**FORM      10-QSB**

**December      31, 2006**

**(Exact      name of small business issuer as specified in its charter)**

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| SYNERGX                  SYSTEMS INC. AND SUBSIDIARIES                                                                                |   |                          |      |
|---------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------|-----------|
|                                                                                                                                  |   |                          |      |
| CONDENSED                  CONSOLIDATED BALANCE SHEET                                                                                 |   |                          |      |
|                                                                                                                                  |   |                          |      |
| (Unaudited)                                                                                                                           |   |                          |      |
|                                                                                                                                  |   | December                  31, |      |
|                                                                                                                                  |   | 2006                          |      |
| ASSETS                                                                                                                                |   |                          |      |
|                                                                                                                                  |   |                          |      |
| CURRENT                  ASSETS                                                                                                       |   |                          |      |
|     Cash                  and cash equivalents                                                                    |   | $                             | 261,786   |   |
|     Accounts                  receivable, principally trade, less allowance                                       |   |                          |      |   |
|         for                  doubtful accounts of $352,685                                    |   |                          | 5,437,819 |   |
|     Inventories,                  net                                                                             |   |                          | 2,332,138 |   |
|     Deferred                  taxes                                                                               |   |                          | 575,500   |   |
|     Prepaid                  expenses and other current assets                                                    |   |                          | 244,498   |   |
|     Income                  Tax Receivable                                                                        |   |                          | 82,936    |   |
|                                                                                                                                  |   |                          |      |   |
|                 TOTAL                  CURRENT ASSETS |   |                          | 8,934,677 |   |
|                                                                                                                                  |   |                          |      |   |
| PROPERTY                  AND EQUIPMENT -at cost, less                                                                                |   |                          |      |   |
|     accumulated                  depreciation and amortization of $1,658,744                                      |   |                          | 786,044   |   |
|                                                                                                                                  |   |                          |      |   |
| OTHER                  ASSETS                                                                                                         |   |                          | 207,629   |   |
|                                                                                                                                  |   |                          |           |   |
| DEFERRED                  TAXES                                                                                                       |   |                          | 3,600     |   |
|                                                                                                                                  |   |                          |      |   |
|           TOTAL                  ASSETS                                             |   | $                             | 9,931,950 |   |
|                                                                                                                                  |   |                          |      |   |
|                                                                                                                                  |   |                          |      |   |
| See                  accompanying Notes to the Condensed Consolidated Financial                  Statements                           |   |                          |      |   |

----

| SYNERGX                  SYSTEMS INC. AND SUBSIDIARIES                                                                                     |   |                          |            |
|--------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------|-----------------|
|                                                                                                                                       |   |                          |            |
| CONDENSED                  CONSOLIDATED BALANCE SHEET                                                                                      |   |                          |            |
|                                                                                                                                       |   |                          |            |
| (Unaudited)                                                                                                                                |   |                          |            |
|                                                                                                                                       |   | December                  31, |            |
|                                                                                                                                       |   | 2006                          |            |
|                                                                                                                                       |   |                          |            |
| LIABILITIES                  AND STOCKHOLDERS' EQUITY                                                                                      |   |                          |            |
|                                                                                                                                       |   |                          |            |
| CURRENT                  LIABILITIES                                                                                                       |   |                          |            |
|                                                                                                                                       |   |                          |            |
|     Notes                  payable - current portion                                                                   |   | $                             | 25,898     |   |
|     Accounts                  payable and accrued expenses                                                             |   |                          | 1,499,099  |   |
|     Deferred                  revenue                                                                                  |   |                          | 927,846    |   |
|                                                                                                                                       |   |                          |            |   |
|                 TOTAL                  CURRENT LIABILITIES |   |                          | 2,452,843  |   |
|                                                                                                                                       |   |                          |            |   |
|                                                                                                                                       |   |                          |                 |   |
|     Note                  payable to bank                                                                              |   |                          | 1,351,753  |   |
|     Notes                  payable - less current portion                                                              |   |                          | 83,591     |   |
|                                                                                                                                       |   |                          |            |   |
|                 TOTAL                  LIABILITIES         |   |                          | 3,888,187  |   |
|                                                                                                                                       |   |                          |            |   |
| STOCKHOLDERS'                  EQUITY                                                                                                      |   |                          |            |   |
|                                                                                                                                       |   |                          |                 |   |
|     Preferred                  stock, 2,000,000 shares authorized-                                                     |   |                          |                 |   |
|         none                  issued and outstanding                                               |   |                          | --         |   |
|     Common                  stock, 10,000,000 shares authorized, $.001                                                 |   |                          |            |   |
|         par                  value; issued and outstanding 5,210,950 shares                        |   |                          | 5,211      |   |
|     Additional                  Paid                  in Captal                                                        |   |                          | 6,811,847  |   |
|     Accumulated                  deficit                                                                               |   |                          | (773,295)       |   |
|                                                                                                                                       |   |                          |            |   |
| TOTAL                  STOCKHOLDERS' EQUITY                                                                                                |   |                          | 6,043,763  |   |
|                                                                                                                                       |   |                          |            |   |
|                                                                                                                                       |   |                          |            |   |
| TOTAL                  LIABILITIES AND STOCKHOLDERS' EQUITY                                                                                |   | $                             | 9,931,950  |   |
|                                                                                                                                       |   |                          |            |   |
|                                                                                                                                       |   |                          |            |   |
| See                  accompanying Notes to the Condensed Consolidated Financial                  Statements                                |   |                          |            |   |
|                                                                                                                                       |   |                          |            |   |

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| SYNERGX                  SYSTEMS INC. AND SUBSIDIARIES                                                      |   |                                                     |      |   |   |
|-------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------|-----------|--------|--------|
|                                                                                                        |   |                                                     |      |   |   |
| CONDENSED                  CONSOLIDATED STATEMENTS OF OPERATIONS                                            |   |                                                     |      |   |   |
|                                                                                                        |   |                                                     |      |   |   |
| (Unaudited)                                                                                                 |   |                                                     |      |   |   |
|                                                                                                        |   | For                  the Three Months Ended December 31, |
|                                                                                                        |   | 2006                                                     |      | 2005   |   |
| Product                  sales                                                                              |   | $                                                        | 2,322,223 |   | $      | 2,283,570 |   |
| Subcontract                  sales                                                                          |   |                                                     | 107,189   |   |   | 122,897 |   |
| Service                  revenue                                                                            |   |                                                     | 1,225,683 |   |   | 1,191,593 |   |
| Total                  revenues                                                                             |   |                                                     | 3,655,095 |   |   | 3,598,060 |   |
|                                                                                                        |   |                                                     |           |   |   |  |   |
| Cost                  of product sales                                                                      |   |                                                     | 1,434,479 |   |   | 1,741,566 |   |
| Cost                  of subcontract sales                                                                  |   |                                                     | 86,160    |   |   | 92,905 |   |
| Cost                  of service revenue                                                                    |   |                                                     | 718,457   |   |   | 705,379 |   |
| Selling,                  general and administrative                                                        |   |                                                     | 1,477,432 |   |   | 1,310,672 |   |
| Depreciation                  and amortization                                                              |   |                                                     | 40,023    |   |   | 33,805 |   |
| Total                  operating expenses                                                                   |   |                                                     | 3,756,551 |   |   | 3,884,327 |   |
|                                                                                                        |   |                                                     |      |   |   |   |   |
| (Loss)                  from operations                                                                     |   |                                                     | (101,456  | )      |   | (286,267 | ) |
|                                                                                                        |   |                                                     |      |   |   |   |   |
| Other                  expenses:                                                                            |   |                                                     |      |   |   |   |   |
|     Interest                  expense                                                   |   |                                                     | (24,870   | )      |   | (33,614 | ) |
|     (Loss)                  on equity investment                                        |   |                                                     | 0         |   |   | (25,000 | ) |
|                                                                                                        |   |                                                     | (24,870   | )      |   | (58,614 | ) |
|                                                                                                        |   |                                                     |      |   |   |   |   |
| (Loss)                  before (benefit) for income taxes                                                   |   |                                                     | (126,326  | )      |   | (344,881 | ) |
|                                                                                                        |   |                                                     |      |   |   |   |   |
| (Benefit)                  provision for income taxes:                                                      |   |                                                     |      |   |   |   |   |
|     Current                                                                             |   |                                                     | 2,000     |   |   | (131,000 | ) |
|     Deferred                                                                            |   |                                                     | (59,000   | )      |   | (10,000 | ) |
|                                                                                                        |   |                                                     |      |   |   |   |   |
|                                                                                                        |   |                                                     | (57,000   | )      |   | (141,000 | ) |
|                                                                                                        |   |                                                     |      |   |   |   |   |
| (Loss)                  from continuing operations                                                          |   |                                                     | ($69,326  | )      |   | ($203,881 | ) |
|                                                                                                        |   |                                                     |      |   |   |   |   |
| Discontinued                  operations (Note 7):                                                          |   |                                                     |      |   |   |   |   |
|     (Loss)                  from discontinued operations                                |   |                                                     | 0         |   |   | (65,380 | ) |
|     Current                  income tax (benefit)                                       |   |                                                     | 0         |   |   | (22,000 | ) |
|                                                                                                        |   |                                                     |      |   |   |   |   |
| (Loss)                  income from discontinued operations                                                 |   |                                                     | 0         |   |   | (43,380 | ) |
|                                                                                                        |   |                                                     |      |   |   |   |   |
| Net                  (loss)                                                                                 |   |                                                     | ($69,326  | )      |   | ($247,261 | ) |
|                                                                                                        |   |                                                     |      |   |   |   |   |
| (Loss)                  Per Common Share:                                                                   |   |                                                     |      |   |   |   |   |
|     Basic                  (loss) income from continuing operations                     |   |                                                     | ($0.01    | )      |   | ($0.04 | ) |
|     Basic                  (loss) income from discontinued operations                   |   |                                                     |      |   |   | ($0.01 | ) |
|     Basic                  (loss) income Per Share                                      |   |                                                     | ($0.01    | )      |   | ($0.05 | ) |
|                                                                                                        |   |                                                     |      |   |   |   |   |
| Diluted                  (loss) income from continuing operations                                           |   |                                                     | ($0.01    | )      |   | ($0.04 | ) |
| Diluted                  (loss) income from discontinued operations                                         |   |                                                     |      |   |   | ($0.01 | ) |
| Diluted                  (loss) income Per Share                                                            |   |                                                     | ($0.01    | )      |   | ($0.05 | ) |
|                                                                                                        |   |                                                     |      |   |   |   |   |
| Weighted                  average number of common shares outstanding                                       |   |                                                     | 5,210,950 |   |   | 5,192,327 |   |
|                                                                                                        |   |                                                     |      |   |   |   |   |
| Weighted                  average number of common and dilutive                                             |   |                                                     |      |   |   |   |   |
| common                  share equivalents outstanding                                                       |   |                                                     | 5,210,950 |   |   | 5,192,327 |   |
|                                                                                                        |   |                                                     |      |   |   |   |   |
| See                  accompanying Notes to the Condensed Consolidated Financial                  Statements |   |                                                     |      |   |   |   |   |

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| SYNERGX                  SYSTEMS INC. AND SUBSIDIARIES                                                                                                                                                     |   |   |     |   |    |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|----------|--------|---------|
|                                                                                                                                                                                                       |   |   |     |   |    |
| CONDENSED                  CONSOLIDATED STATEMENTS OF CASH FLOWS                                                                                                                                           |   |   |     |   |    |
|                                                                                                                                                                                                       |   |   |     |   |    |
| (Unaudited)                                                                                                                                                                                                |   |   |     |   |    |
| For                  the Three Months Ended December 31,                                                                                                                          |
|                                                                                                                                                                                                       |   | 2006   |     | 2005   |    |
| OPERATING                  ACTIVITIES                                                                                                                                                                      |   |   |     |   |    |
| Net                  (Loss) income from continuing operations                                                                                                                                              |   | $      | (69,326  | )      |  $ | (203,881 | ) |
| Adjustments                  to reconcile net (loss) income to net cash                                                                                                                                    |   |   |     |   |    |   |   |
|         provided                  by                  operating activities:                                                                                        |   |   |     |   |    |   |   |
|     Depreciation                  and amortization *                                                                                                                                   |   |   | 46,473   |   |    | 33,805 |   |
|     Deferred                  tax                  (benefit)                                                                                                                           |   |   | (59,000  | )      |    | (10,000 | ) |
|     Share-based                  compensation                                                                                                                                          |   |   | 7,857    |   |    |   |   |
|     Loss                  on                  equity investment                                                                                                                        |   |   |     |   |    | 25,000 |   |
| Changes                  in operating assets and liabilities:                                                                                                                                              |   |   |     |   |    |   |   |
|     Accounts                  receivable, net                                                                                                                                          |   |   | 580,929  |   |    | 1,321,820 |   |
|     Inventories                                                                                                                                                                        |   |   | (291,698 | )      |    | (345,602 | ) |
|     Prepaid                  expenses and other current assets                                                                                                                         |   |   | (31,587  | )      |    | 53,871 |   |
|     Income                  Tax Receivable                                                                                                                                             |   |   | (936     | )      |    |  |   |
|     Other                  assets                                                                                                                                                      |   |   | (547     | )      |    | (747 | ) |
|     Accounts                  payable and accrued expenses                                                                                                                             |   |   | (575,983 | )      |    | (551,831 | ) |
|     Deferred                  revenue                                                                                                                                                  |   |   | 23,412   |   |    | 265,488 |   |
| Net                  cash (used in) provided by continuing operations                                                                                                                                      |   |   | (370,406 | )      |    | 587,923 |   |
| Net                  cash provided by operating activities of discontinued                  operation                                                                                                      |   |   | 0        |   |    | 42,973 |   |
|                                                                                                                                                                                                       |   |   |     |   |    |   |   |
| NET                  CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES                                                                                                                                       |   |   | (370,406 | )      |    | 630,896 |   |
|                                                                                                                                                                                                       |   |   |     |   |    |   |   |
| INVESTING                  ACTIVITIES                                                                                                                                                                      |   |   |     |   |    |   |   |
|     Purchases                  of                  property and equipment                                                                                                              |   |   | (56,555  | )      |    | (129,097 | ) |
|                                                                                                                                                                                                       |   |   |     |   |    |   |   |
| Net                  cash (used in) continuing operations                                                                                                                                                  |   |   | (56,555  | )      |    | (129,097 | ) |
| Net                  cash (used in) discontinued operations                                                                                                                                                |   |   |     |   |    | (24,878) |   |
|                                                                                                                                                                                                       |   |   |     |   |    |   |   |
| NET                  CASH PROVIDED (USED IN) BY INVESTING ACTIVITIES                                                                                                                                       |   |   | (56,555  | )      |    | (153,975 | ) |
|                                                                                                                                                                                                       |   |   |     |   |    |   |   |
| FINANCING                  ACTIVITIES                                                                                                                                                                      |   |   |          |   |    |  |   |
|     Principal                  payments on notes payable                                                                                                                               |   |   | (6,742   | )      |    | (11,887 | ) |
|     Payments                  and                  proceeds from note payable bank - net                                                                                               |   |   | 422,581  |   |    | (222,996 | ) |
|     Proceeds                  from                  exercise of stock options and warrants                                                                                             |   |   |          |   |    | 9,203 |   |
|                                                                                                                                                                                                       |   |   |     |   |    |   |   |
| NET                  CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES                                                                                                                                       |   |   | 415,839  |   |    | (225,680 | ) |
|                                                                                                                                                                                                       |   |   |     |   |    |   |   |
| NET                  (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS                                                                                                                                      |   |   | (11,122  | )      |    | 251,241 |   |
|                                                                                                                                                                                                       |   |   |          |   |    |   |   |
| Cash                  and cash equivalents at beginning of period                                                                                                                                          |   |   | 272,908  |   |    | 465,650 |   |
|                                                                                                                                                                                                       |   |   |     |   |    |   |   |
| Cash                  and cash equivalents at end of period                                                                                                                                                |   | $      | 261,786  |   | $       | 716,891 |   |
|                                                                                                                                                                                                       |   |   |     |   |    |   |   |
| SUPPLEMENTAL                  CASH FLOW INFORMATION:                                                                                                                                                       |   |   |     |   |    |   |   |
|                                                                                                                                                                                                       |   |   |     |   |    |   |   |
| Cash                  paid during the period for:                                                                                                                                                          |   |   |     |   |    |   |   |
|     Income                  taxes                                                                                                                                                      |   | $      | 3,100    |   | $       | 42,511 |   |
|     Interest                                                                                                                                                                           |   | $      | 22,797   |   | $       | 27,076 |   |
|                                                                                                                                                                                                       |   |   |     |   |    |   |   |
| NON-CASH                  INVESTING AND FINANCING ACTIVITIES                                                                                                                                               |   |   |     |   |    |   |   |
| Included                  in the three months ended Decemberr 31, 2005, was the purchase                  of                  equipment for $25,559 through financing                                      |
|                                                                                                                                                                                                       |   |   |     |   |    |   |   |
| *                  Depreciation of $6,450 and $2,150 is included in cost of product                  sales for                  the years ended December 31, 2006 and 2005,                  respectively. |
|                                                                                                                                                                                                       |   |   |     |   |    |   |   |
| See                  accompanying Notes to the Condensed Consolidated Financial                  Statements                                                                                                |   |   |     |   |    |   |   |

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**.**

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|                                              |   |     2006 |                                                                                 |  WeightedAverage                  ExercisePrice |    | WeightedAverageRemaining                  ContractualTerm |   |   Aggregate IntrinsicValue |                     |
|---------------------------------------------------|--------|------------------------------|--------------------------------------------------------------------------------------|------------------------------------------------------|---------|-----------------------------------------------------------|--------|-------------------------------------------|--------------------------|
| Outstanding                  October 1, 2006      |   |                         | 108,000                                                                              |                                                 | $       | 2.50                                                      |   |                                      | 3.5                  Yrs |   |   | -- |   |
| Granted                                           |   |                         | -                             |                                                 |    |                                                      |   |                                      |                     |   |   |   |   |
| Exercised                                         |   |                         | -                             |                                                 |    |                                                      |   |                                      |                     |   |   |   |   |
| Outstanding                  December 31, 2006    |   |                         | 108,000                                                                              |                                                 |  $ | 2.50                                                      |   |                                      | 3.2                  Yrs |   |   | -- |   |
| Exercisable                  at December 31, 2006 |   |                         |              21,600 |                                                 |  $ | 2.50                                                      |   |                                      | 3.2                  Yrs |   |   | -- |   |

|                                            |   |    2006 |                                                                                                                                                                                            | WeightedAverageGrant                  DateFair                  Value |   |
|-------------------------------------------------|--------|------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------|--------|
| Nonvested                  at October 1, 2006   |   |                   | 86,400                                                                                                                                                                                          |                                                                  | $      | 1.21 |   |
| Vested                                          |   |                   |                                   -            |                                                                  |   |   |   |
| Forfeited                                       |   |                   | -                                                                                                                                        |                                                                  |   |   |   |
| Nonvested                  at December 31, 2006 |   |                   | 86,400                                                                                                                                                                                          |                                                                  | $      | 1.21 |   |

----

|                                                                                                                                                        |   | Three                  Months Ended December                  31, 2005 |      |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------|-----------|
| Net                  (Loss)                                                                                                                                 |   | $                                                                      | (247,261  | ) |
| Less:                  Fair Value of Options issued to     employees                  and                  directors, net of income tax |   |                                                                   | (4,713    | ) |
| Pro                  Forma Net (loss)                                                                                                                       |   | $                                                                      | (251,974  | ) |
| Weighted                  Average Basic Shares                                                                                                              |   |                                                                   | 5,192,327 |   |
| Weighted                  Average Diluted Shares                                                                                                            |   |                                                                   | 5,192,327 |   |
| Basic                  Net Loss Per Share as Reported                                                                                                       |   | $                                                                      | (.05      | ) |
| Basic                  Pro Forma Net Loss per share                                                                                                         |   | $                                                                      | (.05      | ) |
| Diluted                  Net Loss Per Share as Reported                                                                                                     |   | $                                                                      | (.05      | ) |
| Diluted                  Pro Forma Net Loss per share                                                                                                       |   | $                                                                      | (.05      | ) |

----

| Sales                                          |   | $      | 643,123 |   |
|------------------------------------------------|--------|--------|---------|--------|
| Cost                  of Sales                 |   |   | 485,934 |   |
| Operating                  expenses            |   |   | 222,569 |   |
| Operating                  (loss) before taxes |   | $      | (65,380 | )      |

----

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|                                                                           |   |  Three                Months Ended  |
|--------------------------------------------------------------------------------|--------|-----------------------------------------------|
|                                                                           |   |  December                31,             |
|                                                                           |   |  2006                                    |   |  2005 |   |
|                                                                           |   | (In                thousands of dollars)      |
| Product                Revenue                                                 |   | $                                             | 2,322 |   | $ | 2,284 |   |
| Subcontract                Revenue                                             |   |                                          | 107 |   |   | 123 |   |
| Service                Revenue                                                 |   |                                          | 1,226 |   |   | 1,191 |   |
| Total                Revenue                                                   |   | $                                             | 3,655 |   | $ | 3,598 |   |
|                                                                           |   |                                          |   |   |   |   |   |
| Gross                Profit Product                                            |   | $                                             | 888 |   | $ | 542 |   |
| Gross                Profit Subcontract                                        |   |                                          | 21 |   |   | 30 |   |
| Gross                Profit Service                                            |   |                                          | 507 |   |   | 486 |   |
| Total                Gross Profit                                              |   | $                                             | 1,416 |   | $ | 1,058 |   |
|                                                                           |   |                                          |   |   |   |   |   |
| Gross                Profit Product %Gross                Profit Subcontract % |   |                                          | 3820 | %% |   | 2424 | %% |
| Gross                Profit Service %                                          |   |                                          | 41 | % |   | 41 | % |
| Total                Gross Profit %                                            |   |                                          | 39 | % |   | 29 | % |

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