UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549  FORM 10-QSB (Mark One)  x
        Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.  For the quarterly period ended March 31, 2006. or  o
        Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.  For the transition period from ______to______.  Commission File number 333-110324  BTX HOLDINGS, INC. (Name of small business issuer in its charter)  FLORIDA
        16-1682307(State or other jurisdiction of
incorporation or organization)
        (IRS Employer Identification No.)1400 Cypress Creek Road, Fort Lauderdale, Florida
        33309(Address of principal executive offices)
        (Zip Code)  (954)776-6600 (Registrants telephone number, including area code)  (Former name, former address and former fiscal year, 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 preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YesxNoo  Indicate by check mark whether the registrant is a shell company as defined in Rule 12b-2 of the Exchange Act.  Yes
        x
        Noo  State the number of shares outstanding of each of the issuers classes of
common equity, as of May 18, 2006: 6,593,600shares of common stock.              BTX HOLDINGS, INC.

(Formerly known as King Capital Holdings, Inc.)

FINANCIAL STATEMENTS



INDEX



PART I-- FINANCIAL INFORMATION




Item 1.
        Financial Statements


Item 2.
        Managements Discussion and Analysis of Financial Condition


Item 3.
        Control and Procedures

PART II-- OTHER INFORMATION




Item 1.
        Legal Proceedings


Item 2.
        Changes in Securities


Item 3.
        Defaults Upon Senior Securities


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


Item 5.
        Other Information


Item 6.
        Exhibits and Reports on Form 8-K

SIGNATURE



Item 1. Financial Information



BASIS OF PRESENTATION



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

























BTX HOLDINGS, INC. AND SUBSIDIARY

(A DEVELOPMENT STAGE COMPANY)





CONTENTS






PAGE
        2
        CONSOLIDATEDBALANCE SHEET AS OF MARCH  31, 2006 (UNAUDITED)PAGE
        3
        CONSOLIDATEDSTATEMENTS OF OPERATIONS FOR THE THREE MONTHS  ENDED MARCH 31, 2006  AND 2005(RESTATED) AND FOR THE PERIOD FROM JANUARY 8, 2003 (INCEPTION)  TO MARCH 31,  2006 (UNAUDITED)PAGE
        4
        CONSOLIDATEDSTATEMENTS OF STOCKHOLDERS DEFECIT FOR THE PERIOD FROM JANUARY 8, 2003 (INCEPTION) TO MARCH  31, 2006 (UNAUDITED)PAGE
        5
        CONSOLIDATEDSTATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 2006 AND 2005(RESTATED) AND FOR THE PERIOD FROM JANUARY 8, 2003 (INCEPTION) TO MARCH  31, 2006 (UNAUDITED)PAGES
        6 - 14
        NOTES TO CONSOLIDATEDFINANCIAL STATEMENTS











BTX HOLDINGS, INC. AND SUBSIDIARY

(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED BALANCE SHEET

AS OF MARCH 31, 2006

(UNAUDITED)




ASSETSCURRENT ASSETSCash
        $
        -Prepaid expenses
        
        3,130TOTAL CURRENT ASSETS
        
        3,130Property and Equipment, net
        
        10,688TOTAL ASSETS
        $
        13,818LIABILITIES AND STOCKHOLDERS DEFICIENCYCURRENT LIABILITIESCash overdraft
        $
        1,815Accounts payable
        
        65,708Accrued payroll
        
        50,567Accrued interest
        
        11,391Notes payable- related party
        
        179,250Notes payable
        
        5,000TOTAL CURRENT LIABILITIES
        
        313,731COMMITMENTS AND CONTINGENCIES
        
        -STOCKHOLDERS DEFICIENCYPreferred  stock, $00001 par value, 10,000,000shares authorized,  none issued and outstanding
        
        -Common stock, $0.0001 par value, 100,000,000 shares authorized,  6,593,600 shares issued and outstanding
        
        6,593Additional paid in capital
        
        1,347,287Deferred compensation
        
        (153,000)Accumulated deficit during development stage
        
        (1,500,793)Total Stockholders Deficiency
        
        (299,913)TOTAL LIABILITIES AND STOCKHOLDERS DEFICIENCY
        $
        13,818

See accompanying notes to consolidated financial statements.

2





BTX HOLDINGS, INC. AND SUBSIDIARY

(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)






Three Months Ended March 31,
        
        For The Period From January  8, 2003 (Inception) to       March 31, 20062006
        
        2005(Restated)OPERATING EXPENSESConsulting fees
        $
        -
        $
        -
        $
        198,660Management fees - related party
        
        -
        
        -
        
        84,000Professional fees
        
        26,361
        
        -
        
        155,600Research and development
        
        10,000
        
        20,000
        
        106,925Stock compensation expense
        
        -
        
        -
        
        30,000Impairment of technology
        
        -
        
        -
        
        500,000General and administrative
        
        97,442
        
        94,972
        
        318,717Total Operating Expenses
        
        133,803
        
        114,972
        
        1,393,902LOSS FROM OPERATIONS
        
        (133,803)
        
        (114,972)
        
        (1,393,902)OTHER EXPENSES:Interest Expense
        
        13,528
        
        1,677
        
        21,891Financing fees
        
        -
        
        20,959
        
        85,000Total Other Expenses
        
        13,528
        
        22,636
        
        106,891LOSS BEFORE PROVISION FOR INCOME TAXES
        
        (147,331)
        
        (137,608)
        
        (1,500,793)Provision for Income Taxes
        
        -
        
        -
        
        -NET LOSS
        $
        (147,331)
        $
        (137,608)
        $
        (1,500,793)Net loss per share - basic and diluted
        $
        (0.02)
        $
        (0.04)
        $
        (0.40)Weighted average number of shares outstanding during the period - basic and diluted
        
        6,504,600
        
        3,149,200
        
        3,716,576



See accompanying notes to consolidated financial statements.

3








BTX HOLDINGS, INC. AND SUBSIDIARY

(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDER EQUITY

FOR THE PERIOD FROM JANUARY 8, 2003 (INCEPTION) TO MARCH 31, 2006

(UNAUDITED)





Preferred Stock
        
        Common Stock
        
        Additional Paid-In
        
        Deferred
        
        Accumulated Deficit During DevelopmentShares
        
        Amount
        
        Shares
        
        Amount
        
        Capital
        
        Compensation
        
        Stage
        
        TotalBALANCE, JANUARY 8, 2003 (Inception)
        
        -
        $
        -
        
        -
        $
        -
        $
        -
        $
        -
        $
        -
        $
        -Issuance of founders stock
        
        -
        
        -
        
        3,149,200
        
        3,149
        
        (1,149)
        
        -
        
        -
        
        2,000Net loss, 2003
        
        -
        
        -
        
        -
        
        -
        
        -
        
        -
        
        -
        
        -BALANCE, DECEMBER 31, 2004
        
        -
        
        -
        
        3,149,200
        
        3,149
        
        (1,149)
        
        -
        
        -
        
        2,000Beneficial conversion on convertible debt
        
        -
        
        -
        
        -
        
        -
        
        85,000
        
        -
        
        -
        
        85,000Net loss, 2004
        
        -
        
        -
        
        -
        
        -
        
        -
        
        
        
        (102,668)
        
        (102,668)-BALANCE, December 31, 2004
        
        -
        
        -
        
        3,149,200
        
        3,149
        
        83,851
        
        -
        
        (102,668)
        
        (15,668)Sale of common stock
        
        -
        
        -
        
        623,000
        
        623
        
        622,377
        
        -
        
        -
        
        623,000Stock issued to acquire technology
        
        -
        
        -
        
        500,000
        
        500
        
        499,500
        
        -
        
        -
        
        500,000Common stock issued for reverse merger
        
        -
        
        -
        
        565,000
        
        565
        
        (565)
        
        -
        
        -
        
        -Common stock issued for reverse merger
        
        -
        
        -
        
        33,101,400
        
        33,101
        
        (33,101)
        
        -
        
        
        
        -Repurchase and cancellation of common stock
        
        
        
        
        
        (31,475,000)
        
        (31,475)
        
        (18,525)
        
        
        
        
        
        (50,000)Common stock issued for financing fees on note payable
        
        -
        
        -
        
        10,000
        
        10
        
        9,990
        
        -
        
        -
        
        10,000In-kind contribution of management services
        
        -
        
        -
        
        -
        
        -
        
        880
        
        -
        
        -
        
        880Common stock  issued for legal services
        
        -
        
        -
        
        30,000
        
        30
        
        29,970
        
        -
        
        -
        
        30,000Net loss, 2005
        
        -
        
        -
        
        -
        
        -
        
        -
        
        -
        
        (1,250,794)
        
        (1,250,794)BALANCE, December 31, 2005
        
        -
        
        -
        
        6,503,600
        
        6,503
        
        1,194,377
        
        -
        
        (1,353,462)
        
        (152,582)Common stock issued for services
        
        -
        
        -
        
        90,000
        
        90
        
        152,910
        
        (153,000)
        
        -
        
        -Net Loss, March 31, 2006
        
        -
        
        -
        
        -
        
        -
        
        -
        
        -
        
        (147,331)
        
        (147,331)Balance March 31, 2006
        
        
        $
        
        
        6,593,600
        $
        6,593
        $
        1,347,287
        $
        (153,000)
        $
        (1,500,793)
        $
        (299,913)






See accompanying notes to consolidated financial statements.

4




BTX HOLDINGS, INC. AND SUBSIDIARY

(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)


For The Period From January  8, 2003 (Inception) to       March  31, 2006Three Months Ended March 31,2006
        
        2005           (Restated)CASH FLOWS FROM OPERATING ACTIVITIES:Net loss
        $
        (147,331)
        $
        (137,559)
        $
        (1,500,793)Adjustments to reconcile net loss to net cash used in operating activities:Stock issued for services
        
        -
        
        -
        
        30,000Depreciation expense
        
        1,174
        
        2,180
        
        4,663Amortization
        
        9,667
        
        20,959
        
        95,000Impairment of technology
        
        -
        
        
        
        500,000In-kind contribution of services
        
        -
        
        
        
        880Changes in operating assets and liabilities:(Increase) / Decrease in prepaid expenses
        
        3,911
        
        (18,765)
        
        (3,130)Accounts payable and accrued expenses
        
        88,570
        
        5,096
        
        127,666Net Cash Used In Operating Activities
        
        (44,009)
        
        (128,089)
        
        (745,714)CASH FLOWS FROM INVESTING ACTIVITIES:Purchase of property and equipment
        
        -
        
        (9,196)
        
        (15,351)Net Cash Used In Investing Activities
        
        -
        
        (9,196)
        
        (15,351)CASH FLOWS FROM FINANCING ACTIVITIES:Cash overdraft
        
        1,815
        
        
        
        1,815Proceeds from notes payable
        
        5,000
        
        5,000
        
        40,000Repayments of notes payment
        
        (20,000)
        
        
        
        (35,000)Proceeds from notes payable related party
        
        37,250
        
        -
        
        179,250Repurchase and retirement or treasury stock
        
        -
        
        
        
        (50,000)Proceeds from issuance of common stock
        
        -
        
        196,263
        
        625,000Net Cash Provided By Financing Activities
        
        24,065
        
        201,263
        
        761,065NET INCREASE (DECREASE) IN CASH
        
        (19,944)
        
        63,978
        
        -CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
        
        19,944
        
        9,674
        
        -CASH AND CASH EQUIVALENTS AT END OF PERIOD
        $
        -
        $
        73,652
        $
        -Supplemental disclosure of non cash investing & financing activities:Cash paid for income taxes
        $
        -
        $
        -
        $
        -Cash paid for interest expense
        $
        500
        $
        -
        $
        -See accompanying notes to consolidated financial statements.

5







BTX HOLDINGS, INC. AND SUBSIDIARY

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2006








NOTE 1
        ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(A) Basis of Presentation



The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in The United States of America and the rules and regulations of the Securities and Exchange Commission for interim financial information. Accordingly, they do not include all the information necessary for a comprehensive presentation of financial position and results of operations.



It is managements opinion, however that all material adjustments (consisting of normal recurring adjustments) have been made which are necessary for a fair financial statements presentation. The results for the interim period are not necessarily indicative of the results to be expected for the year.



(B) Organization



BTX Holdings, Inc. f/k/a King Capital Holdings, Inc. was incorporated under the laws of the State of Florida on April 24, 2003.



BioTex Corporation (f/k/a YB Holdings, Inc.) (a development stage company), established in 2003 to develop and employ technologies from around the world to process biomass (plant derived) waste, extract the usable fractions, and then utilize or sell those extractions for varied applications or in further processes.



Activities during the development stage include developing the business plan, acquiring technology and raising capital.



Pursuant to a share purchase agreement, dated December 30, 2005, BioTex Corporation, consummated an agreement with BTX Holdings, Inc., pursuant to which BioTex Corporation, exchanged all of its 12,837,200 then issued and outstanding shares of common stock for 12,837,200 shares or approximately 89% of the common stock of BTX Holdings, Inc.. This transaction has been accounted for as a reverse acquisition. Accounting principles applicable to reverse acquisitions have been applied to record the acquisition. Under this basis of accounting, BioTex Corporation, is the acquirer and, accordingly, the consolidated entity is considered to be a continuation of BioTex Corporation, with the net assets of BTX Holdings, Inc. deemed to have been acquired and recorded at its historical cost. The statements of operations include the results of BioTex Corporation for the three months  ended March 31, 2006
and 2005 and for the period from January 3, 2003 (inception) to March 31, 2006.



BTX Holdings, Inc. and BioTex Corporation are hereafter referred to as (the Company).



(C) Use of Estimates



In preparing financial statements in conformity with generally accepted accounting principles, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reported period. Actual results could differ from those estimates.









6





(D) Consolidation



The accompanying March 31, 2006 consolidated financial statements include the accounts of BTX Holdings, Inc (from December 30, 2005) and its 100% owned subsidiary BioTex Corporation. The accompanying March 31, 2005 consolidated financial statements include the accounts of BioTex Corporation. All inter-company accounts have been eliminated in the consolidation.



(E) Cash and Cash Equivalents



For purposes of the cash flow statements, the Company considers all highly liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents. The Company at times has cash in excess of FDIC insurance limits and places its temporary cash investments with high credit quality financial institutions. At March 31, 2006, the Company did not have any balances that exceeded FDIC insurance limits.



(F) Property and Equipment



Property and equipment are stated at cost, less accumulated depreciation. Expenditures for maintenance and repairs are charged to expense as incurred. Depreciation is provided using the straight-line method over the estimated useful life of five years.



(G) Income Taxes



The Company accounts for income taxes under the Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes"
("Statement 109"). Under Statement 109, deferred tax assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective
tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years
in which those temporary differences are expected to be recovered or settled. Under Statement 109, the effect on deferred tax assets
and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. As of March 31, 2006
, the Company has a net operating loss carryforward of approximately $1,000,793, available to offset future taxable income through
2025. The valuation allowance at March 31, 2006 was $376,598 respectively. The net change in the valuation allowance for the year
ended March 31, 2006 was an increase of $55,441.



(H) Stock-Based Compensation



In December 2004, the FASB issued SFAS No. 123(R), Share-Based Payment, which replaces SFAS No. 123 and supersedes APB Opinion No. 25. Under SFAS No. 123(R), companies are required to measure the compensation costs of share-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over the period during which employees are required to provide services. Share-based compensation arrangements include stock options, restricted share plans, performance-based awards, share appreciation rights and employee share purchase plans. In March 2005 the SEC issued Staff Accounting Bulletin No. 107, or SAB 107. SAB 107 expresses views of the staff regarding the interaction between SFAS No. 123(R) and certain SEC rules and regulations and provides the staffs views regarding the valuation of share-based payment
arrangements for public companies. SFAS No. 123(R) permits public companies to adopt its requirements using one of two methods. On April 14, 2005, the SEC adopted a new rule amending the compliance dates for SFAS 123R. Companies may elect to apply this statement either prospectively, or on a modified version of retrospective application under which financial statements for prior periods are adjusted on a basis consistent with the pro forma disclosures required for those periods under SFAS 123. Effective January 1, 2006, the Company has fully adopted the provisions of SFAS No. 123R and related interpretations as provided by SAB 107. As such, compensation cost is measured on the date of grant at their fair value. Such compensation amounts, if any, are amortized over the respective vesting periods of the option grant. The Company applies this statement prospectively.



7





A summary of the status of the Companys stock options as of March  31, 2006 and the changes during the year ended is presented below:




Fixed Options
        
        Shares
        
        Weighted Average
Exercise PriceOutstanding at beginning of year
        
        1,000,000
        $
        5.75Granted
        
        -
        
        -Outstanding at March 31,  2006
        
        1,000,000
        $
        5.75Options exercisable at March 31, 2006
        
        1,000,000Weighted average exercise price of options granted to employeesduring period ended March  31, 2006
        $
        5.75(I) Loss Per Share



Basic and diluted net loss per common share is computed based upon the weighted average common shares outstanding as defined by Financial Accounting Standards No. 128, Earnings Per Share. As of March 31, 2006 and 2005, common share equivalents were anti-dilutive and not used in the calculation of diluted net loss per share.



(J) Business Segments



The Company operates in one segment and therefore segment information is not presented.



(K) Long-Lived Assets



The Company accounts for long-lived assets under the Statements of Financial Accounting Standards Nos. 142 and 144 Accounting for Goodwill and Other Intangible Assets and Accounting for Impairment or Disposal of Long-Lived Assets (SFAS No. 142 and 144). In accordance with SFAS No. 142 and 144, long-lived assets, goodwill and certain identifiable intangible assets held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. For purposes of evaluating the recoverability of long-lived assets, goodwill and intangible assets, the recoverability test is performed using undiscounted net cash flows related to the long-lived assets.



(L) Fair Value of Financial Instruments

The carrying amounts of the Companys accounts payable, accrued expenses, notes payable related party, notes payable and deferred compensation approximate fair valuedue to the relatively short period to maturity for these instruments.



MI) Recent Accounting Pronouncements



In May 2005, the FASB issued SFAS 154, Accounting Changes and Error Corrections. This Statement replaces APB Opinion No,. 20, Accounting Changes, and FASB Statement No. 3, Reporting Accounting Changes in Interim Financial Statements, and changes the requirements for the accounting for and reporting of a change in accounting principle. This Statement applies to all voluntary changes in accounting principle. It also applies to changes required by an accounting pronouncement in the unusual instance that the pronouncement does not include specific transition provisions. SFAS 154 also requires that a change in depreciation, amortization or depletion method for long-lived, nonfinancial assets be accounted for as a change in accounting estimate effected by a change in accounting principle. This Statement is effective in fiscal years beginning after December 15, 2005.  The Company has not yet
determined the effect of implementing this standard.

8





NOTE 2
        RESTATEMENT

The company has restated its March 31, 2005  financial statements to give effect to the beneficial conversion feature on its convertible debt and interest expense. Accordingly finaning fees have been restated to give effect to the amortization of the debt discount of  $20,959 and interest expense of $1,677, net loss and earning per share have been restated to give effect to the recording of the beneficial conversion feature.



The following table summarizes the effects of the restatement on the Companys consolidated financial statements as of March 31, 2005:




As Reported
        
        As RestatedIncome Statement:Interest Expense
        $
        --
        $
        1,677Financing costs
        
        --
        
        20,959Net loss
        $
        (114,972)
        $
        (137,608)


NOTE 3
        PROPERTY AND EQUIPMENT

Property and equipment at March  31, 2006 were as follows:




Computer
        $
        15,351Less accumulated depreciation
        
        (4,663)$
        10,688

During the thee months ended March 31, 2006 and 2005 and the period January 8, 2003 (Inception) to March 31, 2006 the Company
recorded depreciation expense of $1,174, $2,180 and $4,663, respectively.




NOTE 4
        PURCHASE OF INTELLECTUAL PROPERTY

During January 2005, the Company entered into an agreement with BioReduction Technology, LLC, pending the Companys acceptance of a working prototype. Whereby the Company has the right to acquire an exclusive license to make and have made and to use, offer to sell, sell, license, rent, and distribute products embodying the bio reduction technology and any improvements to such technology throughout the entire world. In exchange for the aforementioned license, the Company has agreed to issued 1,500,000 shares of common stock valued at $1,500,000 the fair market value on the agreement date and an option to purchase 300,000 additional shares of common stock, which will be exercisable at a price of $5.00 per share. As of March 31, 2006 the Company has not received a working prototype and has not closed on the agreement.



During May 2005, the Company entered into an agreement with an individual who is the sole inventor of and holds all the rights, title, and interest in a pending patent for citrus separation technology, whereby the Company has been assigned the pending patent and the right to make and have made and to use, offer to sell, sell, license, rent, and distribute products embodying the citrus separation technology and improvements to such technology throughout the entire world. In exchange for the aforementioned pending patent, the Company issued 500,000 shares of common stock valued at $500,000, the fair market value on the agreement date and an option for the purchase of 300,000 additional shares of YB common stock, exercisable at a price of $5.00 per share. The options were valued based on the Black-Scholes model with the following assumptions as required under SFAS 123 with the following
weighted average assumptions: expected dividend yield 0%, volatility 0%, risk-free interest rate of 4.25%, and expected warrant life of one year. The Company also agreed to share a certain percentage of profits derived from sales. As the Company has yet to determine the commercial feasibility of this technology, it has elected to fully impair the value of it.

9





On December 29, 2005, we entered into an agreement with Dexion International, Ltd to acquire all rights and interest in its patent application number 5425221.8 for Hypercritical Separation Technology that was filed with the European Patent Office on April 15, 2005. Upon successful testing, the rights, title and interest to the technology are being acquired by us at a cost of $2.5 million and 5,800,000 shares of common stock. Additionally, pending successful testing of the technology, we have agreed to acquire Dexions HST machine for $500,000 and to establish a research and development facility for the technology. As of March 31, 2006 the Company has not completed testing.




NOTE 5
        NOTES PAYABLE



The Company borrowed $5,000 from an investor. The note is due June 1, 2006 and bears interest at a rate of 15%




NOTE 6
        NOTES PAYABLE  RELATED PARTIES

During 2004, the Company issued a one-year 8% Convertible Debenture (Debenture) in the principal amount of $87,000, to an officer, director and shareholder in settlement of the note payable to such related party, which was issued for the sole purpose of funding ongoing operations. The principal and accrued interest of the Debenture is convertible upon issuance into shares of common stock, par value $0.001 per share, at a conversion price of $0.25 per share. The Company recorded financing fees for the beneficial conversion feature for the year ended December 31, 2005, 2004 and the period January 8, 2003 (Inception) to December 31, 2005 of $70,795, $14,205 and $85,000 respectively. Principle and accrued interest is due December 31, 2006.





On December 28, 2005, the officer, director and shareholder loaned the company $40,000 at a rate of 10% per annum. The principle and interest are due on December 31, 2006.



On December 27, 2005, the Company borrowed $15,000 from a related party. The note is due twelve months from the date of issuance and bears interest at a rate of 10%.



In March, 2006 a related party repaid an existing note of the Company in the amount of $20,000 and $500 of accrued interest. The related party entered into a new note agreement in the amount of $20,500 bearing interest at a rate of  15% per annum and is due December 31, 2006.



During the three months ended March 31, 2006, officer, director and shareholder loaned the company an additional $16,750. The balance accrued interest at a rate of 10% per annum and is due on December 31, 2006.






NOTE 7
        JOINT VENTURE

On August 15, 2005, the Company entered into an agreement with the Citrus Products of Belize Limited (CPBL). Pursuant to the Agreement, the Company and CPBL formed a joint venture named BTX Citrus Belize, Ltd. (BTXC) for the purpose of building a plant in Belize for waste peel processing. Pursuant to the terms of the Agreement, the Company will own 65% and CPBL will own 35% of the joint venture company. As of March  31, 2006 the joint venture has not been formed.



10





The parties have agreed that the Net Profits generated by BTXC, minus a working capital reserve to be determined by the BTXC board of directors, shall be distributed on a quarterly basis on the same percentage basis as each partys equity ownership. For the purpose of this Agreement, Net Profits has been defined as Gross Revenues from the sale of finished products less all associated costs of operation, including, but not limited to, salaries and wages, utilities, commissions, SG&A, royalties and debt service. An additional 20% of the Net Profits will be retained to establish a sinking fund in order to retire the debt incurred in building the plant until such time that the debt is retired.




NOTE 8
        STOCKHOLDERS EQUITY

(A) Common Stock Issued to Founders



During January 2003 the Company issued 3,149,200 shares of common stock to founders for a capital contribution of $2,000.



(B) Common Stock Issued for Cash



In 2005, the Company sold a total of 623,000 shares of common stock to 22 individuals for cash of $623,000 ($1.00 per share).



(C) Common Stock Issued for Services



In December 2005 the Company issued 30,000 shares of common stock with a fair market value of $30,000 for legal services.



In March 2006 the company issued 90,000 shares of common stock valued at $153,000 for investor relations. The term of the agreement is from June 1, 2006 to June 1, 2007. As of March 31, 2006 the company has recorded the value of these shares as deferred compensation and will amortize them over the term of the agreement.



(D) Common Stock Issued for Financing Fees



In December 2005 the Company issued 10,000 shares of common stock with a fair market value of $10,000 for financing fees in relation to a note payable(See Note 4).



(E) Common Stock Issued for Technology



The Company issued 500,000 shares of common stock with a fair value of $500,000 and 300,000 warrants during 2005, at an exercise price of $5.00 per share for the purchase of intellectual technology. The fair market value of the warrants was estimated on the grant date using the Black-Scholes option pricing model as required under SFAS 123 with the following weighted average assumptions: expected dividend yield 0%, volatility 1%, risk-free interest rate of 4.25%, and expected warrant life of one year. The value was immaterial at the grant date.



(F) Capital Contribution



In December, 2005 the Companys CEO elected to forgo $880 of amounts owed to him for management fees. This amount has been recorded as in-kind contribution of services at December 31, 2005



(G) Reverse Mergers



On June 9, 2005, pursuant to the Stock Purchase Agreement and Share Exchange, the Company issued a total of 565,000 shares of the Companys common stock to the shareholders of Capital Ventures I.

11





On December 30, 2005 pursuant to the Stock Purchase Agreement and Share Exchange, the Company issued a total of 33,101,400 shares of the Companys common stock to the shareholders of BTX Holdings, Inc. simultaneous with the Stock Purchase Agreement and Share Exchange, the Company purchased and retired a total of 31,475,000 shares of its common stock for $50,000 from a former shareholder of King Capital.



(H) Shares in Escrow



During 2005, 5,800,000 shares of common stock were issued into escrow pending the acceptance of the Agreement between the Company and Dexion International Ltd. to acquire the right to Hypercritical Separation Technology. As at May 18, 2006 the Company has not completed the transaction with Dexion and the shares remain in escrow.



During 2005, 1,500,000 shares of common stock and 300,000 warrants with an exercise price of $5.00 were issued into escrow pending the acceptance of the Agreement between the Company and Bio Reduction Technology, LLC to acquire the license to their Bio Reduction Technology. As at

May 18, 2006 the Company has not completed the transaction with Bio Reduction Technology, LLC and the shares remain in escrow.



During 2005 the Company issued 500,000 shares of common for the a finders fee which were put into escrow pending the acceptance of the Agreement between the Company and Dexion International Ltd. to acquire the license to their HyperCritical Separation Technology. As at May 18, 2006 the Company has not completed the transaction with Dexion International Ltd. and the shares remain in escrow.




NOTE 9
        RELATED PARTY TRANSACTIONS

During 2004, the Company issued a one-year 10% Convertible Debenture (Debenture) in the principal amount of $87,000, to an officer, director and shareholder in settlement of the note payable to such related party, which was issued for the sole purpose of funding ongoing operations. The principal and accrued interest of the Debenture is convertible upon issuance into shares of common stock, par value $0.001 per share, at a conversion price of $0.25 per share. The Company recorded financing fees for the beneficial conversion feature for the year ended December 31, 2005, 2004 and the period January 8, 2003 (Inception) to December 31, 2005 of $70,795, $14,205 and $85,000 respectively. Principle and accrued interest is due December 31, 2006.



On December 28, 2005, the officer, director and shareholder loaned the company $40,000 at a rate of 10% per annum. The principle and interest are due on December 31, 2006.



On December 27, 2005, the Company borrowed $15,000 from a related party. The note is due twelve months from the date of issuance and bears interest at a rate of 10%.



In March, 2006 a related party repaid an existing note of the Company in the amount of $20,000 and $500 of accrued interest. The related party entered into a new note agreement in the amount of $20,500 bearing interest at a rate of  15% per annum and is due December 31, 2006.



During the three months ended March 31, 2006, the officer, director and shareholder loaned the company an additional $16,750. The balance accrued interest at a rate of 10% per annum and is due on December 31, 2006.



12



NOTE 10
        COMMITMENTS AND CONTINGENCIES

(A) Employment Agreement



During December 2005, the Company entered into an employment agreement with the President and Chief Executive Officer of the Company for a term of five years at an annual minimum salary of $150,000.



In the event that the net profits of the Company is less than $2,500,000 per annum than the Executive shall receive a salary of $150,000; If net profits of the Company are more than $2,500,000 per annum and less than $5,000,000 than the Executive shall receive a salary of $250,000; if net profits of the Company are more than $5,000,000 per annum but less than $7,500,000 than the Executive shall receive a salary of $375,000; if the net profits of the Company are greater than $7,500,000 per annum than the Executive shall receive a salary of $500,000 and 4% of the Annual Net Profits of the Companies, from all sources, before Depreciation, Amortization and Taxes, in excess of $10,000,000. In addition the Company has agreed to a monthly car allowance of up $1,500 per month. Net Profits is based upon the net corporate profits, from all sources, before Depreciation, Amortization and Taxes as
collectively defined by the United States Generally Accepted Accounting Principles (GAAP).



The Company has agreed to issue the following common stock options:



Options to purchase 200,000 shares of the Companys common stock at an exercise price of $2.50 expiring in 2015.



Options to purchase 200,000 shares of the Companys common stock at an exercise price of $3.75 expiring in 2015.



Options to purchase 200,000 shares of the Companys common stock at an exercise price of $5.00 expiring in 2015.



Options to purchase 200,000 shares of the Companys common stock at an exercise price of $7.50 expiring in 2015.



Options to purchase 200,000 shares of the Companys common stock at an exercise price of $10.00 expiring in 2015.



(B) Joint Venture



During August 2005, the Company formed a majority-owned venture, BTX Citrus Belize, Ltd. (hereinafter known as BTXC), with Citrus Products Of Belize Ltd. (CPBL), comprised of the Companys capital funding and citrus peel processing equipment. CPBL is providing the land, free citrus peels for 10 years and is placing $700,000 in an escrow account for a period of no longer than four months. As a result of this transaction, BioTex Corp. (BIOTEX) will have a 65% ownership interest. The remaining 35% shall be owned by Citrus Products Of Belize Ltd. (CPBL).




NOTE 11
        GOING CONCERN

As reflected in the accompanying financial statements, the Company is in the development stage with no operations, a stockholders deficiency of $299,913, a working capital deficiency of $310,601 and used cash in operations from inception of $745,714. This raises substantial doubt about its ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Companys ability to raise additional capital and implement its business plan. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.



.

13





NOTE 12
        SUBSEQUENT EVENTS





On April 18, 2006, a related party loaned the company $50,000 at a rate of 15% per annum and due December 31, 2006. Upon execution of the promissory note, the company issued 25,000 shares of common stock.



On April 24, 2006, an investor loaned the company $25,000 at a rate of 10% per annum and due August 24, 2006. Upon execution of the promissory note, the Company issued 10,000 shares of common stock.



On May 2, 2006, an investor loaned the company $5,000 at a rate of 7% per annum and due June 1, 2006.





14











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



GENERAL



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



Plan of Operations



Our plan of operations for the next fifteen months is focused on the following primary objectives.




1.
        Complete testing and close on contracts for technologies currently under agreements2.
        Raising capital through private debt or equity offerings;


3.
        Find additional customers to purchase or lease machinery from us or enter into joint venture or strategic partner arrangements


4.
        Assemble new facilities to operate and demonstrate our technologies


5.
        Implement Sales & Marketing of value added products derived from our technology


6.
        Further develop and enhance our technology; and continue research and development for new applications of existing technologies and seek out new technologies

Subject to the requisitefinancing, we believe that we can  complete the following objectives within the time period specified:



New Facilities



We intend to finance the development of several new facilities and have such facilities in operation during 2006. These will be
on-site locations owned, leased and/or operated by BioTex, where we will joint venture with existing operations to process wet citrus
peel into specific products. We intend to build a demonstration facility in Florida, and additionally we intend to build facilities
in Belize and California. Although we do not have any agreements in place for facilities in Florida or California, we are in
negotiations with several juicing operations, and it is our intention to open our demonstration facility in Florida in the third
quarter of 2006. This will be a pilot operation and we estimate the cost of equipment to be $50,000 which will be financed
internally. Assuming we receive financing on a timely basis, we believe this can be accomplished in this time period since the
facility would only take a month to build.



We estimate that the additional planned facilities will cost $18.5 million to to
become fully operational. We intend to secure the funding necessary and to begin
construction of the Belize facility during the 3rd Quarter of 2006. Pending
successful negotiation with juicing plants in Florida and California to build
CST facilities, we intend to secure funding and begin construction under the
following cost and time projections; 4th Quarter 2006, California $5 Million and
expand the Florida operation, $2.5 million, 2nd Quarter 2007, expand Belize
facilities at an estimate of $6 Million. We presently do not have the funds
available to finance these activities, however management believes that actions
presently being taken to obtain additional funding will be successful and will
allow us to construct the aforementioned facilities in a timely manner. We
intend to raise the funds through equity sales and debt, though no definitive
agreements have been signed yet. However, since we do not currently have any
definitive plans for raising these funds, we may have to delay our plan if we
can not raise the necessary funds in a timely manner.



Sales Marketing



All sales will initially be generated through direct sales with three internal
employees: We are in preliminary talks with several customers, although no
contracts have been consummated for the leasing of our machines. Sales and
marketing expenditures are budgeted at $75,000 for the next twelve months. Our
sales success depends on the following fundamental points:




1.
        Demonstrating proof of our technology and its applications for producing value added products


2.
        Providing increased cost savings and profit


3.
        Introducing and educating customers on our technology and our processes





We will initially focus our marketing efforts on establishing joint ventures that will utilize our Citrus Separation Technology (CST)
and pending completion of our due diligence and  acquisition of the Hypercritical Separation Technology (HST) for the processing of
biomass waste streams, as well as leasing individual BioReduction Technology (BRT) machines:



1.Joint ventures utilizing our CST and HST technologies.In August, 2005, we entered into an agreement with Citrus Products of Belize, Ltd. to form a joint venture company which will use our CST technology for the processing of citrus peel waste in Belize. We will continue to market our technologies through this model to citrus juice producers, pineapple, rice, grain, corn and sugar cane grower cooperatives, as well as continue to develop new markets that may use our technologies. Through these joint ventures, value-added products will be generated, and as a result, we will also focus our marketing efforts on the sale of these products. We have identified several markets for these products, such as the chemical and perfume industries, paper producers, animal
and human consumable manufacturers, nutraceutical and pharmaceutical companies and ethanol producers. We will focus our efforts on marketing our value-added products to these industries.



On August 16, 2005, we entered into an agreement to form a Joint Venture Company, BTX Citrus Belize, Ltd., along with Citrus Products
of Belize, Ltd (CPBL). BTX Citrus Belize will be formed with the purpose of constructing a citrus peel processing facility utilizing
BioTex's CST technology. CPBL will contribute land, building and citrus peel to BTX Citrus, and BioTex will arrange for funding,
provide the technology, oversee construction of the plant, operate the plant, and sell the products the plant generates. CPBL will
own 35% of the joint venture and BioTex will own 65%. The plant is expected to cost approximately $11 million.



On December 27, 2005 we reached an agreement with Smart Assets, LLC, pursuant to which, after successful demonstration of our technology, we will form a joint venture company with Smart Assets to process precious metals and mineral mine tailings. The joint venture will seek out mining operations that generate metals rich waste that can be processed using our HST technology. Upon successful testing, Smart Assets will pay us $750,000 for a 49.9% ownership interest in the joint venture that will be formed. Additionally, Smart Assets has stakes in several mining operations in the Western United States which will become the first sites to install the HST machines for precious metals processing. We have not yet successfully demonstrated our technology to Smart Assets, LLC. We intend to do so during the 2ndor 3rdquarter of 2006.



On December 29, 2005, we terminated our agreement with Mastercraft Ltd. dated May 31, 2005. The agreement contemplated the acquisition of the rights, title and interest to its MST technology at a cost of $3 million and 6,500,000 shares of common stock of BioTex. The agreement was terminated when Mastercraft defaulted on the terms of the agreement and both Mastercraft and BioTex signed mutual releases of liability. Upon termination, the 6,500,000 shares being held in escrow were returned to the treasury.



On December 29, 2005, we entered into an agreement with Dexion International,
Ltd to acquire all rights and interest in its patent application number
5425221.8 for Hypercritical Separation Technology that was filed with the
European Patent Office on April 15, 2005. Upon successful testing, the rights,
title and interest to the technology are being acquired by us at a cost of $2.5
million and 5,800,000 shares of common stock. Additionally, pending successful
testing of the technology, we have agreed to acquire Dexions HST machine
for $500,000 and to establish a research and development facility for the
technology. Finally, upon closing of this transaction, we will pay a fee of
500,000 shares of common stock to an individual that introduced the business
opportunity to the Company. The technology has not yet been demonstrated to our
satisfaction and we have not closed on the transaction. We intend to continue
testing and intend to close on this transaction by the 3rdQuarter of 2006.



We are also currently in negotiations with a juicing facilities located in Southern California and Florida to construct CST processing plants at their respective facilities. BioTex will form joint venture companies which will own and operate the plants. The joint venture partners will contribute citrus peel and possibly land and/or buildings to the joint ventures, and we will arrange for the funding, will provide the technology, oversee construction of the plants, operate the plants and sell the value added products that are produced. It is anticipated that the plants will cost approximately $5 million and $2.5 million respectively.



We presently do not have the funds available to finance these activities,
however management believes that actions presently being taken to obtain
additional funding will be successful and will allow us to construct the
aforementioned facilities. We intend to raise the funds through equity sales and
debt, though no definitive agreements have been signed yet.






We account for long-lived assets under the Statements of Financial  Accounting  Standards Nos. 142 and 144 "Accounting for Goodwill and
Other  Intangible  Assets" and  "Accounting  for Impairment or Disposal of Long-Lived  Assets" ("SFAS No. 142 and 144").  In accordance
with SFAS No. 142 and 144,  long-lived  assets,  goodwill and certain  identifiable  intangible assets held and used by the Company are
reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. For purposes of evaluating the
recoverability of long-lived assets, goodwill and intangible assets, the recoverability test is performed using undiscounted net cash
flows related to the long-lived assets. A 100% or $500,000 impairment charge was recorded for the Citrus Separation Technology
acquired during the year ended December 31, 2005 as it was determined by management that the future value was impaired.



2BRT machines in the large urban areas of the United States.Upon BioTex Corporations acceptance of the technology, we will market the BRT machines to supermarkets, produce distributors, waste transfer stations and commercial bakeries in urban areas which have waste disposal problems. Future business will be derived by marketing to farms and other large-scale commercial generators of organic waste. The BRT machine will initially be built in three sizes. It is our intention to build these machines and then lease them to our customers. We intend to focus only on a niche market of the waste industry, not unlike the current recycling industry. It is our intent to become the premier supplier of equipment for the collection and disposal of biomass
(plant-derived material) streams from commercial and industrial sources. To that end, we will market our three sizes of machines to commercial industries as appropriate. Initially, we will focus on companies that generate medium sized biomass streams. Examples include waste transfer stations and institutional re-packagers of vegetable products, such as suppliers to the airline and hospitality industries, large produce markets, terminal markets and produce distributors.



We intend to implement a sales & marketing plan for value added products derived from our technology. In addition to direct sales, we have currently secured a domain name, BioTexcorp.com, and during the first quarter of 2006, launched a web-site for Sales and Marketing purposes and explaining our processes and the various aspects of our business. The value added products we intend to derive for sale from our technology for sale are represented below:




a.
        Cellulose can either be sold to the paper industry, or can be used to create ethanol, a renewable energy sourceb.
        Hemicellulose can be converted into xylose, which is the basis for a new sweetener, and can also be used in the manufacture of paperc.
        Lignin is an industrial fuel, usually used to provide energy to industrial plants


d.
        Starch can also be used in ethanol production and well as in food productione.
        Fiber is used in the nutraceutical industry, as well as in the food industryf.
        Pectin is used in the food, pharmaceutical and nutraceutical industriesg.
        Protein is used in the food, nutraceutical and pharmaceutical industries

Research & Development



We intend to devote time and financial resources to research and development activities to develop additional products and services. Research and development expenditures are budgeted at $120,000 for the next twelve months. There is no assurance that we will successfully develop these products or services, or that competitors will not develop products or services sooner or products or services that are superior to our product or service offerings.



As part of our agreement with Dexion International, Ltd., pending successful testing, we will purchase the existing HST machine at a cost of $500,000 and establish a research and development center during the third quarter of 2006, where the machine will be used for testing the marketing applications specific to the HST machines processing of organic and inorganic waste streams. Additional uses for the machine will also be developed through the continual testing of newly contemplated feed stocks. Our research and development will be focused on the following initiatives:





1.
        Seeking out new technologies2.
        Develop new applications for existing technologies3.
        Develop other uses for output from our machines4.
        Develop new ways to market our products

Administrative Costs



We do expect to hire several employees for sales, engineering, administrative and finance support staff as necessary. We anticipate
employee recruiting and training to cost $24,000 over the next twelve months.  (Salaries are included below as part of the office
salaries)



Completion of our plan of operations is subject to attaining adequate revenue. We cannot assure investors that adequate revenues will be generated. In the absence of our projected revenues, we may be unable to proceed with our plan of operations. Even without significant revenues within the next twelve months, we still anticipate being able to continue with our present activities, but we may require financing to potentially achieve our goal of profit, revenue and growth.



We anticipate that our operational as well as general and administrative expenses for the next 12 months will total $24,189,000. The breakdown is as follows:







The foregoing represents our best estimate of our cash needs based on current planning and business  conditions.  The exact allocation,
purposes and timing of any monies raised in subsequent  private  financings may vary  significantly  depending upon the exact amount of
funds raised and status of our business plan. In the event we are not successful in reaching our initial  revenue  targets,  additional
funds will be required and we may then not be able to proceed  with our business  plan for the  development  and  marketing of our core
products  and  services.  Should this occur,  we would  likely seek  additional  financing  to support the  continued  operation of our
business.  Additionally,  should we not successfully  close on the acquisitions of technologies  that we are currently under agreements
to  acquire,  we may not be able to meet  our  revenue  targets.  We  presently  do not have  the  funds  available  to  finance  these
activities,  however  management  believes that actions presently being taken to obtain additional  funding will be successful and will
allow us to  undertake  our plan of  operations.  We intend to raise the funds  through  equity  sales and debt,  though no  definitive
agreements have been signed yet.



We anticipate that depending on market conditions and our plan of operations, we will incur operating losses in the foreseeable future.



Going Concern Consideration



As reflected in the accompanying financial statements, we are in the development stage with no operations, a stockholders' deficiency
of $299,913, and a working capital deficiency of $310,601 and used cash in operations from inception of $745,714. This raises
substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern is dependent on our
ability to raise additional capital and implement our business plan. The financial statements do not include any adjustments that
might be necessary if the Company is unable to continue as a going concern.



We believe that actions presently being taken to obtain additional funding and implement our strategic plans provide the opportunity for us to continue as a going concern.



Liquidity and Capital Resources



As of March 31, 2006, we have assets of $13,818 consisting of cash of $0, prepaid expenses of $3,130 and property and equipment of $10,688 and total liabilities of $313,731 consisting of accounts payable of $65,708; and accrued expenses of $61,958, an amount of $179,250 due to related parties, and notes payable of $5,000.



Cash and cash equivalents from inception to date have been sufficient to cover expenses involved in starting our business. Current cash on hand is insufficient to support our operations for the next twelve months. Therefore, we will require additional funds to continue to implement and expand our business plan during the next twelve months.



Critical Accounting Policies



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



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



Item 3. Controls and Procedures



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



to our management, including our principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.



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



PART II - OTHER INFORMATION



Item 1. Legal Proceedings.



The Company is currently not a party to any pending legal proceedings and no such action by, or to the best of its knowledge, against the Company has been threatened.



Item 2. Changes in Securities.



On February 21, 2006, the Company approved the issuance of 10,000 shares of restricted common stock to Ofer Azrielant pursuant to a
promissory note dated December 30, 2005. Such shares were issued pursuant to an exemption from registration at Section 4(2) of the
Securities Act of 1933 and are restricted in accordance with Rule 144 of the Securities Act of 1933.



On March 30, 2006, the Company approved the issuance of 90,000 shares of restricted common stock to Wallstreet Direct, Inc for
services to be rendered to the Company. Such shares were issued pursuant to an exemption from registration at Section 4(2) of the
Securities Act of 1933 and are restricted in accordance with Rule 144 of the Securities Act of 1933.



Item 3. Defaults Upon Senior Securities.



None



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



No matter was submitted during the quarter ending March 31, 2006, covered by this report to a vote of the Companys shareholders, through the solicitation of proxies or otherwise.



Item 5. Other Information.



None



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




(a)
        Exhibits


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


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


(b)
        Reports of Form 8-K


None











SIGNATURES



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




BTX HOLDINGS, INC.Registrant


Date: May 19, 2006
        By:/s/ Scott J. SilvermanScott J. SilvermanPresident, Chief Executive Officer,Chairman of Board of Directors