---

UNITED
STATES SECURITIES AND EXCHANGE COMMISSION

Washington,
D.C. 20549

FORM
10  QSB

QUARTERLY
REPORT UNDER SECTION 13 OR 15(D) OFTHE SECURITIES EXCHANGE ACT OF 1934.

333-39208(Commission
File Number)

For
the quarterly period ended March 31, 2006

COL China
Online International Inc.(Exact name of small business issuer as specified in its charter)

|Delaware                        | 52-2224845
|------------------------------- | ----------
|(State or other jurisdiction of |           
|incorporation or organization)  |           
|                                |           

3176
South Peoria Court, Suite 100Aurora, Colorado, 80014(Address
of principal executive offices including zip code)

(303)
695-8530(Small Business Issuer telephone number, including area code)

N/A(Former
Name or 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 Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.Yes [  X  ] No
[     ]



As of
May 11, 2006, the Registrant had outstanding 50,155,000 shares of its common
stock, par value $.001.

Transitional
Small Business Disclosure Format (Check One):Yes [     ]  No [  X  ]

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---

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COL
China Online International Inc.

FORM
10-QSB

March
31, 2006

Table of
Contents

PART I.   
FINANCIAL INFORMATION

|                           |  | Page No.                                                                             
|-------------------------- |  | -------------------------------------------------------------------------------------
|
|Item 1                     |  | Financial Statements:                                                                
|                           |  | Condensed Consolidated Balance Sheets as of March 31, 2006 (unaudited)               
|                           |  | and June 30, 2005                                                                    
|                           |  | Condensed Consolidated Statements of Operations for the three and nine months ended  
|                           |  | March 31, 2006 and 2005 (unaudited)                                                  
|                           |  | Condensed Consolidated Statements of Cash Flows for the nine months ended            
|                           |  | March 31, 2006 and 2005 (unaudited)                                                  
|                           |  | Notes to Condensed Consolidated Financial Statements                                 
|Item 2                     |  | Managements Discussion and Analysis of Financial Condition and Results of Operations
|Item 3                     |  | Controls and Procedures                                                              
|                           |  |                                                                                      
|PART II. OTHER INFORMATION |  |                                                                                      
|                           |  |                                                                                      
|Item 1                     |  | Legal Proceedings                                                                    
|Item 2                     |  | Unregistered Sales of Equity Securities and Use of Proceeds                          
|Item 3                     |  | Defaults Upon Senior Securities                                                      
|Item 4                     |  | Submissions of Matters to a Vote of Security Holders                                 
|Item 5                     |  | Other Information                                                                    
|Item 6                     |  | Exhibits                                                                             
|                           |  |                                                                                      
|Signature Page             |  |                                                                                      
|Exhibit 31                 |  | Certifications                                                                       
|Exhibit 32                 |  | Certifications                                                                       



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PART
I FINANCIAL INFORMATION

Item 1 Financial
Statements

COL
CHINA ONLINE INTERNATIONAL INC.CONDENSED
CONSOLIDATED BALANCE SHEETS

|                                                         | JUNE 30,2005 | MARCH 31, 2006 (unaudited) |  
|-------------------------------------------------------- | ------------ | -------------------------- | -
|
|
|Assets                                                   |              |                            |  
|                                                         |              |                            |  
|CURRENT ASSETS:                                          |              |                            |  
|Cash                                                     |              | 598,654                    |  
|Accounts receivable, net of an allowance for doubtful    |              |                            |  
|accounts                                                 |              | 68,055                     |  
|Prepaid expense and other receivables                    |              | 266,786                    |  
|                                                         |              |                            |  
|                                                         |              |                            |  
|Total current assets                                     |              | 933,495                    |  
|                                                         |              |                            |  
|PROPERTY, OFFICE SPACE AND EQUIPMENT, net of             |              |                            |  
|accumulated depreciation and impairment of Rmb12,148,813 |              |                            |  
|(US$1,511,940) and Rmb107,557 (US$13,386), respectively  |              | 1,270,592                  |  
|                                                         |              |                            |  
|                                                         |              |                            |  
|TOTAL ASSETS                                             |              | 2,204,087                  |  
|                                                         |              |                            |  
|                                                         |              |                            |  
|                                                         |              |                            |  
|LIABILITIES AND STOCKHOLDERS DEFICIENCY                 |              |                            |  
|                                                         |              |                            |  
|CURRENT LIABILITIES:                                     |              |                            |  
|Accounts payable and accrued expenses                    |              | 790,945                    |  
|Due to a minority stockholder                            |              | 187,155                    |  
|Taxes payable                                            |              | 199,889                    |  
|                                                         |              |                            |  
|                                                         |              |                            |  
|Total current liabilities                                |              | 1,177,989                  |  
|                                                         |              |                            |  
|NOTES PAYABLE:                                           |              |                            |  
|Majority Stockholder                                     |              | 76,617,572                 |  
|                                                         |              |                            |  
|STOCKHOLDERS DEFICIENCY:                                |              |                            |  
|Common stock, US$0.001 par value, 100,000,000 shares     |              |                            |  
|authorized, 50,155,000 shares issued, outstanding        |              | 408,864                    |  
|Additional paid-in capital                               |              | 1,214,118                  |  
|Accumulated deficit                                      |              | (77,181,865                | )
|Accumulated other comprehensive loss / (gain)            |              | (32,591                    | )
|                                                         |              |                            |  
|                                                         |              |                            |  
|Total stockholders deficiency                           |              | (75,591,474                | )
|                                                         |              |                            |  
|                                                         |              |                            |  
|TOTAL LIABILITIES AND STOCKHOLDERS DEFICIENCY           |              | 2,204,087                  |  
|                                                         |              |                            |  
|                                                         |              |                            |  

Page 2



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COL
CHINA ONLINE INTERNATIONAL INC.CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

|                                           | FOR THE THREE MONTHS ENDED |            |  
|------------------------------------------ | -------------------------- | ---------- | -
|
|
|
|NET REVENUES:                              |                            |            |  
|Telecommunication                          |                            | 174,441    |  
|Marketing fee - PIERS                      |                            |           |  
|                                           |                            |            |  
|                                           |                            |            |  
|                                           |                            | 174,441    |  
|                                           |                            |            |  
|COST OF SALES:                             |                            |            |  
|Telecommunication                          |                            | (137,944   | )
|Marketing fee  PIERS                      |                            |           |  
|                                           |                            |            |  
|                                           |                            |            |  
|                                           |                            | (137,944   | )
|                                           |                            |            |  
|                                           |                            |            |  
|                                           |                            | 36,497     |  
|                                           |                            |            |  
|OPERATING EXPENSES:                        |                            |            |  
|General and administrative                 |                            | (1,052,598 | )
|Amortization and depreciation              |                            | (173,286   | )
|                                           |                            |            |  
|                                           |                            |            |  
|Total operating expenses                   |                            | (1,225,884 | )
|                                           |                            |            |  
|                                           |                            |            |  
|OPERATING LOSS                             |                            | (1,189,387 | )
|                                           |                            |            |  
|Other income                               |                            | 95,165     |  
|                                           |                            |            |  
|                                           |                            |            |  
|LOSS BEFORE MINORITY INTEREST              |                            | (1,094,222 | )
|                                           |                            |            |  
|Minority interest                          |                            |           |  
|                                           |                            |            |  
|                                           |                            |            |  
|NET LOSS                                   |                            | (1,094,222 | )
|                                           |                            |            |  
|                                           |                            |            |  
|COMPREHENSIVE LOSSES                       |                            | (1,094,222 | )
|                                           |                            |            |  
|                                           |                            |            |  
|BASIC AND FULLY DILUTED NET LOSS PER SHARE |                            | (0.022     | )
|                                           |                            |            |  
|                                           |                            |            |  
|WEIGHTED AVERAGE COMMON SHARES             |                            | 50,155,000 |  
|                                           |                            |            |  

Page 3



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COL
CHINA ONLINE INTERNATIONAL INC.CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

|                                           | FOR THE NINE MONTHS ENDED |            |  
|------------------------------------------ | ------------------------- | ---------- | -
|
|
|
|NET REVENUES:                              |                           |            |  
|Telecommunication                          |                           | 536,803    |  
|Marketing fee  PIERS                      |                           |           |  
|                                           |                           |            |  
|                                           |                           |            |  
|                                           |                           | 536,803    |  
|                                           |                           |            |  
|COST OF SALES:                             |                           |            |  
|Telecommunication                          |                           | (362,157   | )
|Marketing fee  PIERS                      |                           |           |  
|                                           |                           |            |  
|                                           |                           |            |  
|                                           |                           | (362,157   | )
|                                           |                           |            |  
|                                           |                           |            |  
|Gross margin                               |                           | 174,646    |  
|                                           |                           |            |  
|OPERATING EXPENSES:                        |                           |            |  
|General and administrative                 |                           | (4,881,537 | )
|Amortization and depreciation              |                           | (519,857   | )
|                                           |                           |            |  
|                                           |                           |            |  
|Total operating expenses                   |                           | (5,401,394 | )
|                                           |                           |            |  
|                                           |                           |            |  
|OPERATING LOSS                             |                           | (5,226,748 | )
|                                           |                           |            |  
|Other income                               |                           | 166,229    |  
|                                           |                           |            |  
|                                           |                           |            |  
|LOSS BEFORE MINORITY INTEREST              |                           | (5,060,519 | )
|                                           |                           |            |  
|Minority interest                          |                           |           |  
|                                           |                           |            |  
|                                           |                           |            |  
|NET LOSS                                   |                           | (5,060,519 | )
|                                           |                           |            |  
|                                           |                           |            |  
|COMPREHENSIVE LOSSES                       |                           | (5,060,519 | )
|                                           |                           |            |  
|                                           |                           |            |  
|BASIC AND FULLY DILUTED NET LOSS PER SHARE |                           | (0.101     | )
|                                           |                           |            |  
|                                           |                           |            |  
|WEIGHTED AVERAGE COMMON SHARES             |                           | 50,155,000 |  
|                                           |                           |            |  
|                                           |                           |            |  

Page 4



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COL
CHINA ONLINE INTERNATIONAL INC.CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

|                                                    | FOR THE NINE MONTHS ENDED |            |  
|--------------------------------------------------- | ------------------------- | ---------- | -
|
|
|CASH FLOWS FROM OPERATING ACTIVITIES:               |                           |            |  
|Net loss                                            |                           | (5,060,519 | )
|Adjustments to reconcile net loss to net cash used  |                           |            |  
|in operating activities:                            |                           |            |  
|Amortization and depreciation                       |                           | 487,866    |  
|Change in operating assets and liabilities:         |                           |           |  
|Decrease (Increase) in:                             |                           |            |  
|Accounts receivables                                |                           | 19,500     |  
|Prepaid expenses and other receivables              |                           | (58,145    | )
|(Decrease) Increase in:                             |                           |            |  
|Accounts payable and accrued expenses,              |                           |            |  
|and advance deposit received                        |                           | (593,333   | )
|Taxes payable                                       |                           | 123,124    |  
|                                                    |                           |            |  
|                                                    |                           |            |  
|Net cash used in operating activities               |                           | (5,081,507 | )
|                                                    |                           |            |  
|                                                    |                           |            |  
|CASH FLOWS FROM INVESTING ACTIVITIES:               |                           |            |  
|Purchase of equipment                               |                           |           |  
|Lease payments received                             |                           | 741,220    |  
|                                                    |                           |            |  
|                                                    |                           |            |  
|Net cash provided by (used in) investing activities |                           | 741,220    |  
|                                                    |                           |            |  
|                                                    |                           |            |  
|CASH FLOWS FROM FINANCING ACTIVITIES:               |                           |            |  
|Advances from Majority Stockholder                  |                           | 5,022,165  |  
|Minority stockholders interest and advance          |                           | 27,505     |  
|                                                    |                           |            |  
|                                                    |                           |            |  
|Net cash provided by financing activities           |                           | 5,049,670  |  
|                                                    |                           |            |  
|                                                    |                           |            |  
|EFFECT OF EXCHANGE RATE CHANGES ON CASH             |                           |           |  
|                                                    |                           |            |  
|                                                    |                           |            |  
|NET INCREASE IN CASH                                |                           | 709,383    |  
|                                                    |                           |            |  
|CASH, beginning of period                           |                           | 101,532    |  
|                                                    |                           |            |  
|                                                    |                           |            |  
|CASH, end of period                                 |                           | 810,915    |  
|                                                    |                           |            |  
|                                                    |                           |            |  
|                                                    |                           |            |  
|CASH PAID FOR INTEREST                              |                           |           |  
|                                                    |                           |            |  
|                                                    |                           |            |  
|                                                    |                           |            |  

Page 5



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COL  CHINA
ONLINE INTERNATIONAL INC.NOTES  TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.   Company
Organization and Operations

| | Nature
of Operations  COL China Online International Inc. (COL  International or
the Company) was incorporated as a Delaware  corporation on February 22,
2000, for the purpose of acquiring and conducting  the engineering services and internet
related business of Migration Developments  Limited, a British Virgin Islands Company (Migration)
and raising  equity capital to be utilized in the business of Migration. Beginning around
January 2004, the Company focused its business on internet and telecommunication
convergence solutions and customer-specific solutions for the retail industry.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
July 2001, the Company completed its initial public offering of common stock.  The
Company issued 1,655,000 shares of common stock in this offering at US$0.05  per share
(approximately US$83,000). All net proceeds from this offering were  used to pay costs
associated with the offering.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | On
September 24, 2001, the Company acquired all the outstanding shares of common  stock of
Migration in exchange for 40.2 million shares of the Companys  common stock. As a
result of the acquisition, Migration became a wholly owned  subsidiary of the Company.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | For
financial reporting purposes, the acquisition of Migration by the Company on  September
24, 2001 has been treated as a reverse acquisition. Migration is the  continuing entity
for financial reporting and the acquisition of the Company is  considered a
recapitalization and restructuring of Migration. On this basis, the  historical financial
statements prior to September 24, 2001 represent the  financial statements of Migration.
The historical stockholders equity  accounts of the Company have been retroactively
restated to reflect the issuance  of 40,200,000 shares of common stock since inception of
Migration and the  issuance of 9,955,000 shares of stock upon the merger with the Company.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Migration
was formed on May 18, 1998 and has two  subsidiaries,  Shenzhen  Knowledge &Communications
Co.,  Ltd.  (formerly  Shenzhen Rayes Electronic  Systems Co., Ltd.) (Joint Venture)
and Shanghai Shangyi Science and Trade Information  Consulting  Co.,  Ltd.  (Shangyi),
in which it has 90% and 70% equity  interests,  respectively.  The Joint  Venture  and
Shangyi  are  Sino-foreign  equity joint ventures in the Peoples  Republic of China
(PRC).  Most of the operations of Migration are through  the Joint  Venture,  which did
not  commence  substantive  operations  until the  Spring of 1999.  The  acquisitions  of
Joint  Venture and Shangyi had been accounted for as purchases by Migration.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Migration
initially provided marketing and technical services for the Internet Service  Provider
(ISP) and value-added services generally related to the installation of  computer network
systems (i.e., Local Area Networks or LANs) in the PRC.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Because
the Companys past business model of attempting to be the IT department for  small
and medium-sized business by offering a broad range of IT services and  providing
electronic commerce services had not been successful, the Company has  developed a new
business model and now focuses on the provision of internet and  telecommunication
convergence solutions to its customers.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Page 6



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2.   Basis
of Presentation

| | The
unaudited condensed consolidated financial statements have been prepared by the  Company,
pursuant to the rules and regulations of the Securities and Exchange  Commission (SEC).
Certain information and footnote disclosures normally included  in financial statements
prepared in accordance with generally accepted  accounting principles have been omitted
pursuant to such SEC rules and  regulations; nevertheless, the Company believes that the
disclosures are  adequate to make the information presented not misleading. These
financial  statements have been prepared on the same basis as the annual financial
statements. These financial statements and the notes hereto should be read in
conjunction with the financial statements and notes thereto included in the  Companys
Annual Report on Form 10-KSB for the year ended June 30, 2005  which was filed October
13, 2005. In the opinion of the Company, all  adjustments, including normal recurring
adjustments necessary to present fairly  the financial position of the Company as of
March 31, 2006 and the results of  its operations and cash flows for the three months and
nine months period then  ended, have been included. The results of operations for the
interim period are  not necessarily indicative of the results for the full year.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
amounts included in the financial statements are presented in Renminbi  (Rmb)
which is COL Internationals functional currency, because  COL Internationals
operations are primarily located in the PRC. For  illustrative purposes, the condensed
consolidated balance sheet as March 31,  2006 and condensed consolidated statement of
operations for the three months and  nine months ended March 31, 2006 and condensed
consolidated statement of cash  flows for the nine months ended March 31, 2006 have been
translated into US  dollars at approximately 8.03525 Rmb to the dollar, which was the
exchange rate  at March 31, 2006.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

3.   Recently
Issued Accounting Standards

| | There
are no new accounting pronouncements for which adoption is expected to have a  material
effect on the Companys condensed consolidated financial  statements.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------

4.   Comprehensive
Income (Loss)

| | The
Company accounts for comprehensive income (loss) in accordance with SFAS No.  130, Reporting
Comprehensive Income. SFAS No. 130 establishes  standards for reporting
comprehensive income and its components in financial  statements. Comprehensive income,
as defined therein, refers to revenues,  expenses, gains and losses that are not included
in net income but rather are  recorded directly in stockholders equity. Accumulated
other comprehensive  loss for the three months and nine months periods ended March 31,
2006,  respectively, represented foreign currency translation adjustments.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Page 7



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5.   Net
Loss Per Share

| | Basic
and diluted net loss per share is computed by dividing net loss by the weighted  average
number of common shares outstanding.
| | -----------------------------------------------------------------------------------------------------------------------------------

| | Pursuant
to the Companys 2000 Stock Option Plan, options may be granted to purchase  an
aggregate of 4,000,000 shares of common stock to key employees and other  persons who
have or are contributing to the Companys success. As of March  31, 2006, no options
had been granted under the 2000 plan.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Page 8



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Item 2   
Managements Discussion and Analysis of Financial Condition and Results of Operations

This  document
contains certain forward-looking statements that involve risks and  uncertainties, such
as statements of the Companys plans, objectives,  expectations and intentions. When
used in this document, the words  expects, anticipates, intends and
plans and similar expressions are intended to identify certain of  these
forward-looking statements. The cautionary statements made in this  document should be
read as being applicable to all related forward-looking  statements wherever they appear
in this document. Our actual results could  differ materially from those discussed in
this document. Factors that could  cause or contribute to such difference include those
discussed below and in the  Companys Annual Report on Form 10-KSB for the year
ended June 30, 2005.

Overview

COL
China Online International, Inc. (the Company or COL  International)
was formed for the purpose of acquiring and conducting the  engineering services and the
internet related business of Migration Development  Limited, a British Virgin Islands
Company (Migration) and raising  equity capital to be utilized in the
business of Migration. Beginning in January  2004, because the Companys past
business model was not successful, the  Company has developed a new business model. The
Company now focuses on the  provision of internet and telecommunication convergence
solutions to its  customers with particular emphasis on customer-specific solutions for
the retail  industry.

COL
Convergence (COLc) is a division responsible for provision of internet and
communication convergence services to companies in China.

The
mission of COLc is to help its customers to obtain a communication environment in which
they can be competitive. Normally, after a custom-made plan has been
developed and is accepted by a client, COLc will continue to be responsible for
the setting up and the running of that plan through the deployment of its
experienced engineers and managers. The Company, through its Migration
subsidiary, currently employs approximately 45 employees, including 15 staff
members responsible for sales of trade data products from Commonwealth Business
Media, Inc. (CBM) in China. In November 2005, COLc signed an
Overseas Representative Agreement (ORA) on a revenue sharing basis
with CBM to promote and market its trade data products to end users in the
region of Eastern China. Port Import Export Reporting Service
(PIERS), a division of CBM, is legally authorized by the U.S.
Customs and Border Protection (title 19, code of Federal Regulations, part
103.31) to collect and publish import/export information derived from manifests
of vessels calling at U.S. ports. The ORA signed with CBM, subject to renewal
upon consent by both parties, is for a period of two years commencing from
November 21, 2005. The Company may recruit more staff should its plan of
operations prove successful, of which there is no assurance.

COLc
is currently discussing possible engagement with a number of telecommunication
network providers.

Going
concern  The Company has accumulated, since its commencement of
business, a significant deficit. Accordingly, the ability of the Company to
continue operations as a going concern is dependent upon continuing support from
Honview International Limited (Honview), a former shareholder of
Migration, which is now a major stockholder of the Company, until such time as,
when or if, the combined entity of the Company and Migration achieve profitable
operations and/or additional funds are raised in future private and public
offerings. There is no assurance that the Company will continue to receive
financing from Honview or that any future offerings of its securities will
occur.

Page 9



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Currently,
the Company has a negative cash flow from operating activities and is seeking
additional financing in order to satisfy its cash requirements. The Company
anticipates that it will require approximately Rmb3,000,000 (or approximately
US$373,000) in financing during the next 12 months to satisfy its cash
requirements for the development of the Companys new business plan.

Results of
Operations

Three
months period and nine-months period ended March 31, 2006 compared to the same
periods ended March 31, 2005.

|Revenue                  | Three months ended | Nine months ended |  |        
|------------------------ | ------------------ | ----------------- |  | -------
|
|
|
|
|Telecommunication income |                    | 398,537           |  | 174,441
|Marketing fee - PIERS    |                    | 528,321           |  |       
|                         |                    |                   |  |        
|                         |                    |                   |  |        
|Total revenue            |                    | 926,858           |  | 174,441
|                         |                    |                   |  |        
|                         |                    |                   |  |        

Telecommunication
income represents the services commission revenues from ISP services and selling
IP phones. The Company contracted with telecommunication services companies
selling IDD (IP phone) to end-users and receives telecommunication services
commission income from the agents, which is a percentage of the fees paid by the
end users for monthly usage of the phones.

Marketing
fee is derived from sales of trade data products from Commonwealth Business
Media, Inc. (CBM). The Company contracted with CBM on a revenue
sharing basis to promote and market its trade data products to end users in the
region of Eastern China. The marketing fee is recognized upon referring customer
sales orders to CBM and is recognized on a net basis.

For
the three months and nine months period ended March 31, 2006, the Company had
other income of Rmb729 (US$91) and Rmb1,927 (US$240) as compared to Rmb95,165
and Rmb166,229 for the three months period and nine months period ended March
31, 2005. Other income primarily represents interest income and
miscellaneous income.

General
and administrative costs include salaries, rent, travel and other overhead
costs. For the three months ended March 31, 2006 and 2005, general and
administrative costs totaled Rmb1,291,442 (US$160,722) and Rmb1,052,598
respectively. The increase in expenses was caused by an increase in head count
for the PIERS project. For the nine months ended March 31, 2006 and
2005, general and administrative costs totaled Rmb3,421,289 (US$425,785) and
Rmb4,881,537 respectively. The decrease in general and administrative costs
mainly resulted from the close-down of the in-store advertising business in
2005.

Amortization
and depreciation expense for the three months ended March 31, 2006 and 2005 was
Rmb126,186 (US$15,704) and Rmb173,286 respectively. For the nine months ended
March 31, 2006 and 2005 amortization and depreciation expense was Rmb375,905
(US$46,782) and Rmb519,857 respectively. The decrease is due primarily to the
fact that some fixed assets were fully depreciated in the prior year.

Page 10



---

The
Company has not recognized any future tax benefits resulting from its operating
losses due to the uncertainty of future realization. No share of loss has been
absorbed by the minority shareholder for the three months and nine months ended
March 31, 2006 and 2005 as its initial capital contribution was fully absorbed.

The
above has resulted in net losses of Rmb932,154 (US$116,007) and Rmb1,094,222 for
the three months ended March 31, 2006 and 2005 respectively, compared to
Rmb3,003,057 (US$373,735) and Rmb5,060,519 for the nine months ended March 31,
2006 and 2005. The Company expects to continue to incur losses until its
services are more fully developed and accepted in China.

Liquidity
and Capital Resources

COLs
ability to continue operations is currently dependent upon continuing financial
support from its majority stockholder. As of March 31, 2006 and June 30, 2005,
the Company had a negative working capital of Rmb578,459 (US$71,988) and
Rmb244,494 respectively. As of March 31, 2006, advances from the majority
stockholder totaled Rmb78,509,083 (US$9,770,584). The Companys management
believes the majority stockholder will continue to provide financial support to
the Company, although the majority stockholders agreement with the Company
to provide financial support up to US$8 million expired on January 1, 2004.

Cash
used in operating activities for the nine months ended March 31, 2006 was
Rmb2,093,314 (US$260,516) as compared with Rmb5,018,507 for the nine months
ended March 31, 2005. The cash used in operations was to fund operating losses
of Rmb3,003,057 (US$373,735) and Rmb5,060,519, generally offset by non-cash
expenses related to amortization and depreciation of Rmb375,905 (US$46,782) and
Rmb487,866 for the nine months ended March 31, 2006 and 2005, respectively.

Cash
used for investing activities was Rmb35,380 (US$4,386) for the nine months ended
March 31, 2006. Cash used for investing activities for the period ended March
31, 2006 was mainly due to the addition of new computer equipment.

Cash
flows from financing activities have generally come from advances by the
majority stockholder of the Company. During the nine months ended March 31, 2006
and 2005, the majority stockholder has advanced Rmb1,891,511 (US$235,402) and
Rmb5,022,165, respectively.

Critical
Accounting Policies

The
Companys significant accounting policies are described in note 2 to the
financial statements for the three months ended March 31, 2006 and 2005 included
in the accompanying financial statements and notes to consolidated financial
statements. The Company believes its most critical accounting policies include
accounting for provision for doubtful debts and impairment loss provision.

No
provision for impairment loss on fixed assets is made for the three months and
nine months ended March 31, 2006, respectively, because the recoverable amount
of fixed assets is estimated to be higher than its carrying value at the
respective period-end and year-end date by management.

Off Balance
Sheet Arrangements

The
Company has no off balance sheet arrangements.

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---

---

Item 3   
Controls and Procedures

Within
the 90-day period prior to the filing of this report, an evaluation was carried
out under the supervision and with participation of the Companys
management, including our Chief Executive Officer and Principal Financial
Officer, of the effectiveness of our disclosure controls and procedures (as
defined in Rule 13a-14 (c) under the Securities Exchange Act of 1934). Based on
their evaluation, as of March 31, 2006, our Chief Executive Officer and
Principal Financial Officer have concluded that disclosure controls and
procedures are, to the best of their knowledge, effective to ensure that
information required to be disclosed by the Company in reports that it files or
submits under the Exchange Act is recorded, processed, summarized and reported
within the time periods specified in Securities and Exchange Commission rules
and forms. Subsequent to the date of their evaluation, there were not
significant changes in the Companys internal controls or in other factors
that could significantly affect these controls, including any corrective actions
with regard to significant deficiencies and material weaknesses.

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---

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

Exhibits.

Exhibit No.               Description

|3.1 |  | Certificate
Of Incorporation filed with the Delaware Secretary Of State effective as of February 22,
2000 (2)
|--- |  | -------------------------------------------------------------------------------------------------------------

|3.2 |  | Certificate
Of Amendmet To The Certificate Of Incorporation filed with the Delaware Secretary Of
State effective as of April 3, 2000 (2)
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------

|3.3 |  | Amended
And Restated Bylaws (3)
|--- |  | -------------------------------

|3.4 |  | Sino-Foreign
Joint Venture Contract (1)(2)
|--- |  | ------------------------------------------

|3.5 |  | Articles
Of Association of the Sino-Foreign Joint Venture (1)(2)
|--- |  | ----------------------------------------------------------------

|31 |  | Certifications
of the Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------

|32 |  | Certifications
of Chief Executive  Officer and Chief Financial Officer pursuant to 18 U.S.C.  Section
1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|-- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

________________

|(1) |  | Translated
into English from Chinese.
|--- |  | -------------------------------------

|(2) |  | Incorporated
by reference from the Companys Registration Statement on Form SB-2 on June 13, 2000
(Registration No.  333-39208).
|--- |  | --------------------------------------------------------------------------------------------------------------------------------

|(3) |  | Incorporated
by reference from Amendment No. 3 to the Companys Registration Statement on Form
SB-2 on January 17, 2001  (Registration No. 333-39208).
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------

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SIGNATURE

Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

Date:   May 19,
2006

| | COL
CHINA ONLINE INTERNATIONAL INC.
| | -----------------------------------

| | By:   
/s/   Chi Keung Wong         Chi Keung Wong         Chief Executive Officer and         Chief Financial Officer
| | ----------------------------------------------------------------------------------------------------------------------

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