UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

[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

[ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934
      For the transition period from:

                        Commission file number 000-30115

                          HANKERSEN INTERNATIONAL CORP.
                         -------------------------------
       (Exact name of Small Business Issuer as specified in its charter.)

             DELAWARE                                         13-3912047
             --------                                         ----------
(State of other jurisdiction of                             (IRS Employer
incorporation or organization)                            Identification No.)

                        3rd Floor, A Tower of Chuang Xin
                              Information Building
     No. 72 Second Keji Road, Hi Tech Zone, Xi'an, Shaanxi 710075 P.R. China
     -----------------------------------------------------------------------
          (Address of principal executive offices, including zip code)

                              (011) 86-13301996766
                              --------------------
                (Issuer's telephone number, including area code)


              ----------------------------------------------------
                 (Former Address, if changed since last report)

Check whether the Issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days. YES [ x ] NO [ ]

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: At November 30, 2006 there were
35,413,850 shares of Common Stock, par value $.0001 per share, outstanding.

Indicate by check mark whether the Registrant is a shell company (as defined in
Rule 12b-2 of the Securities Exchange Act of 1934) (check one): Yes [ ] No [X ]



<PAGE>




                          HANKERSEN INTERNATIONAL CORP.
                                   FORM 10-QSB
                    QUARTERLY PERIOD ENDED September 30, 2006

                                      INDEX




PAGE

PART I - FINANCIAL INFORMATION

      Item 1 - Financial Statements

      Consolidated Balance Sheet (Unaudited)
                  September 30, 2006 .......................................   2
      Consolidated Statements of Income and Comprehensive Income (Unaudited)
                  For the Three Months and Nine Months Ended
                  September 30, 2006 and 2005 ..............................   3
      Consolidated Statements of Cash Flows (Unaudited)
                  For the Nine Months Ended September 30, 2006 and 2005 ....   4

      Notes to Consolidated Financial Statements (Unaudited) ............... 5-7

      Item 2 - Management's Discussion and Analysis or
                  Plan of Operation .....................................   8-17

      Item 3 - Controls and Procedures .....................................  17


PART II - OTHER INFORMATION

      Item 1 - Legal Proceedings ...........................................  18

       Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds   18

      Item 3 - Default upon Senior Securities ..............................  18

      Item 4 - Submission of Matters to a Vote of Security Holders .........  18

      Item 5 - Other Information ...........................................  18

      Item 6 - Exhibits ....................................................  18













<PAGE>




                                     PART I
                              FINANCIAL INFORMATION

ITEM 1.   FINANCIAL STATEMENTS

<TABLE>
<CAPTION>

HANKERSEN INTERNATIONAL CORP. AND SUBSIDIARIES
(FORMERLY KUSHI NATURAL FOODS CORP. AND SUBSIDIARIES)
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
--------------------------------------------------------------------------------

                                                     September 30,  December 31,
                                                          2006         2005
                                                     ---------------------------
ASSETS                                                 Unaudited      Audited
CURRENT ASSETS:
<S>                                                   <C>            <C>
  Cash and equivalents                                $ 2,430,007    $   574,774
  Accounts receivable, net of allowance for
  doubtful accounts of $17,353 and
  $16,995, respectively                                 2,638,874      2,284,854
  Inventories                                             304,567        859,656
  Due from stockholders/officers                             --        1,380,292
  Loan to related party                                      --          978,910
  Deposit for purchase of fixed assets                  1,771,255        743,476
  Advance to suppliers                                  1,510,350        962,678
  Prepayments and other current assets                     89,495         65,211
                                                      -----------    -----------
    TOTAL CURRENT ASSETS                                8,744,548      7,849,851
                                                      -----------    -----------

Property and Equipment - Net                            2,243,109      2,365,014
Investment - At cost                                    1,771,255      1,734,777
Land Use Right - Net                                      154,160        154,221
                                                      -----------    -----------
    TOTAL ASSETS                                       12,913,072     12,103,863
                                                      ===========    ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
  Accounts payable                                         95,971        179,144
  Accrued expenses                                        594,790        218,930
  Loan payable                                               --          371,738
  Taxes payable                                           249,202        164,854
  Due to stockholders/officers                            127,149           --
  Other current liabilities                                24,742        147,393
                                                      -----------    -----------
    TOTAL CURRENT LIABILITIES                           1,091,854      1,082,059
                                                      -----------    -----------
Minority Interest                                       1,353,459      1,300,597

Stockholders' Equity
  Series A Preferred stock, $0.0001 par value,
    5,000,000 shares authorized,
    0 and 1,000 shares issued and outstanding,
    respectively                                             --                1
  Common stock, $0.0001 par value,
    200,000,000 shares authorized,
    35,295,727 and 5,764,786 shares issued
    and outstanding, respectively                           3,530            577
  Additional paid-in capital                            4,396,783      4,399,735
  Reserve funds                                         1,330,756      1,330,756
  Retained earnings                                     4,253,007      3,745,588
  Accumulated other comprehensives income                 483,683        244,550
                                                      -----------    -----------
    TOTAL STOCKHOLDERS' EQUITY                         10,467,759      9,721,207
                                                      -----------    -----------
    TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY        $12,913,072    $12,103,863
                                                      ===========    ===========

The accompanying notes are an integral part of the condensed
consolidated financial statements.
</TABLE>


                                       2
<PAGE>

<TABLE>
<CAPTION>


HANKERSEN INTERNATIONAL CORP. AND SUBSIDIARIES
(FORMERLY KUSHI NATURAL FOODS CORP. AND SUBSIDIARIES)
STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (UNAUDITED)
FOR THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2006 AND 2005
--------------------------------------------------------------------------------

                                                For Three Months Ended      For Nine Months Ended
                                               ------------------------    ------------------------
                                                Sept 30,     Sept 30,        Sept 30,      Sept 30,
                                                  2006         2005            2006          2005
                                               ---------     ---------      ---------     ---------
                                               Unaudited     Unaudited      Unaudited     Unaudited

<S>                                           <C>           <C>            <C>           <C>
Revenues                                      $ 3,907,418   $ 4,086,540    $ 8,646,522   $ 9,262,593

Cost of Goods Sold                              3,097,971     2,373,861      6,690,156     5,202,224
                                              -----------   -----------    -----------   -----------
Gross Profit                                      809,447     1,712,679      1,956,366     4,060,369
                                              -----------   -----------    -----------   -----------
Operating expenses
  Selling expenses                                465,437       380,784        999,794       887,120
  General and administrative expense              128,281        77,445        391,477       258,549
                                              -----------   -----------    -----------   -----------
Total operating expenses                          593,718       458,229      1,391,271     1,145,669
                                              -----------   -----------    -----------   -----------
Income from operations                            215,729     1,254,450        565,095     2,914,700
                                              -----------   -----------    -----------   -----------
Other income (expense)
  Interest income, net                             16,791        (3,336)        53,958           901
  Other income (expense), net                      17,168        18,842         51,232        56,377
  Acquisition costs                                  --        (280,179)          --        (280,179)
                                              -----------   -----------    -----------   -----------
Total other (expense) income                       33,959      (264,673)       105,190      (222,901)
                                              -----------   -----------    -----------   -----------

Income before taxes and minority interest         249,688       989,777        670,285     2,691,799

Income tax provision                               39,295       181,037        110,004       349,426
                                              -----------   -----------    -----------   -----------
Income before minority interest                   210,393       808,740        560,281     2,342,373

Minority interest                                  13,112        65,198         52,862       187,889
                                              -----------   -----------    -----------   -----------
Net income                                    $   197,281   $   743,542    $   507,419   $ 2,154,484
                                              ===========   ===========    ===========   ===========
Other comprehensive income:
Foreign currency translation gain                 132,667       159,287        239,133       159,287
                                              -----------   -----------    -----------   -----------
Comprehensive income                          $   329,948   $   902,829    $   746,552   $ 2,313,771
                                              ===========   ===========    ===========   ===========
Net income per common share
  - Basic                                     $      0.01   $      0.13    $      0.06   $      0.37
                                              ===========   ===========    ===========   ===========
  - Diluted:                                  $      0.01   $      0.13    $      0.01   $      0.37
                                              ===========   ===========    ===========   ===========
Weighted Average Common Shares Outstanding*
  - Basic                                      15,387,227     5,764,786      8,948,419     5,764,786
                                              ===========   ===========    ===========   ===========
  - Diluted:                                   35,295,727     5,764,786     35,295,727     5,764,786
                                              ===========   ===========    ===========   ===========

* As restated to reflect recapitalization and the subsequent reverse stock split.

The accompanying notes are an integral part of the condensed
consolidated financial statements.
</TABLE>


                                        3
<PAGE>

<TABLE>
<CAPTION>


HANKERSEN INTERNATIONAL CORP. AND SUBSIDIARIES
(FORMERLY KUSHI NATURAL FOODS CORP. AND SUBSIDIARIES)
STATEMENTS OF CASH FLOWS (UNAUDITED) FOR NINE MONTHS
ENDED SEPTEMBER 30, 2006 AND 2005

                                                   For the Nine Months Ended
                                                   -------------------------
                                                  Sept 30, 2006 Sept 30, 2005
                                                  ------------- -------------
                                                    Unaudited     Unaudited

CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                               <C>            <C>
NET INCOME                                        $   507,419    $ 2,154,484
Adjustments to reconcile net income to net cash
  provided by operating activities
  Depreciation and amortization                       171,336        168,495
  Minority interest                                    52,862        187,889
  Changes in operating assets and liabilities:
    Accounts receivable                              (303,988)       980,475
    Inventories                                       561,361         10,794
    Advance to suppliers                             (516,567)       453,875
    Prepayments and other current assets              (22,441)       188,984
    Accounts payable and accrued expenses             278,461       (903,697)
    Customer deposits                                    --          (22,811)
    Taxes payable                                      79,216        725,851
    Other current liabilities                        (123,161)       (47,236)
                                                  -----------    -----------
NET CASH PROVIDED BY OPERATING ACTIVITIES             684,498      3,897,103
                                                  -----------    -----------
CASH FLOWS FROM INVESTING ACTIVITIES
  Deposit for purchase of fixed assets               (991,301)          --
  Return of deposits                                     --        1,233,030
  Proceeds from sale of marketable securities            --            4,309
  Purchase of equipment                                  --          (33,028)
  Long term investment at cost                           --       (1,726,243)
  Minority interest                                      --          246,606
  Repayment of loan to related party                  978,910           --
                                                  -----------    -----------
NET CASH USED IN INVESTING ACTIVITIES                 (12,391)      (275,326)
                                                  -----------    -----------
CASH FLOWS FROM FINANCING ACTIVITIES
  (Payment to) Proceeds from short-term loan         (371,738)       369,909
  Payment on long-term debt                              --           (3,942)
  Payment to stockholders/officers                       --         (223,059)
  Receipts from stockholders/officers               1,504,822      1,319,682
                                                  -----------    -----------
NET CASH PROVIDED BY FINANCING ACTIVITIES           1,133,084      1,462,590
                                                  -----------    -----------
Net increase in cash and equivalents                1,805,191      5,084,367
Effect of exchange rate changes on cash                50,042         32,336
Cash and equivalents at beginning of period           574,774      1,027,869
                                                  -----------    -----------
Cash and equivalents at end of period             $ 2,430,007    $ 6,144,572
                                                  ===========    ===========

The accompanying notes are an integral part of the
condensed consolidated financial statements.

</TABLE>


                                        4
<PAGE>




The accompanying notes are an integral part of the condensed consolidated
financial statements.


<PAGE>

HANKERSEN INTERNATIONAL CORP. AND SUBSIDIARIES
(FORMERLY KUSHI NATURAL FOODS CORP. AND SUBSIDIARIES)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------


1. BASIS OF PRESENTATION

   a) INTERIM FINANCIAL STATEMENTS:

The accompanying financial statements and footnotes have been condensed and
therefore do not contain all disclosures required by generally accepted
accounting principles. The interim financial statements are unaudited; however,
in the opinion of Hankersen International Corp., f/k/a Kushi Natural Foods
Corp., (the "Company"), the interim financial statements include all
adjustments, consisting only of normal recurring adjustments, necessary for a
fair statement of the results for the interim periods. Results for interim
periods are not necessarily indicative of those to be expected for the full
year. It is suggested that these condensed consolidated financial statements be
read in conjunction with the December 31, 2005 audited consolidated financial
statements and the accompanying notes thereto.

The consolidated financial statements include the accounts of the Company and
its subsidiaries. All material intercompany balances and transactions have been
eliminated.

   b) DESCRIPTION OF BUSINESS AND REVERSE MERGER:

Hankersen International Corp. was incorporated on August 1, 1996, under the laws
of the State of Delaware. Until August 2005, the Company had no operations and
the sole purpose of the Company was to locate and consummate a merger or
acquisition with a private entity.

In August 2005, the Company, through Kushi Sub, Inc., a newly formed Delaware
corporation and wholly-owned subsidiary of the Company ("Acquisition Sub")
acquired all the ownership interest in Hanxin (Cork) International Holding Co.,
Ltd. ("Hanxin International"), a British Virgin Islands limited liability
corporation, organized in September 2004. The Company acquired Hanxin
International in exchange for shares of common stock and shares of the Series A
Preferred Stock of the Company.

Subsequent to the merger and upon the conversion of the Series A Preferred
Stock, the former shareholders of Hanxin International will own 95% of the
outstanding shares of the Company's common stock. As a result of the ownership
interests of the former shareholders of Hanxin International, for financial
statement reporting purposes, the merger was treated as a reverse acquisition,
with Hanxin International deemed the accounting acquirer and Kushi deemed the
accounting acquiree. Historical information of the surviving company is that of
Hanxin International.

Hanxin International has no other business activities but owns 100% of Xi'An
Cork Investments Consultative Management Co., Ltd. ("Xi'An"), which owns 92% of
Xian Hanxin Technology Co., Ltd. ("Hanxin"), incorporated in July 2002, both
Xi'An and Hanxin are People's Republic of China (PRC) corporations. Most of the
Company's activities are conducted through Hanxin.

Hanxin is engaged in developing, manufacturing and marketing of cork wood floor,
wall and decorating materials. Its products are sold to customers in China and
oversea customers in India, the United States of America, Germany and Japan.
Hanxin currently owns 4 cork processing technology related patents in China.

The Company through Hanxin acquired 75% equity interest of Cork Import and
Export Co. Ltd ("CIE")., a PRC corporation engaged in cork trading businesses
during fiscal year 2005.


                                       5
<PAGE>


   c) 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 reporting amounts of revenues and expenses during the reported period.
Significant estimates in 2006 and 2005 include the estimated useful lives and
fair values of the assets. Actual results could differ from those estimates.

   d) RECENT ACCOUNTING PRONOUNCEMENTS:

In December 2004, the FASB issued SFAS 123R. Under this standard, all forms of
share-based payment to employees, including stock options, would be treated as
compensation and recognized in the statement of operations. This standard will
be effective for awards granted, modified or settled in fiscal years beginning
after June 15, 2005. The Company is currently researching the appropriate
valuation model to use for stock options. In connection with the issuance of FAS
123R, the SEC issued Staff Accounting Bulletin No. 107 (SAB 107) in March of
2005. SAB 107 provides implementation guidance for companies to use in their
adoption of FAS 123R. The Company is currently evaluating the effect of FAS 123R
and SAB 107 on its financial statements.

2. INVENTORIES

Inventories at September 30, 2006, consisted of the following:

Raw material                                      $ 166,010
Work in progress                                     84,099
Finished goods                                       54,458
                                              --------------
Total                                             $ 304,567
                                              ==============


3. DEPOSIT FOR PURCHASE OF FIXED ASSETS

The Company intends to purchase certain factory facilities from an unrelated
company without disclosing its own identity. The purchase was arranged through
an agent. $743,476 (equivalent to RMB 6,000,000) deposit was paid to the agent
as of December 31, 2005 and $1,771,255 (equivalent to RMB 14,000,000) was paid
to the agent as of the quarter ending September 30, 2006. The agency agreement
has no firm commitment on the purchase but it states a maximum price the Company
is willing to pay for the fixed assets. The deposit is fully refundable if the
purchase did not go through.

4. INVESTMENT AND LOAN TO INVESTEE

On June 28, 2005, the Company purchased a 12% equity interest of Shaanxi DeRong
Technology Information Development Co. Ltd. ("DeRong"), a PRC corporation, for
$1,751,248 (equivalent to RMB 14,000,000). DeRong owns a cork tree forest
plantation in China. The investment is long term and is stated at cost.

During the year, the Company also advanced to DeRong $988,204 (equivalent to RMB
7,900,000). The amount is unsecured and accrues interest at a minimum rate of
bank loan. This loan principal was re-paid by DeRong on September 7, 2006.


5. INCOME AND OTHER TAXES

The Company and its U. S. subsidiary will file consolidated Federal and state
income tax returns. The Company's PRC subsidiaries file income tax returns under
the Income Tax Law of the People's Republic of China concerning Foreign
Investment Enterprises and Foreign Enterprises and local income tax laws. The
Company's BVI subsidiary is exempt from income taxes.


                                       6
<PAGE>


Pursuant to the PRC Income Tax Law, any new foreign owned corporation is exempt
from income tax for the first two years, and then is either 50% exempt of income
tax for the next three years for non high-tech corporation or 15% tax rate for
corporation qualified by State Science and Technology Commission as "High Tech
corporation" located in State "High Tech Zone" approved by China State Council.
Hanxin is qualified as a High Tech corporation. Based on this regulation, Hanxin
was exempt from income tax in year 2003 and 2004 and its income is now subject
to 15% tax starting as of January 1, 2005. CIE is not located in State "High
Tech Zone" approved by China State Council, and its income is subject to a 33%
tax rate.


6. STOCKHOLDERS EQUITY

On August 9, 2005, the Company acquired Hanxin International in exchange for (i)
24,000,000 shares of the Company's common stock and (ii) 1,000 shares of the
Company's Series A Preferred Stock, which are converted into 177,185,642 shares
of the Company's common stock, without taking into effect of a reverse stock
split as described below.

In November 2005, the Company filed and circulated to its shareholders the
Information Statement which permitted the Company, among other things, to (i)
amend its Articles of Incorporation to increase its authorized shares of common
stock to 200,000,000 shares; (ii) approve one for six reverse split as to all
outstanding shares of common stock of the Company, effective as to holders of
record of shares of common stock on December 9, 2005, (iii) approve a stock
option, SAR and stock bonus plan for the directors, officers, employees and
consultants of the Company. A certificate of amendment officially increasing the
authorized shares of common stock and approving the reverse stock split was
filed with the State of Delaware on December 13, 2005.

All net income per share amounts for the nine months ended September 30, 2006
and 2005 have been restated to assume recapitalization and to reflect the
reverse stock split and, with respect to fully diluted amounts, the conversion
of the 1,000 shares of preferred stock into 29,530,937 shares of the Company's
common stock after giving effect to the reverse stock split. This amount
reflects a reduction of four shares otherwise issuable upon conversion of the
shares of preferred stock on account of the cancellation of fractional shares.

On September 1, 2006, the 1,000 shares Series A preferred stock were converted
into 29,530,937 shares of the Company's common stock. As a result, the number of
common stock issued and outstanding was 35,295,727 as of September 30, 2006.
Subsequently, the Company issued additional 118,123 shares in October 2006 to
reflect an under-issuance to a stockholder of the shares of common stock
issuable upon conversion of the preferred stock . As a result, the total issued
and outstanding shares of the Company's common were 35,413,850 as of November
30, 2006.


7. LEASE COMMITMENTS

The Company leases its office space and land under operating lease agreements
that are expiring at November 2006 and February 2007. The future minimum rental
and properties management fee payments as of September 30, 2006 are $9,782.

The Company also leases three patents right from its Chairman, Mr. Fang She
Zhang, under operating lease agreements that expire on April 16, 2011. The
following is a schedule of future minimum rental payments required under these
operating leases that have remaining lease terms in excesses of one year as of
September 30, 2006.

           Quarter Ending September 30,
                       2007                          $      303,644
                       2008                                 303.644
                       2009                                 303.644
                       2010                                 165.317
                                                        ------------
          Total minimum payments required            $    1,076,249
                                                        ============


                                       7
<PAGE>



ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

         The following analysis of our consolidated financial condition and
results of operations for the three months and nine months ended September 30,
2006 and 2005, should be read in conjunction with the consolidated financial
statements, including footnotes, and other information presented in our annual
report on Form 10-KSB as filed with the Securities and Exchange Commission on
June 26, 2006.

         OVERVIEW

         The Company was incorporated under the laws of the State of Delaware on
August 1, 1996. The Company was formed in connection with the merger acquisition
of Kushi Macrobiotics Corp. ("KMC") with American Phoenix Group, Inc. ("APGI")
in 1996. Prior to such acquisition, KMC had operated a business of marketing a
line of natural foods (the "Kushi Cuisine"). This business was not successful
and management determined that it would be in the shareholder's interest for KMC
to operate a different business. In the APGI reverse merger, the shareholders of
APGI became the owners of 85% of the shares of KMC, which changed its name to
American Phoenix Group, Inc. As a condition to the merger, KMC was required to
divest itself of all assets related to the Kushi Cuisine business. This
divestiture was affected by transferring all of the assets related to the Kushi
Cuisine business, principally inventory and receivables, and approximately
$115,000 to a newly formed entity, the Company, and spinning off the shares of
the Company to the KMC shareholders on a three for one basis simultaneously with
the consummation of the KMC merger with APGI. The Kushi Cuisine assets and a
portion of the cash were contributed to a joint venture which failed and the
Company lost its investment therein of approximately $42,000.

         As a result of the failed business, the Company had no operations and
its business plan became to seek, investigate, and, if warranted, acquire one or
more properties or businesses, and to pursue other related activities intended
to enhance shareholder value. The proposed business activities classified the
Company as a "blank check" or "shell company" whose sole purpose at this time
was to locate and consummate a merger or acquisition with a private entity. As
part of its business plan, the Company filed a registration statement on Form
10-SB on a voluntary basis in order to become a "public" company by virtue of
being subject to the reporting requirements of the Securities Exchange Act of
1934 (the "Exchange Act"). To the best of the Company's knowledge, the Company's
shares have never traded, nor have any such shares been transferred from their
original holders except by the laws of descent and distribution.

                On August 9, 2005, the Company, through Kushi Sub, Inc., a newly
formed Delaware corporation and wholly-owned subsidiary of the Company
("Acquisition Sub") acquired a 100% ownership interest in Hanxin (Cork)
International Holding Co., Ltd., a British Virgin Islands limited liability
corporation ("Hanxin International") through a merger of Hanxin International
into Acquisition Sub (the "Merger"). The Company acquired Hanxin International
in exchange for (i) 4,000,000 shares of the Company's common stock after taking
into account a one for six reverse stock split as described below (the "Reverse
Split") and (ii) 1,000 shares of the Company's Series A Preferred Stock, which
are converted into 29,530,940 shares of the Company's common stock, after taking
into account the Reverse Split. Hanxin International was the direct parent of
Xi'An and the indirect parent of Hanxin. Both Xi'An and Hanxin are privately
held corporations organized under the laws of The People's Republic of China.
The aggregate amount of shares of common stock issued to the shareholders of
Hanxin International pursuant to the Merger, taking into account conversion of
all of shares of the Series A Preferred Stock, represented 95% of the issued and
outstanding shares of the Company's common stock. Under the terms of the
Agreement and Plan of Merger (the "Agreement") executed on July 11, 2005, the
former stockholders of the Company continue to own an aggregate of 5% of the
issued and outstanding shares of the Company's common stock. As a result of the
Merger, Acquisition Sub now owns 100% of Xi'An, which, in turn, continues to own
ninety two percent (92%) of the issued and outstanding shares of capital stock
of Hanxin. The transactions contemplated by the Agreement were intended to be a
"tax-free" reorganization pursuant to the provisions of Section 368 of the
Internal Revenue Code of 1986, as amended. For accounting purposes, this
transaction was accounted for as a reverse merger, since the former stockholders
of Hanxin International now own a majority of the issued and outstanding shares
of common stock of the Company, and the directors and executive officers of
Hanxin have become the directors and executive officers of the Company.


                                       8
<PAGE>


         In November 2005, the Company filed and circulated to its shareholders
the Information Statement which permitted the Company to (i) change its name to
HanKersen International Corp.; (ii) amend its Articles of Incorporation to
increase its authorized shares of common stock to 200,000,000 shares; (iii)
approve the Reverse Split as to all outstanding shares of common stock of the
Corporation, effective as to holders of record of shares of common stock on
December 9, 2005, (iv) appoint the new directors of the Company; and (v) approve
a stock option, SAR and stock bonus plan for the directors, officers, employees
and consultants of the Company. A certificate of amendment officially changing
the name, increasing the authorized shares of common stock and approving the
reverse stock split was filed with the State of Delaware on December 13, 2005.

         BUSINESS OVERVIEW

         Hanxin is a manufacturing company based in China, which produces
cork-building material sold under the Hanxin brand name. Presently,
approximately 75% of Hanxin's sales are to customers in China, and the balance
of its sales are made to customers in India, the United States, Germany and
Japan.

         Hanxin's objective is to utilize the cost advantages of being based in
China in order to become a leading cork processor. In order to achieve its
objectives Hanxin plans to increase its sales and marketing efforts, to seek to
acquire other cork exporting companies in China and to establish its own cork
plantation. There can be no assurance that Hanxin will be able to achieve these
objectives.

         FOREIGN EXCHANGE CONSIDERATIONS

         Even though we are a U.S. company, because all of our operations are
located in the PRC, we face certain risks associated with doing business in that
country. These risks include risks associated with the ongoing transition from
state business ownership to privatization, operating in a cash-based economy,
dealing with inconsistent government policies, unexpected changes in regulatory
requirements, export restrictions, tariffs and other trade barriers, challenges
in staffing and managing operations in a communist country, differences in
technology standards, employment laws and business practices, longer payment
cycles and problems in collecting accounts receivable, changes in currency
exchange rates and currency exchange controls. We are unable to control the vast
majority of these risks associated both with our operations and the country in
which they are located and these risks could result in significant declines in
our revenues.

         Because revenues from our operations in the PRC accounted for 100% of
our consolidated net revenues, how we report net revenues from our PRC-based
operations is of particular importance to understanding our financial
statements. Transactions and balances originally denominated in U.S. dollars are
presented at their original amounts. Transactions and balances in other
currencies are converted into U.S. dollars in accordance with Statement of
Financial Accounting Standards (SFAS) No. 52, "Foreign Currency Translation,"
and are included in determining comprehensive net income or loss. For foreign
operations with the local currency as the functional currency, assets and
liabilities are translated from the local currencies into U.S. dollars.
Translation adjustments resulting from the process of translating the local
currency financial statements into U.S. dollars are included in determining
comprehensive income or loss.


                                       9
<PAGE>


         The functional currency of our Chinese subsidiaries is the Chinese RMB,
the local currency. The financial statements of the subsidiaries are translated
to U.S. dollars using year-end rates of exchange for assets and liabilities, and
average rates of exchange for the period for revenues, costs, and expenses. Net
gains and losses resulting from foreign exchange transactions are included in
the consolidated statements of operations and were not material during the
periods presented. Until 1994, the RMB experienced a gradual but significant
devaluation against most major currencies, including U.S. dollars, and there was
a significant devaluation of the RMB on January 1, 1994 in connection with the
replacement of the dual exchange rate system with a unified managed floating
rate foreign exchange system. Since 1994, the value of the RMB relative to the
U.S. Dollar has remained stable and has appreciated slightly against the U.S.
dollar. Countries, including the United States, have argued that the RMB is
artificially undervalued due to China's current monetary policies and have
pressured China to allow the RMB to float freely in world markets.

         On July 21, 2005, the PRC reported that it would have its currency
pegged to a basket of currencies rather than just tied to a fixed exchange rate
to the dollar. It also increased the value of its currency 2% higher against the
dollar, effective immediately. If any devaluation of the RMB were to occur in
the future, returns on our operations in China, which are expected to be in the
form of RMB, will be negatively affected upon conversion to U.S. dollars.
Although we attempt to have most future payments, mainly repayments of loans and
capital contributions, denominated in U.S. dollars, if any increase in the value
of the RMB were to occur in the future, our product sales in China and in other
countries may be negatively affected.

         CRITICAL ACCOUNTING POLICIES

         The discussion and analysis of our 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. The preparation of these consolidated financial statements
requires us to make estimates and judgments that affect the reported amounts of
assets, liabilities, revenues and expenses, and related disclosure of contingent
assets and liabilities. On an on-going basis, we evaluate our estimates based on
historical experience and on various other assumptions that are believed to be
reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results may differ from these
estimates under different assumptions or conditions.

         We record property and equipment at cost. Depreciation is provided
using the straight-line method over the estimated economic lives of the assets,
which are from 1 to 35 years. Expenditures for major renewals and betterments
that extend the useful lives of property and equipment are capitalized.
Expenditures for maintenance and repairs are charged to expense as incurred. We
review the carrying value of long-lived assets for impairment at least annually
or whenever events or changes in circumstances indicate that the carrying amount
of an asset may not be recoverable. Recoverability of long-lived assets is
measured by comparison of its carrying amount to the undiscounted cash flows
that the asset or asset group is expected to generate. If such assets are
considered to be impaired, the impairment to be recognized is measured by the
amount by which the carrying amount of the property, if any, exceeds its fair
market value.


                                       10
<PAGE>


         The Company's revenues from the sale of products are recognized when
the goods are shipped, title passes, the sales price to the customer is fixed
and collectibility is reasonably assured. Persuasive evidence of an arrangement
is demonstrated via purchase order from customer, product delivery is evidenced
by warehouse shipping log as well as bill of lading from the trucking company
and no product return is allowed except defective or damaged products, the sales
price to the customer is fixed upon acceptance of purchase order, there is no
separate sales rebate, discounts, and volume incentives.


RESULTS OF OPERATIONS

<TABLE>
<CAPTION>

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

                                               FOR THREE MONTHS  ENDED
                                            ----------------------------
                                            SEPT 30, 2006  SEPT 30, 2005       (DECREASE)/INCREASE
                                            -------------  -------------       -------------------
                                              UNAUDITED      UNAUDITED

<S>                                         <C>            <C>                <C>             <C>
Revenues                                    $ 3,907,418    $ 4,086,540        (179,122)      -4.4%
Cost of Goods Sold                            3,097,971      2,373,861         724,110       30.5%
                                            -----------    -----------
Gross Profit                                    809,447      1,712,679        (903,232)     -52.7%
Gross Profit percentage                                                           20.7%      41.9%
Operating expenses
  Selling expenses                              465,437        380,784          84,653       22.2%
  General and administrative expense            128,281         77,445          50,836       65.6%
                                            -----------    -----------
Total operating expenses                        593,718        458,229         135,489       29.6%
                                            -----------    -----------
Income from operations                          215,729      1,254,450      (1,038,721)     -82.8%
                                            -----------    -----------
Other income (expense)
  Interest income, net                           16,791         (3,336)         20,127     -603.3%
  Other income (expense), net                    17,168         18,842          (1,674)      -8.9%
  Acquisition costs                                --         (280,179)        280,179     -100.0%
                                            -----------    -----------
Total other (expense) income                     33,959       (264,673)        298,632     -112.8%
Income before taxes and minority interest       249,688        989,777        (740,089)     -74.8%
Income tax provision                             39,295        181,037        (141,742)     -78.3%
                                            -----------    -----------
Income before minority interest                 210,393        808,740        (598,347)     -74.0%
Minority interest                                13,112         65,198         (52,086)     -79.9%
                                            -----------    -----------
Net income                                  $   197,281    $   743,542        (546,261)     -73.5%
                                            ===========    ===========

</TABLE>



REVENUES

         For the three months ended September 30, 2006, our revenues were
$3,907,418 as compared to $4,086,540 for the three months ended September 30,
2005, a decrease of $179,122 or approximately 4.4%. The decrease in net revenues
is mainly due to clients' different demands of cork wood floors and material
types. During the quarter ended September 30, 2006, the Company sold
approximately $364,902 less on general wood material, 4.5 UV Floor, and 12mm
wood floor, but it sold approximately $170,982 more products on 1,3,5,and 6mm
wood material, 6mm UV floor, and 4.5 and 6 mm PVC floor. The new line of paper
products also added an additional $14,797 of net revenue for the quarter ending
September 30, 2006.

                                       11
<PAGE>


COST OF SALES AND GROSS PROFIT

         For the three months ended September 30, 2006, cost of sales amounted
to $3,097,971 or 71.3% of net revenues as compared to cost of sales of
$2,373,861 or 58.1% of net revenues for the three months ended September 30,
2005. This increase was primarily a result of a price increase in raw materials,
workers' salaries, patent lease costs, and product mix. Gross profit for the
three months ended September 30, 2006 was $809,447 or 20.7% of revenues, as
compared to $1,712,679 or 41.9% of revenues for the three months ended September
30, 2005. The Company is currently working with a vendor of raw materials to
secure future price by proposing long term supplier contracts.


OPERATING EXPENSES

         Our operating expenses increased for the three months ended September
30, 2006 as compared to the three months ended September 30, 2005. For the three
months ended September 30, 2006, total operating expenses were $593,718 as
compared to $458,229 for the three months ended September 30, 2005, a increase
of $135,489 or 29.6%. This was attributable to an increase in selling expenses
was primarily attributable to increases in freight cost, commissions, and
advertising fees associated with exhibit shows attended in Shanghai China. The
increase in general and administrative costs was primarily attributable to
increases in employees' salaries and benefits, directors conference fee, as well
as technical , legal, accounting and professional fees in connection with our
SEC filings and continued compliance with the provisions of the Sarbanes-Oxley
Act of 2002, including new provisions which will be effective in 2007. These
increases could serve to reduce our net income absent a significant increase in
our revenues at the current gross profit margins.


OTHER INCOME (EXPENSES)

         For the three months ended September 30, 2006, other income (expense),
net, amounted to $17,168 as compared to net other income of $18,842 for the
three months ended September 30, 2005. Other income for the three months ended
September 30, 2006 and 2005 is related to the income received from the rental of
its entertainment facility.

         For the three months ended September 30, 2006, net interest income was
$16,791 as compared to net interest expense of $3,336 for the three months ended
September 30, 2005, an increase of $20,127 for the three months ended September
30, 2006 was attributable to loans made to its related party DeRong and interest
income from bank deposits during 3rd quarter of year 2006. The outstanding
principal amount of the loan from the related party DeRong was paid off in full
on September 7, 2006.

         For the three months ended September 30, 2006, acquisition costs were
$0 as compared to net acquisition costs $280,179 for the three months ended
September 30, 2005. The acquisition costs for the three months ended September
30, 2005 were associated with reverse-merger acquisition procedures occurred
during the third quarter of year 2005.

INCOME TAX

         Our income taxes decreased by $141,742 to $39,295 for the three months
ended September 30, 2006 from $181,037 for the three months ended September 30,
2005. This decrease was on account of lower taxable income. The Company's
tax-exempt status ended as of December 31, 2004. Hanxin is now subject to a 15%
corporate income tax starting from the year 2005. CIE is subject to a 33%
corporate income tax starting from the inception of the Company.



                                       12
<PAGE>

<TABLE>
<CAPTION>


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


                                              FOR NINE MONTHS  ENDED
                                           ----------------------------
                                           SEPT 30, 2006  SEPT 30, 2005     (DECREASE)/ INCREASE
                                           -------------  -------------     --------------------
                                             UNAUDITED       UNAUDITED

<S>                                         <C>            <C>               <C>             <C>
Revenues                                    $ 8,646,522    $ 9,262,593       (616,071)      -6.7%
Cost of Goods Sold                            6,690,156      5,202,224      1,487,932       28.6%
                                            -----------    -----------
Gross Profit                                  1,956,366      4,060,369     (2,104,003)     -51.8%
Gross Profit percentage                            22.6%          43.8%
Operating expenses
Selling expenses                                999,794        887,120        112,674       12.7%
General and administrative expense              391,477        258,549        132,928       51.4%
Total operating expenses                      1,391,271      1,145,669        245,602       21.4%
                                            -----------    -----------
Income from operations                          565,095      2,914,700     (2,349,605)     -80.6%
                                            -----------    -----------
Other income (expense)
Interest income, net                             53,958            901         53,057     5888.7%
Other income (expense), net                      51,232         56,377         (5,145)      -9.1%
Acquisition costs                                  --         (280,179)       280,179     -100.0%
                                            -----------    -----------
Total other (expense) income                    105,190       (222,901)       328,091     -147.2%
Income before taxes and minority interest       670,285      2,691,799     (2,021,514)     -75.1%
Income tax provision                            110,004        349,426       (239,422)     -68.5%
                                            -----------    -----------
Income before minority interest                 560,281      2,342,373     (1,782,092)     -76.1%
Minority interest                                52,862        187,889      (135,027)      -71.9%
                                            -----------    -----------
Net income                                  $   507,419    $ 2,154,484     (1,647,065)     -76.4%
                                            ===========    ===========
</TABLE>




REVENUES

         For the nine months ended September 30, 2006, our revenues were
$8,646,522 as compared to $9,262,593 for the nine months ended September 30,
2005, a decrease of $616,071 or approximately 6.7%. The reason for the decrease
is primarily due to the change of our pricing structure as a result of the
change in our applicable value added tax rate (VAT). Starting from December
2005, our small taxpayer status ended and the Company became a general taxpayer
for VAT purposes. The Company began to charge 17% VAT instead of 4% VAT on its
invoices to the customers. In order to stay competitive in the market and with
some long term sale contracts signed with customers, the Company maintains its
products selling price and did not shifting the VAT to its customers. The
decrease in net revenue was also attributed by the tightening of receivable
credit policy. The Company limited sales to certain customers with receivables
outstanding exceeding half or one year depending upon a particular customers'
credit limit. This policy reduced sales on one hand but improved the Company
overall financial position. For the nine months ended September 30, 2006, our
revenue from Cork Wood Floor sales were $800,834 less than the revenue from cork
wood floor products sales for nine months ended September 30, 2005. This
decreased amount was offset by additional revenue of $99,649 and $85,114 from
tree skin and cork paper products sales respectively for the nine months ended
September 30, 2006.


                                       13
<PAGE>



COST OF SALES AND GROSS PROFIT

         For the nine months ended September 30, 2006, cost of sales amounted to
$6,690,156 or 77.4% of net revenues as compared to cost of sales of $5,202,224
or 56.2% of net revenues for the nine months ended September 30, 2005. This
increase was primarily a result of a price increase in raw materials, workers'
salaries and benefits, patent lease cost, and product mix. During the nine
months ended September 30, 2006, the Company sold raw material (tree skins) at
lower margins to a business partner. Gross profit for the nine months ended
September 30, 2006 was $1,956,366 or 22.6% of revenues, as compared to
$4,060,369 or 43.8% of revenues for the nine months ended September 30, 2005.
The Company is currently working with a vendor of raw materials to secure future
price by proposing long term supplier contracts.


OPERATING EXPENSES

         Our operating expenses increased for the nine months ended September
30, 2006 as compared to the nine months ended September 30, 2005. For the nine
months ended September 30, 2006, total operating expenses were $1,391,271 as
compared to $1,145,669 for the nine months ended September 30, 2005, a increase
of $245,602 or 21.4%. This increase was attributable to an increase in our
selling expenses, mainly employees' salaries and benefits, and freight cost,
despite a reduction in our revenue. The increase in general and administrative
costs was primarily attributable to an increase in employees' salaries and
benefits, directors conference fees, as well as technical, legal, accounting and
professional fees during 2006 in connection with our SEC filings and continued
compliance with the provisions of the Sarbanes-Oxley Act of 2002, including new
provisions which will be effective in 2007. These increases could serve to
reduce our net income absent a significant increase in our revenues at the
current gross profit margins.


OTHER INCOME (EXPENSES)

         For the nine months ended September 30, 2006, other income (expense),
net, amounted to $51,232 as compared to $56,377 for the nine months ended
September 30, 2005. Other income for the nine months ended September 30, 2006
and 2005 is related to the income received from the rental of its entertainment
facility.

         For the nine months ended September 30, 2006, net interest income was
$53,958 as compared to net interest income of $901 for the nine months ended
September 30, 2005, an increase of $53,057 for the nine months ended September
30, 2006. This was attributable to (i) loans made to its related party DeRong
during first nine months of 2006 and (ii) interest income from bank deposits
which increased for the nine months ended September 30, 2006.

         For the nine months ended September 30, 2006, acquisition costs were $0
as compared to net acquisition costs $280,179 for the nine months ended
September 30, 2005. The acquisition costs for the nine months ended September
30, 2005 were associated with reverse-merger acquisition procedures occurred
during the third quarter of year 2005.


                                       14
<PAGE>



INCOME TAX

         Our income taxes decreased by $239,422 to $110,004 for the nine months
ended September 30, 2006 as compared to $349,426 for the nine months ended
September 30, 2005. This decrease was due to lower taxable income. The Company's
tax-exempt status ended as of December 31, 2004. Hanxin is now subject to a 15%
corporate income tax starting from the year 2005. CIE is subject to a 33%
corporate income tax starting from the inception of the Company.



LIQUIDITY AND CAPITAL RESOURCES

            Operating working capital (accounts receivable plus inventory less
accounts payable and accrued expenses) decreased by $493,756 from $2,746,436 as
of December 31, 2005 to $2,252,680 as of September 30, 2006. The decrease was
primarily due to a decrease in inventory of $555,089 from $859,656 as of
December 31, 2005 to $304,567 as of September 30, 2006 and an increase in
accrued expenses of $375,860 from December 31, 2005 through September 30, 2006.
The reduction of inventory is a result of reduced productions with less
inventory demand and the increase in accrued expenses is attributable to an
increase in accrued commissions, legal fees, union operation expenses, and
education expenses.

            Cash provided by operating activities was $684,498 for the nine
months ended September 30, 2006 as compared to $3,897,103 provided for the nine
months ended September 30, 2005. The decrease in cash provided by operating
activities for the nine months ended September 30, 2006 is a result of a
reduction of net income and increase of account receivable and advance to
suppliers

            Cash used in investing activities was $12,391 for the nine months
ended September 30, 2006 as compared to $275,326 for the nine months ended
September 30, 2005 which included a payment of $1,726,243 investment in 12%
equity interest of DeRong during the nine months ended September 30, 2005 valued
at historical exchange rate.

            With approximately $2.3 million of net working capital as of
September 30, 2006 and cash flow positive operating results, the Company
believes it will have sufficient resources to finance its operations for the
coming year.


CRITICAL ACCOUNTING POLICIES AND ESTIMATES

                 Management's Discussion and Analysis of Financial Condition and
Plan of Operations discusses the Company's financial statements, which have been
prepared in accordance with accounting principles generally accepted in the
United States of America. The preparation of these financial statements requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. On an on-going
basis, management evaluates its estimates and judgments, including those related
to revenue recognition, intangible assets, financing operations, and
contingencies and litigation. Management bases its estimates and judgments on
historical experience and on various other factors that are believed to be
reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying value of assets and liabilities that are not
readily apparent from other sources. Actual results may differ from these
estimates under different assumptions or conditions. The most significant
accounting estimates inherent in the preparation of the Company's financial
statements include estimates as to the appropriate carrying value of certain
assets and liabilities which are not readily apparent from other sources,
primarily allowance for doubtful accounts and accruals for other liabilities.
These accounting policies are described at relevant sections in this discussion
and analysis and in the notes to the consolidated financial statements included
in our Annual Report on Form 10-KSB for the fiscal year ended December 31, 2005.


                                       15
<PAGE>



ITEM 3.     CONTROLS AND PROCEDURES

         Based on the evaluation of the Company's disclosure controls and
procedures by Pengcheng Chen, the Company's Chief Executive Officer and Yi Tong,
the Company's Chief Financial Officer, as of a date within 90 days of the filing
date of this quarterly report, such officers have concluded that the Company's
disclosure controls and procedures are effective in ensuring that information
required to be disclosed by the Company in the reports that it files or submits
under the Securities and Exchange Act of 1934, as amended, is recorded,
processed, summarized and reported, within the time period specified by the
Securities and Exchange Commission's rules and forms. There were no significant
changes in the Company's internal controls or in other factors that could
significantly affect these controls subsequent to the date of their evaluation,
including any corrective actions with regard to significant deficiencies and
material weaknesses.









                                       16
<PAGE>


                           PART II - OTHER INFORMATION

Item 1.  Legal Proceedings

         None

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

         None

Item 5. Other Information

         None

Item 6.  Exhibits

Exhibit
Number     Description
--------   ----------------
31.1      Certification of the Chief Executive Officer pursuant to Section 302
          of the Sarbanes-Oxley Act of 2002.
31.2      Certification of the Chief Financial Officer pursuant to Section 302
          of the Sarbanes-Oxley Act of 2002.
32.1      Certification of Chief Executive Officer Certification pursuant to
          Section 906 of the Sarbanes- Oxley Act of 2002.
32.2      Certification of Chief Financial Officer Certification pursuant to
          Section 906 of the Sarbanes- Oxley Act of 2002.














                                       17
<PAGE>



                                   SIGNATURES

         In accordance with the requirements of the Exchange Act, the registrant
has caused his report to be signed on its behalf by the undersigned, thereunto
duly authorized.

                          HANKERSEN INTERNATIONAL CORP.


Dated:   December 8, 2006           By: /S/ PENGCHENG CHEN
                                        ----------------------------------------
                                        Pengcheng Chen, Chief Executive Officer


                                    By: /S/ YI TONG
                                        ----------------------------------------
                                        Yi Tong, Chief Financial Officer





















                                       18