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 June 30, 2006

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

For the transition period from             , 20    , to             , 20    .

Commission File Number

333-109118

Turbine Truck Engines, Inc.

(Exact Name of Registrant as Specified in Charter)

Delaware	59-3691650
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification Number)

1301 International Speedway Boulevard, Deland, Florida 32724

(Address of Principal Executive Offices)

(386) 943-8358

(Registrant’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 during the past 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    x  YES    ¨  NO

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    ¨  YES    x  NO

There were 12,173,175 shares of the Registrant’s $.001 par value common stock outstanding as of June 30, 2006.

Transitional Small Business Format (check one)    Yes  ¨    NO  x

Turbine Truck Engines, Inc.

(A Development Stage Company)

Contents

Part I – Financial Information		3
Item 1.	Financial Statements	4
Item 2.	Management’s Discussion & Analysis of Financial Condition or Plan of Operation	14
Item 3.	Controls and Procedures	19
Part II – Other Information		19
Item 1.	Legal Proceedings	19
Item 2.	Changes in Securities	19
Item 3.	Defaults Upon Senior Securities	20
Item 4.	Submission of Matters to a Vote of Security Holders	20
Item 5.	Other Matters	20
Item 6.	Exhibits and Reports on Form 8-K	20
Signatures		21

PART I—FINANCIAL INFORMATION

Statements in this Form 10QSB Quarterly Report may be “forward-looking statements.” Forward-looking statements include, but are not limited to, statements that express our intentions, beliefs, expectations, strategies, predictions or any other statements relating to our future activities or other future events or conditions. These statements are based on our current expectations, estimates and projections about our business based, in part, on assumptions made by our management. These assumptions are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in the forward-looking statements due to numerous factors, including those risks discussed in this Form 10QSB Quarterly Report, under “Management’s Discussion and Analysis of Financial Condition or Plan of Operation and in other documents which we file with the Securities and Exchange Commission.

In addition, such statements could be affected by risks and uncertainties related to our financial condition, factors that affect our industry, market and customer acceptance, changes in technology, fluctuations in our quarterly results, our ability to continue and manage our growth, liquidity and other capital resource issues, competition, fulfillment of contractual obligations by other parties and general economic conditions. Any forward-looking statements speak only as of the date on which they are made, and we do not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this Form 10QSB Quarterly Report, except as required by law.

Item 1. Financial Statements

Financial Statements

Turbine Truck Engines, Inc.

(A Development Stage Enterprise)

Financial Statements

As of June 30, 2006 (unaudited) and for the

three and six months ended June 30, 2006 and 2005 (unaudited)

and the Period November 27, 2000 (Date of Inception)

through June 30, 2006 (unaudited)

Contents

Financial Statements:

Balance Sheet	2
Statements of Operations	3
Statement of Changes in Stockholders’ Deficit	4 - 5
Statements of Cash Flows	6 - 7
Notes to Financial Statements	8 - 10

Turbine Truck Engines, Inc.

(A Development Stage Enterprise)

Balance Sheet

June 30, 2006

(unaudited)

Assets
Current assets:
Cash	$	25,644
Prepaid expenses		76,962
Total current assets		102,606
Furniture and equipment, net of accumulated depreciation of $4,596		3,693
	$	106,299
Liabilities and Stockholders’ Deficit
Current liabilities:
Accounts payable	$	46,278
Accrued expenses		66,230
Accrued interest		12,879
Accrued royalty fees		354,167
Accrued payroll		122,663
Due to stockholder		22,988
Total current liabilities		625,205
Due to stockholder		94,602
Note payable to related party		1,901
Stockholders’ deficit:
Preferred stock; $.001 par value; 1,000,000 shares authorized; 0 shares issued and outstanding
Common stock; $.001 par value; 99,000,000 shares authorized; 12,173,175 shares issued and outstanding		12,174
Additional paid-in capital		4,299,225
Deficit accumulated during development stage		(4,759,739	)
Prepaid consulting services paid with common stock		(166,979	)
Subscription receivable		(90	)
Total stockholders’ deficit		(615,409	)
	$	106,299

The accompanying notes are an integral part of the financial statements. 2

Turbine Truck Engines, Inc.

(A Development Stage Company)

Statements of Operations

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,						Period November 27, 2000 (Date of Inception) through June 30, 2006
	2006			2005			2005			2006
Research and development costs	$	3,337					$	10,670					$	2,746,319
Operating costs		256,035		$	433,110			374,145		$	669,698			1,946,971
		259,372			433,110			384,815			669,698			4,693,290
Interest expense		362						1,024			660			66,449
Net loss	$	(259,734	)	$	(433,110	)	$	(385,839	)	$	(670,358	)	$	(4,759,739	)
Net loss per share	$	(.02	)	$	(.04	)	$	(.03	)	$	(.06	)	$	(.44	)
Weighted average number of common shares		11,831,582			11,506,152			11,802,093			11,468,187			10,927,323

The accompanying notes are an integral part of the financial statements. 3

Turbine Truck Engines, Inc.

(A Development Stage Enterprise)

Statements of Changes in Stockholders’ Deficit

For the Period November 27, 2000 (Date of Inception)

through June 30, 2006 (unaudited)

	Common Stock					Additional Paid-In Capital			Deficit Accumulated During Development Stage			Deferred Non-Cash Offering Costs			Prepaid Services Paid for with Common Stock	Subscription Receivable			Total
	Shares		Amount
Issuance of common stock for option to acquire license and stock subscription receivable, December 2000	10,390,000		$	10,390												$	(390	)	$	10,000
Net loss for the period									$	(4,029	)									(4,029	)
Balance, December 31, 2000	10,390,000			10,390						(4,029	)						(390	)		5,971
Issuance of common stock for cash, February 2001*	10,000			10		$	4,990													5,000
Issuance of common stock for cash, March 2001*	10,000			10			4,990													5,000
Issuance of common stock for cash, August 2001*	10,000			10			4,990													5,000
Issuance of common stock for cash, September 2001*	55,000			55			27,445													27,500
Payment for common stock issued under subscription receivable																	300			300
Net loss										(31,789	)									(31,789	)
Balance, December 31, 2001	10,475,000			10,475			42,415			(35,818	)						(90	)		16,982
Issuance of common stock for cash, January 2002*	5,000			5			2,495													2,500
Issuance of common stock for cash, February 2002*	10,000			10			4,990													5,000
Issuance of common stock for cash, April 2002*	25,000			25			12,475													12,500
Issuance of common stock for cash, May 2002*	65,000			65			32,435													32,500
Issuance of common stock for cash, June 2002*	70,000			70			34,930										(2,500	)		32,500
Issuance of common stock for cash, August 2002*	10,000			10			4,990													5,000
Issuance of common stock for cash, October 2002*	10,000			10			4,990													5,000
Issuance of common stock to acquire licensing agreement, July 2002*	5,000,000			5,000			2,495,000													2,500,000
Shares returned to treasury by founding stockholder, July 2002	(5,000,000	)		(5,000	)		5,000
Net loss										(2,796,768	)									(2,796,768	)
Balance, December 31, 2002	10,670,000			10,670			2,639,720			(2,832,586	)						(2,590	)		(184,786	)
Issuance of common stock for cash, February 2003*	207,000			207			103,293													103,500
Issuance of common stock for cash, September 2003*	30,000			30			14,970													15,000
Issuance of common stock for services, September 2003*	290,000			290			144,710					$	(74,850	)						70,150
Payment for common stock issued under subscription agreement																	2,500			2,500
Offering costs for private placement offering							(33,774	)												(33,774	)
Net loss										(190,567	)									(190,567	)
Balance, December 31, 2003	11,197,000			11,197			2,868,919			(3,023,153	)		(74,850	)			(90	)		(217,977	)
Issuance of notes payable with beneficial conversion feature							19,507													19,507
Issuance of common stock for services, September 2004 ($2.00 per share)	20,000			20			39,980													40,000
Conversion of notes payable, August 2004 ($2.00 per share)	31,125			31			62,219													62,250
Issuance of common stock for cash, September 2004 ($2.00 per share)	25,025			25			50,025													50,050
Issuance of common stock for cash, October 2004 ($2.00 per share)	1,000			1			1,999													2,000
Issuance of common stock for cash, November 2004 ($2.00 per share)	3,500			4			6,996													7,000
Issuance of common stock for cash, December 2004 ($2.00 per share)	3,000			3			5,997													6,000
Amortization of offering costs related to Form SB-2 filing							(10,159	)												(10,159	)
Amortization of stock for services related to Form SB-2 offering							(6,317	)					6,317
Contribution from shareholder							18,256													18,256
Net loss										(282,009	)									(282,009	)
Balance, December 31, 2004	11,280,650		$	11,281		$	3,057,422		$	(3,305,162	)	$	(68,533	)	$	$	(90	)	$	(305,082	)

* Common stock issued at $.50 per share.

The accompanying notes are an integral part of the financial statements. 4

Turbine Truck Engines, Inc.

(A Development Stage Enterprise)

Statements of Changes in Stockholders’ Deficit

For the Period November 27, 2000 (Date of Inception)

through June 30, 2006 (unaudited)

	Common Stock			Additional Paid-In Capital			Deficit Accumulated During Development Stage			Deferred Non-Cash Offering Costs		Prepaid Services Paid for with Common Stock			Subscription Receivable			Total
	Shares	Amount
Issuance of common stock for services, January 2005 ($2.00 per share)	80,000	$	80	$	159,920													$	160,000
Issuance of common stock in satisfaction of a note payable, February 2005 ($2.00 per share)	125,000		125		249,875														250,000
Issuance of common stock for cash, February 2005 ($2.00 per share)	3,200		3		6,397														6,400
Issuance of common stock for cash, March 2005 ($2.00 per share)	1,500		1		2,999														3,000
Amortization of offering costs related to Form SB-2 filing					(31,216	)													(31,216	)
Amortization of stock for services related to Form SB-2 offering					(19,413	)				$	19,413
Issuance of common stock for services, April 2005 ($2.00 per share)	5,000		5		9,995														10,000
Capital contribution from stockholder, May 2005					170,000														170,000
Issuance of common stock for cash, May 2005 ($2.00 per share)	15,550		16		31,084														31,100
Write off of stock for services related to Form SB-2 filing											49,120								49,120
Issuance of common stock for cash, June 2005 ($2.00 per share)	9,100		9		18,191														18,200
Issuance of common stock for services, June 2005 ($1.70 per share)	100,000		100		169,900							$	(170,000	)
Capital contribution from stockholder, June 2005					450														450
Issuance of common stock for cash, August 2005 ($1.00 per share)	5,000		5		4,995														5,000
Issuance of common stock for services, July 2005 ($1.00 per share)	40,000		40		39,960								(40,000	)
Amortization of prepaid services paid for with common stock													26,833						26,833
Write off prepaid services paid for with common stock due to terminated agreement													161,500						161,500
Issuance of common stock for cash, October ($1.00 per share)	25,000		25		24,975														25,000
Issuance of common stock for cash, November ($1.00 per share)	20,000		20		19,980														20,000
Issuance of common stock for cash, December ($1.00 per share)	5,000		5		4,995														5,000
Net loss								(1,068,738	)										(1,068,738	)
Balance, December 31, 2005	11,715,000		11,715		3,920,509			(4,373,900	)				(21,667	)		(90	)		(463,433	)
Issuance of common stock for cash, January ($1.00 per share) (unaudited)	65,000		65		64,935														65,000
Issuance of common stock for cash, February ($1.00 per share) (unaudited)	1,500		2		1,498														1,500
Amortization of prepaid services paid for with common stock (unaudited)													27,188						27,188
Issuance of common stock for cash, March ($1.00 per share) (unaudited)	1,675		2		1,673														1,675
Issuance of common stock for cash, April ($1.00 per share) (unaudited)	5,000		5		4,995														5,000
Issuance of common stock for services, May ($1.00 per share) (unaudited)	10,000		10		9,990														10,000
Issuance of common stock for services, May ($1.15 per share) (unaudited)	10,000		10		11,490														11,500
Issuance of common stock for cash, June ($.80 per share) (unaudited)	15,000		15		11,985														12,000
Issuance of common stock and warrants for cash, June ($.50 per share) (unaudited)	200,000		200		99,800														100,000
Issuance of common stock for services, June ($1.15 per share) (unaudited)	150,000		150		172,350								(172,500	)
Net loss for the period ended (unaudited)								(385,839	)										(385,839	)
Balance June 30, 2006 (unaudited)	12,173,175	$	12,174	$	4,299,225		$	(4,759,739	)	$		$	(166,979	)	$	(90	)	$	(615,409	)

The accompanying notes are an integral part of the financial statements. 5

Turbine Truck Engines, Inc.

(A Development Stage Enterprise)

Statements of Cash Flows

	Six Months Ended June 30,						Period November 27, 2000 (Date of Inception) through June 30, 2006
	2006			2005
	(unaudited)			(unaudited)			(unaudited)
Operating activities
Net loss	$	(385,839	)	$	(670,358	)	$	(4,759,739	)
Adjustments to reconcile net loss to net cash (used) by operating activities:
Common stock and long-term debt issued for acquisition of license agreement								2,735,649
Common stock issued for services		48,688			170,000			517,172
Contribution from shareholder					170,450			188,706
Write off deferred offering costs					78,995			119,383
Write off of non-cash deferred offering costs					49,120			49,120
Depreciation		1,210			455			4,596
Amortization of discount on notes payable								33,858
(Increase) in prepaid expenses		(76,962	)		(5,000	)		(76,962	)
Increase (decrease) in:
Accounts payable		(3,629	)		(10,175	)		46,278
Accrued expenses					7,500			66,230
Accrued payroll		29,007			27,557			122,663
Accrued royalty fees		125,000			104,167			354,167
Accrued interest					660			12,879
Net cash used by operating activities		(262,525	)		(76,629	)		(586,000	)
Investing activities
Issuance of notes receivable from stockholders								(23,000	)
Repayment of notes receivable from stockholders								22,095
Advances from related party								805
Purchase of fixed assets		(3,094	)					(8,289	)
Net cash used by investing activities		(3,094	)					(8,389	)
Financing activities
Repayment of stockholder advances		(10,000	)		30,400			(56,247	)
Advances from stockholders		102,601						175,837
(Increase) in deferred offering costs								(194,533	)
Proceeds from issuance of common stock		185,175			58,702			632,816
Proceeds from issuance of subscription								(90	)
Proceeds from issuance of notes payable								62,250
Net cash provided by financing activities		277,776			89,102			620,033
Net increase in cash		12,157			12,473			25,644
Cash at beginning of year/period		13,487			27
Cash at end of year/period	$	25,644		$	12,500		$	25,644

The accompanying notes are an integral part of the financial statements. 6

	Six Months Ended June 31,				Period November 27, 2000 (Date of Inception) through June 31, 2006
	2006		2005
	(unaudited)		(unaudited)		(unaudited)
Supplemental disclosures of cash flow information and noncash investing and financing activities:
Cash paid for interest	$	0	$	0	$	0
Subscription receivable for issuance of common stock	$	0	$	0	$	90
Option to acquire license for issuance of common stock	$	0	$	0	$	10,000
Deferred offering costs netted against issuance of common stock under private placement	$	0	$	0	$	33,774
Deferred offering costs netted against issuance of common stock	$	0	$	31,216	$	41,735
Value of beneficial conversion feature of notes payable	$	0	$	0	$	19,507
Deferred non-cash offering costs in connection with private placement	$	0	$	0	$	74,850
Application of amount due from shareholder against related party debt	$	0	$	0	$	8,099
Amortization of offering costs related to stock for services	$	0	$	19,413	$	25,730
Settlement of notes payable in exchange for common stock	$	0	$	250,000	$	250,000
Common stock issued in exchange for prepaid services	$	172,500	$	0	$	172,500

The accompanying notes are an integral part of the financial statements. 7

Turbine Truck Engines, Inc.

(A Development Stage Enterprise)

Notes to Financial Statements

For the Six Months Ended June 30, 2006 and 2005 (unaudited)

and the Period November 27, 2000 (Date of Inception)

through June 30, 2006 (unaudited)

1. Background Information

Turbine Truck Engines, Inc. (the “Company”) is a development stage enterprise that was incorporated in the state of Delaware on November 27, 2000. To date, the Company’s activities have been limited to raising capital, organizational matters, and the structuring of its business plan. The corporate headquarters is located in DeLand, Florida. The Company’s planned line of business will be the design, development, and testing of turbine truck engine technology licensed through Alpha Engines Corporation (“Alpha”). Alpha owns the patents to a new gas turbine engine system called Detonation Cycle Gas Turbine Engine. Upon the successful demonstration of a highway truck engine using the technology, the Company may form a joint venture with a major heavy duty highway truck manufacturer to manufacture, market, and sell turbine truck engines for use in heavy duty highway trucks throughout the United States.

2. Financial Statements

In the opinion of management, all adjustments consisting only of normal recurring adjustments necessary for a fair statement of (a) the results of operations for the three and six month periods ended June 30, 2006 and 2005 and the Period November 27, 2000 (Date of Inception) through June 30, 2006, (b) the financial position at June 30, 2006, and (c) cash flows for the six month periods ended June 30, 2006 and 2005, and the Period November 27, 2000 (Date of Inception) through June 30, 2006, have been made.

The unaudited financial statements and notes are presented as permitted by Form 10-QSB. Accordingly, certain information and note disclosures normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted. The accompanying financial statements and notes should be read in conjunction with the audited financial statements and notes of the Company for the fiscal year ended December 31, 2005. The results of operations for the three and six month periods ended June 30, 2006 are not necessarily indicative of those to be expected for the entire year.

3. Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. For the three and six months ended June 30, 2006 and since November 27, 2000 (Date of Inception) through June 30, 2006, the Company has had a net loss of $259,734, $385,839 and $4,759,739, respectively. As of June 30, 2006, the Company has not emerged from the development stage. In view of these matters, recoverability of recorded furniture and equipment and other asset amounts shown in the accompanying financial statements is dependent upon the Company’s ability to begin operations and to achieve a level of profitability. Since inception, the Company has financed its activities principally from the sale of public equity securities. The Company intends on financing its future development activities and its working capital needs largely from the sale of public equity securities with some additional funding from other traditional financing sources, including term notes and proceeds from sub-licensing agreements until such time that funds provided by operations are sufficient to fund working capital requirements.

4. Contingencies

Once the Company becomes operational, it will be obligated to pay production royalties to Alpha at the rate of eight percent of net sales of the Detonation Cycle Gas Turbine Engine. The minimum royalty amount is $250,000 per year, and the Company began accruing these fees during 2005. The royalty fee will be reduced by any production royalties paid. The Company has accrued $354,167 in royalty fees as of June 30, 2006.

During the three months ended June 30, 2006, in connection with a June 2004 Agreement with Alpha, the Company has paid an up-front payment of $75,000 towards the completion of the design and testing of a prototype of the Dyno-test 540 Horsepower Detonation Cycle Gas Turbine Engine. The total cost of this process per the Agreement is $461,750 and it is expected to be completed within a year.

On September 25, 2001, the Company entered into a consulting agreement with Vladan Ivankovic whereby Mr. Ivankovic would act as intermediary on the European Union market, with interested manufacturers of trucks and truck engines, as well as manufacturers of other engines for all possible purposes, in order to locate partners interested in buying the Detonation Cycle Gas Turbine Engine license for production and distribution. Mr. Ivankovic will receive compensation in the amount of six percent of all equities raised by Mr. Ivankovic. In addition, for all mergers and acquisitions introduced to the Company, Mr. Ivankovic would receive payment based on a sliding scale starting at six percent of the first $25,000,000; five percent of the next $25,000,000; four percent of the next $25,000,000; and three percent of the remaining enterprise value. Mr. Ivankovic has been authorized to choose potential partners and to conduct negotiations on behalf of the Company. As of June 30, 2006, Mr. Ivankovic has not raised any funds nor has he located any partners or merger or acquisition targets for the Company.

8

Turbine Truck Engines, Inc.

(A Development Stage Enterprise)

Notes to Financial Statements

For the Six Months Ended June 30, 2006 and 2005 (unaudited)

and the Period November 27, 2000 (Date of Inception)

through June 30, 2006 (unaudited)

4. Contingencies (continued)

On July 1, 2002, the Company entered into a consulting agreement with the inventor of the Detonation Cycle Gas Turbine Engine and majority stockholder of Alpha. In connection with the consulting agreement, a $2,500 retainer per month is due for consulting services rendered. This agreement was cancelled as of April 2005, however, the Company has accrued $62,500 for unpaid retainer fees as of June 30, 2006. In addition, the Company agreed to pay the inventor $1,000 per day plus all out-of-pocket expenses for design and engineering services rendered. The inventor has not provided any design or engineering services through June 30, 2006.

Effective December 1, 2005, the Company entered into an agreement with Laidlaw & Company (UK) Ltd. (Laidlaw) to assist the Company on a “best efforts” basis in raising approximately $10 million in a private offering of equity securities. Laidlaw is entitled to 8% of the total proceeds raised from the sale of the securities and reimbursement of expenses and legal fees up to $25,000. Upon the closing of the minimum amount of securities, the Company shall grant Laidlaw 5 year warrants for the purchase of a number of shares of common stock equal to 6% of the gross number of shares sold in the offering. The agreement will terminate 60 days following the commencement of the offering. No shares have been sold to date under this agreement.

On February 1, 2006, the Company entered into an agreement with Embry-Riddle Aeronautical University to complete a 3D model and certain modifications to the original Detonation Gas Turbine Engine in exchange for a fixed price amount. Currently, the Company has expensed $10,670 related to this agreement which expires on July 30, 2007.

On May 31, 2006, the Company entered into a $10 million investment agreement with Dutchess Private Equities Fund, L.P. (“Dutchess”). Pursuant to the terms of the investment agreement, over the next three years the Company may at its discretion periodically sell (or “put”) to Dutchess shares of its common stock having an aggregate purchase price of up to $10 million. For each share of common stock sold under the investment agreement, Dutchess agreed to pay the Company 93% of the lowest closing bid price of the Company’s common stock during the 5 trading days immediately following the applicable put notice date. The Company may elect not to sell any shares to Dutchess at a price that is less than 75% of the closing bid price for the (10) trading days immediately preceding the applicable put notice date.

Under the terms of the Investment Agreement the Company may, every 7 trading days, sell to Dutchess common stock with a value equal to either $250,000 or 200% of the average daily trading volume of the common stock for the 10 trading days prior to the applicable put notice date multiplied by the average of the three daily closing bid prices immediately preceding the put notice date. Dutchess’s obligation to purchase shares of the Company’s common stock is subject to certain conditions, including the Company obtaining an effective registration statement for shares of common stock to be sold under the Investment Agreement. As of June 30, 2006, there has been no activity under this agreement.

5. Due to Stockholder

The due to stockholder account is made up of advances from the majority stockholder to assist the Company with its financial obligations. These advances are non-interest bearing, unsecured and due on demand. The Company expects to repay $22,988 prior to June 30, 2007. The remaining $94,602 is expected to be repaid via the issuance of common stock and has therefore been classified as long term in the accompanying balance sheet.

The above amounts are not necessarily indicative of the amounts that would have been incurred had comparable transactions been entered into with independent parties.

9

Turbine Truck Engines, Inc.

(A Development Stage Enterprise)

Notes to Financial Statements

For the Six Months Ended June 30, 2006 and 2005 (unaudited)

and the Period November 27, 2000 (Date of Inception)

through June 30, 2006 (unaudited)

6. Prepaid Consulting Services Paid with Common Stock

During the three months ended June 30, 2006, the Company entered into an agreement with an individual to provide consulting services. In exchange for those services, the Company issued 150,000 shares of common stock to the individual. These shares were valued at $172,500 and will be amortized to consulting expense over the next twelve months. As of June 30, 2006 the remaining balance to be amortized is $166,979.

7. Common Stock Issued with Warrants

During the three months ended June 30, 2006, the Company issued 100,000 warrants in conjunction with the issuance of common stock. The warrants entitle the holder to purchase 100,000 shares of the Company’s common stock, at any time, at an exercise price of $2.00 per share and expire on June 26, 2011.

	Shares	Range of Exercise Prices		Weighted Average Exercise Price
Outstanding at December 31, 2005	0
Warrants granted	100,000	$	2.00	$	2.00
Warrants cancelled or expired		$
Outstanding at June 30, 2006	100,000	$	2.00	$	2.00

The following table summarizes information about warrants outstanding and exercisable as of June 30, 2006:

	Outstanding Warrants				Exercisable Warrants and Options
Range of Exercise Price	Number Outstanding	Weighted Average Remaining Life	Weighted Average Price		Weighted Average Remaining Life	Number Exercisable	Weighted Average Price
$2.00	100,000	5 years	$	2.00	5 years	100,000	$	2.00

8. Subsequent Event

Subsequent to the period ended June 30, 2006, the Company entered into a one year strategic alliance agreement with UTEK Corporation to identify technology acquisition opportunities for the Company. In exchange for these services, the Company shall issue 109,091 shares of unregistered common stock valued at $120,000 to UTEK Corporation at a rate of 9,091 shares per month for 12 months or a cash payment of $10,000 per month for twelve months at the Company’s discretion.

10

PART I – FINANCIAL INFORMATION

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

THIS FILING CONTAINS FORWARD-LOOKING STATEMENTS. THE WORDS “ANTICIPATED,” “BELIEVE,” “EXPECT,” “PLAN,” “INTEND,” “SEEK,” “ESTIMATE,” “PROJECT,” “WILL,” “COULD,” “MAY,” AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS. THESE STATEMENTS INCLUDE, AMONG OTHERS, INFORMATION REGARDING FUTURE OPERATIONS, FUTURE CAPITAL EXPENDITURES, AND FUTURE NET CASH FLOW. SUCH STATEMENTS REFLECT THE COMPANY’S CURRENT VIEWS WITH RESPECT TO FUTURE EVENTS AND FINANCIAL PERFORMANCE AND INVOLVE RISKS AND UNCERTAINTIES, INCLUDING, WITHOUT LIMITATION, GENERAL ECONOMIC AND BUSINESS CONDITIONS, CHANGES IN FOREIGN, POLITICAL, SOCIAL, AND ECONOMIC CONDITIONS, REGULATORY INITIATIVES AND COMPLIANCE WITH GOVERNMENTAL REGULATIONS, THE ABILITY TO ACHIEVE FURTHER MARKET PENETRATION AND ADDITIONAL CUSTOMERS, AND VARIOUS OTHER MATTERS, MANY OF WHICH ARE BEYOND THE COMPANY’S CONTROL. SHOULD ONE OR MORE OF THESE RISKS OR UNCERTAINTIES OCCUR, OR SHOULD UNDERLYING ASSUMPTIONS PROVE TO BE INCORRECT, ACTUAL RESULTS MAY VARY MATERIALLY AND ADVERSELY FROM THOSE ANTICIPATED, BELIEVED, ESTIMATED, OR OTHERWISE INDICATED. CONSEQUENTLY, ALL OF THE FORWARD-LOOKING STATEMENTS MADE IN THIS FILING ARE QUALIFIED BY THESE CAUTIONARY STATEMENTS AND THERE CAN BE NO ASSURANCE OF THE ACTUAL RESULTS OR DEVELOPMENTS.

The following discussion and analysis of our financial condition and plan of operations should be read in conjunction with our financial statements and related notes appearing elsewhere herein. This discussion and analysis contains forward-looking statements including information about possible or assumed results of our financial conditions, operations, plans, objectives and performance that involve risk, uncertainties and assumptions. The actual results may differ materially from those anticipated in such forward-looking statements. For example, when we indicate that we expect to increase our product sales and potentially establish additional license relationships, these are forward-looking statements. The words expect, anticipate, estimate or similar expressions are also used to indicate forward-looking statements.

Background of our company

We are a development-stage company and not yet generating any revenues. We expect to continue the commercialization of our Detonation Cycle Gas Turbine Engine (“DCGT”) technology. The licensor of the acquired technology has passed the research and development phase and has designed a working prototype. We need to redesign an engine for our application based on this proven Core Technology. We are relying on Alpha to design, construct and test a 540 horsepower engine prototype for our licensed application (see “Business of the Company”, “Our Product.”). Our primary focus is to complete a public offering of our securities for the purpose of funding initial stages of operations.

The financing for our development activities to date has come from the sale of common stock. We intend to finance our future development activities and working capital needs largely from the sale of public equity securities with additional funding from a private placement or secondary offering of up to $10 million and other traditional financing sources, including term notes and proceeds from sub-licensing agreements until such time that funds provided by operations are sufficient to fund working capital requirements.

Since we have had a limited history of operations, we anticipate that our quarterly results of operations will fluctuate significantly for the foreseeable future. We believe that period-to-period comparisons of our operating results should not be relied upon as predictive of future performance. Our prospects must be considered in light of the risks, expenses and difficulties encountered by companies at an early stage of development, particularly companies commercializing new and evolving technologies such as the DCGT. In July 2002, we acquired the license for the DCGT technology for the manufacture and marketing of heavy-duty highway truck engine.

The following steps are required to demonstrate the viability of a final prototype engine:

Step 1	Complete the design and build prototype engine
Cost:	$75,000
Time frame:	Completed design of the prototype, however it has not been built as of June 30, 2006
Step 2	Complete testing of engine
Cost:	$385,000
Time frame:	6 months from completion of Step 1
Step 3	Lease of office and demonstration facilities
Cost:	$48,000
Time frame:	within 12 months

Step 1 of this process will be completed by Alpha in connection with performing the design and construction of the prototype engine at their facilities at Deland Industrial Center, 1601 Old Daytona Street, Deland, FL 32724. In Step 2, we will also rely on Alpha to test the prototype engine at their facilities. Alpha will conduct test demonstrations to show the viability and function of the engine. In Step 3, we intend to construct our own office and demonstration facilities. We will design a facility and hire a licensed general contractor to complete the project. All of these steps are intended to be funded from the proceeds of a public offering.

These initial steps are intended to be completed with the funds from a public offering. Should we be unable to raise the funds from an offering, we may attempt a private placement or other form of debt financing which would have to be obtained in order to continue as a going concern.

For the three months ended June 30, 2006 compared to the three months ended June 30, 2005

Operating Costs – During the three months ended June 30, 2006 and 2005, operating costs totaled $256,035 and $433,110, respectively. The decrease of $177,075 is principally attributable to the decrease of $175,000 in consulting fees for services related to the advisory board.

Interest Expense - Net - During the three months ended June 30, 2006 and 2005 net interest expense totaled $362 and $0, respectively. The increase of $362 was due to finance charges on an outstanding vendor invoice.

The net loss for the three months ended June 30, 2006 of $259,734 as compared to the three months ended June 30, 2005 of $433,110 decreased by $173,376. The decrease in the net loss was mainly attributable to the decrease in consulting fees of $175,000.

For the Six Months Ended June 30, 2006 Compared to the Six Months Ended June 30, 2005

Operating Costs – During the six months ended June 30, 2006 and 2005, operating costs totaled $374,145 and $669,698, respectively. The decrease of $295,553 was attributable principally to the decrease in consulting fees of $331,500 for service on the advisory board and for technical services rendered to the Company.

Interest Expense – During the six months ended June 30, 2006 interest expense stayed relatively the same at $1,024, compared to the same period for June 30, 2005 where interest expense totaled $660. The decrease of $364 is mainly attributable to finance charges on a vendor invoice.

The net loss for the six months ended June 30, 2006 of $385,839 as compared to the six months ended June 30, 2005 of $670,358 decreased by $284,519. The decrease in the net loss was mainly attributable to the decrease in consulting expense during 2006.

Liquidity and Capital Resources

As shown in the accompanying financial statements, for the six months ended June 30, 2006 and 2005 and since November 27, 2000 (Date of Inception) through June 30, 2006, the Company has had net losses of $385,839, $670,358 and $4,759,739, respectively. As of June 30, 2006, the Company has not emerged from the development stage. In view of these matters, recoverability of recorded furniture and equipment and other asset amounts shown in the accompanying financial statements is dependent upon the Company’s ability to begin operations and to achieve a level of profitability. Since inception, the Company has financed its activities principally from the sale of public equity securities. The Company intends on financing its future development activities and its working capital needs largely from the sale of public equity securities with some additional funding from other traditional financing sources, including term notes and proceeds from sub-licensing agreements until such time that funds provided by operations are sufficient to fund working capital requirements.

As previously mentioned, since inception, we have financed our operations largely from the sale of common stock. From inception through June 30, 2006 we raised cash of $632,816 net of issuance costs, through private placements of common stock financings and $62,250 through the issuance of convertible notes payable. Included in the amount of cash received from common stock sales is the monies received from the Form SB-2 Registration Statement of $123,753 via common stock sales, therefore, we offset $41,735 of offering costs against those proceeds. The proceeds from the sale of common stock have been used for general and administrative expenses. At June 30, 2006 we had cash totaling $25,644.

Since our inception through June 30, 2006 we have incurred approximately $2,746,319 of research and development costs and operating expenses. These expenses were principally related to the acquisition of a license agreement in July 2002 in the amount of $2,735,649, which was expensed to research and development costs for the DCGT technology and general and administrative expenses.

We have incurred significant net losses and negative cash flows from operations since our inception. As of June 30, 2006, we had an accumulated deficit of $4,759,739 and a working capital deficit of $522,599.

We anticipate that cash used in product development and operations, especially in the marketing, production and sale of our products, will increase significantly in the future.

We will be dependent upon our existing cash, together with anticipated net proceeds from a public offering and future debt issuances and private placements of common stock and potential license fees, to finance our planned operations through the next 12 months without receiving proceeds from the Post Effective Amendment of the Form SB-2 Offering we can satisfy our current cash requirements for approximately six months. We will continue to proceed in the design and testing phase of the DCGT engine during the next 12 months and will require additional funding to continue operations. Also, with proceeds from the Post Effective Amendment of Form SB-2, we intend to secure a larger office, manufacturing and testing facility. Based on our anticipated growth, we plan to add several employees to our staff. The level of employees is primarily contingent on the level of success of the offering.

Additional capital may not be available when required or on favorable terms. If adequate funds are not available, we may be required to significantly reduce or refocus our operations or to obtain funds through arrangements that may require us to relinquish rights to certain or potential markets, either of which could have a material adverse effect on our business, financial condition and results of operations. To the extent that additional capital is raised through the sale of equity or convertible debt securities, the issuance of such securities would result in ownership dilution to our existing stockholders.

The Company may receive proceeds in the future from the exercise of warrants outstanding as of June 30, 2006 in accordance with the following schedule:

	Approximate Number of Shares	Approximate Proceeds
Non-Plan Options and Warrants	100,000	200,000

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

We believe that the following critical policies affect our more significant judgments and estimates used in preparation of our financial statements.

The Company’s financial instruments include cash and cash equivalents, notes receivable and accounts payable. The carrying amounts of these financial instruments approximate their fair value, due to the short term nature of these items. The carrying amount of the note payable approximates its fair value due to the use of market rates of interest.

Furniture and equipment are recorded at cost and depreciated on a declining balance and straight-line basis over their estimated useful lives, principally five to seven years. Accelerated methods are used for tax depreciation. Maintenance and repairs are charged to operations when incurred. Betterments and renewals are capitalized. When furniture and equipment are sold or otherwise disposed of, the asset account and related accumulated depreciaiotn account are relieved, and any gain or loss is included in operations.

Research and development costs are charged to operations when incurred and are included in operating expenses.

New Accounting Pronouncements

In May 2005, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards (“SFAS”) 154, Accounting Changes and Error Corrections, a Replacement of Accounting Principles Board (APB) Opinion 20 and FASB Statement 3. SFAS 154 requires retrospective application to prior periods’ financial statements for changes in accounting principles, unless it is impracticable to determine either the period-specific effects or the cumulative effect of the change. SFAS 154 also requires that retrospective application of a change in accounting principle be limited to the direct effects of the change. Indirect effects of a change in accounting principle, such as a change in non-discretionary profit-sharing payments resulting from an accounting change, should be recognized in the period of the accounting change. SFAS 154 also requires that a change in depreciation, amortization, or depletion method for long-lived, non-financial assets be accounted for as a change in accounting estimate affected by a change in accounting principle. SFAS 154 is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005. The adoption of this standard did not have a significant effect on our financial position, results of operation or cash flows.

In February 2006, FASB issued SFAS No. 155. This accounting standard permits fair value re-measurement for any hybrid financial instrument containing an embedded derivative that otherwise would require bifurcation; clarifies which interest-only strips and principal-only strips are not subject to the requirements of SFAS No. 133; establishes a requirement to evaluate interests in securitized financial assets to identify them as freestanding derivatives or as hybrid financial instruments containing an embedded derivative requiring bifurcation; clarifies that concentrations of credit risk in the form of subordination are not embedded derivatives; and amends SFAS No. 140 to eliminate the prohibition on a qualifying special-purpose entity from holding a derivative financial instrument pertaining to a beneficial interest other than another derivative financial instrument. SFAS No. 155 is effective for all financial instruments acquired or issued after the beginning of an entity’s first fiscal year beginning after September 15, 2006. The adoption of this standard did not have a significant effect on our financial position, results of operation or cash flows.

In March 2006, the FASB issued SFAS No. 156, which addresses the accounting for servicing assets and liabilities. SFAS No. 156 is effective at the beginning of an entity’s first fiscal year beginning after September 15, 2006. We do not expect SFAS No. 156 to have a material effect on our results of operations or financial position.

In July 2006, the FASB issued Interpretation No. 48, “Accounting for Uncertainty in Income Taxes” (FIN 48), effective for fiscal years beginning after December 15, 2006. FIN 48 requires a two-step approach to determine how to recognize tax benefits in the financial statements where recognition and measurement of a tax benefit must be evaluated separately. A tax benefit will be recognized only if it meets a “more-likely-than-not” recognition threshold. For tax positions that meet this threshold, the tax benefit recognized is based on the largest amount of tax benefit that is greater than 50 percent likely of being realized upon ultimate settlement with the taxing authority. We do not believe that the adoption of FIN 48 will have a material affect on our overall results of operations, cash flows or financial position.

Item 3. Controls and Procedures

Evaluation of disclosure controls and procedures.

Under the supervision and with the participation of our Management, including our Principal Executive Officer and Principal Accounting Officer, we conducted an evaluation of the effectiveness of the design and operations of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as of the end of the period covered by this report. Based on this evaluation, our Principal Executive Officer and Principal Accounting Officer concluded that our financial disclosure controls and procedures were not effective so as to timely identify, correct and disclose information required to be included in our Securities and Exchange Commission (“SEC”) reports due to the Company’s limited internal resources and lack of ability to have multiple levels of transaction review. Through the use of external consultants and the audit process, management believes that the financial statements and other information presented herewith are materially correct.

There have been no significant changes in the Company’s internal control over financial reporting or, to our knowledge, in other factors that could significantly affect the Company’s internal controls over financial reporting subsequent to the evaluation date.

PART II—OTHER INFORMATION

Item 1. Legal Proceedings

As of the date of this Quarterly Report, neither we nor any of our officers or directors is involved in any litigation either as plaintiffs or defendants. As of this date, there is not any threatened or pending litigation against us or any of our officers or directors.

Item 2. Changes in Securities

During the three month period ended June 30, 2006, there was no modification of any instruments defining the rights of holders of the Company’s common stock and no limitation or qualification of the rights evidenced by the Company’s common stock as a result of the issuance of any other class of securities or the modification thereof.

During April 2006, the Company issued 5,000 shares of common stock for cash to qualified investors at a price of $1.00 per share.

During May 2006, the Company issued 10,000 shares of common stock for services valued at a price of $1.00 per share.

During May 2006, the Company issued 10,000 shares of common stock for services valued at $1.15 per share.

During June 2006, the Company issued 15,000 shares of common stock for cash to qualified investors at a price of $.80 per share.

During June 2006, the Company issued 200,000 shares of common stock and 100,000 warrants for cash to qualified investors at a price of $.50 per share.

During June 2006, the Company issued 150,000 shares of common stock for services valued at $1.15 per share.

Item 3. Defaults upon Senior Securities

During the three month period ended June 30, 2006, the Company was not in default on any of its indebtedness.

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

During the three month period ended June 30, 2006, the Company did not submit any matters to a vote of its security holders.

Item 5. Other Matters

The Company does not have any other material information to report with respect to the three month period ended June 30, 2006.

Item 6. Exhibits and Reports on Form 8-K

(a) Exhibits included herewith are:

31.1	Certification of the Chairman of the Board, Chief Executive Officer, and Chief Financial Officer
	(This certification required as Exhibit 31 under Item 601(a) of Regulation S-K is filed as Exhibit 99.1 pursuant to SEC interim filing guidance.) (2)
31.2	Certification of the Principal Accounting Officer
	(This certification required as Exhibit 31 under Item 601(a) of Regulation S-K is filed as Exhibit 99.2 pursuant to SEC interim filing guidance.) (2)
32	Written Statements of the Chief Executive Officer, Chief Financial Officer, and Principal Accounting Officer (This certification required as Exhibit 32 under Item 601(a) of Regulation S-K is furnished in accordance with Item 601(b)(32)(iii) of Regulation S-K as Exhibit 99.3 pursuant to SEC interim filing guidance.) (2)

(b) Reports on Form 8-K –

On June 2, 2006, the Company & Dutchess Private Equities Fund, L.P. entered into an agreement, (the “Agreement”)whereby the company will, pursuant to the terms and conditions of the Agreement have access to a ten million dollar line of credit. As part of the Agreement the Company is obligated to register additional shares of its common stock to have in reserve for issuance pursuant to the Registration Rights Agreement entered into as part of this transaction.

SIGNATURES

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

	TURBINE TRUCK ENGINES, INC.
Dated: August 10, 2006	By:	/S/ Michael Rouse
		Chief Executive Officer and Chairman of the Board (Principal Executive Officer and Principal Financial Officer)

Dated: August 10, 2006	By:	/S/ Rebecca A. McDonald
		Principal Accounting Officer