**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**WASHINGTON,
      D.C. 20549**







**FORM
      10-KSB**




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





For
      The
      Fiscal Year Ended: December 31, 2006





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








**KINGSWAY
      CAPITAL, INC.**


(EXACT
      NAME OF REGISTRANT AS SPECIFIED IN CHARTER)





Delaware
            52198
            To
                be applied(State
                or other jurisdiction of incorporation)
            (Commission
                file number)
            (IRS
                Employer Identification Number)





2350
      Senter Rd


San
      Jose, CA 95112


(ADDRESS
      OF PRINCIPAL EXECUTIVE OFFICES)





Issuer's
      telephone number, Including Area Code: 877-333-2326





Securities
      registered pursuant to Section 12(b) of the Act: None





Securities
      registered pursuant to Section 12(g) of the Act:





Common
      Stock, par value $0.0001 per share





Check
      whether the issuer is not required to file reports pursuant to Section 13 or
      15(d) of the Exchange Act. o





Check
      whether the Issuer (1) filed all reports required to be filed by Section 13
      or
      15(d) of the 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. Yes x No o





Check
      if
      there is no disclosure of delinquent filers in response to Item 405 of
      Regulation S-B contained in this form, and no disclosure will be contained,
      to
      the best of the registrant's knowledge, in definitive proxy or information
      statements incorporated by reference in Part III of this Form 10-KSB or any
      amendments to this Form 10-KSB. x





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





The
      issuer's revenues for the fiscal year ended December 31, 2006 were
      $0.





The
      aggregate market value of the common stock held by non-affiliates of the issuer
      was $0.00 on December 31, 2006.





As
      of
      December 31, 2006, there were 1,390,000 shares of common stock, $.0001 par
      value
      per share, outstanding.





The
      following documents are incorporated by reference: None.





Transitional
      Small Business Disclosure Format (check one): Yes o No x





TABLE
        OF
        CONTENTS
 
 PagePART
                  IItem
                  1       Description of
                  Business
              1Item
                  2       Description of Property
              8Item
                  3       Legal Proceedings
              8Item
                  4       Submission of Matters to a Vote of Security
                  Holders
              8PART
                  IIItem
                  5       Market for Common Equity and Related
                  Stockholder Matters
              8Item
                  6       Management's Discussion and Analysis or
                  Plan of Operation
              9Item
                  7       Financial Statements
              10Item
                  8       Changes In and Disagreements with
                  Accountants on Accounting and Financial Disclosure
              10Item
                  8A    Controls and Procedures
              10Item
                  8B    Other Information
              10PART
                  IIIItem
                  9       Directors, Executive Officers,
                  Promoters and Control Persons; Compliance with Section 16(A) of
                  the
                  Exchange Act
              11Item
                  10     Executive Compensation
              12Item
                  11     Security Ownership of Certain Beneficial Owners
                  and Management
              13Item
                  12     Certain Relationships and Related
                  Transactions
              13Item
                  13     Exhibits
              14Item
                  14     Principal Accountant Fees and
                  Services
              14







Part
      I





ITEM
      1.
      DESCRIPTION OF BUSINESS





(a)
      Business Development





Kingsway
      Capital, Inc. (the "Company" or the "Registrant") was incorporated in the State
      of Delaware on May 31, 2006. Since inception, the


Company
      has been engaged in organizational efforts and obtaining initial financing.
      The
      Company was formed as a vehicle to pursue a business combination and has made
      no
      efforts to identify a possible business combination. As a result, the Company
      has not conducted negotiations or entered into a letter of intent concerning
      any
      target business. The business purpose of the Company is to seek the acquisition
      of, or merger with, an existing company.





(b)
      Business of Issuer





The
      Company, based on proposed business activities, is a "blank check" company.
      The
      SEC defines those companies as "any development stage company that is issuing
      a
      penny stock, within the meaning of Section 3 (a)(51) of the Exchange
      Act, and that has no specific business plan or purpose, or has indicated that
      its business plan is to merge with an unidentified company or companies." Many
      states have enacted statutes, rules and regulations limiting the sale of
      securities of "blank check" companies in their respective jurisdictions.
      Management does not intend to undertake any efforts to cause a market to develop
      in our securities, either debt or equity, until we have successfully concluded
      a
      business combination. The Company intends to comply with the periodic reporting
      requirements of the Exchange Act for so long as we are subject to those
      requirements.





The
      Company was organized as a vehicle to investigate and, if such investigation
      warrants, acquire a target company or business seeking the perceived advantages
      of being a publicly held corporation. The Company's principal business objective
      for the next 12 months and beyond such time will be to achieve long-term growth
      potential through a combination with a business rather than immediate,
      short-term earnings. The Company will not restrict its potential candidate
      target companies to any specific business, industry or geographical location
      and, thus, may acquire any type of business.





The
      analysis of new business opportunities has and will be undertaken by or under
      the supervision of the officers and directors of the Registrant. The Registrant
      has considered potential acquisition transactions with several companies, but
      as
      of this date has not entered into any Letter of Intent or other agreement with
      any party. The Registrant has unrestricted flexibility in seeking, analyzing
      and
      participating in potential business opportunities. In its efforts to analyze
      potential acquisition targets, the Registrant will consider the following kinds
      of factors:





(a)
      Potential for growth, indicated by new technology, anticipated market expansion
      or new products;





(b)
      Competitive position as compared to other firms of similar size and experience
      within the industry segment as well as within the industry as a
      whole;




1





(c)
      Strength and diversity of management, either in place or scheduled for
      recruitment;





(d)
      Capital requirements and anticipated availability of required funds, to be
      provided by the Registrant or from operations, through the sale of additional
      securities, through joint ventures or similar arrangements or from other
      sources;





(e)
      The
      cost of participation by the Registrant as compared to the perceived tangible
      and intangible values and potentials;





(f)
      The
      extent to which the business opportunity can be advanced;





(g)
      The
      accessibility of required management expertise, personnel, raw materials,
      services, professional assistance and other required items; and





(h)
      Other
      relevant factors.





In
      applying the foregoing criteria, no one of which will be controlling, management
      will attempt to analyze all factors and circumstances and make a determination
      based upon reasonable investigative measures and available data. Potentially
      available business opportunities may occur in many different industries, and
      at
      various stages of development, all of which will make the task of comparative
      investigation and analysis of such business opportunities extremely difficult
      and complex. Due to the Registrant's limited capital available for
      investigation, the Registrant may not discover or adequately evaluate adverse
      facts about the opportunity to be acquired.





FORM
      OF
      ACQUISITION





The
      manner in which the Registrant participates in an opportunity will depend upon
      the nature of the opportunity, the respective needs and desires of the
      Registrant and the promoters of the opportunity, and the relative negotiating
      strength of the Registrant and such promoters.





It
      is
      likely that the Registrant will acquire its participation in a business
      opportunity through the issuance of common stock or other securities of the
      Registrant. Although the terms of any such transaction cannot be predicted,
      it
      should be noted that in certain circumstances the criteria for determining
      whether or not an acquisition is a so-called "tax free" reorganization under
      Section 368(a)(1) of the Internal Revenue Code of 1986, as amended (the "Code"),
      depends upon whether the owners of the acquired business own 80% or more of
      the
      voting stock of the surviving entity. If a transaction were structured to take
      advantage of these provisions rather than other "tax free" provisions provided
      under the Code, all prior stockholders would in such circumstances retain 20%
      or
      less of the total issued and outstanding shares of the surviving entity. Under
      other circumstances, depending upon the relative negotiating strength of the
      parties, prior stockholders may retain substantially less than 20% of the total
      issued and outstanding shares of the surviving entity. This could result in
      substantial additional dilution to the equity of those who were stockholders
      of
      the Registrant prior to such reorganization.





The
      present stockholders of the Registrant will likely not have control of a
      majority of the voting shares of the Registrant following a reorganization
      transaction. As part of such a transaction, all or a majority of the
      Registrant's directors may resign and new directors may be appointed without
      any
      vote by stockholders.




2





In
      the
      case of an acquisition, the transaction may be accomplished upon the sole
      determination of management without any vote or approval by stockholders. In
      the
      case of a statutory merger or consolidation directly involving the Company,
      it
      will likely be necessary to call a stockholders' meeting and obtain the approval
      of the holders of a majority of the outstanding shares. The necessity to obtain
      such stockholder approval may result in delay and additional expense in the
      consummation of any proposed transaction and will also give rise to certain
      appraisal rights to dissenting stockholders. Most likely, management will seek
      to structure any such transaction so as not to require stockholder
      approval.





It
      is
      anticipated that the investigation of specific business opportunities and the
      negotiation, drafting and execution of relevant agreements, disclosure documents
      and other instruments will require substantial management time and attention
      and
      substantial cost for accountants, attorneys and others. If a decision is made
      not to participate in a specific business opportunity, the costs theretofore
      incurred in the related investigation would not be recoverable. Furthermore,
      even if an agreement is reached for the participation in a specific business
      opportunity, the failure to consummate that transaction may result in the loss
      to the Registrant of the related costs incurred.





We
      presently have no employees. Our officers and directors are engaged in outside
      business activities and anticipate that he will devote to our business only
      several hours per week until the acquisition of a successful business
      opportunity has been consummated. We expect no significant changes in the number
      of our employees other than such changes, if any, incident to a business
      combination.





RISK
      FACTORS





AN
      INVESTMENT IN THE COMPANY IS HIGHLY SPECULATIVE IN NATURE AND INVOLVES AN
      EXTREMELY HIGH DEGREE OF RISK.





OUR
      BUSINESS IS DIFFICULT TO EVALUATE BECAUSE WE HAVE NO OPERATING
      HISTORY.





As
      the
      Company has no operating history or revenue and only minimal assets, there
      is a
      risk that we will be unable to continue as a going concern and consummate a
      business combination. The Company has had no recent operating history nor any
      revenues or earnings from operations since inception. We have no significant
      assets or financial resources. We will, in all likelihood, sustain operating
      expenses without corresponding revenues, at least until the consummation of
      a
      business combination. This may result in our incurring a net operating loss
      that
      will increase continuously until we can consummate a business combination with
      a
      profitable business opportunity. We cannot assure you that we can identify
      a
      suitable business opportunity and consummate a business
      combination.






3





THERE
      IS
      COMPETITION FOR THOSE PRIVATE COMPANIES SUITABLE FOR A MERGER TRANSACTION OF
      THE
      TYPE CONTEMPLATED BY MANAGEMENT.





The
      Company is in a highly competitive market for a small number of business
      opportunities which could reduce the likelihood of consummating a successful
      business combination. We are and will continue to be an insignificant
      participant in the business of seeking mergers with, joint ventures with and
      acquisitions of small private and public entities. A large number of established
      and well-financed entities, including small public companies and venture capital
      firms, are active in mergers and acquisitions of companies that may be desirable
      target candidates for us. Nearly all these entities have significantly greater
      financial resources, technical expertise and managerial capabilities than we
      do;
      consequently, we will be at a competitive disadvantage in identifying possible
      business opportunities and successfully completing a business combination.
      These
      competitive factors may reduce the likelihood of our identifying and
      consummating a successful business combination.





FUTURE
      SUCCESS IS HIGHLY DEPENDENT ON THE ABILITY OF MANAGEMENT TO LOCATE AND ATTRACT
      A
      SUITABLE ACQUISITION.





The
      nature of our operations is highly speculative and there is a consequent risk
      of
      loss of your investment. The success of our plan of operation will depend to
      a
      great extent on the operations, financial condition and management of the
      identified business opportunity. While management intends to seek business
      combination(s) with entities having established operating histories, we cannot
      assure you that we will be successful in locating candidates meeting that
      criterion. In the event we complete a business combination, the success of
      our
      operations may be dependent upon management of the successor firm or venture
      partner firm and numerous other factors beyond our control.





THE
      COMPANY HAS NO EXISTING AGREEMENT FOR A BUSINESS COMBINATION OR OTHER
      TRANSACTION.





We
      have
      no arrangement, agreement or understanding with respect to engaging in a merger
      with, joint venture with or acquisition of, a private or public entity. No
      assurances can be given that we will successfully identify and evaluate suitable
      business opportunities or that we will conclude a business combination.
      Management has not identified any particular industry or specific business
      within an industry for evaluation. We cannot guarantee that we will be able
      to
      negotiate a business combination on favorable terms, and there is consequently
      a
      risk that funds allocated to the purchase of our shares will not be invested
      in
      a company with active business operations.





MANAGEMENT
      INTENDS TO DEVOTE ONLY A LIMITED AMOUNT OF TIME TO SEEKING A TARGET COMPANY
      WHICH MAY ADVERSELY IMPACT OUR ABILITY TO IDENTIFY A SUITABLE ACQUISITION
      CANDIDATE.





While
      seeking a business combination, management anticipates devoting no more than
      a
      few hours per week to the Company's affairs. Our officers have not entered
      into
      written employment agreements with us and are not expected to do so in the
      foreseeable future. This limited commitment may adversely impact our ability
      to
      identify and consummate a successful business combination.





THE
      TIME
      AND COST OF PREPARING A PRIVATE COMPANY TO BECOME A PUBLIC REPORTING COMPANY
      MAY PRECLUDE US FROM ENTERING INTO A MERGER OR ACQUISITION WITH THE MOST
      ATTRACTIVE PRIVATE COMPANIES.





Target
      companies that fail to comply with SEC reporting requirements may delay or
      preclude acquisition. Sections 13 and 15(d) of the Exchange Act require
      reporting companies to provide certain information about significant
      acquisitions, including certified financial statements for the company acquired,
      covering one, two, or three years, depending on the relative size of the
      acquisition. The time and additional costs that may be incurred by some target
      entities to prepare these statements may significantly delay or essentially
      preclude consummation of an acquisition. Otherwise suitable acquisition
      prospects that do not have or are unable to obtain the required audited
      statements may be inappropriate for acquisition so long as the reporting
      requirements of the Exchange Act are applicable.




4





THE
      COMPANY MAY BE SUBJECT TO FURTHER GOVERNMENT REGULATION WHICH WOULD ADVERSELY
      AFFECT OUR OPERATIONS.





Although
      we will be subject to the reporting requirements under the Exchange Act,
      management believes we will not be subject to regulation under the Investment
      Company Act of 1940, as amended (the "Investment Company Act"), since we will
      not be engaged in the business of investing or trading in securities. If we
      engage in business combinations which result in our holding passive investment
      interests in a number of entities, we could be subject to regulation under
      the
      Investment Company Act. If so, we would be required to register as an investment
      company and could be expected to incur significant registration and compliance
      costs. We have obtained no formal determination from the Securities and Exchange
      Commission as to our status under the Investment Company Act and, consequently,
      violation of the Act could subject us to material adverse
      consequences.





ANY
      POTENTIAL ACQUISITION OR MERGER WITH A FOREIGN COMPANY MAY SUBJECT US TO
      ADDITIONAL RISKS.





If
      we
      enter into a business combination with a foreign concern, we will be subject
      to
      risks inherent in business operations outside of the United States. These risks
      include, for example, currency fluctuations, regulatory problems, punitive
      tariffs, unstable local tax policies, trade embargoes, risks related to shipment
      of raw materials and finished goods across national borders and cultural and
      language differences. Foreign economies may differ favorably or unfavorably
      from
      the United States economy in growth of gross national product, rate of
      inflation, market development, rate of savings, and capital investment, resource
      self-sufficiency and balance of payments positions, and in other
      respects.





THERE
      IS
      CURRENTLY NO TRADING MARKET FOR OUR COMMON STOCK.





Outstanding
      shares of our Common Stock cannot be offered, sold, pledged or otherwise
      transferred unless subsequently registered pursuant to, or exempt from
      registration under, the Securities Act and any other applicable federal or
      state
      securities laws or regulations. These restrictions will limit the ability of
      our
      stockholders to liquidate their investment.





OUR
      BUSINESS WILL HAVE NO REVENUES UNLESS AND UNTIL WE MERGE WITH OR ACQUIRE AN
      OPERATING BUSINESS.





We
      are a
      development stage company and have had no revenues from operations. We may
      not
      realize any revenues unless and until we successfully merge with or acquire
      an
      operating business.




5





THE
      COMPANY INTENDS TO ISSUE MORE SHARES IN A MERGER OR ACQUISITION, WHICH WILL
      RESULT IN SUBSTANTIAL DILUTION.





Our
      certificate of incorporation authorizes the issuance of a maximum of 100,000,000
      shares of common stock and a maximum of 20,000,000 shares of referred stock.
      Any
      merger or acquisition effected by us may result in the issuance of additional
      securities without stockholder approval and may result in substantial dilution
      in the percentage of our common stock held by our then existing stockholders.
      Moreover, the common stock issued in any such merger or acquisition transaction
      may be valued on an arbitrary or non-arm's-length basis by our management,
      resulting in an additional reduction in the percentage of common stock held
      by
      our then existing stockholders. Our Board of Directors has the power to issue
      any or all of such authorized but unissued shares without stockholder approval.
      To the extent that additional shares of Common Stock or Preferred Stock are
      issued in connection with a business combination or otherwise, dilution to
      the
      interests of our stockholders will occur and the rights of the holders of Common
      Stock might be materially adversely affected.





THE
      COMPANY HAS CONDUCTED NO MARKET RESEARCH OR IDENTIFICATION OF BUSINESS OPPORTUNITIES,
      WHICH MAY AFFECT OUR ABILITY TO IDENTIFY A BUSINESS TO MERGE WITH OR
      ACQUIRE.





The
      Company has neither conducted nor have others made available to us results
      of
      market research concerning prospective business opportunities. Therefore, we
      have no assurances that market demand exists for a merger or acquisition as
      contemplated by us. Our management has not identified any specific business
      combination or other transactions for formal evaluation by us, such that it
      may
      be expected that any such target business or transaction will present such
      a
      level of risk that conventional private or public offerings of securities or
      conventional bank financing will not be available. There is no assurance that
      we
      will be able to acquire a business opportunity on terms favorable to us.
      Decisions as to which business opportunity to participate in will be
      unilaterally made by our management, which may act without the consent, vote
      or
      approval of our stockholders.





BECAUSE
      WE MAY SEEK TO COMPLETE A BUSINESS COMBINATION THROUGH A "REVERSE MERGER",
      FOLLOWING SUCH A TRANSACTION WE MAY NOT BE ABLE TO ATTRACT THE ATTENTION
      OF MAJOR BROKERAGE FIRMS.





Additional
      risks may exist since we will assist a privately held business to become public
      through a "reverse merger." Securities analysts of major brokerage firms may
      not
      provide coverage of our Company since there is no incentive to brokerage firms
      to recommend the purchase of our common stock. No assurance can be given that
      brokerage firms will want to conduct any secondary offerings on behalf of our
      post-merger company in the future.





WE
      CANNOT
      ASSURE YOU THAT FOLLOWING A BUSINESS COMBINATION WITH AN OPERATING BUSINESS,
      OUR COMMON STOCK WILL BE LISTED ON NASDAQ OR ANY OTHER SECURITIES
      EXCHANGE.





Following
      a business combination, we may seek the listing of our common stock on NASDAQ
      or
      the American Stock Exchange. However, we cannot assure you that following such
      a
      transaction, we will be able to meet the initial listing standards of either
      of
      those or any other stock exchange, or that we will be able to maintain a listing
      of our common stock on either of those or any other stock exchange. After
      completing a business combination, until our common stock is listed on the
      NASDAQ or another stock exchange, we expect that our common stock would be
      eligible to trade on the OTC Bulletin Board, another over-the-counter quotation
      system, or on the "pink sheets," where our stockholders may find it more
      difficult to dispose of shares or obtain accurate quotations as to the market
      value of our common stock. In addition, we would be subject to an SEC rule
      that,
      if it failed to meet the criteria set forth in such rule, imposes various
      practice requirements on broker-dealers who sell securities governed by the
      rule
      to persons other than established customers and accredited investors.
      Consequently, such rule may deter broker-dealers from recommending or selling
      our common stock, which may further affect its liquidity. This would also make
      it more difficult for us to raise additional capital following a business
      combination.




6





THERE
      IS
      NO PUBLIC MARKET FOR OUR COMMON STOCK, NOR HAVE WE EVER PAID DIVIDENDS ON OUR
      COMMON STOCK.





There
      is
      no public trading market for our common stock and none is expected to develop
      in
      the foreseeable future unless and until the Company completes a business
      combination with an operating business and such business files a registration
      statement under the Securities Act of 1933, as amended. Additionally,
      we have never paid dividends on our Common Stock and do not presently intend
      to
      pay any dividends in the foreseeable future. We anticipate that any funds
      available for payment of dividends will be re-invested into the Company to
      further its business strategy.





AUTHORIZATION
      OF PREFERRED STOCK.





Our
      Certificate of Incorporation authorizes the issuance of up to 20,000,000 shares
      of preferred stock with designations, rights and preferences determined from
      time to time by its Board of Directors. Accordingly, our Board of Directors
      is
      empowered, without stockholder approval, to issue preferred stock with dividend,
      liquidation, conversion, voting, or other rights which could adversely affect
      the voting power or other rights of the holders of the common stock. In the
      event of issuance, the preferred stock could be utilized, under certain
      circumstances, as a method of discouraging, delaying or preventing a change
      in
      control of the Company. Although we have no present intention to issue any
      shares of its authorized preferred stock, there can be no assurance that the
      Company will not do so in the future.





CONTROL
      BY MANAGEMENT.





Management
      currently owns 100% of all the issued and outstanding capital stock of the
      Company. Consequently, management has the ability to control the operations
      of
      the Company and will have the ability to control substantially all matters
      submitted to stockholders for approval, including:


·
              Election
                  of the board of directors;
 
 ·
              Removal
                  of any directors;
 
 ·
              Amendment
                  of the Company's certificate of incorporation or bylaws;
                  and
 
 ·
              Adoption
                  of measures that could delay or prevent a change in control or
                  impede a
                  merger, takeover or other business
                  combination.




Our
      CEO
      and Director also own 100 % of our issued and outstanding common stock.
      Accordingly, this concentration of ownership by itself may have the effect
      of
      impeding a merger, consolidation, takeover or other business consolidation,
      or
      discouraging a potential acquirer from making a tender offer for the common
      stock.




7





THIS
      REGISTRATION STATEMENT CONTAINS FORWARD-LOOKING STATEMENTS AND INFORMATION
      RELATING TO US, OUR INDUSTRY AND TO OTHER BUSINESSES.





These
      forward-looking statements are based on the beliefs of our management, as well
      as assumptions made by and information currently available to our management.
      When used in this prospectus, the words "estimate," "project," "believe,"
      "anticipate," "intend," "expect" and similar expressions are intended to
      identify forward-looking statements. These statements reflect our current views
      with respect to future events and are subject to risks and uncertainties that
      may cause our actual results to differ materially from those contemplated in
      our
      forward-looking statements. We caution you not to place undue reliance on these
      forward-looking statements, which speak only as of the date of this prospectus.
      We do not undertake any obligation to publicly release any revisions to these
      forward-looking statements to reflect events or circumstances after the date
      of
      this prospectus or to reflect the occurrence of unanticipated
      events.





ITEM
      2.
      DESCRIPTION OF PROPERTY.





The
      Company neither rents nor owns any properties. The Company currently has no
      policy with respect to investments or interests in real estate, real estate
      mortgages or securities of, or interests in, persons primarily engaged in real
      estate activities.





ITEM
      3.
      LEGAL PROCEEDINGS.





There
      are
      not presently any material pending legal proceedings to which the Registrant
      is a party or as to which any of its property is subject, and no such
      proceedings are known to the Registrant to be threatened or contemplated against
      it.





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





For
      the
      period from the inception of the Company on May 31, 2006 to December 31,
      2006
      there have been no matters submitted to the vote of the security
      holders.








PART
      II





ITEM
      5.
      MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.





(a)
      Market Information. The Company's common stock is not trading on any stock
      exchange. There has been no market activity in its stock since its inception
      through the date of this filing.





(b)
      Holders. As of December 31, 2006 there was one holder of our common
      stock.





(c)
      Dividends. We have not paid any dividends on our common stock to date and do
      not
      intend to pay dividends prior to the completion of a business combination.
      The
      payment of dividends in the future will be contingent upon our revenues and
      earnings, if any, capital requirements and general financial condition
      subsequent to completion of a business combination. The payment of any dividends
      subsequent to a business combination will be within the discretion of our then
      board of directors. It is the present intention of our board of directors to
      retain all earnings, if any, for use in our business operations and,
      accordingly, our board does not anticipate declaring any dividends in the
      foreseeable future.




8





ITEM
      6.
      MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.





The
      Company was organized as a vehicle to investigate and, if such investigation
      warrants, acquire a target company or business seeking the perceived advantages
      of being a publicly held corporation. Our principal business objective for
      the
      next 12 months and beyond such time will be to achieve long-term growth
      potential through a combination with a business rather than immediate,
      short-term earnings. The Company will not restrict our potential candidate
      target companies to any specific business, industry or geographical location
      and, thus, may acquire any type of business.





The
      Company does not currently engage in any business activities that provide cash
      flow. The costs of investigating and analyzing business combinations for the
      next 12 months and beyond such time will be paid with amounts to be loaned
      to or
      invested in us by our stockholders, management or other investors.





During
      the next twelve months we anticipate incurring costs related to:





(i)
      filing of Exchange Act reports, and





(ii)
      costs relating to consummating an acquisition.





We
      believe we will be able to meet these costs through amounts, as necessary,
      to be
      loaned to or invested in us by our stockholders, management or other
      investors.





The
      Company may consider a business which has recently commenced operations, is
      a
      developing company in need of additional funds for expansion into new products
      or markets, is seeking to develop a new product or service, or is an established
      business which may be experiencing financial or operating difficulties and
      is in
      need of additional capital. In the alternative, a business combination may
      involve the acquisition of, or merger with, a company which does not need
      substantial additional capital, but which desires to establish a public trading
      market for its shares, while avoiding, among other things, the time delays,
      significant expense, and loss of voting control which may occur in a public
      offering.





Any
      target business that is selected may be a financially unstable company or an
      entity in its early stages of development or growth, including entities without
      established records of sales or earnings. In that event, we will be subject
      to
      numerous risks inherent in the business and operations of financially unstable
      and early stage or potential emerging growth companies. In addition, we may
      effect a business combination with an entity in an industry characterized by
      a
      high level of risk, and, although our management will endeavor to evaluate
      the
      risks inherent in a particular target business, there can be no assurance that
      we will properly ascertain or assess all significant risks.




9





Our
      management anticipates that it will likely be able to effect only one business
      combination, due primarily to our limited financing, and the dilution of
      interest for present and prospective stockholders, which is likely to occur
      as a
      result of our management's plan to offer a controlling interest to a target
      business in order to achieve a tax free reorganization. This lack of
      diversification should be considered a substantial risk in investing in us,
      because it will not permit us to offset potential losses from one venture
      against gains from another.





The
      Company anticipates that the selection of a business combination will be complex
      and extremely risky. Because of general economic conditions, rapid technological
      advances being made in some industries and shortages of available capital,
      our
      management believes that there are numerous firms seeking even the limited
      additional capital which we will have and/or the perceived benefits of becoming
      a publicly traded corporation. Such perceived benefits of becoming a publicly
      traded corporation include, among other things, facilitating or improving the
      terms on which additional equity financing may be obtained, providing liquidity
      for the principals of and investors in a business, creating a means for
      providing incentive stock options or similar benefits to key employees, and
      offering greater flexibility in structuring acquisitions, joint ventures and
      the
      like through the issuance of stock. Potentially available business combinations
      may occur in many different industries and at various stages of development,
      all
      of which will make the task of comparative investigation and analysis of such
      business opportunities extremely difficult and complex.





We
      do not
      currently intend to retain any entity to act as a "finder" to identify
      and analyze the merits of potential target businesses.





ITEM
      7.
      FINANCIAL STATEMENTS.





Please
      see the financial statements beginning on page F-1 located elsewhere in this
      annual report on Form 10-KSB and incorporated herein by reference.





ITEM
      8.
      CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
      DISCLOSURE.





None.





ITEM
      8A.
      CONTROLS AND PROCEDURES.





The
      Company maintains disclosure controls and procedures that are designed to ensure
      that information required to be disclosed in the Company's Exchange Act reports
      is recorded, processed and summarized and is reported within the time periods
      specified in the SEC's rules and forms, and that such information is accumulated
      and communicated to the Chief Executive Officer, as appropriate, to allow timely
      decisions regarding required disclosure. In designing and evaluating the
      disclosure control procedures, no matter how well designed and operated, can
      provide only reasonable assurance of achieving the desired control objectives,
      and management necessarily was required to apply its judgment in evaluating
      the
      cost-benefit relationship of possible controls and procedures.





As
      of the
      date of this report, the Chief Executive Officer carried out an evaluation
      of
      the effectiveness of the design and operation of the Company's disclosure
      controls and procedures pursuant to Exchange Act Rule 13a-14. Based upon the
      evaluation, the Company's Chief Executive Officer concluded that the Company's
      disclosure controls and procedures are effective in timely alerting them to
      material information required to be included in the Company's periodic SEC
      filings. There have been no significant changes in the Company's disclosure
      controls and procedures or in other factors, which could significantly affect
      disclosure controls subsequent to the date the Company's management carried
      out
      its evaluation. During the period covered by this Annual Report on Form 10-KSB,
      there was no change in our internal control over financial reporting (as defined
      in Rule 13a-15(f) under the Exchange Act) that materially affected, or is
      reasonably likely to materially affect, our internal control over financial
      reporting.




ITEM
      8B.
      OTHER INFORMATION.





None.




10





PART
      III





ITEM
      9.
      DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH
      SECTION 16(A) OF THE EXCHANGE ACT.





(a)
      Identification of Directors and Officers.





A.
      Identification of Directors and Officers. The current officers and directors
      will serve for one year or until their respective successors are elected and
      qualified. They are:




Name
              Age
              PositionBia
                  Mac
              54
              Chief
                  Executive Officer and DirectorTheresa
                  Quach
              35
              President
                  and DirectorHung
                  Dang
              52
              Director





Mr.
      Bia
      Mac is the Chief Executive Officer and Director of the Company. Mr. Mac has
      served as a Director of the Company since October 2006 and as an officer since
      January 2007.   Mr. Mac is an inventor, professor and practitioner in the
      area of Low Intensity Laser Medicine.  He has opened and managed multiple
      laser treatment centers globally and has trained numerous doctors worldwide
      in the past 14 years in the area of Low Intensity Laser.  Mr. Mac is the
      founder of Medical Beam, Inc. and Mac Beam, Inc.





Dr.
      Theresa Quach is the President and Director of the Company. Dr. Quach has served
      as an officer and Director of the Company since October 2006. Dr. Quach is
      experienced with managing State and Federal Funded Programs as well as Financial
      Management with Maximum Profits and Cost Saving Measures. Dr. Quach holds a
      Doctorate Degree from South Baylo University.





Mr.
      David
      Dang is the Secretary, Treasurer and Director of the Company. Mr. Dang has
      served as a Director of the Company since October 2006. Mr. Dang was the
      District Sales Manager for EStock Inc. from 2001 to 2003 where he increased
      regional sales from $5 million to $35 million.   Mr. Dang serves as Mac
      Beam, Inc.'s Chief Financial Officer from 2003 to 2005 and as its Vice President
      since 2006.  Mr. Dang has 15 years experience in business development and
      distribution.




B.
      Significant Employees. None







11


C.
      None





D.
      Involvement in Certain Legal Proceedings. None





E.
      The
      Board of Directors acts as the Audit Committee and the Board has no separate
      committees. The Company has no qualified financial expert at this time because
      it has not been able to hire a qualified candidate. Further, the Company
      believes that it has inadequate financial resources at this time to hire such
      an
      expert. The Company intends to continue to search for a qualified individual
      for
      hire.





(b)
      Section 16(a) Beneficial Ownership Compliance.





Section
      16(a) of the Securities Exchange Act of 1934, as amended, requires our executive
      officers and directors and persons who own more than 10% of a registered class
      of our equity securities to file with the Securities and Exchange Commission
      initial statements of beneficial ownership, reports of changes in ownership
      and
      annual reports concerning their ownership of the our common stock and other
      equity securities, on Form 3, 4 and 5 respectively. Executive officers,
      directors and greater than 10% shareholders are required by the Securities
      and
      Exchange Commission regulations to furnish our company with copies of all
      Section 16(a) reports they file. Based solely on our review of the copies of
      such reports received by us, and on written representations by our officers
      and
      directors regarding their compliance with the applicable reporting requirements
      under Section 16(a) of the Exchange Act, we believe that, with respect to the
      fiscal year ended December 31, 2006, our officers and directors, and all of
      the
      persons known to us to own more than 10% of our common stock, filed all required
      reports on a timely basis.





(c)
      Code
      of Ethics.





We
      currently do not have a code of ethics. Upon consummation of a business
      combination, we intend to adopt a code of ethics that applies to our principal
      executive officer, principal financial officer, principal accounting officer
      or
      controller or persons performing similar functions.





(c)
      Board
      Committees and Designated Directors.





We
      currently do not have any committees. It is intended that the board of directors
      will establish an Audit Committee upon the consummation of a business
      combination. The board of directors will take all reasonable actions to ensure
      that one of the members of the Audit Committee will be an "audit committee
      financial expert," as such term is defined in the rules of the Securities and
      Exchange Commission. We will evaluate establishing such committees in the
      future.





ITEM
      10.
      EXECUTIVE COMPENSATION.





The
      Company's officer and director does not receive any compensation for his
      services rendered to the Company since inception, has not received such
      compensation in the past, and is not accruing any compensation pursuant to
      any
      agreement with the Company. No remuneration of any nature has been paid for
      or
      on account of services rendered by a director in such capacity. The Company's
      officers and directors intend to devote no more than a few hours a week to
      our
      affairs.




12





The
      officers and directors of the Company will not receive any finder's fee, either
      directly or indirectly, as a result of his efforts to implement the Company's
      business plan outlined herein.





It
      is
      possible that, after the Company successfully consummates a business combination
      with an unaffiliated entity, that entity may desire to employ or retain one
      or a
      number of members of our management for the purposes of providing services
      to
      the surviving entity. However, the Company has adopted a policy whereby the
      offer of any post-transaction employment to members of management will not
      be a
      consideration in our decision whether to undertake any proposed
      transaction.





No
      retirement, pension, profit sharing, stock option or insurance programs or
      other
      similar programs have been adopted by the Company for the benefit of its
      employees.





There
      are
      no understandings or agreements regarding compensation our management will
      receive after a business combination that is required to be included in this
      table, or otherwise.





ITEM
      11.
      SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.





(a)
      Security ownership of certain beneficial owners.





The
      following table sets forth, as of December 31, 2006, the number of shares of
      Common Stock owned of record and beneficially by executive officers, directors
      and persons who hold 5% or more of the outstanding Common Stock of the Company.
      Also included are the shares held by all executive officers and directors as
      a
      group.


Amount
                  and Nature ofName
                  and
              Beneficial
              PercentageAddress
              Ownership
              of
                  ClassMac
                  Bia
              1,390,000
              100%2350
                  Senter RdSan
                  Jose, CA 95112All
                  Officers and
              1,390,000
              100%Directors
                  as a group
 ITEM
        12.
        CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.





Except
      as
      otherwise indicated herein, there have been no related party transactions,
      or
      any other transactions or relationships required to be disclosed pursuant to
      Item 404 of Regulation S-B.




13





ITEM
      13.
      EXHIBITS





(a)
      Exhibits:


31.1
              Certification
                  of Chief Executive Officer and Chief Financial Officer pursuant
                  to Section
                  302 of the Sarbanes-Oxley Act of 2002(1)32.1
              Certification
                  of Chief Executive Officer and Chief Financial Officer pursuant
                  to
                  pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
                  906 of
                  the Sarbanes-Oxley Act of 2002(1)3.1
              Certificate
                  of Incorporation (1)3.2
              By-laws
                  (1)





(1)
      Incorporated by reference to the Registrant's Registration Statement on Form
      10SB filed on August 25, 2006.





(b)
      The
      following documents are filed as part of the report:





1.
      Financial Statements: Balance Sheet, Statement of Operations, Statement
      of


Stockholder's
      Equity, Statement of Cash Flows, and Notes to Financial Statements.





The
      Company is an inactive entity as defined by Section 3-11 of Regulation S-X.
      Accordingly, the financial statements required for purposes of reports pursuant
      to the Securities Exchange Act of 1934 are unaudited.





ITEM
      14
      PRINCIPAL ACCOUNTANT FEES AND SERVICES.





The
      firm
      of Malone & Bailey, P.C. acts as our principal accountant. Our former
      officer and director paid $1,500 on our behalf to Malone & Bailey, P.C.
      during the period from May 31, 2006 (inception) to June 30, 2006 for its audit
      of our financial statements which were included in our Form 10SB12G filed with
      the Securities and Exchange Commission on August 25, 2006. We have not paid
      Malone & Bailey, P.C. any fees for the fiscal year ending December 31, 2006
      for audit related or tax fees, or for any other services.





Pursuant
      to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
      1934, the registrant has duly caused this registration statement to be signed
      on
      its behalf by the undersigned, thereunto duly authorized.





Kingsway
      Capital, Inc.


(Registrant)





Date:
      March 30, 2007








By:
      /s/ Mac Bia


(Signature)


Mac
      Bia,
      Chief Executive Officer and Director







14


THESE
      FINANCIAL STATEMENTS HAVE NOT BEEN REVIEWED OR AUDITED BY OUR INDEPENDENT
      AUDITORS.





KINGSWAY
        CAPITAL, INC.
 (A
        DEVELOPMENT STAGE COMPANY)
 BALANCE
        SHEET
 December
        31, 2006
 
 
 
 ASSETS
 
 CURRENT
                  ASSETS:Cash
              
              $
              -TOTAL
                  ASSETS
              
              $
              -LIABILITIES
                  AND STOCKHOLDERS' EQUITYCURRENT
                  LIABILITIES:
              
              $
              -Total
                  Current Liabilities
              
              
              -Total
                  Liabilities
              
              $
              -STOCKHOLDERS'
                  DEFICIT:Preferred
                  Stock at $0.0001 par value; authorized 20,000,000 shares; no shares
                  issued
                  and outstanding
              
              
              -Common
                  stock at $0.0001 par value; authorized 100,000,000 shares; 1,390,000
                  shares issued and outstanding
              
              
              139Deficit
                  accumulated during the development stage
              
              
              (139
              )Total
                  Stockholders' Equity
              
              
              -TOTAL
                  LIABILITIES AND STOCKHOLDERS' DEFICIT
              
              $
              -
 
 
 
 The
        accompanying notes are an integral part of these financial
        statements.




F-1





KINGSWAY
        CAPITAL, INC.
 (A
        DEVELOPMENT STAGE COMPANY)
 STATEMENT
        OF OPERATIONS
 
 
 Period
                  fromMay
                  31, 2006(inception)
                  toDecember
                  31,2006Revenue
              
              $
              -General
                  and administrativeOrganization
                  and related expenses
              
              
              139Net
                  loss and loss accumulated during development stage
              
              $
              (139
              )
 
 
 
 
 
 The
        accompanying notes are an integral part of these financial
        statements.


F-2


KINGSWAY
      CAPITAL, INC.


(A
      DEVELOPMENT STAGE COMPANY)


STATEMENT
      OF STOCKHOLDERS' EQUITY








Deficit
              accumulatedCommon
                Stock
            
            Additional
            
            during
                the
            
            TotalNumbers
                of
            
            
            
            paid-in
            
            development
            
            Stockholders'Shares
            
            Amount
            
            capital
            
            stage
            
            EquityMay
                31, 2006 (inception)Shares
                issued for services
            
            
            1,390,000
            
            $
            139
            
            $
            0
            
            $
            0
            
            $
            139Net
                loss
            
            
            0
            
            
            0
            
            
            0
            
            
            (139
            )
            
            (139
            )Balance,
                December 31, 2006
            
            
            1,390,000
            
            $
            139
            
            $
            0
            
            $
            (139
            )
            $
            0























The
      accompanying notes are an integral part of these financial
      statements





F-3


KINGSWAY
        CAPITAL, INC.
 (A
        DEVELOPMENT STAGE COMPANY)
 STATEMENT
        OF CASH FLOWS
 
 
 Period
                  fromMay
                  31, 2006(inception)
                  toDecember
                  31,2006CASH
                  FLOWS FROM OPERATING ACTIVITIES:Net
                  loss
              
              $
              (139
              )Issuance
                  of stock for services rendered
              
              
              139Net
                  Cash Provided (used) by Operating Activities
              
              
              -CASH
                  FLOWS FROM INVESTING ACTIVITIES
              
              
              -CASH
                  FLOWS FROM FINANCING ACTIVITIES
              
              
              -INCREASE
                  IN CASH AND CASH EQUIVALENTS
              
              
              -CASH
                  AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
              
              
              -CASH
                  AND CASH EQUIVALENTS AT END OF PERIOD
              
              $
              -NONCASH
                  FINANCING AND INVESTING ACTIVITIESCommon
                  stock issued to founder for services rendered
              
              $
              139SUPPLEMENTAL
                  SCHEDULE OF CASH FLOW ACTIVITIES:Cash
                  Paid For:Interest
              
              $
              -Income
                  taxes
              
              $
              -
 
 
 
 The
        accompanying notes are an integral part of these financial
        statements.








F-4











KINGSWAY
      CAPITAL, INC.


(A
      Development Stage Company)


NOTES
      TO
      FINANCIAL STATEMENTS


December
      31, 2006











NOTE
      1
      BUSINESS DESCRIPTION AND ORGANIZATION





Kingsway
      Capital, Inc. was incorporated in Delaware on May 31, 2006 and has been inactive
      since inception. Kingsway intends to serve as a vehicle to effect an asset
      acquisition, merger, exchange of capital stock or other business combination
      with a domestic or foreign business.





NOTE
      2
      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





Basis
      of
      Presentation - Development Stage Company





Kingsway
      has not earned any revenue from operations. Accordingly, Kingsway's activities
      have been accounted for as those of a "Development Stage Enterprise" as set
      forth in Financial Accounting Standards Board Statement No. 7. Among the
      disclosures required by SFAS 7 are that Kingsway's financial statements be
      identified as those of a development stage company, and that the statements
      of
      operations, stockholders' equity and cash flows disclose activity since the
      date
      of Kingsway's inception.





Kingsway
      has elected a fiscal year ending on December 31.





A.
      Cash
      and cash equivalents





Cash
      and
      cash equivalents include cash on hand, cash accounts, interest bearing savings
      accounts and time certificates of deposit with a maturity of three months or
      less when purchased.





B.
      Use of
      estimates





The
      preparation of financial statements in conformity with generally accepted
      accounting principles requires management to make estimates and assumptions
      that
      affect the reported amounts of assets and liabilities and disclosures 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.







F-5


C.
      Income
      Taxes





Kingsway
      accounts for income taxes under the Financial Accounting Standards Board (FASB)
      Statement No. 109, "Accounting for Income Taxes." Under Statement 109, deferred
      tax assets and liabilities are recognized for the future tax consequences
      attributable to differences between the financial statement carrying amounts
      of
      existing assets and liabilities and their respective tax bases. Deferred tax
      assets and liabilities are measured using enacted tax rates expected to apply
      to
      taxable income in the years in which those temporary differences are expected
      to
      be recovered or settled. Under Statement 109, the effect on deferred tax assets
      and liabilities of a change in tax rates is recognized in income in the period
      that includes the enactment date. There were no current or deferred income
      tax
      expense or benefits due to Kingsway not having any material operations for
      the
      period ended December 31, 2006.




D.
      Basic
      Loss Per Common Share





Basic
      loss per common share has been calculated based on the weighted average number
      of shares outstanding during the period after giving retroactive effect to
      stock
      splits. There are no dilutive securities at December 31, 2006 for purposes
      of
      computing fully diluted earnings per share.





E.
      Impact
      of New Accounting Standards





Kingsway
      does not expect the adoption of recently issued accounting pronouncements to
      have a significant impact on Kingsway's results of operations, financial
      position, or cash flow.





NOTE
      3
      SHAREHOLDER'S EQUITY





On
      May
      31, 2006 (inception), Kingsway issued 1,390,000 shares of common stock for
      $139
      in services by its founding shareholder.





Preferred
      Stock





Kingsway's
      board of directors has the authority to establish and fix the designation,
      powers, or preferences of preferred shares without further vote by the
      shareholders.






F-6