UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
D.C. 20549




FORM
10-Q








(Mark
One)




x
              QUARTERLY REPORT
      UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934


For the
quarterly period ended    March 31,
2009




o
                TRANSITION
      REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE
  ACT
 For the
transition period from _________ to _________




Commission
file number      000-50760





Sancon
Resources Recovery, Inc.


(Exact
name of small business issuer as specified in its charter)






Nevada
            58-2670972(State or other
      jurisdiction of incorporation or organization)
            (IRS Employee
      Identification No.)




No 2
Yinqing Lu, Songjiang District,


Shanghai,
China, 201615


(Address
of principal executive offices)





(+86) 21
67756099


­­­­­­­­­­­­­­­­­­­­­­­
(Issuer's telephone number)




Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.  Yes x    No
o





APPLICABLE
ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS


DURING
THE PRECEDING FIVE YEARS





Check
whether the registrant filed all documents and reports required by Section l2,
13 or 15(d) of the Exchange Act after the distribution of securities under a
plan confirmed by a court.  Yes o   No
o





APPLICABLE
ONLY TO CORPORATE ISSUERS





State the
number of shares outstanding of each of the issuer's classes of common equity,
as of the latest practicable date:





Common
Stock:  par value of $0.001; 22,614,996 shares issued and outstanding
on March 31, 2009.





Transitional
Small Business Disclosure Format (Check one):  Yes o   No
x








Sancon
Resources Recovery, Inc.


FORM
10-Q





INDEX





PAGEImportant
      Notice
            3PART
      I.
            FINANCIAL
      INFORMATION
            4Item
      1.
            Financial
      Statements  (Unaudited)
            4-15Item
      2.
            Management's
      Discussion and Analysis or Plan of Operation
            15Item
      3.
            Controls
      and Procedures
            22PART
      II.
            OTHER
      INFORMATION
            23Item
      1.
            Legal
      Proceedings
            23Item
      2.
            Changes
      in Securities and Use of  Proceeds
            23Item
      3.
            Default
      Upon Senior Securities
            23Item
      4.
            Submission
      of Matters to a Vote of Security Holders
            23Item
      5.
            Other
      Information
            23Item
      6.
            Exhibits
            24Signatures
            25












CAUTIONARY
STATEMENT REGARDING FORWARD LOOKING INFORMATION





Certain
statements in this report contain or may contain forward-looking statements that
are subject to known and unknown risks, uncertainties and other factors which
may cause actual results, performance or achievements to be materially different
from any future results, performance or achievements expressed or implied by
such forward-looking statements. These forward-looking statements were based on
various factors and were derived utilizing numerous assumptions and other
factors that could cause our actual results to differ materially from those in
the forward-looking statements. These factors include, but are not limited to,
the risk of doing business in the People' Republic of China, or PRC, our ability
to implement our strategic initiatives, our access to sufficient capital, the
effective integration of our subsidiaries in the PRC into a U.S. public company
structure, economic, political and market conditions and fluctuations,
government and industry regulation, Chinese and global competition, and other
factors. Most of these factors are difficult to predict accurately and are
generally beyond our control. You should consider the areas of risk described in
connection with any forward-looking statements that may be made herein. Readers
are cautioned not to place undue reliance on these forward-looking statements
and readers should carefully review this report in its entirety. Except for our
ongoing obligations to disclose material information under the Federal
securities laws, we undertake no obligation to release publicly any revisions to
any forward-looking statements, to report events or to report the occurrence of
unanticipated events. These forward-looking statements speak only as of the date
of this report and you should not rely on these statements without also
considering the risks and uncertainties associated with these statements and our
business.












3


PART
I.   FINANCIAL INFORMATION





ITEM
1.  FINANCIAL STATEMENTS (UNAUDITED)




SANCON
      RESOURCES RECOVERY, INC.CONSOLIDATED
      BALANCE SHEETS(UNAUDITED)AssetsMarch 31, 2009
            
            
            December 31, 2008Current
      assetsCash
      and cash equivalents
            
            $
            2,220,580
            
            
            $
            2,220,509Trade
      receivables, net
            
            
            1,090,719
            
            
            
            289,240Inventory
            
            
            17,617
            
            
            
            7,270Deferred
      Tax Asset
            
            
            21,877
            
            
            
            22,107Other
      receivables
            
            
            195,772
            
            
            
            64,929Advances
      and prepayments
            
            
            116,641
            
            
            
            75,389Current
      assets of entity disposed off
            
            
            -
            
            
            
            156,994Total
      current assets
            
            
            3,663,206
            
            
            
            2,836,438Property,
      plant & equipment, net
            
            
            926,097
            
            
            
            927,044Construction
      in process
            
            
            25,941
            
            
            
            -Security
      deposit
            
            
            7,519
            
            
            
            7,598Marketable
      securities
            
            
            129,000
            
            
            
            128,938Total
      Assets
            
            $
            4,751,763
            
            
            $
            3,900,018Liabilities and Stockholders'
      EquityLiabilitiesCurrent
      liabilitiesTrade
      payables
            
            $
            978,119
            
            
            $
            747,786Capital
      lease - current
            
            
            6,550
            
            
            
            8,735Accrued
      expenses and other payables
            
            
            181,248
            
            
            
            252,424Tax
      payables
            
            
            143,105
            
            
            
            110,314Due
      to related parties
            
            
            482,664
            
            
            
            415,304Other
      payables
            
            
            118,227
            
            
            
            116,178Current
      liability of entity disposed off
            
            
            -
            
            
            
            24,950Total
      current liability
            
            
            1,909,913
            
            
            
            1,675,691Long
      term liabilityCapital
      lease
            
            
            28,871
            
            
            
            29,175Total
      liability
            
            
            1,938,784
            
            
            
            1,704,866Commitment
      & Contingency
            
            
            -
            
            
            
            -




4




SANCON
      RESOURCES RECOVERY, INC.CONSOLIDATED
      BALANCE SHEETS(UNAUDITED)(CONTINUED)Stockholders'
      EquityShare
      CapitalAuthorized:
      500,000,000 common shares, par value $0.001 per shareIssued
      and Outstanding: 22,614,996 shares as of March 31, 2009 and December 31,
      2008 respectively
            
            
            22,615
            
            
            
            22,615Additional
      paid-in capital
            
            
            808,299
            
            
            
            808,299Deferred
      Compensation
            
            
            (154,500
            )
            
            
            (194,400
            )Other
      comprehensive income
            
            
            61,160
            
            
            
            62,854Accumulated
      profit (deficit)
            
            
            1,940,672
            
            
            
            1,367,955Total
      stockholders' equity
            
            
            2,678,246
            
            
            
            2,067,323Noncontrolling
      stockholders' interest
            
            
            134,733
            
            
            
            127,829Total
      liabilities & stockholders' equity
            
            $
            4,751,763
            
            
            $
            3,900,018The
      accompanying notes form an integral of these unaudited financial
      statements.








5




SANCON
      RESOURCES RECOVERY, INC.CONSOLIDATED
      STATEMENTS OF INCOME(UNAUDITED)For
      the three months periods ended March 31,2009
            
            
            2008Net
      Sales
            
            $
            2,594,495
            
            
            $
            2,579,103Cost
      of sales
            
            
            1,281,932
            
            
            
            1,035,271Gross
      profit
            
            
            1,312,563
            
            
            
            1,543,832Operating
      ExpensesDepreciation
            
            
            44,299
            
            
            
            37,621Selling,
      General and Administrative
            
            
            697,953
            
            
            
            673,999Total
      operating expenses
            
            
            742,252
            
            
            
            711,620Operating
      income
            
            
            570,311
            
            
            
            832,212Other
      Income (Expense)Other
      income
            
            
            26,674
            
            
            
            150,372Interest
      income
            
            
            1,285
            
            
            
            2,454Total
      other income
            
            
            27,959
            
            
            
            152,826Income
      from continued operations before income taxes andDiscontinued
      Operation
            
            
            598,270
            
            
            
            985,038Discontinued
      OperationLoss
      from Discontinuing Operation
            
            
            (50
            )
            
            
            (36,208
            )Gain/(Loss)
      on Disposal of Subsidiary
            
            
            (1,834
            )
            
            
            -Gain(loss)on
      Discontinued Operations
            
            
            (1,884
            )
            
            
            (36,208
            )Income
      before income taxes
            
            
            596,386
            
            
            
            948,830Income
      taxes
            
            
            16,765
            
            
            
            93,024Net
      income
            
            
            579,621
            
            
            
            855,806Less:
      Net income attributed to noncontrolling interest
            
            
            (6,904
            )
            
            
            (83,251
            )Net
      income attributable to Company
            
            
            572,717
            
            
            
            772,555Other
      comprehensive item:Foreign
      currency translation gain
            
            
            (1,694
            )
            
            
            22,323Net
      comprehensive income
            
            $
            571,023
            
            
            $
            794,878Earnings
      per share:Basic
      & diluted earnings/(loss) per share continued
    operations
            
            $
            0.03
            
            
            $
            0.05Basic
      earnings/(loss) per share discontinued operations
            
            
            (0.00
            )
            
            
            (0.00
            )Basic
      & diluted earnings/(loss) per share
            
            
            0.03
            
            
            
            0.04Basic
      & diluted weighted average shares outstanding
            
            
            22,614,996
            
            
            
            20,718,329The
      accompanying notes is an integral of these unaudited financial
      statements.




6




SANCON
      RESOURCES RECOVERY, INC.CONSOLIDATED
      STATEMENTS OF CASH FLOWS(UNAUDITED)For
      the three months periods ended March 31,2009
            
            
            2008Cash
      Flows from Operating ActivitiesNet
      Income
            
            $
            572,717
            
            
            $
            772,555Adjustments
      to reconcile net income to net cash flowsprovided
      by operating activities:Depreciation
      and amortization
            
            
            44,299
            
            
            
            37,621Shares
      issued in lieu of compensation & service
            
            
            39,900
            
            
            
            11,250Noncontrolling
      stockholders' interest
            
            
            6,904
            
            
            
            83,251Changes
      in current assets and liabilities:Decrease
      (increase) in trade receivables
            
            
            (801,479
            )
            
            
            (94,884
            )Decrease
      (increase) in inventory
            
            
            (10,347
            )
            
            
            (15,159
            )Decrease
      (increase) in advance to suppliers
            
            
            (53,881
            )
            
            
            (286
            )Decrease
      (increase) in other current assets
            
            
            25,317
            
            
            
            (313,938
            )Increase
      (decrease) in tax payable
            
            
            32,791
            
            
            
            66,568Increase
      (decrease) in trade payable
            
            
            230,333
            
            
            
            (20,768
            )Increase
      (decrease) in other current liabilities
            
            
            2,860
            
            
            
            293,320Net
      cash provided by continued operations
            
            
            89,414
            
            
            
            819,530Net
      cash used in discontinued operations
            
            
            -
            
            
            
            (39,129
            )Net
      cash flows provided by operating activities
            
            
            89,414
            
            
            
            780,401Cash
      Flows from Investing ActivitiesPurchase
      of property and equipment
            
            
            (68,368
            )
            
            
            (112,663
            )Net
      cash provided by discontinued operations
            
            
            (1,884
            )
            
            
            11,894Net
      cash flows used in Investing activities
            
            
            (70,252
            )
            
            
            (100,769
            )Cash
      Flows from Financing ActivitiesShareholders’
      loan
            
            
            (4,627
            )
            
            
            8,049Proceeds
      from (payment of) mortgage loan
            
            
            (2,489
            )
            
            
            146Net
      cash flows provided by (used in) financing activities
            
            
            (7,116
            )
            
            
            8,195Effect
      of exchange rate changes on cash
            
            
            (11,975
            )
            
            
            22,323Net
      Increase in Cash & Cash Equivalent
            
            
            71
            
            
            
            710,150Cash
      & Cash Equivalent at start of period
            
            
            2,220,509
            
            
            
            238,576Cash
      & Cash Equivalent at end of period
            
            $
            2,220,580
            
            
            $
            948,726Supplemental
      information for Cash ExpensesCash
      paid for Interest Expenses
            
            $
            749
            
            
            $
            1,391Cash
      paid for Income Taxes
            
            $
            7,671
            
            
            $
            -The
      accompanying notes is an integral of these unaudited financial
      statements.




7


Sancon
Resources Recovery, Inc.


NOTES TO
THE CONSOLIDATED FINANCIAL STATEMENTS


For the
period ended March 31, 2009


(Unaudited)




Note
1.  Nature of Operations





Sancon
Resources Recovery, Inc. ("Sancon", or "the Company", or "we", or "us") is
registered in good standing under Chapter 78 of the Nevada Statutes, and its
common stock is traded on the OTCBB under the symbol SRRY.OB. Sancon Resources
Recovery, Inc. is an environmental service and waste management company that
operates recycling facilities in China and Australia. Sancon specializes in the
collection and recovery of industrial and commercial solid wastes such as
plastic, paper, cardboard, and glass. The recycled materials are re-used by
Sancon's manufacturing customers in China to make a wide variety of new products
including outdoor furniture, construction materials, building materials, road
surface, and various new products. Sancon's China operation is licensed by the
Chinese government for waste management services, and is certified with ISO 9001
and ISO14001 standards.  Sancon aims to provide solutions to today's
soaring raw material cost for manufactures and assists in solving our
environmental problems.





On August
15, 2007, the Company completed the acquisition of 70% of the equity interest in
Sancon Resources Recovery (Shanghai) Co., Ltd by exercising its option to
convert $200,000 of convertible promissory note





On
November 17, 2006 , the company completed the acquisition of  100%
equity interest in Crossover Solutions Inc (“Crossover” or “CS”) from Fintel
Group by paying $1 for the transfer of one share of Crossover Solutions Inc.
being the total number of outstanding share of Crossover.





Since its
acquisition, Crossover solution Inc has begin the operation of providing
services for management and granulation of waste materials for its clients
located in China.





On March
31, 2008, the company sold 100% equity interest of Digital Financial Service
Limited (“DFSL”) for $7.8 plus the assumption of certain liabilities, resulting
in gain of $1,865 on disposal of the entity.





On March
31, 2009, the company sold 100% equity interest of Guang Cheng Int'l Trading
Ltd. (“Guang Cheng”) for $1,290 plus the assumption of certain liabilities,
resulted in loss of $1,884 on disposal of the entity.





As of
March 31, 2009, the Sancon group comprises of the following
companies:





Registered
      Name
              (business
      is conducted under the registered names)
            Domicile
            Owner
            %
      held
            StatusSancon
      Recycling Pty Ltd.
            Australia
            Sancon
            100
            ActiveSancon
      Resources Recovery (Shanghai) Co., Ltd. ("Sancon SH"
      hereinafter)
            Shanghai
            Sancon
            70
            ActiveCrossover
      Solutions Inc. ("CS" hereinafter)
            British
      Virgin Island
            Sancon
            100
            Active





Note
2.  Basis of Presentation





(a)
            Interim
      Consolidated Financial Statements





The
accompanying unaudited consolidated financial statements have been prepared in
conformity with generally accepted accounting principles in the United States of
America.  However, certain information and footnote disclosures
normally included in financial statements prepared in accordance with generally
accepted accounting principles have been omitted or condensed, pursuant to the
rules and regulations of the Securities and Exchange Commission ("SEC"). In the
opinion of Sancon management, all adjustments of a normal recurring nature
necessary for a fair presentation have been included. The results for periods
are not necessarily indicative of results for the entire year. These financial
statements and accompanying notes should be read in conjunction with our annual
financial statements and the notes thereto for the year ended December 31, 2008,
included in our Annual Report on Form 10K, filed with the Securities and
Exchange Commission.




(b)
              Principles
      of Consolidation
 The
accompanying unaudited consolidated financial statements include all of the
accounts of the Company and all of the subsidiaries under its control, which
include Sancon Recycling Pty Ltd., Sancon SH (70%) and CS as of and for the
period ended March 31,2009.  While the historical results for the
three months period ended March 31, 2008 include the Company, Sancon Recycling
Pty Ltd., Guang Cheng, Sancon SH (70%) and CS.  All material
inter-company balances and transactions have been eliminated in
consolidation.





8




The
accompanying consolidated financial statements have been prepared assuming that
the Company will continue as a going concern.  This basis of
accounting contemplates the recovery of the Company's assets and the
satisfaction of liabilities in the normal course of business.





Note
3.  Summary of Significant Accounting Policies





Use of
Estimates





These
financial statements are prepared in accordance with accounting principles
accepted generally in the USA.  These principles require management to
use its best judgment in determining estimates and assumptions that: affect the
reported amounts of assets and liabilities; disclosure of contingent assets and
liabilities at the date of the financial statements; and the reported amounts of
revenues and expenses during the reporting period.   Management
makes its best estimate of the ultimate outcome for such items based on
historical trends and other information available when the financial statements
are prepared. Changes in estimates are recognized in accordance with the
relevant accounting rules, typically in the period when new information becomes
available to management. Actual results in the future could differ from the
estimates made in the prior and current periods.





Earnings Per
Share





Basic
earnings per share ("EPS") is calculated using net earnings (the numerator)
divided by the weighted-average number of shares outstanding (the denominator)
during the reporting period. Diluted EPS includes the effect from potentially
dilutive securities.  Diluted EPS is equal to basic EPS for all
periods presented, as the Company has no potentially dilutive
securities.





Revenue
Recognition





The
Company's revenue recognition policies are in compliance with Staff Accounting
Bulletin (SAB) 104. Sales revenue is recognized when the significant risks and
rewards of the ownership of goods have been transferred to the
buyers.  No revenue is recognized if there are significant
uncertainties regarding the recovery of the consideration due, the possible
return of goods, or when the amount of revenue and the costs incurred or to be
incurred in respect of the transaction cannot be measured reliably.





Due to
the disposal of subsidiary Guang Cheng Int'l Trading Ltd., the Company now is
organized into two business segments while it was three in the last year:
material recycling and waste management service. Their revenue recognition is as
follows:





(1)
Material Recycling refers to the activities of collecting and processing of
waste materials, then selling them to customers in China. The plant is located
in Australia. The revenue is recognized when delivery of the material is
occurred and invoice issued.


(2) Waste
management Service refers the activities of providing waste management service
with operations located in Shanghai China. The revenue is recognized when
service is completed and invoice is issued.





Income
Taxes





The
Company has adopted Financial Accounting Standard No. 109 (SFAS 109) which
requires the recognition of deferred tax liabilities and assets for the expected
future tax consequences of events that have been included in the financial
statement or tax returns. Under this method, deferred tax liabilities and assets
are determined based on the difference between financial statements and tax
basis of assets and liabilities using enacted tax rates in effect for the year
in which the differences are expected to reverse.





The
Company operates in several countries.  As a result, we are subject to
numerous domestic and foreign tax jurisdictions and tax agreements and treaties
among the various taxing authorities. Our operations in these jurisdictions are
taxed on various bases: income before taxes, deemed profits and withholding
taxes based on revenue. The calculation of our tax liabilities involves
consideration of uncertainties in the application and interpretation of complex
tax regulations in a multitude of jurisdictions across our global
operations.





We
regularly assess our position with regard to individual tax exposures and record
liabilities for our uncertain tax positions and related interest and penalties
according to the principles of FAS 5, Accounting for Contingencies. These
accruals reflect management's view of the likely outcomes of current and future
audits. The future resolution of these uncertain tax positions may be different
from the amounts currently accrued and therefore could impact future tax period
expense.





The
Company has U.S. federal net operating loss carry forwards that if unused could
expire in varying amounts in the years through 2020 to 2026. However, as a
result of the acquisition, the amount of net operating loss carry forward
available to be utilized in reduction of future taxable income was reduced
pursuant to the change in control provisions of Section 382 of the Internal
Revenue Code.




9


A 100%
valuation allowance has been established as a reserve against the deferred tax
assets arising from the net operating losses and other net temporary differences
since it cannot, at this time, be considered more likely than not that their
benefit will be realized in the future.





Changes
in tax laws, regulations, agreements and treaties, foreign currency exchange
restrictions or our level of operations or profitability in each taxing
jurisdiction could have an impact upon the amount of income taxes that we
provide during any given year.





Non-controlling
Stockholders’ Interest





The
Company owned 70% interest in Sancon Shanghai. As at March 31, 2009 and December
31, 2008 minority interest amounted to $134,733 and $127,829
respectively.





Certain
amounts presented for prior periods that were previously designated as minority
interests have been reclassified to conform to the current year presentation.
Effective January 1, 2009, the Company adopted SFAS No. 160,
“Non-controlling Interests in Consolidated Financial Statements, an amendment of
ARB No. 51,” which established new standards governing the accounting for
and reporting of non-controlling interests (NCIs) in partially owned
consolidated subsidiaries and the loss of control of subsidiaries. Certain
provisions of this standard indicate, among other things, that NCIs (previously
referred to as minority interests) be treated as a separate component of equity,
not as a liability (as was previously the case); that increases
and decreases in the parent’s ownership interest that leave control intact
be treated as equity transactions, rather than as step acquisitions or dilution
gains or losses; and that losses of a partially owned consolidated subsidiary be
allocated to the NCI even when such allocation might result in a deficit
balance. This standard also required changes to certain presentation and
disclosure requirements. The provisions of the standard were applied to all NCIs
prospectively, except for the presentation and disclosure requirements, which
were applied retrospectively to all periods presented. As a result, upon
adoption, the Company retroactively reclassified the “Non-controlling
stockholders’ interest” balance previously included in the “Other liabilities”
section of the consolidated balance sheet to a new component of equity with
respect to NCIs in consolidated subsidiaries. The adoption also impacted certain
captions previously used on the consolidated statement of income, largely
identifying net loss including NCI and net loss attributable to
Octavian.





Reclassifications





Certain
reclassifications have been made in prior period's financial statements to
conform to classifications used in the current period.





Recent
pronouncements





In
December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in
Consolidated Financial Statements”. This Statement amends ARB 51 to establish
accounting and reporting standards for the noncontrolling (minority) interest in
a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a
noncontrolling interest in a subsidiary is an ownership interest in the
consolidated entity that should be reported as equity in the consolidated
financial statements. SFAS No. 160 is effective for the Company on January 1,
2009.





In
December 2007, the FASB issued SFAS No. 141(R), “Business Combinations”. This
Statement replaces SFAS No. 141, Business Combinations. This Statement retains
the fundamental requirements in Statement 141 that the acquisition method of
accounting (which Statement 141 called the purchase method) be used for all
business combinations and for an acquirer to be identified for each business
combination. This Statement also establishes principles and requirements for how
the acquirer: a) recognizes and measures in its financial statements the
identifiable assets acquired, the liabilities assumed, and any noncontrolling
interest in the acquiree; b) recognizes and measures the goodwill acquired in
the businesc combination or a gain from a bargain purchase and c) determines
what information to disclose to enable users of the financial statements to
evaluate the nature and financial effects of the business combination. SFAS
No.141(R) is effective for the Company on January 1, 2009.





On
December 30, 2008 FASB issued FIN 48-3, “Effective Date of FASB Interpretation
No. 48 for Certain Nonpublic Enterprises”. This FSP defers the effective date of
FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes, for
certain non-public enterprises as defined in paragraph 289, as amended, of FASB
Statement No. 109, Accounting for Income Taxes, including non-public
not-for-profit organizations. However, non-public consolidated entities of
public enterprises that apply U. S. GAAP are not eligible for the deferral.
Nonpublic enterprises that have applied the recognition, measurement, and
disclosure provisions of Interpretation 48 in a full set of annual financial
statements issued prior to the issuance of this FSP also are not eligible for
the deferral. This FSP shall be effective upon issuance. The Company does not
believe this pronouncement will impact its financial statements.





On
January 12, 2009 FASB issued FSP EITF 99-20-01, “Amendment to the Impairment
Guidance of EITF Issue No. 99-20”. This FSP amends the impairment guidance in
EITF Issue No. 99-20, “Recognition of Interest Income and Impairment on
Purchased Beneficial Interests and Beneficial Interests That Continue to be Held
by a Transferor in Securitized Financial Assets,” to achieve more consistent
determination of whether an other-than-temporary impairment has occurred. The
FSP also retains and emphasizes the objective of an other-than-temporary
impairment assessment and the related disclosure requirements in FASB Statement
No. 115, Accounting for Certain Investments in Debt and Equity Securities, and
other related guidance. The FSP shall be effective for interim and annual
reporting periods ending after December 15, 2008, and shall be applied
prospectively. Retrospective application to a prior interim or annual reporting
period is not permitted. The Company does not believe this pronouncement will
impact its financial statements.





10




Marketable
securities





Company
classifies investment in marketable securities as `Held to Maturity' in
accordance with SFAS 115. Non temporary decline in the fair value of securities
is charged to earnings while unrealized gains or losses are not recognized as at
March 31, 2009 investment in securities amounted to $129,000 and gross
unrecognized holding loss amounted to $11,713.





The
marketable securities will be matured on August 19, 2010 and classified under
non current assets in the accompanied financial statements.





Note
4.  Concentrations and commitments





(a).
Concentrations





The
Company has focused on business in overseas markets, which the Company believes
present opportunities. A business with a foreign lessee is subject to risks
related to the economy of the country or region in which such lessee is located,
which may be weaker than the U.S. economy. On the other hand, a foreign economy
may remain strong even though the U.S. economy does not. A foreign economic
downturn may impact a foreign lessee's ability to make business payments, even
though the U.S. and other economies remain stable. Furthermore, foreign lessees
are subject to risks related to currency conversion fluctuations.





Foreign
laws, regulations and judicial procedures may be more or less protective of
lessor rights than those which apply in the United States. The Company could
experience collection or repossession problems related to the enforcement of its
business agreements under foreign local laws and the remedies in foreign
jurisdictions. The protections potentially offered by Section 1110 of the
Bankruptcy Code do not apply to non-U.S. carriers, and applicable local law may
not offer similar protections.





(b).
Commitments





Office
space:


The
Company leases office space in Australia and China. The lease for Australia
expires in October 2011 while leases for China expire on various dates between
January 2009 to November 2018. Based upon existing leases, without renewals, the
minimum lease payments up to expiry are as follows:





2009
            
            $
            458,7292010
            
            
            286,5882011
            
            
            245,6542012
            
            
            161,4072013
            
            
            162,544Thereafter
            
            
            732,000Total
            
            $
            2,046,922





Equipment:


In year
2005, the company purchased a vehicle under capital lease from Toyota Financial
Service. The annual interest rate is 7.99% with payment term of sixty (60)
months. The payment is to be made in 59 equal monthly installments of $266 each
and the final installment of $4,518. The balance as of March 31, 2009 amounted
to $7,626 with $1,988 as current liability.





In year
2006, the company purchased a vehicle by mortgage loan from CBFC Limited
ABN.  The annual interest rate is 8.32% with payment term of sixty
(60) months. The payment is to be made in 59 equal monthly installments of $367
each and the final installment of $6,720. The balance as of March 31, 2009
amounted to $15,370 with $2,409 as current liability.





In
September 2007, the company purchased a vehicle by mortgage loan from CBFC
Limited ABN.  The annual interest rate is 8.6% with payment term of
sixty (48) months. The payment is to be made in 47 equal monthly installments of
$321 each and the final installment of $5,284. The balance as of March 31, 2009
amounted to $12,425 with $2,153 as current liability.





The
Company pays approximately $954 per month under these leases, the last of which
expires in September 2011.




11


Total
minimum lease payments under the above leases are as follows:





CapitalLeases2010
            
            
            22,7402011
            
            
            17,557$
            40,297Less:
      Amount representing interest
            
            
            (4,876
            )Present
      value of minimum lease payments
            
            
            35,421Less:
      Current portion
            
            
            (6,550
            )$
            28,871





Legal
Proceeding:





The
company involved in the following litigation.





Dragon
Wings Communications Limited, a Hong Kong corporation and Wong Yee Tat, an
individual are the first and second plaintiff. They filed a complaint on July
25, 2008 in the District Court of the Hong Kong special Administrative Region,
Civil Action No. 3251, against the first defendant, Fintel Group Limited for
breach of contract. The Company is the second defendant because plaintiff
claimed Fintel Group Limited is a wholly owned subsidiary of the Company. Under
the writ, the plaintiff claimed that pursuant to a written stock purchase
agreement, the first defendant shall purchase the first plaintiff’s common stock
by common shares of Financial Telecom Limited (USA) inc. (replaced by shares of
MKA Capital Inc. from June 2006) or pay to the plaintiff cash of $94,172 in lieu
of the shares.  Plus the interest and cost of litigation, the total
amount claimed by plaintiff were $104,966. The court adjudged that the first
defendant do pay the plaintiffs damages on September 08, 2008 and also adjudged
that the second defendant do pay the plaintiffs damages on December 10,
2008.  The Company denied all allegations in the complaint because
Fintel Group Limited is no longer our subsidiary since November 27,
2006.  The Company accrued $104,966 of potential liability in the
accompanied financial statements based on the letter of claim received from the
plaintiff.





Note 5.
Discontinued operation





On March
31, 2009, the company sold 100% equity interest of Guang Cheng Int'l Trading
Ltd. (“Guang Cheng”) for $1,290 plus the assumption of certain liabilities,
resulting in loss of $1,884 on disposal of the entity.





Following
is the Gain/Loss Calculation for disposal of Guang Cheng Int'l Trading
Ltd.





Guang
      Cheng Gain/Loss calculationNet
      assets of the Company as on January 1, 2009
            
            $
            3,174Loss
      from discontinued operations through March 31, 2009
            
            
            (50
            )Total
      book value as of March 31, 2009
            
            
            3,124Proceeds
      from disposal
            
            
            1,290Gain
      (loss) on Disposal
            
            $
            (1,834
            )Total
      Gain (loss) on Discontinued Operations
            
            $
            (1,884
            )





Note 6.
Property, plant & equipment





Property,
plant, & equipment are stated at cost, less accumulated depreciation and any
impairment in value. The carrying values are reviewed for impairment when events
or changes in circumstances indicate the carrying value may not be
recoverable.  Impairment losses are recognized in the income
statement.





12




Below is
the table of Property, Plant and Equipment as at March 31, 2009:





Total
            
            Plant
      and Machinery
            
            
            Vehicles
            
            
            Office
      Equipment
            
            
            TotalCost
            
            
            743,337
            
            
            
            427,976
            
            
            
            28,817
            
            
            
            1,200,130Accumulated
      Depreciation
            
            
            (168,167
            )
            
            
            (100,533
            )
            
            
            (5,333
            )
            
            
            (274,033
            )Net
      Carrying Value
            
            
            575,170
            
            
            
            327,443
            
            
            
            23,484
            
            
            
            926,097





Included
in property and equipment is approximately $55,251 of assets, which are leased
under non-cancelable leases and accounted for as capital leases, which expire
through September 2011. The accumulated depreciation included in the property
and equipment for these leases is approximately $24,038





Below is
the table of Property, Plant and Equipment for the fiscal year ended
2008:





Total
            
            Plant
      and Machinery
            
            
            Vehicles
            
            
            Office
      Equipment
            
            
            TotalCost
            
            
            749,355
            
            
            
            383,759
            
            
            
            24,589
            
            
            
            1,157,703Accumulated
      Depreciation
            
            
            (143,029
            )
            
            
            (83,582
            )
            
            
            (4,048
            )
            
            
            (230,659
            )Net
      Carrying Value
            
            
            606,326
            
            
            
            300,177
            
            
            
            20,541
            
            
            
            927,044





Included
in property and equipment is approximately $55,833 of assets, which are leased
under non-cancelable leases and accounted for as capital leases, which expire
through September 2011. The accumulated depreciation included in the property
and equipment for these leases is approximately $21,960.





Depreciation
and amortization expense for the three months period ended March 31, 2009 and
2008 was $44,299 and $37,621, respectively.





Note
7.  Due to related parties





The
amount due to related parties comprised of loan from Mr.Jack Chen, CEO, Mr.
David Chen, former CEO and major shareholder, and Jimmy Yiu, independent
director of the Company.





Included
in the amount due to related parties, there were loans due to Mr. David Chen of
$17,484 and loans due to Mr. Jimmy Yiu, independent director of the Company,
amounting of $5,021 and loans due to Mr. Jack Chen of $460,159 (net) without
interest, unsecured and due on demand.





The
shareholder's loan of Mr. Jack Chen included amount due from him of $15,000 and
amount due to him of $475,159. We combined these two amounts and result in loans
due to Mr. Jack Chen of $460,159. The offsetting amounts due to and due from Mr.
Jack Chen are appropriate and comply with FASB Interpretation No.
39.





Note
8.  Stockholders equity





On
October 15, 2007, the Company entered into a ten years service agreement with
Lyons Capital LLC. In connection with this agreement, Lyons Capital LLC will
receive 300,000 shares of Restricted, RULE 144 Stock, for services rendered or
to be rendered in the future. The Company issued shares on March 10, 2008 and
recorded at the fair market value of $156,000. This amount will be amortized
over a period of ten years from January 01, 2008. For the three month period
ended March 31, 2009, the Company recorded $3,900 in consulting expense. The
unamortized amount of $136,500 is included under deferred compensation as at
December 31, 2008.





On May
15, 2008, the Company entered in a one year service agreement with CEOcast, Inc
to provide investor relations services. In connection with this agreement,
CEOcast will receive total 600,000 shares of Restricted, RULE 144 Stock. On
August 1 and September 30, 2008, the Company issued 300,000 shares to CEOcast
separately and recorded at the fair market value of $144,000. This amount will
be amortized over a period of twelve months. As of December 31, 2008, the
Company recorded $90,000 in consulting expense. The unamortized amount of
$54,000 is included under deferred compensation as at December 31, 2008. As of
March 31, 2009, the Company recorded $36,000 in consulting expense. The
unamortized amount of $18,000 is included under deferred compensation as at as
of March 31, 2009.





On
January 01, 2008, the Company entered in a four years employment agreement with
Mr. Jack Chen, current CEO. In connection with this agreement, Mr. Jack Chen
will receive corporate salary of $90,000 per year that paid in stock. On August
01, 2008, the Company issued 250,000 shares of Restricted, RULE 144 Stock to Mr.
Jack Chen. The shares recorded at the fair market value of $37,500. As of the
March 31, 2009, the Company recorded $75,000 in accrued expenses. No shares have
been issued during the quarter ended March 31, 2009.





13




Note 9.
Segmental information





Statement
of Financial Accounting Standards No. 131 ("SFAS 131"), "Disclosure About
Segments of an Enterprise and Related Information" requires use of the
"management approach" model for segment reporting. The management approach model
is based on the way a company's management organizes segments within the company
for making operating decisions and assessing performance. Reportable segments
are based on products and services, geography, legal structure, management
structure, or any other manner in which management disaggregates a
company.





During
the three months periods ended March 31, 2009, the Company is organized into two
business segments: (1) material recycling, (2) waste service. During the three
months periods ended March 31, 2008, the Company is organized into three
business segments: (1) material recycling, (2) material trade, (3) waste
service. The following table presents a summary of operating information and
certain quarter-end balance sheet information for the three month period ended
March 31, 2009 and 2008:




For
      the three months periods ended March 31,2009
            
            
            2008Revenues
      from various areas:Material
      Recycling
            
            $
            382,382
            
            
            $
            600,667Material
      Trade
            
            
            -
            
            
            
            369,893Waste
      Service
            
            
            2,212,113
            
            
            
            1,978,436Consolidated
            
            $
            2,594,495
            
            
            $
            2,948,996Net
      income (loss):Material
      Recycling
            
            $
            21,220
            
            
            $
            49,837Material
      Trade
            
            
            -
            
            
            
            (38,073
            )Waste
      Service
            
            
            615,781
            
            
            
            707,948Un-allocted
            
            
            (64,284
            )
            
            
            52,843Consolidated
            
            $
            572,717
            
            
            $
            772,555




December
      31, 2008Identifiable
      assets:Material
      Recycling
            
            $
            795,846
            
            
            $
            761,133Material
      Trade
            
            
            -
            
            
            
            157,022Waste
      Service
            
            
            3,943,116
            
            
            
            2,970,350Un-allocted
            
            
            12,801
            
            
            
            11,513Consolidated
            
            $
            4,751,763
            
            
            $
            3,900,018Depreciation
      and amortization:Material
      Recycling
            
            $
            22,520
            
            
            $
            22,025Material
      Trade
            
            
            -
            
            
            
            -Waste
      Service
            
            
            21,779
            
            
            
            15,596Un-allocted
            
            
            -
            
            
            
            -Consolidated
            
            $
            44,299
            
            
            $
            37,621Capital
      expenditures:Material
      Recycling
            
            
            
            
            
            $
            19,577Material
      Trade
            
            
            -
            
            
            
            -Waste
      Service
            
            $
            68,368
            
            
            
            93,086Un-allocted
            
            
            -
            
            
            
            -Consolidated
            
            $
            68,368
            
            
            $
            112,663




14


Note 10.
Major Customers and Vendors





Pernod
Ricard, Hangmai and Hui er hua, our three top customers, provided 74% of net
revenue for the the three months period ended March 31, 2009 respectively. Total
accounts receivable due from these customers was approximately $813,539 as of
March 31, 2009.





Normally,
the payment terms of our accounts receivable is about one month and will not be
more than two months.





Shuizhou
Jiangnan, Dalian Wanlian and Aperio Group are our major
vendors.  Total accounts payable due to these vendors was $799,920 as
of March 31, 2009.





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





Item
2(a). Discussion for the Interim Operations and Financial Condition





Introduction





Management's
discussion and analysis of results of operations and financial condition
("MD&A") is provided as a supplement to the accompanying financial
statements and footnotes to help provide an understanding of our financial
condition, changes in financial condition and results of
operations.  The MD&A is organized as follows:





·
            Caution
      concerning forward-looking statements and risk factors. This section
      discusses how certain forward-looking statements made by us throughout the
      MD&A and in the financial statements are based on our present
      expectations about future events and are inherently susceptible to
      uncertainty and changes in
circumstances.


·
            Overview.
      This section provides a general description of our business, as well as
      recent developments that we believe are important in understanding the
      results of operations and to anticipate future trends in those
      operations.


·
            Results
      of operations. This section provides an analysis of our results of
      operations for the three months period ended March 31, 2009 compared to
      the same period in 2008. A brief description is provided of transactions
      and events, including any related party transactions that affect the
      comparability of the results being
analyzed.


·
            Liquidity
      and capital resources. This section provides an analysis of our financial
      condition and cash flows for the three months period ended March 31, 2009
      and 2008.


·
            Critical
      accounting policies. This section provides an analysis of the significant
      estimates and judgments that affect the reported amounts of assets,
      liabilities, revenues and expenses, and related disclosure of contingent
      assets and liabilities.





Caution
Concerning Forward-looking Statements and Risk Factors





We have
sought to identify what we believe to be the most significant risks to our
business, but we cannot predict whether, or to what extent, any of such risks
may be realized nor can we guarantee that we have identified all possible risks
that might arise. Investors should carefully consider all of such risk factors
before making an investment decision with respect to our Common
Stock.





The
following discussion should be read in conjunction with our financial statements
and the notes thereto, and the other financial information appearing elsewhere
in this document. In addition to historical information, the following
discussion and other parts of this document contain certain forward-looking
information. When used in this discussion, the words "believes", "anticipates",
"expects", and similar expressions are intended to identify forward-looking
statements. Such statements are subject to certain risks and uncertainties,
which could cause actual results to differ materially from projected results,
due to a number of factors beyond our control. We do not undertake to publicly
update or revise any of our forward-looking statements, even if experience or
future changes show that the indicated results or events will not be realized.
Readers are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date hereof. Readers are also urged to
carefully review and consider our discussions regarding the various factors,
which affect our business, included in this section and elsewhere in this
report.





Factors
that might cause actual results, performance or achievements to differ
materially from those projected or implied in such forward-looking statements
include, among other things: (i) the impact of competitive products; (ii)
changes in law and regulations; (iii) limitations on future financing; (iv)
increases in the cost of borrowings and unavailability of debt or equity
capital; (v) our inability to gain and/or hold market share; (vi) managing and
maintaining growth; (vii) customer demands; (viii) market and industry
conditions, (ix) the success of product development and new product
introductions into the marketplace; (x) the departure of key members of
management; as well as other risks and uncertainties that are described from
time to time in our filings with the Securities and Exchange
Commission.





We
provide the following cautionary discussion of risks, uncertainties and possible
inaccurate assumptions relevant to our business and our products. These are
factors that we think could cause our actual results to differ materially from
expected results. Other factors besides those listed here could adversely affect
us.




15


Potential
Fluctuations In Periodic Operating Results





Our
periodic operating results may fluctuate significantly in the future as a result
of a variety of factors, most of which are outside our control, including: the
demand for our products; seasonal trends in purchasing, the amount and timing of
capital expenditures and other costs relating to the development of our
products; price competition or pricing changes in the industry; technical
difficulties or system downtime; general economic conditions, and economic
conditions specific to the industry. Our results may also be significantly
impacted by the impact of the accounting treatment of acquisitions, financing
transactions or other matters. Particularly at our early stage of development,
such accounting treatment can have a material impact on the results for any
period. Due to the foregoing factors, among others, it is likely that our
operating results will fall below our expectations or those of investors in some
future period.





Dependence
Upon Management





Our
future performance and success is dependant upon the efforts and abilities of
our Management. To a very significant degree, we are dependent upon the
continued services of Jack Chen, CEO & Director of the Company. If the
Company lost the services of Mr. Chen, or other key employees before we could
get qualified replacements that loss could materially adversely affect our
business. We do not maintain key man life insurance on any of our
Management.





Limitation
of Liability and Indemnification of Officers and Directors





Our
officers and directors are required to exercise good faith and high integrity in
our Management affairs. Our Articles of Incorporation provide, however, that our
officers and directors shall have no liability to our shareholders for losses
sustained or liabilities incurred which arise from any transaction in their
respective managerial capacities unless they violated their duty of loyalty, did
not act in good faith, engaged in intentional misconduct or knowingly violated
the law, approved an improper dividend or stock repurchase, or derived an
improper benefit from the transaction. Our Articles and By-Laws also provide for
the indemnification by us of the officers and directors against any losses or
liabilities they may incur as a result of the manner in which they operate our
business or conduct the internal affairs, provided that in connection with these
activities they act in good faith and in a manner that they reasonably believe
to be in, or not opposed to, the best interests of the Company, and their
conduct does not constitute gross negligence, misconduct or breach of fiduciary
obligations. To further implement the permitted indemnification, we have entered
into Indemnity Agreements with our officers and directors.





Management
of Potential Growth





We
anticipate rapid growth, which will place a significant strain on our
managerial, operational, and financial systems resources. To accommodate our
current size and manage growth, we must continue to implement and improve our
financial strength and our operational systems, and expand, train and manage our
sales and distribution base. There is no guarantee that we will be able to
effectively manage the expansion of our operations, or that our facilities,
systems, procedures or controls will be adequate to support our expanded
operations. Our inability to effectively manage our future growth would have a
material adverse effect on the Company.





Limited
Market Due To Penny Stock





The
Company's stock differs from many stocks, in that it is a "penny stock". The
Securities and Exchange Commission has adopted a number of rules to regulate
"penny stock". These rules include, but are not limited to, Rules 3a5l-l, 15g-1,
15g-2, 15g-3, 15g-4, 15g-5, 15g-6 and 15g-7 under the Securities and Exchange
Act of 1934, as amended. Because our securities probably constitute "penny
stock" within the meaning of the rules, the rules would apply to us and our
securities. The rules may further affect the ability of owners of our stock to
sell their securities in any market that may develop for them. There may be a
limited market for penny stocks, due to the regulatory burdens on
broker-dealers. The market among dealers may not be active. Investors in penny
stock often are unable to sell stock back to the dealer that sold them the
stock. The mark-ups or commissions charged by the broker-dealers may be greater
than any profit a seller may make. Because of large dealer spreads, investors
may be unable to sell the stock immediately back to the dealer at the same price
the dealer sold the stock to the investor. In some cases, the stock may fall
quickly in value. Investors may be unable to reap any profit from any sale of
the stock, if they can sell it at all. Stockholders should be aware that,
according to the Securities and Exchange Commission Release No. 34- 29093, the
market for penny stocks has suffered in recent years from patterns of fraud and
abuse. These patterns include: - Control of the market for the security by one
or a few broker-dealers that are often related to the promoter or issuer; -
Manipulation of prices through prearranged matching of purchases and sales and
false and misleading press releases; - "Boiler room" practices involving high
pressure sales tactics and unrealistic price projections by inexperienced sales
persons; - Excessive and undisclosed bid-ask differentials and markups by
selling broker-dealers; and - The wholesale dumping of the same securities by
promoters and broker- dealers after prices have been manipulated to a desired
level, along with the inevitable collapse of those prices with consequent
investor losses. Furthermore, the "penny stock" designation may adversely affect
the development of any public market for the Company's shares of common stock
or, if such a market develops, its continuation. Broker-dealers are required to
personally determine whether an investment in "penny stock" is suitable for
customers. Penny stocks are securities (i) with a price of less than five
dollars per share; (ii) that are not traded on a "recognized" national exchange;
(iii) whose prices are not quoted on the NASDAQ automated quotation system
(NASDAQ-listed stocks must still meet




16




requirement
(i) above); or (iv) of an issuer with net tangible assets less than $2,000,000
(if the issuer has been in continuous operation for at least three years) or
$5,000,000 (if in continuous operation for less than three years), or with
average annual revenues of less than $6,000,000 for the last three years.
Section 15(g) of the Exchange Act and Rule 15g-2 of the Commission require
broker-dealers dealing in penny stocks to provide potential investors with a
document disclosing the risks of penny stocks and to obtain a manually signed
and dated written receipt of the document before effecting any transaction in a
penny stock for the investor‘s account. Potential investors in the Company‘s
common stock are urged to obtain and read such disclosure carefully before
purchasing any shares that are deemed to be "penny stock". Rule 15g-9 of the
Commission requires broker-dealers in penny stocks to approve the account of any
investor for transactions in such stocks before selling any penny stock to that
investor. This procedure requires the broker-dealer to (i) obtain from the
investor information concerning his or her financial situation, investment
experience and investment objectives; (ii) reasonably determine, based on that
information, that transactions in penny stocks are suitable for the investor and
that the investor has sufficient knowledge and experience as to be reasonably
capable of evaluating the risks of penny stock transactions; (iii) provide the
investor with a written statement setting forth the basis on which the
broker-dealer made the determination in (ii) above; and (iv) receive a signed
and dated copy of such statement from the investor, confirming that it
accurately reflects the investor's financial situation, investment experience
and investment objectives. Compliance with these requirements may make it more
difficult for the Company's stockholders to resell their shares to third parties
or to otherwise dispose of them.





Overview
of the Company and its Operations





Sancon
Resources Recovery, Inc. is an environmental service and waste management
company that operates recycling facilities in China and Australia. Sancon
specializes in the collection and recovery of industrial and commercial solid
wastes such as plastic, paper, cardboard, and glass. The recycled materials are
re-used by Sancon's manufacturing customers in China to make a wide variety of
new products including outdoor furniture, construction materials, building
materials, road surface, and various new products. Sancon's China operation is
licensed by the Chinese government for waste management services, and is
certified with ISO 9001 and ISO14001 standards. Sancon currently ships more than
25,000 tons of recycled industrial and commercial waste material annually to its
customers in China. Sancon's main operations and services include industrial
waste management consulting, collection and reprocess of recyclable materials
such as plastic, glass, cardboard, and paper before its re-entry into
manufacture cycles as raw materials.  Sancon also provides its full
waste management services to large consumer products maker such as Pernod
Ricard. The use of recycled material is both environmentally friendly and is a
key part of today's competitive manufacturing process to lower
costs.  As China gains global manufacturing dominance and current
economic crisis, Chinese manufacturers are increasingly turning to recycled
materials to lower its costs, resulting tremendous demand for recycled materials
import. The major customers for Sancon are Chinese manufacturers and recycled
material traders which are located mainly in the Chinese provinces of Guangdong,
Zhejiang and Fujian.





The
Trend in Chinese Market





According
to China National Resources Recycling Association, recyclable solid waste import
to China has experienced a dramatic increase in the last 2 decades. During early
1990’s, China imported 1-2 million tons of recyclable wastes per year. By 1999,
China imported 10 million tons of recyclable solid wastes per year. In 2006,China imported 37
million tons of recyclable wastes. China’s total domestic recycled volume is
estimated to have reached over 50 million tons in 2007, with an estimated total
worth of US$6 billion.





The State
Development and Reform Commission of China promotes the recycling industry with
a four-pronged solution ranging from energy saving and clean production to
integrated use of resources and developing environmental protection industry, to
accelerate the development of the recycling economy.  The concept of
recycling economy is included in the 11th Five-year Plan.





The
Chinese Government is emphasizing environmental policies & projects for all
sectors and entities. On August 2008, China's top legislature passed a law to
promote circular economy and will come into force on January 1, 2009. The aim of
the law is to boost sustainable development through energy saving and reduction
of pollutant discharges. At present China's environmental industry is highly
fragmented and at its infancy stage.





Due to
the serious environment pollution problems faced in China, the 11th Five-year
plan emphasis energy saving, emission reduction and environmental protection at
the highest level ever.  At the end of the 11th Five-year plan, the
annual production of the environmental industry will exceed 1.1 trillion RMB, of
which environmental equipment spending is 120 billion RMB, environmental
services is 100 billion RMB, resources recovery is 660 billion RMB, cleaning
products spending is 250 billion RMB.





In the
past 30 years of development, environmental production value in China increased
from 0.5% of GDP to the current 1.6%. China will expedite the demonstration and
promotion of technologies for energy saving and emission reduction; actively
promote the development of the environmental services industry; and also
intensify the financial services for the environmental industry; and tax benefit
policies for the environmental industry.  During the 11th Five-year
period, investment for environmental protection will reach 1.4 trillion RMB.
Central government financing is investing in environmental industry at annual
compound growth rate of 18%. Chinese government set out policies supports 4 key
areas: developing a resources recovery and recycling economy; pollution
reduction and ecological protection; environment testing instruments;
environmental services and the development of the environmental
industry.




17


Sancon is
uniquely position to benefits from these initiatives as an early mover in the
industry and one of the few foreign companies being awarded a waste management
license in China.  Sancon has for the past years developed one of the
largest collection and recovery network in China for commercial wastes and
expects to expand into other areas of environmental services.





Sancon's
Visions and Goals





The
long-term objective of Sancon is to seek and develop further alternative
resources recovery solutions, which will protect our environment and maximize
sustainable usage for industrial waste materials. At Sancon we believe reducing
the environmendal impact of manufactured products is through both professional
services offered to manufacturers and commercial entities to increase
recyclability of waste materials, and efficient redeployment of waste
materials.





Services
Offered To Our Clients





Sancon
strives to take an all-inclusive approach to provide eco-friendly solutions
leading to the sustainable use of waste materials. Our services include
collection from manufacturing and commercial sites, re-process waste materials
to increase recyclability, end-of-life disassembly, redeployment of recyclable
materials, and destruction of sensitive materials and products.





Competition





The
markets for the Company's products and services are competitive, and the Company
faces competition from a number of sources. Many of the Company's competitors
have substantially greater resources than the Company. Those resources may
include greater name recognition; larger product lines; complementary lines of
business; and greater financial, marketing, information systems, and other
resources. The Company can give no assurance competitive pressures will not
materially and adversely affect the Company's business, financial condition, and
results of operations.





But the
management has identified several key points which will give Sancon the
competitive edge in the market place:





1)
            Sancon
      offers large selection of plastic and glass raw materials to our
      customers.


2)
            With
      the expansion of our operations in Melbourne Australia, Sancon will be
      able to serve greater number of customers and sell direct to our customs
      in both Australia and China.


3)
            Sancon
      has 6 strategically positioned recycling plants and about 40 depots in
      China and it will enable Sancon to meet the demand for nationwide
      environmental services.


4)
            Industry
      know-how and management team’s ability to ensure all operating and
      environmental standards are achieved. Our team's experience in logistic
      management and waste management operations are key factors enabling the
      delivery of a high standard of service to Sancon's
  clients.





Employees





As of
March 31, 2009, the Company employed 15 people in Australia subsidiaries. Our
joint venture in China employed 20 people full time, and all other personnel of
the China joint venture are employed as sub contractors.  To make our
work more efficient, we outsourced a few other functions, such as logistics,
bookkeeping and administration, to certain professional firms to enable our
resource being focused on sales and processing functions.





Factors
That May Affect Future Results





The
business in which the Company is engaged is capital
supportive.  Accordingly, the Company's ability to execute its
business strategy and to sustain its operations depends upon its ability to
maintain or procure capital. There can be no absolute assurance the necessary
amount of capital will continue to be available to the Company on favorable
terms, or at all.  The Company's inability to obtain sufficient
capital or to renew its credit facilities would limit the Company's ability to:
(i) add new equipment to its portfolio, (ii) fund its working capital needs, and
(iii) finance possible future acquisitions.  The Company's access to
capital may have a material adverse effect on the Company's business, financial
condition and/or results of operations.





There can
be no absolute assurance the Company will be able to effectively manage its
existing or the possible future expansion of its operations, or the Company's
systems, procedures or controls will be adequate to support the Company's
operations.  Consequently, the Company's business, financial condition
and/or results of operations could be possibly and adversely
affected.





The
Company does not foresee changes in tax laws for the jurisdictions in which the
Company and its subsidiaries operate.  There can be no absolute
assurance that changes will not occur, and therefore no absolute assurance such
changes will not materially and adversely affect the Company's business,
financial condition and results of operations.





As a
public company, Sancon is subject to certain regulatory requirements including,
but not limited to, compliance with Section 404 of the Sarbanes-Oxley Act of
2002 ("SOX404"). Such compliance results in significant additional costs to the
Company by increased audit and consulting fees, and the time required by
management to address the regulations. The SEC has recently delayed the
implementation date of SOX404 for non-accelerated filers until the fiscal year
ended December 31, 2009. However, should the Company successfully fulfill its
plans to procure financing and expand its operations; the Company may come under
the accelerated filer definition, and be required to comply with SOX404 before
December 31, 2009.  In any case, such cocts will likely affect
adversely the Company's business, financial condition and results of
operations.




18




Results
of Operations - Comparison between the three months ended March 31, 2009 and
same periods of 2008.





Sales





Sales are
generated by service charges and the sale of recyclable materials. The sales for
the three months period ended March 31, 2009 were $2,594,495, representing
$15,392 or 1% increase compared to the sales of $2,579,103 in same period of
2008. The sales of Sancon SH increased from $1,547,936 for the three months
period ended March 31, 2008 to $1,609,428 for the three months period ended
March 31, 2009, an increase of $61,492 or 4%. CS contributed $602,685 sales
during the three months period ended March 31, 2009 while it was $430,500 for
the three months period ended March 31, 2008, representing $172,185 or 40%
increase.  However, the sales of Sancon AU decreased $218,285 or 36%
from $600,667 for the three months period ended March 31, 2008 to $382,382 for
the three months period ended March 31, 2009. The decrese of sales in Sancon AU
was mainly due to the falling of Australia dollars and reduce of economic
activities which caused by current economic crisis.





Cost of
Sales





The cost
of sales is the direct cost for sale of the recycling materials. For the three
months period ended March 31, 2009, the cost of sales was $1,281,932. It was
$246,661 or 24% increase as compared to the cost of sales of $1,035,271 for the
three months period ended March 31, 2008.  Among which, the cost of
sales in Sancon SH increased $318,903 or 39% from $819,839 for the three months
period ended March 31, 2008 to $1,138,742 for the three months period ended
March 31, 2009.  The increase mainly contained $197,255 of shipping
expenses, $46,691 of workshop rental fee and $29,295 of labor service fee for
sub contractors. All these costs were related to our chinese market
expandant.  Cost of revenue in Sancon AU for the three months period
ended March 31, 2008 and 2009 was $204,182 and $143,190 respectively, a decrease
of $60,992 or 30%.  The decrease of cost of sales in Sancon AU was in
line with the sales.





For the
three months period ended March 31, 2008 and 2009, cost of sales was 40% and 49%
of sales respectively.





Gross
profit





The gross
profit for the three months preiod ended March 31, 2009 was $1,312,563,
representing $231,269 or 15% decrease compared to $1,543,832 for the three
months preiod ended March 31, 2008.  The gross margin reduced from 60%
for the three months preiod ended March 31, 2008 to 51% for the three months
preiod ended March 31, 2009. The decrease of the gross profit is mainly due to
its reduce in Sancon SH of $257,411 or  35% and in Sancon AU of
$157,293 or 40% although the gross profit in CS increased $172,185 or
40%.





Selling,
general and administrative expenses





Selling,
general and administrative expenses increased to $697,953 for the three
months preiod ended March 31, 2009, from $673,999 for the three months
preiod ended March 31, 2008, an increase of $23,954 or 4%.  The
SG&A expenses of Sancon SH was $343,397 for the three months preiod
ended March 31, 2008, this number increased to $418,759 for the three
months preiod ended March 31, 2009.  It increased $75,362 or 22%.
The increase was mainly contained $33,740 of entertainment fee and $38,438
of legal and professional fee which is for developing new market and
customer.  The SG&A expenses of Sancon AU decreased $105,769 or
33% from $319,169 for the three months preiod ended March 31, 2008 to
$213,400 for the three months preiod ended March 31, 2009. The decrease was
mainly due to the falling of Australia dollars. The SG&A expenses also
included investor relationship expenses which increased $50,967 or 446% from
$11,433 for the three months period ended March 31, 2008 to $62,400 for the
three months period ended March 31, 2009.





The
SG&A expenses was 27% of the sales for the three months preiod ended
March 31, 2009 while it was 26% for the three months preiod ended March 31,
2008.





Depreciation
Expense





Depreciation
expense increased to $44,299 for the three months preiod ended March 31,
2009 from $37,621 for the three months preiod ended March 31, 2008.  It
increased $6,678 or 18%. The increases were mainly due to the purchase of
plant and machinery in Sancon SH. The depreciation expense of Sancon SH
increased $6,183 or 40% from $15,596 for the three months preiod ended
March 31, 2008 to $21,779 for the three months preiod ended March 31, 2009.
For the three months preiod ended March 31, 2008, depreciation expense was 1% of
the sales while it was 2% for the same period in 2009.




19




Other
Income (Expense)





For the
three months preiod ended March 31, 2009, the Company booked other income of
$27,959 compared to $152,826 for the three months preiod ended March 31,
2008.  The decrease in other income is $124,867 or 82%.





For the
three months preiod ended March 31, 2009, other income was 1% of the sales whie
it was 6% for the three months preiod ended March 31, 2008.





Noncontrolling
interest





On August
15, 2007, the Company completed the acquisition of 70% of the
equity interest in Sancon Resources Recovery (Shanghai) Co., Ltd by
exercising its option to convert $200,000 of convertible promissory note.
 Noncontrolling interest was minus $83,251 for the three
months preiod ended March 31, 2008 while it was minus $6,904 for the year
ended 2008. For the three months preiod ended March 31, 2008 and 2009,
noncontrolling interest was 3% and 0.3% of the sales respectively.





Discontinued
Operation





On March
31, 2009, the company sold 100% equity interest of Guang Cheng Int'l Trading
Ltd. (“Guang Cheng”) for $1,290 plus the assumption of certain
liabilities.





Loss on
discontinued operation was $1,884 for the three months preiod ended March
31, 2009. During the same period in 2008, Loss on discontinued operation
was $36,208.





Income
Tax





The
income tax decreased to $16,765 for the three months preiod ended March 31,
2009 from $93,024 for the three months preiod ended March 31, 2008, a
decrease of $76,259 or 82%.  That is because the profit of Sancon SH
decreased dramaticly.  For the three months preiod ended March 31,
2008 and 2009, income tax was 4% and 0.6% of the sales
respectively.





Net
loss/income





Net
income for the three months preiod ended March 31, 2009 was $572,717, compared
to $772,555 for the three months preiod ended March 31, 2008, a decrease of
$199,838 or 26%. The decrease is mainly due to the significant reduce of
net income in Sancon SH of $254,491 or 92% and in Sancon AU of $28,617 or 57%
although net income of CS increased $169,228 or 39%. Net profit margin for the
three months preiod ended March 31, 2009 was 22% while it was 30% for the same
period in 2008.





Liquidity
and Capital Resources





As shown
in the accompanying financial statements, the Company has accumulated profit of
$1,940,672 as of March 31, 2009 compared to $1,367,955 as of March 31, 2008. In
addition, we have positive working capital $1,753,293 as of March 31, 2009 and
it was $1,160,747 as of December 31, 2008.  It increased $592,546.
That is mainly due to the increase of trade receivables. It increased to
$1,090,719 from $289,240.





Operating
Activities





The net
cash provided by operating activities for the three months preiod ended March
31, 2009 amounted to $89,414 compared to $780,401 for the three months preiod
ended March 31, 2008, and decrease $690,987 or 89%. The decrease mainly included
net income of $199,838, trade receivables of $706,595, other current liabilities
of $290,460 and noncontrolling interest of $76,347. These decreases were offset
by other current assets of $339,255 and trade payable of $251,101. The payment
terms of our accounts receivable is about one month and will not be more than
two months.





Investing
Activities





Net cash
used in investing activities amounted to $70,252 for the three months preiod
ended March 31, 2009 compared to $100,769 for the three months preiod ended
March 31, 2008, a decrease of $30,517 or 30%. It’s mainly due to the decrease on
purchase of property and equipment.  For the three months preiod ended
March 31, 2008, the cash used in purchase of property and equipment was
$112,663, however, this number decreased to $68,368 for the same period in
2009.





20


Financing
Activities





Net cash
used in financing activities amounted to $7,116 for the three months preiod
ended March 31, 2009. For the three months preiod ended March 31, 2008, net cash
provided by financing activities was $8,195, a decrease of $15,311 or 187%. The
decrease mainly included shareholder’s loan of $12,676.





The
Company has financed its growth by utilizing cash reserves and loan from
directors.  Loan from directors usually was unsecured, and no payment
term and without interest bearing. The Company's primary use of funds is for the
purchase of equipment for operation and the purchase of inventory.





Inflation





In the
opinion of management, inflation has not had a material effect on the Company's
financial condition or results of its operations.





Trends
and uncertainties





Management
believes there are no known trends, events, or uncertainties that could, or
reasonably be expected to, adversely affect the Company's liquidity in the short
and long terms, or its net sales, revenues, or income from continuing
operations.





The
Company's operations are not affected by seasonal factors.





Critical
Accounting Policies and Estimates





The
preparation of our consolidated financial statements in conformity with
accounting principles generally accepted in the United States requires us to
make estimates and judgments that affect our reported assets, liabilities,
revenues, and expenses, and the disclosure of contingent assets and liabilities.
We base our estimates and judgments on historical experience and on various
other assumptions we believe to be reasonable under the circumstances. Future
events, however, may differ markedly from our current expectations and
assumptions. While there are a number of significant accounting policies
affecting our consolidated financial statements; we believe the following
critical accounting policies involve the most complex, difficult and subjective
estimates and judgments: allowance for doubtful accounts; income taxes;
stock-based compensation; asset impairment.





Allowance
for doubtful accounts




We
maintain an allowance for doubtful accounts to reduce amounts to their estimated
realizable value. A considerable amount of judgment is required when we assess
the realization of accounts receivables, including assessing the probability of
collection and the current credit-worthiness of each customer. If the financial
condition of our customers were to deteriorate, resulting in an impairment of
their ability to make payments, an additional provision for doubtful accounts
could be required. We initially record a provision for doubtful accounts based
on our historical experience, and then adjust this provision at the end of each
reporting period based on a detailed assessment of our accounts receivable and
allowance for doubtful accounts. In estimating the provision for doubtful
accounts, we consider: (i) the aging of the accounts receivable; (ii) trends
within and ratios involving the age of the accounts receivable; (iii) the
customer mix in each of the aging categories and the nature of the receivable;
(iv) our historical provision for doubtful accounts; (v) the credit worthiness
of the customer; and (vi) the economic conditions of the customer's industry as
well as general economic conditions, among other factors.




Income
taxes




We
account for income taxes in accordance with SFAS No. 109, Accounting for Income
Taxes. SFAS 109 prescribes the use of the liability method. Under this method,
deferred tax assets and liabilities are recognized for the future tax
consequences attributable to temporary differences between the financial
statement carrying amounts and the tax basis of assets and liabilities. Deferred
tax assets and liabilities are measured using the enacted tax rates expected to
apply to taxable income in the years in which those temporary differences are
expected to be recovered or settled. We then assess the likelihood that our
deferred tax assets will be recovered from future taxable income and to the
extent we believe that recovery is not likely, we establish a valuation
allowance. To the extent we establish a valuation allowance, or increase or
decrease this allowance in a period, we increase or decrease our income tax
provision in our statement of operations. If any of our estimates of our prior
period taxable income or loss prove to be incorrect, material differences could
impact the amount and timing of income tax benefits or payments for any period.
In addition, as a result of the significant change in the Company's ownership,
the Company's future use of its existing net operating losses may be
limited.




The
Company operates in several countries.  As a result, we are subject to
numerous domestic and foreign tax jurisdictions and tax agreements and treaties
among the various taxing authorities. Our operations in these jurisdictions are
taxed on various bases: income before taxes, deemed profits and withholding
taxes based on revenue. The calculation of our tax liabilities involves
consideration of uncertainties in the application and interpretation of complex
tax regulations in a multitude of jurisdictions across our global
operations.




21




We
recognize potential liabilities and record tax liabilities for anticipated tax
audit issues in the U.S. and other tax jurisdictions based on our estimate of
whether, and the extent to which, additional taxes will be due. The tax
liabilities are reflected net of realized tax loss carry forwards. We adjust
these reserves upon specific events; however, due to the complexity of some of
these uncertainties, the ultimate resolution may result in a payment that is
different from our current estimate of the tax liabilities. If our estimate of
tax liabilities proves to be less than the ultimate assessment, an additional
charge to expense would result. If payment of these amounts ultimately proves to
be less than the recorded amounts, the reversal of the liabilities would result
in tax benefits being recognized in the period when the contingency has been
resolved and the liabilities are no longer necessary.





Changes
in tax laws, regulations, agreements and treaties, foreign currency exchange
restrictions or our level of operations or profitability in each taxing
jurisdiction could have an impact upon the amount of income taxes that we
provide during any given year.





Stock-Based
Compensation




During
December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based
Compensation-Transition and Disclosure-an amendment of SFAS 123". This statement
amends SFAS No. 123, "Accounting for Stock-Based Compensation", to provide
alternative methods of transition for a voluntary change to the fair value based
method of accounting for stock-based employee compensation. In addition, this
statement amends the disclosure requirements of SFAS No. 123 to require
prominent disclosures in both annual and interim financial statements about the
method of accounting for stock-based employee compensation and the effect of the
method used on reported results. The Company has chosen to continue to account
for stock-based compensation using the intrinsic value method prescribed in APB
Opinion No. 25 and related interpretations. Accordingly, compensation expense
for stock options is measured as the excess, if any, of the fair market value of
the Company's stock at the date of the grant over the exercise price of the
related option. The Company has adopted the annual disclosure provisions of SFAS
No. 148 in its financial reports for the year ended December 31, 2005 and has
adopted the interim disclosure provisions in its financial reports for the
subsequent periods.





Effective
January 1, 2006, the beginning of Sancon's first fiscal quarter of 2006, the
Company adopted the fair value recognition provisions of SFAS 123R, using the
modified-prospective transition method. Under this transition method,
stock-based compensation expense was recognized in the consolidated financial
statements for granted stock options, since the related purchase discounts
exceeded the amount allowed under SFAS 123R for non-compensatory treatment.
Compensation expense recognized included: the estimated expense for stock
options granted on and subsequent to January 1, 2006, based on the grant date
fair value estimated in accordance with the provisions of SFAS 123R; and the
estimated expense for the portion vesting in the period for options granted
prior to, but not vested as of January 1, 2006, based on the grant date fair
value estimated in accordance with the original provisions of SFAS 123. Results
for prior periods have not been restated, as provided for under the
modified-prospective method.





As of
March 31, 2009 and 2008, the Company did not issue or make provision through the
issuance of stock options to employees and directors.





For other
items paid for by common stock, the value of the transaction is determined by
the value of the goods or services received, measured at the time of the
transaction.  The corresponding stock value, used to determine the
number of share to be issued, is the value of the average price for the 20 to 30
days prior to the transaction date.





Asset
Impairment




We
periodically evaluate the carrying value of other long-lived assets, including,
but not limited to, property and equipment and intangible assets, when events
and circumstances warrant such a review. The carrying value of a long-lived
asset is considered impaired when the anticipated undiscounted cash flows from
such asset is less than its carrying value. In that event, a loss is recognized
based on the amount by which the carrying value exceeds the fair value of the
long-lived asset. Fair value is determined primarily using the anticipaded cash
flows discounted at a rate commensurate with the risk involved. Significant
estimates are utilized to calculate expected future cash flows utilized in
impairment analyses. We also utilize judgment to determine other factors within
fair value analyses, including the applicable discount rate.





Item
2(b).  Off-Balance Sheet Arrangements





There are
no off-balance sheet arrangements that have or are reasonably likely to have a
current or future effect on the Company's financial condition, changes in
financial condition, revenues or expenses, results of operations, liquidity,
capital expenditures or capital resources, that are material to
investors.





ITEM
3.  CONTROLS AND PROCEDURES





Under the
supervision and with the participation of our management, including our
principal executive officer and the principal financial officer, we conducted an
evaluation of the effectiveness of the design and operation of its disclosure
controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the
Securities Exchange Act of 1934, as of the end of the period covered by this
report (the "Evaluation Date"). Based on this evaluation, our principal
executive officer and principal financial officer concluded as of the Evaluation
Date, that our disclosure controls and procedures were not
effective.




22




Management
is responsible for establishing and maintaining adequate internal control over
financial reporting of the Company. Internal control over financial reporting is
a process designed by, or under the supervision of, our chief executive and
chief financial officers and effected by our board of directors, management and
other personnel, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles.





Management,
with the participation of our principal executive officer and principal
financial officer, has evaluated the effectiveness of our internal control over
the three months period ended March 31, 2009,  based on criteria
established under the COSO framework, an integrated framework for evaluation of
internal controls issued to identify the risks and control objectives related to
the evaluation of the control environment by the Committee of Sponsoring
Organizations of the Treadway Commission.





Based on
our evaluation described above, management has concluded that our internal
control over financial reporting was not effective as of March 31,
2009.  We have limited resources and we rely heavily on direct
management oversight of transactions, along with the use of legal and accounting
professionals. As we grow we will hire skilled professionals that will enable us
to implement adequate segregation of duties within the internal control
framework.





In
September 2008, the Company appointed an Accounting Manager experienced in US
GAAP to prepare financial statement and control our accounting and financial
reporting process. Furthermore, our management implemented additional review
procedures designed to ensure that the disclosure provided by the Company meets
the current requirements of the applicable filing made under the Exchange Act
and methodology to review the statements.





During
the three months ended March 31, 2009, there were no changes in our internal
accounting controls or in other factors that materially affected our internal
controls over financial reporting.





PART
II.  OTHER INFORMATION





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





None





Item
2   Changes in Securities and Use of Proceeds





None





Item
3.  Defaults Upon Senior Securities.





None.





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





Matters
for a vote of security holders were submitted to security holders in the
Company's Proxy Statement, filed upon December 6, 2005.  The remainder
of the information required by this item is incorporated by reference to the
Company's Proxy Statement.





Item
5.  Other Information.





None.




23




Item
6.  Exhibits





The
following list describes the exhibits filed as part of this Report on Form
10-Q.





Exhibit
      Number
            Note
            Description
      of Document3.1
            (1)
            Articles
      of Incorporation of Financial Telecom Limited (USA),
  Inc.3.2
            (1)
            Amended
      and Restated Bylaws of Financial Telecom Limited (USA),
    Inc.10.1
            (1)
            Agreement
      between Hong Kong Futures Exchange Limited and Financial Telecom
      Limited.10.2
            (1)
            Market
      Service Datafeed Agreement between Stock Exchange Information Services
      Limited and Financial Telecom Limited.10.3
            (2)
            Option
      agreement dated December 14, 2004 between Fintel Group Limited and
      shareholders of Shanghai Long terms Technology Limited.10.4
            (2)
            Option
      agreement dated January 5, 2005 between Fintel Group Limited and
      shareholders of Beijing JCL Technology Commerce
Limited.10.5
            (2)
            Option
      agreement dated January 20, 2005 between Fintel Group Limited and
      shareholders of Shanghai Qianhou Computer Technology
    Limited.10.6
            (2)
            Independent
      contractor agreement between Fintel Group Limited and Mr. Sam Chong
      Keen.10.7
            (2)
            Independent
      contractor agreement between Fintel Group Limited and Info Media
      Company.10.8
            (2)
            Independent
      contractor agreement between Fintel Group Limited and China Digital
      Distribution Limited.10.9
            (3)
            Sales
      and purchase agreement dated March 25, 2005 between Fintel Group Limited
      and shareholders of Enjoy Media Holdings Limited.10.10
            (4)
            Sales
      and purchase agreement dated April 25, 2005 between Fintel Group Limited
      and shareholders of Beijing Genial Technology Co. Ltd.10.11
            (4)
            Option
      agreement dated March 7, 2005 between Fintel Group Limited and
      shareholders of Beijing Sinoskyline technology Trading Co.
      Ltd.14.1
            (9)
            Code
      of Ethics.16.1
            (7)
            Change
      in Certifying Accountants.16.2
            (10)
            Incorporated
      herein by reference to registrant's Current Report on Form 8K/A (File No.
      000-50760) filed July 7, 2006.17.1
            (6)
            Correspondence
      on departure of Directors.20.1
            (8)
            Proxy
      Statement dated December 6, 2005.21.1
            (5)
            Subsidiaries
      of the registrant.24.1
            (5)
            Power
      of Attorney.31.1
            (5)
            Certification
      of Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted
      pursuant to Section 302 of the Sarbanes-Oxley Act of
  2002.31.2
            (5)
            Certification
      of Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted
      pursuant to Section 302 of the Sarbanes-Oxley Act of
  2002.32.1
            (5)
            Certification
      of Officers, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
      Section 906 of the Sarbanes-Oxley Act of 2002.


______________________




(1)
            Incorporated
      herein by reference to the registrant's initial Registration Statement on
      Form 10-SB (File No. 000-50760) filed on May 13,
  2004.


(2)
            Incorporated
      herein by reference to the registrant's Annual Report on Form 10-KSB (File
      No. 000-50760) filed April 15,
2005.


(3)
            Incorporated
      herein by reference to the registrant's Quarterly Report of Form 10-QSB
      (File No. 000-50760) filed May 6,
2005.


(4)
            Incorporated
      herein by reference to the registrant's Quarterly Report of Form 10-QSB
      (File No. 000-50760) filed August 6,
2005.


(5)
            Filed
      herewith.


(6)
            Incorporated
      herein by reference to the registrant's Current Report on Form 8K/A (File
      No. 000-50760) filed November 29, 2005.(7)
            Incorporated
      herein by reference to the registrant's Current Report on Form 8K/A (File
      No. 000-50760) filed January 25, 2006.(8)
            Incorporated
      herein by reference to the registrant's Proxy Statement (File No.
      000-50760) filed December 6, 2005.(9)
            Incorporated
      herein by reference to the registrant's Annual Report on Form 10-KSB (File
      No. 000-50760) filed April 26, 2006.(10)
            Incorporated
      herein by reference to the registrant's Current Report on Form 8K/A (File
      No. 000-50760) filed July 7, 2006.





24





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, thereunto duly
authorized.





Sancon
Resources Recovery, Inc.





Date:
 May 15, 2009


By: /s/ Jack Chen


Jack
Chen


Chief
Executive Officer




In
accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.





Sancon
Resources Recovery, Inc.





Date:
 May 15, 2009


By:
/s/ David
Chen


David
Chen


Chairman





Date:
 May 15, 2009


By: /s/ Jimmy Yiu


Jimmy
Yiu


Independent
Director





Date:   May
15, 2009


By: /s/ Cong Yuanli


Cong
Yuanli


Independent
Director





Date:   May
15, 2009


By:
/s/ Jack Chen
 Jack
Chen
 Director
   25