UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549  FORM 10-QSB

/A   XQUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2006  ___ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____ to ____  ALCO, INC. (Name of small business issuer in its charter)  Nevada0-5110511-3644700(State or other jurisdiction of incorporation)(Commission File Number)(IRS Employer Identification No.)Suite 501, Bank of America Tower
12 Harcourt Road, Central
Hong Kong(Address of Principal Executive Office)Registrants telephone number, including area code:  852-2521-0373  Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act 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....  Applicable only to issuers involved in bankruptcy proceedings during the past five years.  Check whether the issuer has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court.  Yes...  No.....  Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes.. No X  Applicable only to corporate issuers  State the number of shares outstanding of each of the issuers classes of common equity, as of the latest practicable date. At March 31, 2006, the following shares were outstanding: 10,000,000.  Transitional Small Business Disclosure Format (Check one):  Yes...     No X   - 1 -      EXPLANATORY NOTE  We are filing this Form 10-QSB/A for the period ended March 31, 2006, to amend our Financial Statements.  Any items included in the original report on Form 10-QSB for the period ended March 31, 2006, that are not included herein, are not amended and remain in effect as of the date of the original filing thereof.  Additionally, this Form 10-QSB/A does not purport to provide a general update or discussion of any other developments subsequent to the original filing.  The filing of this Form 10-QSB/A shall not be deemed to be an admission that the original filing, when made, included any untrue statement of material fact or omitted to state a material fact necessary to make a statement contained therein not misleading.   PART 1 - FINANCIAL INFORMATION   ITEM 1.  FINANCIAL STATEMENTS AND EXHIBITS  (a) The consolidated financial statements of ALCO, Inc. and subsidiaries (collectively, the "Company"), included herein were prepared, without audit, pursuant to rules and regulations of the Securities and Exchange Commission.  Because certain information and notes normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America were condensed or omitted pursuant to such rules and regulations, these financial statements should be read in conjunction with the financial statements and notes thereto included in the audited financial statements of the Company as included in the Company's Form 10-KSB for the year ended December 31, 2005.                      - 2 -                  ALCO, INC. AND SUBSIDIARIES    CONSOLIDATED FINANCIAL STATEMENTS    MARCH 31, 2006                  - 3 -       CONTENTS      PAGEConsolidated Balance Sheet (unaudited)5Consolidated Statements of Operations (unaudited)7Consolidated Statements of Cash Flows (unaudited)9Notes to Unaudited Financial Statements11                      - 4 -    ALCO, INC. AND SUBSIDIARIES  CONSOLIDATED BALANCE SHEET (UNAUDITED)  March 31,2006
(Restated)ASSETSCurrent Assets:Cash and cash equivalents (Note

3

)$1,645,592Commissions receivable, net (Note

5

)326,935Total current assets1,972,527Property, plant and equipment, net (Note

6

)74,169Other assetsDeposit and prepayment48,127Restricted Cash (Note

4

)1,448,113Due from shareholders  (Note

8

)192Receivable from a sub-broker1,867Total other assets1,498,299Total Assets$3,544,995LIABILITIES AND STOCKHOLDERS' EQUITYCurrent Liabilities:Bank over draft  (Note

7

)$42,289Trade accounts payable306,703Claims payable740,596Other payable (Note

11

)187,162Accrued expenses33,769Due to directors (Note

10

)89,855Income tax payable223,909Total Current Liabilities1,624,283Minority interest16,849Commitments and contingencies (Note

14

)-Stockholders' Equity:Preferred stock, par value $0.01, 5,000,000 shares authorized;no shares issued and outstanding-  - 5 -     Common stock, par value $0.001, 50,000,000 shares authorized;10,000,000 shares issued and outstanding as of March 31, 200610,000Additional Paid-in capital10,513Retained earnings1,883,350Stockholders' Equity1,903,863Total Liabilities and Stockholders' Equity$3,544,995See Notes to Financial Statements                             - 6 -         ALCO, INC. AND SUBSIDIARIES  CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)  For the Three Months EndedMarch 31,20062005(

Restated

)RevenuesCommission income$847,132$713,914Consulting income-4,829Website advertising14,000-Total revenues861,132718,743Operating ExpensesSalaries168,09385,242Travel expenses41,94339,812Rents85,90452,626Bad debt expenses-17,450Depreciation3,6176,185Exchange loss (gain)2,264460Other general and administrative67,56058,252Total Operating Expenses369,381260,027Income (Loss) from Operations491,751458,716Other Income (Expense)Other income4,2364,881Interest income13,0471,714Interest expense(1,191)(1,220)Total operating expenses16,0925,375Income (Loss) before provisionfor Income Taxes and Minority Interest507,843464,091Provision for Income Taxes86,32583,378Income (loss) before Minority Interest421,518380,713Minority Interest9,15810,826  - 7 -       Net Income (Loss)$412,360$369,887Basic and fully diluted earnings per share$0.04$0.04Weighted average shares outstanding10,000,0009

,

9

00,000See Notes to Financial Statements.                                - 8 -      ALCO, INC. AND SUBSIDIARIES  CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)  For the Three Months EndedMarch 31,2006
(Restated)2005
(Restated)Operating ActivitiesNet income (loss)$412,360$369,887Adjustments to reconcile net income (loss) tonet cash provided (used) by operating activities:Depreciation3,6176,185Minority interest (income)9,15810,826Adjustment of minority interestChanges in operating assets and liabilities:(Increase)/Decrease in commission receivable (net)(187,615)(205,871)(Increase)/Decrease in restricted cash(99,203)(9,122)(Increase)/Decrease in deposit and prepayment21,442-(Increase)/Decrease in other receivable-(65,340)Increase/(Decrease) in accounts payable(496,705)196,333Increase/(Decrease) in claims payable205,961(106,583)Increase/(Decrease) in other payable155,5144,854Increase/(Decrease) in accrued expenses(7,000)(2,072)Increase/(Decrease) in income tax payable86,32568,262Net cash provided by operating activities103,854267,359Investing ActivitiesPurchase of fixed assets(50,153)(810)Net cash (used) by investing activities(50,153)(810)Financing ActivitiesBank overdraft-44,162Repayment of bank overdraft(3,614)-Loan from obligations under finance leases-(4,242)Repayment of shareholders' loan(25,642)(66,666)Loan from directors-13,039Net cash provided (used) by financing activities(29,256)(13,707)Increase in cash24,446252,842Cash at beginning of period1,621,146750,805Cash at end of period$1,645,592$1,003,647  - 9 -       Supplemental Disclosures of Cash Flow Information:Cash paid (receive) during year for:Interest$1,191$1,220Income taxes$-$15,116See Notes to Financial Statements.                        - 10 -      ALCO, INC. AND SUBSIDIARIES  NOTES TO FINANCIAL STATEMENTS  (UNAUDITED)   Note

1

- ORGANIZATION AND OPERATIONS Description of BusinessALCO, Inc., (the "Company") was incorporated under the laws of the State of Nevada on June 7, 1999 as Seahorse, Inc. and changed its name to Lotus Capital Corp. on September 20, 2004.  The Company changed its name to ALCO, Inc. on January 7, 2006.The Company is principally engaged in the marine insurance brokerage business in the Asia Pacific region, through its wholly owned subsidiary, AL Marine Holdings (BVI), Ltd., a British Virgin Islands corporation ("AL Marine").Under the terms of the Agreement for the Share Exchange, Lotus has agreed to acquire all of the issued and outstanding stock of AL Marine and $50,000 in a share exchange transaction, in return for the issuance of 9,766,480 shares of stock of Lotus. Upon closing under the Agreement for Share Exchange, AL Marine would become a wholly-owned subsidiary of Lotus.AL Marine is the 100% owner of Andrew Liu and Co., Ltd., a corporation principally engaged in the business of marine insurance brokerage in Asia.  AL Marine owns 60% of Chang An Consultants Ltd., a joint venture with China Changjiang National Shipping Corporation (CSC Group) that serves as a vehicle for the provision of marine insurance brokerage and other marine business services by AL Marine.  AL Marine owns 85% of EduShipAsia Ltd.  In 2005 and 2004, EduShipAsia Ltd. was appointed as an exclusive agent by the Institute of Chartered Shipbrokers (UK) ("ICS") to set up ICS's first distant learning center in Shanghai, PRC.ALCO, Inc. and AL Marine are hereafter collectively referred to as the Company.          - 11 -      ALCO, INC. AND SUBSIDIARIES  NOTES TO FINANCIAL STATEMENTS  (UNAUDITED)   Note

1

- ORGANIZATION AND OPERATIONS (continued)  Control by Principal StockholdersThe directors, executive officers, their affiliates and related parties own, beneficially and in the aggregate, the majority of the voting power of the outstanding share capital of the Company. Accordingly, directors, executive officers and their affiliates, if they voted their shares uniformly, would have the ability to control the approval of most corporate actions, including approving significant expenses, increasing the authorized capital stock and the dissolution, merger or sale of the Company's assets.  Note

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- SIGNIFICANT ACCOUNTING POLICIES  Economic and Political RisksThe Company faces a number of risks and challenges since its assets are located in Hong Kong,  a Special Administrative Region of the People's Republic of China ("PRC"), and its revenues are derived from its operations therein.  The PRC is a developing country with an early stage market economic system, overshadowed by the state.  Its political and economic systems are very different from the more developed countries and are in a state of change.  The PRC also faces many social, economic and political challenges that may produce major shocks and instabilities and even crises, in both its domestic arena and in its relationships with other countries, including the United States.  Such shocks, instabilities and crises may in turn significantly and negatively affect the Company's performance.Basis of PresentationThe consolidated financial statements include the accounts of the Company and all its majority-owned subsidiaries which require consolidation.  Inter-company transactions have been eliminated in consolidation.The accompanying financial statements are prepared in accordance with generally accepted accounting principles in the United States of America ("US GAAP").  This basis of accounting differs from that used in the statutory accounts of the Company, which are prepared in accordance with the "Hong Kong Accounting Standard" ("HKAS").Certain accounting principles, which are stipulated by US GAAP, are not applicable in the HKAS.  The difference between HKAS accounts of the Company and its US GAAP financial statements is immaterial.   - 12 -      ALCO, INC. AND SUBSIDIARIES  NOTES TO FINANCIAL STATEMENTS  (UNAUDITED)   Note

2

- SIGNIFICANT ACCOUNTING POLICIES (continued)  The Company maintains its books and accounting records in Hong Kong dollar ("HK$"), which is determined as the functional currency.  Assets and liabilities of the Company are translated at the prevailing exchange rate at each year-end. Contributed capital accounts are translated using the historical rate of exchange when capital is injected. Income statement accounts are translated at the average rate of exchange during the year. Translation adjustments arising from the use of different exchange rates from period to period are included in the cumulative translation adjustment account in shareholders' equity. Gain and losses resulting from foreign currency transactions are included in operations.Concentration of Credit RiskFinancial instruments which subject the Company to concentrations of credit risk consist principally of accounts receivable and cash.  Exposure to losses on receivables is dependent on each customer's financial condition.  The Company controls its exposure to credit risk through a process of credit approvals, credit limits and monitoring procedures, establishing allowances for anticipated losses.Use of EstimatesThe preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period.  Actual results, when ultimately realized could differ from those estimates.Significant EstimatesSeveral areas require significant management estimates relating to uncertainties for which it is reasonably possible that there will be a material change in the near term. The more significant areas requiring the use of management estimates relate to the valuation of accounts receivable and payable, equipment, accrued liabilities, and the useful lives for amortization and depreciation.   - 13 -      ALCO, INC. AND SUBSIDIARIES  NOTES TO FINANCIAL STATEMENTS  (UNAUDITED)   Note

2

- SIGNIFICANT ACCOUNTING POLICIES (continued) Revenue Recognition Commission revenue is recognized as of the effective date of the insurance policy or the date the customer is billed, whichever is later. At that date, the earnings process has been completed and the Company can reliably estimate the impact of policy cancellations based upon historical cancellation experience adjusted by known circumstances. The policy cancellation reserve is periodically evaluated and adjusted as necessary. Subsequent commission adjustments are recognized upon notification from the insurance companies. Commission revenues are reported net of commissions paid to sub-brokers. Consulting income is recognized as services are rendered.  Cash and Cash Equivalents The Company invests idle cash primarily in money market accounts, certificates of deposit and short-term commercial paper. Money market funds and all highly liquid debt instruments with an original maturity of three months or less are considered cash equivalents.  Commissions Receivable Commissions receivable are reported as net of premiums receivable from customers and premiums payable to  respective insurers and commissions payable to sub-brokers, if any, then less an allowance for any doubtful amounts.  We made allowance for doubtful accounts based on a review of all outstanding amounts on a monthly basis. We analyze the aging of receivable balances, historical bad debts, customer concentrations, customer credit-worthiness, current economic trends and changes in our customer payment terms. Significant changes in customer concentration or payment terms, deterioration of customer credit-worthiness or weakening in economic trends could have a significant impact on the collectibility of receivables and the allowance. If the financial condition of our customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances will be made.  Property, Plant and Equipment Property, plant and equipment are carried at cost.  The cost of repairs and maintenance is expensed as incurred; major replacements and improvements are capitalized.  When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in the income statement in the year of disposition.  Depreciation is calculated on a straight-line basis over the estimated useful life of the assets.  The annual percentages applied are: Motor vehicles20%Furniture and fixtures15%Office equipment15%Leasehold improvements20%  - 14 -      ALCO, INC. AND SUBSIDIARIES  NOTES TO FINANCIAL STATEMENTS  (UNAUDITED)   Note

2

- SIGNIFICANT ACCOUNTING POLICIES (continued)  Accounts Payable and Claims PayableIn its capacity as an insurance agent or broker, the Company collects premiums from insures and, after deducting its commissions, remits the premiums to the respective insurers; the Company also collects claims or refunds from insurers on behalf of insures. Unremitted insurance premiums and claims are held in a fiduciary capacity. The obligation to remit premiums is recorded as accounts payable and the obligation to remit claims and refunds is recorded as claims payable on the balance sheet.Pension CostsMandatory contributions are made to the Hong Kong's Mandatory Provident Fund (MPF), based on a percentage of the employees' basic salaries.  The cost of these payments are charged to the profit and loss accounts as they become payable in accordance with the rule of the MPF Scheme.  The employer contributions vest fully with the employees when contributed into the MPF Scheme.Income TaxesIncome tax expense is based on reported income before income taxes. Deferred income taxes reflect the effect of temporary differences between assets and liabilities that are recognized for financial reporting purposes and the amounts that are recognized for income tax purposes. In accordance with Statement of Financial Accounting Standards (SFAS) No. 109, "Accounting for Income Taxes," these deferred taxes are measured by applying currently enacted tax laws.  The effective tax rate was 17.5% in 2006 and 2005.The Company did not provide any current or deferred income tax provision or benefit for any period presented to date because book income is substantially equal to taxable income, with only minor timing differences with regard to the depreciation of fixed assets. Management has determined that any deferred tax asset or liability is inconsequential, and not material to the financial statements.Fair Value of Financial InstrumentsThe carrying value of financial instruments, including cash and cash equivalents, receivables, accounts payable and accrued expenses, approximates their fair value at March 31, 2006, due to the relatively short-term nature of these instruments.  - 15 -      ALCO, INC. AND SUBSIDIARIES  NOTES TO FINANCIAL STATEMENTS  (UNAUDITED)   Note

2

- SIGNIFICANT ACCOUNTING POLICIES (continued) Interim Financial Information
The unaudited interim financial statements have been prepared in accordance with United States generally accepted accounting principles for interim financial information. In the opinion of management, all adjustments considered necessary for a fair presentation of the financial position, results of operations and cash flows as at March 31, 2006, and 2005, have been included.  Readers of these financial statements should note that the interim results for the three-month period ended March 31, 2006, are not necessarily indicative of the results that may be expected for the fiscal year as a whole.  Valuation of Long-Lived assetsThe Company periodically analyzes its long-lived assets for potential impairment, assessing the appropriateness of lives and recoverability of unamortized balances through measurement of undiscounted operating cash flows on a basis consistent with US GAAP.Related Party TransactionsThe captions "Due from directors" and "Due from shareholders" represent loans receivable that are unsecured, non-interest bearing and have no fixed terms of repayment, and therefore are not considered current assets.

The captions "Due to directors" and  "Due to shareholders" represent loans payable that are unsecured, non-interest bearing and have no fixed terms of repayment, therefore, deemed payable on demand.The Company rents office space in Hong Kong and Shanghai from a company owned by directors of the Company.Foreign Currency and Other Comprehensive IncomeThe accompanying financial statements are presented in United States (US) dollars. The functional currency is the Hong Kong dollar (HK$). The financial statements are translated into US dollars from HK$ at period end exchange rates for assets and liabilities, and weighted average exchange rates for revenues and expenses. Capital accounts are translated at their historical exchange rates when the capital transactions occurred.

The Hong Kong Monetary Authority (HKMA), Hong Kong's central bank, maintains a Linked Exchange Rate System since 1983. The HKMA operates Convertibility Undertakings on both the strong side and the weak side of the Linked Rate of US$1: HK$7.8.  In fact, the exchange rate for HK$ to US dollars has varied by only 100ths during the period of 2006 and 2005. Thus, the consistent exchange rate used has been 7.80 HK$ per each US dollar. Since there have been no greater fluctuations in the exchange rate, there is no gain or loss from foreign currency translation and no resulting other comprehensive income or loss.Foreign currency transactions are those that required settlement in a currency other than HK$. Gain or loss from foreign currency transactions, or exchange loss, are recognized in income in the period they occur.  - 16 -      ALCO, INC. AND SUBSIDIARIES NOTES TO FINANCIAL STATEMENTS (UNAUDITED)   Note

2

- SIGNIFICANT ACCOUNTING POLICIES (continued)  Reverse stock splitOn August 11, 2005, our Board of Directors approved a 10-for-1 reverse stock split of our outstanding shares of capital stock.  The reverse stock split became effective on September 26, 2005.  All share and per share information included in these consolidated financial statements have been adjusted to reflect this reverse stock split.Earnings (Loss) Per ShareBasic earnings (loss) per share is computed by dividing income (loss) available to common shareholders by the weighted-average number of common shares outstanding during the period.  Diluted earnings per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive.  As of March 31, 2006, there are no potentially dilutive securities issued and outstanding.  Note

3

- CASH AND CASH EQUIVALENTS

 (restated)  Cash consists of the following:March 31,2006Cash on hand$303Cash in BankBank of America1,639,881Bank of China5,408$1,645,592Cash balances are held principally at one financial institution and are not insured.  The Company believes it mitigates its risk by investing in or through major financial institutions.  Recoverability is dependent upon the performance of the institution.  Note

4

- RESTRICTED CASH

 (restated)  Restricted cash are cash balances held by a bank, mainly consisting of premium collected from customers and payable to insurers, and claims received from insurers and payable to policyholders.

When we receive a premium from a customer, we debit the lam sum amount into one bank account and establish a schedule to keep tract of the amount of premium payable to the insurer. At the monthly closing, we reclassify the amount of premium payable to insurers as restricted cash.  Also, when we receive a claim on behalf of a policyholder, we debit restricted cash, and credit claim payable and other payable, if necessary.  The restricted cash balance was $1,448,113 as of March 31, 2006.  - 17 -         ALCO, INC. AND SUBSIDIARIES  NOTES TO FINANCIAL STATEMENTS  (UNAUDITED)  Note

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- COMMISSIONS RECEIVABLE Commissions receivable consist of the following:March 31,2006Commissions receivable$421,461Less: allowances for doubtful accounts94,526$326,935  Note

6

- PROPERTY, PLANT AND EQUIPMENT  Property, Plant and Equipment consist of the following at March 31,2006:Furniture and fixtures$152,179Office equipment101,867Leasehold improvements86,311340,356Less: Accumulated depreciation266,187$74,169Depreciation expense for the three months ended March 31, 2006 and 2005 was $3,617 and $6,185, respectively.  Note

7

- BANK OVERDRAFT  The Bank Over Draft consist of the following as of March 31, 2006:LoanMonthlyFinancial InstitutionsAmountDurationInterest RateCollateral *United Oversea BankRepayable on demand3% over Prime Lending rate$12,821Repayable on demand2% over Prime Lending rate29,468$42,289(*) Pledged of GBP 26,000 certificate of deposit (CD) in the name of third parties and Personal guarantee for $12,821 signed by third parties    - 18 -      ALCO, INC. AND SUBSIDIARIES  NOTES TO FINANCIAL STATEMENTS  (UNAUDITED)   Note

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- DUE FROM SHAREHOLDERS  Due to shareholders consist of the following:March 31,2006Chiang Wei Heng Henry$128Chin Tsu- Kuang64$192  Note

9

- DUE TO DIRECTORS  Due to directors consist of the following:March 31,2006Andrew Liu Fu Kang$89,855$89,855  Note

10

- RELATED PARTY TRANSACTION  The Company rents office space in Hong Kong and Shanghai from companies owned by directors of the Company.  The relevant rent expenses consist of following:March 31,20062005LocationLandlordHK Office Room 501 and 502AFortune Ocean Ltd$26,308$27,835HK Office Room 502BFortune Ocean Ltd8,308-Shanghai Office and quarterFortune Ocean and Andrew Liu Fu Kang15,385-First Pacific Development LtdHK Director (Andrew) quarter5,000-$55,000$27,835   - 19 -      ALCO, INC. AND SUBSIDIARIES  NOTES TO FINANCIAL STATEMENTS  (UNAUDITED)  Note

11

- OTHER PAYABLE  Other payable consist of the following:March 31,2006Customer Deposit$176,562Deposit for lease payable10,600$187,162  Note

12

- INCOME TAXES The Company's effective tax rate for the years ended March 31, 2006 and 2005 was 17.50%.The provisions for income taxes for each of the two years ended March 31, 2006 and 2005 are summarized as follows:Hong Kong only:20062005Current$86,325$83,378Deferred--$86,325$83,378  Note

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- COMMON STOCK  During the quarter ended September 30, 2005, the Company issued 100,000 shares of common stock in reliance upon exemptions from registration under the Securities Act of 1933.  The shares were issued to Mid-Continental Securities Corporation on or about August 5, 2005, for total consideration of $40,000, or $0.40 per share.  The consideration included cash advances of $20,000 made by Mid-Continental Securities Corporation for payment of on-going legal, accounting and operational expenses, and services valued at $20,000 in conjunction with completing a name change, preparation and filing of a registration statement on Form 10 - SB under the Securities Act of 1934, and preparation and filing of required periodic under the Securities Exchange Act of 1934.   The shares were issued in reliance upon an exemption from registration provided by Section 4(2) under the Securities Act of 1933, and Rule 506 of Regulation D adopted under the Securities Act of 1933.  Note

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- COMMITMENTS AND CONTINGENCIES  The Company's business operations exist solely in the PRC and are subject to significant risks not typically associated with companies in North America and Western Europe.  These include risks associated with, among others, the political, economic and legal environments and foreign currency limitations. The Company's results may thus be adversely affected by changes in the political and social conditions in the PRC, and by changes in governmental policies, laws, regulations, anti-inflationary measures, currency conversion and remittance limitation, and rates and methods of taxation, among other things.  - 20 -       ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATION  DISCLAIMER REGARDING FORWARD-LOOKING STATEMENTS  Certain statements in this report, including statements in the following discussion, which are not statements of historical fact, are what are known as forward-looking statements, which are basically statements about the future.  For that reason, these statements involve risk and uncertainty since no one can accurately predict the future.  Words such as plans, intends, will, hopes, seeks, anticipates, expects, and the like, often identify such forward-looking statements, but are not the only indication that a statement is a forward-looking statement.  Such forward-looking statements include statements concerning our plans and objectives with respect to the present and future operations of the Company, and statements which express or imply that such present and future operations will or may produce revenues, income or profits.  Numerous factors and future events could cause the Company to change such plans and objectives, or fail to successfully implement such plans or achieve such objectives, or cause such present and future operations to fail to produce revenues, income or profits.  Therefore, the reader is advised that the following discussion should be considered in light of the discussion of risks and other factors contained in this report on Form 10QSB and in the Companys other filings with the Securities and Exchange Commission.  No statements contained in the following discussion should be construed as a guarantee or assurance of future performance or future results.  THREE MONTHS ENDED MARCH 31, 2006 COMPARED WITH THREE MONTHS ENDED MARCH 31, 2005  RESULTS OF OPERATIONS  Revenues for the three months ending March 31, 2006 were $861,132, as compared to  revenues of $718,743 for the same period in 2005.  This increase of $142,389, or approximately 20%, was the result of greater commission income due to premium increases and website advertising income.  Net income before tax and minority interest for the three months ending March 31, 2006 was $507,843 compared to $464,091 for the same period of 2005.  The increase in pre-tax profit of $43,752 was due to an increase in commission income during the three months ended March 31, 2006.  Operating expenses for the three months ending March 31, 2006 were $369,381 compared to $260,027 for the same period in 2005.  The increase of $109,354, or approximately 42%, was mainly due to increases in rental and salary expenses during the three months ended March 31, 2006.  LIQUIDITY AND CAPITAL RESOURCES  For the three months ended March 31, 2006, cash provided by operating activities totaled $103,854. This was primarily due to net income during the period plus an increase in claims payable, taxation and other payables as well as a decrease in deposits and prepayments, partially offset by an increase in commissions receivable, restricted cash and a decrease in trade accounts payable and accrued expenses. For the three months ended March 31 2005, cash provided by operating activities totaled $267,359. This was mainly due to a net income plus an increase in trade accounts  - 21 -      payable, other payable and taxation, partially offset by an increase commission receivable, restricted cash, other receivable, as well as decrease claims payable and accrued expenses. For the three months ended March 31, 2006, cash used in investing activities amounted to $50,153. The use of funds was for the purchases of office equipment. For the three months ended March 31, 2005, cash used in investing activities amounted to $810. The use of funds was for the purchases of office equipment  For the three months ended March 31 2006 cash used in financing activities amounted to $29,256 which was due to repayment of shareholders loan and repayment of bank overdraft. For the three months ended March 31 2005 cash used in finance activities amounted to $13,707 which was due to repayment of obligations under finance lease, repayment of shareholders loan and loan from bank overdraft and loan from director.  For the three months ended March 31, 2006, the Groups balance sheet reflects current and total assets of $3,544,995, and total liabilities of $1,624,283. The Group has bank and cash equivalent of approximately $1,645,592 as of March 31, 2006. The Group has sufficient funds to satisfy its financial commitments and working capital requirements. During the period, the Group has no material commitments for capital expenditures and off-balance sheet arrangements.  The Company is in the process of raising additional capital through the sale of securities to fund further expansion in the region.   ITEM 3. CONTROLS AND PROCEDURES  The Company's Chief Executive Officer and Chief Financial Officer (or those persons performing similar functions), after evaluating the effectiveness of the Company's disclosure controls and procedures (as defined in Rules 13a-14(c) and 15d-14(c) under the Securities Exchange Act of 1934, as amended) as of a date within 90 days before the filing date of this quarterly report (the "Evaluation Date"), have concluded that, as of the Evaluation Date, the Company's disclosure controls and procedures were effective to ensure the timely collection, evaluation and disclosure of information relating to the Company that would potentially be subject to disclosure under the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder. There were no significant changes in the Company's internal controls or in other factors that could significantly affect the internal controls subsequent to the Evaluation Date.  PART II - OTHER INFORMATION  ITEM 1. LEGAL PROCEEDINGS None.   ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDSUNREGISTERED SALES OF EQUITY SECURPROCEEDS  ITEM 3. DEFAULTS UPON SENIOR SECURITIES None.  ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS  ITEM 5. OTHER INFORMATION  - 22 -      None  ITEM 6. EXHIBITS  The following exhibits are filed herewith:  3.1 Articles of Incorporation (herein incorporated by reference from Registration Statement on Form 10-SB filed with the Securities and Exchange Commission on January 6, 2005).  3.1(b) Amendment to Articles of Incorporation (herein incorporated by reference from Registration Statement on Form 10-SB filed with the Securities and Exchange Commission on January 6, 2005).  3.2 Bylaws (herein incorporated by reference from Registration Statement on Form 10-SB filed with the Securities and Exchange Commission on January 6, 2005).  31.1 Certifications pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.  31.2 Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.  32.1 Certifications pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.  32.2 Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.      - 23 -       SIGNATURES  In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.   ALCO, INC.   By: /s/ Andrew Liu, CEO and Chairman  Date:   

November 10

, 2006   By: /s/ Yip Kam Ming, Chief Financial Officer  Date:  

November 10

, 2006   By: /s/ John Liu, Director  Date:   

November 10

, 2006    - 24 -