March                        31, 2006 and                        for the years ended December 31, 2004, 2003, and 2002. As                        of March 31,                        2006, there exist unexercised stock options from grants made                        in 2001 under                        a prior stock option plan. The fair value of options granted                        in 2001 were                        estimated at the date of grant using a Black-Scholes option                        pricing model                        with the following weighted average assumptions: risk-free                        interest rates                        ranging from 3.07% to 4.78%; dividend yield of zero; volatility                        factor of                        the expected price of the Company's stock of 0.729; and a                        weighted average                        expected life of 4.51 years. The weighted average fair value                        of options                        granted during 2001 was $0.42 per share.Compensation                        cost for the stock option plans was approximately $4,000                        for the three                        months ended March 31, 2006 and has been recorded in selling,                        general, and                        administrative expense. As of March 31, 2006 there was approximately                        $59,000 of unrecognized compensation cost related to 128,720                        nonvested                        stock options that the Company estimates to ultimately vest                        which have a                        $0.78 per share weighted average exercise price. There has been no                        change to the number of unvested stock options during the                        three months                        ended March 31, 2006. |

----

|   | A                        summary of the Company's stock option activity and related                        information for                        the three months ended March 31, 2006                        follows: |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |                                               |   | Options |    | Weighted                  Avg. Exercise                  Price |   | Aggregate                  Intrinsic                  Value |   | Weighted                  Avg. Remaining                  Life |      |
|--------|----------------------------------------------------|--------|---------|---------|----------------------------------------------------------------|--------|-------------------------------------------------------------|--------|----------------------------------------------------------------|-----------|
|   | Outstanding                  beginning of the year |   |    | 813,074 |                                                           | $      | 5.57                                                        |   |                                                           |      |   |   |   |   |
|   | Granted                                            |   |    | --      |                                                           |   | --                                                          |   |                                                           |      |   |   |   |   |
|   | Exercised                                          |   |    | (7,732  | )                                                              |   | 0.71                                                        |   |                                                           |      |   |   |   |   |
|   | Forfeited                                          |   |    | --      |                                                           |   | --                                                          |   |                                                           |      |   |   |   |   |
|   | Outstanding                  at end of quarter     |   |    | 805,342 |                                                           | $      | 5.61                                                        |   | $                                                              | 5,458,000 |   |   | 6.03 |   |
|   |                                               |   |    |    |                                                           |   |                                                        |   |                                                           |      |   |   |   |   |
|   | Exercisable                  at end of quarter     |   |    | 676,622 |                                                           | $      | 6.53                                                        |   | $                                                              | 3,963,000 |   |   | 7.12 |   |

|   |                                      |   | As                  of March 31, 2006 |    |
|--------|-------------------------------------------|--------|---------------------------------------|---------|
|   |                                      |   | Options                  Outstanding  |    | Options                  Exercisable |   |
|   | Range                  of Exercise Prices |   | Number                  Outstanding   |    | Weighted                  Avg. Remaining Life |   | Weighted                  Avg. Exercise Price |   | Number                  Exercisable |   | Weighted                  Avg. Exercise Price |   |
|   | $0.71                  - $0.78            |   |                                  | 262,342 |   |   | 0.29 |   | $ | 0.74 |   |   | 133,622 |   | $ | 0.71 |   |
|   | $7.92                - $8.68              |   |                                  | 543,000 |   |   | 8.80 |   | $ | 7.97 |   |   | 543,000 |   |  $ | 7.97 |   |
|   | $0.71                  - $8.68            |   |                                  | 805,342 |   |   |   |   |   |   |   |   | 676,622 |   |   |   |   |

|   | For                  the three months ended March 31, 2006, the total intrinsic value,                  cash                  received, and actual tax benefit realized for stock options exercised                  (7,732 shares) was $113,000, $5,000, and $-0-,                  respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   | In                accordance with the modified prospective transition method, the Company's                consolidated financial statements for prior periods have not been                restated                and do not include the impact of SFAS 123(R). Accordingly, no compensation                expense related to such stock option awards was recognized in the                three-month period ended March 31, 2005 because all stock options                granted                had an exercise price equal to the fair market value of the underlying                common stock on the date of grant. The following table shows the                effect on                net income and earnings per share as if the fair-value-based method                of                accounting had been applied to all outstanding and unvested stock                option                awards prior to adoption of SFAS 123(R). For purposes of this pro                forma                disclosure, the estimated fair value of the stock option award is                assumed                to be expensed over the award's vesting periods using the Black-Scholes                model. |

|   | Three                  months ended March 31, 2005                                                                                                                                                   |   |   |      |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-----------|
|   |                                                                                                                                                                                                 |   |   |      |
|   | Net                  income, as reported                                                                                                                                                             |   | $      | 2,063,389 |   |
|   |                                                                                                                                                                                                 |   |   |      |   |
|   | Deduct:                    Total stock-based employee compensation expense                    determined under fair value based method for                    all awards, net of related tax effects |   |   | 854,500   |   |
|   |                                                                                                                                                                                                 |   |   |      |   |
|   | Pro                    forma net income available to common                    shareholders                                                                                                          |   | $      | 1,208,889 |   |
|   |                                                                                                                                                                                                 |   |   |      |   |
|   | Earnings                  per share:                                                                                                                                                                 |   |   |      |   |
|   | Basic--as                  reported                                                                                                                                                                  |   | $      | 0.13      |   |
|   | Basic--pro                  forma                                                                                                                                                                    |   | $      | 0.07      |   |
|   |                                                                                                                                                                                                 |   |   |      |   |
|   | Diluted--as                  reported                                                                                                                                                                |   | $      | 0.12      |   |
|   | Diluted--pro                  forma                                                                                                                                                                  |   | $      | 0.07      |   |

----

| ** Note 6--** | **Subsequent                    Event**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|               | On                      February 21, 2006, the Company filed a registration statement                      on Form S-3                      with the Securities and Exchange Commission relating to an                      underwritten                      public offering of 2,000,000 shares of its common stock. On                      April 5, 2006,                      the Company commenced the public offering at a price of $11.25                      per share.                      The public offering was completed on April 11, 2006 and consisted                      of                      1,200,000 shares of common stock offered and sold by the Company                      and                      800,000 shares of common stock offered and sold by selling                      stockholders.                      The selling stockholders were four directors and/or officers                      of the                      Company. The underwriters had a 30-day option to purchase up                      to 300,000                      additional shares from certain of the selling stockholders                      to cover                      over-allotments, if any. This option was exercised for the                      full 300,000                      shares and closed on May 9, 2006. The Company did not receive                      any proceeds                      from the sale of common stock by the selling stockholders.The                      Company intends to use the net proceeds from the offering for                      the                      repayment of debt and for general corporate purposes, including                      working                      capital, continued domestic and international growth, and for                      possible                      product acquisitions. Net proceeds to the Company from the                      offering, after                      reduction for the underwriters' fees and other estimated offering                      expenses, are expected to be $12.0                      million. |

----

**Exhibit      Index**

| ExhibitNumber | Document                                                                                                                                                                                                                                            |
|---------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|          |                                                                                                                                                                                                                                                |
| 31.1          | Certification of Chief Executive Officer                pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities                Exchange Act, as amended (filed herewith).                                                                   |
|          |                                                                                                                                                                                                                                                |
| 31.2          | Certification of Chief Financial Officer                pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities                Exchange Act, as amended (filed herewith).                                                                   |
|          |                                                                                                                                                                                                                                                |
| 32            | Certification of Chief Executive Officer                and                Chief Financial Officer pursuant to 18 U.S.C. 1350,                as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                (filed herewith). |

----