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

                                   FORM 10-QSB
(Mark One)

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

      FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2006

                                       OR

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

      For the transition period from _______ to ________.

      Commission File Number - None

                    NEW TAOHUAYUAN CULTURE TOURISM CO., LTD.

         Nevada                                        98-0440893
---------------------------                    -------------------------
State or other jurisdiction                      (I.R.S.) Employer
 of incorporation                                 Identification No.

                                1# Dongfeng Road
                   Xi'an Weiyang Tourism Development District
                                  Xi'an, China
                     Address of principal executive offices

                                0086-29-86671555
               Registrant's telephone number, including area code

                                     N/A
                  Former address of principal executive offices

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 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) had been subject to such filing
requirements for the past 90 days.

      Yes        X               No
            ---------                  ----

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

      Yes                        No    X
            --------                 ------

     As of May 15, 2006 the Company had 17,027,328 outstanding shares of common
stock.


<PAGE>










                   Condensed Consolidated Financial Statements
                       New Taohuayuan Culture Tourism Company Limited
                   Three months ended March 31, 2006 and 2005




<PAGE>


New Taohuayuan Culture Tourism Company Limited

Condensed Consolidated Statements of Operations
-------------------------------------------------------------------------------

                                                             (Unaudited)
                                                         Three months ended
                                                              March 31,
                                                        ---------------------
                                                        2006            2005
                                              Note       US$             US$
Operating revenues
Catering services income                               497,809       447,730
Hotel and related services income                      384,922       326,983
Management fee income                         5(c)     312,756       362,902
                                                     ---------     ---------
                                                     1,195,487     1,137,615
                                                     ---------     ---------
Operating expenses
Depreciation                                           127,156       123,969
Raw materials and consumables used                     199,842       171,346
Salaries, wages and allowances                          91,933        80,321
General and administrative expenses                    137,048       133,794
Other taxes                                             62,493        70,093
                                                      ---------     ---------
Total operating expenses                               618,472       579,523
                                                      ---------     ---------
Income from operations                                 577,015       558,092
                                                      ---------     ---------
Non-operating income (expense)
Interest income                                            296            20
Sundry income                                            3,988         1,985
Surcharge on taxes                            7(b)    (367,457)     (293,088)
                                                      ---------     ---------
                                                      (363,173)     (291,083)
                                                      ---------     ---------
Income before income tax                               213,842       267,009
Income tax                                    4       (278,374)     (198,926)
                                                      ---------     ---------
Net (loss) income                                      (64,532)       68,083
                                                      =========     =========
Earnings (Loss) per share
- Basic                                                   0.00          0.00
- Diluted                                                 0.00          0.00
                                                      =========     =========

The financial  statements  should be read in conjunction  with the  accompanying
notes.


                                     1 of 9
<PAGE>

New Taohuayuan Culture Tourism Company Limited

Condensed Consolidated Balance Sheet
-------------------------------------------------------------------------------
                                                                (Unaudited)
                                                                   As of
                                                                 March 31,
                                                                  2006  US$
ASSETS                                                Note

Current assets
Bank balances and cash                                             52,732
Trade receivables                                                  30,580
Prepayments and other debtors                                      40,999
Inventories                                                        44,205
Due from related parties                              5(b)        786,298
                                                                ---------

Total current assets                                              954,814
Property, plant and equipment, net                              8,808,165
Prepayments                                           6        15,842,188
Deferred tax assets                                               739,838
                                                               -----------
Total assets                                                   26,345,005
                                                               ===========
LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities
Trade payables                                                    124,908

Accrued charges and other creditors                               867,719
Deposits                                                           56,866
Income tax payable                                               5,062,334
Other taxes payable                                              1,662,982

Surcharge on taxes payable                            7(b)       3,101,507
                                                                -----------
Total current liabilities                                       10,876,316
                                                                ----------

Commitments and contingencies                         7

Stockholders' equity
Preferred stock, par value of US$0.001
   10,000,000 shares of stock authorized,
     none issued and outstanding
Common stock, par value of US$0.001 50,000,000
     shares of stock authorized, 17,027,328
     shares of stock issued and outstanding                        17,027

Additional paid-in capital                                     14,922,428
Statutory reserves                                              1,584,607
Other comprehensive income                                        352,710
Accumulated losses                                             (1,408,083)
                                                              ------------
Total stockholders' equity                                     15,468,689
                                                              -----------
Total liabilities and stockholders' equity                     26,345,005
                                                              ============

The financial statements should be read in conjunction with the accompanying
notes.


                                     2 of 9
<PAGE>



New Taohuayuan Culture Tourism Company Limited

Condensed Consolidated Statements of Cash Flows
-------------------------------------------------------------------------------
                                                              (Unaudited)
                                                         Three months ended
                                                              March 31,
                                                        -----------------------
                                                        2006           2005
                                                         US$            US$

Cash flows from operating activities:
Net (loss) income                                      (64,532)       68,083

Adjustments to reconcile net (loss) income to
  net cash provided by operating activities:
    Depreciation                                       127,156       123,969
    Changes in working capital:
      Trade receivables                                (10,594)        1,311
      Prepayments and other debtors                     (1,621)       (3,494)
      Inventories                                         (103)       (3,539)
      Due from related parties                         (77,631)     (277,141)
      Trade payables                                   (34,338)       17,052
      Accrued charges and other creditors               (4,758)      (14,791)
      Deposits                                         (25,784)        7,077
      Income tax payable                               223,737       201,554
      Other taxes payable                               43,550        33,078
      Surcharge on taxes                               367,457       293,088
      Deferred tax assets                               54,637        (2,628)
                                                    ----------   -----------
Net cash provided by operating activities              597,176       443,619
                                                     ---------     ---------

Cash flows from investing activities:
Purchase of property, plant and equipment               (5,914)       (5,812)
Prepayments                                           (606,933)     (471,773)
                                                     ---------      --------
Net cash used in investing activities                 (612,847)     (477,585)
                                                      --------      --------

Net decrease in cash and cash equivalents              (15,671)      (33,966)

Cash and cash equivalents at beginning of period        68,403        93,294
                                                      --------    ----------

Cash and cash equivalents at end of period,
  represented by bank balances and cash                 52,732        59,328
                                                      ========     =========


The financial  statements  should be read in conjunction  with the  accompanying
notes.


                                     3 of 9
<PAGE>

New Taohuayuan Culture Tourism Company Limited

Notes to the Condensed Consolidated Financial Statements
-------------------------------------------------------------------------------

1. BASIS OF PRESENTATION

      The accompanying unaudited condensed consolidated financial statements
      have been prepared in accordance with generally accepted accounting
      principles for interim financial information and with the instructions to
      Form 10-QSB and Article 10 of Regulation S-B. Accordingly, they do not
      include all of the information and footnotes required by generally
      accepted accounting principles for complete financial statements. In the
      opinion of management, all adjustments (consisting of normal recurring
      accruals) considered necessary for a fair presentation have been included.
      Operating results for the three month period ended March 31, 2006 are not
      necessarily indicative of the results that may be expected for the year
      ending December 31, 2006.

      These financial statements should be read in conjunction with the
      consolidated financial statements for the year ended December 31, 2005
      included in the Company's Form 10-KSB filed on April 14, 2006.


2. ORGANIZATION AND PRINCIPAL ACTIVITIES

      New Taohuayuan Culture Tourism Company Limited ("New Tao") was
      incorporated under the laws of the state of Nevada on November 3, 2004.
      New Tao is an investment holding company and its subsidiary, Shaanxi New
      Taohuayuan Culture Tourism Company Limited ("Shaanxi THY"), principally
      operates a resort in Xian, the People's Republic of China, providing
      catering, hotel and related services.

      In November 2004, Shaanxi THY was converted  into a wholly  foreign owned
      enterprise.


3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      Basis of accounting

      The financial statements have been prepared in accordance with generally
      accepted accounting principles in the United States of America.

      Preparation of financial statements

      The Company had negative working capital of US$9,921,502 as of March 31,
      2006. This raised substantial doubt about the Company's ability to
      continue as a going concern. The negative working capital mainly arises
      from the provision for income and other taxes and related surcharge as
      discussed in note 7(b) to the financial statements. Management believes
      that the Company will be able to negotiate a settlement in installments
      with the PRC tax authority if the PRC tax authority demands payment. In
      addition, since the Company has generated positive operating cash flows,
      management is confident that the Company will be able to settle other
      liabilities by internally generated funds from operations. Therefore, the
      Company will have sufficient funds to settle its liabilities when they
      come due. As a result, the financial statements have been prepared in
      conformity with the principles applicable to a going concern.

                                     4 of 9
<PAGE>

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

      Revenue recognition

      The Company generally recognizes catering, hotel and related service
      revenues when persuasive evidence of an arrangement exists, services are
      rendered, the fee is fixed or determinable, and collectability is
      probable. Such service revenues are recognized net of discounts.
      Management fee income is recognized when services are rendered in
      accordance with the agreements (see note 5(c)(i)).

      Income and other taxes

      Provision for income and other taxes has been made in accordance with the
      tax rates and laws in effect in the PRC.

      Deferred taxes are provided using the liability method for all significant
      temporary differences between the financial statement carrying amounts of
      existing assets and liabilities and their respective tax bases and net
      operating loss carry-forwards. The tax consequences of those differences
      are classified as current or non-current based on the classification of
      the related assets or liabilities in the financial statements.

      Foreign currency translation

      The Company considers Renminbi its functional currency as a substantial
      portion of the Company's business activities are based in Renminbi
      ("RMB"). However, the Company has chosen the United States dollar as its
      reporting currency.

      Transactions in currencies other than the functional currency during the
      period are translated into the functional currency at the applicable rates
      of exchange prevailing at the time of the transactions. Monetary assets
      and liabilities denominated in currencies other than the functional
      currency are translated into the functional currency at the applicable
      rates of exchange in effect at the balance sheet date. Exchange gains and
      losses are recorded in the statements of operations.

      For translation of financial statements into the reporting currency,
      assets and liabilities are translated at the exchange rate at the balance
      sheet date, equity accounts are translated at historical exchange rates,
      and revenues, expenses, gains and losses are translated at the weighted
      average rates of exchange prevailing during the period. Translation
      adjustments resulting from this process are recorded in accumulated other
      comprehensive income (loss) within stockholders' equity.

                                     5 of 9
<PAGE>

4.    INCOME TAX

   The Company is subject to the PRC enterprise income tax at the rate of 33%.
   The income tax expense comprised:

                                                            (Unaudited)
                                                         Three months ended
                                                              March 31,
                                                         -------------------
                                                          2006         2005
                                                           US$          US$

      Current tax expense                                223,737      201,554
      Deferred  tax expense (benefit)                     54,637       (2,628)
                                                       ---------     ---------
                                                         278,374      198,926
                                                       =========     =========

5. RELATED PARTY TRANSACTIONS

   In addition to the transactions/information disclosed elsewhere in these
   financial statements, the Company had the following transactions with related
   parties.

      (a)  Name and relationship of related parties

     Name                                      Relationships with the Company

     Chen Jingmin                              A director and stockholder of the
                                               Company

     Shaanxi New Taohuayuan Economy Trade      The principal stockholder of the
     Company Limited ("Trading  Company")      Company in which Chen Jingmin
            *                                  has control and  a  beneficial
                                               interest

     Shaanxi Wenhao Zaliang Shifu,             A stockholder of the Company in
            Limited ("Wenhao") *               which Chen Jingmin has control
                                               and a beneficial interest

*    The  official  names are in Chinese  and the  English  names are a straight
     translation for reference only.

                                     6 of 9
<PAGE>

5. RELATED PARTY TRANSACTIONS (CONTINUED)

(b)   Due from related parties
                                                             (Unaudited)
                                                               As of
                                                            March 31, 2006
                                                            ---------------
                                                    Note          US$

           Due from Trading Company                  (i)        520,966
           Due from Wenhao                           (i)        265,332
                                                               --------
                                                                786,298
                                                               ========

(i)  The  amounts   due  from   Trading   Company  and  Wenhao  are   unsecured,
     interest-free and have no fixed repayment terms.

(c)   Summary of related party transactions
                                                               (Unaudited)
                                                           Three months ended
                                                                March 31,
                                                           ------------------
                                                   Note     2006        2005
                                                             US$         US$
           Management fee income earned from:
           - Trading Company                        (i)     49,546     105,847
           - Wenhao                                 (i)    263,210     257,055
           Laundry income earned from:
           - Trading company                       (ii)      2,477       5,444
           - Wenhao                                (ii)      7,432       6,048
           Rental and other services income
              earned from Trading Company         (iii)         --       8,073
                                                           =======    ========

(i)  The Company  entered into  management  agreements  with Trading Company and
     Wenhao on  January  15,  2004 for a period of five  years  commencing  from
     January 15,  2004.  The annual  management  fees from  Trading  Company and
     Wenhao are fixed at US$433,524 and US$1,052,843 respectively,  plus a bonus
     calculated  at 15% on  the  excess  of the  actual  revenue  over  targeted
     revenue. There was no bonus management fee income earned by the Company for
     the three months ended March 31, 2006 and 2005.

(ii) Pursuant to  agreements  entered  into  between the Company and the related
     parties  effective  from  January 1, 2004,  the  Company  provides  laundry
     services  to Trading  Company and Wenhao at annual  fees of  US$22,295  and
     US$29,727, respectively.of US$22,295 and US$29,727, respectively.

                                     7 of 9
<PAGE>

5. RELATED PARTY TRANSACTIONS (CONTINUED)

      (c)   Summary of related party transactions (Continued)

           The amounts of management fee income and laundry income from Trading
           Company recognized during the three months ended March 31, 2006 were
           different from the amounts stipulated in the agreements because
           Trading Company has suspended business for renovation from
           mid-February to March 31, 2006 and therefore no income was earned
           from Trading Company during that period.

(iii) The  Company  entered  into a rental agreement  with  Trading  Company on
      January 15, 2004.  The rental  income was charged at a 50% discount of the
      standard daily rate. No rental income was earned from Trading  Company for
      the three months ended March 31, 2006.


6. PREPAYMENTS

      The balance as of March 31, 2006 included prepayments of US$14,479,685
      made to the local government for acquisition of a piece of land in the
      PRC. Pursuant to an agreement signed on May 26, 2002 (the "Agreement"),
      total estimated consideration for the land is approximately US$15 million.
      There is no specific due date for payment of the balance of the
      consideration in the Agreement.

      The Company proposes to use the land for property development. The
      Agreement stipulates that the planning and preparation works should be
      completed by the end of 2002 while the construction work should have
      commenced by March 2003. Up to March 31, 2006, the Company paid design and
      planning fees of US$1,362,503. Although the project has been delayed,
      management believes that the Agreement still remains effective and there
      is no penalty for the delay pursuant to the Agreement.

      Although it is the present intention of the management to develop the
      land, the Company shall have a right to dispose of the land through the
      local government. The land was valued by international professional
      valuation specialists on a depreciated replacement cost basis and its
      value at December 31, 2005 was approximately US$19 million.


                                     8 of 9
<PAGE>



7. COMMITMENTS AND CONTINGENCIES

      (a)  Capital commitment

          As of March 31, 2006, the Company had capital expenditure  commitments
          contracted  but  not  provided  for  net  of  deposits  paid  for  the
          acquisition of land as mentioned in note 6 to the financial statements
          amounting to US$383,977.

      (b)  Contingencies

          Prior to the  conversion  into a wholly  foreign  owned  enterprise as
          mentioned in note 1 above,  Shaanxi THY had certain  arrangements with
          the local  government  that the total  taxes  payable of the  Company,
          including  mainly the PRC enterprise  income tax and business tax, was
          subject to a maximum  amount of US$123,864  per annum and that Shaanxi
          THY was not  liable for any taxes in excess of that  amount.  However,
          this   arrangement  is  not  in  compliance  with  national  laws  and
          regulations in the PRC. For this reason, the Company has made full tax
          provision  in  accordance  with  relevant  national and local laws and
          regulations in the PRC,  together with a default  interest that may be
          levied on the  Company at a daily  rate of 0.05% of the unpaid  taxes.
          Other taxes include mainly business tax, which have been provided at a
          certain  percentage on the revenues  derived by the Company during the
          periods.  Despite the fact that the Company has made full provision of
          the taxes and related  default  interest in the financial  statements,
          the Company may be subject to  penalties  ranging  from 50% to 500% of
          the  underpaid  tax  amounts.  The exact  amount of penalty  cannot be
          estimated with any reasonable degree of certainty.



                                     9 of 9
<PAGE>

ITEM 2.  MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND PLAN OF
         OPERATION

     You should read the  following  discussion  and  analysis of our  financial
condition and results of operations in conjunction with our financial statements
and  the  related  notes  included  elsewhere  in  this  report.  Our  financial
statements  have been  prepared in  accordance  with U.S.  GAAP.  The  following
discussion and analysis contains  forward-looking  statements that involve risks
and  uncertainties.  Actual results could differ materially from those projected
in the forward-looking statements.

Overview

      We own and operate the Taohuayuan Inn hotel and resort located in the city
of Xi'an, province of Shaanxi, in the PRC. The Taohuayuan Inn has 23 courtyards
with 146 rooms and 292 beds.

      We manage the DongJin Taoyuan Villas, a hotel and resort property
approximately 10 miles from downtown Xi'an. DongJin Taoyuan Villas has 84 rooms
and 168 beds.

      We also manage a chain of three traditional Chinese restaurants. Two of
the restaurants are in Xi'an, and one is in Beijing.

      We receive fees for managing the DongJin Taoyuan Villas and the three
restaurants.

      Room rates in the Shaanxi province are established by the Shaanxi Price
Bureau. Room rates are established for each hotel or resort in the Shaanxi
Province and are based upon a number of factors, including the quality of the
property and amenities offered. Room rates may be changed at any time by the
Shaanxi Price Bureau based upon economic conditions in China.

      Our business is not seasonal in nature.

Results of Operation for the three months ended March 30, 2006 compared to three
months ended March 31, 2005

      Key performance indicators which we use to manage our business and to
assess future operating results are shown below:

                                       Increase or
      Category                        (Decrease) US$     Percentage

      Operating Revenue                   57,872            5.1%
      Operating Expenses                  38,949            6.7%
      Non-Operating Expenses              72,090           24.8%
      Income Tax                          79,448           40.0%
      Net Income                        (132,615)       (194.8)%


<PAGE>

Operating Revenues

                              Three months ended
                                   March 31,          Increase or
Category                     2006 US$     2005 US$   (Decrease) US$  Percentage
--------                     --------     --------   --------------  ----------

Catering Services Revenue     497,809     447,730        50,079       11.19%
Hotel and Related Services
     Revenue                  384,922     326,983        57,939       17.72%
Management Revenue            312,756     362,902       (50,146)    (13.82)%
                           ----------   ---------     ---------
   Total                    1,195,487   1,137,615        57,872         5.1%
                            =========   =========     =========

     The increase in Catering Services revenue was due to the new menu items
introduced this year. Hotel and Related Services revenue was lower than normal
last year as a result of cold weather and heavy snow during the first three
months of 2005. The winter was not as severe this year and our occupancy rate
for the first three months of 2006 improved to 79%, as compared to 52% for the
same period last year. Management revenues decreased because the Dongjin Taoyuan
Villas closed for repairs on February 13, 2006.

Operating Expenses

                              Three months ended
                                   March 31,          Increase or
Category                     2006 US$     2005 US$   (Decrease) US$  Percentage
--------                     --------     --------   --------------  ----------

Depreciation                  127,156     123,969        3,187        2.57%
Raw material and
   consumables used           199,842     171,346       28,496       16.63%
Salaries, Wages and
   Allowances                  91,933      80,321       11,612       14.46%
General and Administrative    137,048     133,794        3,254        2.43%
Other taxes                    62,493      70,093       (7,600)      10.84%
                            ---------    --------     --------
   Total Operating Expenses   618,472     579,523       38,949         6.7%
                            =========    ========      =======

      The cost of our raw materials and consumables for the three months ended
March 31, 2006 increased in line with the increases in revenue from Catering
Services and Hotel and Related Services.

      Salaries, Wages and Allowances increased due to the hiring of new
management personnel and higher wages paid to our power station engineers.

     General and Administrative expenses increased from the comparable period in
2005 since we hired more employees during the first three months of 2006. We
also hosted more events during the 2006 spring festival which resulted in more
power consumption.


                                       2
<PAGE>

Non-operating Income (Expense)


                              Three months ended
                                   March 31,          Increase or
Category                     2006 US$     2005 US$   (Decrease) US$  Percentage
--------                     --------     --------   --------------  ----------

Interest Revenue                296          20            276       1380.00%
Sundry Revenue                 3,988       1,985         2,003        100.91%
Surcharge on taxes          (367,457)   (293,088)       74,369         25.37%
                            ---------   ---------     --------
Total Non-operating Expense (363,173)   (291,083)       76,648          26.3%
                            =========   =========     ========

      We had arrangements with the local government which provided that our
total taxes payable, including the PRC enterprise income and business tax, would
be subject to a maximum of US$123,864 per year. Since this arrangement was not
in compliance with the national laws and regulations in the PRC we made accruals
for all taxes which may be due in accordance with PRC laws and regulations,
together with interest on the unpaid taxes at a rate of 0.05% per day. The
increase in the surcharge on taxes was the result of the accumulation of
additional unpaid taxes.

Income tax

      Our effective tax rates were 130% and 75% respectively for the three
months ended March 31, 2006 and 2005. The difference between the effective tax
rate and the PRC enterprise income tax rate is mainly due to the surcharge on
taxes which we are accruing and which is not deductible for PRC enterprise
income tax purposes.

Liquidity and Capital Resources

       Our material sources (uses) of cash during the following periods were:

                                              Three months       Three months
                                                 ended              ended
                                             March 31, 2006     March 31, 2005
                                             --------------     --------------

  Cash provided by operations                   $597,176           $443,619
  Purchase of property, plant and equipment      (5,914)            (5,812)
  Payment for land use rights                   606,933)          (471,773)
  Cash on hand at beginning of period            68,403             93,294


      We intend to develop an 848 acre commercial and residential development in
Lantian, a city located approximately 23 miles from Xi'an and a 150 room hotel
and resort in Xi'an. We have not started actual construction work on these
projects.

     As of March 31, 2006 project expenditures for the mixed-use  development in
Lantian were  $14,480,000 for the land use rights and $1,363,000 for preliminary


                                       3
<PAGE>

planning  and design.  We  anticipate  that the  remaining  costs to develop the
project,  excluding  the remaining  $2,325,000  payment for the land use rights,
will  be  approximately   $45,000,000  over  five  years.  We  expect  to  begin
construction on the property in 2007.

      As of March 31, 2006 project expenditures for the hotel and resort in Xian
were $1,258,000 for the land use rights. We expect to complete the New Hainan
hotel and resort project in 2007 and commence operations at the end of 2007. The
remaining costs to develop the project are expected to be approximately
$5,000,000.

      We had a written arrangement with the local government which provides that
the total taxes payable by us, including the PRC enterprise income tax and
business tax, would be subject to a maximum amount of US$123,864 per year.
However, this arrangement was not in compliance with the national tax laws and
regulations in the PRC which require that taxes are based upon a percentage of
taxable income and are not limited to a specific amount. Accordingly, we have
accrued all taxes which may be due in accordance with relevant national and
local laws and regulations in the PRC, together with a surcharge for interest
that may be levied on the unpaid taxes at a rate of 0.05% per day. By December
31, 2006 we plan to resolve this issue with the national PRC taxing authorities.
If the PRC taxing authority demands payment of all taxes and interest which they
claim are due we believe that we will be able to pay the amounts owed in
installments with cash from our operations. We do not have any legal opinion
concerning the validity of our tax agreement with the local government.

       Based upon the foregoing, our future capital requirements are:

                                                   Projected
Activity                                           Time Frame    Estimated Cost
--------                                          -----------    --------------
Pay remaining amount for land use rights
  for Lantian project                               12/2006       $ 2,325,000
Construction and development costs -
  Lantian project                                 2007-2012       $45,000,000
Construction and development costs - New
  Hanian project                                  2006-2007       $ 5,000,000
Accrued taxes                                       Unknown       $ 9,827,000

      We have financed our operations to date through the sale of our common
stock and cash generated by our operations. As of March 31, 2006 expenditures
for the Lantian and New Hainan projects have been funded with cash from our
operations and proceeds from the sale of our common stock. We expect to finance
the remaining costs for the Lantian and New Hainan projects through cash from
our operations and loans. Loans would be collateralized by the property and
issued in conjunction with the government. However, required financing may not
be available to us, in which case the development of the projects may take
additional time or we may be unable to develop the projects. At present, we do
not have any lines of credit or other bank financing arrangements.

      We do not know of any trends, events or uncertainties that have, or are
reasonably likely to have, a material impact on our short-term or long-term
liquidity other than our need to pay the taxes and surcharges which we have
accrued as liabilities on our March 31, 2006 balance sheet.


                                       4
<PAGE>

Restrictions on currency exchange

         Substantially all of our projected revenues and operating expenses are
denominated in Renminbi. The Renminbi is currently freely convertible under the
"current account", which includes dividends, trade and service-related foreign
exchange transactions, but not under the "capital account", which includes
foreign direct investment and loans.

         We may purchase foreign exchange for settlement of "current account
transactions", including payment of dividends to our shareholders, without the
approval of the State Administration for Foreign Exchange. We may also retain
foreign exchange in our current account, subject to a ceiling approved by the
State Administration for Foreign Exchange, to satisfy foreign exchange
liabilities or to pay dividends. However, the Chinese government may change its
laws or regulations and limit or eliminate our ability to purchase and retain
foreign currencies in the future.

      Since a significant amount of our future revenues will be denominated in
Renminbi, the existing and any future restrictions on currency exchange may
limit our ability to utilize revenues generated in Renminbi to fund any business
activities outside China or fund expenditures denominated in foreign currencies.

Reserves

      In accordance with current Chinese laws, regulations and accounting
standards, we are required to set aside as a general reserve at least 10% of our
respective after-tax profits. Appropriations to the reserve account are not
required after these reserves have reached 50% of our registered capital. These
reserves are created to fund potential operating losses and are not
distributable as cash dividends. We are also required to set aside between 5% to
10% of our after-tax profits to the statutory public welfare reserve. In
addition and at the discretion of our directors, we may set aside a portion of
our after-tax profits for enterprise expansion funds, staff welfare and bonus
funds and a surplus reserve. These statutory reserves and funds can only be used
for specific purposes and may not be used for dividends.

Critical Accounting Policies and Estimates

      We prepare financial statements in conformity with U.S. GAAP, which
requires us to make estimates and assumptions that affect the reported amounts
of assets and liabilities, disclosure of contingent assets and liabilities on
the date of the financial statements, and the reported amounts of revenue and
expenses during the financial reporting period. We continually evaluate these
estimates and assumptions based on the most recently available information, our
own historical experience and various other assumptions that are believed to be
reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying values of assets and liabilities that are
not readily apparent from other sources. Since the use of estimates is an
integral component of the financial reporting process, actual results could
differ from those estimates. Some of our accounting policies require higher
degrees of judgment than others in their application. We consider the policies
discussed below to be critical to an understanding of our financial statements
as their application assists management in making their business decisions


                                       5
<PAGE>

Revenue recognition

        We generally recognize service revenues when persuasive evidence of an
arrangement exists, services are rendered, the fee is fixed or determinable, and
collectibility is probable. Service revenues are recognized net of discounts.

Foreign currency translation

        We consider Renminbi as our functional currency as a substantial portion
of our business activities are based in Renminbi ("RMB"). However, we have
chosen the United States dollar as our reporting currency.

        Transactions in currencies other than the functional currency during the
year are translated into the functional currency at the applicable rates of
exchange prevailing at the time of the transactions. Monetary assets and
liabilities denominated in currencies other than the functional currency are
translated into the functional currency at the applicable rates of exchange in
effect at the balance sheet date. Exchange gains and losses are recorded in the
statements of operations.

      For translation of financial statements into the reporting currency,
assets and liabilities are translated at the exchange rate at the balance sheet
date, equity accounts are translated at historical exchange rates, and revenues,
expenses, gains and losses are translated at the weighted average rates of
exchange prevailing during the period. Translation adjustments resulting from
this process are recorded in accumulated other comprehensive income (loss)
within stockholders' equity.

Property, plant and equipment and depreciation

            Property, plant and equipment are stated at cost less accumulated
depreciation.

            The cost of an asset consists of its purchase price and any directly
attributable costs of bringing the asset to its present working condition and
location for its intended use. Expenditures incurred after the assets have been
put into operation, such as repairs and maintenance, are normally recognized as
an expense in the period in which they are incurred. In situations where it can
be clearly demonstrated that expenditure has resulted in an increase in the
future economic benefits expected to be obtained from the use of the assets, the
expenditure is capitalized.

            When assets are sold or retired, their costs and accumulated
depreciation are eliminated from the accounts and any gain or loss resulting
from their disposal is included in the statement of operations.

            Depreciation is calculated to write off the cost of property, plant
and equipment over their estimated useful lives as set out below, from the date
on which they become fully operational and after taking into account their
estimated residual values, using the straight-line method.


                                       6
<PAGE>

Taxes

      Although we had a written arrangement with the local government which
provides that the total taxes payable by us, including the PRC enterprise income
tax and business tax, would be subject to a maximum amount of US$123,864 per
year, we do not believe that this arrangement is in compliance with the national
tax laws and regulations in the PRC which require that taxes are based upon a
percentage of taxable income and are not limited to a specific amount.
Accordingly, we have accrued all taxes which may be due in accordance with
relevant national and local laws and regulations in the PRC, together with a
surcharge for interest that may be levied on the unpaid taxes at a rate of 0.05%
per day. If the taxes and interest we ultimately are required to pay are less
than the amounts we have accrued, we will reduce our recorded liability for
unpaid taxes.

ITEM 3. CONTROLS AND PROCEDURES

      Cai Danmei, the Company's Chief Executive and Financial Officer, has
evaluated the effectiveness of the Company's disclosure controls and procedures
as of a date prior to the filing date of this report, and in her opinion the
Company's disclosure controls and procedures are effective to ensure that
material information relating to the Company, including its consolidated
subsidiaries, is made known to her by others within those entities, particularly
during the period in which this report is being prepared, so as to allow timely
decisions regarding required disclosure. There have been no changes in the
Company's internal controls or in other factors that could significantly affect
the Company's internal controls. As a result, no corrective actions with regard
to significant deficiencies or material weakness in the Company's internal
controls were required.


                                       7
<PAGE>



                                     PART II
                                OTHER INFORMATION


Item 6. Exhibits and Reports on Form 8-K

(a) Exhibits

            Number        Exhibit

            31            Rule 13a-14(a) Certifications

            32            Section 1350 Certifications

(b) Reports on Form 8-K

            The Company did not file any reports on Form 8-K during the three
            months ended March 31, 2006.







<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 on May 17, 2006.

                                        NEW TAOHUAYUAN CULTURE TOURISM CO., LTD.



                                        By: /s/ Cai Danmei
                                            -------------------------------
                                            Cai Danmei, Chief Executive Officer,
                                            Principal Financial Officer and
                                            Principal Accounting Officer