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 quarter ended June 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: 000-30790  ARTCRAFT V, INC. (Exact name of small business issuer as specified in its charter)  Delaware(State or other jurisdiction of incorporation or organization)
        (IRS Employee Identification No.)  Baimang Checking Station 1stBuilding South Mountain Xili Town, Shenzhen, China(Address of principal executive offices)  011-775 27653497(Issuers telephone number)  (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
        Noo   Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes
        o
        Nox   State the number of shares outstanding of each of the issuers classes of common equity, as of August 14, 2006: shares of common stock.          ARTCRAFT V, INC.



FORM 10-QSB



TABLE OF CONTENTS






PART I  FINANCIAL INFORMATION
        1Item 1. Financial Information
        1Item 2. Managements Discussion and Analysis or Plan of Operation
        1Item 3. Controls and Procedures
        2PART II  OTHER INFORMATION
        2Item 1. Legal Proceedings
        2Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
        2Item 3. Defaults Upon Senior Securities
        2Item 4. Submission of Matters to a Vote of Security Holders
        2Item 5. Other Information
        2Item 6. Exhibits and Reports on Form 8-K
        2SIGNATURES
        4











i









PART IFINANCIAL INFORMATION




Item 1.
        Financial Statements.

BASIS OF PRESENTATION



The accompanying reviewed financial statements are presented in accordance with generally accepted accounting principles for interim financial information and the instructions to Form 10-QSB and item 310 under subpart A of Regulation S-B. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting only of normal occurring accruals) considered necessary in order to make the financial statements not misleading, have been included. Operating results for the three months ended June 30, 2006 are not necessarily indicative of results that may be expected for the year ending December 31, 2006. The financial statements are presented on the accrual basis.













ARTCRAFT V, INC. AND SUBSIDIARIES



CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)



JUNE 30, 2006









ARTCRAFT V, INC. AND SUBSIDIARIES



CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

JUNE 30, 2006



TABLE OF CONTENTS












Unaudited Condensed Consolidated Balance Sheet
        2


Unaudited Condensed Consolidated Statements of Operations
        3


Unaudited Condensed Consolidated Statements of Cash Flow
        4


Notes to unaudited Condensed Consolidated Financial Statements
        5



1



ARTCRAFT V, INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETJune 30, 2006(Unaudited)ASSETSJune 30, 2006Current AssetsCash and cash equivalents
        
        
        $
        14,716Other receivables
        
        
        
        250Note receivable
        
        
        
        87,838Total Current Assets
        
        
        102,804Property & equipment, net
        
        
        
        23,379Intangible assets, net
        
        
        
        9,695$
        135,878LIABILITIES AND STOCKHOLDERS' DEFICITCurrent LiabilitiesAccounts payable and accrued expenses
        
        $
        12,649Loan payable to related party
        
        
        118,924Deferred revenue
        
        
        
        2,817Total Current Liabilities
        
        
        134,390Minority Interest
        
        
        
        34,196Stockholders' EquityCommon stock, $.001 par value, 100,000,000shares authorized, 10,100,000 issued and outstanding
        
        10,100Shares to be issued, 150,000 shares of common stock
        
        60,000Additional paid in capital
        
        
        
        42,700Subscription receivable
        
        
        
        (110,000)Other accumulated comprehensive gain
        
        
        1,096Accumulated deficit
        
        
        
        (36,604)Total Stockholders' Deficit
        
        
        (32,708)$
        135,878

The accompanying notes are an integral part of these unaudited consolidated financial statements.




2



ARTCRAFT V, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS(UNAUDITED)Three Month Periods Ended
        
        Six Month Periods EndedJune 30, 2006
        
        
        June 30, 2005
        
        June 30, 2006
        
        
        June 30, 2005Revenue, net
        
        
        
        $
        5,565
        
        $
        4,909
        
        11,222
        
        $
        9,646Operating Expenses:General and administrative expenses
        
        20,709
        
        
        5,328
        
        49,737
        
        
        10,430Loss from operations
        
        
        
        (15,144)
        
        
        (419)
        
        (38,515)
        
        
        (784)Other (Income) ExpenseInterest income
        
        
        
        (1,165)
        
        
        -
        
        (2,253)
        
        
        -Other income
        
        
        
        (525)
        
        
        (6)
        
        (525)
        
        
        (116)Interest expense
        
        
        
        -
        
        
        -
        
        73
        
        
        -Total Other Expense
        
        
        (1,690)
        
        
        (6)
        
        (2,705)
        
        
        (116)Net loss before minority interest
        
        
        (13,454)
        
        
        (413)
        
        (35,810)
        
        
        (668)Minority interest
        
        
        
        
        842
        
        
        123
        
        1,864
        
        
        200Net loss
        
        
        
        
        
        (12,612)
        
        
        (290)
        
        (33,946)
        
        
        (468)Other comprehensive incomeForeign currency translation
        
        
        373
        
        
        -
        
        1,134
        
        
        -Comprehensive Income
        
        
        $
        (12,239)
        
        $
        (290)
        
        (32,812)
        
        $
        (468)Net loss per share:Basic & diluted
        
        
        $
        (0.001)
        
        $
        (0.000)
        
        (0.003)
        
        $
        (0.000)Weighted average number of shares outstanding:Basic & diluted
        
        
        
        10,100,000
        
        
        10,000,000
        
        10,100,000
        
        
        10,000,000Weighted average number of shares for dilutive securities has not been taken since the effect of dilutive securities is anti-dilutiveThe accompanying notes are an integral part of these unaudited consolidated financial statements.




ARTCRAFT V, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWSFOR THE SIX MONTH PERIODS ENDED JUNE 30, 2006 AND 2005(UNAUDITED)2006
        
        
        2005CASH FLOWS FROM OPERATING ACTIVITIESNet Loss
        
        
        
        $
        (33,946)
        
        $
        (468)Adjustments to reconcile net loss to net cashprovided by (used in) operating activities:Depreciation & amortization
        
        
        
        4,183
        
        
        686Minority interest
        
        
        
        
        (1,864)
        
        
        (200)(Increase) / decrease in assets:Prepaid expense
        
        
        
        
        -
        
        
        93Increase/ (decrease) in current liabilities:Accounts payable and accrued expenses
        
        7,674
        
        
        498Deferred revenue
        
        
        
        
        727
        
        
        492Total Adjustments
        
        
        
        
        10,720
        
        
        1,569Net cash provided by (used in) operations
        
        (23,226)
        
        
        1,101CASH FLOWS FROM INVESTING ACTIVITIESPurchase of property & equipment
        
        
        -
        
        
        (10,552)CASH FLOWS FROM FINANCING ACTIVITIESNote receivables
        
        
        
        
        (14,705)
        
        
        (89,609)Loan from related party
        
        
        
        34,924
        
        
        -Net cash provided by financing activities
        
        20,219
        
        
        (89,609)Effect of exchange rate changes on cash and cash equivalents
        
        104
        
        
        -Net increase/(decrease) in cash and cash equivalents
        
        (2,903)
        
        
        (99,060)Cash and cash equivalents, beginning balance
        
        
        17,619
        
        
        119,446Cash and cash equivalents, ending balance
        
        $
        14,716
        
        $
        20,386SUPPLEMENTAL DISCLOSURES:Cash paid during the year for:Income tax payments
        
        
        $
        -
        
        $
        -Interest payments
        
        
        $
        73
        
        $
        -The accompanying notes are an integral part of these unaudited consolidated financial statements.



ARTCRAFT V, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Note A ORGANIZATION



Artcraft V, Inc. was incorporated under the laws of the State of Delaware on June 7, 2004. On November 7, 2005, the Company entered into an Exchange Agreement with Top Interest International Limited (Top Interest). Top Interest owns 70% equity interest of Shenzhen Xin Kai Yuen Info Consult Co., Ltd. (188.com) which operates 188info.com, a professional information searching platform that is engaged in the business of providing information search engine, online web application and image designing, digital network service, online market research, online promotion and advertising services, and query searches for both individuals and businesses. Top Interest was incorporated under the laws of the British Virgin Islands. 188.com was legally established under the laws of the Peoples Republic of China. When used in these notes, the terms Company,
we, our or us mean Artcraft V, Inc. and its subsidiaries.



Pursuant to the Stock Purchase and Share Exchange Agreement, the Company purchased all of the issued and outstanding shares of Top Interest from the shareholders for issuance of a total of 10,000,000 shares of the Companys common stock, or approximately 99% of the total issued and outstanding shares. This transaction closed on November 7, 2005 and has been accounted for as a reverse acquisition.



Note B SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES



Unaudited Interim Financial Information

The accompanying unaudited consolidated financial statements have been prepared by Artcraft V, Inc., pursuant to the rules and regulations of the Securities and Exchange Commission (the SEC) Form 10-QSB and Item 310 of Regulation S-B, and generally accepted accounting principles for interim financial reporting. The information furnished herein reflects all adjustments (consisting of normal recurring accruals and adjustments) which are, in the opinion of management, necessary to fairly present the operating results for the respective periods. Certain information and footnote disclosures normally present in annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted pursuant to such rules and regulations. These consolidated financial statements should be read in conjunction with
the audited consolidated financial statements and footnotes included in the Companys Annual Report on Form 10-KSB. The results of the three months and six months ended June 30, 2006 are not necessarily indicative of the results to be expected for the full year ending December 31, 2006.



Basis of Consolidation

The consolidated financial statements include the accounts of Artcraft V, Inc. and its wholly owned subsidiary Top Interest International and majority owned subsidiary Shenzhen Xin Kai Yuen Info Consult Co., Ltd., collectively referred to within as the Company. All material intercompany accounts, transactions and profits have been eliminated in consolidation.



Revenue Recognition

The Companys revenue recognition policies are in compliance with Staff accounting bulletin (SAB) 104. Sales revenue is recognized at the date of shipment to customers when a formal arrangement exists, the price is fixed or determinable, the delivery is completed, no other significant obligations of the Company exist and collectibility is reasonably assured. Payments received before all of the relevant criteria for revenue recognition are satisfied are recorded as unearned revenue.







1



ARTCRAFT V, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)



Note B -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)



Risks and Uncertainties

The Company is subject to substantial risks from, among other things, intense competition associated with the industry in general, other risks associated with financing, liquidity requirements, rapidly changing customer requirements, limited operating history, foreign currency exchange rates and the volatility of public markets.



Contingencies

Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Companys management and legal counsel assess such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Companys legal counsel evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought.



If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Companys financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material would be disclosed.



Loss contingencies considered to be remote by management are generally not disclosed unless they involve guarantees, in which case the guarantee would be disclosed.



Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles 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 revenues and expenses during the reporting period. Actual results could differ from those estimates.



Exchange Gain (Loss)

During the three month and six month periods ended June 30, 2006, the transactions of 188.com were denominated in foreign currency and were recorded in Chinese Yuan Renminbi (CNY) at the rates of exchange in effect when the transactions occur. Exchange gains and losses are recognized for the different foreign exchange rates applied when the foreign currency assets and liabilities are settled.















2



ARTCRAFT V, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)



Note B -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)



Translation Adjustment

As of June 30, 2006, the accounts of 188.com were maintained, and its financial statements were expressed, in Chinese Yuan Renminbi (CNY). Such financial statements were translated into U.S. Dollars (USD) in accordance with Statement of Financial Accounts Standards (SFAS) No. 52, Foreign Currency Translation, with the CNY as the functional currency. According to the Statement, all assets and liabilities were translated at the current exchange rate, stockholders equity are translated at the historical rates and income statement items are translated at the average exchange rate for the period. The resulting translation adjustments are reported under other comprehensive income in accordance with SFAS No. 130, Reporting Comprehensive Income as a component of shareholders equity.



Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk are cash, accounts receivable and other receivables arising from its normal business activities. The Company places its cash in what it believes to be credit-worthy financial institutions. The Company has a diversified customer base. The Company controls credit risk related to accounts receivable through credit approvals, credit limits and monitoring procedures. The Company routinely assesses the financial strength of its customers and, based upon factors surrounding the credit risk, establishes an allowance, if required, for uncollectible accounts and, as a consequence, believes that its accounts receivable credit risk exposure beyond such allowance is limited.



Cash and Cash Equivalents



Cash and cash equivalents include cash in hand and cash in time deposits, certificates of deposit and all highly liquid debt instruments with original maturities of three months or less.



Property & Equipment

Property and equipment are stated at cost less accumulated depreciation. Expenditures for major additions and improvements are capitalized, and minor replacements, maintenance and repairs are charged to expense as incurred. Depreciation is provided on the straight-line method over the estimated useful lives of the assets, or the remaining term of the lease, as follows:




Furniture and Fixtures
        5 yearsEquipment
        5 yearsComputer Hardware and Software
        5 years

Depreciation expenses were $2,977 and $686 for the six month periods ended June 30, 2006 and 2005, respectively.



Advertising

Advertising expenses consist primarily of costs of promotion for corporate image and product marketing and costs of direct advertising. The Company expenses all advertising costs as incurred.













3



ARTCRAFT V, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)



Note B -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)



Income Taxes

The Company utilizes SFAS No. 109, Accounting for Income Taxes, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.




Basic and Diluted Earnings Per ShareEarnings per share is calculated in accordance with the Statement of financial accounting standards No. 128 (SFAS No. 128), Earnings per share. SFAS No. 128 superseded Accounting Principles Board Opinion No.15 (APB 15). Net loss per share for all periods presented has been restated to reflect the adoption of SFAS No. 128. Basic net loss per share is based upon the weighted average number of common shares outstanding. Diluted net loss per share is based on the assumption that all dilutive convertible shares and stock options were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period.



Statement of Cash Flows

In accordance with SFAS No. 95, Statement of Cash Flows, cash flows from the Companys operations is based upon the local currencies. As a result, amounts related to assets and liabilities reported on the statement of cash flows will not necessarily agree with changes in the corresponding balances on the balance sheet.



Segment Reporting

Statement of Financial Accounting Standards No. 131 (SFAS 131), Disclosure About Segments of an Enterprise and Related Information requires use of the management approach model for segment reporting. The management approach model is based on the way a companys management organizes segments within the company for making operating decisions and assessing performance. Reportable segments are based on products and services, geography, legal structure, management structure, or any other manner in which management disaggregates a company. SFAS 131 has no effect on the Companys consolidated financial statements as the Company consists of one reportable business segment.















4



ARTCRAFT V, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)



Note B -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)



Intangible assets

The Company applies the criteria specified in SFAS No. 141, Business Combinations to determine whether an intangible asset should be recognized separately from goodwill. Intangible assets acquired through business acquisitions are recognized as assets separate from goodwill if they satisfy either the contractual-legal or separability criterion. Per SFAS 142, intangible assets with definite lives are amortized over their estimated useful life and reviewed for impairment in accordance with SFAS No. 144, Accounting for the Impairment or Disposal of Long-lived Assets. Intangible assets, such as purchased technology, trademark, customer list, user base and non-compete agreements, arising from the acquisitions of subsidiaries and variable interest entities are recognized and measured at fair value upon acquisition. Intangible assets are
amortized over their estimated useful lives from one to ten years. The Company reviews the amortization methods and estimated useful lives of intangible assets at least annually or when events or changes in circumstances indicate that it might be impaired. The recoverability of an intangible asset to be held and used is evaluated by comparing the carrying amount of the intangible asset to its future net undiscounted cash flows. If the intangible asset is considered to be impaired, the impairment loss is measured as the amount by which the carrying amount of the intangible asset exceeds the fair value of the intangible asset, calculated using a discounted future cash flow analysis. The Company uses estimates and judgments in its impairment tests, and if different estimates or judgments had been utilized, the timing or the amount of the impairment charges could be different.



Long-Lived Assets

Effective January 1, 2002, the Company adopted Statement of Financial Accounting Standards No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets (SFAS 144), which addresses financial accounting and reporting for the impairment or disposal of long-lived assets and supersedes SFAS No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of, and the accounting and reporting provisions of APB Opinion No. 30, Reporting the Results of Operations for a Disposal of a Segment of a Business. The Company periodically evaluates the carrying value of long-lived assets to be held and used in accordance with SFAS 144. SFAS 144 requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash
flows estimated to be generated by those assets are less than the assets carrying amounts. In that event, a loss is recognized based on the amount by which the carrying amount exceeds the fair market value of the long-lived assets. Loss on long-lived assets to be disposed of is determined in a similar manner, except that fair market values are reduced for the cost of disposal. Based on its review, the Company believes that, as of June 30, 2006 there were no significant impairments of its long-lived assets.













5



ARTCRAFT V, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)



Note B -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)



Recent accounting pronouncements

In May 2005, the FASB issued SFAS No. 154, Accounting Changes and Error Corrections. This statement applies to all voluntary changes in accounting principle and requires retrospective application to prior periods financial statements of changes in accounting principle, unless this would be impracticable. This statement also makes a distinction between retrospective application of an accounting principle and the restatement of financial statements to reflect the correction of an error. This statement is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005.



In February 2006, FASB issued SFAS No. 155, Accounting for Certain Hybrid Financial Instruments. SFAS No. 155 amends SFAS No 133, Accounting for Derivative Instruments and Hedging Activities, and SFAF No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities. SFAS No. 155, permits fair value remeasurement for any hybrid financial instrument that contains an embedded derivative that otherwise would require bifurcation, clarifies which interest-only strips and principal-only strips are not subject to the requirements of SFAS No. 133, establishes a requirement to evaluate interest in securitized financial assets to identify interests that are freestanding derivatives or that are hybrid financial instruments that contain an embedded derivative requiring bifurcation, clarifies that concentrations of credit risk in
the form of subordination are not embedded derivatives, and amends SFAS No. 140 to eliminate the prohibition on the qualifying special-purpose entity from holding a derivative financial instrument that pertains to a beneficial interest other than another derivative financial instrument. This statement is effective for all financial instruments acquired or issued after the beginning of the Companys first fiscal year that begins after September 15, 2006.



In March 2006 FASB issued SFAS 156 Accounting for Servicing of Financial Assets this Statement amends FASB Statement No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, with respect to the accounting for separately recognized servicing assets and servicing liabilities. This Statement:




1.
        Requires an entity to recognize a servicing asset or servicing liability each time it undertakes an obligation to service a financial asset by entering into a servicing contract.2.
        Requires all separately recognized servicing assets and servicing liabilities to be initially measured at fair value, if practicable.3.
        Permits an entity to choose Amortization method or  Fair value measurement method for each class of separately recognized servicing assets and servicing liabilities:4.
        At its initial adoption, permits a one-time reclassification of available-for-sale securities to trading securities by entities with recognized servicing rights, without calling into question the treatment of other available-for-sale securities under Statement 115, provided that the available-for-sale securities are identified in some manner as offsetting the entitys exposure to changes in fair value of servicing assets or servicing liabilities that a servicer elects to subsequently measure at fair value.5.
        Requires separate presentation of servicing assets and servicing liabilities subsequently measured at fair value in the statement of financial position and additional disclosures for all separately recognized servicing assets and servicing liabilities.

This Statement is effective as of the beginning of the Companys first fiscal year that begins after September 15, 2006. Management believes that this statement will not have a significant impact on the consolidated financial statements.





6



ARTCRAFT V, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)



Note C NOTES RECEIVABLE



Other receivable includes unsecured cash loan of $84,510 to an ex shareholder. Interest receivable of $3,328 has been accrued as of June 30, 2006 on the loan at the prevailing bank rate of 5.52% per China Renmin Bank. The loan is due on November 10, 2006.



Note D RELATED PARTY TRANSACTIONS



Throughout the history of the Company, certain members of the Board of Directors and general management have made loans to the Company to cover operating expenses or operating deficiencies. As of June 30, 2006, the Company has non interest-bearing, unsecured and due on demand note payable to former shareholders of 188.com in the amount of $84,000.



On May 2, 2006 the Company entered into a Promissory note with the Chief Executive Officer of the Company for $34,924.  The note is non interest-bearing, unsecured and due and payable on December 31, 2007.



Note E COMMON STOCK



On May 17, 2005, the Company issued 150,000 shares of common stock to individuals for subscriptions receivable of $60,000 ($0.40 per share). However, the physical certificates were not issued as the company is still waiting for its registration statement to become effective. The amount received has been reflected as shares to be issued in the equity section in the accompanying consolidated financial statements.



On November 7, 2005, the Company issued 10,000,000 shares of common stock at par of $0.001 per share for purchase all of the issued and outstanding shares of Top Interest from its shareholders.





























7



ARTCRAFT V, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)



Note F -STOCKEXCHANGE AGREEMENT



On November 7, 2005, the Company entered into an Exchange Agreement with Top Interest, a company incorporated under the laws of the British Virgin Islands. Top Interest owns 70% of equity interest of 188.com which is incorporated under the laws of the Peoples Republic of China, and is engaged in the business of providing information search engine, online web application and image designing, digital network service, online market research, online promotion and advertising services, and query searches for both individuals and businesses.



Pursuant to the Stock Purchase and Share Exchange Agreement, the Company purchased all of the issued and outstanding shares of Top Interest form the shareholders for issuance of a total of 10,000,000 shares of the Companys common stock, or approximately 99% of the total issued and outstanding shares. This transaction closed on November 7, 2005.



As a result of the exchange agreement, the reorganization was treated as an acquisition by the accounting acquiree that is being accounted for as a recapitalization and as a reverse merger by the legal acquirer for accounting purposes. Pursuant to the recapitalization, all capital stock shares and amounts and per share data have been retroactively restated. Accordingly, the financial statements include the following:



(1) The balance sheet consists of the net assets of the accounting acquirer at historical cost and the net assets of the legal acquirer at historical cost.



(2) The statements of operations include the operations of the accounting acquirer for the period presented and the operations of the legal acquirer from the date of the merger.



Note G PROPERTY & EQUIPMENT



Property & equipment consist of the following at June 30, 2006:




Automobile
        
        $ 10,919Office equipment
        
        18,98929,908Accumulated depreciation
        
        (6,529)$23,379



















8



ARTCRAFT V, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)



Note H  INTANGIBLEASSETS



Intangible assets consist of the following at June 30, 2006:




June 30, 2006Software
        $
        12,11912,119Accumulated amortization
        
        (2,424)$
        9,695

Amortization expense for the Companys intangible assets over the next five fiscal years is estimated to be: 2007-$2,416, 2008-$2,416, 2009-$2,416, 2010-$2,416 and 2011-$605.



Note I INCOME TAXES

The Company through its subsidiary, 188.com, is governed by the Income Tax Laws of the PRC. Operations in the United States of America have incurred net accumulated operating losses for income tax purposes. The Company believes that it is more likely than not that these net accumulated operating losses will not be utilized in the future and hence the Company has not recorded any deferred assets as of June 30, 2006.



Pursuant to the PRC Income Tax Laws, the Enterprise Income Tax (EIT) is at a statutory rate of 33%, which is comprises of 30% national income tax and 3% local income tax. 188.com qualified as a new technology enterprise and under PRC Income Tax Laws, they are subject to a preferential tax rate of 15%.

Income tax provision for the six months ended June 30, 2006:


June 30, 2006Provision for PRC Income and local taxes
        
        $
        0U.S Statutory rates
        
        
        34%Foreign income not recognized in USA
        
        
        (34%)PRC income tax
        
        
        15%













9



ARTCRAFT V, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)



Note J STATUTORY COMMON WELFARE FUND



In accordance with the laws and regulations of the PRC, after the payment of the PRC income taxes shall be allocated to the statutory surplus reserves and statutory public welfare fund for staff and workers. The proportion of allocation for reserve is 5 to 10 percent of the profit after tax until the accumulated amount of allocation for statutory reserve reaches 50 percent of the registered capital. Statutory surplus reserves are to be utilized to offset prior years losses, or to increase its share capital.



General reserve fund and statutory surplus fund are restricted for set off against losses, expansion of production and operation or increase in register capital of the respective company. Statutory public welfare fund is restricted to the capital expenditures for the collective welfare of employees. These reserves are not transferable to the Company in the form of cash dividends, loans or advances. These reserves are therefore not available for distribution except in liquidation. As of June 30, 2006, the Company had no reserves to these non-distributable reserve funds since it had no income from operations.



Note K OTHER COMPREHENSIVE INCOME



Balances of related after-tax components comprising accumulated other comprehensive income (loss), included in stockholders equity, at June 30, 2006 are as follows:




Foreign Currency Translation Adjustment
        Accumulated Other Comprehensive IncomeBalance at December 31, 2005
        $ (38)
        
        $ (38)Change for 2006
        1,134
        
        1,134Balance at June 30, 2006
        $ 1,096
        
        $ 1,096







10









Item 2.
        Managements Discussion and Analysis or Plan of Operation

THE FOLLOWING INFORMATION SHOULD BE READ IN CONJUNCTION WITH THE FINANCIAL STATEMENTS AND NOTES THERETO APPEARING ELSEWHERE IN THIS FORM 10-QSB.

SAFE HARBOR REGARDING FORWARD-LOOKING STATEMENTS

The information contained in Item 2 contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Actual results may materially differ from those projected in the forward-looking statements as a result of certain risks and uncertainties set forth in this report. Although management believes that the assumptions made and expectations reflected in the forward-looking statements are reasonable, there is no assurance that the underlying assumptions will, in fact, prove to be correct or that actual results will not be different from expectations expressed in this report.

Overview



Artcraft V, Inc. was incorporated under the laws of the State of Delaware on June 7, 2004. On November 7, 2005, the Company entered into an Exchange Agreement with Top Interest International Limited (Top Interest). Top Interest owns 70% equity interest of Shenzhen Xin Kai Yuen Info Consult Co., Ltd. (188.com) which operates 188info.com, a professional information searching platform that categorized the information it provides based on geographical. Top Interest was incorporated under the laws of the British Virgin Islands. 188.com was legally established under the laws of the Peoples Republic of China. When used in this report, the terms the Company, we, our or us mean Artcraft V, Inc. and its subsidiaries.



On November 7, 2005, the Company entered into an Exchange Agreement with Top Interest, a company incorporated under the laws of the British Virgin Islands. Top Interest owns 70% of equity interest of 188.com which is incorporated under the laws of the Peoples Republic of China, and is engaged in the business of providing information search engine, online web application and image designing, digital network service, online market research, online promotion and advertising services, and query searches for both individuals and businesses.



Pursuant to the Stock Purchase and Share Exchange Agreement, the Company purchased all of the issued and outstanding shares of Top Interest form the shareholders for issuance of a total of 10,000,000 shares of the Companys common stock, or approximately 97.56% of the total issued and outstanding shares. This transaction closed on November 7, 2005.



As a result of the exchange agreement, the reorganization was treated as an acquisition by the accounting acquiree that is being accounted for as a recapitalization and as a reverse merger by the legal acquirer for accounting purposes. Pursuant to the recapitalization, all capital stock shares and amounts and per share data have been retroactively restated. Accordingly, the financial statements include the following:



(1)   The balance sheet consists of the net assets of the accounting acquirer at historical cost and the net assets of the legal acquirer at historical cost.



(2)  The statements of operations include the operations of the accounting acquirer for the period       presented and the operations of the legal acquirer from the date of the merger.



The Company is now engaged in the business of mobile phone and facsimile machines distribution.



Plan of Operations



During the next twelve months, we expect to take the following steps in connection with the development of our business and the implementation of our plan of operations:





1) Initiate substantive construction of our corporate website. We currently have constructed a comprehensive and well designed site webpage at www.188info.com which outlines the products and services that we offer and such website includes additional sub-pages, our phone and email information, navigational tools and a more detailed description of our products and services. 188 infonet features a wide range of Web advertisement. Web advertising can reach any part of the world equally fast, which is an impossible feat for conventional advertisement. Our multimedia presentation is rich in audio, and video. Our web content is interactive by nature. Current programs such as Flash, Shockwave provide vivid, animated interaction.



The next stage of web development will focus on promoting 188 infonet and expand its influence into peoples daily activities. Including a plan to discuss with various industries consultants to assist us, as well as companies within the industry to partner with; further promote of 188Info and develop related websites to attract a younger demographic and achieve one million hits on a daily basis; Establish a community information service in Shenzhen by cooperating with communities, Such as publish yellow pages in Shenzhen.



Incorporation of these services could run from $2,500 to $100,000 depending upon the level of detail in these services and the nature of the partnerships reached. If we reach partnerships whereby we incorporate other companys services into our site and co-brand with partners, programming will be far simpler and thereby cheaper than if we have to offer users the ability to design their own service requests.



Further website expansion in 2006 and 2007 will be in various phases subject to revenue and capital availability.



2) Within 30 days of effectiveness of our SB-2 filed on January 13, 2006, we will seek a quotation for our common shares on the OTC Bulletin Board. We anticipate that the date of the application for the quotation will be by the end of the year and there are no fees to us for such filing. At such time, we will also begin discussions with various potential real estate consultants to assist us, as well as companies within the industry to partner with. We have already commenced the process of searching for consultants and partners and will continue to do so in an ongoing manner and we believe that such consultants will also be secured by the end of year. Our preference would be to structure deals that have little cash outlays and reward consultants with stock and percentages of revenue and profits, however, consultants could require monthly fees of $2,000 to $8,000 a month. We do not
anticipate any costs being involved with our initial partnership as we will attempt to strike partnership deals that are revenue and profit-sharing arrangements;



3) Within 60 days of effectiveness of this prospectus, identify funding options to raise additional capital for the company and key geographic markets to target during our first phase of operations. We intend to seek funding options such as equity or debt financing. However, currently we have had no preliminary discussions with any group regarding such financing. As we develop and the overall economic climate improves, we expect to be in a better position to raise outside capital later in 2006. The only associated costs for such funding may be the due diligence costs or expenses associated with putting a financing deal together. The costs would be as much as 5%-6% of the funding raised, but any such fees would be taken out of the closing of the funding transaction. Searching for capital will likely be an ongoing process even if we raise an initial amount of funds. The only potential
expenses would be if we decide to pay for outside research or if business trips are required.



4) Hire and train additional staff, including management, marketing staff, and administrative personnel; we anticipate hiring at a minimum 10 employees in the next twelve months. We anticipate hiring additional employees by the end of 2006. The number of employees hired will be dependent upon a variety of factors including our progress in implementing our business plan and available capital. Ultimately, we expect to require approximately $10,000 per month for payroll. We will need additional capital to meet these expenses and will scale down accordingly until we are in such a position. The hiring of employees will be an ongoing process during the companys existence.



We intend to grow through internal development and strategic alliances.



Because of uncertainties surrounding our development and limited operating history, we anticipate incurring development stage losses in the foreseeable future. Our ability to achieve our business objectives is contingent upon its success in raising additional capital until adequate revenues are realized from operations.





Results of Operations for the Six Months Ended June 30, 2006 compared to the Six Months Ended June 30, 2005



The following table presents certain consolidated statement of operations information for the six months ended June 30, 2006 and 2005. Certain columns may not add due to rounding.




2006
        
        2005Sales, net
        $
        11,222
        $
        9,646General and Administrative Expense
        
        49,737
        
        10,430Income (Loss) from Operations
        $
        (38,515)
        $
        (784)

Net sales



Net sales for the six months ended June 30, 2006 totaled $11,222 compared to $9,646 as of the six months ended June 30, 2005, an increase of $1,576 or approximately 16.3%. The increase was due to the increase in the number of new clients.



Operating Expense



Operating expense for six months ended June 30, 2006 totaled $49,737 or approximately 443.2% of net sales, compared to $10,430 or approximately 108.1% for the six months ended June 30, 2005. The increase in operating expense of $39,307 or approximately 376.9% was due to increased expenses incurred during expansion of the business.



Loss from Operations



Loss from operations for the six months ended June 30, 2006 was $38,515 as
compared to loss from operations of $784 for six months ended June 30, 2005, an
increase of $37,731 or approximately 4,812.6%. The increase was due reasons
stated above.



Interest Expense



Interest expense for the six months ended June 30, 2006 totaled $73 compared to $0 for the six months ended June 30, 2005, an increase of $73. The increase in interest expense was due to the indebtedness related to the acquisition of fixed assets.



Net Loss



Net loss was $33,946 for the six months ended June 30, 2006 compared to net loss
of $468 for six months ended June 30, 2005, an increase of $33,478 or 7,153.4%.
The increase was due to the increased operating expenses



Liquidity and Capital Resources



Cash has historically been generated from operations. Operations and liquidity needs are funded primarily through cash flows from operations and short-term borrowings. Cash and cash equivalents were $14,716 at June 30, 2006 and current assets totaled $102,804 at June 30, 2006. The Companys total current liabilities were $134,390 at June 30, 2006. Working capital at June 30, 2006 was $(31,586). During the six months ended June 30, 2006, net cash used in operating activities was $23,226.

Our operations and short term financing does not currently meet our cash needs. We believe we will be able to generate revenues from sales and raise capital through private placement offerings of its equity securities to provide the necessary cash flow to meet anticipated working capital requirements. Our actual working capital needs for the long and short term will depend upon numerous factors, including our operating results, competition, and the availability of credit facilities, none of which can be predicted with certainty. Our future expansion will depend on operating results and will be limited by its ability to enter into financings and raise capital.





Capital expenditures



Total capital expenditures during the six months ended June 30, 2006 and 2005 was $0 and $10,552, respectively for the purchase of fixed assets.



Working Capital Requirements



Historically operations and short term financing have been sufficient to meet our cash needs. We believe that we will be able to generate revenues from sales and raise capital through private placement offerings of its equity securities to provide the necessary cash flow to meet anticipated working capital requirements. However, our actual working capital needs for the long and short term will depend upon numerous factors, including operating results, competition, and the availability of credit facilities, none of which can be predicted with certainty. Future expansion will be limited by the availability of financing products and raising capital.



Critical Accounting Policies



Artcraft V, Inc.s financial statements and related public financial information are based on the application of accounting principles generally accepted in the United States (GAAP). GAAP requires the use of estimates; assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenue and expense amounts reported. These estimates can also affect supplemental information contained in our external disclosures including information regarding contingencies, risk and financial condition. We believe our use if estimates and underlying accounting assumptions adhere to GAAP and are consistently and conservatively applied. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these
estimates under different assumptions or conditions. We continue to monitor significant estimates made during the preparation of our financial statements.



Our significant accounting policies are summarized in Note 1 of our financial statements. While all these significant accounting policies impact its financial condition and results of operations, Artcraft V. views certain of these policies as critical. Policies determined to be critical are those policies that have the most significant impact on Artcraft V, Inc.s consolidated financial statements and require management to use a greater degree of judgment and estimates. Actual results may differ from those estimates. Our management believes that given current facts and circumstances, it is unlikely that applying any other reasonable judgments or estimate methodologies would cause effect on our consolidated results of operations, financial position or liquidity for the periods presented in this report.



Off-Balance Sheet Arrangements



We have never entered into any off-balance sheet financing arrangements and have never established any special purpose entities. We have not guaranteed any debt or commitments of other entities or entered into any options on non-financial assets.




Item 3.
        Controls and Procedures

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (Exchange Act), as of March 31, 2006. Based on this evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commissions rules and forms and that our disclosure and controls are designed to ensure that information required to be
disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.





There were no changes (including corrective actions with regard to significant deficiencies or material weaknesses) in our internal controls over financial reporting that occurred during the second quarter of fiscal 2006 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.





PART II - OTHER INFORMATION




Item 1.
        Legal Proceedings.

We are currently not a party to any pending legal proceedings and no such action by, or to the best of our knowledge, against us has been threatened.




Item 2.
        Unregistered Sales of Equity Securities and Use of Proceeds.

None.




Item 3.
        Defaults Upon Senior Securities.


None.


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

No matter was submitted during the quarter ending June 30, 2006, covered by this report to a vote of the Companys shareholders, through the solicitation of proxies or otherwise.




Item 5.
        Other Information.


None.


Item 6.
        Exhibits and Reports of Form 8-K.


(a)
        Exhibits


31.1   Certification pursuant to Section 302 of Sarbanes Oxley Act of 2002


32.1   Certification pursuant to Section 906 of Sarbanes Oxley Act of 2002




(b)
        Reports of Form 8-K


None.





SIGNATURES



In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, there unto duly authorized.




ARTCRAFT V, INC.


By:/s/ Li Te XiaoLi Te XiaoPresident, Chief Executive Officer,Chief Financial Officer and Director



Date: August 14, 2006