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

                                    FORM 10-Q
(Mark One)

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

                For the quarterly period ended September 30, 2009

[ ]  TRANSITION REPORT UNDER 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.
                    ----------------------------------------
             (Exact Name of Registrant as Specified in its Charter)

                      Nevada                          Applied For
         -------------------------------          -------------------
         (State or other jurisdiction of           (I.R.S. Employer
          incorporation or organization)          Identification No.)

                                1# Dongfeng Road
                   Xi'an Weiyang Tourism Development District
                                  Xi'an, China
                  -------------------------------------------
               (Address of Principal Executive Offices) (Zip Code)

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

                                       N/A
     ----------------------------------------------------------------------
         Former name, former address, and former fiscal year, if changed
                                since last report

Indicate by check mark whether the registrant (1) filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the past 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 [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
definition of "large accelerated filer", "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act.

Larger accelerated filer  [ ]                Accelerated filer           [ ]
Non-accelerated filer     [ ]                Smaller reporting company   [X]

Indicate by check mark whether registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).      Yes [ ]      No  [X]

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: 18,727,327 shares outstanding
as of November 10, 2009.



<PAGE>


         NEW TAOHUAYUAN CULTURE TOURISM COMPANY LIMIITED AND SUBSIDIARY


                   UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

                               SEPTEMBER 30, 2009





                                TABLE OF CONTENTS





Unaudited consolidated Balance Sheets as of September 30, 2009
and December 31, 2008 ................................................        1

Unaudited consolidated Statements of Income...........................        2
for the three and nine month periods ended September 30, 2009
and 2008

Unaudited consolidated Statements of Cash Flows.......................        3
for the nine month periods ended September 30, 2009 and 2008

Notes to unaudited consolidated financial statements .................     4-16




<PAGE>


          NEW TAOHUAYUAN CULTURE TOURISM COMPANY LIMITED AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEETS
                 AS OF SEPTEMBER 30, 2009 AND DECEMBER 31, 2008
                                   (UNAUDITED)

                                           September 30, 2009  December 31, 2008
                                           ------------------  -----------------
                       ASSETS

Current assets
 Cash and cash equivalents                    $   10,096          $   89,252
 Accounts receivable, net                         13,972              39,657
 Inventories                                      78,290              77,147
 Prepaid expenses and other
  current assets                                   3,121               2,501
 Due from related parties                        549,376             566,748
                                          -------------------  -----------------
            Total Current Assets                 654,855             775,305

Property & equipment, net                      5,969,971           6,489,210

Construction-in- progress                     16,424,218          13,134,481

Land use right, net                            2,519,541           2,566,063

Deposit for land use right                    17,579,327          17,588,860
                                          -------------------  -----------------
Total assets                              $   43,147,913       $  40,553,918
                                          ===================  =================

           LIABILITIES AND STOCKHOLDERS' EQUITY

Current
liabilities
 Accounts payable and accrued expenses    $      684,702       $    627,391
 Deferred revenue                                105,884             60,217
 Taxes Payable                                 6,193,579          5,461,359
                                          -------------------  -----------------
       Total Current Liabilities               6,984,166          6,148,967

Stockholders' equity
 Common stock, $.001 par value, 50,000,000
  shares authorized, 18,727,327 issued and
  outstanding as of September 30, 2009 and
  December 31, 2008                               18,727             18,727
 Preferred stock, $.001 par value,
  10,000,000 shares authorized, none issued
  and outstanding
   Additional paid in capital                 15,855,727         15,855,727
   Statutory reserve                           2,463,301          2,285,706
   Other comprehensive income                  5,287,565          5,304,720
   Retained earnings                          12,538,427         10,940,071
                                          -------------------  -----------------
   Total stockholders' equity                 36,163,747         34,404,951
                                          -------------------  -----------------
Total liabilities and stockholders'
equity                                    $  43,147,913        $ 40,553,918
                                           =================   =================

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


                                       1
<PAGE>

          NEW TAOHUAYUAN CULTURE TOURISM COMPANY LIMITED AND SUBSIDIARY
        CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME
     FOR THE THREE AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 2009 AND 2008
                                   (UNAUDITED)

<TABLE>
<S>                                                                   <C>          <C>            <C>          <C>

                                                                    Three month periods        Nine month periods
                                                                           ended                      ended
                                                                        September 30               September 30
                                                                  -------------------------   ------------------------
                                                                      2009         2008          2009         2008
                                                                  -----------   -----------   ------------ -----------
Net revenue
 Catering and hotel related services income                      $ 1,256,043   $ 1,381,739   $ 3,570,610   $ 3,580,363
 Management fee income                                               506,648       503,494     1,514,944     1,482,190
                                                                 ------------  ------------  ------------  ------------
       Total net revenue                                           1,762,691     1,885,232     5,085,554     5,062,552

Cost of revenue                                                      411,745       397,949     1,284,666     1,087,631
                                                                 ------------  ------------  ------------  ------------
Gross profit                                                       1,350,946     1,487,283     3,800,888     3,974,921

Operating expenses
    General and administrative expenses                               50,269       299,204       883,734       939,896
    Depreciation and amortization                                    344,363       258,075       560,381       555,571
                                                                 ------------  ------------  ------------  ------------
       Total operating expenses                                      394,631       557,279     1,444,114     1,495,467
                                                                 ------------  ------------  ------------  ------------
Income from operations                                               956,314       930,004     2,356,773     2,479,454
                                                                 ------------  ------------  ------------  ------------
Other Income
  Interest income                                                        143           283           382         1,045
  Other income, net                                                    4,037         7,107        10,779        15,400
                                                                 ------------  ------------  ------------  ------------
       Total other income                                              4,180         7,390        11,161        16,445
                                                                 ------------  ------------  ------------  ------------
Income before income taxes                                           960,495       937,395     2,367,935     2,495,899

Provision for income taxes                                           240,124       232,545       591,984       624,011
                                                                 ------------  ------------  ------------  ------------
Net income                                                           720,371       704,850     1,775,951     1,871,889

Other comprehensive item:
 Foreign currency translation gain (loss)                             95,176       317,412       (17,155)    2,253,508
                                                                 ------------  ------------  ------------  ------------
Net comprehensive income                                         $   815,547   $ 1,022,262   $ 1,758,796   $ 4,125,397
                                                                 ============  ============  ============  ============
Earning per share:
    Basic & diluted earning per share                            $      0.04   $      0.06   $      0.09   $      0.10
                                                                 ============  ============  ============  ============
Weighted average number of shares
outstanding:
  Basic & diluted weighted average number of shares               18,727,327    18,727,327    18,727,327    18,727,327
                                                                 ============  ============  ============  ============
</TABLE>


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


                                       2
<PAGE>

          NEW TAOHUAYUAN CULTURE TOURISM COMPANY LIMITED AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
           FOR THE NINE MONTH PERIOD ENDED SEPTEMBER 30, 2009 AND 2008
                                   (UNAUDITED)

                                                        2009           2008
                                                    ------------   ------------

CASH FLOWS FROM OPERATING ACTIVITIES
 Net income                                         $ 1,775,951    $ 1,871,889
 Adjustments to reconcile net income to
  net cash provided by operating activities:
 Depreciation and amortization                          560,381        555,571
 Bad debt expense                                       109,748              -
  (Increase) / decrease in current assets:
    Accounts receivables                                (37,348)       (23,266)
    Inventory                                            (1,184)        48,535
    Other receivables                                    (1,353)        (1,562)
    Prepaid expenses and other current assets               732              -
    Increase/(decrease) in current liabilities:
    Accounts payable and accrued expenses                57,603        (53,693)
    Taxes Payable                                       734,564        787,194
    Deferred revenue                                     45,661        (42,874)
                                                    ------------   ------------
 Net cash provided by operating activities            3,244,755      3,141,794
                                                    ------------   ------------
CASH FLOWS FROM INVESTING ACTIVITIES
   Payment for construction in progress              (3,294,088)    (3,090,401)
   Advances to related parties                          (29,708)       (31,234)
                                                    ------------   ------------
   Net cash used in investing activities             (3,323,796)    (3,121,635)
                                                    ------------   ------------

   Effect of exchange rate changes on cash
     and cash equivalents                                  (115)         3,964
                                                    ------------   ------------
   Net increase/(decrease) in cash and
     cash equivalents                                   (79,156)        24,122

   Cash and cash equivalents, beginning balance          89,252         45,680
                                                    ------------   ------------
   Cash and cash equivalents, ending balance        $    10,096    $    69,802
                                                    ============   ============
SUPPLEMENTAL NONCASH FINANCIAL DISCLOSURES:

   Cash paid during the year for:
     Income tax payments                            $         -    $         -
                                                    ============   ============
     Interest payments                              $         -    $         -
                                                    ============   ============


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


                                       3
<PAGE>

          NEW TAOHUAYUAN CULTURE TOURISM COMPANY LIMITED AND SUBSIDIARY
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


Note 1 - ORGANIZATION

New Taohuayuan Culture Tourism Company Limited (the "Company") was incorporated
under the laws of the State of Nevada on November 3, 2004. The Company is an
investment holding company.

Shaanxi New Taohuayuan Culture Tourism Company Limited ("Shaanxi NTHY") was
incorporated in the People's Republic of China ("PRC") on August 3, 1997 as a
limited liability company. Shaanxi NTHY operates a resort in Xi'an, in the PRC,
providing catering, hotel and related services.

Pursuant to an agreement and plan of migratory merger between the Company and
Shaanxi NTHY on November 5, 2004, the Company acquired Shaanxi NTHY by issuing
17,027,328 shares of its common stock to the original shareholders of Shaanxi
NTHY in exchange for 100% of their membership interests (the "Merger"). As a
result, the controlling member of Shaanxi NTHY has effective and actual
operating control of the Company. The Merger was approved by the Shaanxi
Ministry of Commerce on November 24, 2004. Since then, Shaanxi NTHY has become a
wholly owned subsidiary of the Company and its status has changed to a wholly
owned foreign owned enterprise.

Since the Company had no operations or net assets prior to the acquisition, the
acquisition was considered to be a capital transaction in substance, rather than
a business combination and no goodwill was recognized. For financial reporting
purposes, the acquisition was treated as a reverse acquisition whereby Shaanxi
NTHY is considered to be the accounting survivor and the operating entity while
the Company is considered to be the legal survivor.

Note 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Unaudited Interim Financial Information

The accompanying unaudited consolidated financial statements have been prepared
by New Taohuayuan Tourism Company Limited pursuant to the rules and regulations
of the Securities and Exchange Commission (the "SEC") Form 10-QSB and Item 310
of Regulation S-B, and generally accepted accounting principles for interim
financial reporting. The information furnished herein reflects all adjustments
(consisting of normal recurring accruals and adjustments) which are, in the
opinion of management, necessary to fairly present the operating results for the
respective periods. Certain information and footnote disclosures normally
present in annual consolidated financial statements prepared in accordance with
accounting principles generally accepted in the United States of America have
been omitted pursuant to such rules and regulations. These consolidated
financial statements should be read in conjunction with the audited consolidated
financial statements and footnotes included in the Company's Annual Report on
Form 10-K as of December 31, 2008. The results of the nine month periods ended
September 30, 2009 are not necessarily indicative of the results to be expected
for the full year ending December 31, 2009.

Basis of Presentation

The accompanying consolidated financial statements have been prepared in
conformity with accounting principles generally accepted in the United States of
America. The Company's functional currency is the Chinese Renminbi (CNY);
however the accompanying consolidated financial statements have been translated
and presented in United States Dollars (USD).



                                       5
<PAGE>

          NEW TAOHUAYUAN CULTURE TOURISM COMPANY LIMITED AND SUBSIDIARY
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


Foreign currency transactions and comprehensive income (loss)

As of September 30, 2009, the accounts of Shaanxi NTHY were maintained, and its
financial statements were expressed, in Chinese Yuan Renminbi (CNY). Such
financial statements were translated into U.S. Dollars (USD) in accordance with
Statement of Financial Accounts Standards ("SFAS") No. 52 (ASC 830), "Foreign
Currency Translation," with the CNY as the functional currency. According to the
Statement, all assets and liabilities were translated at the current exchange
rate, stockholder's equity are translated at the historical rates and income
statement items are translated at the average exchange rate for the period. The
resulting translation adjustments are reported under other comprehensive income
in accordance with SFAS No. 130 (ASC 220), "Reporting Comprehensive Income" as a
component of shareholders' equity.

During the nine months ended September 30, 2009 and 2008 the transactions of
Shaanxi NTHY were denominated in foreign currency and were recorded in Chinese
Yuan Renminbi (CNY) at the rates of exchange in effect when the transactions
occur. Exchange gains and losses are recognized for the different foreign
exchange rates applied when the foreign currency assets and liabilities are
settled. Transaction gains and losses that arise from exchange rate fluctuations
on transactions denominated in a currency other than the functional currency are
included in the results of operations as incurred.

Use of Estimates

The preparation of financial statements in conformity with generally accepted
accounting principles in the United States ("GAAP") requires management to make
certain 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,
and such differences may be material to the financial statements. Certain prior
year amounts have been reclassified to conform to the current year presentation.

Principles of Consolidation

The consolidated financial statements include the accounts of New Taohuayuan
Culture Tourism Company Limited and its wholly owned subsidiary Shaanxi NTHY,
collectively referred to within as the Company. All material inter-company
accounts, transactions and profits have been eliminated in consolidation.

Revenue Recognition

The Company generates revenue from catering, hotel, and related services. The
Company's revenue recognition policies are in compliance with Staff Accounting
Bulletin (SAB) 104 (ASC 605). Revenue is generally recognized: (a) when
persuasive evidence of an arrangement exists; (b) when services are rendered;
(c) when the fee is fixed or determinable; and (d) when collectibility is
reasonably assured. Such service revenues are recognized net of discounts.

The Company also generates management fee income in accordance with Shaanxi New
Taohuayuan Economy Trade Company Limited and its subsidiaries (related parties)
based on terms stated in the agreement. These companies are controlled by a
common director and stockholder of the Company. Cost of good sold related to
management fee income is immaterial comparing with the total expenses incurred
for the Company during its fiscal year.



                                       6
<PAGE>

          NEW TAOHUAYUAN CULTURE TOURISM COMPANY LIMITED AND SUBSIDIARY
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


Advertising

Advertising expenses consist primarily of costs of promotion for corporate image
and product marketing and costs of direct advertising. The Company expenses all
advertising costs as incurred.

Income Taxes

The Company utilizes SFAS No. 109 (ASC 740), "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.

In July 2006, the Financial Accounting Standards Board ("FASB") issued FASB
Interpretation No. 48, Accounting for Uncertainty in Income Taxes--an
Interpretation of FASB Statement No. 109 ("FIN 48") (ASC 740). FIN 48 seeks to
reduce the diversity in practice associated with certain aspects of measuring
and recognition in accounting for income taxes. In addition, FIN 48 requires
expanded disclosure with respect to the uncertainty in income taxes and is
effective


Beginning January 1, 2008, the new Enterprise Income Tax ("EIT") law will
replace the existing laws for Domestic Enterprises ("DES") and Foreign Invested
Enterprises ("FIEs"). The new standard EIT rate of 25% will replace the 33% rate
currently applicable to both DES and FIEs. The two years tax exemption, three
years 50% tax reduction tax holiday for production-oriented FIEs will continue
until it expires.

Statement of Cash Flows

In accordance with SFAS No. 95 (ASC 230), "Statement of Cash Flows," cash flows
from the Company's operations is based upon the local currencies. As a result,
amounts related to assets and liabilities reported on the statement of cash
flows will not necessarily agree with changes in the corresponding balances on
the balance sheet.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of
credit risk are cash, and other receivables arising from our normal business
activities. We place our cash in what we believe to be credit-worthy financial
institutions. We have a diversified customer base, most of which are in China.
We control credit risk by collecting the revenue in advance. The Company
routinely assesses the financial strength of its customers and, based upon
factors surrounding the credit risk, establishes an allowance, if required, for
uncollectible accounts and, as a consequence, believes that its accounts
receivable credit risk exposure beyond such allowance is limited.

Segment Reporting

Statement  of  Financial  Accounting  Standards  No. 131 ("SFAS 131") (ASC 250),
"Disclosure  About Segments of an Enterprise and Related  Information"  requires
use of the  "management  approach" model for segment  reporting.  The management
approach  model is based on the way a company's  management  organizes  segments
within the company for making  operating  decisions and  assessing  performance.
Reportable segments


                                       7
<PAGE>

          NEW TAOHUAYUAN CULTURE TOURISM COMPANY LIMITED AND SUBSIDIARY
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

are based on products and services, geography, legal structure, management
structure, or any other manner in which management disaggregates a company.

Risks and Uncertainties

The Company is subject to substantial risks from, among other things, intense
competition associated with the industry in general, other risks associated with
financing, liquidity requirements, rapidly changing customer requirements,
limited operating history, foreign currency exchange rates and the volatility of
public markets.

The Company's operations are carried out in the PRC. Accordingly, the Company's
business, financial condition and results of operations may be influenced by the
political, economic and legal environments in the PRC, by the general state of
the PRC's economy. The Company's business may be influenced by changes in
governmental policies with respect to laws and regulations, anti-inflationary
measures, currency conversion and remittance abroad, and rates and methods of
taxation, among other things.

Contingencies

Certain conditions may exist as of the date the financial statements are issued,
which may result in a loss to the Company but which will only be resolved when
one or more future events occur or fail to occur. The Company's management and
legal counsel assess such contingent liabilities, and such assessment inherently
involves an exercise of judgment. In assessing loss contingencies related to
legal proceedings that are pending against the Company or unasserted claims that
may result in such proceedings, the Company's legal counsel evaluates the
perceived merits of any legal proceedings or unasserted claims as well as the
perceived merits of the amount of relief sought or expected to be sought.

If the assessment of a contingency indicates that it is probable that a material
loss has been incurred and the amount of the liability can be estimated, then
the estimated liability would be accrued in the Company's financial statements.
If the assessment indicates that a potential material loss contingency is not
probable but is reasonably possible, or is probable but cannot be estimated,
then the nature of the contingent liability, together with an estimate of the
range of possible loss if determinable and material would be disclosed.

Loss contingencies considered to be remote by management are generally not
disclosed unless they involve guarantees, in which case the guarantee would be
disclosed.

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.

Allowance for Doubtful Accounts

Management reviews the composition of accounts receivable, loans and prepaid
expense and analyzes historical bad debts, aging analysis, current economic
trends and changes in payment patterns to evaluate the adequacy of these
reserves. Reserves are recorded primarily on a specific identification basis.
Allowance for doubtful accounts amounted to $169,772 and $29,144 at September
30, 2009 and 2008 respectively.



                                       8
<PAGE>

          NEW TAOHUAYUAN CULTURE TOURISM COMPANY LIMITED AND SUBSIDIARY
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


Inventory

Inventory is valued at the lower of cost or market. Inventory includes gift
cards, raw materials and consumables.

Potential losses from obsolete and slow-moving inventories are provided for when
identified. Cost, which comprises all costs of purchase and, where applicable,
other costs that has been incurred in bringing their inventories to their
present location and condition, is calculated using the first-in, first-out
method.

Property, Plant & Equipment

Property and equipment are stated at cost. Expenditures for maintenance and
repairs are charged to earnings as incurred; additions, renewals and betterments
are capitalized. When property and equipment are retired or otherwise disposed
of, the related cost and accumulated depreciation are removed from the
respective accounts, and any gain or loss is included in operations.
Depreciation of property and equipment is provided using the straight-line
method for substantially all assets with estimated lives of:

Buildings                                                          40 years
Infrastructures and leasehold improvement                          15 years
Equipment (including electronic facilities, sports, education
  and recreation facilities)                                      5-7 years
Automobile                                                          7 years
Furniture and Fixtures                                              5 years

Intangible Assets

The Company  applies  criteria  specified  in SFAS No. 141 (ASC 805),  "Business
Combinations"  to determine  whether an  intangible  asset should be  recognized
separately  from  goodwill.   Intangible   assets  acquired   through   business
acquisitions  are  recognized  as assets  separate from goodwill if they satisfy
either the  "contractual-legal" or "separability"  criterion.  Per SFAS 142 (ASC
350),  intangible  assets with definite lives are amortized over their estimated
useful life and reviewed for  impairment  in  accordance  with SFAS No. 144 (ASC
360),  "Accounting  for  the  Impairment  or  Disposal  of  Long-lived  Assets."
Intangible assets, such as purchased technology,  trademark, customer list, user
base and non-compete  agreements,  arising from the acquisitions of subsidiaries
and variable  interest  entities are  recognized and measured at fair value upon
acquisition.  Intangible  assets are amortized over their estimated useful lives
from  one to ten  years.  The  Company  reviews  the  amortization  methods  and
estimated useful lives of intangible  assets at least annually or when events or
changes  in   circumstances   indicate   that  assets  may  be   impaired.   The
recoverability  of an  intangible  asset  to be held and  used is  evaluated  by
comparing  the  carrying  amount  of the  intangible  asset  to its  future  net
undiscounted  cash flows. If the intangible  asset is considered to be impaired,
the  impairment  loss is measured as the amount by which the carrying  amount of
the intangible asset exceeds the fair value of the intangible asset,  calculated
using a discounted  future cash flow  analysis.  The Company uses  estimates and
judgments in its impairment  tests, and if different  estimates or judgments had
been  utilized,  the timing or the  amount of the  impairment  charges  could be
different.

Effective January 1, 2002, the Company adopted Statement of Financial Accounting
Standards  No. 144 (ASC 360),  "Accounting  for the  Impairment  or  Disposal of
Long-Lived  Assets"  ("SFAS 144"),  which  addresses  financial  accounting  and
reporting for the  impairment or disposal of  long-lived  assets and  supersedes
SFAS No.  121,  "Accounting  for the  Impairment  of  Long-Lived  Assets and for
Long-Lived  Assets  to  be  Disposed  Of,"  and  the  accounting  and  reporting
provisions of APB Opinion No. 30,  "Reporting  the Results of  Operations  for a
Disposal of a Segment of a Business."  The Company  periodically  evaluates  the
carrying value of long-lived  assets to be held and used in accordance with SFAS


                                       9
<PAGE>

          NEW TAOHUAYUAN CULTURE TOURISM COMPANY LIMITED AND SUBSIDIARY
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

144 (ASC 360). SFAS 144 (ASC 360) requires  impairment  losses to be recorded on
long-lived  assets used in operations  when indicators of impairment are present
and the  undiscounted  cash flows  estimated to be generated by those assets are
less than the assets'  carrying  amounts.  In that event,  a loss is  recognized
based on the amount by which the carrying  amount  exceeds the fair market value
of the  long-lived  assets.  Loss on  long-lived  assets  to be  disposed  of is
determined in a similar  manner,  except that fair market values are reduced for
the cost of disposal.

Basic and Diluted Earnings Per Share

Earnings per share are calculated in accordance with the Statement of Financial
Accounting Standards No. 128 (SFAS No. 128) (ASC 260), "Earnings per share".
SFAS No. 128 superseded Accounting Principles Board Opinion No.15 (APB 15). Net
income (loss) per share for all periods presented has been restated to reflect
the adoption of SFAS No. 128. Basic net income (loss) per share is based upon
the weighted average number of common shares outstanding. Diluted net loss per
share is based on the assumption that all dilutive convertible shares and stock
options were converted or exercised. Dilution is computed by applying the
treasury stock method. Under this method, options and warrants are assumed to be
exercised at the beginning of the period (or at the time of issuance, if later),
and as if funds obtained thereby were used to purchase common stock at the
average market price during the period. Basic and diluted earnings per share
were $0.09 and $0.10 for the nine month periods ended September 30, 2009 and
2008 respectively.

Recent Accounting Pronouncements

In June 2009, the FASB issued SFAS No. 166 (ASC 860), "Accounting for Transfers
of Financial Assets -- an amendment of FASB Statement No. 140" ("SFAS 166 (ASC
860)"), which requires additional information regarding transfers of financial
assets, including securitization transactions, and where companies have
continuing exposure to the risks related to transferred financial assets. SFAS
166 eliminates the concept of a "qualifying special-purpose entity," changes the
requirements for derecognizing financial assets, and requires additional
disclosures. SFAS 166 (ASC 860) is effective for fiscal years beginning after
November 15, 2009.

In June 2009, the FASB issued SFAS No. 167 (ASC 860), "Amendments to FASB
Interpretation No. 46(R)" ("SFAS 167") (ASC 860), which modifies how a company
determines when an entity that is insufficiently capitalized or is not
controlled through voting (or similar rights) should be consolidated. SFAS 167
(ASC 860) clarifies that the determination of whether a company is required to
consolidate an entity is based on, among other things, an entity's purpose and
design and a company's ability to direct the activities of the entity that most
significantly impact the entity's economic performance. SFAS 167 (ASC 860)
requires an ongoing reassessment of whether a company is the primary beneficiary
of a variable interest entity. SFAS 167 (ASC 860) also requires additional
disclosures about a company's involvement in variable interest entities and any
significant changes in risk exposure due to that involvement. SFAS 167 (ASC 860)
is effective for fiscal years beginning after November 15, 2009.

In June 2009, the FASB issued SFAS No. 168 (ASC 105), The FASB Accounting
Standards Codification TM and the Hierarchy of Generally Accepted Accounting
Principles ("SFAS No. 168") (ASC 105), which becomes effective for financial
statements issued for interim and annual periods ending after September 15,
2009. SFAS No. 168 (ASC 105) replaces SFAS No. 162, The Hierarchy of Generally
Accepted Accounting Principles. SFAS No. 168 identifies the sources of
accounting principles and the framework for selecting principles used in the
preparation of financial statements of nongovernmental entities that are
presented in conformity with US GAAP (the GAAP hierarchy).


                                       10
<PAGE>

          NEW TAOHUAYUAN CULTURE TOURISM COMPANY LIMITED AND SUBSIDIARY
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS



In August 2009, the FASB issued Accounting Standards Update No. 2009-05,
"Measuring Liabilities at Fair Value" (ASU 2009-05). This Standards Update
provides amendments to ASC Topic 820, "Fair Value Measurements and Disclosure"
for the fair value measurement of liabilities when a quoted price in an active
market is not available. ASU 2009-05 is effective for reporting periods
beginning after August 28, 2009. This ASU is effective for our third quarter of
our fiscal 2010 ending December 31, 2009. The adoption is not expected to have
an impact on our financial position or results of operations.

Reclassifications - Certain amounts in the 2008 financial statements have been
reclassified to conform to the 2009 presentation. These reclassifications had no
effect on previously reported results of operations or retained earnings.

Note 3 - DEPOSIT FOR LAND USE RIGHT

The Company has deposited amounts with the local government, for land use rights
amounting $17,579,327 (RMB 120,000,000) as of September 30, 2009, for the
acquisition of a piece of land in PRC. The Company intends to acquire the land
for the development of new project. To obtain the land use right from the
Government, the Company is required to pay the demolish fee associated with the
acquisition of the land use right amounting $21,974,158 (RMB 150,000,000). As of
September 30, 2009, the demolish fee was not deposited to the government,
therefore, the official title of land use right has not been transferred to the
Company. The deposit for land use right was guaranteed by the asset of the
shareholder company.

Note 4 - PROPERTY AND EQUIPMENT

As of September 30, 2009 and December 31, 2008, the property and equipment of
the Company consisted of the following:

                                      9/30/2009     12/31/2008
                                    -----------------------------
       Buildings                      7,216,072      7,219,985
       Infrastructure and
         Leasehold Improvement        1,784,338      1,785,306

       Furniture and fixtures         1,640,250      1,641,140

       Equipments                     1,978,485      1,979,558

       Automobiles                      313,502        313,672
                                    -----------------------------
                                     12,932,647     12,939,661

       Accumulated Depreciation      (6,962,676)    (6,450,451)
                                    -----------------------------
       Property and Equipment, net  $ 5,969,971    $ 6,489,210
                                    =============================

The Company had depreciation expenses of $515,288 and $505,967 for the nine
month ended September 30, 2009 and 2008 respectively.

Note 5 - LAND USE RIGHT

According to the laws of China, the government owns all the land in China.
Companies or individuals are authorized to possess and use the land only through
land use rights granted by the Chinese government. Land use rights are being
amortized using the straight-line method over the lease term of 40 to 68 years.

As of September 30, 2009 and December 31, 2008, the intangible assets of the
Company consisted of the following:

                                       11
<PAGE>

          NEW TAOHUAYUAN CULTURE TOURISM COMPANY LIMITED AND SUBSIDIARY
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

                                              9-30-2009  12-31-2008

                  Land use rights           $  3,341,278   $  3,343,090
                  Accumulated amortization      (821,737)      (777,027)
                                            -------------  -------------
                  Land use rights, net      $  2,519,541   $  2,566,063
                                            ============================

The Company had amortization expenses of $45,093 and $49,604 as of September 30,
2009 and 2008. The amortization expenses for land use right for next five years
after September 30, 2009 are as follows:

                2010                          $     60,123
                2011                                60,123
                2012                                60,123
                2013                                60,123
                2014                                60,123
                After                            2,218,926
                                              -------------
                  Total                       $  2,519,541
                                              =============

Note 6 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES

The Company's accounts payable and accrued expenses as of September 30, 2009 and
December 31, 2008 are summarized as follows:

            -------------------------------------------------------------
                                                  9-30-2009     12-31-08
            -------------------------------------------------------------
            Accounts payables                  $    195,277    $ 141,761
            -------------------------------------------------------------
            Other payables                          340,317      372,014
            -------------------------------------------------------------
            Accrued payroll                          69,038       41,019
            -------------------------------------------------------------
            Accrued expenses                         80,070       72,597
            -------------------------------------------------------------
            Total accounts payables and            $684,702    $ 627,391
            accrued expenses
            -------------------------------------------------------------

Note 7 - DEFERRED REVENUE

The Company has recorded deferred revenue of $105,884 and $60,217 as of
September 30, 2009 and December 31, 2008. Deferred revenue represents advances
from customers for using the resort facilities within the next twelve month
period.

Note 8- TAXES PAYABLE

As of September 30, 2009 and December 31, 2008, taxes payable are summarized as
follows:

                                           9/30/2009      12/31/2008
                                         ------------------------------
       Income tax payable                $ 4,839,413     $ 4,432,281

       Business tax payable                1,042,372         904,104

       Other taxes payable                   311,794         124,974
                                         ------------    ------------
       Taxes payable                     $ 6,193,579     $ 5,461,359
                                         ============    ============

                                       12
<PAGE>

          NEW TAOHUAYUAN CULTURE TOURISM COMPANY LIMITED AND SUBSIDIARY
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Note 9 - INCOME TAXES

The Company is registered in the State of Nevada and has registered primarily in
two tax jurisdictions - the PRC and the United States. For certain operations in
US and China, the Company has incurred net accumulated operating losses for
income tax purposes The Company believes that it is more likely than not that
these net accumulated operating losses will not be utilized in the future.
Therefore, the Company has provided full valuation allowance for the deferred
tax assets arising from the losses at these locations as of September 30, 2009.
Accordingly, the Company has no net deferred tax assets.

The provision for income taxes from operations on income consists of the
following for the nine month periods ended September 30, 2009 and 2008:

                                                        9-30-2009    9-30-2008
            US Current Income Tax Expense (Benefit)
            -------------------------------------------------------------------
            PRC Current Income                            591,984       624,011
            Expense (Benefit)
                                                      ------------  ------------
            Total Provision for                       $   591,984   $   624,011
            Income Tax
                                                      ============  ============

The following is a reconciliation of the provision for income taxes at the U.S.
federal income tax rate to the income taxes reflected in the Statement of
Operations:

            -------------------------------------------------------------
                                                9-30-2009    9-30-2008
            -------------------------------------------------------------
            Tax expense (credit) at                34%          34%
            statutory rate - federal
            -------------------------------------------------------------
            State tax expense net of federal       6%            6%
            tax
            -------------------------------------------------------------
            Valuation allowance                   (40%)        (40%)
            -------------------------------------------------------------
            Foreign income tax - PRC               25%          25%
            -------------------------------------------------------------
            Tax expense (benefit) at actual        25%          25%
            rate
            -------------------------------------------------------------

United States of America
------------------------

As of September 30, 2009, the Company in the United States had approximately
$1,187,035 in net operating loss carry forwards available to offset future
taxable income. Federal net operating losses can generally be carried forward 20
years. The deferred tax assets for the United States entities at September 30,
2009 consists mainly of net operating loss carry forwards and were fully
reserved as the management believes it is more likely than not that these assets
will not be realized in the future.

The following table sets forth the significant components of the net deferred
tax assets for operation in the US as of September 30, 2009 and 2008.

               ------------------------------------------------------
                                             9-30-2009   12-31-2008
               ------------------------------------------------------
               Net operation loss carry     $ 1,187,035 $1,075,040.00
               forward
               ------------------------------------------------------
               Total deferred tax assets        474,814     365,514
               ------------------------------------------------------
               Less: valuation allowance       (474,814)   (365,514)
               ------------------------------------------------------
               Net deferred tax assets        $        -   $       -
               ------------------------------------------------------

                                       13
<PAGE>

          NEW TAOHUAYUAN CULTURE TOURISM COMPANY LIMITED AND SUBSIDIARY
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

People's Republic of China (PRC)

Pursuant to the PRC Income Tax Laws, the Enterprise Income Tax ("EIT") is at a
statutory rate of 33%, which is comprises of 30% national income tax and 3%
local income tax. Beginning January 1, 2008, the new Enterprise Income Tax
("EIT") law will replace the existing laws for Domestic Enterprises ("DES") and
Foreign Invested Enterprises ("FIEs"). The new standard EIT rate of 25% replaced
the 33% rate currently applicable to both DES and FIEs. The two years tax
exemption, three years 50% tax reduction tax holiday for production-oriented
FIEs will continue until the tax exemption period expires. The applicable new
EIT for the Company is 25%. The Company paid $0 of income tax payable as of
September 30, 2009 and 2008.

Deferred income tax assets

Deferred income taxes are determined using the liability method for the
temporary differences between the financial reporting basis and income tax basis
of the Company's assets and liabilities. Deferred income taxes are measured
based on the tax rates expected to be in effect when the temporary differences
are included in the Company's tax return. Deferred tax assets and liabilities
are recognized based on anticipated future tax consequences attributable to
differences between financial statement carrying amounts of assets and
liabilities and their respective tax bases. The Company's deferred tax assets
represent deductible temporary differences arising mainly from the other
payables.

The Company did not have any significant deferred income tax in PRC as of
September 30, 2009 and December 31, 2008.

Note 10 - MANAGEMENT FEE AGREEMENTS

The Company entered into five management agreements with Shaanxi New Taohuayuan
Economy Trade Company Limited and Shaanxi Wenhao Group and its subsidiary on
various time for a period of five years. Shaanxi New Taohuayuan Economy Trade
Company Limited and Shaanxi Wenhao Group and its subsidiary are related parties.
The annual management fees are fixed at approximately $2,019,925
(RMB13,800,000). For the nine month periods ended September 30, 2009 and 2008,
the Company earned $1,514,944 and $1,482,190 in management fees, respectively.
There is a bonus management fee clause contained in the agreement calculated at
15% on the excess of the actual revenue over targeted revenue, as defined
therein. No bonus management fees have been earned to date (See Note 12 for
details).

Note 11 -RELATED PARTIES TRANSACTIONS

The Company has identified the following related parties:

Chen Jingmin - a director and stockholder of the Company.

Dongjin Taoyuan - a stockholder of the Company in which Chen Jingmin has control
and a beneficial interest.

Shaanxi New Taohuayuan Economy Trade Company Limited - the principal stockholder
of the Company in which Chen Jingmin has control and a beneficial interest.

Shaanxi Wenhao Zaliang Shifu Co., Limited - a stockholder of the Company in
which Chen Jingmin has control and a financial interest. The Wenhao Group has
various entities as noted below:


                                       14
<PAGE>

          NEW TAOHUAYUAN CULTURE TOURISM COMPANY LIMITED AND SUBSIDIARY
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


Shaanxi Wenhao Dongjin Taohuyuan - part of Wenhao Group.
Shaanxi Wenhao Naner Huan Wenhao - part of Wenhao Group.
Shaanxi Wenhao Xijiao Wenhao(Taoyuan Nanlu Branch) - part of Wenhao Group.
Shaanxi Wenhao Yuan Taizu - part of Wenhao Group

Shaanxi Kangze Economic and Trade Co., Limited - a stockholder of the Company in
which Chen Jingmin has control and a beneficial interest.

Shaanxi  Xianyong Luye Developing Co., Limited - a stockholder of the Company in
which Chen Jingmin has control and a beneficial interest.

The Company as of September 30, 2009 had receivable $168,625 from Shaani NTHY -
Dongjing Taoyuan Co., $379,923 from the Wenhao Group, $20,195 from Shaanxi
Xianyong Luye Developing Co., Ltd. These receivables are unsecured,
interest-free and have no fixed repayment terms. The Company has classified
these receivables as due from related parties under current assets.

The Company as of December 31, 2008 had receivable $128,460 from Shaani NTHY -
Dongjing Taoyuan Co., $381,785 from the Wenhao Group, and $56,503 from Shaanxi
Xianyong Luye Developing Co., Ltd. These receivables are unsecured,
interest-free and have no fixed repayment terms. The Company has classified
these receivables as due from related parties under current assets.

As of September 30, 2009 and December 31, 2008, there were no related parties'
payables.

Note 12 -- COMMITMENTS

Following are some of the significant commitments as of September 30, 2009 and
2008:

1. Management Agreements with Shaanxi New Taohuayuan Tourism & Trading Co. Ltd.
- Dongjin Taoyuan Branch and Shaanxi Wenhao Taoyuan Nanlu Branch

On January 15, 2004 the Company signed two five-year agreements with Shannxi New
Taohuayuan Tourism & Trading Co. Ltd - Dongjin Taoyuan Branch and Xi'an Taoyuan
Nanlu Branch to manage the restaurants. The Company will perform management and
operation function including advertising, marketing, human resources and
accounting on monthly basis. The Company will receive RMB 3,500,000 from each of
the restaurant respectively as basic annual management fees, paid quarterly. In
addition, if the annual revenue exceeds the targeted amount, the Company will be
compensated for additional 15% of the revenue as bonus. The agreements expired
on Jan 14, 2009. The company extended the agreements for 5 years and the new
agreements will expire on Jan. 9, 2014. For the nine month periods ended
September 30, 2009, the management fees earned amounting to $384,225 and
$384,225 respectively based upon the agreements.

2. Management Agreements with Shaanxi Wenhao Zaliang Co. Ltd - Xi'an Nanerhuan
Branch, Yuantaizu Branch and Beijing Branch

On January 10, 2006 the Company signed three five-year agreements with Shaanxi
Wenhao Zaliang Co. Ltd - Xi'an Nanerhuan Branch, Yuantaizu Branch and Beijing
Branch respectively to manage the restaurants. The company will perform
management and operation function including advertising, marketing, human
resources and accounting on monthly basis. The Company will receive RMB
3,600,000, RMB 1,800,000 and RMB 1,400,000 from each of these restaurants
respectively as basic annual management compensation, paid quarterly. In
addition, if the annual revenue exceeds the targeted amount, the company will be

                                       15
<PAGE>

          NEW TAOHUAYUAN CULTURE TOURISM COMPANY LIMITED AND SUBSIDIARY
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

compensated for additional 15% of the revenue as bonus. The agreements will
expire on January 9, 2010. For the nine month periods ended September 30, 2009,
the management fees earned amounting $395,203, $197,601 and $153,690
respectively based upon the agreements.

3. Lantian Xintianyou Garden Decoration Project Agreements with Shaanxi
Traditional Decoration Co., Ltd.

On Mar. 15, 2006, the Company signed a decoration agreement with Shannxi
Traditional Decoration Co. Ltd for Shannxi Lantian Xintianyou Garden Decoration
Project. The Company hired the Shannxi Traditional Decoration Co. Ltd., to do
decoration work on its property with the commitment to pay RMB 80,000,000 as
total compensation. The Company will pay 30% of the amount at the beginning of
the construction, 30% will be paid on 50% completion and 40% after the project
is completed. The Company is also responsible for appointing the third party as
supervisor to monitor the project and to protect the surrounding environment.
The project started on April 1st, 2006 and will be finished in June 2012. The
project was delayed because of public facility construction. As of September 30,
2009, the Company has paid $3,493,891 to the said contractor included in
construction in progress.

4. Lantian Xintianyou Garden Green Project Agreement with Shannxi Qinghua Green
Project Co.,Ltd.

On May 15, 2007, the Company signed an agreement with Shannxi Qinghua Green Co.
Ltd for the afforesting project of Lantian Xintianyou Garden Green. The Company
hired Shannxi Oinghua Green Project Co. Ltd., to perform afforesting work on the
garden with the commitment to pay RMB 50,000,000 as total compensation. The
Company will pay 30% of the amount at the inception of the construction, 35%
will be paid on 50% completion and 30% after the project completes. The final 5%
will be held as project quality insurance deposit. After the project completed,
Shannxi Qinghua Green Co.,Ltd will be responsible for the maintenance of the
garden and the company will pay RMB 1,250,000 as annual compensation for
services. The project started on Oct. 6, 2007 and will be finished in June 2012.
The project was delayed because of public facility construction. As of September
30, 2009, the Company has paid $12,930,327 to the said contractor included in
construction in progress.

5.    Lantian Xintianyou Garden Project

The Company entered an agreement with Lantian County, Xian City, Shaanxi
Province to offer a new project's development - Lantian Xingtianyou Project in
2003. The Company acquired a land (4512 Mu) in Lantian County and committed to
finish the project in one year. The project has been started since 2004.
However, the Company paid amount of $17,531,557 (RMB 120,000,000) as land cost
in 2006 but the title is not yet transferred to the Company without paying the
demolish fee associated with the project (See note C for details).

Note 13- STATUTORY RESERVE AND STATUTORY COMMON WELFARE FUND

As stipulated by the Company Law of the People's Republic of China (PRC), net
income after taxation can only be distributed as dividends after appropriation
has been made for the following:

i. Making up cumulative prior years' losses, if any;

ii. Allocations to the "Statutory surplus reserve" of at least 10% of income
after tax, as determined under PRC accounting rules and regulations, until the
fund amounts to 50% of the Company's registered capital;

                                       16
<PAGE>

          NEW TAOHUAYUAN CULTURE TOURISM COMPANY LIMITED AND SUBSIDIARY
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


iii. Allocations of 5-10% of income after tax, as determined under PRC
accounting rules and regulations, to the Company's "Statutory common welfare
fund", which is established for the purpose of providing employee facilities and
other collective benefits to the Company's employees; and

iv. Allocations to the discretionary surplus reserve, if approved in the
stockholders' general meeting.

In accordance with the Chinese Company Law, the company reserved $177,595 and
$187,189 statutory fund for the nine month periods ended September 30, 2009 and
2008 respectively.

According to the new Company Law of the People's Republic of China (PRC)
executed in 2006, the Company is no more required to reserve the "Statutory
common welfare fund". Accordingly, the Company did not reserve the common
welfare fund as of September 30, 2009.

Note 14 - RETIREMENT PLAN

As stipulated by the rules and regulations in the PRC, the Company is required
to contribute to a state-sponsored social insurance plan for all of its
employees who are residents in the PRC at rates ranging from 12% to 17% of the
basic salary of its employees. The Company has no further obligations for the
actual pension payments or post-retirement benefits beyond the annual
contributions. The state-sponsored retirement plan is responsible for the entire
pension obligations payable to all employees.

Note 15 - STOCKHOLDERS' EQUITY

In January 2007, the Company entered into an agreement with outside third party
to provide consulting services. As part of agreement the Company agreed to issue
1,699,999 shares of common stock at discount at $0.05 per share or $85,000 for
cash. The consulting company will provide consulting service to the Company
during the six month periods starting January 2007. The fair market value of the
common stocks of the company was $0.55 on the agreement date. Accordingly the
Company booked $85,000 as compensation expense after accounting for the shares
issued at discount price of $0.05 for the said stock issuance as of December 31,
2007.

Since the consulting company did not provide the services to the Company's
satisfaction, on February 28, 2008, the Company's directors adopted a resolution
authorizing the repurchase of these shares at a price of $0.05 per share. As of
September 30, 2009, the consulting company has not sold any of these shares to
the Company.

Note 16 - OTHER COMPREHENSIVE INCOME

Balances of related after-tax components comprising accumulated other
comprehensive income (loss), included in stockholders' equity, as of September
30, 2009 and December 31, 2008 are as follows:

                                                Foreign Currency
                                             Translation Adjustment
                                            -------------------------

            Balance at December 31, 2008        $      5,304,720

            Change in 2009                               (17,153)
                                            -------------------------
            Balance at September 30, 2009       $      5,287,567
                                            =========================

                                       17
<PAGE>

          NEW TAOHUAYUAN CULTURE TOURISM COMPANY LIMITED AND SUBSIDIARY
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Note 17- SEGMENT REPORTING

The Company had two principal operating segments which were: resort income and
management fee income. These operating segments were determined based on the
nature of the services provided. Operating segments are defined as components of
an enterprise about which separate financial information is available that is
evaluated regularly by the chief operating decision-maker in deciding how to
allocate resources and in assessing performance. The Company's chief executive
officer and chief financial officer have been identified as the chief operating
decision makers. The Company's chief operating decision makers direct the
allocation of resources to operating segments based on the profitability, cash
flows, and other measurement factors of each respective segment.

The Company evaluates performance based on several factors, of which the primary
financial measure is business segment income before taxes. The segments'
accounting policies are the same as those described in the summary of
significant accounting policies. The following table shows the operations of the
Company's reportable segments:

                                               For the nine month periods ended
                                                         September 30
                                                    2009               2008
Revenues
 Resort income from unaffiliated customers     $  3,570,610       $  3,580,363
 Management fee income from affiliated
   customers                                      1,514,944          1,482,190
                                               -------------      -------------
     Consolidated                              $  5,085,554       $  5,062,552
                                               =============      =============
Operating income(loss)
 Resort income                                 $    953,824       $  1,106,752
 Management fee income                            1,514,944          1,482,190
 Corporation (1)                                   (111,995)          (109,588)
                                               -------------      -------------
     Consolidated                              $  2,356,773       $  2,479,454
                                               =============      =============
Net income (loss)
 Resort income                                 $    751,738       $    869,834
 Management fee income                            1,136,208          1,111,643
 Corporation (1)                                   (111,995)          (109,588)
                                               -------------      -------------
    Consolidated                               $  1,775,951       $  1,871,889
                                               =============      =============
Identifiable assets:
 Resort income                                 $ 26,723,694       $ 40,553,918
 Corporation (1)                                 16,424,218                  -
                                               -------------      -------------
    Consolidated                               $ 43,147,913       $ 40,553,91
                                               =============      =============
Depreciation and amortization:
 Resort income                                 $    560,381       $    555,571
                                               =============      =============
Capital expenditures:
 Resort income                                 $  3,294,088       $  3,090,401
                                               -------------      -------------
    Consolidated                               $  3,294,088       $  3,090,401
                                               =============      =============


(1). Unallocated loss from Operating income (loss) and Net income (loss) before
taxes are primarily related to general corporate expenses and capital
expenditure for new project.


                                       18
<PAGE>


Item 2.  Management's Discussion and Analysis of Financial Condition and Results
         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. In addition, our
financial statements and the financial data included in this report reflect our
reorganization and have been prepared as if our current corporate structure had
been in place throughout the relevant periods. 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. This property closed for major remodeling in 2006 and reopened in
September 2009.

      We also manage a chain of four 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. The agreements relating to the management of these properties are
discussed in more detail in Item 1 of this report.

      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 Operations

Three and Nine Months Ended September 30, 2009

      Material changes of certain items in our Statement of Operations for the
three and nine months ended September 30, 2009, as compared to the three and
nine months ended September 30, 2008, are discussed below:


                                       1
<PAGE>


                              Increase (I)
Item                         or Decrease (D)  Reason
----                         ---------------  ------

Foreign Currency
   Translation Gain (loss)          D         Change in currency exchange rates.

Liquidity and Capital Resources

Our material sources and (uses) of cash during the nine months ended September
30, 2009 are shown in our Statement of Cash Flows which are part of the
financial statements included with this report.

      As discussed in our annual report on Form 10-K for the year ended December
31, 2008, 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. As of November 10, 2009 we had not started
actual construction work on these projects.

      We have financed our operations to date through the sale of our common
stock and cash generated by our operations. As of September 30, 2009
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 September 30, 2009 balance sheet.

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.


                                       2
<PAGE>

     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.

     Exchange rate  fluctuations may adversely affect our financial  performance
because of our foreign  currency  denominated  assets and  liabilities,  and may
reduce the value,  translated or converted,  as applicable into U.S. dollars, of
our net fixed assets, our earnings and our declared dividends.  We do not engage
in any  hedging  activities  in order to minimize  the effect of  exchange  rate
risks.

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


                                       3
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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.



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Item 4T.    Controls and Procedures

     Our  Principal   Executive   and   Financial   Officer  has  evaluated  the
effectiveness  of our  disclosure  controls and  procedures  (as defined in Rule
13a-15(e)  of the  Securities  Exchange Act of 1934) as of the end of the period
covered  by  this  report,  and in  her  opinion  our  disclosure  controls  and
procedures  are  effective  at the  reasonable  assurance  level to ensure  that
information is adequately disclosed.

     There were no changes in our internal  controls  over  financial  reporting
that  occurred  during the fiscal  quarter  ended  September  30, 2009 that have
materially affected, or are reasonably likely to materially affect, our internal
control over financial reporting as discussed above.


                                     PART II
Item 6.  Exhibits

Exhibits

  31.1       Certification pursuant to Section 302 of the Sarbanes-Oxley Act of
             2002.

  31.2       Certification pursuant to Section 302 of the Sarbanes-Oxley Act of
             2002.

  32         Certification pursuant to Section 906 of the Sarbanes-Oxley Act of
             2002.




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                                   SIGNATURES

     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.



                                      NEW TAOHUAYUAN CULTURE TOURISM CO., LTD.


November 10, 2009                     By:  /s/ Cai Danmei
                                          ------------------------------------
                                          Cai Danmei, Principal Executive,
                                           Financial and Accounting Officer







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