FORM 10-QSB/A

                       SECURITIES AND EXCHANGE COMMISSION

                              WASHINGTON, DC 20549


              [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                        For Quarter Ended March 31, 2006

                                       OR

              [ ] 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 33-20432

                       MAGNITUDE INFORMATION SYSTEMS, INC.
             (Exact Name of Registrant as Specified in its Charter)

                         Delaware                   75-2228828
             (State or other Jurisdiction of      (IRS Employer
              Incorporation or Organization)    Identification No.)

                  401 State Route 24, Chester, New Jersey 07930
               (Address of Principal Executive Office) (Zip Code)

                                 (908) 879-2722
               (Registrant's telephone number including area code)

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.
                                 Yes |x| No |_|

The number of shares of Registrant's Common Stock, $0.0001 par value,
outstanding as of March 31, 2006, was 146,931,672 shares.

Explanatory Note

This Form 10-QSB/A is being filed for the purpose of providing additional
disclosure language to sections of the Company's report for the quarter ended
March 31, 2006 on Form 10-QSB as filed with the U.S. Securities and Exchange
Commission on May 15, 2006. The restatement provides for additional disclosure
pertaining to "Non-cash investing and financing activities" in the Statements of
Cash Flows, and to "Securities issued for services", "Reclassification of
certain securities under EITF 00-19", "Accounts payable and accrued expenses",
"Long-term debt", and "Commitments and contingencies" in the Notes to
Consolidated Financial Statements. The restatement also corrects a typographical
error in the Net loss figure appearing in the Income Statement. In addition, the
restatement provides for the disclosure of a Subsequent Event pertaining to the
appointment of Edward Marney to the executive positions of President and Chief
Executive Officer of the Registrant.



<PAGE>

              MAGNITUDE INFORMATION SYSTEMS, INC. AND SUBSIDIARIES




                                      INDEX


                                                                       Page
                                                                       Number
                                                                       ------

PART 1 - FINANCIAL INFORMATION

Item 1   Financial Statements (unaudited)

         Consolidated Balance Sheet
         - March 31, 2006                                                3

         Consolidated Statements of Operations
         - Three months ended March 31, 2006 (as restated) and 2005      4

         Consolidated Statements of Cash Flows
          - Three months ended March 31, 2006 and 2005                   5

         Notes to Consolidated Financial Statements                      6 - 12


Item 2   Management's Discussion and Analysis of Financial Condition
         and Results of Operations                                       13 - 14

Item 3   Controls and Procedures                                         15


PART II - OTHER INFORMATION 16 - 17


SIGNATURES                                                               18





                                                                               2
<PAGE>

PART I - ITEM 1 FINANCIAL STATEMENTS

               MAGNITUDE INFORMATION SYSTEMS, INC. AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEET
                           March 31, 2006 (Unaudited)

<TABLE>
<CAPTION>

<S>                                                                            <C>
Assets
  Current Assets
  Cash                                                                         $      9,025
  Accounts receivable, net of allowance for
       doubtful accounts of $0                                                       22,056
  Prepaid expenses                                                                   29,710
                                                                               ------------
     Total Current Assets                                                            60,791
  Property and equipment, net of accumulated
  depreciation of $154,518                                                            6,807
  Software, net of accumulated amortization of $1,223,181                           284,109
  Deposits                                                                           23,996
                                                                               ------------
     Total Assets                                                                   375,703
                                                                               ============
Liabilities and Stockholders' Equity (Impairment)

  Current Liabilities
  Accounts payable and accrued expenses                                             382,550
  Deferred revenue                                                                   20,763
  Obligations to be settled in stock                                                 74,000
  Dividends payable                                                                 629,879
  Loans payable                                                                     130,000
  Notes payable                                                                      25,000
  Derivative conversion feature                                                     122,240
  Current maturities of long-term debt                                              133,419
  Current maturities of capitalized lease obligations                                   256
                                                                               ------------
     Total Current Liabilities                                                    1,518,107
Capitalized lease obligations, less current portion                                      --
                                                                               ------------
     Total Liabilities                                                            1,518,107

Stockholders' Equity (Impairment)
Preferred Stock, $0.001 par value, non-voting, 3,000,000 shares authorized:
2,500 shares have been designated Cumulative Preferred Stock,
of which 1 share is issued and outstanding                                                0
300,000 shares have been designated Series A Convertible Preferred Stock,
350,000 shares have been designated Series B Convertible Preferred Stock,
120,000 shares have been designated Series C Convertible Preferred Stock,
500,000 shares have been designated Series D Convertible Preferred Stock,
500,000 shares have been designated Series E Convertible Preferred Stock,
of which a combined total 322,333 shares are issued and outstanding                     322
Common Stock, $0.0001 par value, 300,000,000 shares authorized;
issued and outstanding 146,931,672 shares                                            14,693
Additional paid-in capital
                                                                                 31,230,240
Accumulated (deficit)                                                           (32,043,629)
Deferred compensation                                                              (344,030)
                                                                               ------------
     Total Stockholders' Equity (Impairment)                                     (1,142,404)

     Total Liabilities and Equity (Impairment)                                 $    375,703
                                                                               ============
</TABLE>

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



                                                                               3
<PAGE>

               MAGNITUDE INFORMATION SYSTEMS, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)

                                                     Three Months Ended
                                                           March 31,
                                             2006 (as restated)      2005
                                             ------------------ ------------
Total Revenues                                $      11,075    $      19,264

Cost of Goods Sold                                   36,365           36,367
                                              -------------    -------------

Gross Profit (Loss)                                 (25,290)         (17,103)

Selling expenses                                    140,121           96,219
Stock-based compensation (see below) .              112,492           66,123
Research and development cost                        35,562           53,050
General and administrative expenses                 406,264          383,190
                                              -------------    -------------

Loss From Operations                               (719,729)        (615,685)

Other Income (Expense)
Miscellaneous income                                     --           17,537
Interest income                                          --                2
Change in fair value - derivative liability         (19,478)              --
Interest expense                                   (107,977)          (3,182)
                                              -------------    -------------
Total Other Income (Expense)                       (127,455)          14,357
                                              -------------    -------------

Loss Before Provision for Income Taxes             (847,184)        (601,328)

Provision for Income Taxes                           (1,000)            (630)
                                              -------------    -------------
Net Loss                                      $    (848,184)   $    (601,958)
                                              =============    =============
Dividends on Preferred Stock                        (28,380)         (28,379)
                                              -------------    -------------
Net Loss Applicable to Common Shareholders    $    (876,564)   $    (630,337)
                                              =============    =============
Net Loss per Common Share                     $      (0.006)   $      (0.005)
                                              =============    =============
Weighted Average Number of
Common Shares Outstanding                       142,715,005      132,657,612
                                              =============    =============

All of the stock-based compensation relates to selling, general and
administrative expenses.

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



                                                                               4
<PAGE>

               MAGNITUDE INFORMATION SYSTEMS, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)


                                                        Three Months Ended
                                                             March 31,
                                                         2006         2005
                                                      ---------    ---------
Cash Flows from Operating Activities
Net Loss                                              $(848,184)   $(601,958)
Adjustments to Reconcile Net Loss
to Net Cash Used by Operations
   Depreciation and amortization                         37,520       39,126
   Securities issued for various expenses                92,384      182,800
   Recognition of expenses - deferred compensation       20,108       21,878
   Recognition of expenses - derivative liabilities     122,240           --
Decreases (Increases) in Assets
   Accounts receivable                                      241       21,227
   Miscellaneous receivables                                 --        6,270
   Prepaid expenses                                      (6,924)
                                                                     (24,912)
Increases (decreases) in Liabilities
   Deferred revenues                                     (4,776)     (10,429)
   Accounts payable and accrued expenses                 74,803     (102,632)
                                                      ---------    ---------
Net Cash Used by Operating Activities                  (512,588)    (468,630)

Cash Flows from Investing Activities
Purchases of equipment and fixtures                        (583)      (2,160)
                                                      ---------    ---------
Net Cash Used by Investing Activities                      (583)      (2,160)

Cash Flows from Financing Activities
Dividends paid                                               --       (1,020)
Prepayments on common stock subscriptions                74,000           --
Proceeds from loans and notes                            85,000           --
Repayment of loans and notes                            (30,000)          --
Issuance of common and preferred stock                  274,500      670,000
                                                      ---------    ---------
Net Cash Provided by Financing Activities               403,500      668,980

Net Increase in Cash                                   (109,671)     198,190
Cash at Beginning of Period                             118,696       44,144
                                                      ---------    ---------
Cash at End of Period                                 $   9,025    $ 242,334
                                                      =========    =========


SUPPLEMENTARY SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:

During the three months ended March 31, 2006, $11,550 in accrued expenses were
settled via issuance of common stock.

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



                                                                               5
<PAGE>

               MAGNITUDE INFORMATION SYSTEMS, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2006

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

    Nature of Organization

      Magnitude Information Systems, Inc. (the "Company") was incorporated as a
      Delaware corporation on April 19, 1988 under the name Fortunistics, Inc.
      On November 18, 1998, the Company changed its name to Magnitude
      Information Systems, Inc.

      The Company and Magnitude, Inc. are two separate legal entities whereby
      Magnitude, Inc. operates as a subsidiary of the Company. However, the
      operations of the combined entity are currently comprised solely of the
      operations of Magnitude, Inc. The 1% of Magnitude, Inc. not owned by the
      Company constitutes a minority interest which is valued at $0.

      The Company's primary product is an integrated suite of proprietary
      software modules marketed under the name ErgoEnterpriseTM which are
      designed to help individual computer users and businesses increase
      productivity and reduce the risk of potentially preventable repetitive
      stress injury (RSI). These software modules can be applied individually or
      together in a comprehensive ergonomic and early intervention program that
      seeks to modify a user's behavior by monitoring computer usage patterns
      over time and warning the user when to break a dangerous trend in
      repetitive usage of an input device, such as a keyboard or mouse. The
      product was developed to train people working on computers, monitor
      computer-use related activities and evaluate a user's risk exposure and
      propensity towards injury or loss of effectiveness in connection with
      his/her day-to-day work. Moreover, the software enables a company to not
      only address the issue of health risks involving employees and to minimize
      resulting potential liabilities, but delivers a powerful tool to increase
      overall productivity.

    Basis of Presentation

      The accompanying unaudited consolidated financial statements have been
      prepared in accordance with generally accepted accounting principles for
      interim financial statements and with the instructions to Form 10-QSB and
      Article 10 of Regulation S-X. Accordingly, they do not include all of the
      information and disclosures required for annual financial statements.
      These financial statements should be read in conjunction with the
      consolidated financial statements and related footnotes included in the
      Company's annual report on Form 10-KSB for the year ended December 31,
      2005.

      In the opinion of the Company's management, all adjustments (consisting of
      normal recurring accruals) necessary to present fairly the Company's
      financial position as of March 31, 2006, the results of operations for the
      three months ended March 31, 2006 and 2005, and the cash flows for the
      three months ended March 31, 2006 and 2005, have been included.

    Principles of Consolidation

      The consolidated financial statements include the accounts of Magnitude
      Information Systems, Inc. and its subsidiary, Magnitude, Inc. All
      significant inter-company balances and transactions have been eliminated.

    Depreciation and Amortization

      Property and equipment are recorded at cost. Depreciation on equipment,
      furniture and fixtures and leasehold improvements is computed on the
      straight-line method over the estimated useful lives of such assets
      between 3-10 years. Maintenance and repairs are charged to operations as
      incurred. Software assets are capitalized at the fair value of stock
      exchanged/granted upon acquisition and are amortized on the straight-line
      method on a product-by-product basis over the estimated economic life of
      the products which has been determined to be 10 years.




                                                                               6
<PAGE>

               MAGNITUDE INFORMATION SYSTEMS, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2006

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued

    Evaluation of Long Lived Assets
      Long-lived assets are assessed for recoverability on an ongoing basis. In
      evaluating the fair value and future benefits of long-lived assets, their
      carrying value would be reduced by the excess, if any, of the long-lived
      asset over management's estimate of the anticipated undiscounted future
      net cash flows of the related long-lived asset.

    Securities Issued for Services

      The Company accounts for stock, stock options and stock warrants issued
      for services and compensation by employees under the fair value method.
      For non-employees, the fair market value of the Company's stock on the
      date of stock issuance or option/grant is used. The Company determined the
      fair market value of the warrants/options issued under the Black-Scholes
      Pricing Model. Effective January 1, 2006, the Company adopted the
      provisions of Statement of Financial Accounting Standards (SFAS) 123R,
      SHARE-BASED PAYMENT, which establishes accounting for equity instruments
      exchanged for employee services. Under the provisions of SFAS 123(R),
      share-based compensation cost is measured at the grant date, based on the
      fair value of the award, and is recognized as an expense over the
      employee's requisite service period (generally the vesting period of the
      equity grant). Prior to January 1, 2006, the Company accounted for
      share-based compensation to employees in accordance with Accounting
      Principles Board (APB) Opinion No. 25, ACCOUNTING FOR STOCK ISSUED TO
      EMPLOYEES, and related interpretations. The Company also followed the
      disclosure requirements of SFAS 123, ACCOUNTING FOR STOCK-BASED
      COMPENSATION. The Company elected to adopt the modified prospective
      transition method as provided by SFAS 123(R) and, accordingly, financial
      statement amounts for the prior periods presented in the Form 10-QSB have
      not been restated to reflect the fair value method of expensing
      share-based compensation.

    Reclassification of certain securities under EITF 00-19

      Pursuant to Emerging Issues Task Force (EITF) Issue 00-19, if a company
      has more than one contract subject to this Issue, and partial
      reclassification is required, there may be different methods that could be
      used to determine which contracts, or portions of contracts, should be
      reclassified. The Company's method for reclassification of such contracts
      is reclassification of contracts with the latest maturity date first. The
      changes in fair value for any contracts reclassified during the first
      quarter in 2006 were not material.

    Income Taxes

      The Company provides for income taxes based on enacted tax law and
      statutory tax rates at which items of income and expenses are expected to
      be settled in the Company's income tax return. Certain items of revenue
      and expense are reported for Federal income tax purposes in different
      periods than for financial reporting purposes, thereby resulting in
      deferred income taxes. Deferred taxes are also recognized for operating
      losses that are available to offset future taxable income. Valuation
      allowances are established when necessary to reduce deferred tax assets to
      the amount expected to be realized. The Company has incurred net operating
      losses for financial-reporting and tax-reporting purposes. Accordingly,
      for Federal and state income tax purposes, the benefit for income taxes
      has been offset entirely by a valuation allowance against the related
      federal and state deferred tax asset.

    Net Loss Per Share

      Net loss per share, in accordance with the provisions of Financial
      Accounting Standards Board No. 128, "Earnings Per Share" is computed by
      dividing net loss by the weighted average number of shares of Common Stock
      outstanding during the period. Common Stock equivalents have not been
      included in this computation since the effect would be anti-dilutive.



                                                                               7
<PAGE>

               MAGNITUDE INFORMATION SYSTEMS, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2006

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued

    Revenue Recognition
      The Company's revenue recognition policy for software sales is in
      accordance with Accounting Statement of Position (SOP) 97-2 "Software
      Revenue Recognition" and SOP 98-9 "Software Revenue recognition" which
      modifies SOP 97-2. Revenue is recognized at the time of licensing provided
      that the resulting receivable is deemed probable of collection and is
      fixed or determinable. Revenue from software maintenance contracts is
      recognized ratably as earned. When a sales contract includes multiple
      elements, revenues are allocated to the various elements based on
      Company-specific objective evidence of fair value, regardless of any
      separate prices for each element that may be stated within the contract.

    Use of Estimates
      The preparation of financial statements in conformity with generally
      accepted accounting principles requires management to make estimates and
      assumptions that affect the reported amounts of assets and liabilities and
      disclosure of contingent assets and liabilities at the date of the
      financial statements and the reported amounts of revenues and expenses
      during the reporting period. Actual results could differ from those
      estimates.

2. GOING CONCERN
      The ability of the Company to continue its operations is dependent on
      increasing sales and obtaining additional capital and financing. In their
      report for the fiscal year ended December 31, 2005, our auditors had
      expressed an opinion that, as a result of the losses incurred, there was
      substantial doubt regarding our ability to continue as a going concern.
      The accompanying financial statements do not include any adjustments that
      might be necessary if the Company were unable to continue as a going
      concern. Management's plans are to continue seeking additional working
      capital through equity and debt placements with private and institutional
      investors.

3. CONCENTRATIONS OF BUSINESS AND CREDIT RISK

      The Company maintains cash balances in a financial institution which is
      insured by the Federal Deposit Insurance Corporation up to $100,000.
      Balances in these accounts may, at times, exceed the federally insured
      limits. The Company provides credit in the normal course of business to
      customers located throughout the U.S. and overseas. The Company performs
      ongoing credit evaluations of its customers and maintains allowances for
      doubtful accounts based on factors surrounding the credit risk of specific
      customers, historical trends, and other information.

4. PREPAID EXPENSES

      Prepaid Expenses at the end of the quarter included $19,465 prepaid
      insurance costs, with the remainder representing miscellaneous prepaid
      expenses.

5. PROPERTY AND EQUIPMENT

      Property and equipment consist of the following at March 31, 2006:
              Equipment                                          $      89,095
              Furniture and fixtures                                    72,230
                                                                 --------------

                                                                       161,325

              Less accumulated depreciation                            154,518
                                                                 --------------

                          Total                                  $       6,807
                                                                 ==============

Depreciation expense charged to operations was $1,135 and $2,742 in the first
three months of 2006 and 2005, respectively.



                                                                               8
<PAGE>

               MAGNITUDE INFORMATION SYSTEMS, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2006

6. ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consisted of the following at March 31,
2006:

              Accounts payable                              $    239,164

              Accrued interest                                    60,267

              Accrued salaries                                    24,671

              Accrued commissions                                 22,183

              Accrued professional fees                           34,265

              Miscellaneous accruals                               2,000
                                                            ------------

                    Total                                   $    382,550
                                                            ============

      Accrued commissions are due to a consultant who is retained in the
      capacity of Senior Vice President of Business Development. In accordance
      with the terms of the consulting agreement, one half of such commissions
      are payable in cash and the other half in form of restricted shares of the
      Company's common stock, valued at the market price of the Company's common
      stock on the date payment of such commissions are made. At March 31, 2006,
      the price of the stock was $0.09 which would, had payment of the
      commission been made that day, require issuance of 123,239 shares.


7. DEFERRED REVENUES

      Deferred revenues at March 31, 2006 consist of prepaid software
      maintenance and support charges which are amortized ratably over the
      remaining duration of the underlying maintenance agreements.

8. LOANS PAYABLE

      The Company and Magnitude, Inc. had borrowings under short term loan
      agreements with the following terms and conditions at March 31, 2006:

<TABLE>
<CAPTION>

      <S>                                                                       <C>
      On December 4, 1996, Magnitude, Inc. repurchased 500,000 shares of its
      common stock and retired same against issuance of a promissory note
      maturing twelve months thereafter accruing interest at 5% per annum and
      due December 4, 1998. This note is overdue at September 30, 2005 and no
      demand for payment has been made.                                         $       75,000

      During March 2006 a non-affiliated lender extended a short-term loan
      bearing interest at the rate of 10% per year.                                     30,000

      During March 2006 a director of the Company provided for a cash advance,
      repayable on demand.                                                              25,000
                                                                                ---------------

              Total                                                             $      130,000
                                                                                ===============
</TABLE>

                                                                               9
<PAGE>

9. NOTES PAYABLE

<TABLE>
<CAPTION>

      <S>                                                                            <C>
      At December 31, 1999 the Company had $1,475,000 of notes outstanding
      related to a June 1995 private placement offering. During 2000 the holders
      of $1,450,000 worth of notes agreed to accept partial repayment of             $       25,000
      approximately 30% of the note balances and converted the remaining
      balances into common shares or convertible preferred shares. The total
      amount of non-converted notes outstanding at March 31, 2006 is $25,000.
      Attempts to locate the holder of this note, to settle this liability, have
      been unsuccessful.

                                                                                     --------------
             Total                                                                   $       25,000
                                                                                     ==============
</TABLE>

                 MAGNITUDE INFORMATION SYSTEMS, INC. SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2006

10. LONG-TERM DEBT

      Long-term debt as of March 31, 2006 is comprised of the following:

<TABLE>
<CAPTION>

      <S>                                                                         <C>
      Pursuant to the February 2, 1998, Agreement and Plan of Merger with Rolina
      Corporation, the Company had issued 155,556 shares (the "Shares") of its
      common stock to the principal of Rolina Corporation who currently serves
      as the Company's Chief Executive Officer and Board Chairman, and had
      issued a Put Option for such Shares at a price of $2.41 per share in
      accordance with the provisions contained therein, with notice for exercise
      eligible to be given at any time after February 1, 2000, and before 5:00
      p.m. on the 90th day thereafter. This liability was converted into a
      Company obligation for $274,890 maturing March 31, 2002 and a demand loan
      for $100,000 both carrying interest at the rate of 7% per year,
      subsequently increased to 10%, payable monthly. The demand portion of this
      note was repaid in April 2002 and the due date for $274,890 of the
      remaining balance was extended to July 1, 2003. Subsequently, the maturity
      of the unpaid balance was changed to a portion of $174,890 payable on
      demand, and a portion of $100,000 due and payable on January 2, 2005.
      During the first quarter of 2004, $175,000 was repaid and the maturity of
      the unpaid balance was changed to "due upon demand". The obligation
      includes an option to the holder for conversion of the outstanding
      principal into Units consisting of one share of the Company's common stock
      and one warrant, exercisable at $0.08/share, whereby such Units are priced
      at the rate extended to outside investors prevailing at the time the
      conversion option is exercised. The conversion feature has been accounted
      for as a derivative liability of $122,240.                                    $       99,890

      Discounted present value of a non-interest bearing $70,000 settlement with
      a former investor of Magnitude, Inc. to be paid in 24 equal monthly
      payments commencing July 1, 1997. The imputed interest rate used to
      discount the note is 8% per annum. This obligation is in default.                     33,529
                                                                                    --------------
             Total                                                                         133,419
                  Less current maturities                                                  133,419
                                                                                    --------------
                  Long-term debt, net of current maturities                         $           --
                                                                                    ==============
</TABLE>

                                                                              10
<PAGE>

               MAGNITUDE INFORMATION SYSTEMS, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2006

11. CAPITALIZED LEASE OBLIGATIONS

      The Company leases office equipment under a non-cancelable capital lease
      agreement expiring in 2006. The capital lease obligation has been recorded
      at the present value of future minimum lease payments, discounted at an
      interest rate of 6.00%. The capitalized cost of equipment at March 31,
      2006 amounted to $257 net of accumulated depreciation of $8,252.

12. DEFERRED COMPENSATION

      Deferred compensation amounted to $344,030 representing the unamortized
      portions of the value of restricted stock, options and warrants issued to
      six consultants, for future services.

13. COMMITMENTS AND CONTINGENCIES

      Lease Agreement

      On March 15, 2000, the Company entered into a lease agreement for office
      space which is utilized for the Company's principal offices. Such lease
      commenced April 15, 2000 and expired on March 31, 2005. The Company had
      subsequently negotiated a lease renewal which extended the term of the
      lease to March 31, 2007 at a monthly rental of $10,000.

      Under the lease agreement, the Company is required to make future minimum
      lease payments as follows in addition to a pro-rata share of certain
      operating expenses:


                Year Ending December 31,
                ------------------------
                         2006                                         $ 90,000
                         2007                                           30,000
                                                                      --------
                                         Total minimum payments       $120,000
                                                                      ========

      Consulting Agreements

      During the first quarter in 2006 the Company entered into consulting
      agreements with seven outside consultants for sales, marketing and general
      business advisory services. Such consulting agreements provided for
      compensation packages which besides certain cash remuneration include in
      the aggregate, subject to such agreements being in effect at future dates,
      the issuance of up to 1,200,000 restricted common shares, warrants for the
      purchase of up to 2,500,000 shares exercisable at prices between $0.10 and
      $0.15 per share, and options for the acquisition of up to 1,500,000 shares
      exercisable at $0.08 per share. Certain of these agreements call for
      contingent payments of earned commissions in cash and restricted stock or
      with common stock options exercisable at the higher of $0.10 per share or
      90% of the 20 day trailing market price of the Company's stock prior to
      the date earned.

      The Company also entered into an agreement with a sales executive which
      provided for the issuance of 400,000 restricted shares and, conditionally,
      sales commissions payable in the form of common shares valued at the
      higher of $0.10 per share or 90% of the prevailing market price of the
      Company's stock.

      Employment Agreements

      The Company has entered into employment agreements with certain key
      personnel which provide for a base salary, yearly bonuses in common stock
      and/or options of the Company and other benefits. Termination of the
      agreements may be made by either party with advance notice.

                                                                              11
<PAGE>

14. RELATED PARTY TRANSACTIONS

      In September 2005 our officers and directors surrendered for cancellation
      4,507,709 stock options, 2,283,916 common stock purchase warrants and
      11,247,607 common shares in order to provide sufficient authorized common
      shares to accommodate the Company's current private placement. We replaced
      the surrendered and cancelled common shares with shares of our Series E
      preferred stock which are automatically convertible after six months into
      11,247,607 common shares, the amount of common shares equal to those
      surrendered. Stock certificates for such common shares were issued in
      April 2006. We also intend to reissue the 4,507,709 stock options and
      2,283,916 warrants also surrendered for cancellation by our officers and
      directors with an equal amount of common shares underlying these
      securities. The recipients of the Series E preferred stock have waived
      their right to receive any dividends on these shares. In February 2006,
      the board of directors approved a modification to the conversion option on
      debt outstanding and payable to an officer of the Company (see Note 10).
      During March 2006, a director of the Company extended a cash advance of
      $25,000 to the Company, repayable on demand.


15. SUBSEQUENT EVENTS

      On April 10, 2006, the Registrant and a shareholder who is former officer
      and former director entered into a Settlement and Conversion Agreement.
      Pursuant to the principal terms of this Agreement, the shareholder
      converted $900,000 of the stated value of the shares of 7% Series C Senior
      Convertible Preferred Stock and approximately $331,000 of accrued but
      unpaid dividends into 10,250,000 common shares of the Company. The
      Agreement obligates the Company to pay the shareholder a $5,000 monthly
      payment for one year and subjects the common shares received in this
      conversion to certain lock-up provisions. As a result of this Agreement,
      approximately $331,000 in current liabilities were terminated and removed
      from the Company's balance sheet. The Company issued the common shares in
      reliance upon the exemption from the registration requirements of the
      Securities Act of 1933, as amended (the "1933 Act"), provided by Section
      4(2) of the 1933 Act and Regulation D promulgated thereunder.

      On May 5, 2006, Registrant's board of directors unanimously appointed
      Edward Marney to the executive positions of President and Chief Executive
      Officer of the Registrant. Steven D. Rudnik, who previously held these
      positions, continues to serve as chairman of the board of directors and to
      devote his full time and efforts to the Company pursuant to his employment
      agreement.




                                                                              12
<PAGE>

ITEM 2.

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

Our marketing efforts during the quarter were focused on broadening our
cooperative program with our strategic partner Aon Risk Services whereby
Magnitude will jointly market our ErgoEnterprise(TM) software solutions to
clients of Aon Risk Services. Both parties expect these ventures to produce
tangible results in terms of software licensing contracts over time. No such
sales were as yet recorded during the first quarter ended March 31, 2006 which
yielded revenues of $11,075, compared to the $19,264 achieved in the first
quarter of 2005. Most of these revenues were derived from software maintenance
and support activities.

Gross profits amounted to negative $25,290 for the quarter including a fixed
charge for amortization of certain proprietary software assets. Such software
assets underlie the Company's products and are being amortized on a straight
line over 10 years, resulting in a level charge of approximately $12,000 per
month to cost-of-goods-sold. Our expense and cost structure was essentially
unchanged from prior periods, except that we faced higher compensation costs in
the marketing and general business consultancy sectors, reflected primarily in
the "stock-based compensation" amount. Management is trying to conserve cash by
favoring securities-based compensation arrangements where possible. Restricted
stock is priced at market and options and warrants grants are valued using the
Black-Scholes valuation model. After deducting selling- and general and
administrative expenses, stock-based compensation and R&D expenses totaling
$694,439 the Company realized a loss from operations of $719,729 for the three
months period ended March 31, 2006, compared to an operating loss of $615,685 in
the first quarter in 2005. The increase in operating expenses from last year to
the current period reflects primarily an increase in staffing and other
compensation costs. Non-operating income and expenses consisted of $107,977
interest expense (which included $102,762 from the recognition of a derivative
liability for the embedded conversion option on a debt instrument) and $19,478
for changes in the value of derivative liability. The period result was a net
loss of $848,184 for the quarter, compared to a loss of $601,958 for the same
period in 2005.

After accounting for dividend accruals on outstanding preferred stock which
totaled $28,380, the net loss for the quarter applicable to common shareholders
was $876,564 or $0.006 per share, compared to a loss of $630,337 or $0.005 per
share for the same quarter in the previous year.


LIQUIDITY AND CAPITAL RESOURCES

In the absence of cash flow from operations, required working capital to finance
ongoing operations was supplied almost entirely from new equity capital,
augmented by short-term borrowings. During the quarter, the Company attracted
$274,500 in new equity funding in the form of cash.

At March 31, 2006, the deficit in working capital amounted to $1,457,316 as
compared to $1,016,230 at December 31, 2005. Stockholders' equity showed an
impairment of $1,142,404 at the end of the quarter. The negative cash flow from
operations for the three months ended March 31, 2006 totaled approximately
$512,588 and was substantially financed by new equity which was obtained through
private placements, as well as limited borrowings. The new equity placements
were consummated by issuance of common stock and stock purchase warrants to
accredited private investors in the United States and overseas. Details of such
transactions can be found in the "Changes and Issuance of Securities" section of
this report. The Company plans to file a new registration statement on Form SB-2
and amendments to certain previously filed registration statements on Form SB-2,
all of which covered common shares directly issued, as well as common shares
underlying previously issued convertible preferred stock and warrants, in
connection with these and prior financing transactions. These filings are made
on behalf of certain investors in the Company's equities and proceeds of any
sales of such registered securities will accrue entirely to such investors.

At the time of this submission, the Company had no bank debt. At March 31, 2006
its short-term liabilities, aside from trade payables and accruals, consisted of
certain notes and loans aggregating approximately $288,000 of which
approximately $100,000 was owed to the chairman and chief executive officer of
the Company in form of a demand note and $25,000 in the form of a cash advance
payable on demand (see "Related Party Transactions"). Current liabilities
include $629,879 unpaid dividends on outstanding preferred stock. We expect that
the majority of such dividends will be paid only if and when capital surplus and
cash-flow from operations are sufficient to cover the outstanding amounts
without thereby unduly impacting the Company's ability to continue operating and
growing its business.

Current cash reserves and net cash flow from operations expected during the near
future are inadequate when measured against present and anticipated future
needs, and the Company's financial situation remains precarious. In order to
remedy the liquidity constraints management is seeking further investments in
form of debt or equity capital. There can be no assurance, however, that these
efforts will lead to the desired outcome and that the Company will be successful
in obtaining the working capital needed to fund on-going operations. If the
Company failed to do so, either by not acquiring sufficient funds, or not
receiving such funds in a timely manner, management may be forced to effect
severe cut-backs in the Company's operations.



                                                                              13
<PAGE>

ITEM 3. CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures.

      As of the end of the period covered by this Form 10-QSB for the quarter
ended March 31, 2006, an evaluation was undertaken by the Company's Chief
Executive Officer and Chief Financial Officer of the effectiveness of the design
and operation of the Company's disclosure controls and procedures, as defined in
Exchange Act Rule 13(a)-14(c), and; based upon that evaluation, Company
management, including the Chief Executive Officer and the Chief Financial
Officer, has concluded that the Company's disclosure controls and procedures
were effective as of the end of the period covered by the subject Form 10-QSB
and ensured that all material information required to be disclosed in the
subject Form 10-QSB, was recorded, processed, summarized and reported as of the
end of the period covered by the subject Form 10-QSB.

      The Company maintains a system of internal controls designed to provide
reasonable assurance that: (i) the Company's transactions are properly
authorized; (ii) the Company's assets are protected against unauthorized or
improper use, and (iii) the Company's transactions are properly recorded and
reported, all to permit the preparation of complete and accurate financial
statements in conformity with generally accepted accounting principles.

(b) Changes in Internal Control over Financial Reporting

      Since the date of the most recent evaluation of the Company's internal
controls by the Chief Executive Officer and Chief Financial Officer, there have
not been any significant changes in the Company's internal controls or other
factors for the period covered by the subject Form 10-QSB that materially
affected or were likely to materially affect the Company's internal control over
financial reporting.



                                                                              14
<PAGE>

PART II - OTHER INFORMATION

Item 1 LEGAL PROCEEDINGS

On March 21, 2005, the Company filed a patent infringement lawsuit in the United
States District Court, District of New Jersey, against Niche Software, Ltd. of
New Zealand, alleging that its software product called Workplace(TM) willfully
infringed on the Company's patent underlying its ErgoEnterprise(TM) product
line. On September 13, 2005, defendant filed an answer and counterclaim, denying
the allegations in our complaint and seeking a judgment declaring our patent to
be invalid. The Company intends to vigorously prosecute its infringement claims
against this infringer. Except for this infringement lawsuit, the Company is not
a party in any legal proceedings.



Item 2 UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

      a) Issuance of unregistered securities

      During the quarter ended March 31, 2006, the Company issued the following
      unregistered securities:

      (i)   4,725,000 shares of common stock, accompanied by warrants for the
            purchase of 4,725,000 common shares, exercisable during three years
            at the price of $0.08 per share, to seven accredited investors
            pursuant to private placement subscriptions, issued in reliance upon
            exemptions provided under Section 4(2) of the Securities Act,
            altogether resulting in the receipt by the Company of $274,500 in
            cash.

      (ii)  1,600,000 shares of common stock to five outside consultants for
            services rendered.

      (iii) Options for 3,250,000 shares of common stock and warrants for
            1,250,000 shares to two outside consultants for services rendered.
            The options and warrants are exercisable at prices between $0.08 and
            $0.15 per share.

(b) Not applicable

(c) None

Item 3 DEFAULTS UPON SENIOR SECURITIES

      The Company, as of the date of this filing, is in arrears on the payment
      of certain dividends on its Series A, C, and D Senior Convertible
      Preferred Stock. Such arrears total approximately $620,000. These
      dividends have been accrued, however, the Company's management has
      refrained from making payments at this time because of the absence of
      positive equity and/or surplus funds.

Item 4 SUBMISSION OF MATTERS TO A VOTE OF
       SECURITY HOLDERS

      At a special meeting of the stockholders of the Company, held on March 31,
      2006, the stockholders approved the following:

      1) Election of Steven D. Rudnik, Steven Gray, Joerg Klaube and Joseph
      Tomasek as Directors of the Company to serve until the next annual meeting
      of stockholders. Votes were cast as follows:

      Steven D. Rudnik:  71,699,130 FOR,  1,931,670 AGAINST,     351,821 ABSTAIN
      Steven Gray:       73,301,464 FOR,    333,336 AGAINST,     351,821 ABSTAIN
      Joerg H. Klaube    73,468,131 FOR,    166,669 AGAINST,     351,821 ABSTAIN
      Joseph J. Tomasek  73,468,131 FOR,    166,669 AGAINST,   3,018,521 ABSTAIN

                                                                              15
<PAGE>

      2) Approval of an amendment to the Company's Certificate of Incorporation,
      to increase the authorized number of shares of common stock from
      200,000,000 shares to 300,000,000 shares.

      FOR:  66,078,423       AGAINST: 8,800,197       ABSTAIN: 2,074,201

      3) Approval of an amendment to the employment agreement for Steven D.
      Rudnik.

      FOR:  29,094,463       AGAINST:  6,930,509      ABSTAIN:   358,169

      4) Ratification of the appointment of Rosenberg Rich Baker Berman &
      Company as the Company's independent auditors for the fiscal year ended
      December 31, 2005:

      FOR:  75,696,983       AGAINST:      6,437      ABSTAIN:  1,247,801

      On March 31, 2006, we amended our Certificate of Incorporation to increase
      the authorized number of shares of common stock from 200,000,000 shares to
      300,000,000 shares.


Item 5 OTHER INFORMATION

      - None



                                                                              16
<PAGE>

Item 6 EXHIBITS AND REPORTS ON FORM 8-K

      (a)   Exhibits

            (3)(i) - Articles of Incorporation and Amendments thereto,
            incorporated herein by reference to Exhibits of previous filings
            with the Commission.

            (3)(ii) - By-laws of the Company, incorporated herein by reference
            to Exhibits of previous filings with the Commission.

            (31.1) - Certification of Edward Marney, Chief Executive Officer,
            pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

            (31.2) - Certification of Joerg H. Klaube, Chief Financial Officer,
            pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

            (32.1) - Certification of Edward Marney, Chief Executive Officer,
            pursuant to Sections 906 of the Sarbanes-Oxley Act of 2002, 18
            U.S.C. Section 1350

            (32.2) - Certification of Joerg H. Klaube, Chief Financial Officer,
            pursuant to Sections 906 of the Sarbanes-Oxley Act of 2002, 18
            U.S.C. Section 1350

      (b)   Reports on Form 8-K:

            On January 23, 2006, the Company filed a report on Form 8-K,
            informing about a press release in connection with the signing of a
            sales contract.

            On January 25, 2006, the Company filed a report on Form 8-K,
            informing about a press release in connection with the hiring of two
            sales executives.

            On March 1, 2006, the Company filed a report on Form 8-K, informing
            about a press release in connection with the hiring of two business
            development and marketing executives.




                                                                              17
<PAGE>

                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report on Form 10-QSB to be signed on its behalf
by the undersigned, thereunto duly authorized.



                                          MAGNITUDE INFORMATION SYSTEMS, INC.




Date:   May 17, 2006                      By:    /s/  Edward Marney
                                                 -----------------------
                                                 Edward Marney
                                                 Chief Executive Officer





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