UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   FORM 10-QSB

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

                  For the quarterly period ended March 31, 2006

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

                        Commission File number 000-24623

                          NEW GENERATION HOLDINGS, INC.
                          -----------------------------

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

            Delaware                                             13-4056896
(State or other jurisdiction of                               (I.R.S. Employer
 Incorporation or organization)                            Identification No.)


                         c/o 245 Park Avenue, 39th floor
                            New York, New York 10167

               Address of principal executive offices) (Zip Code)

                                 (212) 792-4030
                           (Issuer's telephone number)

Check whether the issuer (1) 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) has been subject to such filing requirements for the past 90
days. |X| Yes |_| No

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


                      APPLICABLE ONLY TO CORPORATE ISSUERS:

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

As of May 2, 2006, the issuer had 48,913,560 shares of Common Stock, par value
$.001 per share, outstanding.

Transitional Small Business Disclosure Format (Check one): Yes |_| No |X|

<PAGE>

--------------------------------------------------------------------------------

                                TABLE OF CONTENTS

PART I      FINANCIAL INFORMATION

ITEM 1      FINANCIAL STATEMENTS                                           F1-F9

ITEM 2      PLAN OF OPERATION                                                 10

ITEM 3      QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK        13

            CONTROLS AND PROCEDURES
ITEM 4                                                                        13
            OTHER INFORMATION
PART II                                                                       13
            LEGAL PROCEEDINGS
ITEM 1                                                                        13
            CHANGES IN SECURITIES AND USE OF PROCEEDS
ITEM 2                                                                        14
            DEFAULTS UPON SENIOR SECURITIES
ITEM 3                                                                        14
            SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
ITEM 4                                                                        14
            OTHER INFORMATION
ITEM 5                                                                        14
            EXHIBITS
ITEM 6
            SIGNATURES

            CERTIFICATES



--------------------------------------------------------------------------------


<PAGE>










                          PART 1 FINANCIAL INFORMATION
           ---------------------------------------------------------

                          ITEM 1. FINANCIAL STATEMENTS

           ---------------------------------------------------------

The accompanying consolidated balance sheet of New Generation Holdings, Inc. at
March 31, 2006 and the consolidated statements of losses and consolidated
statements of cash flows for the three months ended March 31, 2006 and 2005 have
been prepared by the Company's management in conformity with accounting
principles generally accepted in the United States of America. In the opinion of
management, all adjustments considered necessary for a fair presentation of the
results of operations and financial position have been included and all such
adjustments are of a normal recurring nature.

Operating results for the three months ended March 31, 2006 are not necessarily
indicative of the results that can be expected for the year ending December 31,
2006.


<PAGE>




                          NEW GENERATION HOLDINGS, INC.

                          INDEX TO FINANCIAL STATEMENTS


Condensed Consolidated Balance Sheet at March 31, 2006                      F-3
Condensed Consolidated Statements of Losses for the three months
   ended March 31, 2006 and 2005                                            F-4
Condensed Consolidated Statement of Deficiency in Stockholder's
   Equity at March 31, 2006                                                 F-5
Condensed Consolidated Statements of Cash Flows for the three months
   ended March 31, 2006 and 2005                                            F-6
Notes to Condensed Consolidated Financial Statements                 F-7 - F-10








                                       F-2

<PAGE>



                          NEW GENERATION HOLDINGS, INC.
                          (A Development Stage Company)
                      CONDENSED CONSOLIDATED BALANCE SHEEET
                                 MARCH 31, 2006
                                   (Unaudited)
<TABLE>
<CAPTION>


<S>                                                                             <C>
Assets

Current assets:
  Cash                                                                          $     10,190
                                                                                ============


Liabilities and deficiency in stockholders' equity

Current liabilities:

Accounts payable and accrued expenses:                                          $  2,039,568
Convertible note payable, stockholder                                                753,304
                                                                                ------------

Total current liabilities                                                          2,792,872

Embedded conversion derivative                                                       753,304
Warrant derivatives                                                                5,103,026
                                                                                ------------

Total liabilities                                                                  8,649,202
                                                                                ------------

Deficiency in stockholders' equity:

Preferred stock, par value $.001 per share; 1,000,000 shares authorized,
  none issued and outstanding                                                             --
Common stock, par value $.001 per share; 50,000,000 shares authorized,
  46,829,960 shares issued and outstanding                                            46,832
Additional paid-in capital                                                        27,783,380
Stock subscriptions                                                                  320,475
Other comprehensive income                                                            26,478
Accumulated deficit prior to development stage                                   (31,081,731)
Deficit accumulated during the development stage                                  (5,734,446)
                                                                                ------------

Total deficiency in stockholders' equity                                          (8,639,012)
                                                                                ------------

Total liabilities and deficiency in stockholders' equity                        $     10,190
                                                                                ============
</TABLE>



See accompanying notes to unaudited condensed consolidated financial statements.


                                       F-3

<PAGE>



                          NEW GENERATION HOLDINGS, INC.
                          (A Development Stage Company)
                   CONDENSED CONSOLIDATED STATEMENTS OF LOSSES
                                   (Unaudited)


<TABLE>
<CAPTION>

                                                                                                     Cumulative Period
                                                                                                    from April 8, 2003
                                                                                                   (date of inception as
                                                                                                     development stage
                                                                                                        enterprise) to
                                                            Three months ended March 31,                 March 31,
                                                            2006                    2005                   2006
                                                        --------------         --------------    ----------------------
                                                          (Unaudited)            (Unaudited)            (Unaudited)
<S>                                                     <C>                      <C>                      <C>
Operating expenses:
  General and administrative expenses                   $    246,145             $    387,498             $  3,260,983
  Depreciation and amortization                                   --                       --                  107,790
  Research and development                                    19,796                  202,342                  910,838
                                                        ------------             ------------             ------------

Loss from operations                                        (265,941)                (589,840)              (4,279,611)

Change in value of warrant liability                         244,979                       --                 (677,698)
Interest expense                                             (18,833)                      --                 (777,137)
                                                        ------------             ------------             ------------

Loss before provision for income taxes                       (39,795)                (589,840)              (5,734,446)

Provision for income taxes                                        --                       --                       --
                                                        ------------             ------------             ------------

Net loss                                                $    (39,795)            $   (589,840)            $ (5,734,446)
                                                        ============             ============             ============

Net loss per common share, basic and diluted            $      (0.00)            $      (0.02)
                                                        ============             ============

Weighted average shares outstanding                       46,576,449               27,269,843

Comprehensive loss:
  Net loss                                              $    (39,795)            $   (589,840)
  Foreign currency translation (loss) gain                    (2,491)                  20,572
                                                        ------------             ------------

Comprehensive loss                                      $    (42,286)            $   (569,268)
                                                        ============             ============
</TABLE>


      See accompanying notes to un-audited condensed consolidated financial
                                  statements.

                                       F-4
<PAGE>

                         NEW GENERATION HOLDINGS, INC.
                          (A Development Stage Company)
     CONDENSED CONSOLIDATED STATEMENT OF DEFICIENCY IN STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                                                              Additional        Common
                                                                                               Paid-in           Stock
                                                                   Common Stock                Capital        Subscribed
                                                           -----------------------------    -------------    -------------

<S>                                                        <C>             <C>              <C>              <C>
Balance, December 31, 2002                                    21,056,690   $      21,059    $  29,636,051    $        --

Disposition of previously controlled
  wholly and majority owned subsidiaries,
  net                                                               --              --               --               --

Net loss from January 1, 2003 to
  April 7, 2003                                                     --              --               --               --
                                                           -------------   -------------    -------------    -------------

Balance, April 7, 2003                                        21,056,690          21,059       29,636,051             --

Net loss                                                            --              --               --               --
                                                           -------------   -------------    -------------    -------------

Balance, December 31, 2003                                    21,056,690          21,059       29,636,051             --

Sale of common stock                                           6,500,120           6,500          643,514             --

Common stock subscribed                                             --              --               --             54,600

Shares physically issued                                            --              --               --               --

Currency translation adjustment                                     --              --               --               --

Net loss                                                            --              --               --               --
                                                           -------------   -------------    -------------    -------------

Balance, December 31, 2004                                    27,556,810          27,559       30,279,565           54,600

Sale of common stock                                          18,014,150          18,014        1,783,401             --

Warrants issued for services                                        --              --             21,100             --

Shares physically issued                                         546,000             546           54,054          (54,600)

Common stock subscribed                                                                                            131,300

Reclassification of warrants to liabilities                         --              --         (4,275,966)            --

Currency translation adjustment                                     --              --               --               --

Net loss                                                            --              --               --               --
                                                           -------------   -------------    -------------    -------------

Balance, December 31, 2005                                    46,116,960          46,119       27,862,154          131,300

Shares physically issued (unaudited)                             713,000             713           70,587          (71,300)

Common stock subscribed (unaudited)                                 --              --               --            260,475

Reclassification of warrants to liabilities (unaudited)             --              --           (149,361)            --

Currency translation adjustment (unaudited)                         --              --               --               --

Net loss (unaudited)                                                --              --               --               --
                                                           -------------   -------------    -------------    -------------

Balance, March 31, 2006 (unaudited)                           46,829,960   $      46,832    $  27,783,380    $     320,475
                                                           =============   =============    =============    =============
</TABLE>



<TABLE>
<CAPTION>
                                                               Accumulated Deficit
                                                           ------------------------------
                                                             Prior to          During           Other
                                                            Development      Development    Comprehensive     Stockholders'
                                                               Stage            Stage           Income          Deficiency
                                                           -------------    -------------    -------------    -------------

<S>                                                        <C>              <C>              <C>              <C>
Balance, December 31, 2002                                 $ (34,634,693)   $        --      $        --      $  (4,977,583)

Disposition of previously controlled
  wholly and majority owned subsidiaries,
  net                                                          3,882,801             --               --          3,882,801

Net loss from January 1, 2003 to
  April 7, 2003                                                 (329,839)            --               --           (329,839)
                                                           -------------    -------------    -------------    -------------

Balance, April 7, 2003                                       (31,081,731)            --               --         (1,424,621)

Net loss                                                            --           (330,321)            --           (330,321)
                                                           -------------    -------------    -------------    -------------

Balance, December 31, 2003                                   (31,081,731)        (330,321)            --         (1,754,942)

Sale of common stock                                                --               --               --            650,014

Common stock subscribed                                             --               --               --             54,600

Shares physically issued                                            --               --               --               --

Currency translation adjustment                                     --               --             14,383           14,383

Net loss                                                            --           (620,770)            --           (620,770)
                                                           -------------    -------------    -------------    -------------

Balance, December 31, 2004                                   (31,081,731)        (951,091)          14,383       (1,656,715)

Sale of common stock                                                --               --               --          1,801,415

Warrants issued for services                                        --               --               --             21,100

Shares physically issued                                            --               --               --               --

Common stock subscribed                                                                                             131,300

Reclassification of warrants to liabilities                         --               --               --         (4,275,966)

Currency translation adjustment                                     --               --             14,586           14,586

Net loss                                                            --         (4,743,560)            --         (4,743,560)
                                                           -------------    -------------    -------------    -------------

Balance, December 31, 2005                                   (31,081,731)      (5,694,651)          28,969       (8,707,840)

Shares physically issued (unaudited)                                                                                   --

Common stock subscribed (unaudited)                                 --               --               --            260,475

Reclassification of warrants to liabilities (unaudited)             --               --               --           (149,361)

Currency translation adjustment (unaudited)                         --               --             (2,491)          (2,491)

Net loss (unaudited)                                                --            (39,795)            --            (39,795)
                                                           -------------    -------------    -------------    -------------

Balance, March 31, 2006 (unaudited)                        $ (31,081,731)   $  (5,734,446)   $      26,478    $  (8,639,012)
                                                           =============    =============    =============    =============
</TABLE>

See accompanying notes to consolidated financial statements.

                                      F-5
<PAGE>

                          NEW GENERATION HOLDINGS, INC.
                          (A Development Stage Company)
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                              Cumulative Period
                                                                                              from April 8, 2003
                                                                                            (date of inception as
                                                                                              development stage
                                                                                                enterprise) to
                                                       Three months ended March 31,                March 31,
                                                        2006                  2005                   2006
                                                 -----------------      -----------------   ------------------------
                                                     (Unaudited)           (Unaudited)             (Unaudited)
<S>                                                 <C>                     <C>                     <C>
Cash flows from operating activities:
Net loss                                            $   (39,795)            $  (589,840)            $(5,734,446)
Adjustments to reconcile net loss to net
  cash used in operating activities:
  Warrants issued for services                               --                  21,100                  21,100
  Amortization of debt discount                              --                      --                 753,304
  Change in value of warrant liability                 (244,979)                     --                 677,698
  Depreciation                                               --                      --                 107,790
Increase (decrease) in liabilities:
  Accounts payable                                       34,034                  (2,198)              1,260,466
                                                    -----------             -----------             -----------

Cash used in operating activities                      (250,740)               (570,938)             (2,914,088)
                                                    -----------             -----------             -----------

Cash flows from financing activities:
Proceeds from sale of common stock                      260,475                 546,768               2,897,800
                                                    -----------             -----------             -----------

Effect of exchange rate changes on cash                  (2,491)                 20,572                  26,478
                                                    -----------             -----------             -----------

Net increase (decrease) in cash                           7,244                  (3,598)                 10,190
Cash, beginning of period                                 2,946                   6,555                      --
                                                    -----------             -----------             -----------
Cash, end of period                                 $    10,190             $     2,957             $    10,190
                                                    ===========             ===========             ===========
</TABLE>

     See accompanying notes to un-audited condensed consolidated financial
                                  statements.

                                       F-6
<PAGE>


                          NEW GENERATION HOLDINGS, INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 2006

NOTE A - SUMMARY OF ACCOUNTING POLICIES

A summary of the significant accounting policies applied in the preparation of
the accompanying consolidated financial statements follows.

BUSINESS

New Generation Holdings, Inc. (we ", "us", " our company " or "NGH" ), was
formed under the laws of the State of Delaware in 1999. We are a development
stage company, as defined by Statement of Financial Accounting Standards No. 7
("SFAS No. 7"), and we are currently developing, through our wholly owned
subsidiary, a proprietary technology designed to process two or more discrete
plastic polymers. The technology is in the final stages of testing and, when
testing is completed, the technology will be marketed primarily in the United
States.

To date, the Company has generated no sales revenues, has incurred expenses and
has sustained losses. Consequently, its operations are subject to all the risks
inherent in the establishment of a new business enterprise. For the period from
entering the development stage on April 7, 2003 through March 31, 2006, the
Company has accumulated losses of $5,734,446.

The consolidated financial statements include the accounts of NGH and our
domestic and foreign subsidiaries that are more than 50% owned and controlled.
All significant intercompany transactions and balances have been eliminated in
the consolidated financial statement.

BASIS OF PRESENTATION



The accompanying unaudited financial statements as of March 31, 2006 and for the
three month periods ended March 31, 2006 and 2005 and from date of inception as
development stage enterprise (April 7, 2003) to March 31, 2006 have been
prepared by NGH pursuant to the rules and regulations of the Securities and
Exchange Commission, including Form 10-QSB and Regulation S-B. 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 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. The company believes that the disclosures provided are adequate to
make the information presented not misleading. These financial statements should
be read in conjunction with the audited financial statements and explanatory
notes for the year ended December 31, 2005 as disclosed in the company's 10-KSB
for that year as filed with the SEC, as it may be amended.

The results of the three months ended March 31, 2006 are not necessarily
indicative of the results to be expected for the pending full year ending
December 31, 2006.

GOING CONCERN

The financial statements have been prepared on a going concern basis, and do not
reflect any adjustments related to the uncertainty surrounding our recurring
losses or accumulated deficit

We have had substantial net losses of $5,734,446 from the reestablishment of
development stage operations, have not generated any revenue during that period,
have a deficit in working capital of $2,782,682 at March 31, 2006 and have a
stockholders' deficiency of $8,639,012 at March 31, 2006. These factors raise
substantial doubt about our ability to continue as a going concern.

                                       F-7
<PAGE>

The continuation of the company as a going concern is dependent on our ability
to develop revenues and to obtain additional financing from outside sources.
Management is also attempting to secure ongoing revenue relationships for our
products. We are currently developing, through our wholly subsidiary, a
proprietary technology designed to process two or more discrete plastic
polymers. The technology is in the final stages of testing and, when testing is
completed, the technology will be marketed primarily in the United States.

USE OF ESTIMATES

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the consolidated financial statements and
accompanying disclosures. Although these estimates are based on management's
best knowledge of current events and actions the Company may undertake in the
future, actual results may differ from those estimates.

NET EARNINGS (LOSS) PER SHARE

We use SFAS No. 128, "Earnings Per Share" for calculating the basic and diluted
earnings (loss) per share. We compute basic earnings (loss) per share by
dividing net earnings (loss) by the weighted average number of common shares
outstanding. Diluted earnings (loss) per share is computed similar to basic
earnings (loss) per share except that the denominator is increased to include
the number of additional common shares that would have been outstanding if the
potential shares had been issued and if the additional shares were dilutive.
Common equivalent shares are excluded from the computation of net loss per share
if their effect is anti-dilutive.

Per share basic and diluted net loss amounted to $0.00 for the three months
ended March 31, 2006 and $0.02 for the three months ended March 31, 2005. For
the three months ended March 31, 2006 and 2005, 63,038,776 potential shares and
13,922,820 potential shares, respectively, were excluded from the shares used to
calculate diluted earnings per share as their inclusion would reduce net loss
per share.

RECLASSIFICATIONS

Certain prior period items have been reclassified to conform to the current
period presentation.

NEW ACCOUNTING PRONOUNCEMENTS

On January 1, 2006, we adopted the fair value recognition provisions of
Financial Accounting Standards Board ("FASB") Statement of Financial Accounting
Standards ("SFAS") No. 123, Accounting for Stock Based Compensation, to account
for compensation costs under our stock option plans. We previously utilized the
intrinsic value method under Accounting Principles Board Opinion No. 25,
Accounting for Stock Issued to Employees (as amended) ("APB 25"). Under the
intrinsic value method prescribed by APB 25, no compensation costs were
recognized for our employee stock options because the option exercise price
equaled the market price on the date of the grant. Prior to January 1, 2006 we
only disclosed the pro forma effects on net income and earnings per share as if
the fair value recognition provisions of SFAS 123(R) had been utilized.

In adopting SFAS No. 123(R), we elected to use the modified prospective method
to account for the transition from the intrinsic value method to the fair value
recognition method. Under modified prospective method, compensation cost is
recognized from the adoption date forward for all new stock options granted and
for any outstanding unvested awards as if the fair value method had been applied
to those awards as of the date of the grant. We had no outstanding unvested
awards at the adoption date and we had no outstanding unvested awards during the
2005 comparative period.

NOTE B -CAPITAL STOCK

The Company is authorized to issue 50,000,000 shares of common stock with a par
value of $.001 per share. As of March 31, 2006 the Company has issued and
outstanding 46,829,960 shares of common stock. The Company is also authorized to
issue 1,000,000 shares of preferred stock with a par value of $.001 per share.
There were no preferred shares outstanding at March 31, 2006.

During the three months ended March 31, 2006 we received subscriptions in the
aggregate amount of $260,475 to purchase 2,604,750 shares of common stock along
with warrants for an additional 2,604,750 shares of common stock, at an exercise
price of $0.35 per share, in connection with a private placement of its
restricted common stock and warrants under Regulation S.

During the three months ended March 31, 2005 we received subscriptions in the
aggregate amount of $567,270 to purchase 5,672,700 shares of common stock along
with warrants for an additional 2,547,700 shares of common stock, at an exercise
price of $0.35 per share, in connection with a private placement of its
restricted common stock and warrants under Regulation S.

During the three months ended March 31, 2005 we issued 200,000 common stock
purchase warrants for services. The warrants are exercisable immediately at an
exercise price of $0.25 per share and expire if unexercised in three years. The
warrants have been valued at $21,100 using the Black-Sholes option pricing model
with the following assumptions: (1) dividend yield of 0%; (2) expected
volatility of 60%, (3) risk-free interest rate of 3%, and (4) expected life of 3
years.

                                       F-8
<PAGE>

Since we do not have sufficient authorized shares to enable the exercise of our
outstanding common stock purchase warrants, we have reclassified the fair value
of the warrants as a liability on the balance sheet at December 31, 2005 (See
Note F).

NOTE C- WARRANTS AND STOCK OPTIONS

Since we do not have sufficient authorized shares to enable the exercise of our
outstanding common stock purchase options and warrants, we have reclassified the
fair value of the options and warrants as a liability on the balance sheet at
December 31, 2005 (See Note F).

NOTE D - RELATED PARTY TRANSACTIONS

During the year ended December 31, 2002 the Company's President advanced funds
to the Company for working capital purposes in the form of a non-interest
bearing unsecured promissory note payable on demand. The net amount of the
advances due the Company's President at December 31, 2004 is $200,000 and is
included in accrued expenses.

NOTE E- CONVERTIBLE NOTE PAYABLE TO RELATED PARTY

The Company entered into a Debt Exchange Agreement with its president and chief
executive officer, Jacques Mot and its wholly owned subsidiary New Generation
Plastic, Inc. dated as of the December 7, 2005. Pursuant to the Debt Exchange
Agreement, we issued Mr. Mot a Convertible Promissory Note in the original
principal amount of $753,304 representing outstanding amounts owed to him under
his Consulting Agreement through December 31, 2004. The Convertible Promissory
Note bears interest at a rate of 10% per annum, is payable on demand and is
convertible at the option of Mr. Mot into shares of our Preferred Stock, or into
shares of NGP Preferred Stock, subject to stockholder approval of the "spinoff"
of NGP. The conversion rate under the note is $1.507 per share of Preferred
Stock (whether NGH or NGP) and each share of Preferred Stock is convertible into
73 shares of Common Stock subject to adjustment for stock splits, stock
dividends or similar transactions. Accordingly, if Mr. Mot converts the entire
amount outstanding under the Convertible Promissory Note as of the date of
issuance into shares of NGH Preferred Stock, he would own 37,690,506 shares of
Common Stock (including the 100,000 shares and currently exercisable options to
purchase 1,100,000 shares he owned prior to the issuance of the Convertible
Promissory Note) representing approximately 34% of the Company on a fully
diluted basis or approximately 45% of the Company assuming exercise of Mr. Mot's
options, but excluding options and/or warrants held by all other stockholders.
Similarly, if our stockholders approve the "spinoff" of NGP and Mr. Mot elects
to convert the entire amount outstanding under the Convertible Promissory Note
into NGP Preferred Stock, he would own 37,690,506 shares of NGP Common Stock
representing approximately 34% on fully diluted basis or approximately 45%
assuming exercise of Mr. Mot's options, but excluding options and/or warrants
held by all other stockholders.

As the note is convertible at a discount to market at the date of issue, the
Company has determined that there is a beneficial conversion feature associated
with the debt in the amount of $753,304. Since the note is due upon demand this
amount has been charged to interest expense as of the date issued.

Since we do not have sufficient authorized shares to enable the conversion of
the note into our common shares, we have reclassified the value of the embedded
conversion option as a liability on the balance sheet at December 31, 2005 (See
Note F).

                                       F-9
<PAGE>

NOTE F - WARRANT AND DERIVATIVE LIABILITIES

As disclosed in Note B, we do not have sufficient authorized common shares
available to enable the exercise of outstanding options and warrants and
conversion of our outstanding convertible note. Any increase in authorized
shares is subject to shareholder approval. Accordingly, the Company can not be
assured that there will be adequate authorized shares to settle all contractual
obligations under the note agreement and other option and warrant agreements
outstanding.

Accordingly, in accordance with the provisions of EITF 00-19, "Accounting for
Derivative Financial Instruments Indexed to and Potentially Settled in a
Company's Own Stock" the Company has reviewed all instruments previously
recorded as permanent equity under EITF 00-19.

During January through March, 2006 the fair value of new instruments issued
during this period have been classified as liabilities as of the date of issue.
This amount aggregated $149,362 computed under a Black Scholes model with the
following assumptions: (1) dividend yield of 0% (2) expected volatility of 141%
(3) risk-free interest rate of 4.4% and (4) expected life of 2 years.

At March 31, 2006 the fair value of each instrument was again computed under a
Black Scholes model with the following assumptions: (1) dividend yield of 0% (2)
expected volatility of 151% (3) risk-free interest rate of approximately 5% and
(4) expected life and exercise prices consistent with each individual
instrument. These calculations resulted in an aggregate value of derivative
instruments of approximately $5,103,000. As a result, for the three months ended
March 31, 2006 the Company recorded approximately $245,000 as a credit to Change
in Value of Warrant Liability.

We have also classified the value attributed to the beneficial conversion
feature described in Note I as a liability on the balance sheet in the amount of
$753,304, since we do not have sufficient authorized common shares available to
enable the conversion of our outstanding convertible note.


                                      F-10
<PAGE>




ITEM 2. PLAN OF OPERATION

The following discussion and analysis provides information which our management
believes to be relevant to an assessment and understanding of our results of
operations and financial condition. This discussion should be read together with
our financial statements and the notes to financial statements, which are
included in this report.

We are pursuing a business plan related to NGP and the NGP Process described
below. Accordingly, the operating activities prior to April 8, 2003 have been
reported as discontinued operations on the Company's consolidated statement of
operations. We are now considered to be in the development stage as defined by
Statement of Financial Accounting Standards ("SFAS") No. 7, "Accounting and
reporting by Development Stage Enterprises".


NGP AND THE NGP PROCESS (TM)

We own and develop patented and proprietary plastic blending (NGP(TM))
technology, whereby various kinds of plastic can be mixed without the use of
expensive chemical additives. The uniqueness of this blending technology stems
from its potential cost-effective applications in many fields of the plastic
industry from the recycling of computer scrap to the creation of new thermo
plastic compound and, in conjunction with saw dust, to the creation of new
versions of wood plastic.

Our mission is to commercialize the technology through applications in the
virgin plastic markets (polymer alloys) and the plastic recycling sector
(recycling of obsolete computer and other electronic equipment).

We believe our patented proprietary process, the NGP(TM) technology, is capable
of producing homogeneous, commercially usable polymer end products from mixed
virgin plastic and/or recycled waste plastic without chemical additives, or
so-called compatibilizers which link non-compatible resins.


CRITICAL ACCOUNTING POLICIES

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

USE OF ESTIMATES

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the consolidated financial statements and
accompanying disclosures. Although these estimates are based on management's
best knowledge of current events and actions the Company may undertake in the
future, actual results may differ from those estimates.

<PAGE>

FOREIGN CURRENCY TRANSLATION

The Company translates the foreign currency financial statements of its foreign
subsidiaries in accordance with the requirements of Statement of Financial
Accounting Standards No. 52, "Foreign Currency Translation." Assets and
liabilities are translated at current exchange rates, and related revenue and
expenses are translated at average exchange rates in effect during the period.
Resulting translation adjustments are recorded as a separate component in
stockholders' equity. Foreign currency translation gains and losses are included
in the statement of income.

GOING CONCERN

We are currently in the process of implementing our business plan for developing
and marketing our NGP Process. At present, we have insufficient capital on hand
to fund our operations through 2006. There can be no assurance that upon
implementing our new business plan, we will be successful or that we will start
producing sufficient revenues to maintain our operations. The foregoing matters
raise substantial doubt about our ability to continue as a going concern.

NEW ACCOUNTING PRONOUNCEMENTS

On January 1, 2006, we adopted the fair value recognition provisions of
Financial Accounting Standards Board ("FASB") Statement of Financial Accounting
Standards ("SFAS") No. 123, Accounting for Stock Based Compensation, to account
for compensation costs under our stock option plans. We previously utilized the
intrinsic value method under Accounting Principles Board Opinion No. 25,
Accounting for Stock Issued to Employees (as amended) ("APB 25"). Under the
intrinsic value method prescribed by APB 25, no compensation costs were
recognized for our employee stock options because the option exercise price
equaled the market price on the date of the grant. Prior to January 1, 2006 we
only disclosed the pro forma effects on net income and earnings per share as if
the fair value recognition provisions of SFAS 123(R) had been utilized.

In adopting SFAS No. 123(R), we elected to use the modified prospective method
to account for the transition from the intrinsic value method to the fair value
recognition method. Under modified prospective method, compensation cost is
recognized from the adoption date forward for all new stock options granted and
for any outstanding unvested awards as if the fair value method had been applied
to those awards as of the date of the grant. We had no outstanding unvested
awards at the adoption date and we had no outstanding unvested awards during the
2005 comparative period.

RESULTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2006 COMPARED TO THE THREE MONTHS ENDED MARCH 31,
2005

Operating losses decreased from $589,840 for the three months ended March 31,
2005 to $265,941for the three months ended March 31, 2006. The decrease of
$323,899 was the result of a decrease of $141,353 in general and administrative
expenses, from $387,498 in 2005 to $246,145 in 2006, and a decrease in research
and development expenses of $182,546, from $202,342 in 2005 to $19,796 in 2006.
The decrease in general and administrative expense results primarily from
decreased consulting expenses and professional fees. The decreases in these
areas is attributable to decreases in the costs of implementation of our NGP
business strategy, decreased costs to bring our public filings current, and
decreased costs in raising additional equity to enable us to revive the business
operations of our plastic subsidiary. Decreased research and development
expenses are a direct result decreased spending in the current period as
compared to 2005. We anticipate additional expenditures of approximately
$330,000 for research and development for the remainder of 2006.

We also recorded net other income of $226,146 in 2006, with no comparable items
in 2005. This other income consists of the non-cash gain in change of fair value
of the warrant liability of $244,979, partially offset by interest expense of
$18,833.

LIQUIDITY AND CAPITAL RESOURCES

As of March 31, 2006, we had a deficiency in working capital of $2,782,682. For
the three months ended March 31, 2006, we generated a net cash flow deficit from
operating activities of $250,740 consisting primarily of a net loss of $39,795,
adjusted for a net change in liabilities of $34,034 and non-cash financial
income of $244,979 related to the change in fair value of our warrant liability.
We have funded our operations through the sale of our common stock through
private placements. We do not have sufficient capital resources to meet
projected cash flow deficits and will continue to rely on debt and equity
funding. If we are unable to raise additional capital through debt or equity
financings, on terms acceptable to us, and are not successful in generating
sufficient liquidity from operations, then this lack of financing would have a
material adverse effect on our business, results of operations, liquidity and
financial condition.

We have relied mostly on advances from stockholders and sales of our common
stock. There is no assurance that the stockholders will continue to provide
sufficient funds for us to successfully continue our operations. Therefore, we
will need additional capital to continue our operations and will endeavor to
raise funds through the sale of equity shares and revenues from operations.

During the three months ended March 31, 2006, we raised $260,475 in
subscriptions for 2,604,750 shares of common stock (and warrants to purchase an
additional 2,604,750 shares of common stock at a purchase price of $0.35 per
share exercisable for a period of three years) in a Regulation S offering to
foreign investors that commenced in April of 2004; however, we currently have no
commitments for additional financing and there is no guarantee that we will be
successful in raising additional required funds.

<PAGE>

There can be no assurance that we will generate revenues from operations or
obtain sufficient capital on acceptable terms, if at all. Failure to obtain such
capital or generate such operating revenues would have an adverse impact on our
financial position and results of operations and ability to continue as a going
concern. Our operating and capital requirements during the next fiscal year and
thereafter will vary based on a number of factors, including the level of sales
and marketing activities for our plastic services and products. There can be no
assurance that additional private or public financings including debt or equity
financing, will be available as needed, or, if available, on terms favorable to
us. Any additional equity financing may be dilutive to stockholders and such
additional equity securities may have rights, preferences or privileges that are
senior to those of our existing common stock.

Furthermore, debt financing, if available, will require payment of interest and
may involve restrictive covenants that could impose limitations on our operating
flexibility. Our failure to successfully obtain additional future funding may
jeopardize our ability to continue our business and operations.

If we raise additional funds by issuing equity securities, existing stockholders
may experience a dilution in their ownership. In addition, as a condition to
giving additional funds to us, future investors may demand, and may be granted,
rights superior to those of existing stockholders.

Recent Developments

Consulting Arrangements

Pursuant to an engagement letter with Robert Scherne, CPA, P.C. dated February
10, 2006, we retained Robert Scherne as our interim Chief Financial Officer on a
consulting basis. Pursuant to the terms of the engagement letter, we pay Robert
Scherne, CPA, P.C. at an hourly rate of $150 per hour, $90 of which is payable
in cash and $60 of which is payable in restricted shares of our common stock.
The amount of common stock due to Mr. Scherne is determined on a monthly basis
by dividing $60 per billed hour by 50% of our average trading price for the
prior ninety days. Mr. Scherne's engagement may be terminated by either party
upon notice to the other party.

On March 15, 2006, we executed a Consulting Agreement with Patrick Hellinckx
relating to the provision of advice regarding financing options. Although this
Agreement was executed in March, certain of the services were performed in 2005.
Pursuant to this Consulting Agreement, we paid Mr. Hellinckx $7,800 and agreed
to issue 226,300 shares of our common stock (or at our option shares of NGP
Common Stock provided that the "spinoff" of NGP has occurred on or prior to
December 31, 2006) and warrants to purchase an additional 226,300 shares of our
common stock (or at our option shares of NGP Common Stock provided that the
"spinoff" of NGP has occurred on or prior to December 31, 2006) which shares and
warrants have been accrued on our December 31, 2005 balance sheet. The warrants
have an exercise price of $0.35 per share and expire five years from the date of
issuance. The Consulting Agreement expires on December 31, 2006.

On March 15, 2006, we executed a Consulting Agreement with Volader Corp.
relating to the provision of advice regarding financing options. Although this
Agreement was executed in March, certain of the services were performed in 2005.
Pursuant to this Consulting Agreement, we paid Volader $27,180 and agreed to
issue 714,847 shares of our common stock (or at our option shares of NGP Common
Stock provided that the "spinoff" of NGP has occurred on or prior to December
31, 2006) and warrants to purchase an additional 714,847 shares of our common
stock (or at our option shares of NGP Common Stock provided that the "spinoff"
of NGP has occurred on or prior to December 31, 2006) which shares and warrants
have been accrued on our December 31, 2005 balance sheet. The warrants have an
exercise price of $0.35 per share and expire five years from the date of
issuance. The Consulting Agreement expires on December 31, 2006.

On March 15, 2006, we executed a Consulting Agreement with Polymer Consulting
relating to the provision of advice regarding financing options. Although this
Agreement was executed in March, certain of the services were performed in 2005.
Pursuant to this Consulting Agreement, we paid Polymer Consulting $153,399.70
and agreed to issue 801,487 shares of our common stock (or at our option shares
of NGP Common Stock provided that the "spinoff" of NGP has occurred on or prior
to December 31, 2006) and warrants to purchase an additional 801,487 shares of
our common stock (or at our option shares of NGP Common Stock provided that the
"spinoff" of NGP has occurred on or prior to December 31, 2006) which shares and
warrants have been accrued on our December 31, 2005 balance sheet. The warrants
have an exercise price of $0.35 per share and expire five years from the date of
issuance. The Consulting Agreement expires on December 31, 2006.

On March 15, 2006, we executed a Consulting Agreement with Clanders Investors
relating to the provision of advice regarding financing options. Although this
Agreement was executed in March, certain of the services were performed in 2005.
Pursuant to this Consulting Agreement, we agreed to issue Clanders Investors
136,950 shares of our common stock (or at our option shares of NGP Common Stock
provided that the "spinoff" of NGP has occurred on or prior to December 31,
2006) and warrants to purchase an additional 136,950 shares of our common stock
(or at our option shares of NGP Common Stock provided that the "spinoff" of NGP
has occurred on or prior to December 31, 2006) which shares and warrants have
been accrued on our December 31, 2005 balance sheet. The warrants have an
exercise price of $0.35 per share and expire five years from the date of
issuance. The Consulting Agreement expires on December 31, 2006.

On March 15, 2006, we executed a Consulting Agreement with Jan Rasschaert
relating to the provision of advice regarding financing options. Although this
Agreement was executed in March, certain of the services were performed in 2005.
Pursuant to this Consulting Agreement, we agreed to issue Mr. Rasschaert 100,400
shares of our common stock (or at our option shares of NGP Common Stock provided
that the "spinoff" of NGP has occurred on or prior to December 31, 2006) and
warrants to purchase an additional 100,400 shares of our common stock (or at our
option shares of NGP Common Stock provided that the "spinoff" of NGP has
occurred on or prior to December 31, 2006) which shares and warrants have been
accrued on our December 31, 2005 balance sheet. The warrants have an exercise
price of $0.35 per share and expire five years from the date of issuance. The
Consulting Agreement expires on December 31, 2006.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is not exposed to foreign currency risk due to the Company's revenue
transactions being conducted in U.S. dollars.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure controls and procedures are controls and other procedures that are
designed to ensure that information required to be disclosed by us in the
reports that we file or submit under the Exchange Act is recorded, processed,
summarized and reported, within the time periods specified in the Securities and
Exchange Commission's rules and forms. Disclosure controls and procedures
include, without limitation, controls and procedures designed to ensure that
information required to be disclosed by us in the reports that we file under the
Exchange Act is accumulated and communicated to our management, including our
principal executive and financial officers, as appropriate to allow timely
decisions regarding required disclosure.

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

As of the end of the period covered by this Quarterly Report, we conducted an
evaluation, under the supervision and with the participation of our chief
executive officer and interim chief financial officer, of our disclosure
controls and procedures (as defined in Rules 13a-15(e) of the Exchange Act).
Based on their evaluation, our CEO and interim CFO have concluded that our
disclosure controls and procedures need improvement and were not adequately
effective as of March 31, 2006 to ensure timely reporting with the Securities
and Exchange Commission. We have engaged Robert Scherne in an effort to, among
other things, identify deficiencies with respect to our disclosure controls and
procedures and implement corrective measures, including the establishment of new
internal policies related to financial reporting.

<PAGE>

Changes in Internal Controls

There were not significant changes in the Company's internal controls or in
other factors that could significantly affect the Company's disclosure controls
and procedures subsequent to the Evaluation Date, nor any significant
deficiencies or material weaknesses in such disclosure controls and procedures
requiring corrective actions.


                            PART II OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

In the ordinary course of business, we may be involved in legal proceedings from
time to time. Although occasional adverse decisions or settlements may occur, we
believe that the final disposition of such matters will not have material
adverse effect on our financial position, results of operations or liquidity. We
will seek to minimize disputes but recognize the inevitability of legal action
in today's business environment as an unfortunate price of conducting business.

ITEM 2. UNREGISTERED SALES OF SECURITIES AND USE OF PROCEEDS

During the quarter ended March 31, 2006, we received subscriptions to purchase
2,604,750 shares of our common stock and warrants to purchase an additional
2,604,750 shares of our common stock to offshore investors for an aggregate
purchase price of $260,475 in reliance upon Regulation S. The warrants have an
exercise price of $0.35 per share and expire three years from the date of
issuance.

(b) None


                      ISSUER PURCHASES OF EQUITY SECURITIES
<TABLE>
<CAPTION>


Period                  (a)               (b)                   (c)                               (d)
                  Total Number of       Average      Total Number of Shares (or     Maximum Number (or Approximate
                 Shares (or Units)    Price Paid    Units) Purchased as Part of   Dollar Value) of Shares (or Units)
                     Purchased)        per Share    Publicly Announced Plans or     that May Yet Be Purchased Under
                                       (or Unit)            Programs (1)               the Plans or Programs (1)
<S>                     <C>              <C>                    <C>                               <C>

01/01/06-01/31/06        0                $ 0                    0                                 0
02/01/06-02/28/06        0                $ 0                    0                                 0
03/01/06-03/31/06        0                $ 0                    0                                 0

</TABLE>

<PAGE>


(1) We have not entered into any plans or programs under which we may repurchase
its common stock.

ITEM 3. DEFAULT UPON SENIOR SECURITIES

No report is required.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

ITEM 5. OTHER INFORMATION

Not applicable.

ITEM 6. EXHIBITS

(a) Exhibits required to be attached by Item 601 of Regulation S-B are listed
below and are incorporated herein by this reference.

Exhibit 31.1  Certificate pursuant to section 302 of the Sarbanes-Oxley Act of
              2002.

Exhibit 32.1  Certificate pursuant to section 906 of the Sarbanes-Oxley Act of
              2002.


<PAGE>




                                    SIGNATURE

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 GENERATION HOLDINGS, INC.


 /s/ Jacques Mot
------------------------------------------------
Jacques Mot
President, Chief Executive Officer, Secretary and Director

May 11, 2006