**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**WASHINGTON,
      D.C. 20549**





**FORM
      10-QSB**





(Mark
      One)





x
            QUARTERLY
                REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE
                ACT OF
                1934.





FOR
                THE QUARTERLY PERIOD ENDED SEPTEMBER 30,
                2006





o
            TRANSITION
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                ACT OF
                1934.





For
      the
      transition period from ____________ to ____________





Commission
      File Number 0-31193





USIP.COM,
      INC.


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




NEVADA
            16-1583162(State
                or other jurisdiction of
            (I.R.S.
                Employerincorporation
                or organization)
            Identification
                No.)





HARBIN
      DONGDAZHI STREET 165,


HARBIN
      150001


PEOPLE’S
      REPUBLIC OF CHINA


(Address
      of principal executive offices)





(011)-86-451-53948666


(Issuer's
      telephone number)





7325
      OSWEGO ROAD


LIVERPOOL,
      NEW YORK 13090


(315)
      451-7515


(Former
      name, former address and former fiscal year


if
      changed since last report)




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





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act).


Yes
o 
No
x





State
      the
      number of shares outstanding of each of the issuer's classes of common equity,
      as of the latest practicable date: 49,643,222 shares of Common Stock, $.0001
      par
      value, were outstanding as of September 30, 2006





Transitional
      Small Business Disclosure Format (check one); Yes o  No x










**PART
      I - FINANCIAL INFORMATION**





**Item
      1.**  **Financial
      Statements**





**USIP.COM,
      INC.**


**INDEX
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**


**SEPTEMBER
      30, 2006 & 2005**


**(UNAUDITED)**





**TABLE
      OF CONTENTS**




**Page(s)**Condensed
                Consolidated Balance Sheet as of September 30, 2006(Unaudited)
            
            
            3Condensed
                Consolidated Statements of Operations for the Nine andThree
                months Ended September 30, 2006 and 2005 (Unaudited)
            
            
            4Condensed
                Consolidated Statements of Cash Flows for the Nine MonthsEnded
                September 30, 2006 and 2005 (Unaudited)
            
            
            5-6Notes
                to Condensed Consolidated Financial Statements (Unaudited)
            
            
            7-11




2







**USIP.COM,
                INC.****CONDENSED
                CONSOLIDATED BALANCE SHEET (UNAUDITED)****SEPTEMBER
                30, 2006****ASSETS**Current
                assets:Cash
                and cash equivalents
            
            $
            1,560,653Accounts
                receivable
            
            
            436,945Inventory
            
            
            36,826Prepaid
                expense
            
            
            8,669Total
                Current Assets
            
            
            2,043,093Property
                and equipment, net of accumulated depreciation
            
            
            1,499,467Other
                assets:Construction
                in progress
            
            
            2,616,162Advances
                to suppliers
            
            
            2,469,054Other
                receivables
            
            
            650,836Total
                Other Assets
            
            
            5,736,052Net
                assets of discontinued operations
            
            
            49,270Total
                Assets
            
            $
            9,327,882**LIABILITIES
                AND STOCKHOLDERS' EQUITY (DEFICIT)**Current
                liabilities:Loan
                payable - current portion
            
            $
            1,002,843Accounts
                payable
            
            
            230,905Taxes
                payable
            
            
            926,023Accrued
                expenses and other payables
            
            
            248,621Note
                payable - related party
            
            
            5,000,000Total
                Current Liabilities
            
            
            7,408,392Long-term
                liabilities:Loan
                payable - net of current portion
            
            
            2,192,119Net
                liabilities of discontinued operations
            
            
            122,831Total
                Liabilities
            
            
            9,723,342Stockholders'
                Equity (Deficit)Common
                stock, $0.0001 par value, 100,000,000 shares authorized;49,632,222
                shares issued and outstanding at September 30, 2006
            
            
            4,963Additional
                paid in capital
            
            
            -Accumulated
                other comprehensive income
            
            
            357,459Retained
                earnings (Deficit)
            
            
            (757,882
            )Total
                Stockholders' Equity (Deficit)
            
            
            (395,460
            )Total
                Liabilities and Stockholders' Equity (Deficit)
            
            $
            9,327,882




The
      accompanying notes are an integral part to this statement.


3




**USIP.COM,
                INC.****CONDENSED
                CONSOLIDATED STATEMENTS OF OPERATIONS****(UNAUDITED)****Nine-Months
                Ended**
            
            **Three-Months
                Ended****September
                30,**
            
            **September
                30,**
            
            **September
                30,**
            
            **September
                30,****2006**
            
            **2005**
            
            **2006**
            
            **2005**Sales
            
            $
            2,418,642
            
            $
            1,431,186
            
            $
            579,981
            
            $
            427,813Cost
                of Sales
            
            
            305,001
            
            
            258,664
            
            
            70,035
            
            
            96,035Gross
                Profit
            
            
            2,113,641
            
            
            1,172,522
            
            
            509,946
            
            
            331,778Operating
                ExpensesSelling,
                general and administrative
            
            
            249,918
            
            
            159,809
            
            
            109,619
            
            
            37,099Operating
                income
            
            
            1,863,723
            
            
            1,012,713
            
            
            400,327
            
            
            294,679Other
                Income and ExpensesInterest
                income
            
            
            2,535
            
            
            2,386
            
            
            1,801
            
            
            2,406Interest
                expense
            
            
            (33,302
            )
            
            (61,760
            )
            
            (7,496
            )
            
            (45,151
            )Other
                expense
            
            
            (24,970
            )
            
            -
            
            
            (25,109
            )
            
            -Total
                other income (expenses)
            
            
            (55,737
            )
            
            (59,374)
            -
            
            (30,804
            )
            
            (42,745
            )Income
                Before Income Taxes
            
            
            1,807,986
            
            
            953,339
            -
            
            369,523
            
            
            251,934Provision
                for Income Taxes
            
            
            502,398
            
            
            322,955
            
            
            158,699
            
            
            83,138Net
                Income
            
            $
            1,305,588
            
            $
            630,384
            
            $
            210,824
            
            $
            168,796Basic
                income per common share
            
            $
            0.03
            
            $
            0.03
            
            $
            0.00
            
            $
            0.01Weighted
                average common shares
            
            
            45,391,661
            
            
            25,000,000
            
            
            45,391,661
            
            
            25,000,000




The
      accompanying notes are an integral part to this statement.


4









**USIP.COM,
                INC.****CONDENSED
                CONSOLIDATED STATEMENTS OF CASH FLOWS****(UNAUDITED)****FOR
                THE NINE MONTHS ENDED SEPTEMBER 30,****2006**
            
            **2005**Cash
                Flows From Operating Activities:Net
                income
            
            $
            1,305,588
            
            $
            630,384Adjustments
                to reconcile net income to net cashprovided
                by operating activities:Depreciation
                and amortization
            
            
            225,060
            
            
            121,267Changes
                in operating assets and liabilities:Accounts
                receivable
            
            
            241,450
            
            
            (742,190
            )Inventory
            
            
            56,333
            
            
            (36,406
            )Other
                receivable
            
            
            136,533
            
            
            (412,346
            )Advance
                to suppliers
            
            
            331,752
            
            
            (127,406
            )Accounts
                payable
            
            
            (19,603
            )
            
            11,953Unearned
                revenue
            
            
            (121,872
            )
            
            19,515Taxes
                payable
            
            
            511,773
            
            
            328,431Accrued
                expenses and other payables
            
            
            (5,770
            )
            
            1,108,066Net
                cash provided by operating activities
            
            
            2,661,244
            
            
            901,268Cash
                Flows From Investing Activities:Purchase
                of equipment
            
            
            (402
            )
            
            (284,573
            )Additions
                to construction in progress
            
            
            (937,732
            )
            
            (1,336,576
            )Net
                cash (used in) investing activities
            
            
            (938,134
            )
            
            (1,621,149
            )Cash
                Flows From Financing ActivitiesProceeds
                received from additional paid-in capital
            
            
            -
            
            
            363,075Payment
                on long-term debt
            
            
            (724,944
            )
            
            (724,944
            )Payment
                for loan from related parties
            
            
            (324,032
            )
            
            (177,505
            )Net
                cash (used in) financing activities
            
            
            (1,048,976
            )
            
            (539,374
            )Effect
                of exchange rate changes on cash and cash equivalents
            
            
            65,378
            
            
            153,106Increase
                (Decrease) in cash and cash equivalents
            
            
            739,512
            
            
            (1,106,149
            )Cash
                and Cash Equivalents - Beginning of period
            
            
            821,141
            
            
            2,246,295Cash
                and Cash Equivalents - Ending of period
            
            $
            1,560,653
            
            $
            1,140,146Supplemental
                Disclosure of Cash Flow Information:Cash
                paid during the period for:Interest
            
            $
            33,302
            
            $
            61,760Income
                taxes
            
            $
            -
            
            $
            -Supplemental
                Disclosure of Non-cash Investing and financing activities:Stock
                issued for cancellation of debt
            
            $
            241,278
            
            $
            -




The
      accompanying notes are an integral part to this statement.


5




**USIP.COM,
                INC.****CONDENSED
                CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)****FOR
                THE NINE MONTHS ENDED SEPTEMBER 30,****2006**
            
            **2005**SUMMARY
                OF ACQUISITION OF BUSINESSAssets
                acquired (after allocation of $900,261 of negativegoodwill
                to fixed assets)
            
            $
            9,131,400
            
            
            -Liabilities
                / accrued expenses assumed
            
            
            (4,131,400
            )Net
                assets acquired
            
            
            5,000,000Notes
                issued for 100% ownership
            
            
            (5,000,000
            )Total
            
            $
            -




The
      accompanying notes are an integral part to this statement.


6




**USIP.COM,
      INC.**




**CONDENSED
      NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**




**NOTE
      1. ORGANIZATION AND NATURE OF BUSINESS**




USIP.COM,
      Inc. (“the Company”) was originally incorporated under the laws of the State of
      Utah. The Company was later merged into USIPNV, Inc., A Nevada Corporation
      and
      the surviving corporation continues under the name of USIP.COM, Inc.




On
      September 6, 2006, the Company entered into a share purchase agreement with
      each
      of Messrs. Yun Wang, Shibin Jiang and Bin Feng (“Purchasers”). Pursuant to the
      share purchase agreement, the Company agreed to sell to Purchasers 50.1% of
      the
      Company’s total 49,643,222 shares of issued and outstanding common stock.




On
      the
      same day, the Company also signed a Share Exchange Agreement with American
      Eco-Environment Corporation (“AEEC”), a privately held Delaware holding
      Corporation, whereby, the Company agreed to acquire all of the outstanding
      capital stock of AEEC by issuing a $5,000,000 face value convertible notes
      to
      the shareholders of AEEC, namely, Yun Wang, Shibin Jiang and Bin Feng. The
      notes
      will automatically covert upon the occurrence of the Reverse Split into
      9,049,399 post-split shares of common stock of the Company. The Notes also
      carry
      a total of 1,494,144,955 votes and have a right to vote along with the common
      stock on all matters.




As
      a
      result of these transactions, there has been a change in control of the Company
      as the shareholders of AEEC now constitute the majority shareholders of the
      Company.




For
      accounting purposes, the transaction has been accounted for as a reverse
      acquisition under the purchase method of accounting. Accordingly, AEEC was
      treated as the continuing entity for accounting purposes. Following the merger,
      the officers and directors of USIP.COM resigned and were replaced with the
      officers and directors of AEEC.




AEEC
      operates its business through its wholly-owned subsidiary Harbin Yifeng
      Eco-Environment Co., Ltd. (“Harbin Yifeng”), a corporation organized and
      existing under the laws of the People’s Republic of China (“PRC”). Harbin Yifeng
      is an environmental engineering company in the PRC that specializes in providing
      non-hazardous municipal solid waste processing and disposal services in the
      northeast regions of China.


7




**NOTE
      2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**




**INTERIM
      REPORTING**




The
      unaudited financial statements as of September 30, 2006 and for the nine months
      then ended reflect, in the opinion of management, all adjustments (which include
      only normal recurring adjustments) necessary to fairly state the financial
      position and results of operations for the nine months. Operating results for
      interim periods are not necessarily indicative of those to be expected for
      full
      years.




**MANAGEMENT
      ESTIMATES**




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




**PRINCIPLES
      OF CONSOLIDATION**




The
      accompanying consolidated Financial Statements include the accounts of USIP.COM,
      Inc. and its wholly owned subsidiaries, American Eco-Environment Corporation,
      Datone, Inc. and NB Telecom, Inc. Inter-company transactions and balances have
      been eliminated in consolidation and combination.




**CONCENTRATIONS
      OF CREDIT RISK**





After
      the
      reverse acquisition transaction, the operations of the Company are now located
      in the PRC. Accordingly, the Company’s business, financial condition, and
      results of operations may be influenced by the political, economic, and legal
      environments in the PRC, in addition to the general state of the PRC economy.
      The Company's operations in the PRC are subject to special considerations and
      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 legal environments and foreign
      currency exchange.





The
      Company’s results may be adversely affected by changes in the political and
      social conditions in the PRC, and by changes in governmental policies with
      respect to laws and regulations, anti-inflationary measures, currency conversion
      and remittance abroad, and rates and methods of taxation, among other
      things.




8




**NOTE
      2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)**




**FOREIGN
      CURRENCY TRANSLATION**





The
      functional currency for the Company’s operations in China is the Renminbi
      (“RMB”). Foreign currency transactions are translated at the applicable rates of
      exchange in effect at the transaction dates. Monetary assets and liabilities
      denominated in foreign currencies at the balance sheet date are translated
      at
      the applicable rates of exchange in effect at that date. Revenues and expenses
      are translated at the average exchange rates in effect during the reporting
      period.





Translation
      adjustments arising from the use of different exchange rates from period to
      period are included as a component of stockholders' equity as "Accumulated
      Other
      Comprehensive Income". Gains and losses resulting from foreign currency
      translations are included in Accumulated Other Comprehensive
      Income.




**NEW
      ACCOUNTING PRONOUNCEMENTS**





In
      February 2006, the Financial Accounting Standards Board (“FASB”) issued SFAS No.
      155, Accounting for Certain Hybrid Financial Instruments, which amends SFAS
      No.
      133, Accounting for Derivative Instruments and Hedging Activities (“SFAS No.
      155), and SFAS No. 140, Accounting for Transfers and Servicing of Financial
      Assets and Extinguishments of Liabilities. SFAS No. 155 simplifies the
      accounting for certain derivatives embedded in other financial instruments
      by
      allowing them to be accounted for as a whole if the holder elects to account
      for
      the whole instrument on a fair value basis. SFAS No. 155 also clarifies and
      amends certain other provisions of SFAS No. 133 and SFAS No. 144. The Company
      does not expect the adoption of SFAS No. 155 to have a material impact on its
      financial position, results of operations or cash flows as the Company currently
      has no financial instruments within the scope of SFAS No. 155.





In
      May
      2005, the FASB issued Statement No. 154, "Accounting Changes and Error
      Corrections" ("FAS 154"). FAS 154 generally require that accounting changes
      and
      errors be applied retrospectively. FAS 154 is effective for accounting changes
      and corrections of errors made in fiscal years beginning after December 15,
      2005. The Company does not expect FAS 154 to have a material impact on its
      financial statements.


9




**NOTE
      3. INVENTORY**





Inventory
      as of September 30, 2006 consists of the following:




Materials
            
            $
            19,724Finished
                Goods
            
            
            1,208Calling
                Cards
            
            
            893Parts
                and Accessories
            
            
            15,001Total
            
            $
            36,826




**NOTE
      4. PROPERTY AND EQUIPMENT, NET**





Machinery
                and Equipment
            
            $
            1,402,656Automobiles
            
            
            214,314Landfills
            
            
            1,805,532Total
            
            
            3,422,502Less:
                Accumulated Depreciation
            
            
            (1,923,035
            )Property
                and Equipment, net
            
            $
            1,499,467




Depreciation
      expense for the nine months ended September 30, 2006 was $225,060.





**NOTE
      5. CONSTRUCTION IN PROGRESS**





Construction
      in progress represents direct costs of construction or acquisition and design
      fees incurred for the Company’s new operating site and equipments.
      Capitalization of these costs ceases and the construction in progress is
      transferred to plant and equipment when substantially all the activities
      necessary to prepare the assets for their intended use are completed. No
      depreciation is provided until it is completed and ready for its intended
      use.








**NOTE
      6. NOTE PAYABLE - RELATED PARTY**





On
      September 6, 2006, the Company issued an aggregate of $5,000,000 face value
      convertible notes to the three shareholders of AEEC in exchange for 100% of
      all
      the outstanding capital stock of AEEC. Those three shareholders of AEEC are
      also
      the same majority shareholders that control 50.1% of the issued and outstanding
      stock of the Company, based on the share purchase agreement signed earlier
      on
      that day.




10




The
      notes
      have a maturity date of eighteen (18) months from the date of the Note and
      a
      default interest rate of prime interest rate plus two percent (2%). The notes
      will automatically convert upon the occurrence of a reverse split.





**NOTE
      7. LONG-TERM DEBT**





The
      Company’s long-term debt includes several small notes payable from its old
      operations and a bank loan for the newly acquired Chinese subsidiary. Balances
      of long term debt as of September 30, 2006 are as follows:





Vehicle
                Note, Monthly payments of $462with
                interest at 9.25%;
            
            $
            3,057Bank
                Note, Monthly payments of $1,825with
                interest at 7.5%;
            
            
            38,316Vehicle
                Note, Monthly payments of $535with
                interest at 8.2%;
            
            
            7,291Vehicle
                Note, Monthly payments of $589with
                interest at 8.2%;
            
            
            4,874Bank
                loan, 5-year terms, quarterly repaymentof
                $241,648 with adjustable interest rate;
            
            
            3,141,4243,194,962Less
                current portion of long-term debt
            
            
            1,002,843$
            2,192,119




**NOTE
      8. STOCKHOLDERS' EQUITY**





On
      January 18, 2006, the Company issued 26,627,834 shares of its common stock
      in
      consideration for the cancellation of a debt owed by the Company in the amount
      of $241,728. On August 24, 2006, additional 3,000,000 shares of common stock
      were issued for the same debt cancellation.




11





**Item
      2.**  **Management’s
      Discussion and Analysis**




**Forward
      looking statements**





The
      following is a discussion and analysis of the results of operations of our
      Company and should be read in conjunction with our financial statements and
      related notes contained in the Form 10-QSB. This Form 10-QSB contains forward
      looking statements that involve risks and uncertainties. You can identify these
      statements by the use of forward-looking words such as "may", "will", "expect",
      "anticipate", "estimate", "believe", "continue", or other similar words. You
      should read statements that contain these words carefully because they discuss
      our future expectations, contain projections of our future results of operation
      or financial condition or state other "forward-looking" information. We believe
      that it is important to communicate our future expectations to our investors.
      However, there may be events in the future that we are unable to accurately
      predict or control. Those events as well as any cautionary language in this
      quarterly statement provide examples of risks, uncertainties and events that
      may
      cause our actual results to differ materially from the expectations we describe
      in our forward-looking statements. You should be aware that the occurrence
      of
      the events described in this Form 10-QSB could have a material adverse effect
      on
      our business, operating results and financial condition. Actual results may
      differ materially from current expectations.





**Overview**





We
      are
      incorporated under the laws of the state of Nevada and, along with our
      wholly-owned subsidiaries, are headquartered in Harbin, People’s Republic of
      China (“PRC”). We provide municipal solid waste (“MSW”) non-hazardous disposal
      service for Harbin city. MSW includes residential, commercial, institutional
      and
      municipal waste. Our business is conducted through our wholly-owned subsidiary,
      Harbin Yifeng Eco-environment Co. Ltd (“Yifeng”) and Yifeng’s subsidiary, Harbin
      Zhiye Management Co. Ltd. (“Zhiye”). Both of Yifeng and Zhiye are organized
      under the laws of the PRC.





Yifeng
      was incorporated in the PRC in 2003, which is the first privately-owned
      environmental engineering firm providing non-hazardous MSW processing and
      disposal services and environmental engineering consulting services (provided
      through its wholly-owned subsidiary, Zhiye) in the northeast regions of the
      PRC.
      We currently have only one landfill site for non-hazardous MSW processing and
      disposal services are conducted under a Build-Operate-Transfer (“BOT”) Contract
      with the Harbin Municipal Urban Administrative Bureau (“HMUAB”) for a 17-year
      term. HMUAB is presently its only customer for MSW disposal. It transports
      the
      MSW it collects from Harbin for processing. Yifeng’ current production capacity
      is 1,200 tons of MSW per day, approximately 34% of the total MSW in
      Harbin .
      The
      municipal government levies fees for the disposal of waste by residential,
      commercial and industrial producers as part of their general taxes. However,
      in
      recent years, there has been a move in several cities to introduce direct waste
      fees levied against the producer of such waste. Yifeng believes that MSW
      disposal fees in the PRC will increase, as the national government has been
      trying to improve waste management to keep pace with the economic growth and
      rapid urbanization of the PRC.


12





We
      believe that our Company’s objectives are ambitious yet achievable. Net income
      reached US$1.3 million in 2005. Management seeks to maintain a constant growth
      rate through the offering of our flagship service - MSW landfill disposal
      service. We believe we can continue to maintain a 34% market share in the city
      of Harbin and try to expand our business to the other regions of the PRC.





On
      January 31, 2000 Datone Communications, Inc., ("Datone"), a New York corporation
      and an independent payphone provider merged into our Company. All of the Datone
      shares were retired and Datone shareholders received, 268,388 restricted shares
      of common stock of the Company. On April 29, 2000 we purchased all the shares
      of
      NB Payphones, Ltd., ("NB"), the owner of 466 payphones in Pennsylvania and
      Cointel Leasing, Inc. ("Cointel"), the owner of 45 payphones in Syracuse, New
      York, from Riviera Bay Holding Trust, a Gibraltar Trust, for 8,750,000
      restricted shares of our common stock. NB is a wholly owned subsidiary of
      USIP.





On
      August
      30, 2000 we incorporated Datone, Inc. as a Delaware company. Datone, Inc. is
      a
      wholly owned subsidiary of USIP. All the revenue generating assets and related
      expenses that we received from the Datone Communications Merger were
      subsequently moved, via an intercompany transfer, from USIP into Datone, Inc.
      Datone, Inc., was capitalized with $1,017. All of the Datone, Inc., shares
      were
      conveyed to USIP. On October 1, 2000 we merged Cointel into Datone, Inc. by
      way
      of an intercompany transaction.





Both
      Datone Inc. and NB will be spun off from the Company pursuant to a Stock
      Purchase Agreement dated August 24, 2006. The Company will thereafter be solely
      in the business of providing non-hazardous
      MSW processing and disposal services and environmental engineering consulting
      services.





**Results
      of Operations**




The
      following table sets forth our statements of operations for the nine months
      ended September 30, 2006 and 2005, and three months ended September 30, 2006
      and
      2005:


Nine
                  Months Ended Sept 30,
              
              Three
                  Months Ended Sept 30,2006
              
              2005
              
              2006
              
              2005Revenue
              
              $
              2,418,642
              
              $
              1,431,186
              
              $
              579,981
              
              $
              427,813Costs
                  of goods sold
              
              
              305,001
              
              
              258,664
              
              
              70,035
              
              
              96,035Gross
                  profit
              
              
              2,113,641
              
              
              1,172,522
              
              
              509,946
              
              
              331,778Selling,
                  general and administrative costs
              
              
              249,918
              
              
              159,809
              
              
              106,619
              
              
              37,099Income
                  from operations
              
              
              1,863,723
              
              
              1,012,713
              
              
              400,327
              
              
              294,679Other
                  (expense) income, net
              
              
              (55,738
              )
              
              (59,374
              )
              
              (30,804
              )
              
              (42,745
              )Income
                  before income taxes
              
              
              1,807,985
              
              
              953,339
              
              
              369,523
              
              
              251,934Provision
                  for income taxes
              
              
              502,398
              
              
              322,955
              
              
              158,699
              
              
              83,138Net
                  income
              
              
              1,305,588
              
              
              630,384
              
              
              210,824
              
              
              168,796


13




Our
      revenue is derived from the provision of MSW disposal and environmental
      consulting services.




THE
      NINE
      MONTHS ENDED SEPTEMBER 30, 2006 COMPARED TO THE NINE MONTHS ENDED SEPTEMBER
      30,
      2005




Revenues




Revenues
      for the nine months ended September 30, 2006 were $2,418,642, an increase of
      $987,456 or 69%, from the revenue of $1,431,186 for the comparable period in
      2005. The increase in revenue was primarily attributable to Yifeng’s acquisition
      of Zhiye in October 2005. The acquisition introduced an additional source of
      revenue from the provision of environmental consulting services. Our increased
      revenue is also attributable to the growth in Yifeng’s waste disposal business.
      Revenue for the nine months ended September 30, 2006 from Yifeng’s waste
      disposal business was $1,796,892, and revenues from Zhiye’s environmental
      consulting services were $621,750.




Cost
      of Revenue




Cost
      of
      revenue for the nine months ended September 30, 2006 was $305,001, an increase
      of $46,337, or 18%, from $258,664 for the comparable period in 2005. The
      increase in cost of revenue was primarily due to the cost of revenue of Zhiye’s
      environmental consulting services. Labor costs for the nine months ended
      September 30, 2006 were $20,911, a decrease of $30,648, or 59.44% from $51,559
      for the same period in 2005. Material costs for the nine months ended September
      30, 2006 were $35,090, a decrease of $35,502 or 50.29% from $70,592 for the
      same
      period in 2005. Both decreases resulted from an internal evaluation and
      restructuring of the Company’s manufacturing performance, leading to greater
      productivity and lowering of costs.




14




Gross
      Profit




Gross
      profit for the nine months ended September 30, 2006 was $2,113,641, an increase
      of $941,119 or 80%, from $1,172,522 for the comparable period of 2005. Our
      gross
      profit margin for the six months ended June 30, 2006 was 87% as compared with
      82% for the nine months ended September 30, 2005. Our increased gross profit
      margin was attributable to the higher gross profit margin arising from our
      environmental consulting business.




Selling,
      General and Administrative Expenses




Selling,
      general and administrative expenses were $249,918 for the nine months ended
      September 30, 2006, an increase of $90,109 from $159,809 for the comparable
      period in 2005. The increase was principally due to the additional
      administrative expenses, for example staff salaries, from the acquisition of
      Zhiye, and additional audit expenses.




Other
      Expenses




Other
      expenses were $55,738 and $59,374 for the nine months ended September 30, 2006
      and 2005, respectively and principally were comprised of loan interest. The
      decrease in interest expense was a result of our repayment of installments
      of
      outstanding loans.




Income
      Taxes




Provision
      for income taxes was $502,398 for the nine months ended September 30, 2006,
      an
      increase of $179,443 from $322,955 for the comparable period in 2005. The
      increase resulted from our increased revenue. The waste disposal industry was
      previously operated by the PRC government. In transforming the operating
      entities of the government from state owned enterprises to private enterprises
      using the BOT model, the government did not promulgate changes in the relevant
      tax regulations governing such entities. Consequently, as a PRC privately-owned
      enterprise conducting waste disposal business prior to August 28, 2006, Yifeng’s
      income tax status is not known. Accordingly, it has reserved and pre-recorded
      its income tax and value added tax in our consolidated financial statements
      pending the implementation of the PRC government’s tax rules and regulations.
      Yifeng was converted into a wholly foreign-owned enterprise on August 28, 2006.
      According to a letter issued by the State Taxation Administration in 2003,
      Yifeng is exempted from income tax for two years from its first profitable
      year
      and only has to pay 50% of its income taxes for the following three years.
      Zhiye, Yifeng’s subsidiary, is entitled to be exempted from the income tax
      and value-added tax for three years from August 2004 because Zhiye has
      hired employees that have formerly served with the national army and the state
      grants tax benefits for such employers.




15





Net
      Income




Net
      income for the nine months ended September 30, 2006 was $1,305,588, an increase
      of $675,204 from $630,384 for the comparable period in 2005.




THE
      THREE
      MONTHS ENDED SEPTEMBER 30, 2006 COMPARED TO THE THREE MONTHS ENDED SEPTEMBER
      30,
      2005




Revenues




Revenues
      for the three months ended September 30, 2006 were $579,981, an increase of
      $152,168 or 36%, from revenue of $427,813 for the comparable period in 2005.
      The
      increase in our revenue was attributable to the increased quantity of MSW
      disposed of during that period and accordingly an increase in MSW-generated
      revenue.




Cost
      of revenue




Cost
      of
      revenue for the three months ended September 30, 2006 was $70,035, a decrease
      of
      $26,000, or 27%, from $96,035 for the comparable period in 2005. Labor costs
      for
      the three months ended September 30, 2006 were $10,467, a decrease of $7,346
      or
      41.24% from $16,813 for the same period in 2005. Material costs for the three
      months ended September 30, 2006 were $12,607, a decrease of $15,890 or 55.76%
      from $28,497 for the same period in 2005. Both decreases resulted from an
      internal evaluation and restructuring of the Company’s manufacturing
      performance, leading to greater productivity and lowering of costs.




Gross
      Profit




Gross
      profit for the three months ended September 30, 2006 was $509,946, an increase
      of $178,168 or 54%, from $331,778 for the comparable period of 2005. Our gross
      profit margin for the three months ended June 30, 2006 was 88% as compared
      with
      78% for the three months ended September 30, 2005. Our increased gross profit
      margin was attributable to the higher gross profit margin arising from our
      environmental consulting business.




Selling,
      General and Administrative Expenses




Selling,
      general and administrative expenses were $109,619 for the three months ended
      September 30, 2006, an increase of $72,520 or 295.48% from $37,099 for the
      comparable period in 2005. The increase was principally due to the additional
      administrative expenses, for example staff salaries, from the acquisition of
      Zhiye, and additional audit expenses.




16




Other
      Expenses




Other
      expenses were $30,804 and $42,745 for the three months ended September 30,
      2006
      and 2005.  The
      decrease in interest expenses was a result of our repayment in installments
      of
      the loan.




Income
      Taxes




Provision
      for income taxes was $158,699 for the three months ended September 30, 2006,
      an
      increase of $75,561 from $83,138 for the comparable period in 2005 as a result
      of our increased revenue. The increase resulted from our increased revenue.
      The
      waste disposal industry was previously operated by the PRC government. In
      transforming the operating entities of the government from state owned
      enterprises to private enterprises using the BOT model, the government did
      not
      promulgate changes in the relevant tax regulations governing such entities.
      Consequently, as a PRC privately-owned enterprise conducting waste disposal
      business prior to August 28, 2006, Yifeng’s income tax status is not known.
      Accordingly, it has reserved and pre-recorded its income tax and value added
      tax
      in our consolidated financial statements pending the implementation of the
      PRC
      government’s tax rules and regulations. Yifeng was converted into a wholly
      foreign-owned enterprise on August 28, 2006. According to a letter issued by
      the
      State Taxation Administration in 2003, Yifeng is exempted from income tax for
      two years from its first profitable year and only has to pay 50% of its income
      taxes for the following three years. Zhiye, Yifeng’s subsidiary, is entitled to
      be exempted from the income tax and value-added tax for three years from
      August 2004 because Zhiye has hired employees that have formerly served with
      the
      national army and the state grants tax benefits for such employers.





Net
      Income




Net
      income for the three months ended September 30, 2006 was $210,824, an increase
      of $42,028 from $168,796 for the comparable period in 2005.




**Liquidity
      and Capital Resources**





We
      finance our operation and meet capital expenditure requirements primarily
      through bank loans and operating income. We received a long-term loan of RMB40
      million (approximately $5 million) from China Industrial and Commercial Bank
      on
      November 18, 2004 for our landfill site construction. The loan was secured
      by
      the Company’s building. It is for a term of sixty months maturing on November
      15, 2009. The annual interest rate of the first year of the loan is 7.605%.
      The
      annual interest rates for the following years are adjusted based on the bank’s
      official rates at that time. In addition to paying the quarterly interest,
      the
      Company is also required to make $241,648 in principal repayments every quarter.
      In 2005, principal repayments in the amount of $966,592 were made. The principal
      repayments for the nine months ended September 30, 2006 amounted to $724,944.
      The balance of the bank loan as of September 30, 2006 was
      $3,141,424.


17




Cash
      and Cash Equivalents





Our
      cash
      and cash equivalent was $821,141 at the beginning of the nine months ended
      September 30, 2006 and increased to $1,560,653 and the end of such period.
      This
      was due to the revenue contributed by our operating activities.




Net
      cash provided by operating activities





Net
      cash
      provided by our operating activities was $2,661,244 for the nine months ended
      September 30, 2006, an increase of $1,759,976 or 195.28% from $901,268 for
      the
      same period in 2005. The increase in net cash provided by operations was due
      to
      cash generated by our new environmental consulting services provided by
      Zhiye.





Net
      cash used in investing activities




Net
      cash
      used in investing activities decreased to $938,134 for the nine months ended
      September 30, 2006, or 42.13% from $1,621,149 for the same period 2005. The
      decrease was due to the fact that we had fulfilled most of our payment
      obligations for the landfill construction in 2005.





We
      intend
      to use our available funds to accelerate the development of our projects. We
      believe that our available funds will provide us with sufficient capital for
      the
      next twelve months; however, to the extent that we make acquisitions or
      establish additional facilities, we may require additional capital for the
      acquisition or for the operation of the combined companies. We cannot assure
      that such funding will be available, or if available, that it will be available
      on acceptable terms.




**Critical
      Accounting Policies and Estimates**





We
      have
      disclosed in Note 2 to our financial statements those accounting policies that
      we consider to be significant in determining our results of operations and
      our
      financial position which are incorporated by reference herein.





Management’s
      discussion and analysis of its financial condition and results of operations
      are
      based upon our consolidated financial statements, which have been prepared
      in
      accordance with accounting principles generally accepted in the United States.
      Our financial statements reflect the selection and application of accounting
      policies which require management to make significant estimates and judgments.
      Management bases its estimates on historical experience and on various other
      assumptions that are believed to be reasonable under the circumstances. We
      believe that the following reflect the more critical accounting policies that
      currently affect our financial condition and results of operations.




18




The
      significant accounting policies which we believe are the most critical to aid
      in
      fully understanding and evaluating our reported financial results include the
      following:




Management
      Estimates




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





Concentrations
      of Credit Risks





After
      merging with AEEC, the main operations of the Company are now located in the
      PRC. Accordingly, the Company’s business, financial condition, and results of
      operations may be influenced by the political, economic, and legal environments
      in the PRC, in addition to the general state of the PRC economy. The Company's
      operations in the PRC are subject to special considerations and 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 legal environments and foreign currency
      exchange.




The
      Company’s results may be adversely affected by changes in the political and
      social conditions in the PRC, and by changes in governmental policies with
      respect to laws and regulations, anti-inflationary measures, currency conversion
      and remittance abroad, and rates
      and
      methods of taxation, among other things.




Cash
      and Cash Equivalents




The
      Company considers all highly liquid instruments with a maturity of three months
      or less when purchased to be cash equivalents for purposes of classification
      in
      the balance sheets and statement of cash flows. Cash and cash equivalents
      consists of cash in bank and cash on hand.




Accounts
      Receivables





Accounts
      receivables are stated at net realizable value. Any allowance for doubtful
      accounts is established based on the management’s assessment of the
      recoverability of accounts and other receivables. A considerate amount of
      judgment is required in assessing the realization of these receivables,
      including the current credit worthiness of each customer and the related aging
      analysis. Based on this assessment, the Company considers all its accounts
      receivables fully collectible and no allowance for doubtful accounts was
      provided for the nine months ended September 30, 2006 and 2005.




Inventories





Inventories
      consist of the raw materials, supplies, and goods to be used in the regular
      day-to-day operations. Inventories are valued at the lower of cost or market
      with cost determined on a first-in first-out basis.




19




Fixed
      Assets and Depreciation




Fixed
      assets are stated at cost. Depreciation is calculated on a straight-line basis
      over the useful lives of the related assets, which range from five to seventeen
      years.




Advance
      to Suppliers





Advance
      to suppliers represent the payments made and recorded in advance for goods
      and
      services. Advances were also made for the purchase of the materials and
      equipments of the Company’s construction in progress.




Income
      Taxes




Income
      taxes are accounted for in accordance with Statement of Financial Accounting
      Standards No. 109, "Accounting for Income Taxes". Under SFAS No. 109, deferred
      income taxes are recognized using the asset and liability method by applying
      tax
      rates to cumulative temporary differences based on when and how they are
      expected to affect the tax return. Deferred tax assets and liabilities are
      adjusted for income tax rate changes.




Net
      Income Per Common Share




Net
      income per common share has been calculated by taking the net income for the
      current period and dividing by the weighted average shares outstanding at the
      end of the period.




Revenue
      Recognition




The
      Company now derives its primary revenue from the operations in China through
      the
      wholly owned subsidiary of AEEC, Harbin Yifeng Eco-Environment Co., Ltd. and
      Yifeng’s own subsidiary, Harbin Yifeng Zhiye Management Co., Ltd. Revenues from
      operations in China are recognized when services are provided and payments
      of
      customers and collections are reasonably assured.




Foreign
      Currency Translation





The
      functional currency for the Company’s operations in China is the Renminbi
      (“RMB”). Foreign currency transactions are translated at the applicable rates of
      exchange in effect at the transaction dates. Monetary assets and liabilities
      denominated in foreign currencies at the balance sheet date are translated
      at
      the applicable rates of exchange in effect at that date. Revenues and expenses
      are translated at the average exchange rates in effect during the reporting
      period.




Translation
      adjustments arising from the use of different exchange rates from period to
      period are included as a component of stockholders' equity as "Accumulated
      Other
      Comprehensive Income". Gains and losses resulting from foreign currency
      translations are included in "Accumulated Other Comprehensive
      Income".





20




**Item
      3.**  **Controls
      and Procedure**





(a)  Disclosure
      Controls and Procedures.





Mr.
      Yun
      Wang, our chief executive officer and Mr. Jianhua Sun, our chief financial
      officer, evaluated the effectiveness of the design and operation of our
      disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e)
      under the Exchange Act, as of the end of the nine months of 2006. Based on
      that
      evaluation, our officers concluded that our disclosure controls and procedures
      were effective and adequately designed to ensure that the information required
      to be disclosed by us in the reports we submit under the Exchange Act is
      recorded, processed, summarized and reported within the time periods specified
      in the applicable rules and forms and that such information was accumulated
      and
      communicated to our chief executive officer and chief financial officer, in
      a
      manner that allowed for timely decisions regarding required
      disclosure.





(b)
      Changes in Internal Control over Financial Reporting





During
      the nine months ended September 30, 2006, there has been no change in internal
      control over financial reporting that has materially affected, or is reasonably
      likely to materially affect our internal control over financial
      reporting.




PART
      II -
      OTHER INFORMATION.





**Item
      6.**  **Exhibits**





(a)  Exhibits




ExhibitNo.
            
            Description31.1
            
            Certification
              pursuant to Exchange Act Rules 13a-15(e) and 15d-15(e), as adopted
              pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Yun
              Wang;31.2
            
            Certification
              pursuant to Exchange Act Rules 13a-15(e) and 15d-15(e), as adopted
              pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Jianhua
              Sun;32.1
            
            Certification pursuant to 18 U.S.C.
              1350.




21




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.




USIP.Com,
              Inc.
              (Registrant)Dated:
              November 14 , 2006
            
            /s/ Yun
              WangYun
              Wang
              Chief
                Executive Officer




22