Technoconcepts 10QSB 2006 Q1 Quarterly report (small business)

U.S. SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-QSB

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2005

Commission File Number 333-90682

TechnoConcepts, Inc.

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

	Colorado	84-1605055
	(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

6060 Sepulveda Blvd. Suite 202

Van Nuys, Ca. 91411

(Address of principal executive offices)

(818) 988-3364

(Registrant's telephone number including area code)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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.

x Yes oNo

As of February 13, 2006, 2005, the Registrant had 27,409,934 shares of common stock, no par value, outstanding.

Transitional Small Business Disclosure format:

Yes o No x

INDEX

		Page No.
Part I: Financial Information

Item 1. Financial Statements

Condensed balance sheet, December 31, 2005 (unaudited)		3

Condensed statement of operations, three months ended December 31, 2005, three months ended December 31, 2004 (unaudited)		4

Condensed statement of changes in stockholders’ equity, three months ended December 31, 2005 (unaudited)		5

Condensed statements of cash flows, three months ended December 31, 2005, and December 31, 2004 (unaudited)		6

Notes to condensed financial statements (unaudited)		7

Item 2. Management's Discussion and Analysis or Plan of Operations		14

Item 3. Controls and Procedures		20

Part II. Other Information

Item 1. Legal Proceedings		20

Item 2. Changes in Securities		21

Item 3. Defaults Upon Senior Securities		21

Item 4. Submission of Matters to a Vote of Security Holders		21

Item 5. Other Information		21

Item 6. Exhibits		21

Signatures		22

PART I. Financial Information

ITEM 1. FINANCIAL STATEMENTS

TechnoConcepts, Inc.

And Subsidiaries

Consolidated Balance Sheets

	December 31,			September 30,
	2005			2005
	(Unaudited)

ASSETS

Current assets:
Cash	$	86,378	��	$	190,669
Accounts receivable, net of allowance for doubtful
accounts of $72,744 and $190,040		1,029,068			318,202
Inventory, net of reserves of $512,930 and $534,851		393,112			499,543
Prepaid expenses		414,279			328,723

Total current assets		1,922,837			1,337,137

Fixed assets, net		536,624			383,525

Other assets:
Intellectual property and patents		8,000,000			8,000,000
Goodwill		5,663,629			5,663,629
Deposits		77,251			77,251
Debt issuance costs, net		478,854			250,762

Total assets	$	16,679,195		$	15,712,304

See accompanying notes to consolidated financial statements.

TechnoConcepts, Inc.

And Subsidiaries

Consolidated Balance Sheets

	December 31,			September 30,
	2005			2005

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
Line of Credit	$	387,500		$	$ 331,639
Convertible notes payable,
net of unamortized debt issuance costs of $1,077,826		1,722,174			--
Note Payable		645,000			750,000
Capital Leases payable - current portion		10,567			10,567
Accounts payable		2,562,943			2,163,838
Accrued expenses payable		1,148,384			1,076,336
Customer Deposits		126,599			278,806
Due to related parties		300,982			263,698



Total current liabilities		6,904,149			4,874,884

Capital Leases payable, net of current portion		13,447			17,123

Convertible notes payable,
net of unamortized debt issuance costs of $1,872,673		--			1,902,327


Total liabilities		6,917,596			6,794,334

Minority interest		697,453			--

Shareholders' equity:
Series A Preferred stock, no par value, 10,000,000
shares authorized, 16,000 shares
issued and outstanding		16			16
Series B Preferred, no par value, 3,100 authorized, 1,875 and 800
issued and outstanding , respectively		4,686,200			2,000,000
Common stock, no par value, 50,000,000
shares authorized 27,409,934 and 27,015,035 shares
issued and outstanding, respectively		27,410			27,015
Additional paid in capital		22,175,823			20,490,380
Accumulated deficit		(17,825,303	)		(13,599,441	)

Total stockholders' equity		9,064,146			8,917,970

Total liabilities and shareholders' equity	$	16,679,195		$	15,712,304


See accompanying notes to consolidated financial statements.

TechnoConcepts, Inc.

And Subsidiaries

Consolidated Statements of Operations and Comprehensive Loss

	October 1, 2005			October 1, 2004
	To			To
	December 31, 2005			December 31, 2004

Revenues:
Net Sales	$	1,106,377		$	--

Cost of goods sold		890,164			--

Gross Profit		216,213			--

Operating expenses:
General and administrative		2,890,139			459,536

Total operating expenses		2,890,139			459,536

Loss before other income (expense) and income taxes		(2,673,926	)		(459,536	)

Other income (expense):
Interest expense, net		(1,554,483	)		(364,915	)

Other income (expenses)		(1,554,483	)		(364,915	)

Minority interest		52,547			--

Loss before income taxes		(4,175,862	)		(824,451	)

Income taxes		--			--

Net loss		(4,175,862	)		(824,451	)

Dividends on preferred stock		50,000			--

Net loss available to
common shareholders	$	(4,225,862	)	$	(824,451	)

Weighted shares outstanding:
Basic		27,212,484			24,852,671
Diluted		27,212,484			24,852,671

Loss per share available to common shareholder:
Basic	$	(.16	)	$	(.03	)
Diluted	$	(.16	)	$	(.03	)


See accompanying notes to consolidated financial statements

TechnoConcepts Inc.

And Subsidiaries

Comprehensive Statement of Stockholders’ Equity

	Preferred Stock						Common Stock				Paid-In			Subscriptions
	Shares			Amount			Shares		Amount		Capital			Receivable			Accumulated Deficit

Balances, December 31, 2003		16,000		$	16			7,930,320	$	7,930	$	7,996,062		$	(4,008	)	$	(1,107,957	)

Shares issued for:

Conversion of debentures		—			—			697,641		698		315,977			—			—

Consulting services.....		—			—			4,525,030		4,525		464,348			—			—

Effect of merger....		16,000			16			11,699,680		11,699		(11,546	)		—			—

Beneficial conversion feature from issuance of convertible debenture.............................		—			—			—		—		284,143			—			—

Net loss		—			—			—		—		—			—			(1,132,974	)
Balances, September 30, 2004....................................		32,000		$	32			24,852,671	$	24,852	$	9,048,984		$	(4,008	)	$	(2,240,931	)
Collection of subscription receivable............................		—			—			—		—		—			4,008			—
Beneficial conversion feature from the issuance of convertible debentures ....		—			—			—		—		3,329,200			—			—
Shares issued for:

Preferred shares........................		800			2,000,000			—		—		—			—			—
Conversion of debentures......		—			—			771,480		771		1,232,854			—			—
Consulting services.....		—			—			229,713		230		909,483			—			—
Effect of merger......		—			—			1,161,170		1,162		4,998,838			—			—

Issuance of warrants for services rendered......		—			—			—		—		971,005			—			—
Retirement of preferred shares......		(16,000	)		(16	)		—		—		16			—			—
Dividends on preferred stock....................................		—			—			—		—		—			—			(100,000	)
Net loss......		—			—			—		—		—			—			(11,258,510	)
Balances, September 30, 2005......		16,800			2,000,016			27,015,034		27,015		20,490,380			—			(13,599,441	)

Issuance of warrants for Services rendered.....................		—			—			—		—		699,769			—			—

Conversion of debentures.........		—			—			394,900	$	395		985,674			—			—

Preferred shares........................		1,075		$	2,686,200			—		—		—			—			—

Dividends..................................		—			—			—		—		—			—			(50,000	)

Net Loss....................................		—			—			—		—		—			—			(4,175,862	)

Balances, December 31, 2005..		17,875		$	4,686,216			27,409,934	$	27,410	$	22,175,823		$	--		$	(17,825,303	)

See accompanying notes to consolidated financial statements.

TechnoConcepts, Inc.

And Subsidiaries

Consolidated Statements of Cash Flows

	October 1, 2005			October 1, 2004
	To			To
	December 31, 2005			December 31, 2004

Cash flows from operating activities:

Net loss	$	(4,175,862	)	$	(824,451	)

Adjustments to reconcile net loss to
net cash provided by operating activities:
Depreciation		30,670			29,856
Amortization of debt costs		992,479			276,014
Minority interest		697,453			--
Interest paid in warrants		274,044			--

Changes in operating assets and liabilities:
Decrease in accounts receivable		(710,866	)		--
Decrease in inventory		106,431			--
Increase in other assets		(85,556	)		--
(Decrease) increase in accounts payable		246,898			52,503
Increase in accrued expenses		33,118			(151,210	)

Net cash flows from operating activities		(2,591,191	)		(617,288	)

Cash flows from investing activities:
Net Borrowings from related parties		37,284			--
Acquisition of fixed assets		(183,769	)		(18,752	)

Net cash flows from investing activities		(146,485	)		(18,752	)

Cash flows from financing activities:
Proceeds from notes payable		--			3,975,000
Debt acquisition costs		--			(445,800	)
Proceeds from preferred shares		2,686,200			--
Net borrowings from bank		(49,139	)		--
Repayment of long-term debt		(3,676	)		--
Stock subscriptions received		--			4,008

Net cash flows from financing activities		2,633,385			3,533,208

Net change in cash and cash equivalents		(104,291	)		2,897,168
Cash and cash equivalents, beginning of period		190,669			66,558

Cash and cash equivalents, end of period	$	86,378		$	$2,963,726

Supplemental cash flow information:
Interest paid	$	--		$	--
Income taxes paid	$	800		$	--


Non-cash investing and financing activities

Warranties issued as debt issuance costs	$	425,725		$	--
Shares issued for conversion of debt		986,069			742


See accompanying notes to consolidated financial statements.

TechnoConcepts, Inc.

And Subsidiaries

Notes to Financial Statements

September 30, 2005

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Interim Financial Information - The unaudited condensed consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission. The information furnished herein reflects all adjustments (consisting of normal recurring accruals and adjustments) which are, in the opinion of management, necessary to fairly present the operating results for the respective periods. Certain information and footnote disclosures normally presented in annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted pursuant to such rules and regulations. The condensed consolidated financial statements should be read in conjunction with the description of business and management's plan of operations, contained in the Company's Annual Report on Form 10-KSB/A for the year ended September 30, 2005. The results of operations for the three months December 31, 2005 are not necessarily indicative of the results that may be expected for the year ending September 30 2006, or for any future period.

Except as follows, the accounting policies followed by the Company are set forth in Note 1 to the Company's financial statements included in its Annual Report on Form 10-KSB/A for the fiscal year ended September 30, 2005.

Basis for Presentation

The consolidated financial statements include the accounts of the Company and it’s wholly- owned subsidiaries, Acquisition Corp. and Techno HK. All material intercompany transactions have been eliminated in consolidation.

Inventory

Inventories consist of the following:

	December 31, 2005			September 30, 2005
Raw materials		108,908			91,122
Finished goods		797,134			943,272
		906,042			1,034,394
Less: Reserve		(512,930	)		(534,851	)
	$	393,112		$	499,543

TechnoConcepts, Inc.

And Subsidiaries

Notes to Financial Statements

September 30, 2005

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Stock Based Compensation - In October 1995, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (SFAS) No. 123, “Accounting for Stock-Based Compensation”. The Company currently accounts for its stock-based compensation plans using the accounting prescribed by Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees”. As the Company is not required to adopt the fair value based recognition provisions prescribed under SFAS No. 123, as amended, it has elected only to comply with the disclosure requirements set forth in the statement which includes disclosing pro forma net income (loss) and earnings (loss) per share as if the fair value based method of accounting had been applied.

The fair value of each option grant was estimated on the date of the grant using the Black-Scholes option-pricing model with the following weighted average assumptions for the fiscal quarter ended December 31, 2005: expected volatility of 93%; risk free interest rate of 5.75%; and expected lives of 5 years.

The effects of applying SFAS No. 123, as amended, in the above pro forma disclosures are not indicative of future amounts as they do not include the effects of awards granted prior to Fiscal 1996. Additionally, future amounts are likely to be affected by the number of grants awarded since additional awards are generally expected to be made at varying amounts.

The proforma net loss and loss per share consists of the following:

	Three Months Ended
	December 31,			December 31,
	2005			2004

Net loss available to common shareholders as reported	$	(4,225,862	)	$	(824,451	)
Effect of stock options, net of tax		(216,137	)		(129,960	)

Proforma net loss	$	(4,441,999	)	$	(954,411	)
Proforma diluted loss per share	$	(0.16	)	$	(0.04	)

NOTE 2 PREFERRED STOCK

In November 2005, the Company negotiated a private placement of convertible preferred stock. Under the negotiated terms, the company has offered up to 2,300 shares of Series B-1 Preferred Stock ("Series B-1 Preferred"), convertible into 2,300,000 shares of our Common Stock (“Common”), at a purchase price of $2,500 per share for a total of $5,750,000. The Series B-1 Preferred has a dividend rate of 5% per annum, payable quarterly, either by cash or through the issuance of common stock at the Company's option. As part of this transaction, the Company will also issue five-year warrants to purchase up to 920,000 shares of the Company's common stock, one-half of the warrants at an exercise price of $3.00 per share and the remaining half at an exercise price of $4.00 per share. As of December 31, 2005, the Company has sold 1,075 shares of the 2,300 Series B-1 Preferred as described above (convertible to 1,075,000 shares of Common) at an aggregate purchase price of $2,686,200.

TechnoConcepts, Inc.

And Subsidiaries

Notes to Financial Statements

September 30, 2005

NOTE 2 PREFERRED STOCK (continued)

The Company issued 431,972 warrants as part of the transaction, with an estimated fair value of $425,725. The fair value of each warrant was estimated on the date of the grant using the Black-Scholes option-pricing model with the following weighted average assumptions for the three months ended December 31, 2005: expected volatility of 90.34%; risk free interest rate of 6.75%; and expected lives of 5 years.

NOTE 3 GOING CONCERN

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company has a cumulative loss from operations of $17,825,303, negative working capital of $4,981,312 at December 31, 2005 and a negative cash flow from operations for the three months ended December 31, 2005 of $2,591,191 which raises doubt about its ability to continue as a going concern. These financial statements do not include any adjustment that might result from the outcome of this uncertainty. We expect our cash requirements will increase significantly throughout our current fiscal year, as we continue our research and development efforts, hire and expand our staff and attempt to execute on our business strategy through working capital growth and capital expenditures. The amount and timing of cash requirements will depend on market acceptance of our products and the resources we devote to researching and developing, marking, selling and supporting our products. We believe that our current cash and cash equivalents on hand, including financing obtained subsequent to December 31, 2005, should be sufficient to fund our operations for at least the next 3 months. Thereafter, if current sources are not sufficient to meet our needs, we may seek additional equity or debt financing. In addition, any material acquisition of complementary businesses, products or technologies or material joint venture could require us to obtain additional equity or debt financing. There can be no assurance that such additional financing would be available on acceptable terms, if at all. If we raise additional funds through the issuance of equity securities the percentage ownership of our stockholders would be reduced. If we are unable to raise sufficient funds on acceptable terms we may not succeed in executing our strategy and achieving our business objective. In particular, we could be forced to limit our product development and marketing activities, forego attractive business opportunities and we may lose the ability to respond to competitive pressures.

NOTE 4 CONVERTIBLE DEBENTURES

On November 17, 2004 the Company entered into a securities purchase agreement (the "Purchase Agreement"), a registration rights agreement, and a security agreement with certain institutional investors (the "Buyers"). Pursuant to the Purchase Agreement, the Company agreed to sell, and the Buyers agreed to purchase, 7% Secured Convertible Debentures (the “Debentures”) in the aggregate principal amount of $3,775,000 and warrants (“Warrants”) exercisable for a total of 608,000 shares of the Company’s common stock, par value $.001 per share ("Common Stock"), one half of which are exercisable at $3.50 per share and one half of which are exercisable at $4.00 per share. Net proceeds to the Company from this transaction were approximately $3,442,000, after the payment of commissions and expenses.

TechnoConcepts, Inc.

And Subsidiaries

Notes to Financial Statements

September 30, 2005

NOTE 4 CONVERTIBLE DEBENTURES (continued)

The Debentures are due and payable on November 17, 2006 and are convertible into shares of Common Stock at $2.50 per share, subject to certain customary anti-dilution adjustments. Interest on the Debentures is due quarterly on the last day of each calendar quarter and may, at the Company’s discretion, be paid in cash or shares of Common Stock assuming certain conditions are satisfied (including, that the shares of Common Stock issuable upon conversion of the Debentures have been registered for resale to the public with the Securities and Exchange Commission). In addition, the Company may require the conversion of the Debentures into shares of Common Stock if certain conditions are satisfied, including without limitation, that the average trading price of the Common Stock exceeds $7.00 per share for not less than 22 consecutive trading days. On the first day of each month commencing on December 1, 2005, the Company is required to redeem one-twelfth of the original principal amount of the Debentures. The Company has not made the payment required on December 31, 2005.

On July 15, 2005, the Company entered into an amendment (the “Amendment”) of certain of the Debentures issued pursuant to the Purchase Agreement in order to amend the default provisions thereof. The Amendment extended the period of time within which the Company’s Resale Registration Statement may be declared effective by the Securities and Exchange Commission without triggering an “Event of Default” from 240 days from the Closing Date to 300 days from the Closing Date and also eliminated the cross default provisions of the Debenture relating to the Company’s covenant to timely file the Resale Registration Statement as set forth in the Registration Rights Agreement.

During November, 2005, certain debenture holders notified the Company that they were exercising their right to conversion and as a result, $975,000 of the $3,775,000 outstanding 7% Secured Convertible Debentures have been converted into 390,000 shares. During February 2006, certain debenture holders notified the Company that they were exercising their right to conversion and as a result, $150,000 of the then remaining $2,800,000 outstanding 7% Secured Convertible Debentures have been converted into 60,000 shares.

As of December 31, 2005 the convertible debentures consisted of the following:

Convertible debentures	$	2,800,000
Less: unamortized conversion costs		(1,077,826	)
	$	1,722,174

The Company reflected the amortization of the discounts on these debentures as interest expense totaling $794,847 and $276,014 for the three months ended December 31, 2005 and 2004 respectively.

TechnoConcepts, Inc.

And Subsidiaries

Notes to Financial Statements

September 30, 2005

NOTE 5 NOTES PAYABLE

During October, 2005 the Company issued promissory notes of $665,000 that matured two months after date of issue and have been extended 90 days. These promissory notes bear interest at a rate of 8% per annum. There shall be no penalty for prepayment. There is a finders fee of 10% of proceeds, payable upon maturity. At the option of each Note holder, the outstanding principal balance and all accrued interest thereon, shall be converted into the same stock class, share price and terms as the next round of equity investment in the Company of a minimum of $5 million (including conversion of the amounts described herein) (the “Next Financing”); provided, however, that such conversion shall only occur if the Next Financing occurs on or before the Maturity Date. Conversion stock into which the Company's indebtedness is convertible shall be granted the same registration rights as the stock issued in the Next Financing round. The Company shall issue 5-year warrants to purchase shares of its common stock at an exercise price of $3.00, with each Note purchaser to receive a pro rata share of the warrant pool of 200,000 warrants. As of December 31, 2005 the total notes payable amounted to $645,000. As part of the consideration, the Company issued 5-year warrants to purchase shares of its common stock at an exercise price of $3.00, with each Note purchaser to receive a pro rata share of the warrant pool of 200,000 warrants. As of December 31, 2005 the total notes payable amounted to $645,000 and the amount of warrants issued was 123,000, with an estimated fair value of $274,044. The fair value of each warrant was estimated on the date of the grant using the Black-Scholes option-pricing model with the following weighted average assumptions for the three months ended December 31, 2005: expected volatility of 91.19%; risk free interest rate of 7.0%; and expected lives of 5 years.

NOTE 6 ACQUISITION

On June 2, 2005, TechnoConcepts, Inc. (the "Company"), through its wholly-owned subsidiary, Asante Acquisition Corp. (“Acquisition Corp.”) acquired substantially all of the assets (collectively, the “Asante Assets”) of Asante Technologies, Inc. (“Asante”). The acquisition of the Asante Assets was consummated pursuant to an Agreement and Plan of Acquisition among Asante, the Company, and Acquisition Corp. dated as of February 25, 2005. In connection with the acquisition, Acquisition Corp. purchased the Asante Assets, which included certain patents, trademarks and other intellectual property rights along with cash and cash equivalents, accounts receivable, inventory, property, plant, equipment and other capital assets, in exchange for 1,161,170 restricted shares of the Company’s common stock. The consideration paid by Acquisition Corp. to acquire the Asante Assets will increase in the event that Acquisition Corp. achieves certain net sales targets. If Acquisition Corp. achieves certain net sales goals, the Company will issue up to an additional $3,000,000 worth restricted shares of its common stock.

The following unaudited income statement data presents the consolidated results operation of the Company had the acquisition of Asante occurred as of the beginning of the earliest period presented:

	3 months ended December 31, 2005			3 months ended December 31, 2004
Net Revenues	$	1,106,377		$	2,193,000
Net Loss		(4,175,862	)		(1,328,451	)
Basic and diluted loss per share		(0.16	)	$	(0.05	)

TechnoConcepts, Inc.

And Subsidiaries

Notes to Financial Statements

September 30, 2005

NOTE 6 ACQUISITION (continued)

On October 17, 2005, TechnoConcepts, Inc., through its wholly-owned subsidiary, Asante Acquisition Corp. completed a reorganization with RegalTech Inc.( “RegalTech”), a publicly traded Delaware corporation. The Reorganization provided for the merger of Acquisition Corp. and RegalTech, pursuant to the companies’ Agreement and Plan of Reorganization dated August 31, 2005. RegalTech’s name was changed to Asante Networks, Inc. (“Asante Networks”) and is trading on the pink sheets under the ticker symbol “ASTN”.

In connection with the merger, the Company received 15,000 shares of Series A Nondilutable Convertible Preferred Stock (the “Preferred Stock”) of Asante Networks, which when converted will represent approximately eight-five percent (85%) of the outstanding shares of Asante Networks. Each share of Preferred Stock may be converted at any time after October 1, 2006 for 10,000 shares of Common Stock. The Company, as the holder of the Preferred Stock shall have the same voting rights with respect to the business, management and affairs of Asante Networks as if the Preferred Stock were converted to shares of Common Stock on the record date. The Preferred Stock bears dividends at an annual rate of $10.00 per share. In addition, Asante Networks has effected a 10 for 1 forward split of its common shares. Since the Company has retained 85% of the voting shares, the Company continues to report Asante as a subsidiary and reflects the remaining 15% as a minority interest.

NOTE 7 OPTIONS

In October 2005, the Company granted 278,257 additional shares under the 2005 Equity Incentive Plan. As of December 31, 2005 there are 3,130,757 options granted and outstanding. In January 2006, the Company granted 1,960,000 shares of common stock, of which 1,650,000 shares are restricted, at exercise prices ranging from $1 to $3 per share.

NOTE 8 SUBSEQUENT EVENTS

Subsequent to December 31, 2005, the Company sold 80 shares of Series B-1 Preferred (convertible to 80,000 shares of Common) at an aggregate purchase price of $200,750 in one transaction and the Company also sold 360 shares (convertible to 360,000 shares of Common) at an aggregate price of $900,000 in another transaction.

ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

This Form 10-QSB quarterly report of TechnoConcepts Inc(the "Company") for the three months ended December 31, 2005, contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbors created thereby. To the extent that there are statements that are not recitations of historical fact, such statements constitute forward-looking statements that, by definition, involve risks and uncertainties. In any forward-looking statement, where the Company expresses an expectation or belief as to future results or events, such expectation or belief is expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the statement of expectation or belief will be achieved or accomplished.

Certain factors that could cause actual results or events to differ materially from those anticipated are set forth in our Form 10-KSB for the year ended September 30, 2005 under the caption "Risk Factors That May Affect Future Results" within "Management's Discussion and Analysis or Plan of Operations" and elsewhere herein and in our other reports filed from time to time with the Securities and Exchange Commission.

Readers are cautioned not to place undue reliance on the forward-looking statements contained herein, which speak only as of the date hereof. The Company believes the information contained in this Form 10-QSB to be accurate as of the date hereof. Changes may occur after that date, and the Company will not update that information except as required by law in the normal course of its public disclosure practices.

Plan of Operations

The Company’s strategy is to become a leading provider of wireless communication technology by offering True Software Radio™ ASICs and chipsets to major telecommunications equipment and component suppliers for integration into their wireless communications products.

To date the Company has entered into six preliminary agreements with potential strategic partners for the joint development of True Software Radio™ components. None of these six preliminary agreements assure that the Company will realize any revenue from the sale or license of its products or technology.

The Company intends to seek to establish strategic relationships with both component manufacturers and “total solution” providers. The Company believes that incorporation of its True Software Radio™ technology will enable its industry partners to provide less expensive service along with seamless roaming and global interoperability, thereby enabling new and enhanced services and applications such as mobile e-commerce, position location, mobile multimedia web browsing, including music and video downloads, public safety and homeland security. Elements of the Company’s strategy include:

Selling to the Portable Device Market

The Company anticipates opportunities in the portable device market (defined here as the aggregation of handsets, PDAs, and other niche wireless access devices), which include:

• Sales of True Software Radio™ “engines” (essentially very small wireless “motherboards”) to portable device manufacturers, such as PalmOne, Sony, Sharp and Toshiba;

• Non-recurring engineering fees for integration services to large manufacturers such as Raytheon, Lockheed-Martin, BAE Systems, and Northrop that want to adopt True Software Radio™ technology into their products and license fees based upon units sold under their own brand names (embedded products); and

• OEM licensing agreements for physical/data link layer software to handset manufacturers, such as Samsung, Nokia, Motorola, and Ericcson.

The Company has not entered into definitive agreements with any of the companies referred to above as of the date of this report.

Selling to the Base Station Market

The Company believes that True Software Radio™ technology will contribute to the obsolescence of conventional wireless technology. The True Software Radio™ transceiver is capable of providing at least three times the capacity of a conventional unit, making the per-channel cost equal to roughly one-third. The Company anticipates revenue generation from the base station market primarily from four sources:

• Base station transceiver hardware sales to companies such as Lucent, Nortel and MTI;

• Licensing of base station software for physical and data link layer processing to infrastructure makers such as Siemens and Alcatel; and

• Strategic partnerships for international deployment of base station systems with companies such as China Mobile, China Unicom and SK Telcom.

• Non-recurring engineering (NRE) fees for the development of custom interfaces to our physical/data link layer software to government agencies in China, Germany, and the United States, and to their contractors, such as Lockheed Martin, General Dynamics, Raytheon, and Rockwell Collins.

The Company has not entered into definitive agreements with any of the companies referred to above as of the date of this report.

Military Uses

The U.S. military also has radio interoperability problems (as reported in the Marine Corps Gazette, January 2003, RF Design, May 1, 2003, Army Communicator, Summer 2003, and many other sources) in that one branch of the service often cannot communicate with another branch because of different radio systems. During joint country operations, it is not unusual for one country’s radio system to be incompatible with the radio systems of other countries. The Company’s True Software Radio™ technology can provide seamless communications across all bands, including satellite communications. The Company is pursuing direct military sales and strategic partnerships (none of which have been consummated as of the date of this report) with major defense contractors such as Lockheed-Martin, General Dynamics, TRW, BAE Systems, Northrop Grumman, Rockwell Collins, Boeing, and others.

Public Safety

Local, state and federal agencies, which respond to public safety situations, also have radios and other communication devices that cannot currently communicate with each other. This prevents agencies which are all trying to help deal with the same emergency, from talking to each other or sharing database information. Using the Company’s True Software Radio™ technology can provide a flexible and rapid solution so that a variety of emergency workers can communicate directly with each other - firemen can communicate with policemen and FEMA personnel can coordinate with the National Guardsmen - a vitally n important need in our post-9/11 world. Additionally, the Company’s True Software Radio™ technology can be used to enable radio or telephone handsets to be switched from cellular to satellite communications in the event of a blackout disabling cellular base station operations. This capability would have been welcomed during the power blackout that affected the northeastern part of North America in 2003. The Company is actively seeking strategic partnerships with contractors that are involved in providing interoperability wireless communication for State and Federal public safety and emergency agencies and for the Department of Homeland Security.

Accelerating Growth through Partnering and Acquisition

Since the highly competitive wireless communication technology marketplace is changing rapidly, the Company wishes to broaden and build depth in its planned product/service lines as quickly as possible. The Company also recognizes the need to achieve critical mass with a global presence in order to establish a leadership position in the market. To that end, the Company’s strategic initiatives include:

• Preemptively developing partnerships and relationships with processor companies, and wireless communication service providers, emphasizing multiple protocol capabilities and supporting multi-vendor purchase strategies by service providers;

• Preemptively developing strategic partnerships with one or more major digital signal processor suppliers;

• Developing and maintaining an integrated development team with system, hardware, and software/firmware expertise;

• Preemptively developing partnerships and relationships with RF semiconductor service providers and distributing high volume components on an OEM (remarked) basis through one or more of these firms;

• Licensing older designs while continuing to develop new hardware and software; and

• Developing leading edge software and firmware.

The Company also recognizes that consummating strategic acquisitions can help expand the Company’s geographic presence, and obtain specialized management and technical talent. To this end, the Company will consider acquiring companies that will help enable the Company to accelerate growth, accelerate technical development and commercialization of True Software Radio™, add complementary product and service lines, diversify the Company into new markets, expand the Company’s geographic presence, acquire capable management, gain new technical capabilities, and/or gain a larger share of the existing market.

The Company will evaluate potential acquisitions based on the points identified in the previous paragraph taking into account the financial size, geographic influence, technical capabilities, management experience, current capital situation and needs of a potential acquisition target. Further, the Company will seek to identify synergies between a potential target and the Company’s own capabilities, strategies and resources. The Company will carefully consider the following factors prior to making any acquisition:

• The culture of the potential target and its compatibility with TechnoConcepts’ values and operating/management approach;

• The target’s existing technology base - does it offer flexible technologies that will expand, not limit TechnoConcepts’ opportunities;

• The target’s customer base - how it can mesh with TechnoConcepts’ client base; and

• The target’s current financing arrangements.

As of December 31, 2005, the Company had 33 full-time employees and 3 independent contractors. We intend to recruit and hire qualified additional personnel as needed to execute the Company’s strategy. None of our current employees are represented by labor unions or are subject to collective bargaining agreements. We believe that our relationship with our employees is excellent.

RESULTS OF OPERATIONS - Period Ended December 31, 2005

Revenues

Net sales for the three months ended December 31, 2005 was $1,106,377. Sales to date generated by our wholly owned subsidiary subsequent to its acquisition on June 2, 2005. Overall sales revenues continue to be subject to heavy competitive pressures negatively impacting selling prices of networking products and delay of products from vendors. Management however, anticipates that revenues will improve compared to the period just ended.

Cost of Sales and Gross Profit

Cost of sales for the three months ended December 31, 2005 was $890,164. Gross profit for the same period was $216,213. The Company's gross profit as a percentage of net sales was 24%. Management feels this will increase due to a different sales mix in the upcoming quarter with increased sales of products with better gross profit. Management anticipates a gross profit of at least 40% in future quarters.

General and Administrative Expenses

We incurred General and Administrative expenses of $2,890,139, an increase of $ 2,430,603 over the same period ended June 30, 2004 in which we incurred $459,536, as a result of increased overhead expenses including investor relations, investment banking fees, consulting costs, engineering costs, research and development costs and professional fees. Also included in this increase is the overhead generated from consolidation with our subsidiary Asante Networks, which totaled $559,591 for the quarter ended December 31, 2005.

Income Taxes

The Company has recorded no provision or benefit for federal and state income taxes for the three month period ended December 31, 2005 and 2004, due primarily to a valuation allowance being established against the Company's net deferred tax assets which consist primarily of net operating loss carry-forwards. The Company has recorded a full valuation allowance against its net deferred tax assets as sufficient uncertainty exists regarding their recoverability.

Off Balance Sheet Arrangements

During the three months ended December 31, 2005 the Company did not engage in any off-balance sheet arrangements as defined in Item 303(c) of the SEC's Regulation S-B.

FINANCIAL CONDITION

Liquidity and Capital Resources.

As of December 31, 2005, the Company has a working capital deficit of $4,981,312, cumulative losses from operations of $17,825,303 and a negative cash flow from operations of $2,591,191 for the quarter ended December 31, 2005. We expect our cash requirements will increase significantly throughout our current fiscal year, as we continue our research and development efforts, hire and expand our staff, expand our leased facilities, and attempt to execute on our business strategy through working capital growth and capital expenditures. The amount and timing of cash requirement swill depend on market acceptance of our products and the resources we devote to researching and developing, marking, selling and supporting our products. We believe that our current cash and cash equivalents on hand, including financing obtained subsequent to December 31, 2005 should be sufficient to fund our operations for at least the next 3 months. Thereafter, if current sources are not sufficient to meet our needs, we may seek additional equity or debt financing. In addition, any material acquisition of complementary businesses, products or technologies or material joint venture could require us to obtain additional equity or debt financing. There can be no assurance that such additional financing would be available on acceptable terms, if at all. If we raise additional funds through the issuance of equity securities the percentage ownership of our stockholders would be reduced. If we are unable to raise sufficient funds on acceptable terms we may not succeed in executing our strategy and achieving our business objective. In particular, we could be forced to limit our product development and marketing activities, forego attractive business opportunities and we may lose the ability to respond to competitive pressures.

In November 2005, the Company negotiated a private placement of convertible preferred stock. Under the negotiated terms, the company has offered up to 2,300 shares of Series B-1 Preferred Stock ("Series B-1 Preferred"), convertible into 2,300,000 shares of our Common Stock (“Common”), at a purchase price of $2,500 per share for a total of $5,750,000. The Series B-1 Preferred has a dividend rate of 5% per annum, payable quarterly, either by cash or through the issuance of common stock at the Company's option. As part of this transaction, the Company will also issue five-year warrants to purchase up to 920,000 shares of the Company's common stock, one-half of the warrants at an exercise price of $3.00 per share and the remaining half at an exercise price of $4.00 per share. As of December 31, 2005, the Company sold 1,075 shares of Series B-1 Preferred (convertible to 1,075,000 shares of Common) at an aggregate purchase price of $2,686,200. The Company issued 431,972 warrants as part of the transaction, with an estimated fair value of $425,725. The fair value of each warrant was estimated on the date of the grant using the Black-Scholes option-pricing model with the following weighted average assumptions for the three months ended December 31, 2005: expected volatility of 90.34%; risk free interest rate of 6.75%; and expected lives of 5 years.

ITEM 3. CONTROLS AND PROCEDURES

We maintain disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e) and 15d-15(e)) that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding the required disclosure.

In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

As required by SEC Rule 13a-15(b), we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the quarterly period covered by this report.

Based on the foregoing, our Chief Executive Officer and Chief Financial Officer have concluded that our current disclosure controls and procedures are effective to provide reasonable assurance that information is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding the required disclosure. The Company was late in the filing of several current reports on Form 8-K during the year. The Company has instituted additional disclosure controls and has hired additional staff and professionals to prevent future late filings.

There has been no significant change in our internal control over financial reporting during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. Legal Proceedings.

We are subject to legal proceedings from time to time in the ordinary course of our business. As of December 31, 2005, we were not aware of any pending or threatened legal proceedings that could, in management’s opinion, have a material adverse impact on operations, assets or financial condition.

The Company was named as an additional defendant in a lawsuit filed during fiscal 2006 in the Superior Court, State of California for the County of Los Angeles for nonpayment of a promissory note issued to the plaintiffs by the primary defendant, TechnoConcepts, a California corporation, which sold some of its assets to the Company in May 2003. The assets purchased by the Company included all rights to the patent application for the Direct Conversion Delta Sigma Receiver. At the time these assets were purchased, the patent application was in contention at the U.S. Patent and Trademark Office and also was the subject of State Court litigation brought by different plaintiffs. The Company litigated these outstanding issues on behalf of TechnoConcepts-California and eventually prevailed. The U.S. Patent and Trademark Office issued U.S. Patent No. 6,748,025 to the Company for the Direct Conversion Delta Sigma Receiver in June 2004. In the opinion of management, this new lawsuit will not have an adverse effect on the Company's financial condition.

ITEM 2. Changes in Securities and Use of Proceeds

Preferred Stock Offering

In November 2005, the Company negotiated a private placement of convertible preferred stock. Under the negotiated terms, the company has offered up to 2,300 shares of Series B-1 Preferred Stock ("Series B-1 Preferred"), convertible into 2,300,000 shares of our Common Stock (“Common”), at a purchase price of $2,500 per share for a total of $5,750,000. The Series B-1 Preferred has a dividend rate of 5% per annum, payable quarterly, either by cash or through the issuance of common stock at the Company's option. As part of this transaction, the Company will also issue five-year warrants to purchase up to 920,000 shares of the Company's common stock, one-half of the warrants at an exercise price of $3.00 per share and the remaining half at an exercise price of $4.00 per share. As of December 31, 2005, the Company sold 1,075 shares of the 2,300 Series B-1 Preferred as described above (convertible to 1,075,000 shares of Common) at an aggregate purchase price of $2,686,200.

ITEM 3. Defaults Upon Senior Securities.

We are to be considered in default of our issued debentures if the following events, among others, occurs: (i) the registration statement registering the shares of common stock issuable upon conversion of the debentures and upon exercise of the warrants issued in connection with the debentures has not been declared effective by the Securities and Exchange Commission prior to September 13, 2005. The registration statement has been filed but has not been declared effective, as of the date of this report, and therefore an event of default has occurred which has not yet been cured. The Company anticipates that the SEC will declare the registration statement effective by the end of February 2006, which will cure the default. (ii) On the first day of each month commencing on December 1, 2005, the Company is required to redeem one-twelfth of the original principal amount of the Debentures. The Company has not made the payment required on December 31, 2005.

ITEM 4. Submission of Matters to a Vote of Security Holders.

None.

ITEM 5. Other Information.

None.

ITEM 6. Exhibits

31.1 Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2 Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32 Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350

SIGNATURES

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.

Date: February 14, 2006
	TECHNOCONCEPTS, INC. (formerly Technology Consulting Partners, Inc.)

		By: /s/ Antonio E. Turgeon

		Antonio E. Turgeon Chief Executive Officer

Date: February 14, 2006


		By: /s/ Michael Handelman

		Michael Handelman Chief Financial Officer

Technoconcepts Inactive 10QSB2006 Q1 Quarterly report (small business)