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 March 31, 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 March 31, 2006 there were
5,764,786 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/A
                      QUARTERLY PERIOD ENDED MARCH 31, 2006

                                      INDEX

                                                                            Page

PART I - FINANCIAL INFORMATION

     Item 1 - Financial Statements

     Consolidated Balance Sheet
               March 31, 2006 (Unaudited)......................................2
     Consolidated Statements of Income and Comprehensive Income (Unaudited)
               For the Three Months Ended March 31, 2006 and 2005..............3
     Consolidated Statements of Cash Flows (Unaudited)
               For the Three Months Ended March 31, 2006 and 2005..............4

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

     Item 2 - Management's Discussion and Analysis or Plan of Operation.....8-13

     Item 3 - Controls and Procedures.........................................14

PART II - OTHER INFORMATION

     Item 1 - Legal Proceedings...............................................15

     Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds.....15

     Item 3 - Default upon Senior Securities .................................15

     Item 4 - Submission of Matters to a Vote of Security Holders.............15

     Item 5 - Other Information...............................................15

     Item 6 - Exhibits........................................................15


                                       1
<PAGE>

                                     PART I
                              FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

HANKERSEN INTERNATIONAL CORP. AND SUBSIDIARIES
(FORMERLY KUSHI NATURAL FOODS CORP. AND SUBSIDIARIES)
CONDENSED CONSOLIDATED BALANCE SHEET

<TABLE>
<CAPTION>
                                                                                 MARCH 31, 2006    DECEMBER 31, 2005
                                                                               -----------------   -----------------
<S>                                                                            <C>                 <C>
ASSETS
Current Assets:
  Cash and cash equivalents                                                    $       1,072,644   $         574,774
  Accounts receivable, net of allowance for doubtful accounts of
  $17,109 and $16,995, respectively                                                    2,987,276           2,284,854
  Inventories                                                                            564,201             859,656
  Due from stockholders/officers                                                       1,393,224           1,380,292
  Loan to related party                                                                  985,443             978,910
  Prepayments and other current assets                                                 1,807,735           1,771,365
                                                                               -----------------   -----------------
      Total Current Assets                                                             8,810,523           7,849,851

Property and Equipment - Net                                                           2,323,519           2,365,014
Investment - At cost                                                                   1,746,354           1,734,777
Land Use Right - Net                                                                     154,164             154,221
                                                                               -----------------   -----------------
      Total Assets                                                             $      13,034,560   $      12,103,863
                                                                               =================   =================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
  Accounts payable                                                                       489,576             179,144
  Accrued expenses                                                                       227,772             218,930
  Loan payable                                                                           374,219             371,738
  Taxes payable                                                                          464,209             164,854
  Other current liabilities                                                              173,586             147,393
                                                                               -----------------   -----------------
      Total Current Liabilities                                                        1,729,362           1,082,059
Minority Interest                                                                      1,331,798           1,300,597
Stockholders' Equity
  Series A Preferred stock, $0.0001 par value, 5,,000,000 shares authorized,
    1,000 shares issued and outstanding                                                        1                   1
  Common stock, $0.0001 par value, 200,000,000 shares authorized,
    5,764,786 shares issued and outstanding                                                  577                 577
  Additional paid-in capital                                                           4,399,735           4,399,735
  Reserve funds                                                                        1,330,756           1,330,756
  Retained earnings                                                                    3,923,254           3,745,588
  Accumulated other comprehensives income                                                319,077             244,550
                                                                               -----------------   -----------------
      Total Stockholders' Equity                                                       9,973,400           9,721,207
                                                                               -----------------   -----------------
      Total Liabilities and Stockholders' Equity                               $      13,034,560   $      12,103,863
                                                                               =================   =================
</TABLE>

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


                                       2
<PAGE>

HANKERSEN INTERNATIONAL CORP. AND SUBSIDIARIES
(FORMERLY KUSHI NATURAL FOODS CORP. AND SUBSIDIARIES)
CONDENSED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
FOR THREE MONTHS ENDED MARCH 31, 2006 AND 2005

                                               For Three Months Ended March
                                            ---------------------------------
                                             March 31, 2006    March 31, 2005
                                            ---------------   ---------------
                                               Unaudited         Unaudited

Revenues                                    $     1,591,031   $     2,043,846

Cost of Goods Sold                                1,171,904         1,144,404
                                            ---------------   ---------------
Gross Profit                                        419,127           899,442

Operating expenses
  Selling expenses                                  176,119           199,914
  General and administrative expense                 65,717           110,384
                                            ---------------   ---------------
Total operating expenses                            241,836           310,298
                                            ---------------   ---------------
Income from operations                              177,291           589,144
                                            ---------------   ---------------
Other income (expense)
  Interest income, net                               14,939             4,461
  Other income (expense), net                        18,482            18,109
                                            ---------------   ---------------
Total other (expense) income                         33,421            22,570

Income before taxes and minority interest           210,712           611,714

Income tax provision                                  1,845            91,139
                                            ---------------   ---------------
Income before minority interest                     208,867           520,575

Minority interest                                    31,201            41,646
                                            ---------------   ---------------
Net income                                  $       177,666   $       478,929

Other comprehensive income:
Foreign currency translation gain                    74,527                --
                                            ---------------   ---------------
Comprehensive income                        $       252,193   $       478,929
                                            ===============   ===============
Net income per common share
  - Basic                                   $          0.03   $          0.08
                                            ===============   ===============
  - Diluted:                                $          0.01   $          0.08
                                            ===============   ===============
Weighted Common Shares Outstanding*
  - Basic                                         5,764,786         5,764,786
                                            ===============   ===============
  - Diluted:                                     35,295,726         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.


                                       3
<PAGE>

HANKERSEN INTERNATIONAL CORP. AND SUBSIDIARIES
(FORMERLY KUSHI NATURAL FOODS CORP. AND SUBSIDIARIES)
CONDENSED STATEMENT OF CASH FLOWS
FOR THREE MONTHS ENDED MARCH 31, 2006 AND 2005

<TABLE>
<CAPTION>
                                                         For the Three Months Ended
                                                      ----------------------------------
                                                       March 31, 2006     March 31, 2005
                                                      ---------------    ---------------
                                                         Unaudited          Unaudited
<S>                                                   <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income                                            $       177,666    $       478,292
Adjustments to reconcile net income to net cash
  provided by operating activities
  Depreciation and amortization                                57,977             54,584
  Loss on disposal of fixed assets
  Minority interest                                            31,201             41,317
  Changes in operating assets and liabilities:
    Accounts receivable                                      (683,037)            44,742
    Inventories                                               299,195             12,856
    Prepayments and other current assets                      (24,386)           165,655
    Accounts payable and accrued expenses                     314,518           (431,849)
    Customer deposits                                              --            (22,954)
    Taxes payable                                             296,278            174,849
    Other current liabilities                                  25,042             22,386
                                                      ---------------    ---------------
Net cash provided by operating activities                     494,455            539,878
CASH FLOWS FROM INVESTING ACTIVITIES
  Deferred acquisition cost                                        --           (275,850)
  Purchase of equipment                                            --             (5,245)
                                                      ---------------    ---------------
Net cash used in investing activities                              --           (281,095)
CASH FLOWS FROM FINANCING ACTIVITIES
  Payment on long-term debt                                        --             (1,667)
  (Payment to) Receipts from stockholders/officers             (3,696)           997,669
                                                      ---------------    ---------------
Net cash provided by (used in) financing activities            (3,696)           996,002
Net (decrease) increase in cash and cash                      490,759          1,254,785
equivalents
Effect of exchange rate changes on cash                         7,111                 --
Cash and cash equivalents at beginning of period              574,774          1,011,872
                                                      ---------------    ---------------
Cash and cash equivalents at end of period            $     1,072,644    $     2,266,657
                                                      ===============    ===============
</TABLE>

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


                                       4
<PAGE>

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

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., a PRC corporation engaged in cork trading businesses during
fiscal year 2005.

      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.


                                       5
<PAGE>

      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 March 31, 2006, consisted of the following:

   Raw material                      $435,292
   Working in progress                 72,656
   Finished goods                      56,253
                                     --------
   Total                             $564,201
                                     ========

3. DUE FROM STOCKHOLDERS/OFFICERS

Amounts due from a stockholder/officer are unsecured, non-interest bearing and
due on demand. As of March 31, 2006, the total net amount due from the
stockholder/officer was $1,393,224, which included an aggregate net amount of
$93,728 lent by officers to the Company and a $1,486,952 prepayment to the
officer for a potential acquisition of a patent right owned by him. The purchase
was subsequently canceled and the full amount was returned to the Company on
April 25, 2006.

4. INVESTMENT AND LOAN TO INVESTEE

On June 28, 2005, the Company purchased 12% equity interest of Shaanxi DeRong
Technology Information Development Co. Ltd. ("DeRong"), a PRC corporation, for
$1,746,354 (equivalent to RMB 14,000,000). DeRong owns a cork tree forest
plantation in China. The investment is for long term and is stated at cost.

During the year, the Company also advanced to DeRong $985,443 (equivalent to RMB
7,900,000). The amount is unsecured and interest at minimum rate of bank loan.
The principal is due August 14, 2006. The amount is presented on the balance
sheet as Loan to Related Party.

5. LOAN PAYABLE

At May 13, 2005, the Company obtained a short term bank loan by pledging certain
building and land use right with a bank. The loan interest is 9.486% per annum
and the principal is due May 13, 2006.

6. 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>

Per PRC Income Tax Law, any new foreign owned corporation is exempt from income
tax for the first two years, and 50% exemption 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 subject to 15% tax starting from
January 1, 2005.

7. 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 three months ended March 31, 2006 and
2005 has been restated to assume recapitalization and to reflect the reverse
stock split and, with respect to fully diluted amounts, the anticipated
conversion of the 1,000 shares of preferred stock into 29,530,940 shares of the
Company's common stock after giving effect to the reverse stock split.

8. 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 property management fee payments as of March 31, 2006 were $27,747.


                                       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 ended March 31, 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

THREE MONTHS ENDED MARCH 31, 2006 COMPARED TO THREE MONTHS ENDED MARCH 31, 2005

<TABLE>
<CAPTION>
                                         For Three Months Ended March
                                       --------------------------------
                                       March 31, 2006    March 31, 2005      (Decrease)/ Increase
                                       --------------    --------------     ----------------------
                                          Unaudited         Unaudited
<S>                                    <C>               <C>                 <C>            <C>
Revenues                               $    1,591,031    $    2,043,846      (452,815)      -22.2%
                                       --------------    --------------
Cost of Goods Sold                          1,171,904         1,144,404        27,500         2.4%
Gross Profit                                  419,127           899,442      (480,315)      -53.4%
Gross Profit percentage                                                          26.3%       44.0%
Operating expenses
  Selling expenses                            176,119           199,914       (23,795)      -11.9%
  General and administrative expense           65,717           110,384       (44,667)      -40.5%
                                       --------------    --------------
Total operating expenses                      241,836           310,298       (68,462)      -22.1%
                                       --------------    --------------
Income from operations                        177,291           589,144      (411,853)      -69.9%
                                       --------------    --------------
Other income (expense)
  Interest income, net                         14,939             4,461        10,478       234.9%
  Other income (expense), net                  18,482            18,109           373         2.1%
                                       --------------    --------------
Total other (expense) income                   33,421            22,570        10,851        48.1%
Income before taxes and minority              210,712           611,714      (401,002)      -65.6%
interest
Income tax provision                            1,845            91,139       (89,294)      -98.0%
                                       --------------    --------------
Income before minority interest               208,867           520,575      (311,708)      -59.9%
Minority interest                              31,201            41,646       (10,445)      -25.1%
                                       --------------    --------------
Net income                             $      177,666    $      478,929      (301,263)      -62.9%
                                       ==============    ==============
</TABLE>

REVENUES

      For the three months ended March 31, 2006, our revenues were $1,591,031 as
compared to $2,043,846 for the three months ended March 31, 2005, a decrease of
$452,815 or approximately 22.2%. The decrease in net revenues is mainly due 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 shift the VAT to its customers. The decrease in net
revenue was also attributed to the tightening of receivable credit policy. The
Company limited sales to certain customers with receivables outstanding
exceeding half or one year, depend upon clients' credit limit. This policy
reduced sales but improved the Company's overall financial position.


                                       11
<PAGE>

COST OF SALES AND GROSS PROFIT

      For the three months ended March 31, 2006, cost of sales amounted to
$1,171,904 or 73.7% of net revenues as compared to cost of sales of $1,144,404
or 56.0% of net revenues for the three months ended March 31, 2005. This
increase was primarily a result of a price increase in raw materials, workers'
salaries, and product mix. During the first quarter of 2006, the Company sold
raw material at lower margin to a business partner. Gross profit for the three
months ended March 31, 2006 was $419,127 or 26.3% of revenues, as compared to
$899,442 or 44.0% of revenues for the three months ended March 31, 2005. The
Company is currently working with vendor on raw materials to secure future price
by proposing long term supplier contracts.

OPERATING EXPENSES

      Our operating expenses significantly decreased for the three months ended
March 31, 2006 as compared to the three months ended March 31, 2005. This was
attributable to a decrease in direct advertising and trade shows, and
commissions associated with our decreased revenues. The decrease in general and
administrative costs was primarily attributable to decreases in office supplies,
rent, and conference and meeting fees. We anticipate an increase in legal and
accounting 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.

      For the three months ended March 31, 2006, total operating expenses were
$241,836 as compared to $310,298 for the three months ended March 31, 2005, a
decrease of $68,462 or 22.1%.

OTHER INCOME (EXPENSES)

      For the three months ended March 31, 2006, other income (expense), net,
amounted to $33,421 as compared to $22,570 for the three months ended March 31,
2005. Other income for the three months ended March 31, 2006 and 2005 is related
to the income received from the rental of its entertainment facility.

      For the three months ended March 31, 2006, net interest income was $14,939
as compared to net interest income of $4,461 for the three months ended March
31, 2005, an increase of $10,478 for the three months ended March 31, 2006. This
increase was attributable to loans made to its related party DeRong during the
first quarter of 2006.

INCOME TAX

      Our income taxes decreased by $59,532 to $31,607 for the three months
ended March 31, 2006 from $91,139 for the three months ended March 31, 2005 due
to lower taxable income. The Company's tax-exempt status ended as of December
31, 2004 and the Company is subject to a 15% corporate income tax starting from
2005.

LIQUIDITY AND CAPITAL RESOURCES

      Operating working capital (accounts receivable plus inventory less
accounts payable and accrued expenses) increased by $87,693 from $2,746,436 as
of December 31, 2005 to $2,834,129 as of March 31, 2006. The increase was
primarily due to an increase in accounts receivable of $702,422 from $2,284,854
as of December 31, 2005 to $2,987,276 as of March 31, 2006. This amount was
offset, however, by a decrease in inventory of $295,455 from $859,656 at
December 31, 2005 to $564,201 as of March 31, 2006 and an increase in accounts
payable and accrued expenses of $319,274 from December 31, 2005 through March
31, 2006. The increase in account receivables is attributable to a reduced
receivable collection and the reduction of inventory was a result of reduced
productions with less inventories demanded.


                                       12
<PAGE>

      Cash provided by operating activities was $494,455 for the three months
ended March 31, 2006 as compared to $539,878 provided for the three months ended
March 31, 2005. The decrease in cash provided by operating activities for the
three months ended March 31, 2006 is a result of a reduction of net income and
increase of accounts receivable.

      There were no investing activities for the three months ended March 31,
2006 as compared to $5,245 purchase of equipment and payment of $275,850
acquisition expenses for the three months ended March 31, 2005.

      With approximately $7.0 million of net working capital as of March 31,
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.


                                       13
<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.


                                       14
<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.


                                       15
<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: July 10, 2006          By: /s/ Pengcheng Chen
                                  ---------------------------------------
                                  Pengcheng Chen, Chief Executive Officer


                              By: /s/ Yi Tong
                                  ---------------------------------------
                                  Yi Tong, Chief Financial Officer