<PAGE>

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


                                  FORM 10-QSB/A


(Mark One)

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

                For the quarterly period ended SEPTEMBER 30, 2006
                                               ------------------

[_]      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                (IRS Employee Identification No.)
 incorporation or organization)

                        1507 Greenland Commercial Centre
                    1258 Yuyuan Road, Shanghai, China 200050
                    (Address of principal executive offices)

                                (+61) 3 97922555
                           (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 [ ]

          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[ ] No[ ]

                      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; 19,914,348 shares issued and outstanding on
September 30, 2006.

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



<PAGE>


                         Sancon Resources Recovery, Inc.
                                   FORM 10-QSB


                                      INDEX

                                                                            PAGE


          Important Notice

PART I.   FINANCIAL INFORMATION

Item 1.   Financial Statements and Condensed Notes - Quarter Ended
             September 30, 2006 (Unaudited)

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

Item 3.   Controls and Procedures

PART II.  OTHER INFORMATION

Item 1.   Legal Proceedings

Item 2.   Changes in Securities and Use of Proceeds

Item 3.   Default Upon Senior Securities

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

Item 5.   Other Information

Item 6.   Exhibits

          Signatures




<PAGE>



PART I.   FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS (UNAUDITED)

                         SANCON RESOURCES RECOVERY, INC.

                           CONSOLIDATED BALANCE SHEET
                                    UNAUDITED

                                                              SEPTEMBER 30, 2006
ASSETS
       Current assets
           Cash and cash equivalents                                  $ 136,967
           Trade receivables                                             61,516
           Advance to suppliers                                         205,424
           Other current assets                                          41,416
                                                                      ---------
                                                                        445,323

       Fixed assets, net                                                230,412
                                                                      ---------
           TOTAL ASSETS                                               $ 675,735
                                                                      =========
           LIABILITIES & STOCKHOLDERS DEFICIT
LIABILITIES
       Current liabilities
           Trade payables                                             $ 109,484
           Auto Loan                                                     13,279
           Due to related parties                                       521,951
           Other payables                                                72,428
                                                                      ---------
                                                                        717,142
STOCKHOLDERS' DEFICIT
       Share Capital
           Authorized: 500,000,000 common shares, having a
           par value of $0.001 per share
           Issued and Outstanding: 19,914,348 shares                     19,914
       Additional paid-in capital                                            --
       Other comprehensive loss                                          (6,769)
       Accumulated Deficit                                              (54,552)
                                                                      ---------

           Total Stockholders' Deficit                                  (41,407)
                                                                      ---------
           TOTAL LIABILITIES,& STOCKHOLDERS' DEFICIT                  $ 675,735
                                                                      =========


      The accompanying notes are an integral of these financial statements.




                                       2

<PAGE>
<TABLE>

                                          SANCON RESOURCES RECOVERY, INC.

                                       CONSOLIDATED STATEMENTS OF OPERATIONS
                                                     Unaudited

                                                     Three Month Periods Ended          Nine Month Periods
                                                            September 30,               Ended September 30,
                                                    ----------------------------     ----------------------------
                                                        2006            2005             2006            2005
                                                    ------------    ------------     ------------    ------------
<S>                                                 <C>                  <C>         <C>                  <C>
Sales, net                                          $  1,589,117         193,630     $  1,875,230         664,143
     Cost of sales                                     1,377,465         124,627        1,538,112         550,506
                                                    ------------    ------------     ------------    ------------
     Gross profit                                        211,652          69,003          337,118         113,637

Operating Expenses
     Depreciation                                         11,993           3,683           32,088          10,111
     Selling, General and Administrative                 141,318          92,558          290,750         167,156
                                                    ------------    ------------     ------------    ------------
     Total operating expenses                             96,241         177,267
                                                    ------------    ------------     ------------    ------------
                                                                                          153,311         322,838
                                                                                     ------------    ------------
Operating income (loss)                                   58,341         (27,238)          14,280         (63,630)

Other Income (Expense)
     Other income                                          3,808               0            4,453             604
     Interest expense                                          0             162            1,406             163
                                                    ------------    ------------     ------------    ------------
     Total other income                                    3,808             162            5,859             767
                                                    ------------    ------------     ------------    ------------

Net income (loss) before discontinued operation           62,149         (27,076)          20,139         (62,863)

Discontinued Operation
          Gain on Disposal of Subsidiary                      --              --           18,041              --

                                                    ------------    ------------     ------------    ------------
Net income (loss) before income taxes                     62,149         (27,076)          38,180         (62,863)

     Income tax expense                                    9,051              --            9,051              --

                                                    ------------    ------------     ------------    ------------
Net income (loss)                                   $     53,098    $    (27,076)    $     29,129    $    (62,863)
                                                    ============    ============     ============    ============

Earnings per share
     Basic and diluted earnings/(loss) per share    $      0.003    $     (0.002)    $      0.002    $     (0.004)
                                                    ============    ============     ============    ============
     Weighted average shares outstanding              19,914,348      14,897,215       17,139,304      14,897,215
                                                    ============    ============     ============    ============

                       The accompanying notes are an integral of these financial statements.


                                                        3



<PAGE>

                                SANCON RESOURCES RECOVERY, INC.
                             CONSOLIDATED STATEMENTS OF CASH FLOW
                                           Unaudited

                                                                      Nine month periods ended
                                                                            September 30

                                                                        2006          2005
                                                                      ---------     ---------
Cash Flows from Operating Activities
      Net income (loss)                                               $  29,129     $ (62,863)
      Adjustments to reconcile net income (loss)
       to net cash flows provided by
       (used in) operating activities:
         Depreciation and amortization                                   32,088        10,111
         Gain on disposal of investment/subsidiary                      (18,041)           --
         Changes in current assets and liabilities:
           Decrease (increase) in trade receivables                       8,739        14,085
           Decrease (increase) in advance to suppliers                 (205,424)           --
           Decrease (increase) in inventory                               4,816            --
           Decrease (increase) in other current assets                  (10,905)        9,215
           Increase (decrease) in trade payable                          15,617        17,880
           Increase (decrease) in other current liabilities              22,634        15,214
                                                                      ---------     ---------
         Net cash flows provided by (used in) operating activities     (121,347)        3,642

Cash Flows from Investing Activities
      Purchase of property and equipment                               (179,178)      (44,806)
      Cash acquired due to acquisitions                                  71,564            --
      Cash decreased due to disposal of subs                            (67,807)           --
                                                                      ---------     ---------
           Net cash flows used in investing activities                 (175,421)      (44,806)

Cash Flows from Financing Activities
      Shareholders' loan                                                374,532        22,630
      Return of auto loans                                               (2,475)           --
                                                                      ---------     ---------
           Net cash flows provided by financing activities              372,057        22,630
                                                                      ---------     ---------

Effect of exchange rate changes on cash                                  (5,904)       (4,613)
                                                                      ---------     ---------
Increase (decrease) in Cash & cash equivalents                           69,385       (23,147)

      Cash & cash equivalents - balance at start of period               67,583        41,099
                                                                      ---------     ---------
      Cash & cash equivalents - balance at end of period              $ 136,967     $  17,951
                                                                      =========     =========

Supplemental information for Cash Expenses
      Interest paid                                                   $      --     $      --
                                                                      =========     =========
      Income tax paid                                                 $   2,191     $      --
                                                                      =========     =========



             The accompanying notes are an integral of these financial statements.
</TABLE>

                                              4

<PAGE>

                         Sancon Resources Recovery, Inc.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                     For the period ended September 30, 2006
                                   (Unaudited)



Note 1.  Nature of Operations

Sancon Resources Recovery, Inc. ("Sancon", or "the Company", or "we", or "us")
is registered in Nevada Statutes,.. Sancon is an industrial recycling company
with operations based in Melbourne Australia and Hong Kong (SAR) China. Sancon
aims to provide solutions to today's soaring raw material cost for manufactures
and assists in solving our environmental problems.

<TABLE>

The Sancon group comprises the following companies:

Registered Name                                                      Domicile      %     Status
(business is conducted under the registered names)                                       Ownership
<S>                                                                  <C>
Digital Financial Service Limited ("DFSL" hereinafter)               Hong Kong     100   Active
Sancon Recycling Pty Ltd                                             Australia     100   Active
Guang Cheng Int'l Trading Ltd. ("Guang Cheng" hereinafter)           Hong Kong     100   Active
</TABLE>

Note 2. Basis of Presentation

(a)      Condensed 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 condensed financial
statements and accompanying notes should be read in conjunction with our annual
financial statements and the notes thereto for the year ended Dec 31, 2005,
included in our Annual Report on Form 10KSB, 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 as of and
for the period ended September 30, 2006 and 2005. All material inter-company
balances and transactions have been eliminated in consolidation.


Note 3. Business Combination and Corporate Restructure

Effective May 26, 2006, a business combination occurred between Sancon Recycling
Pty Ltd. ("SRPL") and the Company. The combination was effected an exchange of
shares, the Company would exchange its seventy-five percent (75%) equity stake
in MK Aviation, S.A. (hereinafter referred to as "MKA") with one hundred percent
(100%) equity stake in SRPL held by Mr. Jack Chen, Mr. Yiu Lo Chung and Mr. Guy
Waters, ("the Shareholders"). Meanwhile, the Shareholders exchanged its
seventy-five percent (75%) equity stake in MK Aviation, S.A. with 14,897,215
shares of the Registrant's common stock from Mr. Kraselnick and associated
parties.

The exchange of shares with SRPL has been accounted for as a reverse acquisition
under the purchase method of accounting since the stockholders of the SRPL
obtained control of the consolidated entity. Accordingly, the acquisition has
been recorded as a recapitalization of SRPL, with SRPL being treated as the
continuing entity. The historical financial statements presented are those of
SRPL for the nine month periods ended September 30, 2006 and 2005 and of the
Company form the acquisition date through September 30, 2006. The continuing
company has retained December 31 as its fiscal year end.

Effective with the Agreement, the current shareholders of Sancon Resources
Recovery, Inc. will own 14,897,215 shares of the company's voting common stock
or 74.28% of the Registrant's 20,030,370 issued and outstanding voting common
stock.

A change in name for the combined entity was contemplated at the time of
combination. Subsequent to the combination, effective August 4, 2006, the listed
company, MKA Capital Inc., changed its name to Sancon Resources Recovery, Inc.

                                       5

<PAGE>

A summarized financial position for the legal acquirer,, Sancon, at the
acquisition date, is provided below.

                     Summary Statement of Financial Position
                                 At May 31, 2006

Cash                                                            $       71,564
Other current assets                                                    13,593
Depreciable tangible assets                                                  0
Current liabilities                                                   (180,493)
                                                                --------------
Net Assets acquired                                             $      (95,336)
                                                                ==============

Note 4.  Recent pronouncements regarding accounting standards

In February 2006, FASB issued SFAS No. 155, "Accounting for Certain Hybrid
Financial Instruments". SFAS No. 155 amends SFAS No 133, "Accounting for
Derivative Instruments and Hedging Activities", and SFAF No. 140, "Accounting
for Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities". SFAS No. 155, permits fair value remeasurement for any hybrid
financial instrument that contains an embedded derivative that otherwise would
require bifurcation, clarifies which interest-only strips and principal-only
strips are not subject to the requirements of SFAS No. 133, establishes a
requirement to evaluate interest in securitized financial assets to identify
interests that are freestanding derivatives or that are hybrid financial
instruments that contain an embedded derivative requiring bifurcation, clarifies
that concentrations of credit risk in the form of subordination are not embedded
derivatives, and amends SFAS No. 140 to eliminate the prohibition on the
qualifying special-purpose entity from holding a derivative financial instrument
that pertains to a beneficial interest other than another derivative financial
instrument. This statement is effective for all financial instruments acquired
or issued after the beginning of the Company's first fiscal year that begins
after September 15, 2006. Management is currently evaluating the effect of this
pronouncement on financial statements.

In March 2006, FASB issued SFAS 156 "Accounting for Servicing of Financial
Assets" this Statement amends FASB Statement No. 140, ACCOUNTING FOR TRANSFERS
AND SERVICING OF FINANCIAL ASSETS AND EXTINGUISHMENTS OF LIABILITIES, with
respect to the accounting for separately recognized servicing assets and
servicing liabilities.

This Statement:

1. Requires an entity to recognize a servicing asset or servicing liability each
time it undertakes an obligation to service a financial asset by entering into a
servicing contract.

2. Requires all separately recognized servicing assets and servicing liabilities
to be initially measured at fair value, if practicable.

3. Permits an entity to choose "Amortization method" or "Fair value measurement
method" for each class of separately recognized servicing assets and servicing
liabilities.

4. At its initial adoption, permits a one-time reclassification of
available-for-sale securities to trading securities by entities with recognized
servicing rights, without calling into question the treatment of other
available-for-sale securities under Statement 115, provided that the
available-for-sale securities are identified in some manner as offsetting the
entity's exposure to changes in fair value of servicing assets or servicing
liabilities that a servicer elects to subsequently measure at fair value.

5. Requires separate presentation of servicing assets and servicing liabilities
subsequently measured at fair value in the statement of financial position and
additional disclosures for all separately recognized servicing assets and
servicing liabilities.
This Statement is effective as of the beginning of the Company's first fiscal
year that begins after September 15, 2006. Management believes that this
statement will not have a significant impact on the financial statements.

In September 2006, FASB issued SFAS 157 `Fair Value Measurements'. This
Statement defines fair value, establishes a framework for measuring fair value
in generally accepted accounting principles (GAAP), and expands disclosures
about fair value measurements. This Statement applies under other accounting
pronouncements that require or permit fair value measurements, the Board having
previously concluded in those accounting pronouncements that fair value is the
relevant measurement attribute. Accordingly, this Statement does not require any
new fair value measurements. However, for some entities, the application of this
Statement will change current practice. This Statement is effective for
financial statements issued for fiscal years beginning after November 15, 2007,
and interim periods within those fiscal years. Management is currently
evaluating the effect of this pronouncement on financial statements.

                                       6

<PAGE>

In September 2006, FASB issued SFAS 158 `Employers' Accounting for Defined
Benefit Pension and Other Postretirement Plans--an amendment of FASB Statements
No. 87, 88, 106, and 132(R)' This Statement improves financial reporting by
requiring an employer to recognize the overfunded or underfunded status of a
defined benefit postretirement plan (other than a multiemployer plan) as an
asset or liability in its statement of financial position and to recognize
changes in that funded status in the year in which the changes occur through
comprehensive income of a business entity or changes in unrestricted net assets
of a not-for-profit organization. This Statement also improves financial
reporting by requiring an employer to measure the funded status of a plan as of
the date of its year-end statement of financial position, with limited
exceptions. An employer with publicly traded equity securities is required to
initially recognize the funded status of a defined benefit postretirement plan
and to provide the required disclosures as of the end of the fiscal year ending
after December 15, 2006. An employer without publicly traded equity securities
is required to recognize the funded status of a defined benefit postretirement
plan and to provide the required disclosures as of the end of the fiscal year
ending after June 15, 2007. However, an employer without publicly traded equity
securities is required to disclose the following information in the notes to
financial statements for a fiscal year ending after December 15, 2006, but
before June 16, 2007, unless it has applied the recognition provisions of this
Statement in preparing those financial statements:

         a.       A brief description of the provisions of this Statement
         b.       The date that adoption is required
         c.       The date the employer plans to adopt the recognition
                  provisions of this Statement, if earlier.

The requirement to measure plan assets and benefit obligations as of the date of
the employer's fiscal year-end statement of financial position is effective for
fiscal years ending after December 15, 2008. The management is currently
evaluating the effect of this pronouncement on financial statements.

In July 2006, the FASB released FASB Interpretation No. 48, Accounting for
Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109 (FIN
48). FIN 48 clarifies the accounting and reporting for uncertainties in income
tax law. This interpretation prescribes a comprehensive model for the financial
statement recognition, measurement, presentation and disclosure of uncertain tax
positions taken or expected to be taken in income tax returns. This statement is
effective for fiscal years beginning after December 15, 2006. We are currently
in the process of evaluating the expected effect of FIN 48 on our results of
operations and financial position.


Note 5. Summary of Significant Accounting Policies

(a) 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.

(b) Property, Equipment, and Furnishings

Property, equipment, and furnishings are stated at cost, less accumulated
depreciation. These assets are depreciated under declining-balance method down
to nil residual values by multiplying annual rates as follows:


            Plant and equipment                                     20.0%
            Motor Vehicles                                          22.5%
            Fixture and Fittings                                    22.0%


                                       7

<PAGE>

(c) Impairment of Long-lived assets

The Company periodically reviews its portfolio of assets for impairment in
accordance with Statement of Financial Accounting Standards ("SFAS") No. 144,
"Accounting for the Impairment or Disposal of Long-lived Assets." Such review
necessitates estimates of current market values; re-lease rents, residual values
and component values. The estimates are based on currently available market data
and are subject to fluctuation from time to time. The Company initiates its
review periodically, whenever events or changes in circumstances indicate that
the carrying amount of a long-lived asset may not be recoverable. Recoverability
of an asset is measured by comparison of its carrying amount to the expected
future undiscounted cash flows (without interest charges) that the asset is
expected to generate. Any impairment to be recognized is measured by the amount
by which the carrying amount of the asset exceeds its fair market value.
Significant management judgment is required in the forecasting of future
operating results which are used in the preparation of projected undiscounted
cash flows and, should different conditions prevail, material write downs may
occur.

(d) Foreign Currency Translation

The reporting currency used in the preparation of these consolidated financial
statements is U.S. dollars. Local currencies are the functional currencies for
the Companies subsidiaries. For the purpose of consolidation: assets and
liabilities of subsidiaries with functional currencies other than U.S. dollars
are translated into U.S. dollars at the applicable rates of exchange in effect
at the balance sheet date; and income and expense items are translated into U.S.
dollars at the average applicable rates during the year.

Translation gains and losses resulting from fluctuations in exchange rates are
recorded as a separate component of other comprehensive income within
stockholders' equity as cumulative translation adjustments. Gains and losses
resulting from foreign currency transactions are included in results of
operations.

(e) 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.

(f) Revenue Recognition

The Company's revenue recognition policies are in compliance with Staff
accounting bulletin (SAB) 104. Sales revenue is recognised when the significant
risks and rewards of the ownership of goods have been transferred to the buyers.
No revenue is recognised 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.

(g) 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 expire in
2024. 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.

                                       8

<PAGE>

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.

(h) Allowance for Doubtful Accounts

The Company presents accounts receivable at the net of allowances for doubtful
accounts. The allowances are calculated based on detailed review of certain
individual customer accounts and an estimation of the overall economic
conditions affecting the Company's customer base. The Company reviews a
customer's credit history before extending credit. If the financial condition of
its customers were to deteriorate, resulting in an impairment of their ability
to make payments, additional allowances may be required. No provision for
doubtful accounts has been made in these financial statements, as the accounts
are considered collectible in full.

(i) Long-term Investments

Long-term investments in equities are recorded at cost, using the cost method of
accounting for investments in equities.

(j) Segment Information

The Company adopted Statement of Financial Accounting Standards No. 131,
Disclosures about Segments of an Enterprise and Related Information ("SFAS
131"). SFAS establishes standards for reporting information regarding operating
segments in annual financial statements and requires selected information for
those segments to be presented in interim financial reports issued to
stockholders. SFAS 131 also establishes standards for related disclosures about
products and services and geographic areas. Operating segments are identified as
components of an enterprise about which separate discrete financial information
is available for evaluation by the chief operating decision maker, or decision
making group, in making decisions how to allocate resources and assess
performance.

Following is a summary of segment information by geographic unit for the nine
months period ended September 30, 2006:

                                    Australia      Hongkong        TOTAL

Sales, net                          $477,946       $1,397,284      $1,875,230
Net income (loss)                    (19,502)          48,631          29,129
Total Assets                         387,196          288,539         675,735
Capital Expenditure                  179,178               --         179,178
Depreciation                         $32,088       $       --      $   32,088

Following is a summary of segment information by geographic unit for the nine
months period ended September 30, 2005:

                                     Australia     Hongkong        TOTAL

Sales, net                           $664,143      $      --       $  664,143
Net income (loss)                     (62,862)            --          (62,862)
Total Assets                          161,109             --          161,109
Capital Expenditure                    44,806             --           44,806
Depreciation                         $ 10,111      $      --       $   10,111


(k) Comprehensive Income

Statement of Financial Accounting Standards No. 130 ("SFAS 130"), "Reporting
Comprehensive Income," establishes standards for reporting and displaying of
comprehensive income, its components and accumulated balances. Comprehensive
income is defined to include all changes in equity except those resulting from
investments by owners and distributions to owners. Among other disclosures, SFAS
130 requires that all items that are required to be recognized under current
accounting standards as components of comprehensive income be reported in a
financial statement that is displayed with the same prominence as other
financial statements.

(l) Reclassifications

Certain reclassifications have been made in prior years' financial statements to
conform with classifications used in the current year.

Note 5(m)  Stock based payments

                                       9

<PAGE>

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 SRPL'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 December 31, 2005 and September 30, 2006, the Company did not issue or
make provision through the issuance of stock options to employees and directors.

Note 6.  Concentrations, Contingencies, and Commitments

(a) Concentrations

International Risks. 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.

The Company operates in one business segment, recycling of materials, primarily
foreign, and therefore does not present separate segment information for lines
of business.

(b) Commitments

The Company leases office space in Hong Kong and Australia. The lease for
Australia expires in 2008, and Hong Kong in 2007. Based upon existing leases,
without renewals, the minimum lease payments up to expiry are as follows:

          2007                                              $      71,150
          2008                                              $      31,974
                                                            -------------
          Total                                             $     103,124
                                                            =============


                                       10

<PAGE>

Note 7. Depreciable Assets

(a) Property, equipment and furnishings

Property, equipment and furnishings 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.

                                   Plant and                Office
                                   Machinery   Vehicles   Equipment     Total
                                   --------    --------    --------    --------
At September 30, 2006

Cost                                247,646      21,730      17,046     286,422
Accumulated Depreciation             43,452       7,020       5,538      56,010
                                   --------    --------    --------    --------

Net Carrying Value                  204,194      14,710      11,508     230,412
                                   ========    ========    ========    ========

Note 8.  Auto Loan

In 2005 year, the company purchased a vehicle by mortgage loan from Toyota
Financial Service. The totally amount of the loan is $16,882.93 with payment
term of sixty (60) months. The annual interest rate is seven point ninty-nine
percent (7.99%). The payment is to be made in 59 equal monthly installments of
$277.96 each and the final installment of $5,000.

Note 9.  Due to related parties

The shareholders' loan was due to Mr. Jack Chen, CEO and director of the
Company, Mr. Cheng Guangliang, shareholder of the Company and Jimmy Yiu,
directors of the Company. The loan from Mr. Jack Chen was unsecured, and no
payment term and without interest bearing.

Note 10. Stockholders' equity

On January 25, 2006 the Company affected the reverse stock split of 1:25 shares.
All outstanding shares are retroactively restated based on the split.

Following is the summary of shares activity during the nine month period ended
September 30, 2006

During the period ended September 30, 2006 the Company issued 37,019 shares
against compensation and 14,466 shares against settlement of debt. These shares
are recorded on the average closing price of common shares on the OTCBB during
this period.


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:

     o    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.
     o    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.
     o    Results of operations. This section provides an analysis of our
          results of operations for the three months and Nine months ended
          September 30, 2006 compared to the same period in 2005. A brief
          description is provided of transactions and events, including any
          related party transactions that affect the comparability of the
          results being analyzed.
     o    Liquidity and capital resources. This section provides an analysis of
          our financial condition and cash flows for the nine months ended
          September 30, 2006 and 2005.
     o    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.

                                       11

<PAGE>

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.

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.

                                       12

<PAGE>

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 stocks." 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 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.

                                       13

<PAGE>

Overview of the Company and its Operations

Sancon Resources Recovery, Inc. is an industrial waste recycling company with
operations based in Australia, Hong Kong and China. Sancon currently exports
more than 25,000 tons of recycled industrial waste material annually to its
processing partners and manufacturers in China. Sancon's main operations and
services include industrial eco-friendly consulting, collection and reprocess of
recyclable materials such as plastic, cardboard, and paper before its re-entry
into manufacture cycles as raw materials. 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 oil
price soars, Chinese manufacturers are increasingly turning to recycled
materials to lower costs, resulting tremendous demand for recycled materials
import. The major markets for Sancon are Chinese manufacturers located mainly in
the provinces of Guangdong, Zhejiang and Fujian in China.

THE TREND IN CHINESE MARKET

The Chinese demand for secondary plastics and recycled plastics already runs
into 8 million tons per year according to China's State Environmental Protection
Agency. Our near-term growth strategy is to first strengthen our relationships
with our existing major suppliers in Japan and the USA to offer large selection
of plastic products; secondly, we aim to increase our processing capacity for
plastic materials at our existing facilities in Australia for export to China.
The well established trust on quality control of the recycled materials with
Sancon's customers in China, and our aggressive expansion plans laid the
groundwork firmly for long-term growth.

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 environmental 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 have identified several key points which will give Sancon the
competitive edge in the market place:

     1)   Sancon offers large selection of plastic raw materials to our
          customers.
     2)   With our operations in Melbourne Australia and new processing facility
          opened up in Sydney, Sancon will cut out the middle man by selling
          direct to our partners and customs in China to protect our company's
          profit margin.
     3)   Hong Kong trading operation will source recycled materials globally
          for to meet the increasing demand from our customers in China.
     4)   Working closely with more processing partners in China will add value
          to our products
     5)   Industry know-how and management team's ability to ensure all major
          milestones are achieved.

EMPLOYEES

At September 30, 2006, the Company had 10 employees in total (excluding
consultants), in sales and marketing, finance, logistic, and administration.
None of the Company's employees is covered by a collective bargaining agreement
and the Company believes its employee relations are satisfactory.

                                       14

<PAGE>

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, 2007. 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 during
2006. In any case, such costs will likely affect adversely the Company's
business, financial condition and results of operations.

Results of Operations - Comparison between the three and Nine months ended
September 30, 2006 and same periods of 2005

Sales

Sales are generated by the sale of recyclable materials. The sales in Q3 2006
were $1,589,117, representing a 721% increase compared to the sales of $193,630
in same period of 2005. The sales for nine months ended on September 30 for year
2006 were $1,875,230, representing 182% increase compared to the sales amount of
$664,143 in the same period of 2005. The sharp increases were mainly due to the
significant sales amount contributed from DFSL and Guangcheng, which started
their operation in Q3 2006. During the 3 months ended September 30, 2006, the
Company set up its wholly-owned subsidiary Guangcheng in Hong Kong and
restructured DFSL's business. The both companies are engaged in recycling
material trading business.

Cost of Sales

The cost of sales is the direct cost for sale of the recycling materials. In Q3
2006, the cost of the recyclable materials was $1,377,465. It is 1,005% increase
as compared to the cost of sales of $124,627 in Q2 2005. The significant
increase of cost of sales is in line with the sales during the quarter ended
September 30 2006. The cost of sales for nine months ended on September 30 for
period ended 2006 and 2005 were $1,538,112 and $550,506 respectively. The gross
margin dropped significantly due to the significant portion of trading business
added in the quarter ended September 30, 2006, with lower margin as compared to
its processing operations.

Selling, General and Administrative Expenses ("SG&A expenses")

SG&A expenses increased by $48,760 or 53% to $141,318 in Q3 2006 compared to the
same period of 2005, which is due to increased rent, salaries expenses and other
general expenses. SG&A expenses increased by $123,594 or 74% to $290,750 during
nine months period ended on September 30, 2005 compared with the same period of
year 2006. The significant increase of SG&A expenses are mainly resulted from
the increment of SG&A expenses in DFSL and Guangcheng due to their newly started
business during this quarter ended September 30, 2006.

Depreciation Expense

Depreciation expense increased to $11,993 in Q3 2006 from $3,683 in same period
of 2005. The expenses increased from $10,111 to $32,088 during nine months
period nded on September 30, 2005 compared with same period in year 2006. The
increases were due to the purchase of plant and machinery in Q2, 2006.

Discontinued Operation

Discontinued operation in Q2, 2006 represent the gain on disposal of Fintel
Group Limited, a wholly owned subsidiary of Sancon.

                                       15

<PAGE>

Liquidity and Capital Resources

As shown in the accompanying financial statements, the Company still suffered
accumulated loss of $54,552 as of September 30, 2006. In addition, our working
capital is negative $271,819.

Our ability to continue as a going concern depends on the success of our plan to
seek funding sources and the success of our future operations.

Operating Activities

The net cash used by operating activities from the nine months period ended on
September 30, 2006 amounted to $121,347 compared to $3,642 provided by operating
activities in the same period of year 2005. The net cash outflow from operating
activities was mainly due to the increase of cash advance to suppliers $205,424,
increase of other current assets of $10,905 and gain on disposal of $18,041 and
netting of net operating gain of $29,129, depreciation and amortization of
32,088, decrease of trade receivables of 8,739 and increase of trade payable and
other current liabilities of $38,251.

Investing Activities

Net cash used in investing activities amounted to $175,421 during the nine
months period ended on September 30, 2006 compared to $44,806 during the same
period of year 2005. The net cash outflow primarily consisted of the cash
outflow resulting from the purchase of property and equipment of $179,178 and
cash decreased due to disposal of subsidiary of $67,807, and netting of the cash
inflow due to acquisition of MKAC of $71,564.

Financing Activities

Net cash obtained by financing activities amounted to $372,057 during the nine
months period ended on September 30, 2006 compared to net cash obtained by
financing activities of $22,630 during the same period of year 2005. The net
cash inflow was due to the increase of shareholders' loan to the company of
$373,532 and return of auto loan of $2,475.

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 for 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.


                                       16

<PAGE>

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.

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

In December 2002, the FASB issued SFAS No. 148 - Accounting for Stock-Based
Compensation - Transition and Disclosure. This statement amends SFAS No. 123 -
Accounting for Stock-Based Compensation, providing alternative methods of
voluntarily transitioning to the fair market value based method of accounting
for stock based employee compensation. FAS 148 also require disclosure of the
method used to account for stock-based employee compensation and the effect of
the method in both the annual and interim financial statements. The provisions
of this statement related to transition methods are effective for fiscal years
ending after December 15, 2002, while provisions related to disclosure
requirements are effective in financial reports for interim periods beginning
after December 31, 2002.

For stock options, we elected to continue to account for stock-based
compensation plans using the intrinsic value-based method of accounting
prescribed by APB No. 25, "Accounting for Stock Issued to Employees," and
related interpretations. Under the provisions of APB No. 25, compensation
expense is measured at the grant date for the difference between the fair value
of the stock and the exercise price.

                                       17

<PAGE>

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
anticipated 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 effective such that the
material information required to be included in our Securities and Exchange
Commission ("SEC") reports is recorded, processed, summarized and reported
within the time periods specified in SEC rules and forms relating to us,
including our consolidating subsidiaries, and was made known to them by others
within those entities, particularly during the period when this report was being
prepared.

During the Nine months ended September 30, 2006, 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.
<TABLE>

    date          type         amount                 person                 consideration           transaction
<S>           <C>
  1-Feb-06    common share      11,283             R. Gorthuis               $   14,668                  Salary
  1-Feb-06    common share       4,003                R. Yan                 $    4,166                  Salary
  1-Feb-06    common share       3,753   TWC Corporation Services Limited    $    3,642            Settlement of debts
  1-Feb-06    common share       9,685             Bok, Wai Kee              $    9,398            Settlement of debts
  1-Feb-06    common share       1,028           Ng, Yu Yan Betty            $      998           Settlement of debts
 10-Feb-06    common share      54,539           Mr. Lu Zhao Hui             $   68,174       Increase investment holdings
 10-Feb-06    common share      61,846             Mr. Song Lin              $   77,308       Increase investment holdings
 25-May-06    common share     (54,539)          Mr. Lu Zhao Hui             $  (68,174)      Decrease investment holdings
 25-May-06    common share     (61,846)            Mr. Song Lin              $  (77,308)      Decrease investment holdings
 25-May-06    common share      13,110             R. Gorthuis               $   12,668                  Salary
 25-May-06    common share      8,623                 R. Yan                 $    8,332                  Salary
</TABLE>

The number of shares issued was based on the average closing price of our common
shares on the OTCBB during certain periods. The shares were exempt from
registration pursuant to Section 4(2) under the Securities Act of 1933, as
amended, pursuant to Rule 903, as a sale by the issuer in an offshore
transaction. No underwriting or other commissions were paid in connection with
the issuance of these shares. No forms of conversion or exercise options are
attached to the shares.

Item 2   Changes in Securities and Use of Proceeds

None

Item 3.  Defaults Upon Senior Securities.

None.

                                       18

<PAGE>

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.

Item 5.  Exhibits

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

Exhibit
Number    Note   Description of Document

3.1        (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 Longterms 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.

                                       19


<PAGE>


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:  December 18, 2006
                                                               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: December 18, 2006
                                                              By: /s/ David Chen
                                                --------------------------------
                                                                      David Chen
                                                                        Chairman

Date: December 18, 2006
                                                               By: /s/ Jimmy Yiu
                                                      --------------------------
                                                                       Jimmy Yiu
                                                                        Director

Date: December 18, 2006
                                                            By: /s/ Helen Bouzas
                                                      --------------------------
                                                                    Helen Bouzas
                                                            Independent Director

Date:  December 18, 2006
                                                             By: /s/ Cong Yuanli
                                                      --------------------------
                                                                      Cong Yuanl
                                                            Independent Director

Date:  December 18, 2006
                                                               By: /s/ Jack Chen
                                                      --------------------------
                                                                      Jack. Chen
                                                                        Director



                                       20