Commission File No. 000-26408

Wayside Technology Group, Inc.
(Exact name of registrant as specified in its charter)

1157 Shrewsbury Avenue, Shrewsbury, New Jersey 07702
(Address of principal executive offices)

Registrant's Telephone Number (732) 389-8950

Programmers Paradise, Inc.
(Former name, former address and former fiscal year, if changed since last report)

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 and Exchange Act of 1934 during the past 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[ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of "accelerated filer and non-accelerated filer" in Rule 12b-2 of the Exchange Act.

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

There were 4,539,310 outstanding shares of Common Stock, par value $.01 per share, as of November 1, 2006, not including 745,190 shares classified as treasury stock.

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PART I - FINANCIAL INFORMATION

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WAYSIDE TECHNOLOGY GROUP, INC. AND SUBSIDIARIES
(FORMERLY PROGRAMMER'S PARADISE, INC.)
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(Unaudited)
(In thousands, except per share data)

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WAYSIDE TECHNOLOGY GROUP, INC. AND SUBSIDIARIES
(FORMERLY PROGRAMMER'S PARADISE, INC.)
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(Unaudited)
(In thousands, except share amounts)

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WAYSIDE TECHNOLOGY GROUP, INC. AND SUBSIDIARIES
(FORMERLY PROGRAMMER'S PARADISE, INC.)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)

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WAYSIDE TECHNOLOGY GROUP, INC. AND SUBSIDIARIES
(FORMERLY PROGRAMMER'S PARADISE, INC.)
NOTES TO CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
September 30, 2006
(Unaudited)

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	In July 2006, the FASB issued Financial Interpretation No. 48, "Accounting for Uncertainty in Income Taxes-an interpretation of FASB Statement No. 109" ("FIN 48"), which is a change in accounting for income taxes. FIN 48 specifies how tax benefits for uncertain tax positions are to be recognized, measured, and derecognized in financial statements; requires certain disclosures of uncertain tax matters; specifies how reserves for uncertain tax positions should be classified on the balance sheet; and provides transition and interim period guidance, among other provisions. FIN 48 is effective for fiscal years beginning after December 15, 2006. We are currently evaluating the impact of FIN 48 on our consolidated financial position, results of operations, and cash flows.
3.	Assets and liabilities of the Company's Canadian subsidiary have been translated at current exchange rates, and related revenues and expenses have been translated at average rates of exchange in effect during the period. The revenue from our Canadian operations in the first nine months of 2006 increased by $4.9 million to $16.2 million as compared to the first nine months of 2005. The revenue from our Canadian operations increased by $1.2 million to $5.2 million in the third quarter of 2006 as compared to our third quarter of 2005.
4.	Cumulative translation adjustments and unrealized gains (losses) on available-for-sale securities have been classified within other comprehensive income, which is a separate component of stockholders' equity in accordance with FASB Statement No. 130, "Reporting Comprehensive Income".
5.	The Company records revenues from sales transactions when title to products sold passes to the customer. The Company's shipping terms dictate that the passage of title occurs upon receipt of products by the customer. The majority of the Company's revenues relates to physical products and is recognized on a gross basis with the selling price to the customer recorded as net sales with the acquisition cost of the product to the Company recorded as cost of sales. At the time of sale, the Company also records an estimate for sales returns based on historical experience. Certain software maintenance products, third party services and extended warranties sold by the Company (for which the Company is not the primary obligor) are recognized on a net basis in accordance with Staff Accounting Bulletin (SAB) No. 101 and No. 104, "Revenue Recognition" and Emerging Issues Task Force (EITF) 99-19, "Reporting Revenue Gross as a Principal versus Net as an Agent".
	Accordingly, such revenues are recognized in net sales either at the time of sale or over the contract period, based on the nature of the contract, at the net amount retained by the Company, with no cost of goods sold.

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	In accordance with EITF 00-10, "Accounting for Shipping and Handling Fees and Costs", the Company records freight billed to its customers as net sales and the related freight costs as a cost of sales. Vendor rebates and price protection are recorded when earned as a reduction to cost of sales or merchandise inventory, as applicable. Cooperative reimbursements from vendors, which are earned and available, are recorded in the period the related advertising expenditure is incurred. Cooperative reimbursements are recorded as net sales in accordance with EITF 02-16, "Accounting for Consideration Received from a Vendor by a Customer (Including a Reseller of the Vendor's Products)".
6.	Investments in available-for-sale securities at September 30, 2006 were (in thousands):

			Cost			Market value			Unrealized Gain
	U.S. Government Securities	$	8,909		$	8,921		$	12
	Corporate Bonds & Other		90		$	90		$	-
	Total Marketable Securities	$	8,999		$	9,011		$	12

7.	Balance Sheet Detail - Other Assets (in thousands):
	Other assets consisted of the following at September 30, 2006 and December 31, 2005:

			September 30, 2006			December 31, 2005
	Accounts Receivable - long-term	$	2,545		$	404
	Security Deposits		56			35
	Trademarks		17			14
	Total	$	2,618		$	453

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The effective tax rates for the nine and three months ended September 30, 2006 was 41.1% and 42.5%, respectively, due to the impact of the federal alternative minimum tax.

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Changes during 2006 in options outstanding for the combined plans were as follows:

A summary of nonvested shares of restricted stock awards outstanding under the Company's 2006 Plan as of September 30, 2006, and changes during the year then ended is as follows:

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	For the nine month period ended September 30, 2005, the table below shows the effect on net income and net income per share if the Company had applied the fair value recognition provisions of SFAS No. 123 to stock-based employee compensation.

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	The following segment reporting information of the Company is provided (in thousands):

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

The following Management's Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those set forth under the heading "Certain Factors Affecting Operating Results" and elsewhere in this report. The following discussion should be read in conjunction with the consolidated financial statements and related notes included in our Annual Report on Form 10-K (filed under our Company's previous name of Programmer's Paradise, Inc.) filed with the Securities and Exchange Commission for the year ended December 31, 2005.

As from January 1, 2006 we have organized our Company into two reportable operating segments -- the "Programmer's Paradise" segment, which sells technical software, hardware and services directly to end-users (such as individual programmers, corporations, government agencies, and educational institutions) and the "Lifeboat" segment, which distributes technical software to corporate resellers, VARs, consultants and systems integrators.

The Company's sales and results of operations have fluctuated and are expected to continue to fluctuate on a quarterly basis as a result of a number of factors, including: the loss of any major vendor; condition of the software industry in general; shifts in demand for software products; industry shipments of new software products or upgrades; the timing of new merchandise and catalog offerings; fluctuations in response rates; fluctuations in postage, paper, shipping and printing costs and in merchandise returns; adverse weather conditions that affect response, distribution or shipping; shifts in the timing of holidays; and changes in the Company's product offerings. The Company's operating expenditures are based on sales forecasts. If revenues do not meet expectations in any given quarter, operating results may be materially adversely affected.

The following table sets forth for the periods indicated certain financial information derived from the Company's consolidated statements of income expressed as a percentage of net sales. This comparison of financial results is not necessarily indicative of future results:

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	Nine months ended		Three months ended
	September 30,		September 30,
	2006	2005	2006	2005
Net sales	100.0%	100.0%	100.0%	100.0%
Cost of sales	90.2	88.8	91.0	89.1
Gross profit	9.8	11.2	9.0	10.9
Selling, general and administrative expenses	7.2	9.5	6.4	8.3
Income from operations	2.6	1.7	2.6	2.6
Interest income, net	0.4	0.2	0.5	0.2
Realized foreign exchange gain(loss)	0.0	0.0	0.0	0.0
Income before income taxes	3.0	1.9	3.1	2.8
Provision for income taxes	1.2	0.8	1.3	1.1
Net income	1.8%	1.1%	1.8%	1.7%

Net sales for the third quarter of 2006 increased 37% or $13.2 million to $48.7 million compared to $35.5 million for the same period in 2005. Total sales for the third quarter of 2006 for our Programmer's Paradise segment were $17.2 million compared to $14.0 million in the third quarter of 2005, representing a 23% increase. Total sales for the third quarter of 2006 for our Lifeboat segment were $31.5 million compared to $21.5 million in the third quarter of 2005, representing a 46% increase. For the nine months ended September 30, 2006, net sales increased by $29.8 million to $125.5 million or 31% compared to the same period in 2005. Sales for the nine months ended September 30, 2006 for our Programmer's Paradise segment were $42.0 million compared to $39.9 million in the same period last year. Sales for the nine months ended September 30, 2006 for our Lifeboat segment were $83.5 million compared to $55.8 million in the same period last year.

Sales from our Lifeboat segment showed strong growth. The 46% increase in net sales in the third quarter of 2006 compared to 2005 was mainly a result of our continued focus on the expanding virtual infrastructure-centric business as well as strengthening our account penetration.

Sales from our Programmer's Paradise segment also showed strong growth. The 23% increase in net sales in the third quarter of 2006 was mainly a result of our renewed focus on our core business of marketing and selling technical software, tools and components, the ability to finance large software deals and increased productivity of our account representatives.

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Gross Profit

Gross Profit for the quarter ending September 30, 2006 was $4.4 million compared to $3.9 million in the third quarter of 2005, a 13% increase. Total gross profit for our Programmer's Paradise segment was $2.1 million compared to $1.9 million in the third quarter of 2005, representing a 9% increase. Total gross profit for our Lifeboat segment was $2.3 million compared to $2.0 million in the third quarter of 2005, representing a 17% increase. For the nine month period ended September 30, 2006, gross profit in absolute dollars increased $1.6 million to $12.3 million compared to $10.7 million in the same period in 2005. Programmer's Paradise gross profit for the nine months ended September 30, 2006 was $5.6 million compared to $5.5 million during the same period in 2005. Lifeboat's gross profit in absolute dollars for the nine months ended September 30, 2006, was $6.7 million compared to $5.2 million during the same period in 2005.

Gross profit margin, as a percentage of net sales, for the quarter ending September 30, 2006 was 9.0% compared to 10.9% in the third quarter of 2005. Gross profit margin for our Programmer's Paradise segment was 12.2% compared to 13.8% in the third quarter of 2005. Gross profit margin for our Lifeboat segment was 7.3% compared to 9.1% in the third quarter of 2005. Gross profit margin as a percentage of net sales, for the nine months ended September 30, 2006 was 9.8% compared to 11.2% in the same period in 2005.

The increase in gross profit dollars and the decrease in gross profit margin as a percentage of net sales are primarily caused by the aggressive sales growth within our Lifeboat segment. Gross profit margin for our Lifeboat segment was 7.3% compared to 12.2% for our Programmer's Paradise segment in the third quarter of 2006. The decrease in gross margin of our Lifeboat segment to 7.3% from 9.1% in the third quarter of 2005 mainly reflects the competitive nature of our business and a shift in our product mix. We also won several large bids based on our aggressive pricing and we plan to continue to do so.

On a forward-looking basis, gross profit margin in future periods may be less than that achieved in the third quarter of 2006. We have several initiatives to increase gross margin percentages, including increased management control over pricing, a focus on high margin products and/or markets and selling services. However, we do not expect these initiatives to have an immediate positive impact on our gross margin percentages. The objective of these initiatives is to slow the decline in our gross margin percentage.

We also assess the impact of large bids and the continued growth of our Lifeboat distribution segment with lower gross margins on the overall profitability of our Company. We foresee possible pressure on gross profit margins as a result of various factors, including the continued strong growth of our Lifeboat segment, participation by vendors in inventory price protection and rebate programs, product mix, including software maintenance and third party services, pricing strategies, market conditions and other factors, any of which could result in a reduction of gross profit margins below those realized in the third quarter of 2006.

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Selling, General and Administrative Expenses

Total selling, general, and administrative ("SG&A") expenses for the third quarter of 2006 were $3.1 million compared to $3.0 million in the third quarter of 2005 or an increase of $0.1 million. This increase is mainly due to the stock compensation expense of $0.2 million and an increase in our reserve for bad debts of $0.1 million offset by a decrease of $0.2 million for employee related expenses (salaries, commissions and benefits). As a percentage of net sales, SG&A expenses for the third quarter of 2006 were 6.4% compared to 8.3% in the third quarter of 2005. For the nine months ended September 30, 2006 and 2005 SG&A expenses were $9.0 million. As a percentage of net sales, SG&A expenses for the first nine months of 2006 were 7.2% compared to 9.5% in the same period last year.

The Company expects that its SG&A expenses, as a percentage of net sales, may vary by quarter depending on changes in sales volume, as well as the levels of continuing investments in key growth initiatives. We continue to monitor our SG&A expenses closely. We plan to expand our investment in information technology and marketing, while we monitor our sales and remaining general and administrative expenses closely.

The realized foreign exchange gain for the quarter ended September 30, 2006 was $1,000 compared to a gain of $10,000 for the same period in 2005. For the nine months ended September 30 2006, the realized foreign exchange gain was $2,000 compared to a loss of $14,000 in the same period last year. Foreign exchange gains and losses primarily result from our trade activity with our Canadian subsidiary. Although the Company does maintain bank accounts in Canadian currencies to reduce currency exchange fluctuations, the Company is, nevertheless, subject to risks associated with such fluctuations.

For the quarter ended September 30, 2006, the Company recorded a provision for income taxes of $635,000, which consists of a provision of $128,000 for U.S. federal income taxes as well as a $18,000 provision for state and local taxes and $10,000 for Canadian taxes, and a deferred tax expense of $479,000. For the quarter ended September 30, 2005, the Company recorded a provision for income taxes of $407,000, which consisted of a provision of $317,000 for deferred income taxes as well as a $66,000 provision for U.S. state taxes and a provision of $24,000 for Canadian taxes. For the nine months ended September 30, 2006, the Company recorded a provision for income taxes of $1,556,000 which consists of a provision of $670,000 for U.S. federal income taxes as well as a $110,000 provision for state and local taxes and $87,000 for Canadian taxes and a deferred tax expense of $689,000. For the nine months ended September 30, 2005, the Company recorded a provision for income taxes of $728,000, which consists of a provision of $210,000 for U.S. federal income taxes as well as a provision of $487,000 for deferred income taxes and $100,000 for state and local taxes offset by a benefit of $69,000 for Canadian taxes.

As of September 30, 2006, the Company had a U.S. deferred tax asset of approximately $3.6 million reflecting, in part, a benefit of $1.7 million in U.S. federal and state tax loss carry forwards, which will expire in varying amounts between 2006 and 2025. The full realization of the tax benefit associated with the carry forwards depends predominantly upon the Company's ability to generate taxable income during the carry forward period.

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The effective tax rates for the nine and three months ended September 30, 2006 was 41.1% and 42.5%, respectively, due to the impact of the federal alternative minimum tax.

During the first nine months of 2006 our cash and cash equivalents increased by $3.8 million to $11.2 million at September 30, 2006, from $7.4 million at December 31, 2005. During the first nine months of 2006, net cash provided by operating activities amounted to $6.7 million; net cash used in investing activities amounted to $1.4 million and net cash used in financing activities amounted to $1.5 million.

Net cash provided by operating activities in the first nine months of 2006 was $6.7 million and primarily resulted from our net income excluding non-cash charges which totaled $4.2 million, a $5.1 million increase in accounts payable, a $1.0 million decrease in inventory offset by a $3.5 million increase in accounts receivable.

Net cash used in investing activities in the first nine months of 2006 amounted to $1.4 million. In light of the current low interest rates on our short-term savings accounts we decided to invest an additional net $1.1 million in U.S. government securities. These securities are highly rated and highly liquid. These securities are classified as available-for-sale securities in accordance with SFAS 115 "Accounting for Certain Investments in Debt and Equity Securities", and as a result, unrealized gains and losses are reported as part of other comprehensive income (loss). The remaining $0.3 million of cash used in investing activities consisted of capital expenditures.

Net cash used for financing activities in the first nine months of 2006 was $1.5 million which consisted of the $2.2 million payment of our declared dividends, which was partly offset by the proceeds from the exercise of options.

The Company's current and anticipated use of its cash and cash equivalents is, and will continue to be, to fund working capital, operational expenditures, the stock buyback program and dividends if declared by the board of directors. Our business plan furthermore contemplates to continue to use our cash to pay vendors promptly in order to obtain more favorable conditions.

We believe that the funds held in cash and cash equivalents will be sufficient to fund our working capital and cash requirements for at least the next 12 months. We currently do not have any credit facility and, in the foreseeable future, we do not plan to enter into an agreement providing for a line of credit.

Contractual Obligations as of September 30, 2006 were summarized as follows:

(Dollars in thousands)
 

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Operating leases primarily relates to the leases of the space used for our operations in Shrewsbury, New Jersey, and Mississauga, Canada. In the third quarter of 2006, the Company extended the lease on our Shrewsbury location for an additional fifty months extending the lease until December 2012. During the second quarter of 2006, the Company made the decision to close down and sublease it sales office in Hauppauge, New York. The table above includes minimum rent payments for the Hauppauge office net of sublease income. The commitments for operating leases include the minimum rent payments and a proportionate share of operating expenses and property taxes.
 

The Company is not committed by lines of credit or standby letters of credit, and has no standby repurchase obligations or other commercial debt commitments. The Company is not engaged in any transactions with related parties.

As of September 30, 2006, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K.

The Company's discussion and analysis of its financial condition and results of operations are based upon the Company's consolidated financial statements that have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. The Company recognizes revenue from the sale of software and hardware for microcomputers, servers and networks upon shipment or upon electronic delivery of the product. The Company expenses the advertising costs associated with producing its catalogs. The costs of these catalogs are expensed in the same month the catalogs are mailed.

On an on-going basis, the Company evaluates its estimates, including those related to product returns, bad debts, inventories, investments, intangible assets, income taxes, contingencies and litigation.

The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

The Company records revenues from sales transactions when title to products sold passes to the customer. The Company's shipping terms dictate that the passage of title occurs upon receipt of products by the customer. The majority of the Company's revenues relates to physical products and is recognized on a gross basis with the selling price to the customer recorded as net sales with the acquisition cost of the product to the Company recorded as cost of sales. At the time of sale, the Company also records an estimate for sales returns based on historical experience. Certain software maintenance products, third party services and extended warranties sold by the Company (for which the Company is not the primary obligor) are recognized on a net basis in accordance with Staff Accounting Bulletin (SAB) No. 101 and No. 104, "Revenue Recognition" and Emerging Issues Task Force (EITF) 99-19, "Reporting Revenue Gross as a Principal versus Net as an Agent". Accordingly, such revenues are recognized in net sales either at the time of sale or over the contract period, based on the nature of the contract, at the net amount retained by the Company, with no cost of goods sold.

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In accordance with EITF 00-10, "Accounting for Shipping and Handling Fees and Costs", the Company records freight billed to its customers as net sales and the related freight costs as a cost of sales. Vendor rebates and price protection are recorded when earned as a reduction to cost of sales or merchandise inventory, as applicable. Cooperative reimbursements from vendors, which are earned and available, are recorded in the period the related advertising expenditure is incurred. Cooperative reimbursements are recorded as net sales in accordance with EITF 02-16, "Accounting for Consideration Received from a Vendor by a Customer (Including a Reseller of the Vendor's Products)".

The Company believes the following critical accounting policies used in the preparation of its consolidated financial statements affect its more significant judgments and estimates. The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. If the financial condition of the Company's customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. The Company writes down its inventory for estimated obsolescence or unmarketable inventory equal to the difference between the cost of inventory and the estimated market value based upon assumptions about future demand and market conditions. If actual market conditions are less favorable than those projected by management, additional inventory write-offs may be required.

This report includes "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Statements in this report regarding future events or conditions, including statements regarding industry prospects and the Company's expected financial position, business and financing plans, are forward-looking statements. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. We strongly urge current and prospective investors to carefully consider the cautionary statements and risks contained in this report. Such risks include, but are not limited to, the continued acceptance of the Company's distribution channel by vendors and customers, the timely availability and acceptance of new products, contribution of key vendor relationships and support programs, as well as factors that affect the software industry in general.

The Company operates in a rapidly changing business, and new risk factors emerge from time to time. Management cannot predict every risk factor, nor can it assess the impact, if any, of all such risk factors on the Company's business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those projected in any forward-looking statements.

Accordingly, forward-looking statements should not be relied upon as a prediction of actual results and readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

The statement concerning future sales and future gross profit margin are forward looking statements involving certain risks and uncertainties such as availability of products, product mix, market conditions and other factors, which could result in a fluctuation of sales below recent experience.

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Stock Volatility. The technology sector of the United States stock markets has experienced substantial volatility in recent periods. Numerous conditions, which impact the technology sector or the stock market in general or the Company in particular, whether or not such events relate to or reflect upon the Company's operating performance, could adversely affect the market price of the Company's Common Stock.

Furthermore, fluctuations in the Company's operating results, announcements regarding litigation, the loss of a significant vendor, increased competition, reduced vendor incentives and trade credit, higher postage and operating expenses, and other developments, could have a significant impact on the market price of the Company's Common Stock.

In addition to its activities in the United States, the Company also conducts business in Canada. We are subject to general risks attendant to the conduct of business in Canada, including economic uncertainties and foreign government regulations. In addition, the Company's Canadian business is subject to changes in demand or pricing resulting from fluctuations in currency exchange rates or other factors.

The Company's $9.0 million investments in marketable securities are only in highly rated and highly liquid corporate bonds and U.S. government securities. The remaining cash balance is invested in short-term savings accounts with our primary bank, The Bank of New York. As such, the risk of significant changes in the value of our cash invested is minimal.

Evaluation of Disclosure Controls and Procedures. As required by Rule 13a-15(b) under the Exchange Act, our management carried out an evaluation of the effectiveness of the design and operation of the Company's "disclosure controls and procedures" as of September 30, 2006. This evaluation was carried out under the supervision and with the participation of our management, including our Chief Executive Officer (principal executive officer) and Chief Accounting Officer (principal financial officer). As defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, disclosure controls and procedures are controls and other procedures of the Company that are designed to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is accumulated and communicated to the Company's management, including our Chief Executive Officer and Chief Accounting Officer, as appropriate, to allow timely decisions regarding required disclosure.

Based upon that evaluation, our Chief Executive Officer and Chief Accounting Officer concluded that our disclosure controls and procedures were effective as of September 30, 2006. It should be noted that the design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote.

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Changes in Internal Control Over Financial Reporting. As required by Rule 13a-15(d) under the Exchange Act, our management, including our Chief Executive Officer and Chief Accounting Officer, also conducted an evaluation of our internal control over financial reporting to determine whether any change occurred during the quarter ended September 30, 2006, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. Based on that evaluation during the quarter ended September 30, 2006 there has been no change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Effective as of July 27, 2006, the Company extended its lease at its facilities located at 1157 Shrewsbury Avenue, Shrewsbury, New Jersey for fifty months until December 31, 2012 by entering into the Modification of Lease (the "Lease Extension") with SBC Holdings L.P. (successor in interest to Robert C. Baker). Under the Lease Extension, the Company is required to pay $225,000 annually for the term of such extension. The Lease Extension also provides the Company with (i) an option to extend the lease term for an additional three year period whereupon the annual lease payment shall be adjusted pursuant to a prescribed price index, (ii) a reimbursement by the landlord for certain improvements made to the facilities (including limited rental credits if the amounts expended by the Company to make such improvements are less than the prescribed limits), and (iii) lease payment terms with respect to the month to month rental payments due and payable after the expiration of the extended lease term.

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

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