SECURITIES 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

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

  For Quarter Ended:                               Commission File Number:
    June 30, 2005                                          0-7722

                         NEW CENTURY COMPANIES, INC.
--------------------------------------------------------------------------------
            (Exact name of Registrant as specified in its charter)

           DELAWARE                                        061034587
-------------------------------                 ----------------------------
(State or other jurisdiction of                 (IRS Employer Identification
 Incorporation or organization)                             Number)

                          9835 Santa Fe Springs Road
                          Santa Fe Springs, CA 90670
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(Address of Principal Executive Offices)                    (Zip Code)

                                (562) 906-8455
--------------------------------------------------------------------------------
             (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required to file such  reports) and (2) has been subject to filing  requirements
for the past 90 days.

                                 Yes |X| No |_|

The number of shares of Common Stock, par value $ .10 per share, outstanding as
of August 19, 2005 was 8,492,265.

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


<PAGE>

ITEM 1.  FINANCIAL STATEMENTS

      The condensed  consolidated  financial statements are set forth at the end
of this document.

   CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)                    12

   Condensed Consolidated Balance Sheet                                       12

   Condensed Consolidated Statements of Operations                            13

   Condensed Consolidated Statements of Cash Flows                            14

   Notes to Condensed Consolidated Financial Statements                       15

ITEM 2.  MANAGEMENT'S  DISCUSSION  AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATIONS                                   3

ITEM 3. CONTROLS AND PROCEDURES                                                8

PART II OTHER INFORMATION                                                      9

ITEM 1. LEGAL PROCEEDING                                                       9

ITEM 2.  UNREGISTERED  SALES OF EQUITY SECURITIES AND USE OF
         PROCEEDS                                                              9

ITEM 3. DEFAULTS UPON SENIOR SECURITIES                                       10

ITEM 4. SUBMISSION OF MATERS TO A VOTE OF SECURITY HOLDERS                    11

ITEM 5. OTHER INFORMATION                                                     11

ITEM 6. EXHIBITS                                                              11


                                       2
<PAGE>

ITEM 1. FINANCIAL STATEMENTS

      The condensed  consolidated  financial statements are set forth at the end
of this document.

ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

      The following  discussion should be read in conjunction with the Company's
condensed  consolidated  financial  statements  and the notes thereto  appearing
elsewhere in this Form 10-QSB.  Certain statements contained herein that are not
related  to  historical  results,  including,  without  limitation,   statements
regarding the  Company's  business  strategy and  objectives,  future  financial
position,  expectations about pending litigation and estimated cost savings, are
forward-looking  statements  within the meaning of Section 27A of the Securities
Act and Section 21E of the  Securities  Exchange  Act of 1934,  as amended  (the
"Securities  Exchange  Act") and involve risks and  uncertainties.  Although the
Company believes that the assumptions on which these forward-looking  statements
are based are reasonable,  there can be no assurance that such  assumptions will
prove to be accurate  and actual  results  could  differ  materially  from those
discussed  in the  forward-looking  statements.  Factors  that  could  cause  or
contribute  to such  differences  include,  but are not limited  to,  regulatory
policies,  competition  from other  similar  businesses,  and market and general
policies,  competition  from other  similar  businesses,  and market and general
economic factors.  All forward-looking  statements contained in this Form 10-QSB
are qualified in their entirety by this statement.

Plan of Operations

      The  earnings of the Company for the three months ended June 30, 2005 were
negative  as a result  of a  decrease  in sales  and of the  corporate  expenses
related  to  compliance  with  the  regulatory  requirements  of  being a public
company.  The Company's  current  strategy is to expand its customer  sales base
with its present line of machine  products.  Plans for expansion are expected to
be  funded  through  current  working  capital  from  ongoing  sales.   However,
significant  growth will require additional funds in the form of debt or equity,
or a combination thereof. However, there can be no assurance these funds will be
available.

Results Of Operations  For the Three Months Ended June 30, 2005 Compared to June
30, 2004.

      Revenues.  The  Company  generated  revenues of  $1,207,979  for the three
months ended June 30, 2005, which was a $373,782 or 24% decrease from $1,581,761
for the three  months  ended  June 30,  2004.  The  decrease  is the result of a
deficiency in working capital, which has limited our ability to fulfill customer
orders.  Additionally,  the  overall  market  for  machine  tools  is  cyclical,
reflecting economic conditions,  production capacity utilization, changes in tax
and fiscal policies,  corporate profitability and financial condition as well as
the general level of business  confidence.  The Company  cannot predict for what
period of time the decreased level of customer purchases will continue,  whether
the level of customer  purchases  will  decline  further,  or the level at which
incoming orders will be.


                                       3
<PAGE>

      Gross Profit.  Gross profit for the three months ended June 30, 2005,  was
$372,168  or 31% of  revenues,  compared  to $61,210 or 4% for the three  months
ended June 30, 2004.  The $310,958  increase in gross profit was  generated by a
decrease  in cost of  sales  of  $684,740,  due to the  increased  productivity.
Additionally,  management  increased their effort in cutting material losses and
increased efficiency of labor.

      Net operating  loss decreased to $(58,632) for the three months ended June
30, 2005  compared to  $(217,020)  for the three months ended June 30, 2004 as a
result of  reducing  expenses,  such us  consulting,  salaries  and  general and
administrative, based on the continue struggle of the management to increase the
operations productivity.

      Net Loss.  Net loss  increased to $128,850 for the three months ended June
30, 2005  compared to a net income of $283,034  for the three  months ended June
30,  2004,  a  decrease  of  $411,884.  The  decrease  is a result of last years
$545,058 gain on  forgiveness  of accounts  payable when the Company`s  CEO/CFO,
David  Duquette,  proposed to major  suppliers a deal for payment of $0.50c open
payable for a $1, and personally pursued the vendors in accepting the proposal.

      Interest  Expense.  Interest  expense for the three  months ended June 30,
2005,  increased to $70,218 compared to $45,004, for the three months ended June
30, 2004, primarily due to the accrual of interest on four default notes payable
due to the inability of the Company to pay off their notes payable.  The Company
used these funds for the continuation of the operating activities.

Results Of  Operations  For the Six Months Ended June 30, 2005  Compared to June
30, 2004.

      Revenues.  The Company generated revenues of $2,639,868 for the six months
ended June 30, 2005,  which was a $78,799 or 3% increase from $2,561,069 for the
six months  ended June 30,  2004.  The  increase  is the result of less  foreign
competition and improved  market  conditions with impact in the first quarter of
the fiscal year 2005 sales.

      Gross  Profit.  Gross profit for the six months  ended June 30, 2005,  was
$758,187 or 29% of revenues,  compared to $26,517 or 1% for the six months ended
June 30, 2004. The $731,670 increase in gross profit was generated by a decrease
in cost of sales of  $652,871,  due to the  increased  productivity.  Management
increased their effort in cutting  material  losses and increased  efficiency of
labor.

      Net Operating  Income.  Net operating income increased to $101,568 for the
six months  ended June 30, 2005 from a loss of $710,108 for the six months ended
June 30, 2004,  primarily as a result of increased gross profit, and secondarily
as a result of reducing expenses,  such us consulting,  salaries and general and
administrative, based on the continue struggle of the management to increase the
operations productivity.


                                       4
<PAGE>

      Net Loss.  Net loss decreased to $17,717 for the six months ended June 30,
2005  compared to a net loss of $251,852 for the six months ended June 30, 2004,
a decrease of $234,135.  The decrease is a result of 114%  increase in operating
income for the analyzed period.

      Interest Expense. Interest expense for the six months ended June 30, 2005,
increased  to $119,285  compared to $86,802,  for the six months  ended June 30,
2004, primarily due to the accrual of interest on four default notes payable due
to the inability of the Company to pay off their notes payable. The Company used
these funds for the continuation of the operating activities.

FINANCIAL CONDITION, LIQUIDITY, CAPITAL RESOURCES

      The net cash decrease of the Company  during the six months ended June 30,
2005 was ($96,240). The decrease is due to net cash used in operating activities
of ($54,709) and ($41,531) of principal  payments on capital leases. At June 30,
2005,  the Company has a  substantial  working  capital  deficit and requires an
infusion  of funds in the  form of  equity  and/or  debt.  However,  there is no
guarantee that the Company will raise sufficient additional funds to execute its
business  plan.  To the extent  that the  Company is unable to raise  sufficient
additional  funds,  the Company's  business  plan will need to be  substantially
modified,   its   operations   curtailed  or  protection   under   bankruptcy  /
reorganization laws sought.

      The Company is currently  addressing its liquidity  issue by the following
actions: The Company continues its aggressive program for selling inventory that
has been  produced or is  currently  in  production.  The Company  continues  to
implement plans to further reduce  operating  costs.  The Company is continually
seeking  investment capital through the public markets including through private
placements.  However,  there is no guarantee that any of these  strategies  will
enable the Company to meet its obligations for the foreseeable future.

INFLATION AND CHANGING PRICES

      The Company  does not foresee  any  adverse  effects on its  earnings as a
result of inflation or changing prices.

GOING CONCERN

      The Company has  incurred  operating  losses in the last two years,  has a
working  capital  deficit  and  a  significant   stockholders'   deficit.  These
conditions, among others, raise substantial doubt about the Company's ability to
continue as a going concern.


                                       5
<PAGE>

CRITICAL ACCOUNTING POLICIES

      The  preparation  of  financial  statements  and  related  disclosures  in
conformity with accounting principles generally accepted in the United States of
America  requires  management to make judgments,  assumptions and estimates that
affect the amounts reported in the condensed  consolidated  financial statements
and the accompanying  notes.  The amounts of assets and liabilities  reported on
the balance sheet and the amounts of revenues and expenses  reported for each of
the fiscal  periods are affected by estimates  and  assumptions,  which are used
for,  but not  limited to, the  accounting  for  revenue  recognition,  accounts
receivable,  doubtful accounts and inventories. Actual results could differ from
these estimates.  The following critical  accounting  policies are significantly
affected by judgments,  assumptions and estimates used in the preparation of the
financial statements:

      Concentration of Credit Risk

      The Company sells products to customers  throughout the United States. The
Company's ability to collect receivables is affected by economic fluctuations in
the geographic areas served by the Company. Although the Company does not obtain
collateral   with  which  to  secure  its   contracts   receivable,   management
periodically reviews contracts receivable and assesses the financial strength of
its customers  and, as a consequence,  believes that the receivable  credit risk
exposure is limited.

      Long-Lived Assets

      Statement of Financial  Accounting Standards ("SFAS") No. 144, "Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
Of" addresses financial  accounting and reporting for the impairment or disposal
of long-lived  assets.  SFAS 144 requires that long-lived assets be reviewed for
impairment  whenever  events or changes  in  circumstances  indicate  that their
carrying amount may not be recoverable.  If the cost basis of a long-lived asset
is greater than the projected future undiscounted net cash flows from such asset
(excluding  interest),  an impairment loss is recognized.  Impairment losses are
calculated  as the  difference  between  the  cost  basis  of an  asset  and its
estimated  fair value.  SFAS 144 also requires  companies to  separately  report
discounted  operations  and extends  that  reporting to a component of an entity
that either has been disposed of (by sales,  abandonment or in a distribution to
owners) or is classified as held for sale. Assets to be disposed of are reported
at the  lower of the  carrying  amount or fair  value  less  costs to sell.  The
Company adopted SFAS 144 on January 1, 2002. The provision of this statement for
assets  held for sale or other  disposal  generally  are  required to be applied
prospectively after the adoption date to newly initiated  commitments to plan to
sell such assets,  as defined,  by management.  As a result,  management  cannot
determine  the  potential  effects  that  adoption  of SFAS 144 will have on the
Company's financial statements with respect to future disposal decision, if any.
To date,  management has noted no indicators requiring review for impairment and
therefore,  no adjustments  have been made to the carrying  values of long-lived
assets.  There can be no assurance,  however,  that market  conditions  will not
change or demand for the  Company's  products or services  will  continue  which
could result in impairment of long-lived assets in the future.


                                       6
<PAGE>

      Revenue Recognition

      Service  revenues are billed and recognized in the period the services are
rendered.

      The  Company  accounts  for  shipping  and  handling  fees  and  costs  in
accordance  with EITF 00-10  "Accounting  for  Shipping  and  Handling  Fees and
Costs."  Such fees and costs  incurred  by the  Company  are  immaterial  to the
operations of the Company.

      In  accordance  with SFAS 48,  "Revenue  Recognition  when Right of Return
Exists," revenue is recorded net of an estimate of markdowns,  price concessions
and  warranty  costs.  Such  reserve  is based  on  management's  evaluation  of
historical experience, current industry trends and estimated costs.

      In December  1999, the  Securities  and Exchange  Commission  issued Staff
Accounting  Bulletin 101 ("SAB  101"),  "Revenue  Recognition,",  as amended and
superceded  by SAB 104,  which  outlines the basic  criteria that must be met to
recognize  revenue and  provides  guidance for  presentation  of revenue and for
disclosure related to revenue recognition policies in financial statements filed
with the  Securities  and  Exchange  Commission.  Management  believes  that the
Company's revenue  recognition policy for services and product sales conforms to
SAB 104.  The Company  recognizes  revenue of  long-term  contracts  pursuant to
Statement of Position 81-1,  "Accounting  for Performance of Construction - Type
and Certain Production - Type Contracts."

Method of Accounting for Long-Term Contracts

      The Company  uses the  percentage-of-completion  method of  accounting  to
account for long-term  contracts  and,  therefore,  takes into account the cost,
estimated earnings and revenue to date on fixed-fee contracts not yet completed.
The  percentage-of-completion  method is used because management considers total
cost to be the best available  measure of progress on the contracts.  Because of
inherent  uncertainties in estimating costs, it is at least reasonably  possible
that the estimates used will change within the near term.

      The amount of revenue  recognized at the statement  date is the portion of
the total contract price that the cost expended to date bears to the anticipated
final cost, based on current estimates of cost to complete. It is not related to
the progress billings to customers. Contract costs include all materials, direct
labor, machinery, subcontract costs and allocations of indirect overhead.


                                       7
<PAGE>

      Because long-term  contracts may extend over a period of time,  changes in
job  performance,  changes in job  conditions and revisions of estimates of cost
and  earnings  during the  course of the work are  reflected  in the  accounting
period in which the facts that require the revision  become known. At the time a
loss on a contract  becomes known,  the entire amount of the estimated  ultimate
loss is recognized in the consolidated financial statements.

      Contracts  that are  substantially  complete  are  considered  closed  for
consolidated  financial  statement  purposes.  Revenue  earned on  contracts  in
progress in excess of  billings  (under  billings)  is  classified  as a current
asset. Amounts billed in excess of revenue earned  (overbillings) are classified
as a current liability.

      Other Significant Accounting Policies

      Other  significant  accounting  policies not  involving  the same level of
measurement  uncertainties as those discussed above, are nevertheless  important
to an  understanding  of the  financial  statements.  The  policies  related  to
consolidation  and loss  contingencies  require  difficult  judgments on complex
matters that are often subject to multiple sources of authoritative guidance.

      Certain of these matters are among topics currently under reexamination by
accounting  standards setters and regulators.  Although no specific  conclusions
reached by these  standards  setters appear likely to cause a material change in
the Company's accounting policies, outcomes cannot be predicted with confidence.
Also see Note 1 of the Notes to  Condensed  Consolidated  Financial  Statements,
Organization and Significant  Accounting  Policies,  which discusses  accounting
policies  that  must  be  selected  by  management  when  there  are  acceptable
alternatives.

ITEM 3. CONTROLS AND PROCEDURES

(a)   Evaluation of Disclosure Controls and Procedures

      Disclosure controls and procedures are designed to ensure that information
required to be  disclosed in the reports  filed or submitted  under the Exchange
Act is recorded,  processed,  summarized  and reported,  within the time periods
specified in the SEC's rules and forms.  Disclosure  controls and procedures (as
defined in Rules 13(a)-15(c) of the Exchange Act) include,  without  limitation,
controls  and  procedures  designed  to ensure that  information  required to be
disclosed  in the  reports  filed  under the  Exchange  Act is  accumulated  and
communicated  to  management,  including the Chief  Executive  Officer and Chief
Financial Officer, as appropriate,  to allow timely decisions regarding required
disclosure.


                                       8
<PAGE>

      Within 90 days prior to the filing of this report, the Company carried out
an evaluation, under the supervision and with the participation of the Company's
management, including the Company' s Chief Executive Officer and Chief Financial
Officer,  of the  effectiveness  of the design and  operation  of the  Company's
disclosure  controls and  procedures.  Based upon and as of the date of June 30,
2005, the Chief Executive Officer and Chief Financial Officer concluded that the
Company's  disclosure  controls and procedures  over  financial  reports are not
effective to ensure that the information required to be disclosed in the reports
the Company  files and submits  under the Exchange  Act is recorded,  processed,
summarized and reported as and when required.

(b)   Changes in Internal Controls

      There were no changes in the Company's  internal  controls over  financial
reporting during the quarter ended June 30, 2005 that are likely to affect those
controls.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

      None.

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

      During the quarter ended June 30,2005,  the Company issued 900,000 shares.
The shares were issued pursuant to Section 4(2) of the Act.

On April 12, 2005,  the Company and one if its  noteholders  (the  "Noteholder")
executed a mutual agreement (the "Extension  Agreement")  whereby the Noteholder
agreed not to  foreclose on the security  interest of two notes  payable,  which
were in default,  before the  earlier of a funding  (which has not occured as of
the  filing of this Form  10-QSB)  or  August  13,  2005.  As  consideration  to
effectively  extend the due date of the two notes  until  August 13,  2005,  the
Company issued the Noteholder 250,000 shares of the Company's  restricted common
stock.  Additionally,  the Extension  Agreement required the Company to register
the  shares by August  13,  2005,  or it would  need to pay  penalties  of 1,000
additional shares being issued for each day of delay up to thirty days and 2,500
additional  shares  for each day  thereafter.  The  estimated  fair value of the
250,000 shares (based on the trading price of the Company's stock on the date of
issuance)  totaling  $47,500  was  recorded  on the date of  issuance  as a debt
discount  against the face value of the notes and is being amortized to interest
expense  over the  extension  period in  accordance  with EITF 96-19,  "Debtor's
Accounting for a Modification or Exchange of Debt Instruments."  Amortization of
the  discount to interest  expense  during the three  months ended June 30, 2005
totaled $29,687.

On April 21, 2005, the Company  entered into a six month  corporate  finance and
investor  relations  consulting  agreement.  As a  commencement  bonus  for  the
services to be provided by the consultant,  the Company issued 100,000 shares of
restricted  common stock in  accordance  with the  contract.  Additionally,  the
contract requires the Company to pay the consultant a finder's fee of 2.5% under
any future Fee Transaction, as defined, occuring during the term of the contract
or within one year thereafter.  The fair value of the 100,000 share commencement
bonus  (based  on the  trading  price  of the  Company's  stock  on the  date of
issuance) totaling $20,000 was recorded as deferred  consulting fees on the date
of issuance and is being amortized to consulting expense over the six month term
of the agreement.  The remaining  deferred  consulting  fees under this contract
totaled $6,667 at June 30, 2005.


                                       9
<PAGE>

On April 21, 2005, the Company issued 100,000 shares of restricted  common stock
to one of its former customers as a partial legal settlement for a pending claim
related to the sale of one its machines.  Accordingly,  the Company  immediately
expensed  the fair value of such common  stock  totaling  $20,000  (based on the
trading price of the Company's stock on the date of issuance).

On April 25, 2005 the Company issued  300,000 shares of restricted  common stock
to a holder of the Company's Cumulative,  Convertible,  Series D preferred stock
("Series D") under a verbal agreement as the sole  consideration  and remedy for
failure to register the common shares underlying the Series D. Accordingly,  the
Company  expensed  the fair value of the  300,000  common  shares  (based on the
trading price of the Company's stock on such date of issuance) totaling $90,000.

On April 25, 2005, the Company issued 150,000 shares of restricted  common stock
to a consultant for corporate  finance and investor  relations  services under a
six month verbal  agreement.  The Company  recorded the fair value of the common
stock  (based  on the  trading  price  of the  Company's  stock  on the  date of
issuance)  totaling  $45,000 as deferred  consulting fees and is amortizing such
amount  over  the  six  month  term of the  agreement.  The  remaining  deferred
consulting fees under this agreement totaled $14,100 at June 30, 2005.

Item 3. Defaults Upon Senior Securities

During the year ended December 31, 2001,  the Company  entered into an unsecured
note payable ("Note A") with a third party for $250,000. Note A accrues interest
at a fixed rate of 18% per annum and matured in December 2003, as amended.  Note
A is personally  guaranteed  by a stockholder  and is in default at December 31,
2004. At June 30, 2005, the total  outstanding  principal  balance on Note A was
$250,000.

During the year ended December 31, 2001, the Company entered into a note payable
("Note B") with a third party for $215,000.  Note B accrues  interest at a fixed
rate of 15% per annum and  matured in March  2002.  Note B is secured by certain
assets of the Company,  as defined,  and is in default at December 31, 2004.  At
June 30, 2005, the total outstanding principal balance on Note B was $215,000.


                                       10
<PAGE>

In January 2003, the Company  entered into a note payable  agreement  ("Note C")
with two  individuals in the amount of $500,000 with an interest rate of 11% per
annum,  which matured in April 2003 and is in default at December 31, 2004.  The
note was issued  with a discount  of $45,000,  which the  Company  amortized  to
interest  expense in the  accompanying  consolidated  statement of operation for
2003. In connection  with Note C, the Company issued warrants to purchase 25,000
shares of common stock.  Note C is secured by certain assets of the Company.  At
June 30, 2005, the total outstanding principal balance on Note C was $500,000.

In December 2002, the Company entered into a note payable  agreement  ("Note D")
with two  individuals in the amount of $250,000 with an interest rate of 11% per
annum,  which matured in February  2003.  The note was issued with a discount of
$15,000,  which the Company  amortized to interest  expense in the  accompanying
consolidated  statement of operations  for 2003. In connection  with Note D, the
Company issued  warrants to purchase 5,000 shares of common stock related to the
extension of the maturity date of Note D to April 2004. On April 12, 2005,  Note
D was extended  through  August 13, 2005 and had a total  outstanding  principal
balance of $250,000. For the consideration of the extension,  the Company issued
250,000 common stock with a fair value of $47,500. The cost of the extension has
been amortized over 4 month. As of June 30, 2005, the Company  amortized $29,687
of the cost.

During November 2004, the Company  borrowed  $80,816 on two notes payable ("Note
E") to one  individual.  Note E in unsecured,  matured in January  2005,  has an
interest  rate of 6% and is  currently  in  default.  At June 30, 2005 the total
outstanding principal balance on Note E was $80,816.

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

      None.

Item 5. Other Information

      None.

Item 6. Exhibits

      (a)   Exhibits:

            31.1  302 Sarbanes  Oxley  Certification  of David  Duquette,  Chief
                  Executive Officer and Chief Financial Officer

            32.1  906 Sarbanes Oxley Certification


                                       11
<PAGE>

<TABLE>
-----------------------------------------------------------------------------------------------
                             NEW CENTURY COMPANIES, INC. AND SUBSIDIARY
                                CONDENSED CONSOLIDATED BALANCE SHEET

                                             June 30, 2005
                                              (Unaudited)

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


                                   ASSETS

<S>                                                                                 <C>
Current Assets
      Cash                                                                          $    32,847
      Contracts receivable                                                                2,867
      Inventories, net                                                                  930,612
      Costs and estimated earnings in excess of billings on uncompleted contracts       507,528
      Other current assets                                                                1,560
                                                                                    -----------

           Total current assets                                                       1,475,414

Property and Equipment, net                                                             203,464
                                                                                    -----------

                                                                                    $ 1,678,878
                                                                                    ===========

                   LIABILITIES AND STOCKHOLDERS' DEFICIT

Current Liabilities

      Accounts payable and accrued expenses                                         $ 2,201,135
      Dividends payable                                                                 515,100
      Billings in excess of costs and estimated earnings on uncompleted contracts       553,250
      Notes payable, net of discount                                                  1,278,003
      Capital lease obligations                                                          30,848
                                                                                    -----------

           Total current liabilities                                                  4,578,336
                                                                                    -----------

Commitments and Contingencies

Stockholders' Deficit

      Cumulative, convertible, Series B preferred stock, $1 par value
      15,000,000 shares authorized; no shares issued and outstanding                         --
      Cumulative, convertible, Series C preferred stock, $1 par value
      75,000 shares authorized; 60,780 shares issued and outstanding
              (liquidation preference of $1,946,000)                                     60,780
      Cumulative, convertible, Series D preferred stock, $25 par value
      75,000 shares authorized; 23,640 shares issued and outstanding
              (liquidation preference of $680,000)                                      591,000
      Common stock, $0.10 par value, 50,000,000 shares authorized;
        8,192,265 shares issued and outstanding                                         819,227
      Subscriptions receivable                                                         (462,500)
      Notes receivable from stockholders                                               (485,924)
      Deferred consulting fees                                                          (20,767)
      Additional paid-in capital                                                      4,193,474
      Accumulated deficit                                                            (7,594,748)
                                                                                    -----------

      Total stockholders' deficit                                                    (2,899,458)
                                                                                    -----------

                                                                                    $ 1,678,878
                                                                                    ===========

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

               See accompanying notes to condensed consolidated financial statements.
</TABLE>


                                       12
<PAGE>

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------

                                        NEW CENTURY COMPANIES, INC. AND SUBSIDIARY
                                     CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                For the Three and Six Months Ended June 30, 2005 and 2004
                                                       (Unaudited)

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

                                                                For the Three Months         For the Six Months
                                                                   Ended June 30,               Ended June 30,
                                                                2005           2004           2005           2004
                                                             -----------    -----------    -----------    -----------
<S>                                                          <C>            <C>            <C>            <C>
  NET SALES                                                  $ 1,207,979    $ 1,581,761    $ 2,639,868    $ 2,561,069

  COST OF SALES                                                  835,811      1,520,551      1,881,681      2,534,552
                                                             -----------    -----------    -----------    -----------

  GROSS PROFIT                                                   372,168         61,210        758,187         26,517
                                                             -----------    -----------    -----------    -----------

OPERATING EXPENSES

  Consulting and other compensation                              153,407         18,654        198,379        186,513
  Salaries and related                                            40,362         73,784         97,552        128,748
  Selling, general and administrative                            237,031        185,792        360,688        421,364
                                                             -----------    -----------    -----------    -----------
  TOTAL OPERATING EXPENSES                                       430,800        278,230        656,619        736,625
                                                             -----------    -----------    -----------    -----------

OPERATING INCOME (LOSS)                                          (58,632)      (217,020)       101,568       (710,108)
                                                             -----------    -----------    -----------    -----------

OTHER INCOME (EXPENSE)

  Interest expense                                               (70,218)       (45,004)      (119,285)       (86,802)
  Gain on forgiveness of accounts payable                             --        545,058             --        545,058
                                                             -----------    -----------    -----------    -----------
  TOTAL OTHER INCOME (EXPENSE)                                   (70,218)       500,054       (119,285)       458,256
                                                             -----------    -----------    -----------    -----------

INCOME (LOSS) BEFORE PROVISION FOR

INCOME TAXES                                                    (128,850)       283,034        (17,717)      (251,852)

PROVISION FOR INCOME TAXES                                            --             --             --             --
                                                             -----------    -----------    -----------    -----------

NET INCOME (LOSS)                                            $  (128,850)   $   283,034    $   (17,717)   $  (251,852)
                                                             ===========    ===========    ===========    ===========

NET INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS           $  (234,375)   $   243,284    $  (123,242)   $  (331,352)
                                                             ===========    ===========    ===========    ===========

Basic net income (loss) available to common stockholders
per common share                                             $     (0.03)   $      0.03    $     (0.02)   $     (0.05)
                                                             ===========    ===========    ===========    ===========

Diluted net income (loss) available to common stockholders
per common share                                             $     (0.03)   $      0.03    $     (0.02)   $     (0.05)
                                                             ===========    ===========    ===========    ===========

Basic weighted average common shares
  outstanding                                                  7,978,932      6,995,265      7,635,598      6,953,598
                                                             ===========    ===========    ===========    ===========

Diluted weighted average common shares
  outstanding                                                  7,978,932      8,816,848      7,635,598      6,953,598
                                                             ===========    ===========    ===========    ===========

---------------------------------------------------------------------------------------------------------------------
                       See accompanying notes to condensed consolidated financial statements.
</TABLE>


                                       13
<PAGE>

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------

                              NEW CENTURY COMPANIES, INC. AND SUBSIDIARY
                           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                           FOR THE SIX MONTHS ENDED JUNE 30, 2005 AND 2004
                                              (Unaudited)

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

                                                                             2005         2004
                                                                           ---------    ---------
<S>                                                                        <C>          <C>
Cash flows from operating activities:
     Net loss                                                              $ (17,717)   $(251,852)
     Adjustments to reconcile net loss to net cash
     used in operating activities:
         Depreciation and amortization of property and equipment             127,487      138,128
         Amortization of deferred consulting fees                             52,566      103,250
         Gain on forgiveness of accounts payable                                  --      545,058
         Amortization of debt discount                                        29,687           --
         Estimated fair market value of common stock
             issued as partial legal settlement                               20,000       50,000
         Estimated fair market value of common stock issued for
             penalty of failure to register convertible preferred shares      90,000           --
         Changes in operating assets and liabilities:
             Contracts receivable                                                 --      110,684
             Inventories                                                      49,630      (14,697)
             Costs in excess of billings on uncompleted contracts           (255,696)    (172,650)
             Other current assets                                                 --        5,381
             Accounts payable and accrued expenses                            56,470     (896,990)
             Billings in excess of costs on uncompleted contracts           (207,136)    (264,355)
                                                                           ---------    ---------

     Net cash used in operating activities                                   (54,709)    (648,043)
                                                                           ---------    ---------

Cash flows from investing activities:

     Purchases of property and equipment                                          --       (1,396)
                                                                           ---------    ---------

     Net cash used in investing activities                                        --       (1,396)
                                                                           ---------    ---------

Cash flows from financing activities:

     Bank overdraft                                                               --       13,679
     Principal repayments on obligations under capital lease                 (41,531)     (41,209)
     Issuance of preferred stock, net of commissions
         and offering costs                                                       --      521,000
                                                                           ---------    ---------

     Net cash (used in) provided by financing activities                     (41,531)     493,470
                                                                           ---------    ---------

Net decrease increase in cash                                                (96,240)    (155,969)

Cash at beginning of period                                                  129,087      155,969
                                                                           ---------    ---------

Cash at end of period                                                      $  32,847    $      --
                                                                           =========    =========

Supplemental disclosure of noncash investing and financing activities:

     Dividends payable                                                     $ 105,525    $  79,500
                                                                           =========    =========

     Debt discount for note payable extension                              $  47,500    $      --
                                                                           =========    =========

-------------------------------------------------------------------------------------------------
            See accompanying notes to condensed consolidated financial statements.
</TABLE>


                                       14
<PAGE>

NEW CENTURY COMPANIES, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION AND NATURE OF OPERATIONS

New Century  Companies,  Inc. and Subsidiary  (collectively,  the "Company"),  a
California  corporation,  was incorporated March 1996 and is located in Southern
California.  The Company provides after-market  services,  including rebuilding,
retrofitting and remanufacturing of metal cutting machinery.  Once completed,  a
remanufactured  machine is "like new" with state-of-the-art  computers,  and the
cost to the  Company's  customers is  approximately  40% to 50% of that of a new
machine.

The Company  currently  sells its services by direct sales and through a network
of machinery  dealers  across the United  States.  Its  customers  are generally
medium to large sized manufacturing  companies in various industries where metal
cutting is an integral part of their  businesses.  The Company  grants credit to
its customers who are predominately located in the western United States.

The Company trades on the OTC Bulletin Board under the symbol "NCNC.OB".

PRINCIPLES OF CONSOLIDATION

The  condensed  consolidated  financial  statements  include the accounts of New
Century   Companies,   Inc.  and  its  wholly  owned  subsidiary,   New  Century
Remanufacturing  (collectively,  the "Company").  All  significant  intercompany
accounts and transactions have been eliminated in consolidation.

BASIS OF PRESENTATION

The accompanying  unaudited interim condensed  consolidated financial statements
have been prepared by the Company,  pursuant to the rules and regulations of the
Securities and Exchange Commission (the "SEC"). Certain information and footnote
disclosures  normally  included in financial  statements  prepared in accordance
with accounting  principles  generally  accepted in the United States of America
have been omitted pursuant to such SEC rules and regulations;  nevertheless, the
Company  believes  that the  disclosures  are  adequate to make the  information
presented not misleading. These financial statements and the notes hereto should
be read in conjunction with the financial  statements,  accounting  policies and
notes  thereto  included in the  Company's  Annual Report on Form 10-KSB for the
year ended December 31, 2004,  filed with the SEC. In the opinion of management,
all  adjustments  necessary to present  fairly,  in accordance  with  accounting
principles  generally  accepted in the United  States of America,  the Company's
financial  position as of June 30, 2005,  and the results of operations and cash
flows for the  interim  periods  presented,  have been  made.  Such  adjustments
consist only of normal recurring adjustments.  The results of operations for the
three and six months ended June 30, 2005 are not  necessarily  indicative of the
results for the full year.

GOING CONCERN

The accompanying  condensed consolidated financial statements have been prepared
assuming the Company will continue as a going concern, which contemplates, among
other things,  the realization of assets and  satisfaction of liabilities in the
normal course of business. As of June 30, 2005, the Company has negative working
capital of $3,102,922  and an accumulated  deficit of $7,594,748,  and recurring
losses. These factors, among others, raise substantial doubt about the Company's
ability to continue as a going concern.  The Company  intends to fund operations
through  increased  sales  and  debt and  equity  financing  arrangements  which
management  believes  may be  insufficient  to fund  its  capital  expenditures,
working capital and other cash  requirements for the fiscal year ending December
31, 2005.  Therefore,  the Company will be required to seek additional  funds to
finance its long-term  operations.  The successful  outcome of future activities
cannot be  determined  at this time and there is no assurance  that if achieved,
the Company will have sufficient funds to execute its intended  business plan or
generate positive operating results.


                                       15
<PAGE>

In response to these problems, management has taken the following actions:

o     The Company continues its aggressive program for selling inventory.

o     The Company  continues  to  implement  plans to further  reduce  operating
      costs.

o     The Company is seeking investment capital through the public markets.

The condensed  consolidated  financial statements do not include any adjustments
related to recoverability  and  classification of assets carrying amounts or the
amount and classification of liabilities that might result should the Company be
unable to continue as a going concern.

INVENTORY

Inventories  are stated at the lower of cost or net  realizable  value.  Cost is
determined under the first-in,  first-out method.  Inventories represent cost of
work in  process  on units not yet under  contract.  Cost  includes  all  direct
material  and labor,  machinery,  subcontractors  and  allocations  of  indirect
overhead.

REVENUE RECOGNITION

The Company's  revenues consist of contracts with vendors.  The Company uses the
percentage-of-completion method of accounting to account for long-term contracts
and, therefore,  takes into account the cost,  estimated earnings and revenue to
date on fixed-fee  contracts  not yet  completed.  The  percentage-of-completion
method is used because management  considers total cost to be the best available
measure of  progress on the  contracts.  Because of  inherent  uncertainties  in
estimating  costs,  it is at least  reasonably  possible that the estimates used
will change within the near term.

In December  1999,  the SEC issued Staff  Accounting  Bulletin  ("SAB") No. 101,
"Revenue  Recognition," as amended and superseded by SAB No. 104, which outlines
the basic criteria that must be met to recognize  revenue and provides  guidance
for  presentation of revenue and for disclosure  related to revenue  recognition
policies in financial  statements filed with the SEC.  Management  believes that
the Company's  revenue  recognition  policy conforms to SAB No. 104. The Company
recognizes revenue of contracts pursuant to SOP 81-1.

The amount of revenue  recognized  at the  statement  date is the portion of the
total  contract  price that the cost  expended to date bears to the  anticipated
final cost, based on current estimates of cost to complete. It is not related to
the progress billings to customers. Contract costs include all materials, direct
labor, machinery, subcontract costs and allocations of indirect overhead.

Because contracts may extend over a period of time,  changes in job performance,
changes in job conditions and revisions of estimates of cost and earnings during
the course of the work are reflected in the accounting period in which the facts
that require the revision become known. At the time a loss on a contract becomes
known,  the entire  amount of the  estimated  ultimate loss is recognized in the
consolidated financial statements.

Contracts that are substantially complete are considered closed for consolidated
financial statement purposes.  Costs incurred and revenue earned on contracts in
progress in excess of  billings  (under  billings)  is  classified  as a current
asset.  Amounts billed in excess of costs and revenue earned  (overbillings) are
classified as a current liability.

The Company accounts for shipping and handling fees and costs in accordance with
Emerging Issues Task Force ("EITF") Issue No. 00-10 "Accounting for Shipping and
Handling  Fees and  Costs."  Such fees and costs  incurred  by the  Company  are
immaterial to the operations of the Company.


                                       16
<PAGE>

In accordance  with  Statement of Financial  Accounting  Standards  ("SFAS") 48,
"Revenue Recognition when Right of Return Exists," revenue is recorded net of an
estimate of markdowns,  price  concessions and warranty  costs.  Such reserve is
based on  management's  evaluation of historical  experience,  current  industry
trends and estimated costs.

BASIC AND DILUTED LOSS PER COMMON SHARE

Under SFAS 128,  "Earnings  Per  Share,"  basic  earnings  per  common  share is
computed  by  dividing   income   available  to  common   stockholders   by  the
weighted-average  number of common shares assumed to be  outstanding  during the
period of computation.  Diluted  earnings per share is computed similar to basic
earnings  per share  except that the  denominator  is  increased  to include the
number of  additional  common  shares  that would have been  outstanding  if the
potential common shares had been issued and if the additional common shares were
dilutive (there were 179,310 and 1,821,583 additional potential common shares as
of June 30, 2005 and 2004, respectively). With the exception of the three months
ended June 30, 2004, the Company  incurred net losses and basic and diluted loss
per  share  are  equal  because  additional  potential  common  shares  would be
anti-dilutive.

The following is a  reconciliation  of the  numerators and  denominators  of the
basic and diluted  earnings per share  computations  for the three and six month
periods ended June 30, 2005 and 2004:

                                                      For the Three Months Ended
                                                                        June 30,

                                                         2005           2004
                                                     -----------    -----------

Net income (loss)                                    $  (128,850)   $   283,034
Current cumulative preferred dividends                  (105,525)       (39,750)
                                                     -----------    -----------
Numerator for basic income (loss) per share:

Net income (loss) available to common stockholders      (234,375)       243,284

Denominator for basic income (loss) per share:

Weighted average shares                                7,978,932      6,995,265
                                                     -----------    -----------

Basic income (loss) per share                        $     (0.03)   $      0.03
                                                     ===========    ===========
Denominator for diluted income (loss) per share:

Weighted average shares                                7,978,932      8,816,848
                                                     -----------    -----------

Diluted income (loss) per share                      $     (0.03)   $      0.03
                                                     ===========    ===========


                                       17
<PAGE>

                                                        For the Six Months Ended
                                                                        June 30,

                                                         2005           2004
                                                     -----------    -----------

Net loss                                             $   (17,717)   $  (251,852)
Current cumulative preferred dividends                  (105,525)       (79,500)
                                                     -----------    -----------
Numerator for basic and diluted loss per share:

Net loss available to common stockholders               (123,242)      (331,352)

Denominator for basic and diluted loss per share:

Weighted average shares                                7,635,598      6,953,598
                                                     -----------    -----------

Basic and diluted loss per share                     $     (0.02)   $     (0.05)
                                                     ===========    ===========

STOCK BASED EMPLOYEE COMPENSATION

At June 30, 2005, the Company has one stock-based employee compensation plan and
one stock-based  non-employee  compensation  plan. The Company  accounts for the
employee  compensation plan under the recognition and measurement  principles of
Accounting Principles Board Opinion No. ("APB") 25, and related  interpretation.
The  Company  accounts  for  the  non-employee   compensation   plan  under  the
recognition   measurement   principles  of  SFAS  123.  There  was  no  employee
stock-based  compensation  cost recognized in net loss for the six month periods
ended June 30, 2005 and 2004. Hence, the disclosure  requirements under SFAS 148
are not required.  However, the above pro forma non-effects of applying SFAS 123
are not necessarily representative of the impact on reported net loss for future
periods.

NEW ACCOUNTING PRONOUNCEMENTS

Recent accounting pronouncements discussed in the notes to the December 31, 2004
financial   statements   filed  previously  with  the  Securities  and  Exchange
Commission in Form 10-KSB that were required to be adopted during the year ended
December 31, 2005 did not have a significant  impact on the Company's  financial
statements.

2. CONTRACTS IN PROGRESS

Contracts in progress as of June 30, 2005,  which  include  completed  contracts
that have not been completely billed, were as follows:

Cumulative costs to date                                            $ 3,399,242
Cumulative gross profit to date                                       2,800,044
                                                                    -----------
Cumulative revenue earned                                             6,199,286

Less progress billings to date                                       (6,245,008)
                                                                    -----------
      Net overbillings                                              $   (45,722)
                                                                    ===========

The following is included in the accompanying condensed consolidated balance
sheet under these captions as of June 30, 2005:

Costs and estimated earnings on contracts in
  progress in excess of billings                                      $ 507,528

Billings in excess of costs and estimated earnings
  on contracts in progress                                             (553,250)
                                                                      ---------
      Net overbillings                                                $ (45,722)
                                                                      =========


                                       18
<PAGE>

3. EQUITY TRANSACTIONS

On April 12, 2005,  the Company and one if its  noteholders  (the  "Noteholder")
executed a mutual agreement (the "Extension  Agreement")  whereby the Noteholder
agreed not to  foreclose on the security  interest of two notes  payable,  which
were in default,  before the  earlier of a funding  (which has not occured as of
the  filing of this Form  10-QSB)  or  August  13,  2005.  As  consideration  to
effectively  extend the due date of the two notes  until  August 13,  2005,  the
Company issued the Noteholder 250,000 shares of the Company's  restricted common
stock.  Additionally,  the Extension  Agreement required the Company to register
the  shares by August  13,  2005,  or it would  need to pay  penalties  of 1,000
additional shares being issued for each day of delay up to thirty days and 2,500
additional  shares  for each day  thereafter.  The  estimated  fair value of the
250,000 shares (based on the trading price of the Company's stock on the date of
issuance)  totaling  $47,500  was  recorded  on the date of  issuance  as a debt
discount  against the face value of the notes and is being amortized to interest
expense  over the  extension  period in  accordance  with EITF 96-19,  "Debtor's
Accounting for a Modification or Exchange of Debt Instruments."  Amortization of
the  discount to interest  expense  during the three  months ended June 30, 2005
totaled $29,687.

On April 21, 2005, the Company  entered into a six month  corporate  finance and
investor  relations  consulting  agreement.  As a  commencement  bonus  for  the
services to be provided by the consultant,  the Company issued 100,000 shares of
restricted  common stock in  accordance  with the  contract.  Additionally,  the
contract requires the Company to pay the consultant a finder's fee of 2.5% under
any future Fee Transaction, as defined, occuring during the term of the contract
or within one year thereafter.  The fair value of the 100,000 share commencement
bonus  (based  on the  trading  price  of the  Company's  stock  on the  date of
issuance) totaling $20,000 was recorded as deferred  consulting fees on the date
of issuance and is being amortized to consulting expense over the six month term
of the agreement.  The remaining  deferred  consulting  fees under this contract
totaled $6,667 at June 30, 2005.

On April 21, 2005, the Company issued 100,000 shares of restricted  common stock
to one of its former customers as a partial legal settlement for a pending claim
related to the sale of one its machines.  Accordingly,  the Company  immediately
expensed  the fair value of such common  stock  totaling  $20,000  (based on the
trading price of the Company's stock on the date of issuance).

On April 25, 2005 the Company issued  300,000 shares of restricted  common stock
to a holder of the Company's Cumulative,  Convertible,  Series D preferred stock
("Series D") under a verbal agreement as the sole  consideration  and remedy for
failure to register the common shares underlying the Series D. Accordingly,  the
Company  expensed  the fair value of the  300,000  common  shares  (based on the
trading price of the Company's stock on such date of issuance) totaling $90,000.

On April 25, 2005, the Company issued 150,000 shares of restricted  common stock
to a consultant for corporate  finance and investor  relations  services under a
six month verbal  agreement.  The Company  recorded the fair value of the common
stock  (based  on the  trading  price  of the  Company's  stock  on the  date of
issuance)  totaling  $45,000 as deferred  consulting fees and is amortizing such
amount  over  the  six  month  term of the  agreement.  The  remaining  deferred
consulting fees under this agreement totaled $14,100 at June 30, 2005.

4. SUBSEQUENT EVENTS

In July 2005, the Company issued 300,000 shares of restricted  common stock to a
consultant for marketing campaign and investor relations services under a twelve
months agreement.  The agreement  requires payment in cash of $25,000 per month,
for the first two months, and $15,000 per month for the period thereafter.


                                       19
<PAGE>

                                   SIGNATURES

      In accordance  with the  requirements  of the Exchange Act, the Registrant
has caused this report to be signed on its behalf by the undersigned,  thereunto
duly authorized.

August 22, 2005                        /s/ David Duquette
                                       ----------------------------------------
                                       Name:  David Duquette
                                       Title: Chief Executive Officer and Chief
                                              Financial Officer


                                       20