**U.S.
      SECURITIES AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**


**FORM
      10-QSB**




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




**For
      the quarterly period ended July 31, 2006**




o
            TRANSITION
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                ACT OF
                1934




For
      the
      transition period from




**Commission
      File No. 000-50814**




**MEDARTS
      MEDICAL SYSTEM, INC.**


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




**Delaware**(State
                or other jurisdiction of incorporation
              or
                organization)
            (I.R.S.
                Employer Identification No.)




**6/F
      E Yang International Mansion #27**


**Science
      & Technology Road**


**Xi-
      an Hi- Tech Industry Development Zone**


**Xi’
      an PRC 710075**


(Address
      of principal executive offices )(Zip Code)




**86-29-88319908**


(Registrant’s
      telephone no., including area code)




(Former
      name, address and fiscal year, if changed since last report)




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




Indicate
      by check mark whether the registrant is a shell company as defined in Rule
      12b-2
      of the Exchange Act.


Yes
            x
            No
            o




State
      the
      number of shares outstanding of each of the issuer’s classes of common equity,
      as of November 2, 2006: 100,000 shares of common stock.





















**TABLE
      OF CONTENTS**




**PART
                I - FINANCIAL INFORMATION**Item
                1.  Financial Information
            1Item
                2.  Management’s Discussion and Analysis or Plan of
                Operation
            10Item
                3.  Controls and Procedures
            11**PART
                II -OTHER INFORMATION**Item
                1.  Legal Proceedings.
            12Item
                2.  Unregistered Sales of Equity Securities and Use of
                Proceeds.
            12Item
                3.  Defaults Upon Senior Securities.
            12Item
                4.  Submission of Matters to a Vote of Security
                Holders.
            12Item
                5.  Other Information.
            12Item
                6.  Exhibits and Reports of Form 8-K.
            12**SIGNATURES**






i



















**PART
      I - FINANCIAL INFORMATION**




**Item
                1.**
            **Financial
                Information**




**Medarts
                  Medical System, Inc.****(Formerly,
                  Unise Investment Holdings of China, Inc. and Along Mobile Technology,
                  Inc.)****(A
                  Development Stage Company)****Balance
                  Sheet****July
                  31, 2006****(Unaudited)****Assets**Current
                  assetsCash
                  and cash equivalents
              
              $
              -Total
                  current assets
              
              $
              -******Liabilities
                  and Stockholders' Deficit**Current
                  liabilitiesAccounts
                  payable and accrued expenses
              
              $
              5,115Total
                  current liabilities
              
              
              5,115Stockholder's
                  deficitCommon
                  stock, $.0001 par value; 100,000,000 sharesauthorized,
                  100,000 shares issued and outstanding
              
              
              10Additional
                  paid-in capital
              
              
              90Deficit
                  accumulated during the development stage
              
              
              (5,215
              )Total
                  stockholders' deficit
              
              
              (5,115
              )Total
                  liabilities and stockholders' deficit
              
              $
              -






The
        accompanying notes form an integral part of these unaudited financial
        statements.






1




**Medarts
                  Medical System, Inc.****(Formerly,
                  Unise Investment Holdings of China, Inc. and Along Mobile Technology,
                  Inc.)****(A
                  Development Stage Company)****Statements
                  of Operations****(Unaudited)****Cumulative****During
                  the****Development****Three
                  Month Periods Ended**
              
              **Nine
                  Month Periods Ended**
              
              **Stage****July
                  31**
              
              **July
                  31**
              
              **(August
                  19, 2004 to****2006**
              
              **2005**
              
              **2006**
              
              **2005**
              
              **July
                  31, 2006)**Net
                  revenues
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -General
                  and administrative expense
              
              
              1,500
              
              
              -
              
              
              3,265
              
              
              1,350
              
              
              5,215Total
                  expenses
              
              
              1,500
              
              
              -
              
              
              3,265
              
              
              1,350
              
              
              5,215Net
                  loss
              
              $
              (1,500
              )
              $
              -
              
              $
              (3,265
              )
              $
              (1,350
              )
              $
              (5,215
              )Net
                  loss per share, basic and diluted
              
              $
              (0.02
              )
              $
              -
              
              $
              (0.03
              )
              $
              (0.01
              )
              $
              -Weighted
                  average number of commonShares
                  outstanding, basic and diluted
              
              
              100,000
              
              
              100,000
              
              
              100,000
              
              
              100,000
              
              
              100,000




The
        accompanying notes form an integral part of these unaudited financial
        statements.
     2




**Medarts
                  Medical System, Inc.****(Formerly,
                  Unise Investment Holdings of China, Inc. and Along Mobile Technology,
                  Inc.)****(A
                  Development Stage Company)****Statements
                  of Cash Flows****(Unaudited)****Cumulative****During
                  the****Development****Nine
                  Month Periods Ended**
              
              **Stage****July
                  31,**
              
              **(August
                  19,2004to****2006**
              
              **2005**
              
              **July
                  31, 2006**Cash
                  flows from operating activitiesNet
                  loss
              
              $
              (3,265
              )
              $
              (1,350
              )
              $
              (5,215
              )Adjustments
                  to reconcile net loss to net cashused
                  in operating activities:Services
                  rendered for common stock
              
              
              -
              
              
              -
              
              
              100Changes
                  in operating assets and liabilities:Accounts
                  payable and accrued expenses
              
              
              3,265
              
              
              1,350
              
              
              5,115Net
                  cash provided by (used in ) operating activities
              
              
              -
              
              
              -
              
              
              -Cash
                  flows from investing activities
              
              
              -
              
              
              -
              
              
              -Cash
                  flows from financing activities
              
              
              -
              
              
              -
              
              
              -Net
                  increase decrease )in cash
              
              
              -
              
              
              -
              
              
              -Cash
                  and cash equivalents - beginning of period
              
              
              -
              
              
              -
              
              
              -Cash
                  and cash equivalents - end of period
              
              $
              -
              
              $
              -
              
              $
              -**Supplemental
                  disclosures of cash flow information:**Interest
                  paid
              
              $
              -
              
              $
              -
              
              $
              -Income
                  taxes paid
              
              $
              -
              
              $
              -
              
              $
              -








The
        accompanying notes form an integral part of these unaudited financial
        statements.








3




**Medarts
                  Medical System, Inc.****(Formerly,
                  Unise Investment Holdings of China, Inc. and Along Mobile Technology,
                  Inc.)****(A
                  Development Stage Company)****Statements
                  of Stockholders' Deficit****From
                  inception August 19,2004 through July 31,2006****(Unaudited)****Additional**
              
              
              
              **Total****Common
                  Stock**
              
              **paid
                  in**
              
              **Accumulated**
              
              **Stockholders'****Shares**
              
              **Amount**
              
              **Capital**
              
              **Deficit**
              
              **Deficit**Stock
                  issued on acceptanceof
                  incorporation expenses
              
              
              100,000
              
              $
              10
              
              $
              90
              
              $
              -
              
              $
              100Net
                  Loss
              
              
              -
              
              
              -
              
              
              -
              
              
              (600
              )
              
              (600
              )Total
                  at October 31, 2004
              
              
              100,000
              
              
              10
              
              
              90
              
              
              (600
              )
              
              (500
              )Net
                  loss
              
              
              -
              
              
              -
              
              
              -
              
              
              (1,350
              )
              
              (1,350
              )Total
                  at October 30,2005
              
              
              100,000
              
              
              10
              
              
              90
              
              
              (1,950
              )
              
              (1,850
              )Net
                  loss
              
              
              -
              
              
              -
              
              
              -
              
              
              (1,765
              )
              
              (1,765
              )Total
                  at April 30, 2006
              
              
              100,000
              
              
              10
              
              
              90
              
              
              (3,715
              )
              
              (3,615
              )Net
                  loss
              
              
              -
              
              
              -
              
              
              -
              
              
              (1,500
              )
              
              (1,500
              )Total
                  at July 31, 2006
              
              
              100,000
              
              $
              10
              
              $
              90
              
              $
              (5,215
              )
              $
              (5,115
              )






The
        accompanying notes form an integral part of these unaudited financial
        statements.






4




**MEDARTS
        MEDICAL SYSTEM, INC.**
 **(FORMERLY, UNISE
        INVESTMENT HOLDINGS OF CHINA, INC.)**
 **(A
        Development Stage Company)**
 **Notes
        to Financial Statements**
 **For
        the Nine Month Period Ended July 31, 2006 and**
 **2005
        and For the Period from August 19, 2004 (Inception)**
 **to** **July
        31, 2006 (Unaudited)**


**NOTE
        1 - ORGANIZATION**
 
 Medarts
        Medical System, Inc.  (formerly,
        Unise Investment Holding of China, Inc.)(the “Company”) was incorporated in the
        State of Delaware on August 19, 2004 under the name Edmonds 3, Inc. On June
        29,
        2005, the sole officer, director, and stockholder of the Company sold
        al l
        100,000 issued
        and outstanding shares of the Company’s Common Stock to Shaanxi Jialong Hi-Tech
        Industries Inc. (“Shaanxi”), a corporation organized in China, for $76,000 cash.
        Also on June 29, 2005, the Company’s name was changed from Edmonds 3, Inc. to
        Along Mobile Technology Inc. On June 29, 2005, the Company’s intention was
        to merge with Shaanxi Jialong High-tech Industries, Inc., a development stage
        company planning to engage in the business of publishing wireless entertainment
        applications. Subsequently, the Company decided to seek other business entities
        to combine with. The combination will likely take the form of a merger, stock
        for stock exchange, or stock for assets exchange.
 
 On
        June
        28, 2006, the Company changed its name to Medarts Medical System, Inc. The
        Company has no products or services; the Company is seeking a business to
        merge
        with or acquire.
 
 **NOTE
        1 - BASIS OF PRESENTATION**
  The
        unaudited financial statements as of  July
        31,
        2006 and for the nine months ended July 31, 2006 and 2005 and for the period
        August 19, 2004 (inception) to July 31, 2006 have been prepared in accordance
        with accounting principles generally accepted in the United States for interim
        financial information and with instructions to Form 10-QSB. In the opinion
        of
        management, the unaudited financial statements have been prepared on the
        same
        basis as the annual financial statements and reflect all adjustments, which
        include only normal recurring adjustments, necessary to present fairly the
        financial position as of  July
        31,
        2006 and the results of operations and cash flows for the periods ended July
        31,
        2006 and 2005. The financial data and other information disclosed in these
        notes
        to the interim financial statements related to these periods are unaudited.
        The
        results for the nine month period ended July 31, 2006 are not necessarily
        indicative of the results to be expected for any subsequent quarter of the
        entire year ending October 31, 2006. The balance sheet at October 31, 2005
        has
        been derived from the audited financial statements at that date.
  Certain
        information and footnote disclosures normally included in financial statements
        prepared in accordance with accounting principles generally accepted in the
        United States have been condensed or omitted pursuant to the Securities and
        Exchange Commission’s rules and regulations. These unaudited financial
        statements should be read in conjunction with our audited financial statements
        and notes thereto for the year ended October 31, 2005 as included in our
        report
        on Form 10-KSB.
   5
  **MEDARTS
          MEDICAL SYSTEM, INC.**
 **(FORMERLY, UNISE
          INVESTMENT HOLDINGS OF CHINA, INC.)**
 **(A
          Development Stage Company)**
 **Notes
          to Financial Statements**
 **For
          the Nine Month Period Ended July 31, 2006 and**
 **2005
          and For the Period from August 19, 2004 (Inception)**
 **to** **July
          31, 2006 (Unaudited)**
 **NOTE
        3 - DEVELOPMENT STAGE ENTERPRISE & GOING CONCERN**
  The
        Company has been presented as a “development stage enterprise” in accordance
        with Statement of Financial Accounting Standards (“SFAS”) No.7, “Accounting and
        Reporting by Development Stage Enterprises”. Since inception, the Company’s
        activities have been limited to organizational efforts and making various
        filings with the Securities and Exchange Commission (“SEC”).
  GOING
        CONCERN
 
 At  July
        31,
        2006, the Company had no working capital and a negative stockholders’ deficiency
        of $5,115. For the period August 19, 2004 (inception) to July 31, 2006, the
        Company incurred net losses of $5,215. These factors create uncertainty as
        to
        the Company’s ability to continue as a going concern. The Company is making
        efforts to acquire a business with assets and operations. However, there
        is no
        assurance that the Company will be successful in accomplishing this objective.
        The financial statements do not include any adjustments that might be necessary
        should the Company be unable to continue as a going concern.
  **NOTE
        4 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**
 
 Use
        of
        Estimates
 
 The
        preparation of financial statements in conformity with generally accepted
        accounting principles requires management to make estimates and assumptions
        that
        affect the reported amounts of assets and liabilities and disclosure of
        contingent assets and liabilities at the date of the financial statements
        and
        the reported amounts of revenues and expenses during the reporting period.
        Actual results could differ from those estimates.
 
 Cash
        and Cash Equivalents
 
 Cash
        and
        cash equivalents include cash in hand and cash in time deposits, certificates
        of
        deposit and all highly liquid debt instruments with original maturities of
        three
        months or less.
 
 Income
        Taxes
 
 The
        Company utilizes SFAS No. 109, “Accounting for Income Taxes,” which requires the
        recognition of deferred tax assets and liabilities for the expected future
        tax
        consequences of events that have been included in the financial statements or
        tax returns. Under this method, deferred income taxes are recognized for
        the tax
        consequences in future years of differences between the tax bases of assets
        and
        liabilities and their financial reporting amounts at each period end based
        on
        enacted tax laws and statutory tax rates applicable to the periods in which
        the
        differences are expected to affect taxable income. Valuation allowances are
        established, when necessary, to reduce deferred tax assets to the amount
        expected to be realized.
   6
 **MEDARTS
          MEDICAL SYSTEM, INC.**
 **(FORMERLY, UNISE
          INVESTMENT HOLDINGS OF CHINA, INC.)**
 **(A
          Development Stage Company)**
 **Notes
          to Financial Statements**
 **For
          the Nine Month Period Ended July 31, 2006 and**
 **2005
          and For the Period from August 19, 2004 (Inception)**
 **to** **July
          31, 2006 (Unaudited)**
 Recent
        Pronouncements
 
 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
        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. The management is currently
        evaluating the effect of this pronouncement on financial
        statements.
 
 7
  **MEDARTS
          MEDICAL SYSTEM, INC.**
 **(FORMERLY, UNISE
          INVESTMENT HOLDINGS OF CHINA, INC.)**
 **(A
          Development Stage Company)**
 **Notes
          to Financial Statements**
 **For
          the Nine Month Period Ended July 31, 2006 and**
 **2005
          and For the Period from August 19, 2004 (Inception)**
 **to** **July
          31, 2006 (Unaudited)**
   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 service 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 consolidated financial
        statements.
   8
 **MEDARTS
          MEDICAL SYSTEM, INC.**
 **(FORMERLY, UNISE
          INVESTMENT HOLDINGS OF CHINA, INC.)**
 **(A
          Development Stage Company)**
 **Notes
          to Financial Statements**
 **For
          the Nine Month Period Ended July 31, 2006 and**
 **2005
          and For the Period from August 19, 2004 (Inception)**
 **to** **July
          31, 2006 (Unaudited)**
 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.  The Company has not evaluated
        the impact of this pronouncement its financial statements.
 
 **NOTE
        5 - INCOME TAXES**
  No
        provision for income taxes has been recorded since the Company has incurred
        net
        losses since inception.
  At  July
        31,
        2006, deferred tax assets consist of:
  Net
                  operating loss carryforward
              
              $
              5,215Less
                  valuation allowance
              
              
              (5,215
              )Net
              
              $
              -
  
 Based
        on
        management’s present assessment, the Company has not yet determined it to be
        more likely than not that a deferred tax asset of $753 attributable to the
        future utilization of the $5,215 net operating loss carryforward as of July
        31,
        2006 will be realized. Accordingly, the Company has provided a 100% allowance
        against the deferred tax asset in the financial statements at  July
        31,
        2006. The Company will continue to review this valuation allowance and make
        adjustments as appropriate. The net operating loss carryforward expires in
        years
        2024, 2025, and 2026 in the amounts of $600, $1,350 and $3,265,
        respectively.
 
 Current
        tax laws limit the amount of loss available to be offset against future taxable
        income when a substantial change in ownership occurs. Therefore, the amount
        available to offset future taxable income may be limited.
  **NOTE
        6 - RELATED PARTY TRANSACTIONS**
  The
        Company uses the offices of Shaanxi at no cost to the Company. Shaanxi has
        agreed to continue this arrangement until the Company completes an acquisition
        or merger.
  **NOTE
        7 - RECLASSIFICATION**
 
 Certain
        prior period amounts have been reclassified to conform to the nine-month
        period
        ended July 31, 2006 presentation.








9






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




This
      Quarterly Report on Form 10-QSB includes “forward-looking” statements within the
      meaning of Section 27A of the Securities Act of 1933, as amended (the Securities
      Act), and Section 21E of the Securities Exchange Act of 1934, as amended (the
      Exchange Act), which can be identified by the use of forward-looking terminology
      such as, “may,” “believe,” “expect,” “intend,” “anticipate,” “estimate” or
“continue” or the negative thereof or other variations thereon or comparable
      terminology. Although the Company believes that the expectations reflected
      in
      such forward-looking statements are reasonable, it can give no assurance that
      such expectations will prove to have been correct. Important factors with
      respect to any such forward-looking statements include, but are not limited
      to,
      the Company’s limited history of operations, the availability of additional
      capital necessary to execute the Company’s plan of operations, the volatility of
      the over-the-counter bulletin board market and the effect of such volatility
      on
      the value of the marketable securities received by the Company for its services,
      and changes in the state and federal regulation of securities, as well as the
      availability of necessary personnel and general economic conditions within
      the
      United States.




Plan
      of Operation




The
      Registrant is continuing its efforts to locate a merger Candidate for the
      purpose of a merger. It is possible that the registrant will be successful
      in
      locating such a merger candidate and closing such merger. However, if the
      registrant cannot effect a non-cash acquisition, the registrant may have to
      raise funds from a private offering of its securities under Rule 506 of
      Regulation D. There is no assurance the registrant would obtain any such equity
      funding.




Results
      of Operation




The
      Company did not have any operating income from inception (August 19, 2004)
      through July 30, 2006, the registrant recognized a net loss of $5,215. Some
      general and administrative expenses from inception were accrued. Expenses from
      inception were comprised of costs mainly associated with legal, accounting
      and
      office.




Liquidity
      and Capital Resources




At
      July
      30, 2006 the Company had no capital resources and will rely upon the issuance
      of
      common stock and additional capital contributions from shareholders to fund
      administrative expenses pending acquisition of an operating company.




Management
      anticipates seeking out a target company through solicitation. Such solicitation
      may include newspaper or magazine advertisements, mailings and other
      distributions to law firms, accounting firms, investment bankers, financial
      advisors and similar persons, the use of one or more World Wide Web sites and
      similar methods. No estimate can be made as to the number of persons who will
      be
      contacted or solicited. Management may engage in such solicitation directly
      or
      may employ one or more other entities to conduct or assist in such solicitation.
      Management and its affiliates will pay referral fees to consultants and others
      who refer target businesses for mergers into public companies in which
      management and its affiliates have an interest. Payments are made if a business
      combination occurs, and may consist of cash or a portion of the stock in the
      Company retained by management and its affiliates, or both.




The
      Company and or shareholders will supervise the search for target companies
      as
      potential candidates for a business combination. The Company and or shareholder
      may pay as their own expenses any costs incurred in supervising the search
      for a
      target company. The Company and or shareholders may enter into agreements with
      other consultants to assist in locating a target company and may share stock
      received by it or cash resulting from the sale of its securities with such
      other
      consultants.




10


Critical
      Accounting Policies




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





**Item
      3.**  **Controls
      and Procedures**





(a)  Evaluation of disclosure controls and procedures.




Under
      the
      supervision and with the participation of our management, including our
      principal executive officer and principal financial officer, we conducted an
      evaluation of our disclosure controls and procedures, as such term is defined
      under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities
      Exchange Act of 1934, as amended (Exchange Act), as of July 30, 2006. Based
      on
      this evaluation, our principal executive officer and principal financial officer
      have concluded that our disclosure controls and procedures are effective to
      ensure that information required to be disclosed by us in the reports we file
      or
      submit under the Exchange Act is recorded, processed, summarized, and reported
      within the time periods specified in the Securities and Exchange Commission’s
      rules and forms and that our disclosure and controls are designed to ensure
      that
      information required to be disclosed by us in the reports that we file or submit
      under the Exchange Act is accumulated and communicated to our management,
      including our principal executive officer and principal financial officer,
      or
      persons performing similar functions, as appropriate to allow timely decisions
      regarding required disclosure.





(b)  Changes
      in internal controls.




There
      were no changes (including corrective actions with regard to significant
      deficiencies or material weaknesses) in our internal controls over financial
      reporting that occurred during the third quarter ended July 30, 2006 that has
      materially affected, or is reasonably likely to materially affect, our internal
      control over financial reporting.




**PART
      II - OTHER INFORMATION**




**Item
      1.**  **Legal
      Proceedings.**




We
      are
      currently not a party to any pending legal proceedings and no such actions
      by,
      or to the best of our knowledge, against us have been threatened.





**Item
      2.**   **Unregistered
      Sales of Equity Securities and Use of Proceeds.**




None





**Item
      3.**   **Defaults
      Upon Senior Securities.**




None





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




No
      matter
      was submitted during the quarter ending July 30, 2006, covered by this report
      to
      a vote of our shareholders, through the solicitation of proxies or
      otherwise.




**Item
      5.**  **Other
      Information.**




None


11





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




(a)
            Reports
                on Form 8-K and Form 8K-ANone(b)
            Exhibits**Exhibit
                Number**
            **Exhibit
                Title**31.1
            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
            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
            Certification
                of Chief Executive Officer pursuant to 18 U.S.C. Section 1350 as
                adopted
                pursuant to Section 906 of the Sarbanes-Oxley Act of
                2002.32.2
            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.









12








**SIGNATURES**




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




**MEDARTS
                MEDICAL SYSTEM, INC.**By:
            */s/
                Wang Jun*Wang
                Jun
              Chief
                Executive Officer
              PresidentDated:
            November
                13, 2006