**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**WASHINGTON,
      D.C. 20549**





**FORM
      10-K/A**





(Mark
      One)


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


**ACT
      OF 1934**





**For
      the Fiscal Year Ended December 31, 2007***





**o** **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
      SECURITIES**


**EXCHANGE
      ACT OF 1934**





**For
      the transition period from _________ to __________**





**Commission
      file number: 000-27159**




**SUNWAY
      GLOBAL INC.**


(Exact
      name of registrant as specified in its charter)





**Nevada**
            
            **65-0439467**(State
                or other jurisdiction of
              incorporation
                or organization)
            
            (IRS
                Employer Identification
              No.)





**Daqing
      Hi-Tech Industry Development Zone**


**Daqing,
      Heilongjiang, Post Code 163316**


**People’s
      Republic of China**




(Address
      of principal executive offices)





**86-459-604-6043**


(Registrant's
      telephone number, including area code)





**National
      Realty and Mortgage, Inc.**


***Former
      Fiscal Year End: September 30, 2006**


(Former
      name, former address and former fiscal year, if changed since last
      report)





Copies
      to:


Marc
      Ross, Esq.


Sichenzia
      Ross Friedman Ference LLP


61
      Broadway


New
      York,
      New York 10006


Phone:
      (212) 930-9700


Fax:
      (212) 930-9725





Securities
      registered under Section 12(b) of the Exchange Act: **None.**





Securities
      registered pursuant to Section 12(g) of the Act: **Common
      Stock, par value $.0000001**





Indicate
      by check mark if the registrant is a well-known seasoned issuer, as defined
      in
      Rule 405 of the Securities Act. Yes o No x





Indicate
      by check mark if the registrant is not required to file reports pursuant to
      Section 13 or Section 15(d) of the Act Yes x No o





(COVER
      CONTINUES ON FOLLOWING PAGE)







Indicate
      by check mark whether the Registrant: (1) has filed all reports required to
      be
      filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
      the
      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





Indicate
      by check mark if disclosure of delinquent filers in response to Item 405 of
      Regulation S-K (§229.405) is not contained herein, and will not 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-K or any
      amendment to this Form 10-K.o





Indicate
      by check mark whether the registrant is a large accelerated filer, an
      accelerated filer, a non-accelerated filer, or a smaller reporting company.
      See
      the definitions of “large accelerated filer,” “accelerated filer” and “smaller
      reporting company” in Rule 12b2 of the Exchange Act.





Large
                accelerated filero
            Accelerated
                fileroNon-accelerated
                filero(Do not check if a smaller reporting company)
            Smaller
                reporting companyx




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





State
      the
      aggregate market value of the voting and non-voting common equity held by
      non-affiliates computed by reference to the price at which the common equity
      was
      last sold, or the average bid and asked price of such common equity, as of
      the
      last business day of the registrant’s most recently completed second fiscal
      quarter. $4,176,134





Indicate
      the number of shares outstanding of each of the registrant’s classes of common
      stock, as of the latest practicable date: 18,446,045 shares issued and
      outstanding as of July 24, 2008.




*As
      of
      June 6, 2007, Sunway Global Inc. changed its fiscal year end from September
      30
      to December 31. The new fiscal period was first reflected in the Company’s Form
      10-QSB for the quarter ending September 30, 2007.







TABLE
      OF CONTENTS




PagePART
                IItem
                1.
            DESCRIPTION
                OF BUSINESS
            
            3Item
                1A
            RISK
                FACTORS
            
            11Item
                1B
            UNRESOLVED
                STAFF COMMENTS
            
            20Item
                2.
            DESCRIPTION
                OF PROPERTY
            
            21Item
                3.
            LEGAL
                PROCEEDINGS
            
            21Item
                4.
            SUBMISSION
                OF MATTERS TO A VOTE OF SECURITY HOLDERS
            
            21PART
                IIItem
                5.
            MARKET
                FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS ISSUER PURCHASES OF
                EQUITY
                SECURITIES
            
            22Item
                6
            SELECT
                FINANCIAL DATA
            
            23Item
                7.
            MANAGEMENT’S
                DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
                OPERATIONS
            
            23Item
                7A
            QUANTITATIVE
                AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
            
            28Item
                8.
            FINANCIAL
                STATEMENTS AND SUPPLEMENTARY DATA
            
            29Item
                9.
            CHANGES
                IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
                DISCLOSURE
            
            31Item
                9A.
            CONTROLS
                AND PROCEDURES
            
            31Item
                9B.
            OTHER
                INFORMATION
            
            32PART
                IIIItem
                10.
            DIRECTORS,
                EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH
                SECTION
                16(b) OF THE EXCHANGE ACT
            
            33Item
                11.
            EXECUTIVE
                COMPENSATION
            
            34Item
                12.
            SECURITY
                OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
                STOCKHOLDER MATTERS
            
            35Item
                13.
            CERTAIN
                RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
                INDEPENDENCE
            
            36Item
                14.
            PRINCIPAL
                ACCOUNTANT FEES AND SERVICES
            
            37Item
                15.
            EXHIBITS,
                FINANCIAL STATEMENT SCHEDULES
            
            37SIGNATURES
            
            39


2




**FORWARD
      LOOKING STATEMENTS**





In
      this
      annual report, references to “Sunway Global,” “Sunway,” “SUWG,” “the Company,”
“we,” “us,” and “our” refer to Sunway Global Inc.




This
      Annual Report on Form 10-KSB (including the section regarding Management's
      Discussion and Analysis or Plan of Operation) contains forward-looking
      statements regarding our business, financial condition, results of operations
      and prospects. Words such as "expects," "anticipates," "intends," "plans,"
      "believes," "seeks," "estimates" and similar expressions or variations of such
      words are intended to identify forward-looking statements, but are not deemed
      to
      represent an all-inclusive means of identifying forward-looking statements
      as
      denoted in this Annual Report on Form 10-KSB. Additionally, statements
      concerning future matters are forward-looking statements.





Although
      forward-looking statements in this Annual Report on Form 10-KSB reflect the
      good
      faith judgment of our Management, such statements can only be based on facts
      and
      factors currently known by us. Consequently, forward-looking statements are
      inherently subject to risks and uncertainties and actual results and outcomes
      may differ materially from the results and outcomes discussed in or anticipated
      by the forward-looking statements. Factors that could cause or contribute to
      such differences in results and outcomes include, without limitation, those
      specifically addressed under the heading "Risks Related to Our Business" below,
      as well as those discussed elsewhere in this Annual Report on Form 10-KSB.
      Readers are urged not to place undue reliance on these forward-looking
      statements, which speak only as of the date of this Annual Report on Form
      10-KSB. We file reports with the Securities and Exchange Commission ("SEC").
      We
      make available on our website under "Investor Relations/SEC Filings," free
      of
      charge, our annual reports on Form 10-KSB, quarterly reports on Form 10-QSB,
      current reports on Form 8-K and amendments to those reports as soon as
      reasonably practicable after we electronically file such materials with or
      furnish them to the SEC. Our website address is www.sunwaytech.com.cn/.  
You can also read and copy any materials we file with the SEC at the SEC's
      Public Reference Room at 100 F Street, NE, Washington, DC 20549. You can obtain
      additional information about the operation of the Public Reference Room by
      calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains an Internet
      site (www.sec.gov) that contains reports, proxy and information statements,
      and
      other information regarding issuers that file electronically with the SEC,
      including us.





We
      undertake no obligation to revise or update any forward-looking statements
      in
      order to reflect any event or circumstance that may arise after the date of
      this
      Annual Report on Form 10-KSB, except as required by law. Readers are urged
      to
      carefully review and consider the various disclosures made throughout the
      entirety of this Annual Report, which are designed to advise interested parties
      of the risks and factors that may affect our business, financial condition,
      results of operations and prospects.




**PART
      I**




**ITEM
      1. - BUSINESS**





**Our
      Business**





As
      a
      result of the consummation of a reverse merger, discussed below, we are engaged
      in the business of designing, manufacturing and selling logistic transport
      systems and medicine dispensing systems and equipment. Our principal product
      is
      a pneumatic tube logistic transport system used in hospitals and other medical
      facilities. We recently developed an automatic medicine dispensing and packing
      system, which we introduced to the market in the first quarter
      of 2008 for use in hospitals and medical facilities.





Our
      customers are primarily hospitals and medical appliance companies in the
      People’s Republic of China (the “PRC”). As the market for pneumatic transport
      systems is still an emerging market, official data about the industry in general
      and competition in particular have not been readily available. Based on
      information we have collected from bids, the internet and other market
      intelligence, it is our estimate that among the hospitals that have adopted
      pneumatic transport systems in China, we were the supplier to the largest number
      of hospitals in 2005, 2006 and 2007. In 2005, we sold 1,105 units to 43
      hospitals and medical facilities and recognized revenue of $5,047,365. In 2006,
      we sold 1,930 units to 65 hospitals and medical facilities and recognized
      revenue of $8,914,139. In 2007, we sold 2,575 units to 87 hospitals and medical
      facilities and recognized revenue of $11,865,138. We sell our products both
      directly, through our sales employees, direct sales office and indirectly,
      through thirteen independent sales agents and four direct sales office. Our
      sales network covers Beijing, Shanghai, Guangzhou Chengdu, Xian and 13 other
      provinces in the PRC.





We
      generate our revenues from sales in two product types: Type A workstations
      and
      Type B workstations, which have the same function and price but with different
      product designs. Having two types of workstations enables us to provide more
      options and flexibility to our customers to accommodate their aesthetic taste,
      space restrictions and other requirements.




**About
      Us**





We are a Nevada corporation which was formed on
      October 18, 1971. Prior to June 6, 2007, we were a shell company. On June 6,
      2007, we consummated (i) a reverse merger transaction, in which we acquired
      control over an operating company in the PRC and (ii) a private sale of our
      restricted stock, in which we received an aggregate of $6.7 million of
      financing. Through these transactions, we ceased to be a shell company and,
      through our subsidiaries, entered into the business of manufacturing and selling
      logistic transport systems and medicine dispensing and system in the
      PRC.


3





On
      June
      6, 2007, the Company acquired World Through Limited, a British Virgin Islands
      Corporation (“WTL”) through a share exchange transaction with WTL and Rise Elite
      International Limited (“Rise Elite”), a company incorporated under the laws of
      the British Virgin Islands and the owner of 100% of the outstanding voting
      stock
      of WTL (such shares, the “WTL Shares”; such transaction, the “Share Exchange”).
      In the Share Exchange, we received the WTL Shares from Rise Elite, and in
      exchange we issued and delivered to Rise Elite 210,886 shares of our
      newly-designated Series A convertible preferred stock. Each share of Series
      A
      convertible preferred stock is automatically convertible into 60 shares of
      our
      common stock upon the consummation of the reverse stock split described below.
      The Share Exchange was effected pursuant to the terms of a Share Exchange
      Agreement among us, WTL and Rise Elite. As a result of the consummation of
      the
      Share Exchange Agreement, we are no longer a shell company as that term is
      defined in Rule 12b-2 under the Securities Exchange Act, as
      amended.





WTL
      owns
      all of the stock of Sunway World Through Technology (Daqing) Co., Ltd. (“SWT”),
      a wholly foreign-owned enterprise (“WFOE”) organized under the laws of the PRC.
      SWT has a series of contracts with the Company’s operating company, Daqing
      Sunway Technology Co., Ltd. (“Daqing Sunway”), a company organized under the
      laws of the PRC, which gives it control over Daqing Sunway’s business, personnel
      and finances as if it were a wholly owned subsidiary of SWT. The transaction
      was
      structured in this way because PRC regulations require that Daqing Sunway be
      acquired for cash and the natural person in control of WTL was unable to raise
      sufficient funds to pay the full value for Daqing Sunway’s shares of assets in
      cash prior to the acquisition.





On
      June
      6, 2007, concurrent with the reverse merger of WTL into the Company, the Company
      adopted the fiscal year end of Daqing Sunway, thereby changing its fiscal year
      end from September 30 to December 31. The new fiscal period was first reflected
      in the Company’s next Form 10-QSB for the quarter ending September 30,
      2007.





As
      contemplated by the reverse merger and approved by a majority of shareholders
      on
      June 28, 2007, the Company effected a 86.3035-for-one reverse split that took
      effect on February 7, 2008.





**Description
      of Our Products and Services**





***Medical
      Transport Systems***





The
      Company’s principal product has been the SUNTRANS-160 pneumatic tube transport
      system (“PTS”) used in hospitals and medical facilities. Pneumatic tube material
      transport systems are used in over 140 countries throughout the world with
      many
      of the systems used in hospitals and medical facilities. Our annual PTS sales
      in
      2004, 2005, 2006 and 2007 were 785, 1,105, 1,930 and 2,575 units (each unit
      consists of one workstation in a PTS), respectively. The average price of our
      PTS is approximately $138,235 (consisting of 30 workstations on
      average).





Our
      PTS
      transports small materials weighing up to five kilograms in capsules at
      high-speed through a network of tubing and transfer units that connect hundreds
      of working departments of a hospital, including nurse stations, operation
      departments, medicine dispensing centers, testing centers and disinfection
      stations, each designated as a user workstation. The high speed transmission
      of
      the materials in the tubing network is through pneumatic air flow powered by
      air
      compressors and the path of a capsule can be switched and redirected through
      transfer units. Typical applications for our PTS are the transport of items
      from
      a user workstation to another user workstation at a users’ request.





Our
      PTS
      provides two-way carrier travel between send/receive user workstations through
      a
      single interconnecting tube. It can deliver anything that fits in a capsule
      to a
      remote location - even on different floors or in other buildings - in a few
      seconds at speeds up to 8 meters per second on a stream of compressed air in
      the
      transmission tubes. Capsules can be transmitted up to 1,800 meters horizontally
      and 120 meters vertically. Each pneumatic tube transport system can have up
      to
      eight sub-systems with up to 64 send/receive workstations under control by
      each
      sub-system.





The
      control units for user workstations and transfer units contain self-diagnostic
      and troubleshooting software. When an operating error occurs, the applicable
      control unit will send error message to each user workstation and the system
      control center. When a receiving user workstation malfunctions, the system
      will
      automatically return the transmission carrier to its originating user
      workstation.





A
      PTS
      primarily consists of send/receive user workstations, transfer units, tubing
      network, capsules, air compressors, system blower and system control
      centers.


4


*User
      Workstations*





User
      Workstations are combined sending and receiving units that send and receive
      capsules carrying the items transported. Each workstation has an easy-to-use
      control panel equipped with a 5-inch LCD screen. It displays the real-time
      operating status of all workstations, capsules, transfer units and air
      compressors throughout a PTS and also monitors capsules in transit, indicates
      the sequence of transport requests and displays destinations of a transport.
      It
      has a heightened security system that can discern and prevent the entry of
      any
      foreign items that are not requested to be transported by the system. Each
      workstation has a voice function that announces the arrival of a capsule as
      well
      as its originating workstation. When error occurs in one user workstation,
      such
      user workstation can automatically shut down without interfering with the
      operation of other user workstations.





*Transfer
      Units*





Transfer
      units are switching devices used at branching points in a tubing system to
      direct and redirect the path of a capsule from one route into another route
      until it gets to its final destination.





*Tubing
      network*





The
      tubing and bends in a PTS are made from strong, lightweight, non-corroding,
      dent-resistant U-PVC that can withstand adverse exterior weather conditions
      as
      well as a numerous harsh conditions between buildings, through existing
      utilities and underground. Generally, the diameter of a straight tube is 160mm
      and the radius of a bend is 850 mm and the tube wall is 3.2mm
      thick.





*System
      Control Centers*





A
      system
      control center consists of one computer that controls the control units of
      all
      other components of the PTS connected through communication cables, and it
      configures the sub-systems, monitors system operations and troubleshoots system
      errors. It has a graphical user interface, dynamic system monitoring and
      administration, real-time tracking of capsules, event reporting and
      self-diagnostic systems and a security system to prevent unauthorized use.
      The
      system control centers can also store current and historical transport data
      and
      instructions entered into the system, which can be retrieved for research and
      other purposes. In the event of a system shut-down due to a blackout, the system
      can resume operation without loosing any data or instructions and complete
      transport requests given prior to the shut-down when the power supply
      resumes.





*Capsules*





Capsules
      are the transporting “vehicle” for medical items within the hospital. A capsule
      is a tube-like bottle made from transparent Plexiglas with leak-resistant caps
      at both ends. Each capsule can carry a load weigh up to five
      kilograms.





*Air
      Compressors and System Blower*





Air
      compressors and the system blower compress and pressurize air which creates
      pneumatic force that moves capsules through the tubing system.





*Execution
      and Transmission Flow of a Transport Request*





A
      transport request is typically executed as follows: At an originating user
      workstation, a user places the item to be transmitted in a capsule and puts
      the
      capsule in the input basket of the originating user workstation. The user then
      enters a transmission request on the control panel of the workstation for the
      capsule to be delivered to another designated user workstation. The request
      will
      then be transmitted to the system control center. Upon receipt of the
      transmission request, the system control center will check whether there is
      any
      item currently in transit in the applicable route. If not, the system control
      center will instruct the originating user workstation to allow the capsule
      to
      enter the tube. Upon the capsule’s entry into the tube, the air compressor and
      system blower will be turned on. The system blower will provide vacuum to suck
      the capsule into the transfer unit and the transfer unit will then switch to
      the
      path leading to the destination workstation. The system blower will then provide
      positive pressure in the tube that will carry the capsule to its destination.
      Upon arrival of the capsule at the destination workstation, the destination
      workstation will automatically release the capsule into its output basket.
      At
      the same time, the destination workstation will make a voice announcement to
      alert the arrival of the capsule and the system control center records and
      stores all the information regarding the transport operation.





*Installation*





Send/receive
      workstations with built-in air compressors can sit on desks or tables, or mount
      easily in a minimum of space on walls, building columns, or any convenient
      flat
      surface, without using prime locations. Tubing may be installed indoors or
      outdoors and fire prevention measures can be added. Our outdoor installation
      utilizes antifreeze and is waterproof. Tubes can be installed through floors
      and
      walls with fireproof insulation casing.





Our
      PTS
      has two types: Type A Workstations and Type B Workstations. The two types of
      workstations are priced the same with similar functions. The differences between
      the two types lie in the mechanism of sending and receiving items as well as
      size and method of installation. Having two types of workstations enables us
      to
      provide more options and flexibility to our customers to accommodate their
      aesthetic taste, space restrictions and other requirements.


5





***Medicine
      Dispensing Systems***




We
      have
      developed a new medicine dispensing system (“SADP”) primarily for hospital use,
      which we launched commercially in the first quarter of 2008. Our SAPD
      is a computerized system that can automatically fill medical prescriptions
      for
      oral medications in single or multiple dosages with high efficiency. Based
      on
      the prescriptions entered into the system by pharmacists, the system
      automatically dispenses and packages the prescribed amount of medication with
      printed labels that provides a patient’s name, location in the hospital,
      hospital bed identification, name of medication, quantity of medication and
      instructions for taking the medication. The prescription information can be
      stored in medicine dispensing system for up to one year for future reference.
      Each medicine dispensing system is connected with hospital computer network
      and
      can retrieve information from the network when necessary. Our SADP is capable
      of
      dispensing and packaging up to 60 prescriptions in one minute and can fill
      the
      prescriptions and package medication for 500 patients based on three doses
      per
      day in approximately 30 minutes.




Each
      of
      our SADPs has the capacity to house between 240 to 500 medicine storage bins,
      which allows for the dispensing and packaging of between 240 and 500 different
      types of medication at any given time. Each medicine storage bin has a CPU
      which
      controls the precise dosage dispensed in accordance with the prescription.
      The
      interior of the medicine storage bins are specifically designed to hold
      different types of medications based on the specifications provided by
      hospitals. Our SADP also comes with a back-up medicine bin which can house
      up to
      40 different types of medications. When a medication that is not stored in
      any
      of the storage bins is prescribed or if a non-standard dosage of a medication
      is
      prescribed (for example, one-half of a tablet may be prescribed), a pharmacist
      can mix and prepare the medication and place it in the back-up medicine bin
      for
      dispensing by our SADP system together with the rest of the prescribed
      medication.




The
      central control system controls of an SADP monitors the operating status of
      each
      storage bin. It also automatically recognizes and tracks the locations to which
      each medication was transmitted and the quantities of medication in each bin.
      Pharmacists can give operate the SADP with its touch screen.





Medical
      treatment mistakes are often caused by human errors made by medical
      professionals in prescribing and dispensing medicine because of lack of
      historical information on patients and the medication that the patients have
      been taking. We believe that the SAPD, which retains information about patients
      medications can help reduce the number of such errors. In Europe and the United
      States, approximately 80% of hospitals already use some form of automatic drug
      dispensation system. However, the use of such systems has just started in the
      PRC.





**Manufacture
      and Quality Control**





We
      manufacture the main components of our products, such as tube diverters and
      pneumatic direction diverters, in our own facility. We outsource the
      manufacturing of certain other parts such as workstations. We assemble all
      the
      components and parts into finished products. In choosing our suppliers, we
      focus
      on the quality of raw material supplied. We conduct our manufacturing procedures
      and quality testing based on ISO 9000 Quality Standard and ISO Environmental
      Standards. In August 2004 we received ISO 9000 certification.





We
      provide a standard 12-month product warranty to our customers. During the
      warranty period, we replace defective products for our customers without
      charge.





**Our
      Product/Marketing Strategy**





Our
      product/marketing strategy focuses on using our human resources and intellectual
      capital to design new and better hardware and software products with a variety
      of applications for many markets. Currently, we are focused on logistics
      products for the hospital and medical markets, but believe that we can expand
      into other markets.





Implementing
      our product/marketing strategy involves the following:





***Expand
      and Strengthen Our Product Lines.*** Currently, we offer two main products: medical transport systems and medicine
      dispensing systems. We hope to leverage the existing technologies that we own
      and our technical expertise to expand our product offerings in developing new
      logistics products and new medical and hospital products.





***Expand
      and Strengthen Our Markets for our Current Product Lines in the PRC and then
      outside of the PRC.*** Our
      medical transport systems and medicine dispensing systems are designed
      principally for hospital use. Currently, we are conducting research and
      development to expand the use of our products in banks, industrial companies
      and
      office buildings. We believe that our low cost structure that comes with
      operating in the PRC can allow us to expand into other countries and
      successfully compete based on our cost and price advantages.




6




***Expand
      and Strengthen Our Distribution Network in the PRC and then outside of the
      PRC.*** We own
      the technologies used in our existing products, and therefore, our cost of
      sales
      and the prices for our products are lower than those of other companies which
      must pay licensing fees and royalties. As result, we have been able to capture
      significant market share in the PRC (approximately 50% of hospitals and medical
      facilities that use pneumatic tube systems). In order to leverage this strength,
      we will seek to build our own distribution service centers in strategic
      locations in the PRC.





**Sales
      and Marketing**





We
      sell
      our products directly through our sales employees, direct sales office and
      indirectly through independent sales agents. As of the date of this report,
      we
      have thirteen independent sales agents and four direct sales office covering
      Beijing, Shanghai, Guangzhou, Chengdu, Xi’an and 13 other provinces, and
      fourteen sales employees. Our sales agents purchase products from us and resell
      them at higher prices.





**Materials
      and Suppliers**





The
      principal supplies purchased for our business are composite panels, aluminum
      frames, micro processors and other IC chips, power supplies, LCD panels, fans,
      U-PVC tubes and equipment chassis. Except for LCD panels, which we purchase
      from
      Truly Semiconductors Limited, a Japanese manufacturer, we have at least two
      suppliers for each of the supplies we purchase for our business. We generally
      have long-term relationships with our suppliers but no written contracts with
      them as the materials we need are generally available in the
      market.





**Customers**





Our
      customers are primarily hospitals and medical appliance companies. The following
      table presents, for the periods indicated, our largest customers by
      revenue:





****
            
            **Percentage of Sales**********
            
            **Fiscal year ended December 31,****Customers******
            
            **2007**
            
            **2006**Jian
                Su Yong Shen Medical Purge Project Co.,Ltd
            
            
            11.13
            %
            
            -Kun
                Min Wei Shi Science and Technology Development Co., Ltd.
            
            
            10.89
            %
            
            13.90
            %Beijing
                Equipment Setting Project No. 4 Company
            
            
            9.74
            %
            
            -Tai
                Yuan Yi Jia Medical Equipment Co.,Ltd.
            
            
            9.23
            %
            
            -Ji
                Nan Feng Ru Yang Guang Technology Development Co.,Ltd
            
            
            8.96
            %
            
            -Beijing
                He Sheng Science and Technology Development Co., Ltd.
            
            
            7.99
            %
            
            -Total
            
            
            57.94
            %
            
            13.90
            %





The
      payment terms of our standard sales agreement generally require a cash payment
      of 30% of the total purchase price within 5 days of the signing of the
      agreement, a cash payment of 30% of the total purchase price upon receipt of
      the
      products if there is no exterior damage to the products, and a cash payment
      of
      40% of the total purchase price upon installation, completion of testing, and
      acceptance of the products. The purchase price generally includes shipping
      expenses. If a shipment is delayed in breach of a sales agreement, we are
      required to pay 1.0% of the total purchase price for each day delayed up to
      10%
      of the total purchase price.





**Technology
      and Research and Development**





We
      have
      developed and own the intellectual property used in our products. Currently
      we
      hold thirteen PRC patents for our medical transport systems. In September 1999,
      Daqing Sunway was designated as a New-and-High-Technology Enterprise in
      Heilongjiang Province by the Science and Technology Commission of Heilongjiang
      Province.





We
      have
      25 full-time employees engaged in research and development (“R&D”) efforts.
      Our R&D personnel specialize in the fields of software development,
      electronic engineering, machinery design and manufacture, electronic information
      technology, communication technology and application, automatic control
      technology and optoelectronic technology. Most of our R&D personnel have
      more than 5 years experience in their fields of specialty. We also outsource
      certain software development projects to third party software
      developers.





Currently,
      we are conducting R&D on products for use in banks, industrial companies and
      commercial use office buildings.





For
      the
      fiscal years ended December 31, 2007 and 2006, respectively, we expended
      approximately $175,567 and $289,838 on R&D activities.


7


**Competition
      and Competitive Advantages**





*Pneumatic
      Transport System*





Our
      main
      competitors in the supply of PTS are Beijing Chuansheng Weiye Science Trade
      Co.,
      Ltd., Hainan Lingjing Medical Purification Project Co., Ltd., and Beijing Ruize
      Network Co., Ltd. While we are both a manufacturer and distributor of our
      medical transport systems, our competitors are distributors of imported
      pneumatic transport systems. Among these companies, Hainan Lingjing Medical
      Purification Project Co., Ltd. is a distributor of Swisslog’s pneumatic force
      transportation products, and Beijing Ruize Network Co., Ltd. is a distributor
      for Sumetzberger GMBH, an Austrian company.





As
      the
      market for pneumatic transport systems is still an emerging market in the PRC,
      official data about the industry in general, and competition in particular,
      have
      not been readily available. Based on the information we collected from
      competitive bids, the internet and other market intelligence, it is our estimate
      that among suppliers of pneumatic transport systems in the PRC, we were the
      supplier to the largest number of hospitals in the fiscal years ended December
      31, 2006 and 2007.




The
      following table sets forth our estimates, based on information we have
      collected from bids, the internet and other market intelligence, of the relative
      number of hospitals and medical facilities in the PRC supplied with pneumatic
      transport systems by us and our major competitors in 2006 and 2007:





**Time of PRC**
            
            **Percentage of**
              **PRC Hospitals**
              **Adopting PTS****Name**
            
            **Brand**
            
            **Market Entry**
            
            **2007**
            
            **2006**Daqing
                Sunway Technology Co. Ltd.
            
            
            Suntrans
            
            
            2002
            
            
            48.5
            %
            
            46
            %Beijing
                Chuansheng Weiye Science Trade Co., Ltd.
            
            
            Telecom
            
            
            1999
            
            
            3.5
            %
            
            3.5
            %Hainan
                Lingjing Medical Purification Project Co., Ltd.
              Jiangsu
                Jiuxin Purification Project Co., Ltd.
            
            
            Swisslog
              Swisslog
            
            
            1998
              1998
            
            
            20
            %
            
            21.8
            %Beijing
                Ruize Network Co., Ltd.
            
            
            Sumetzberger
            
            
            1996
            
            
            15
            %
            
            16.1
            %Beijing
                Keliping Medical Equipment Co., Ltd
              Shanghai
                Yili Co., Ltd.
            
            
            Hortig
              Hortig
            
            
            2006
              2001
            
            
            7.3
            %
            
            7.3
            %




*Medicine
      Dispensing Systems*





We
      introduced our medicine dispensing systems to the market in May 2007. Currently,
      we face competition from Japanese manufacturers, Yuyama Manufacturing Co.,
      Tosho
      Co., Inc. and Sany Co., Ltd., and a South Korean company, JV Medi Co., Ltd.,
      whose products are imported into the PRC and sold through distributors. **** Since
      the introduction of our medical dispensing system to the market in January
      2008,
      we have received orders to purchase eight of our systems. We already have two
      units delivered as of March 2008.


.


*Competitive
      Advantages*




We
      believe that we have the following competitive advantages over our
      competitors:




*Cost* : We
      have cost advantages because we source our supplies domestically and our
      products are manufactured domestically using technologies developed by us.
      Our
      major competitors are domestic distributors of imported products that cost
      more
      in both materials and labor and, additionally, are subject to customs duties.
      As
      a result, our PTS is generally priced lower than our competitors’ products - our
      PTS is priced at approximately $138,235 per unit while our cost of sales is
      approximately $40,467 per unit, representing a gross margin of approximately
      70.72%. We estimate that similar products of our competitors are priced at
      approximately $210,000 per unit. Our medicine dispensing system, which we
      launched in the first quarter of 2008, is priced at $225,000 per unit
      while our cost of sales is approximately $73,000, representing a gross margin
      of
      approximately 68%. We estimate that our competitors’ prices range from $220,000
      to $280,000.





*Large
      Existing Customer Base and Customer Loyalty:* As of
      the end of 2007, we estimate, based on information we have collected through
      competitive bids, internet research and other market sources, that we had
      an approximate 50% share in hospitals and medical facilities using
      pneumatic tube systems in the PRC market based on the number of hospitals and
      medical facilities that have adopted pneumatic tube transport systems in China
      ,
      as compared to an approximate 20% for our largest competitor, Swisslog. Our
      large existing customer base, which includes approximately 183 hospitals as
      our end users, provides us an advantage in the marketing and sales of additional
      products and services, both because existing customers are an important
      source of new orders, and because we are frequently referred to new
      customers by our existing customers due to our cost advantage, localized
      technology and excellent service.





*Localized
      and Customized Technology* : We are
      the only provider of PTS with localized interfaces in Chinese language
      specifically designed based on the needs of PRC customers. Daqing Sunway’s PTS
      is therefore more user friendly for Chinese speaking customers. Our competitors’
products are based on English language interfaces. As the general population
      in
      the PRC is not proficient in English, purchasers of our competitors’ products
      are required to employ highly educated and specially trained English speaking
      personnel to operate their systems, which represents an additional expense
      adding to their already higher prices. In addition, as the technologies used
      in
      our systems are developed by us, we have the capacity and flexibility to easily
      and quickly adapt our products to specific customer requirements and changing
      market trends.


8




*Extensive
      After-Sales Service Coverage:* We
      believe that we are more accessible to our customers than our competitors
      because we are the only manufacturer in the PRC, as opposed to distributor,
      of pneumatic tube systems. As a manufacturer, we believe we are in a better
      position to provide pre-sale consultation and post-sale services than our
      competitors, all of which are distributors of imported systems. We are available
      to provide pre-sale consultation to help potential customers determine
      their specific needs and design their transportation networks using PTS, and
      post-sale services such as on-site diagnostic tests to identify and prevent
      any
      potential problems, and maintenance and repair services. Our competitors’
customers do not have such easy access to the
      manufacturers because they must rely on the distributors to provide
      that access indirectly. Often, parts needed for maintenance are not available
      in
      the PRC and must be ordered from overseas for replacement, with a lag time
      for
      delivery.




**Intellectual
      Property**





*Patents*





Our
      products use patented technologies developed by us. Currently, we hold thirteen
      PRC patents used in our products. The following is a list of the patents we
      hold:





**No.**
            **Certificate No.**
            **Issuer**
            **Name of the Patent**
            **Registered No.**
            **Application**
              **Date**
            **Valid**
              **Term**1
            523933
            State
                Intellectual Property Office (SIPO)
            Pneumatic
                tube material transport facility
            ZL
                01 2 71975 7
            12/02/2001
            102
            532336
            SIPO
            Tube
                air flow direction converter
            ZL
                02 2 09902 6
            1/22/2002
            103
            534389
            SIPO
            One
                type of tube direction converter
            ZL
                02 2 09901 8
            1/22/2002
            104
            556112
            SIPO
            Pneumatic
                tube material transport sending and receiving box
            ZL
                02 2 73509 7
            5/23/2002
            105
            275295
            SIPO
            Pneumatic
                tube material transport sending and receiving box (exterior
                design)
            ZL
                02 3 52960 1
            5/23/2002
            106
            567890
            SIPO
            Pneumatic
                tube material transport air sender
            ZL
                02 2 73510 0
            20020523
            107
            655292
            SIPO
            Pneumatic
                tube material transport sending and receiving box of parallel changing
                mode
            ZL
                03 2 60602 8
            9/24/2003
            108
            719650
            SIPO
            Self
                motivating rail car for material transport system
            ZL
                2004 2 0070058 5
            7/28/2004
            109
            719482
            SIPO
            Car
                rail of material transport system
            ZL
                2004 2 0070057 0
            7/08/2004
            1010
            732675
            SIPO
            Pneumatic
                tube material transport sending and receiving box of parallel changing
                mode
            ZL
                2004 2 0063538 9
            10/11/2004
            1011
            743362
            SIPO
            Material
                flow tube router
            ZL
                2004 2 0063537 4
            10/11/2004
            1012
            738892
            SIPO
            One
                type of tube air flow direction converter
            ZL
                2004 2 0063535 5
            10/11/2004
            1013
            739042
            SIPO
            One
                type of tube direction converter
            ZL
                2004 2 0063536 X
            10/11/2004
            10




The
      PRC
      Patent Law was adopted by the National People's Congress, the parliament in
      the
      PRC, in 1984 and was subsequently amended in 1992 and 2000. The Patent Law
      aims
      to protect and encourage invention, foster application of inventions and promote
      the development of science and technology. To be patentable, an invention must
      meet three conditions: novelty, inventiveness and practical applicability.
      Certain items are not patentable under the Patent Law, which include scientific
      discoveries, rules and methods for intellectual activities; methods used to
      diagnose or treat diseases, animal and plant breeds or substances obtained
      by
      means of nuclear transformation. The Patent Office under the State Council
      is
      responsible for receiving, examining and approving patent applications. A patent
      is valid for a term of twenty years in the case of an invention and a term
      of
      ten years in the case of utility models and designs. Our patents are all utility
      models and subject to the ten years' protection. Any use of patent without
      consent or a proper license from the patent owner constitutes an infringement
      of
      patent rights which is actionable in court in the PRC.


9




*Registered
      software:*





We
      own
      the following software used in our products:





**No.**
            **Certificate No**
            **Software**
            **Issued by**
            **Issuance date**
            **Term**
              **(year)**1
            HEI DGY-2003
              0005
            Daqing Sunway material transport control
              software V 1.0 (Daqing Sunway material
              transport imbedded software)
            Heilongjiang
              Software Industry
              Association
            20030310
            5


*Trademarks*





We
      have
      two trademarks registered with the Trademark Office of the State Administration
      for Industry and Commerce in PRC as follows:





**No.**
            **Trademark number**
            **Issuer**
            **Classification**
            **Term**1
            1102674
            State Trademark Bureau
            10
            Sep.14,2007 — Sep.13, 20172
            3205734
            State Trademark Bureau
            10
            Dec.14 , 2003 — Dec.13, 2013




Under
      the
      PRC Trademark Law, which was adopted in 1982, and revised in 2001, registered
      trademarks are granted a term of ten years protection, renewable for further
      terms. Each renewal is limited to ten years term and the registrant must
      continue to use the trademark and apply for a renewal within six months prior
      to
      the expiration of the current term.





*Other
      Intellectual Property Rights Protections in the PRC.*





In
      addition to patent, trademark and trade secret protection law in the PRC, we
      also rely on contractual confidentiality provisions to protect our intellectual
      property rights and our brand. Our R&D personnel and executive officers are
      subject to confidentiality agreements to keep our proprietary information
      confidential. In addition, they are subject to a one-year covenant not to
      compete following the termination of employment with our company. Further,
      they
      agree that any work product belongs to our company.





**Insurance**





We
      currently do not carry any product liability or other similar insurance, nor
      do
      we have property insurance covering our plant, manufacturing equipment and
      office building. While product liability lawsuits in the PRC are rare and Daqing
      Sunway has never experienced significant failures or accidents, there can be
      no
      assurance that Daqing Sunway would not face liability in the event of any
      failure or accident.





Daqing
      Sunway maintains social insurance for their staff and employees in accordance
      with relevant compulsory requirements under the PRC laws and have compulsory
      insurance and fixed-sum insurance for cars and other vehicles.





**Employees**




Presently
      we have 226 full-time employees and contractors, out of which 35 are management
      and accounting personnel, 25 are R&D personnel, six are marketing
      and sales personnel and 166 manufacturing personnel.





**Government
      Regulation**





Under
      certain regulations in the form of public notices issued by the PRC State
      Administration of Foreign Exchange, or SAFE, our shareholders who are PRC
      resident entities or individuals are subject to certain registration
      requirements due to the status of WTL as “SPC”s (as defined under the public
      notice issued by SAFE on October 21, 2005). These regulations would prohibit
      SWT
      distributing dividends or profits to WTL and/or SWT as “SPC”s unless the
      registration requirements are complied with. The registration procedures were
      completed and SWT obtained a SAFE certificate from SAFE’s Heilongjiang office on
      March 30, 2007. Our PRC counsel advised us that the SAFE certificate will allow
      SWT to distribute dividends and profits out of the PRC.


10





Medical
      Appliance manufacturing companies in the PRC are required to obtain Medical
      Appliance Manufacturing permits. Daqing Sunway holds a Medical Appliance
      registration certificate and Medical Appliance Manufacturing Permit issued
      by
      Heilongjiang Province Food and Drug Supervision Administration
      Bureau.





Pursuant
      to the tax laws of PRC, general enterprises are subject to income tax at an
      effective rate of 33%. Companies qualified as hi-technology companies are
      subject to certain preferential tax treatment. Daqing Sunway was approved as
      a
      domestic hi-technology company and enjoys a 15% corporate income tax rate
      according to National New and High Tech Develop Zone Taxes Policy.





Other
      than the foregoing, Daqing Sunway is not subject to any other significant
      government regulation of its business or production, or any other government
      permits or approval requirements, except for the laws and regulations of general
      applicability for corporations formed under the laws of the PRC.




**ITEM
      1A. - RISK FACTORS**





An investment in our securities involves a high degree of risk. In determining
      whether to purchase our securities, you should carefully consider all of the
      material risks described below, together with the other information contained
      in
      this prospectus before making a decision to purchase our securities. You should
      only purchase our securities if you can afford to suffer the loss of your entire
      investment.




**Risks
      Related to Our Business**





*We
      operate in an emerging industry and an unsettled market.*





The
      automated material transport system and medication distribution industries
      in
      which we operate in the PRC are in an early stage of development. While we
      believe that the potential advantages of this situation, including a strong
      potential for growth, are significant, there are also related risks. In a
      rapidly-growing market, our competitors could develop new technologies or new
      variations of existing technologies that could gain popularity quickly. While
      we
      believe that we understand the needs and preferences of our potential customers,
      especially hospitals, for the kinds of systems we produce, these needs and
      preferences could change in ways that our competitors anticipate or adapt to
      more rapidly than we do. While we believe that our relatively large customer
      base is one of our strengths, in a rapidly growing market, our industry could
      gain so many new customers that the number of our existing customers could
      become insignificant. If any of these risks materialize, our competitive
      position, results of operations and financial condition could be significantly
      impaired.




*Our
      limited operating history may not serve as an adequate basis to judge our future
      prospects and results of operations.*





We
      commenced our current line of business operations in recent years. Our limited
      operating history may not provide a meaningful basis on which to evaluate our
      business. Although our revenues have grown rapidly since inception, we cannot
      assure you that we will maintain our profitability or that we will not incur
      net
      losses in the future. We expect that our operating expenses will increase as
      we
      expand. Any significant failure to realize anticipated revenue growth could
      result in significant operating losses. We will continue to encounter risks
      and
      difficulties frequently experienced by companies at a similar stage of
      development, including our potential failure to:


11




·
            raise
                adequate capital for expansion and
                operations;





·
            implement
                our business model and strategy and adapt and modify them as
                needed;





·
            increase
                awareness of our brands, protect our reputation and develop customer
                loyalty;





·
            manage
                our expanding operations and service offerings, including the integration
                of any future acquisitions;





·
            maintain
                adequate control of our expenses;·
            anticipate
                and adapt to changing conditions in the transport and distribution
                systems
                markets in which we operate as well as the impact of any changes in
                government regulations, mergers and acquisitions involving our
                competitors, technological developments and other significant competitive
                and market dynamics.




If
      we are
      not successful in addressing any or all of these risks, our business may be
      materially and adversely affected.




*Our
      failure to compete effectively may adversely affect our ability to generate
      revenue.*




We
      compete primarily on the basis of our price advantage, cost advantage, our
      technology and product features that are specifically designed for the PRC
      market, our extensive after-sales service coverage and such after-sales services
      being easily accessible to our clients. These competitive advantages are in
      part
      based on our being a local manufacturer while our competitors are generally
      distributors of foreign products with much higher costs and less accessible
      after-sales services. There can be no assurance that we will maintain these
      advantages in the future. Our foreign competitors may establish manufacturing
      capabilities in the PRC to lower their costs and improve accessibility of
      after-sales services. Our local competitors may gain larger market share and
      reduce their costs by taking advantage of economies of scale. Developments
      of
      this kind could have a material adverse effect on our business, results of
      operations and financial condition. Further, our business requires large amounts
      of working capital to fund our operations. Our competitors may have better
      resources and better strategies to raise capital which could also have a
      material adverse effect on our business, results of operations or financial
      condition.




*We
      rely on sales to a single kind of customer in a single industry. Our long-term
      growth may be impaired if we are unable to expand our customer base beyond
      the
      hospital industry.*





Nearly
      all of our sales are made to hospitals and medical facilities in the PRC. If
      the
      medical industry in the PRC shrinks or loses steam, our customer base and
      potential customers will have fewer resources for the purchase of our products,
      and our business, results of operations and financial condition could be
      adversely affected.





Although
      we intend to expand our business to make products that will be used by customers
      in other industries, there is no guarantee that we will succeed. If we are
      unable to expand beyond the hospital industry, our long-term growth could fall
      short of expectations.





*If
      we
      are unable to fund our capital requirements for research and development, our
      growth and profitability may be adversely affected.*





Pneumatic
      tube transport systems and medicine dispensing systems are the only two products
      from which we generate or expect to generate substantial revenues. Both of
      our
      product lines are designed for use in hospitals and medical facilities. Our
      long-term growth and profitability could depend on our ability to expand beyond
      the medical industry. This expansion may require us to make substantial and
      long-term investments in research and development to develop new products or
      new
      features for our existing products. If we are unable to fund such research
      and
      development efforts, our long-term market potential, income and financial
      condition could be impaired.





*We
      do
      not have written contracts with our suppliers and could be hurt by a change
      in
      the market for our supplies.*





We
      have
      at least two suppliers for most of the principal supplies used in the
      manufacture of our products, including composite panels, aluminum frames, micro
      processors and other IC chips, power supplies, fans, U-PVC tubes and equipment
      chassis. The suppliers of these supplies are PRC companies. We purchase LCD
      panels from one supplier only, Truly Semiconductors Limited, a Japanese
      manufacturer. Although we believe that our supplies are generally available
      in
      the market and that we are not at great risk of disruption to these supply
      chains, there can be no guarantee that the markets for these supplies will
      not
      be disrupted, for business or economic reasons relating to a particular
      manufacturing sector, or for economic or political reasons affecting the PRC
      more generally.


12


*We
      are responsible for the indemnification of our officers and
      directors.*





Our
      bylaws provide for the indemnification of our directors, officers, employees,
      and agents, under certain circumstances, against costs and expenses incurred
      by
      them in any litigation to which they become a party arising from their
      association with or activities on behalf of us. This indemnification policy
      could result in substantial expenditures, which we may be unable to
      recoup.





*We
      may not be able to effectively protect our proprietary technology and other
      intellectual property, which could harm our business and competitive
      position.*




We
      have
      13 PRC patents on proprietary technology used in the manufacture of our
      products. We also have a registered software program and two registered
      trademarks. Our success depends in part on our ability to protect our
      proprietary technologies. Although we believe we are protected from intellectual
      property infringement both by our patents and by the complexity of our designs,
      which we believe makes them difficult to copy, we cannot assure you that we
      will
      be able to effectively protect our technology, or that our current or potential
      competitors do not have, or will not obtain or develop, similar
      technology.




We
      also
      rely on trade secrets, non-patented proprietary expertise and continuing
      technological innovation that we seek to protect, in part, by entering into
      confidentiality agreements with licensees, suppliers, employees and consultants.
      These agreements may be breached and there may not be adequate remedies in
      the
      event of a breach. Disputes may arise concerning the ownership of intellectual
      property or the applicability of confidentiality agreements. Moreover, our
      trade
      secrets and proprietary technology may otherwise become known or be
      independently developed by our competitors. If patents are not issued with
      respect to products arising from research, we may not be able to maintain the
      confidentiality of information relating to these products.




Implementation
      of PRC intellectual property-related laws has historically been problematic,
      primarily because of ambiguities in the PRC laws and difficulties in
      enforcement. Accordingly, intellectual property rights and confidentiality
      protections in China may not be as effective as in the United States or other
      countries. Policing unauthorized use of proprietary technology is difficult
      and
      expensive, and we might need to resort to litigation to enforce or defend
      patents issued to us or to determine the enforceability, scope and validity
      of
      our proprietary rights or those of others. Such litigation may require
      significant expenditure of cash and management efforts and could harm our
      business, financial condition and results of operations. An adverse
      determination in any such litigation will impair our intellectual property
      rights and may harm our business, competitive position, business prospects
      and
      reputation.





*We
      may be exposed to intellectual property infringement and other claims by third
      parties, which, if successful, could cause us to pay significant damage awards
      and incur other costs.*




We
      use
      our own patented proprietary technology in manufacturing our products. However,
      as litigation becomes more common in China in resolving commercial disputes,
      we
      face a higher risk of being the subject of intellectual property infringement
      claims brought by others. The outcome of claims relating to our logistic
      transport systems could involve complex technical, legal and factual questions
      and analysis and, therefore, may be highly uncertain. The defense and
      prosecution of intellectual property suits, patent opposition proceedings and
      related legal and administrative proceedings can be both costly and time
      consuming and may significantly divert the efforts and resources of our
      technical and management personnel. An adverse determination in any such
      litigation or proceedings to which we may become a party could subject us to
      significant liability, including damage awards, to third parties, require us
      to
      seek licenses from third parties, to pay ongoing royalties, or to redesign
      our
      products or subject us to injunctions preventing the manufacture and sale of
      our
      products. Protracted litigation could also result in our customers or potential
      customers deferring or limiting their purchase or use of our products until
      resolution of such litigation.





*Potential
      environmental liability could have a material adverse effect on our operations
      and financial condition.*





To
      the
      knowledge of our management team, the manufacture of our products does not
      require us to comply with PRC environmental laws other than PRC environmental
      laws of general applicability. It has not been alleged that we have violated
      any
      current environmental regulations   by PRC
      government officials; however, there can be no assurance that the Chinese
      government will not amend its current environmental protection laws and
      regulations. Our business and operating results could be materially and
      adversely affected if we were to increase expenditures in order to comply with
      environmental regulations affecting our operations.





*We
      may not be able to hire and retain qualified personnel to support our growth
      and
      if we are unable to retain or hire such personnel in the future, our ability
      to
      improve our products and implement our business objectives could be adversely
      affected.*





Our
      future success depends heavily upon the continuing services of the members
      of
      our senior management team, in particular our President and Chief Executive
      Officer, Mr. Liu Bo; our Chief Financial Officer Mr. Samuel Sheng; and our
      Chief
      Operating Officer and Secretary Mr. Sun Weishan. If one or more of our senior
      executives or other key personnel are unable or unwilling to continue in their
      present positions, we may not be able to replace them easily or at all, and
      our
      business may be disrupted and our financial condition and results of operations
      may be materially and adversely affected. Competition for senior management
      and
      senior technology personnel is intense, the pool of qualified candidates is
      very
      limited, and we may not be able to retain the services of our senior executives
      or senior technology personnel, or attract and retain high-quality senior
      executives or senior technology personnel in the future. Such failure could
      materially and adversely affect our future growth and financial
      condition.


13




*We
      do
      not presently maintain product liability insurance, and our property equipment
      insurance does not cover their full value, which leaves us with exposure in
      the
      event of loss or damage to our properties or claims filed against
      us.*





We
      currently do not carry any product liability or other similar insurance. While
      product liability lawsuits in the PRC are rare and we have never experienced
      significant failures of our products, we cannot assure you that we would not
      face liability in the event of the failure of any of our products. We do not
      carry any property insurance to cover our real property or manufacturing
      equipment , nor do we have other insurance such as business liability or
      disruption insurance coverage for our operations in the PRC .





**Risks
      Related to Doing Business in the PRC**  **.**





*Adverse
      changes in political and economic policies of the Chinese government could
      have
      a material adverse effect on the overall economic growth of China, which could
      reduce the demand for our products and materially and adversely affect our
      competitive position.*




Our
      business, financial condition, results of operations and prospects are affected
      significantly by economic, political and legal developments in China. The
      Chinese economy differs from the economies of most developed countries in many
      respects, including:




Ÿ
            the
                amount of government involvement;




Ÿ
            the
                level of development;




Ÿ
            the
                growth rate;




Ÿ
            the
                control of foreign
                exchange; and




Ÿ
            the
                allocation of resources.




While
      the
      Chinese economy has grown significantly in the past 20 years, the growth
      has been uneven, both geographically and among various sectors of the economy.
      The Chinese government has implemented various measures to encourage
      economic growth and guide the allocation of resources. Some of these measures
      benefit the overall Chinese economy, but may also have a negative effect on
      us.
      For example, our financial condition and results of operations may be adversely
      affected by government control over capital investments or changes in tax
      regulations that are applicable to us, as well as its ability to control prices,
      including the price of coal, which is a principal raw material for our
      business.




The
      Chinese economy has been transitioning from a planned economy to a more
      market-oriented economy. Although in recent years the Chinese government has
      implemented measures emphasizing the utilization of market forces for economic
      reform, the reduction of state ownership of productive assets and the
      establishment of sound corporate governance in business enterprises, a
      substantial portion of the productive assets in China is still owned by the
      Chinese government. Further, there is no private ownership of land in China.
      Rather, land is owned by the government and the government issues land use
      rights. Although the land use rights are transferable, it is necessary to obtain
      government approval for a transfer. The continued control of these assets and
      other aspects of the national economy by the Chinese government could materially
      and adversely affect our business. The Chinese government also exercises
      significant control over Chinese economic growth through the allocation of
      resources, controlling payment of foreign currency-denominated obligations,
      setting monetary policy and providing preferential treatment to particular
      industries or companies.




Any
      adverse change in the economic conditions or government policies, policy
      interpretations, imposition of confiscatory taxation, restrictions on currency
      conversion, exports, devaluations of currency, the nationalization or other
      expropriation of private enterprises in China could have a material adverse
      effect on the overall economic growth and the level of investments and
      expenditures in China, which in turn could lead to a reduction in demand for
      our
      products in both the Chinese and international markets.





*The
      PRC laws and regulations governing our current business operations are sometimes
      vague and uncertain. Any changes in such PRC laws and regulations may have
      a
      material and adverse effect on our business.*




There
      are
      substantial uncertainties regarding the interpretation and application of PRC
      laws and regulations, including but not limited to the laws and regulations
      governing our business, or the enforcement and performance of our arrangements
      with customers in the event of the imposition of statutory liens, death,
      bankruptcy and criminal proceedings. We and any future subsidiaries are
      considered foreign persons or foreign funded enterprises under PRC laws, and
      as
      a result, we are required to comply with PRC laws and regulations. These laws
      and regulations are sometimes vague and may be subject to future changes, and
      their official interpretation and enforcement may involve substantial
      uncertainty. The effectiveness of newly enacted laws, regulations or amendments
      may be delayed, resulting in detrimental reliance by foreign investors. New
      laws
      and regulations that affect existing and proposed future businesses may also
      be
      applied retroactively. We cannot predict what effect the interpretation of
      existing or new PRC laws or regulations may have on our businesses.
      Additionally, if the relevant authorities find us in violation of PRC laws
      or
      regulations, they would have broad discretion in dealing with such a violation,
      including, without limitation:


14




·
            levying
                fines;




·
            revoking
                our business and other licenses;




·
            requiring
                that we restructure our ownership or operations;
                and




·
            to
                the extent that we use the Internet for marketing and providing
                information on our products and services, requiring that we discontinue
                any portion or all of our Internet related
                business.




*A
      slowdown or other adverse developments in the PRC economy may materially and
      adversely affect our customers, demand for our services and our
      business.*




All
      of
      our operations are conducted in the PRC and all of our revenues are generated
      from sales in the PRC. Although the PRC economy has grown significantly in
      recent years, we cannot assure you that such growth will continue. A slowdown
      in
      overall economic growth, an economic downturn or recession or other adverse
      economic developments in the PRC may materially reduce the demand for our
      products and materially and adversely affect our business.





*Inflation
      in the PRC could negatively affect our profitability and
      growth.*




While
      the
      PRC economy has experienced rapid growth, such growth has been uneven among
      various sectors of the economy and in different geographical areas of the
      country. Rapid economic growth can lead to growth in the money supply and rising
      inflation. If prices for our products rise at a rate that is insufficient to
      compensate for the rise in the costs of supplies, it may have an adverse effect
      on profitability. In order to control inflation in the past, the PRC government
      has imposed controls on bank credits, limits on loans for fixed assets and
      restrictions on state bank lending. Such an austerity policy can lead to a
      slowing of economic growth. In October 2004, the People’s Bank of China, the
      PRC’s central bank, raised interest rates for the first time in nearly a decade
      and indicated in a statement that the measure was prompted by inflationary
      concerns in the Chinese economy. Repeated rises in interest rates by the central
      bank would likely slow economic activity in China which could, in turn,
      materially increase our costs and also reduce demand for our
      products.





*SWT
      is subject to restrictions on paying dividends and making other payments to
      us.*




We
      are a
      holding company incorporated in the State of Nevada and do not have any assets
      or conduct any business operations other than our investments in our
      subsidiaries. As a result of our holding company structure, we rely primarily
      on
      dividends payments from our subsidiary in China. However, PRC regulations
      currently permit payment of dividends only out of accumulated profits, as
      determined in accordance with PRC accounting standards and regulations. Our
      subsidiary and affiliated entity in China are also required to set aside a
      portion of their after-tax profits according to PRC accounting standards and
      regulations to fund certain reserve funds. The PRC government also imposes
      controls on the conversion of RMB into foreign currencies and the remittance
      of
      currencies out of China. We may experience difficulties in completing the
      administrative procedures necessary to obtain and remit foreign currency. See
“ *Governmental
      control of currency conversion may affect the value of your
      investment* .”
Furthermore, if our subsidiary or affiliated entity in China incurs debt on
      their own in the future, the instruments governing the debt may restrict their
      ability to pay dividends or make other payments. If we are unable to receive
      all
      of the revenues from our operations through contractual or dividend
      arrangements, we may be unable to pay dividends on our common stock even if
      we
      wish to pay dividends.





*If
      certain tax exemptions within the PRC regarding withholding taxes are removed,
      we may be required to deduct corporate withholding taxes from any dividends
      we
      may pay in the future.*




Under
      the
      PRC’s current tax laws, regulations and rulings, companies are exempt from
      paying withholding taxes with respect dividends paid to stockholders outside
      of
      the PRC. However, if the foregoing exemption is removed, we may be required
      to
      deduct certain amounts from any dividends we pay to our
      stockholders.




*Governmental
      control of currency conversion may affect the value of your
      investment.*




The
      PRC
      government imposes controls on the convertibility of Renminbi into foreign
      currencies and, in certain cases, the remittance of currency out of the PRC.
      We
      receive substantially all of our revenues in Renminbi, which is currently not
      a
      freely convertible currency. Shortages in the availability of foreign currency
      may restrict our ability to remit sufficient foreign currency to pay dividends
      or otherwise satisfy foreign currency dominated obligations. Under existing
      PRC
      foreign exchange regulations, payments of current account items, including
      profit distributions, interest payments and expenditures from the transaction,
      can be made in foreign currencies without prior approval from the PRC State
      Administration of Foreign Exchange by complying with certain procedural
      requirements. However, approval from appropriate governmental authorities is
      required where Renminbi is to be converted into foreign currency and remitted
      out of China to pay capital expenses such as the repayment of bank loans
      denominated in foreign currencies.




The
      PRC
      government may also at its discretion restrict access in the future to foreign
      currencies for current account transactions. If the foreign exchange control
      system prevents us from obtaining sufficient foreign currency to satisfy our
      currency demands, we may not be able to pay certain of our expenses as they
      come
      due.


15




*The
      fluctuation of the Renminbi may materially and adversely affect your
      investment.*




The
      value
      of the Renminbi against the U.S. dollar and other currencies may fluctuate
      and
      is affected by, among other things, changes in the PRC's political and economic
      conditions. As we rely entirely on revenues earned in the PRC, any significant
      revaluation of the Renminbi may materially and adversely affect our cash flows,
      revenues and financial condition. For example, to the extent that we need to
      convert U.S. dollars we receive from an offering of our securities into Renminbi
      for our operations, appreciation of the Renminbi against the U.S. dollar could
      have a material adverse effect on our business, financial condition and results
      of operations. Conversely, if we decide to convert our Renminbi into U.S.
      dollars for the purpose of making payments for dividends on our common shares
      or
      for other business purposes and the U.S. dollar appreciates against the
      Renminbi, the U.S. dollar equivalent of the Renminbi we convert would be
      reduced. In addition, the depreciation of significant U.S. dollar denominated
      assets could result in a charge to our income statement and a reduction in
      the
      value of these assets.




On
      July
      21, 2005, the PRC government changed its decade-old policy pegging the value
      of
      the RMB to the U.S. dollar. Under the new policy, the RMB is permitted to
      fluctuate within a narrow and managed band against a basket of certain foreign
      currencies. This change in policy has resulted in an approximately 2.0%
      appreciation of the RMB against the U.S. dollar. While the international
      reaction to the RMB revaluation has generally been positive, there remains
      significant international pressure on the PRC government to adopt an even more
      flexible currency policy, which could result in a further and more significant
      appreciation of the RMB against the U.S. dollar.





*Price
      controls may affect both our revenues and net income.*




The
      laws
      of the PRC provide for the government to fix and adjust prices. To the extent
      that we are subject to price control, our revenue, gross profit, gross margin
      and net income will be affected since the revenue we derive from our sales
      will
      be limited and, unless there is also price control on the products that we
      purchase from our suppliers, we may face no limitation on our costs. Further,
      if
      price controls affect both our revenue and our costs, our ability to be
      profitable and the extent of our profitability will be effectively subject
      to
      determination by the applicable regulatory authorities in the PRC.




*Our
      operations may not develop in the same way or at the same rate as might be
      expected if the PRC economy were similar to the market-oriented economies of
      OECD member countries.*




The
      economy of the PRC has historically been a nationalistic, “planned economy,”
meaning it functions and produces according to governmental plans and pre-set
      targets or quotas. In certain aspects, the PRC’s economy has been making a
      transition to a more market-oriented economy, although the government imposes
      price controls on certain products and in certain industries. However, we cannot
      predict the future direction of these economic reforms or the effects these
      measures may have. The economy of the PRC also differs from the economies of
      most countries belonging to the Organization for Economic Cooperation and
      Development (the “OECD”), an international group of member countries sharing a
      commitment to democratic government and market economy. For
      instance:




·
            the
                level of state-owned enterprises in the PRC, as well as the level
                of
                governmental control over the allocation of resources is greater
                than in
                most of the countries belonging to the
                OECD;




·
            the
                level of capital reinvestment is lower in the PRC than in other countries
                that are members of the OECD;




·
            the
                government of the PRC has a greater involvement in general in the
                economy
                and the economic structure of industries within the PRC than other
                countries belonging to the OECD;




·
            the
                government of the PRC imposes price controls on certain products
                and our
                products may become subject to additional price controls;
                and




·
            the
                PRC has various impediments in place that make it difficult for foreign
                firms to obtain local currency, as opposed to other countries belonging
                to
                the OECD where exchange of currencies is generally free from
                restriction.




As
      a
      result of these differences, our business may not develop in the same way or
      at
      the same rate as might be expected if the economy of the PRC were similar to
      those of the OECD member countries.




*If
      we
      are not able to protect our intellectual property rights, our business may
      be
      impaired.*




Our
      intellectual property relates to our know-how in developing our products. The
      protection of intellectual property rights in the PRC is weak, and we cannot
      give any assurance that we will be able to protect our intellectual property
      rights. To the extent that our business is dependent upon intellectual property,
      our ability to generate revenue from these products, would be severely impaired
      if we are not able to protect our rights in these products.


16




*Any
      recurrence of severe acute respiratory syndrome, or SARS, or another widespread
      public health problem, could adversely affect our operations.*





A renewed outbreak of SARS or another widespread public health problem in the
      PRC, where all of our revenue is derived, could have an adverse effect on our
      operations. Our operations may be adversely impacted by a number of
      health-related factors, including the following:




·
            quarantines
                or closures of some of our offices which would severely disrupt our
                operations,




·
            the
                sickness or death of our key officers and employees,
                and





·
            a
                general slowdown in the economy of the
                PRC




*Because
      our principal assets are located outside of the United States and nearly all
      of
      our directors and all our officers reside outside of the United States, it
      may
      be difficult for you to enforce your rights based on U.S. Federal Securities
      Laws against us and our officers and some directors in the U.S. or to enforce
      U.S. Court Judgment against us or them in the PRC.*





All
      of
      our directors and officers reside outside of the United States. In addition,
      Sunway, which functions as our operating subsidiary, is located in the PRC
      and
      substantially all of its assets are located outside of the United States. It
      may
      therefore be difficult for investors in the United States to enforce their
      legal
      rights based on the civil liability provisions of the U.S. Federal securities
      laws against us in the courts of either the U.S. or the PRC and, even if civil
      judgments are obtained in U.S. courts, to enforce such judgments in PRC courts.
      Further, it is unclear if extradition treaties now in effect between the United
      States and the PRC would permit effective enforcement against us or our officers
      and directors of criminal penalties, under the U.S. Federal securities laws
      or
      otherwise.





*We
      may have limited legal recourse under Chinese law if disputes arise under
      contracts with third parties.*




Almost
      all of our agreements with our employees and third parties, including our
      supplier and customers, are governed by the laws of the PRC. The legal system
      in
      the PRC is a civil law system based on written statutes. Unlike common law
      systems, such as we have in the United States, it is a system in which decided
      legal cases have little precedential value. The government of the PRC has
      enacted some laws and regulations dealing with matters such as corporate
      organization and governance, foreign investment, commerce, taxation and trade.
      However, their experience in implementing, interpreting and enforcing these
      laws
      and regulations is limited, and our ability to enforce commercial claims or
      to
      resolve commercial disputes is unpredictable. The resolution of these matters
      may be subject to the exercise of considerable discretion by agencies of the
      PRC, and forces unrelated to the legal merits of a particular matter or dispute
      may influence their determination. Any rights we may have to specific
      performance or to seek an injunction under Chinese law are severely limited,
      and
      without a means of recourse by virtue of the Chinese legal system, we may be
      unable to prevent these situations from occurring. The occurrence of any such
      events could have a material adverse effect on our business, financial condition
      and results of operations.





*Because
      we may not be able to obtain business insurance in the PRC, we may not be
      protected from risks that are customarily covered by insurance in the United
      States.*




Business
      insurance is not readily available in the PRC. To the extent that we suffer
      a
      loss of a type which would normally be covered by insurance in the United
      States, such as product liability and general liability insurance, we would
      incur significant expenses in both defending any action and in paying any claims
      that result from a settlement or judgment. Since our products are used for
      the
      transportation and storage of CNG and chemicals, any damage caused by the
      failure or alleged failure of our products could result in substantial damages,
      and if the nature or amount of any uninsured loss is significant, we may be
      unable to continue in business





*Because
      our funds are held in banks which do not provide insurance, the failure of
      any
      bank in which we deposit our funds could affect our ability to continue in
      business.*




Banks
      and
      other financial institutions in the PRC do not provide insurance for funds
      held
      on deposit. As a result, in the event of a bank failure, we may not have access
      to funds on deposit. Depending upon the amount of money we maintain in a bank
      that fails, our inability to have access to our cash could impair our
      operations, and, if we are not able to access funds to pay our suppliers,
      employees and other creditors, we may be unable to continue in
      business.




*Failure
      to comply with the United States Foreign Corrupt Practices Act could subject
      us
      to penalties and other adverse consequences.*




We
      are
      subject to the United States Foreign Corrupt Practices Act, which generally
      prohibits United States companies from engaging in bribery or other prohibited
      payments to foreign officials for the purpose of obtaining or retaining
      business. Foreign companies, including some that may compete with us, are not
      subject to these prohibitions. Corruption, extortion, bribery, pay-offs, theft
      and other fraudulent practices occur from time-to-time in the PRC. We can make
      no assurance, however, that our employees or other agents will not engage in
      such conduct for which we might be held responsible. If our employees or other
      agents are found to have engaged in such practices, we could suffer severe
      penalties and other consequences that may have a material adverse effect on
      our
      business, financial condition and results of operations.


17


*If
      the United States imposes trade sanctions on the PRC due to its currency, export
      or other policies, our ability to succeed in the international markets may
      be
      diminished.*




The
      PRC
      currently “pegs” its currency to a basket of currencies, including United States
      dollar. This means that each unit of Chinese currency has a set ratio for which
      it may be exchanged for United States currency, as opposed to having a floating
      value like other countries’ currencies. This policy is currently under review by
      policy makers in the United States. Trade groups in the United States have
      blamed the cheap value of the Chinese currency for causing job losses in
      American factories, giving exporters an unfair advantage and making its imports
      expensive. There is increasing pressure for the PRC to change its currency
      policies to provide for its currency to float freely on international markets.
      As a result, Congress is considering the enacting legislation which could result
      in the imposition of quotas and tariffs. If the PRC changes its existing
      currency policies or if the United States or other countries enact laws to
      penalize the PRC for its existing currency policies, our business may be
      adversely affected, even though we do not sell outside of the PRC. Further,
      we
      cannot predict what action the PRC may take in the event that the United States
      imposes tariffs, quotas or other sanctions on Chinese products. Even though
      we
      do not sell products into the United States market, it is possible that such
      action by the PRC may nonetheless affect our business since we are a United
      States company, although we cannot predict the nature or extent thereof. Any
      government action which has the effect of inhibiting foreign investment could
      hurt our ability to raise funds that we need for our operations. The devaluation
      of the currency of the PRC against the United States dollar would have adverse
      effects on our financial performance and asset values when measured in terms
      of
      the United Stated dollar.




*Any
      deterioration of political relations between the United States and the PRC
      could
      impair our operations.*




The
      relationship between the United States and the PRC is subject to sudden
      fluctuation and periodic tension. Changes in political conditions in the PRC
      and
      changes in the state of PRC-U.S. relations are difficult to predict and could
      adversely affect our operations. Such a change could lead to a decline in our
      profitability. Any weakening of relations between the United States and the
      PRC
      could have a material adverse effect on our operations, particularly in our
      efforts to raise capital to expand our business activities.




*Our
      operations and assets in the PRC are subject to significant political and
      economic uncertainties.*




Government
      policies are subject to rapid change and the government of the PRC may adopt
      policies which have the effect of hindering private economic activity and
      greater economic decentralization. There is no assurance that the government
      of
      the PRC will not significantly alter its policies from time to time without
      notice in a manner with reduces or eliminates any benefits from its present
      policies of economic reform. In addition, a substantial portion of productive
      assets in the PRC remains government-owned. For instance, all lands are state
      owned and leased to business entities or individuals through governmental
      granting of state-owned land use rights. The granting process is typically
      based
      on government policies at the time of granting, which could be lengthy and
      complex. This process may adversely affect our operations. The government of
      the
      PRC also exercises significant control over China’s economic growth through the
      allocation of resources, controlling payment of foreign currency and providing
      preferential treatment to particular industries or companies. Uncertainties
      may
      arise with changing of governmental policies and measures. In addition, changes
      in laws and regulations, or their interpretation, or the imposition of
      confiscatory taxation, restrictions on currency conversion, imports and sources
      of supply, devaluations of currency, the nationalization or other expropriation
      of private enterprises, as well as adverse changes in the political, economic
      or
      social conditions in the PRC, could have a material adverse effect on our
      business, results of operations and financial condition.





*We
      may have difficulty establishing adequate management, legal and financial
      controls in the PRC.*





The
      PRC
      historically has not adopted a Western style of management and financial
      reporting concepts and practices, as well as in modern banking, computer and
      other control systems. We may have difficulty in hiring and retaining a
      sufficient number of qualified employees to work in the PRC. As a result of
      these factors, we may experience difficulty in establishing management, legal
      and financial controls, collecting financial data and preparing financial
      statements, books of account and corporate records and instituting business
      practices that meet Western standards.





**Risks
      Related to Our Common Stock**





*Our
      officers, directors and affiliates control us through their positions and stock
      ownership and their interests may differ from other
      stockholders.*





Our
      officers, directors and affiliates beneficially own approximately 72.0% (prior
      to the Reverse Split) and 70.9% (after the Reverse Split effective February
      7,
      2008) of our Common Stock. Liu Bo, our Chairman and Chief Executive Officer,
      beneficially owns approximately 65.0% (prior to the Reverse Split) and 63.9%
      (after the Reverse Split effective February 7, 2008) of our Common Stock. As
      a
      result, Mr. Liu is able to influence the outcome of stockholder votes on various
      matters, including the election of directors and extraordinary corporation
      transactions including business combinations. Yet Mr. Liu’s interests may differ
      from other stockholders.





*We
      are not likely to pay cash dividends in the foreseeable
      future.*


18





We
      currently intend to retain any future earnings for use in the operation and
      expansion of our business. We do not expect to pay any cash dividends in the
      foreseeable future but will review this policy as circumstances dictate. Should
      we decide in the future to do so, as a holding company, our ability to pay
      dividends and meet other obligations depends upon the receipt of dividends
      or
      other payments from our operating subsidiary. In addition, our operating
      subsidiary, from time to time, may be subject to restrictions on its ability
      to
      make distributions to us, including as a result of restrictions on the
      conversion of local currency into U.S. dollars or other hard currency and other
      regulatory restrictions.




*There
      is currently a limited trading market for our common stock.*





Our
      common stock is quoted on the over-the-counter Bulletin Board. However, our
      bid
      and asked quotations have not regularly appeared on the OTC Bulletin Board
      for
      any consistent period of time. There is no established trading market for our
      common stock and our common stock may never be included for trading on any
      stock
      exchange or through any other quotation system (including, without limitation,
      the NASDQ Stock Market). In the absence of an active trading market, you may
      have difficulty buying and selling or obtaining market quotations; the market
      visibility for our stock may be limited, and the lack of visibility for our
      common stock may have a depressive effect on the market price for our common
      stock.





*The
      price of our common stock may fluctuate dramatically.*




There
      is
      a limited market for our common stock and we cannot give any assurance that
      there will ever be an active market for our common stock. If a market for our
      common stock develops, there is a significant risk that our stock price may
      fluctuate dramatically in the future in response to any of the following
      factors, some of which are beyond our control:




·
            variations
                in our quarterly operating results;




·
            announcements
                that our revenue or income are below analysts’
                expectations;




·
            general
                economic slowdowns;




·
            matters
                affecting the economy of the PRC and the relationship between the
                United
                States and the PRC;




·
            changes
                in market valuations of both similar companies and companies whose
                business is primarily or exclusively in the
                PRC;




·
            sales
                of large blocks of our common
                stock;




·
            announcements
                by us or our competitors of significant contracts, acquisitions,
                strategic
                partnerships, joint ventures or capital
                commitments;




·
            fluctuations
                in stock market prices and volumes, which are particularly common
                among
                highly volatile securities of internationally-based
                companies.




·
            concern
                by potential investors that the large number of shares of common
                stock
                which may be sold pursuant to this prospectus may have a downward
                effect
                upon the market price of the stock.




·
            the
                effect of sales pursuant to this prospectus on the trading volume
                of our
                common stock.




*Failure
      to achieve and maintain effective internal controls in accordance with Section
      404 of the Sarbanes-Oxley Act could have a material adverse effect on our
      business and operating results and stockholders could lose confidence in our
      financial reporting.*




Effective
      internal controls are necessary for us to provide reliable financial reports
      and
      effectively prevent fraud. If we cannot provide reliable financial reports
      or
      prevent fraud, our operating results could be harmed. We will be required to
      document and test our internal control procedures in order to satisfy the
      requirements of Section 404 of the Sarbanes-Oxley Act, which requires increased
      control over financial reporting requirements, including annual management
      assessments of the effectiveness of such internal controls and a report by
      our
      independent certified public accounting firm addressing these assessments.
      Failure to achieve and maintain an effective internal control environment,
      regardless of whether we are required to maintain such controls, could also
      cause investors to lose confidence in our reported financial information, which
      could have a material adverse effect on our stock price.




*Our
      Common Stock is subject to “Penny Stock” Rules of the Securities and Exchange
      Commission, which makes transactions in our stock more
      difficult*


19




The
      Securities and Exchange Commission has adopted Rule 3a51-1 which establishes
      the
      definition of a "penny stock," for purposes relevant to us, as any equity
      security that has a market price of less than $5.00 per share or with an
      exercise price of less than $5.00 per share, subject to certain exceptions.
      For
      any transaction involving a penny stock, unless exempt, Rule 15g-9
      requires:




•
            
            that
                a broker or dealer approve a person's account for transactions in
                penny
                stocks; and




•
            
            the
                broker or dealer receive from the investor a written agreement to
                the
                transaction, setting forth the identity and quantity of the penny
                stock to
                be purchased




In
      order
      to approve a person’s account for transactions in penny stocks, the broker or
      dealer must:




•
            
            obtain
                financial information and investment experience objectives of the
                person;
                and




•
            
            make
                a reasonable determination that the transactions in penny stocks
                are
                suitable for that person and the person has sufficient knowledge
                and
                experience in financial matters to be capable of evaluating the risks
                of
                transactions in penny stocks.




The
      broker or dealer must also deliver, prior to any transaction in a penny stock,
      a
      disclosure schedule prescribed by the SEC relating to the penny stock market,
      which, in highlight form:




•
            
            sets
                forth the basis on which the broker or dealer made the suitability
                determination; and




•
            
            that
                the broker or dealer received a signed, written agreement from the
                investor prior to the transaction.




Generally,
      brokers may be less willing to execute transactions in securities subject to
      the
“penny stock” rules. This may make it more difficult for investors to dispose of
      our common stock and cause a decline in the market value of our
      stock.




Disclosure
      also has to be made about the risks of investing in penny stocks in both public
      offerings and in secondary trading and about the commissions payable to both
      the
      broker-dealer and the registered representative, current quotations for the
      securities and the rights and remedies available to an investor in cases of
      fraud in penny stock transactions. Finally, monthly statements have to be sent
      disclosing recent price information for the penny stock held in the account
      and
      information on the limited market in penny stocks.




The
      application of these rules may affect the ability of broker-dealers to sell
      our
      common stock and may affect your ability to sell any common stock you may
      own





*As
      an
      issuer of “penny stock” the protection provided by the federal securities laws
      relating to forward looking statements does not apply to us.*




Although
      the federal securities law provide a safe harbor for forward-looking statements
      made by a public company that files reports under the federal securities laws,
      this safe harbor is not available to issuers of penny stocks. As a result,
      we
      will not have the benefit of this safe harbor protection in the event of any
      based upon an claim that the material provided by us contained a material
      misstatement of fact or was misleading in any material respect because of our
      failure to include any statements necessary to make the statements not
      misleading.




*Our
      common stock is illiquid and subject to price volatility unrelated to our
      operations.*





The
      market price of our common stock could fluctuate substantially due to a variety
      of factors, including market perception of our ability to achieve our planned
      growth, quarterly operating results of other companies in the same industry,
      trading volume in our common stock, changes in general conditions in the economy
      and the financial markets or other developments affecting our competitors or
      us.
      In addition, the stock market is subject to extreme price and volume
      fluctuations. This volatility has had a significant effect on the market price
      of securities issued by many companies for reasons unrelated to their operating
      performance and could have the same effect on our common stock.





**ITEM
      1B – UNRESOLVED STAFF COMMENTS**





Not
      Applicable





**Available
      Information**





Our
      electronic filings with the United States Securities and Exchange Commission
      (including our annual report on Form 10-K, quarterly reports on Form 10-Q and
      current reports on Form 8-K, and any amendments to these reports) are available
      free of charge on the Securities and Exchange Commission’s website at
      http://www.sec.gov.


20


**ITEM
      2 – DESCRIPTION OF PROPERTY**





The
      Company’s manufacturing facilities are housed in a two-story building occupying
      26,522 square meters of land located in Daqing Municipal Hi-Tech Development
      Zone, Zone Three, Daqing, Helongjiang Province, PRC. Our office building is
      located in Saertu Daqing Software Development Zone, Daqing, Helongjiang
      Province, PRC.





Under
      the
      PRC law, most land is owned by the government, which grants a "land use right"
      to an individual or entity after a purchase price for such “land use right” is
      paid to the government. The “land use right” allows the holder the right to use
      the land for a specified long-term period of time and enjoys all the ownership
      rights incident to the land. Daqing Sunway holds the land use right for one
      parcel of land that was used in its business and which will be used in SWT's
      business pursuant to the leases entered into in connection with the
      Restructuring Agreements.





*Land
      Use Right*





Set
      forth
      below is the detailed information regarding the land use right registered under
      the name of Daqing Sunway:




Registered owner
              of
              land use right
            
            Location & certificate of land use right
            
            Usage
            
            (Approximate)
              square meters
            
            Date of Issuance
              or Grant
            
            Expiration
              DateDaqing Sunway
            
            Daqing Municipal Hi-Tech Development Zone, Zone
              Three, Daqing, Helongjiang Provice, PRC
              
              Daqing Municipality Guo Yong (2005) No. 021843
            
            Industrial use
            
            26,522
            
            September 16, 2005
            
            June 13, 2052





*Lease*





Pursuant
      to a lease agreement, the Company is leasing from Daqing Chuangye Square Co.,
      Ltd. a building with a total of 2,342.87 square meters for use in its operation
      for a term of three years starting from May 18, 2007 with an annual rent of
      approximately $21,895.





*Building
      Properties*





The
      Company also owns two building properties as follows:





**Owner**
            
            **Location**
            
            **Usage**
            
            **Approximate**
              **square meters**
            
            **Certificate of Ownership or**
              **Right to Use**Daqing
                Sunway
            
            North
                Section of Longfeng District, West Wing of Building No. 15, 1st Floor,
                Daqing, Helongjiang Province, PRC
            
            Real
                property for use by joint stock company limited enterprise
            
            3,050
            
            Qing
                Real Property Right Certificate No. No. 00014093 (Original Certificate
                No.
                0230404)Daqing
                Sunway
            
            Building
                No. 3, Saertu Software Development Zone, Daqing, Helongjiang Province,
                PRC
            
            Real
                property for use by joint stock company limited enterprise
            
            5,066.96
            
            Qing
                Real Property Right Certificate Longfeng District
                No.NA216750





Effective
      on November 30, 2005, Daqing Sunway granted a lien on the land use right and
      property located at the West Wing of Building No. 15 to Daqing Industrial
      and Commercial Mortgage Company for a debt of Sunway in the amount of 3,000,000
      RMB owed to it. The lien will expire on November 30, 2009. The property located
      in the North Section of Longfeng District, West Wing of Building No. 15, 1 st Floor is
      not currently used in Daqing Sunway’s business.





**ITEM
      3 - LEGAL PROCEEDINGS**





To
      our
      knowledge, there is no material litigation pending or threatened against
      us.




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





There
      were no matters submitted to a vote of our security holders during the fourth
      quarter of the fiscal year ended December 31, 2007.





On
      June
      28, 2007 a majority of shareholders approved an amendment to the Company’s
      Articles of Incorporation,that would adopt a 86.3035-for-one reverse split
      of
      the Company’s common stock. The Company effected the reverse split on February
      7, 2008.




21





**PART
      II**




**ITEM
      5 - MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES
      OF EQUITY SECURITIES**




**Market
      Information**





The
      Company’s common stock is quoted on the OTC Bulletin Board under the symbol
“SUWG.OB.”  The following table sets forth, for the calendar periods
      indicated, the range of the high and low last reported bid and ask prices of
      the
      Company’s common stock from January 1, 2006 through December 31, 2007, as
      reported by the OTC Bulletin Board.  The quotations represent inter-dealer
      prices without retail mark-ups, mark-downs or commissions, and may not
      necessarily represent actual transactions.  The quotations may be rounded
      for presentation.




Period
            
            
            High*
            
            
            Low*First
                Quarter 2006
            
            $
            7.334
            
            $
            0.518Second
                Quarter 2006
            
            $
            2.588
            
            $
            0.863Third
                Quarter 2006
            
            $
            1.294
            
            $
            0.863Fourth
                Quarter 2006
            
            $
            2.761
            
            $
            0.431First
                Quarter 2007
            
            $
            1.726
            
            $
            0.690Second
                Quarter 2007
            
            $
            4.228
            
            $
            0.863Third
                Quarter 2007
            
            $
            2.502
            
            $
            0.863Fourth
                Quarter 2007
            
            $
            2.502
            
            $
            0.690





On
      December 31, 2007, the last price of the Company’s common stock as reported on
      the OTC Bulletin Board was $1.510* per share.





As
      of
      December 31, 2007, the Company had approximately 645 shareholders of
      record.  Certain of the shares of common stock are held in “street” name
      and may be held by numerous beneficial owners.




*The
      above-quoted stock prices have been adjusted to reflect the 86.3035-for-one
      reverse split that was approved by a majority of shareholders on June 28, 2007
      and took effect on February 7, 2008.





*Dividends*




The
      Company’s board of directors has not declared a dividend on our common stock
      during the last two fiscal years and we do not anticipate the payments of
      dividends in the near future as we intend to reinvest our profits to grow
      operations. We rely on dividends from Daqing Sunway for our funds and PRC
      regulations may limit the amount of funds distributed to us from Daqing Sunway,
      which will affect our ability to declare any dividends.




**Recent
      Sales of Unregistered Securities**





The
      following summarizes the securities that we sold during the fiscal year
      ended December 31, 2007 without registering the securities under the Securities
      Act:





On
      June
      6, 2007, we issued 210,886 shares of Series A Preferred to Rise Elite pursuant
      to the Share Exchange in exchange for all outstanding ownership interest in
      SWT
      held by Rise Elite.





On
      June
      6, 2007, we issued to Kuhns Brothers, Inc. and its designees an aggregate of
      17,646 shares of Series A Preferred and a Series J warrant to purchase an
      aggregate of 496,296 shares of common stock of the Company at $1.62 per share
      in
      connection with the reverse merger transaction pursuant to the placemen agent
      agreement with the Kuhns Brothers, Inc. 7,990 shares out of the 17,646 share
      of
      Series A Preferred were assigned by Kuhns Brothers to Vision as an incentive
      for
      being the lead investor in the private financing.





On
      June
      6, 2007, pursuant to the Preferred B Agreement, for a cash payment of $6,700,000
      in gross proceeds, the Company issued to Vision and Columbia (i) an aggregate
      of
      165,432 shares of our Series B Preferred and (ii) five series of warrants,
      Series A, B, J, C and D, to purchase an aggregate of 4,962,971, 2,481,481,
      4,496,644, 4,962,963 and 2,248,322 shares of our common stock, respectively.
      Each of the Series A, B, C and D warrants will expire on June 5, 2012. The
      Series J warrants will expire on June 5, 2008. The Series C and D warrants
      are
      exercisable only upon the exercise of the Series J warrants. The warrant
      exercise prices are: $1.76 (Series A), $2.30 (Series B), $1.49 (Series J),
      $1.94
      (Series C) and $2.53 (Series D).





On
      June
      6, 2007, we issued 12,734,696 shares of our common stock to Vision for the
      conversion of the debentures in the outstanding principal amount of $199,202
      that Vision purchased pursuant to the Shell Purchase Agreement.




22





*All
      of
      the above offerings and sales were deemed to be exempt under rule 506 of
      Regulation D and Section 4(2) of the Securities Act of 1933, as amended. No
      advertising or general solicitation was employed in offering the securities.
      The
      offerings and sales were made to a limited number of persons, all of whom were
      accredited investors, business associates of Sunway Global or executive officers
      of Sunway Global, and transfer was restricted by Sunway Global in accordance
      with the requirements of the Securities Act of 1933. In addition to
      representations by the above-referenced persons, we have made independent
      determinations that all of the above-referenced persons were accredited or
      sophisticated investors, and that they were capable of analyzing the merits
      and
      risks of their investment, and that they understood the speculative nature
      of
      their investment. Furthermore, all of the above-referenced persons were provided
      with access to our Securities and Exchange Commission filings.





**Equity
      Compensation Plan Information**





As
      of the
      date of this report, the Company neither has any securities authorized for
      issuance under any equity compensation plans nor does it have any equity
      compensation plans.





**Purchases
      of Equity Securities by the Small Business Issuer and Affiliated
      Purchasers**





None.





**ITEM
      6 – SELECT FINANCIAL DATA**





Not
      Applicable





**ITEM
      7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
      OF
      OPERATIONS**





**Overview**




The
      following discussion and analysis of the consolidated financial condition and
      results of operations should be read in conjunction with the consolidated
      financial statements and related notes of Sunway, appearing elsewhere in this
      report. This discussion and analysis contains forward-looking statements that
      involve risks, uncertainties and assumptions. Actual results may differ
      materially from those anticipated in these forward-looking
      statements.





As
      a
      result of the reverse merger, financing and related transactions described
      in our current report on Form 8-K/A filed with the SEC on June 27, 2007, the
      Company ceased to be a shell company and became a holding company for entities
      that, through contractual relationships, control the business of Daqing Sunway,
      a company organized under the laws of the PRC that designs, manufactures and
      sells logistic transport systems and medicine dispensing systems and equipment
      that are principally used by hospitals and other medical facilities in the
      PRC.
      Because Sunway’s operations are the only significant operations of the Company
      and its affiliates, this discussion and analysis focuses on the business results
      of Sunway, comparing its results in the fiscal years ended December 31, 2007
      and
      2006.




**Results
      of Operations**





In
      the
      fiscal year ended December 31, 2007, company net sales, gross profit, operating
      income and net income all rose substantially as compared with the same period
      in
      the preceding year. These increases are due in large part to increased sales
      of
      Daqing Sunway’s pneumatic tube transport systems. Cost of sales also increased
      during these periods, somewhat outpacing the increase in sales. The increase
      in
      cost of sales is due largely to increased depreciation expenses related to
      Sunway’s investment in 2007 in new molds , production lines used and the
      increased prices of raw materials used in the manufacture of its newly designed
      medicine packaging and dispensing equipment. The company expects cost of sales
      to level off or decline once sales of the new equipment begin in the first
      quarter of 2008.





The
      following table summarizes the results of our operations during the fiscal
      years
      ended December 31, 2007 and 2006, respectively, and provides information
      regarding the dollar and percentage increase or (decrease) from the the fiscal
      years ended December 31, 2007 and 2006.




Fiscal Year Ended December 31,2007
            
            2006
            
            Change
            
            Change
                rateNet
                Revenues
            
            $
            11,865,138
            
            $
            8,914,139
            
            $
            2,950,999
            
            
            33.10
            %Cost
                of net revenues
            
            $
            3,473,411
            
            $
            2,386,996
            
            $
            1,086,415
            
            
            45.51
            %Gross
                Profit
            
            $
            8,391,727
            
            $
            6,527,143
            
            $
            1,864,584
            
            
            28.57
            %Gross
                Margin
            
            
            70.73
            %
            
            73.22
            %
            $
            
            
            
            -2.49
            %Operating
                Income
            
            $
            5,829,728
            
            $
            4,825,513
            
            $
            1,004,215
            
            
            20.81
            %Net
                Income
            
            $
            6,047,505
            
            $
            4,029,553
            
            $
            2,017,952
            
            
            50.08
            %Net
                profit margin
            
            
            50.97
            %
            
            45.20
            %
            
            
            
            
            5.77
            %




23




**Net
      revenue**





Net
      revenue for the fiscal year ended December 31, 2007, which resulted entirely
      from sales of pneumatic material transport system workstations, were
      $11,865,138, an increase of 33.10% as compared with the net revenue of
      $8,914,139 in the same period ended on December 31, 2006. In the same period,
      we
      sold 2,575 workstations, an increase of 33.42% as compared with 1,930
      workstations sold in the same period ended on December 31, 2006.





The
      following table presents information about our revenue for the periods
      indicated:





Fiscal Year Ended December 31,2007
            
            2006
            
            ChangeNet
                revenues
            
            $
            11,865,138
            
            
            8,914,139
            
            
            33.10
            %




**Gross
      Profit**





Gross
      profit increased 28.57% to $8,391,727 for fiscal year ended December 31, 2007,
      as compared to $6,527,143 for the fiscal year ended December 31, 2006. Our
      gross
      profit margin fell 2.49% from 73.22% as of the fiscal year ended December 31,
      2006 to 70.73% as of the same period of 2007, mainly due to our efforts to
      develop new molds and new production line, which raised depreciation costs
      and
      therefore raised the cost of sales; at the same time, due to the use of newer
      but more costly raw materials instead of old raw material in order to increase
      product quality and perfect workstation surface, raw material costs increased
      markedly.





The
      table
      below presents information about our gross profit for the periods
      indicated:





Fiscal
                Year Ended December 31,2007
            
            2006US$
            
            Gross profit
              margin
            
            US$
            
            Gross profit
              marginGross Profit
            
            $
            8,391,727
            
            
            70.73
            %
            $
            6,527,143
            
            
            73.22
            %




**Income
      from Operations**





Operating
      income increased 20.81% to $5,829,728 for the fiscal year ended December
      31, 2007, as compared with $4,825,513 for the fiscal year ended December 31,
      2006. The increase was primarily a result of the higher revenue during the
      fiscal year ended on December 31, 2007 as compared to the same period in
      2006.





**Cost
      of Net Revenues**





Cost
      of
      net revenues increased to $3,473,411 for the fiscal year ended December 31,
      2007, representing 45.51% increase as compared with $2,386,996 for the same
      period of 2006. This increase is due primarily to purchases in August 2006,
      during which we purchased several new molds used in transport system production
      line, and in November 2006 during which we purchased new production line using
      for dispensation and packaging system, both of which increased the depreciation
      cost from the time of purchase forward; and prices of raw materials increased
      5.96% for the fiscal year ended December 31, 2007, as compared to the same
      period in 2006.





The
      table
      below presents information about our cost of sales for the periods
      indicated:





Fiscal Year Ended December 31,2007
            
            2006
            
            ChangeCost
                of net revenues
            
            $
            3,473,411
            
            $
            2,386,996
            
            
            45.51
            %





**Operating
      Expenses**





Operating
      expenses were $2,561,999 for the fiscal year ended December 31, 2007, an
      increase of 50.56% as compared to $1,701,630 for the same period of 2006. This
      increase was composed by two reasons: (1) decrease in selling expenses; and
      (2)
      increase in general and administration expenses. In the fiscal year ended
      December 31, 2007, we decreased exhibition fees for promoting our products,
      which totaled $72,835, compared with $212,504 for the same period of 2006.
      Also,
      in the fiscal year ended December 31, 2007, we increased salary and benefits
      of
      management. Reflecting this change, costs related to salary and benefits
      increased 261% in the fiscal year ended December 31, 2007, compared with the
      same period of 2006, and our inter listing consultant expenses for the reverse
      merger and private placement were increased from $49,402 as of the fiscal year
      ended December 31, 2006 to $178,576 as of the same period of 2007.




24





The
      table
      below presents information about our operating expenses for the periods
      indicated:





Fiscal Year Ended December 31,2007
            
            2006
            
            changeSelling
                expenses
            
            $
            234,792
            
            $
            238,212
            
            $
            -1.44
            %General
                & Administrative Expenses
            
            $
            2,327,207
            
            $
            1,463,418
            
            $
            59.03
            %Total
                operating expenses
            
            $
            2,561,999
            
            $
            1,701,630
            
            $
            50.56
            %





**Net
      Income**





Net
      income was $6,047,505 for the fiscal year ended December 31, 2007, an increase
      of 50.08% from $4,029,553 for the same period of 2006. This increase is
      attributable to the increase in sales of our workstation products and disposal
      of investments. Our net profit margin rose 5.77% from 45.20% as of the fiscal
      year ended December 31, 2006 to 50.97% as of the same period of 2007. This
      increase was primarily attributable to the Company’s increase in gains on
      disposal of investments by $1,346,989 for the fiscal year ended December 31,
      2007, accounting for 11.35% of net revenues.





**Cash
      and Cash Equivalents**





Cash
      and
      Cash Equivalents increased to $5,820,100 as of December 31, 2007, as compared
      to
      $1,749,048 as of December 31, 2006. This increase was mainly due to our reverse
      merger and private placement on June 6, 2007, which resulted in an increase
      of
      $4,977,133 in net cash.





**Accounts
      Receivable**





Accounts
      Receivable increased 3.90% to $1,525,201 as of December 31, 2007, compared
      with
      $1,467,963 as of December 31, 2006. This increase in accounts receivable was
      primarily attributable to a substantial increase in workstation sales in the
      fiscal year ended December 31, 2007. We will focus corporate resources on
      enhancing the cooperation of our marketing and sales department with our
      financial department in order to reduce the deferral of payments by our
      customers and reduce our accounts receivable.





**Inventory**





Inventory
      consists of raw materials and finished goods as of December 31, 2007; the
      recorded value of our inventory has increased 103.59% to $766,933 from $376,708
      as of December 31, 2006. This increase is mainly due to a decrease in finished
      goods from $200,852 as of December 31, 2006 to $161,005 as of December 31,
      2007,
      a decrease of 19.84%. In addition direct raw materials increased from $175,856
      as of December 31, 2006 to $605,928 as of December 31, 2007, an increase of
      244.56%, which was due to increased sales and design capacity.





The
      table
      below presents information about our inventory for the periods
      indicated:





Item
            
            December 31,
              2007
            
            December 31,
              2006
            
            changeRaw
                material
            
            $
            605,928
            
            $
            175,856
            
            
            244.56
            %Finished
                goods
            
            $
            161,005
            
            $
            200,852
            
            
            -19.84
            %Total
            
            $
            766,933
            
            $
            376,708
            
            
            103.59
            %





**Accounts
      payable**





Accounts
      payable amounted to $245,917 as of December 31, 2007, an increase of 329.26%
      from $57,289 as of December 31, 2006. This increase is mainly due to volume
      of
      production increase caused by increased purchases of raw materials.





25




**Liquidity
      and Capital Resources**





We
      have
      historically financed our operations and capital expenditures principally
      through private placements of debt and equity offerings, and cash provided
      by
      operations.





The
      table
      below presents information about our cash flow for the periods
      indicated:




Fiscal Year Ended December 31,2007
            
            2006
            
            ChangeNet
                cash provided by (used in) operating activities
            
            $
            4,903,141
            
            $
            4,161,381
            
            $
            741,760Net
                cash provided by (used in) investing activities
            
            $
            -5,689,488
            
            $
            -3,516,947
            
            $
            -2,172,541Net
                cash provided by (used in) financing activities
            
            $
            4,979,412
            
            $
            -75,170
            
            $
            5,054,582Effect
                of foreign currency translation on cash and cash
                equivalents
            
            $
            -122,013
            
            $
            -8,541
            
            $
            -113,472cash
                and cash equivalents at beginning of year
            
            $
            1,749,048
            
            $
            1,188,325
            
            $
            560,723Cash
                and cash equivalents–end of year
            
            $
            5,820,100
            
            $
            1,749,048
            
            $
            4,071,052





**Operating
      Activities**





For
      the
      fiscal year ended December 31, 2007, net cash provided by operating activities
      was $4,903,141. This was primarily attributable to our net income of $6,047,505,
      adjusted by an add-back of non-cash expenses mainly consisting of depreciation
      and amortization of $1,404,463 offset by a $1,692,887 decrease in working
      capital and a deduction of $1,346,989 profit on disposal of investments.
      Specifically, the working capital decrease was primarily due to i) a $42,054
      accounts receivable decrease driven by reduce the deferral of payments by our
      customers; ii) a $349,802 inventory increase, principally raw materials, to
      support planned expansion and sales growth; iii) a $975,910 increase in advance
      to suppliers to purchase raw materials; i v)
      a
      $350,505 increase in prepayments expenses , tender deposits, travel advances
      to
      shareholders and advances to employees, consisting primarily of prepayments
      for
      raw materials supplies in advance of shipment; partially offset by a $432,325
      increase in accounts payable , tax payable, expected warranty expenses, customer
      deposits, accrued liabilities and other payables.





**Investing
      Activities**





For
      the
      fiscal year ended December 31, 2007, net cash used in investing activities
      was
      $5,198,439 and was primarily attributable to i) a $491,049 increase in
      restricted cash for investor relations hold back; ii) a $2,659,808 income
      for net sales of short term investments; iii) a $619,627 capital expenditure
      for
      purchase of new plant and equipment; iv) a $5,687,457 capital expenditure
      improvement of intangibles assets and purchase of new intangibles; v ) a
      $562,406 working capital for Beijing direct sales offices; vi )
      a
      $988,757 working capital for another direct sales offices.





**Financing
      Activities**





For
      the
      fiscal year ended December 31, 2007, net cash provided by financing activities
      was $4,979,412, which was primarily attributable to $5,176,335 in preference stock and
      debentures, partially offset by a $196,923 decrease in Bank loan
      repayments .





As
      of
      December 31, 2007, we had cash and cash equivalents of $5,820,100, up $4,071,052
      from $1,749,048 at December 31, 2006.





In
      future
      periods, we believe that our existing cash, cash equivalents and cash flows
      from
      operations, combined with availability under our revolving credit facility,
      will
      be sufficient to meet our presently anticipated future cash needs for at least
      the next 12 months. We may, however, require additional cash resources due
      to
      changed business conditions or other future developments, including any
      investments or acquisitions we may decide to pursue.





**Obligations
      under Material Contracts**





We
      do not
      have any material contractual obligations as of December 31,
      2007.





**Critical
      Accounting Policies**





Management's
      discussion and analysis of its financial condition and results of operations
      is
      based upon Sunway’s consolidated financial statements, which have been prepared
      in accordance with United States generally accepted accounting principles.
      Sunway’s financial statements reflect the selection and application of
      accounting policies which require management to make significant estimates
      and
      judgments. Management bases its estimates on historical experience and on
      various other assumptions that are believed to be reasonable under the
      circumstances. Actual results may differ from these estimates under different
      assumptions or conditions. Sunway believes that the following reflect the more
      critical accounting policies that currently affect Sunway’s financial condition
      and results of operations.





26




*Impairment
        of long-lived assets* .
        We
        account for impairment of property, plant and equipment and amortizable
        intangible assets in accordance with SFAS No. SFAS No. 144. The carrying
        value of a long-lived asset is considered impaired when the anticipated
        undiscounted cash flow from such asset is separately identifiable and is
        less
        than its carrying value. In that event, a loss is recognized based on the
        amount
        by which the carrying value exceeds the fair market value of the long-lived
        asset. Fair market value is determined primarily using the anticipated cash
        flows discounted at a rate commensurate with the risk involved. Losses on
        long-lived assets to be disposed of are determined in a similar manner, except
        that fair market values are reduced for the cost to dispose. During the
        reporting years, there was no impairment loss incurred. Competitive pricing
        pressure and changes in interest rates, could materially and adversely affect
        our estimates of future net cash flows to be generated by our long-lived
        assets.





*Inventories*.
      Inventories consist of finished goods and raw materials, and stated at the
      lower
      of cost or market value. Substantially all inventory costs are determined using
      the weighted average basis. Finished goods are comprised of direct materials,
      direct labor and an appropriate proportion of overhead. The management regularly
      evaluates the composition of its inventory to identify slow-moving and obsolete
      inventories to determine if additional write-downs are required. Changes in
      sales volumes due to unexpected economic or competitive conditions are among
      the
      factors that could materially affect the adequacy of such write down. Changes
      in
      sales volumes due to unexpected economic or competitive conditions are among
      the
      factors that could materially affect the adequacy of such write
      down.





*Trade
      receivable* .
      Trade
      receivables are recognized and carried at the original invoice amount less
      allowance for any uncollectible amounts. An allowance for doubtful accounts
      is
      maintained for all customers based on a variety of factors, including the length
      of time the receivables are past due, significant one-time events and historical
      experience. Bad debts are written off as incurred. During the reporting years,
      there were no bad debts. Outstanding accounts balances are reviewed individually
      for collectability. We do not charge any interest income on trade receivables.
      Accounts balances are charged off against the allowance after all means of
      collection have been exhausted and the potential for recovery is considered
      remote. To date, we have not charged off any balances as it has yet to exhaust
      all means of collection. Unexpected economic downturn is a factor that could
      materially affect the adequacy of the write down and the
      provision.





*Revenue
      recognition* .
      Net
      revenue is recognized when customer takes delivery and acceptance of products,
      the price is fixed or determinable as stated on sales contract, and the
      collectibility is reasonably assured. Customers do not have a general right
      of
      return on products delivered, and management has not made allowance for
      estimated sales returns. Contract
      revenues are recognized when the manufacturing and installation of the medical
      equipments is completed. Generally, we receive total contract sum from clients
      in 3 installments. Deposit of 30% is received from client when the contract
      is
      signed. Second payment of 30% is received when the project commenced. The final
      sum of the remaining portion is received after the construction is completed
      within 4 months. Unexpected economic downturn is a factor that could materially
      affect the collectability of our accounts receivable and hence the recognition
      of our revenue.





**Off-Balance
      Sheet Arrangements**





We
      do not
      have any off-balance sheet arrangements as of December 31,
      2007.


27


**ITEM
      7A – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
      RISK**





Not
      Applicable


28


**ITEM
      8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA**





**SUNWAY
      GLOBAL INC.**





**INDEX
      TO FINANCIAL STATEMENTS**





PageReports
                of Independent Registered Public Accounting Firms
            
            F-2Consolidated
                Balance Sheets as of December 31, 2007 and December 31,
                2006
            
            F-3 –
                F-4Consolidated
                Statements of Operations for the Years Ended December 31, 2007 and
                December 31, 2006
            
            F-5Consolidated
                Statements of Shareholders' Equity for the Years Ended December 31,
                2007
                and December 31, 2006
            
            F-6Consolidated
                Statements of Cash Flows for the Years Ended December 31, 2007 and
                December 31, 2006
            
            F-7 –
                F-8Notes
                to Consolidated Financial Statements
            
            F-9 – F-37





29


**ALBERT
                  WONG & CO.**
                CERTIFIED
                  PUBLIC ACCOUNTANTS
                7th
                  Floor, Nan Dao Commercial Building
                359-361
                  Queen’s Road Central
                Hong
                  Kong
                Tel
                  : 2851 7954
                Fax:
                  2545 4086
                
                ALBERT
                  WONG
                B.Soc.,
                  Sc., LL.B., P.C.LL., Barrister-at-law, C.P.A.(Practising).
 
 
 
  To:
        The
        board of directors and stockholders of
 Sunway
        Global Inc.
 
 **Report
        of Independent Registered Public Accounting Firm**
 
 We
        have
        audited the accompanying consolidated balance sheets of Sunway Global Inc.
        and
        subsidiaries as of December 31, 2007 and 2006 and the related consolidated
        statements of income, stockholders' equity and cash flows for the years then
        ended. These consolidated financial statements are the responsibility of
        the
        Company's management. Our responsibility is to express an opinion on these
        financial statements based on our audit.
 
 We
        conducted our audit in accordance with standards of the Public Company
        Accounting Oversight Board (United States). Those standards require that
        we plan
        and perform the audit to obtain reasonable assurance about whether the financial
        statements are free of material misstatement. An audit includes examining,
        on a
        test basis, evidence supporting the amounts and disclosures in the financial
        statements. An audit also includes assessing the accounting principles used
        and
        significant estimates made by management, as well as evaluating the overall
        financial statement presentation. We believe that our audits provide a
        reasonable basis for our opinion.
 
 In
        our
        opinion, the consolidated financial statements referred to above present
        fairly,
        in all material respects, the consolidated financial position of Sunway Global
        Inc. as of December 31, 2007 and 2006 and the results of its operations and
        its
        cash flows for the years then ended in conformity with accounting principles
        generally accepted in the United States of America.
 
 Since
        our
        previous report dated April 8, 2008, it was determined that the consolidated
        financial statements needed restatement to make corrections as described
        in note
        22.
 
 
 
 /s/
                  Albert Wong & Co.Hong
                  Kong
              Albert
                  Wong & Co.April
                  8, 2008
              Certified
                  Public Accountants
 Except
        for note 22 which is dated May 16, 2008
  F-2
  
 **SUNWAY
                  GLOBAL INC.****CONSOLIDATED
                  BALANCE SHEETS****AS
                  AT DECEMBER 31, 2007 AND 2006****(Stated
                  in US Dollars)**
 Notes
              
              2007
              
              2006Restated
              
              Restated**ASSETS**Current
                  assetsCash
                  and cash equivalents
              
              
              
              
              $
              5,820,100
              
              $
              1,749,048Short
                  term investments
              
              
              4
              
              
              -
              
              
              1,702,718Trade
                  receivables, net
              
              
              7
              
              
              1,525,201
              
              
              1,467,963Inventories
              
              
              10
              
              
              766,933
              
              
              376,708Advances
                  to suppliers
              
              
              
              
              
              1,331,159
              
              
              294,535Prepayments
              
              
              
              
              
              125,333
              
              
              334,658Tender
                  deposits
              
              
              
              
              
              131,013
              
              
              42,924Travel
                  advances to shareholders
              
              
              8
              
              
              30,824
              
              
              6,457Advances
                  to employees
              
              
              9
              
              
              548,364
              
              
              54,992Total
                  current assets
              
              
              
              
              $
              10,278,927
              
              $
              6,030,003Restricted
                  cash
              
              
              
              
              
              491,049
              
              
              -Amount
                  due from a related company
              
              
              5
              
              
              585,678
              
              
              -Amount
                  due from a director
              
              
              6
              
              
              1,028,474
              
              
              -Property,
                  plant and equipment, net
              
              
              11
              
              
              4,449,619
              
              
              4,715,150Intangibles,
                  net
              
              
              12
              
              
              6,933,491
              
              
              1,157,950**TOTAL
                  ASSETS**
              
              
              
              
              $
              23,767,238
              
              $
              11,903,103**LIABILITIES
                  AND****STOCKHOLDERS’
                  EQUITY**Current
                  liabilitiesShort
                  term bank loans
              
              
              13
              
              $
              -
              
              $
              191,877Accounts
                  payable
              
              
              
              
              
              245,917
              
              
              57,289Income
                  tax payable
              
              
              
              
              
              157,877
              
              
              249,843Turnover
                  and other taxes
              
              
              
              
              
              143,857
              
              
              110,886Expected
                  warranty expenses
              
              
              14
              
              
              55,351
              
              
              22,811Customers
                  deposits
              
              
              
              
              
              208,274
              
              
              67,157Accrued
                  liabilities
              
              
              
              
              
              323,464
              
              
              164,537Other
                  payables
              
              
              
              
              
              35,984
              
              
              3,110Total
                  current liabilities
              
              
              
              
              $
              1,170,724
              
              $
              867,510**TOTAL
                  LIABILITIES**
              
              
              
              
              $
              1,170,724
              
              $
              867,510
 
 See
        notes
        to consolidated financial statements
  F-3
  
 **SUNWAY
                  GLOBAL INC.****CONSOLIDATED
                  BALANCE SHEETS (Continued)****AS
                  AT DECEMBER 31, 2007 AND 2006****(Stated
                  in US Dollars)**
 
 Notes
              
              2007
              
              2006Restated
              
              Restated**STOCKHOLDERS’
                  EQUITY**Series
                  A Convertible PreferredStock
                  $0.001 par value 400,000shares
                  authorized; 246,176shares
                  issued and outstandingat
                  Dec 31, 2007 and 2006
              
              
              
              
              $
              246
              
              $
              246Series
                  B Convertible PreferredStock
                  $0.001 par value 400,000shares
                  authorized; 165,432shares
                  issued and outstandingat
                  Dec 31, 2007 and 2006
              
              
              16
              
              
              165
              
              
              165Common
                  stock at $0.001 parvalue,
                  100,000,000 shares;authorized
                  223,658 sharesissued
                  and outstanding atDec
                  31, 2007 and 2006
              
              
              
              
              
              224
              
              
              224Additional
                  paid-in capital
              
              
              
              
              
              16,099,333
              
              
              4,223,000Statutory
                  reserves
              
              
              
              
              
              2,127,978
              
              
              1,124,073Retained
                  earnings
              
              
              
              
              
              3,188,280
              
              
              4,844,680Accumulated
                  othercomprehensive
                  incomeUnrealised
                  gain on investment
              
              
              
              
              
              -
              
              
              423,537Foreign
                  currency translation
              
              
              
              
              
              1,180,288
              
              
              419,668$
              22,596,514
              
              $
              11,035,593**TOTAL
                  LIABILITIES AND****STOCKHOLDERS’
                  EQUITY**
              
              
              
              
              $
              23,767,238
              
              $
              11,903,103
 
 See
        notes
        to consolidated financial statements
  F-4
  
 **SUNWAY
                  GLOBAL INC.****CONSOLIDATED
                  STATEMENTS OF INCOME AND COMPREHENSIVE INCOME****FOR
                  THE YEARS ENDED DECEMBER 31, 2007 AND 2006****(Stated
                  in US Dollars)**
 2007
              
              2006Restated
              
              RestatedNotesNet
                  revenues
              
              
              21
              
              $
              11,865,138
              
              $
              8,914,139Cost
                  of net revenues
              
              
              21
              
              
              (3,473,411
              )
              
              (2,386,996
              )Gross
                  profit
              
              
              
              
              $
              8,391,727
              
              $
              6,527,143Selling
                  expenses
              
              
              
              
              
              (234,792
              )
              
              (238,212
              )General
                  and administrative expenses
              
              
              
              
              
              (2,327,207
              )
              
              (1,463,418
              )Operating
                  income
              
              
              
              
              $
              5,829,728
              
              $
              4,825,513Interest
                  income/(expenses), net
              
              
              18
              
              
              51,852
              
              
              (5,175
              )Gain
                  on disposal of investments
              
              
              4
              
              
              1,346,989
              
              
              -Income before
                    income taxes
              
              
              
              
              $
              7,228,569
              
              $
              4,820,338Income
                  taxes
              
              
              19
              
              
              (1,181,064
              )
              
              (790,785
              )Net
                  income
              
              
              
              
              $
              6,047,505
              
              $
              4,029,553Foreign
                  currency translation
              
              
              
              
              
              760,620
              
              
              299,863Unrealized
                  gain on investments
              
              
              
              
              
              -
              
              
              423,537Reclassification
                  adjustment
              
              
              
              
              
              (423,537
              )
              
              -Comprehensive
                  income
              
              
              
              
              $
              6,384,588
              
              $
              4,752,953Net
                  income per share:-Basic
              
              
              17
              
              $
              27.04
              
              $
              18.02-Diluted
              
              
              17
              
              $
              0.41
              
              $
              18.02Weighted
                  average number of common stock-Basic
              
              
              17
              
              $
              223,658
              
              $
              223,658-Diluted
              
              
              17
              
              $
              14,814,958
              
              $
              223,658
 
 See
        notes
        to consolidated financial statements
  F-5
  
 **SUNWAY
                  GLOBAL INC.****CONSOLIDATED
                  STATEMENTS OF STOCKHOLDERS’ EQUITY****FOR
                  THE YEARS ENDED DECEMBER 31, 2007 AND 2006****(Stated
                  in US Dollars)**
 
 Additional
              
              
              
              
              
              AccumulatedPreferred
              
              Preferred
              
              No.
              
              
              
              paid
              
              
              
              
              
              otherSeries
              
              Series
              
              shares
              
              Common
              
              in
              
              Statutory
              
              Retained
              
              comprehensiveA
              
              B
              
              outstanding
              
              stock
              
              capital
              
              reserves
              
              earnings
              
              income
              
              TotalBalance,
                  January 1,2006
              
              $
              246
              
              $
              165
              
              
              223,658
              
              $
              224
              
              $
              4,223,000
              
              $
              451,906
              
              $
              1,487,294
              
              $
              128,976
              
              $
              6,291,811Net
                  income
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              4,029,553
              
              
              -
              
              
              4,029,553Appropriation
                  to statutory reserves
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              672,167
              
              
              (672,167
              )
              
              -
              
              
              -Unrealized
                  gain oninvestment
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              423,537
              
              
              423,537Foreign
                  currency translationadjustment
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              290,692
              
              
              290,692Balance,
                  December 31,2006
              
              $
              246
              
              $
              165
              
              
              223,658
              
              $
              224
              
              $
              4,223,000
              
              $
              1,124,073
              
              $
              4,844,680
              
              $
              843,205
              
              $
              11,035,593Balance,
                  January 1, 2007
              
              $
              246
              
              $
              165
              
              
              223,658
              
              $
              224
              
              $
              4,223,000
              
              $
              1,124,073
              
              $
              4,844,680
              
              $
              843,205
              
              $
              11,035,593Reversal
                  of realized gain oninvestment
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              (423,537
              )
              
              (423,537
              )Net
                  income
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              6,047,505
              
              
              -
              
              
              6,047,505Appropriation
                  to statutory reserves
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              1,003,905
              
              
              (1,003,905
              )
              
              -
              
              
              -Issuance
                  to Vision re: Debentures
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              199,200
              
              
              -
              
              
              
              
              
              -
              
              
              199,200Issuance
                  of Series B ConvertiblePreferred
                  Stock
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              11,677,133
              
              
              -
              
              
              (6,700,000
              )
              
              -
              
              
              4,977,133Foreign
                  currency translationadjustment
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              760,620
              
              
              760,620Balance,
                  December 31,2007
              
              $
              246
              
              $
              165
              
              
              223,658
              
              $
              224
              
              $
              16,099,333
              
              $
              2,127,978
              
              $
              3,188,280
              
              $
              1,180,288
              
              $
              22,596,514
 
 
 
 
 See
        notes
        to consolidated financial statements
  F-6
  
 **SUNWAY
                  GLOBAL INC.****CONSOLIDATED
                  STATEMENTS OF CASH FLOWS****FOR
                  THE YEARS ENDED DECEMBER 31, 2007 AND 2006****(Stated
                  in US Dollars)**
 
 2007
              
              2006Cash
                  flows from operating activitiesNet
                  income
              
              $
              6,047,505
              
              $
              4,029,553Depreciation
              
              
              1,186,203
              
              
              874,376Amortization
              
              
              218,260
              
              
              24,745Profit
                  on disposal of investments
              
              
              (1,346,989
              )
              
              -Provision
                  for bad debs
              
              
              -
              
              
              2,891Loss
                  on disposal of fixed assets
              
              
              -
              
              
              58,186Adjustments
                  to reconcile net incometo
                  net cash provided by operating activities:Trade
                  receivables, net
              
              
              42,054
              
              
              (578,245
              )Inventories
              
              
              (349,802
              )
              
              205,365Advances
                  to suppliers
              
              
              (975,910
              )
              
              48,209Prepayments
              
              
              223,112
              
              
              (68,507
              )Tender
                  deposits
              
              
              (81,747
              )
              
              (42,040
              )Travel
                  advances to shareholders
              
              
              (21,764
              )
              
              (3,588
              )Advances
                  to employees
              
              
              (470,106
              )
              
              (53,859
              )Accounts
                  payable
              
              
              178,921
              
              
              (286,297
              )Income
                  tax payable
              
              
              (104,819
              )
              
              154,564Turnover
                  and other taxes
              
              
              24,330
              
              
              50,234Expected
                  warranty expenses
              
              
              29,737
              
              
              22,341Customers
                  deposits
              
              
              131,064
              
              
              (331,002
              )Accrued
                  liabilities
              
              
              141,730
              
              
              66,702Other
                  payables
              
              
              31,362
              
              
              (12,247
              )Net
                  cash provided by operating activities
              
              $
              4,903,141
              
              $
              4,161,381Cash
                  flows from investing activitiesSale
                  of plant and equipment
              
              $
              -
              
              $
              48,359Restricted
                  cash
              
              
              (491,049
              )
              
              -Sale
                  of short term investments
              
              
              6,073,136
              
              
              -Advances
                  to related company
              
              
              (562,406
              )
              
              -Advances
                  to a director
              
              
              (988,757
              )
              
              (2,736
              )Purchase
                  of short term investments
              
              
              (3,413,328
              )
              
              (1,301,195
              )Purchase
                  of plant and equipment
              
              
              (619,627
              )
              
              (2,261,375
              )Purchase
                  of intangibles assets
              
              
              (5,687,457
              )
              
              -Net
                  cash used in investing activities
              
              $
              (5,689,488
              )
              $
              (3,516,947
              )Cash
                  flows from financing activitiesProceeds
                  from vision re: Debentures
              
              $
              199,202
              
              $
              -Preference
                  Stock
              
              
              4,977,133
              
              
              -Bank
                  borrowings
              
              
              -
              
              
              375,851Bank
                  loan repayments
              
              
              (196,923
              )
              
              (451,021
              )Net
                  cash provided by/(used in) financing activities
              
              $
              4,979,412
              
              $
              (75,170
              )
  F-7
  
 **SUNWAY
                  GLOBAL INC.****CONSOLIDATED
                  STATEMENTS OF CASH FLOWS (Continued)****FOR
                  THE YEARS ENDED DECEMBER 31, 2007 AND 2006****(Stated
                  in US Dollars)**
 
 2007
              
              2006Net
                  in cash and cash equivalents sourced
              
              $
              4,193,065
              
              $
              569,264Effect
                  of foreign currency translation oncash
                  and cash equivalents
              
              
              (122,013
              )
              
              (8,541
              )Cash
                  and cash equivalents-beginning of year
              
              
              1,749,048
              
              
              1,188,325Cash
                  and cash equivalents-end of year
              
              $
              5,820,100
              
              $
              1,749,048
 
 
 2007
              
              2006Supplementary
                  cash flow information:Tax
                  paid
              
              $
              1,117,678
              
              $
              965,229Interest
                  received
              
              
              61,983
              
              
              24,092Interest
                  paid
              
              
              9,442
              
              
              28,863
 
 
  
 See
        notes
        to consolidated financial statements
  F-8
  **SUNWAY
        GLOBAL INC.**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 **FOR
        THE YEARS ENDED DECEMBER 31, 2007 AND 2006**
 **(Stated
        in US Dollars)**
 
 **1.**
              **ORGANIZATION
                  AND PRINCIPAL ACTIVITIES**
 
 Sunway
        Global Inc. (the “Company”) was incorporated in the state of Nevada on October
        18, 1971. Prior to June 6, 2007 the company has only nominal operations and
        assets.
 
 On
        June
        6, 2007, the Company executed a reverse-merger with Rise Elite International
        Limited (“Rise Elite (BVI)”) by an exchange of shares whereby the Company issued
        210,886 shares of the Company’s Series A Convertible Preferred Stock, par value
        $0.001 per share in exchange for all shares in World Through Limited, a British
        Virgin Islands corporation (“World Through (BVI)”).
 
 World
        Through (BVI) holds Sunway World Through Technology (Daqing) Co Ltd (“SWT” or
“WFOE”), which entered into a series of agreements with Daqing Sunway Technology
        Co., Ltd (“Sunway”) including but not limited to management, loan, purchase
        option, consignment, trademark licensing, non-competition, etc. As a result
        of
        entering the abovementioned agreements, WFOE deems to control Sunway as a
        Variable Interest Entity as required by FASB Interpretation No. 46 (revised
        December 2003) Consolidated of Variable Interest Entities, an Interpretation
        of
        ARB No. 51 since SWT was the primary beneficiary.
 
 The
        Company, through its subsidiaries and Sunway, (hereinafter, collectively
        referred to as “the Group”), is now in the business of designing, manufacturing
        and selling logistic transport systems and medicine dispensing systems and
        equipment.
 
 
 **2.**
              **SUMMARY
                  OF SIGNIFICANT ACCOUNTING
                  POLICIES**
 
 *(a)* *Method
        of Accounting*
 
 The
        Company maintains its general ledger and journals with the accrual method
        accounting for financial reporting purposes. The financial statements and
        notes
        are representations of management. Accounting policies adopted by the Company
        conform to generally accepted accounting principles in the United States
        of
        America and have been consistently applied in the presentation of financial
        statements.
  F-9
  **SUNWAY
        GLOBAL INC.**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 **FOR
        THE YEARS ENDED DECEMBER 31, 2007 AND 2006**
 **(Stated
        in US Dollars)**
 
 **2.**
              **SUMMARY
                  OF SIGNIFICANT ACCOUNTING POLICIES (****Continued****)**
 
 *(b)*
              *Principles
                  of Consolidation*
 
 The
        consolidated financial statements, which include the Company and its
        subsidiaries, are complied in accordance with generally accepted accounting
        principles in the United States of America. All significant inter-company
        accounts and transactions have been eliminated. The consolidated financial
        statements include 100% of assets, liabilities, and net income or loss of
        those
        wholly-owned subsidiaries.
 
 The
        company owned the three subsidiaries since its reverse-merger on October
        3,
        2007. Retroactively restated as of December 31, 2006, 2005, and 2004, the
        detailed identities of the consolidating subsidiaries would have been as
        follows:
 
 Name
                  of Company
              
              Place
                  of incorporation
              
              Attributable
                  interestWorld
                  Through Ltd
              
              British
                  Virgin Islands
              
              100%Sunway
                  World Through Technology (Daqing) Co Ltd
              
              PRC
              
              100%Daqing
                  Sunway Technology Co Ltd
              
              PRC
              
              100%*Note:
                  Deemed variable interest entity
 
 *(c)*
              *Use
                  of estimates*
 
 The
        preparation of the financial statements in conformity with generally accepted
        accounting principles 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 periods. Management makes these estimates using the
        best
        information available at the time the estimates are made; however actual
        results
        could differ materially from those estimates.
 
 *(d)*
              *Economic
                  and political risks*
 
 The
        Group’s operations are conducted in the PRC. Accordingly, the Company’s
        business, financial condition and results of operations may be influenced
        by the
        political, economic and legal environment in the PRC, and by the general
        state
        of the PRC economy.
  The
        Group’s operations in the PRC are subject to special considerations and
        significant risks not typically associated with companies in North America
        and
        Western Europe. These include risks associated with, among others, the
        political, economic and legal environment and foreign currency exchange.
        The
        Group’s results may be adversely affected by changes in the political and social
        conditions in the PRC, and by changes in governmental policies with respect
        to
        laws and regulations, anti-inflationary measures, currency conversion,
        remittances abroad, and rates and methods of taxation, among other
        things.
  F-10
  **SUNWAY
        GLOBAL INC.**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 **FOR
        THE YEARS ENDED DECEMBER 31, 2007 AND 2006**
 **(Stated
        in US Dollars)**
 
 **2.**
              **SUMMARY
                  OF SIGNIFICANT ACCOUNTING POLICIES (****Continued****)**
 
 *(e)*
              *Intangibles*
 
 Intangibles
        are stated at cost less accumulated amortisation. Amortisation is provided
        over
        the respective useful lives, using the straight-line method. Estimated useful
        lives of the intangibles are as follows:
 Land
                    use rights
                47
                    yearsTechnology-based
                    design
                10
                    years
 *(f)*
              Accounting
                  for software systems
 
 The
        Company adopts FASB No. 86 for accounting of software systems, in that all
        expenditures incurred from start-up to completion of feasibility are expensed;
        development costs, after the feasibility study through system completion,
        are
        capitalized, and are depreciated over a useful life of three years. Expenditures
        incurred after completion are expensed as repairs and maintenance.
 
 *(g)*
              *Property,
                  plant and equipment*
 
 Plant
        and
        equipment are carried at cost less accumulated depreciation. Depreciation
        is
        provided over their estimated useful lives, using the straight-line method.
        Estimated useful lives of the plant and equipment are as follows:
 Buildings
                20
                    yearsMachinery
                    and equipment
                6
                    yearsMolding
                10
                    yearsComputer
                    software
                3
                    yearsOffice
                    equipment and motor vehicles
                6
                    -
                    10 years
 The
        cost
        and related accumulated depreciation of assets sold or otherwise retired
        are
        eliminated from the accounts and any gain or loss is included in the statement
        of income.
 
 *(h)*
              *Maintenance
                  and repairs*
 
 The
        cost
        of maintenance and repairs is charged to income as incurred, whereas significant
        renewals and betterments are capitalized.
 
 *(i)*
              *Accounting
                  for the impairment of long-lived
                  assets*
 
 The Group
        periodically evaluates the carrying value of long-lived assets to be held
        and
        used, including intangible assets subject to amortization, when events and
        circumstances warrant such a review, pursuant to the guidelines established
        in
        SFAS No. 144. The carrying value of a long-lived asset is considered impaired
        when the anticipated undiscounted cash flow from such asset is separately
        identifiable and is less than its carrying value. In that event, a loss is
        recognised based on the amount by which the carrying value exceeds the fair
        market value of the long-lived asset. Fair market value is determined primarily
        using the anticipated cash flows discounted at a rate commensurate with the
        risk
        involved. Losses on long-lived assets to be disposed of are determined in
        a
        similar manner, except that fair market values are reduced for the cost to
        dispose .
 
 During
        the reporting years, there was no impairment loss.
  F-11
  **SUNWAY
        GLOBAL INC.**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 **FOR
        THE YEARS ENDED DECEMBER 31, 2007 AND 2006**
 **(Stated
        in US Dollars)**
 
 **2.**
              **SUMMARY
                  OF SIGNIFICANT ACCOUNTING POLICIES (****Continued****)**
 
 *(j)*
              *Inventories*
 
 Inventories
        consist of finished goods and raw materials, and stated at the lower of cost
        or
        market value. Substantially all inventory costs are determined using the
        weighted average basis. Finished goods are comprised of direct materials,
        direct
        labor and an appropriate proportion of overhead.
 
 *(k)*
              *Trade
                  receivables*
 
 Trade
        receivables are recognized and carried at the original invoice amount less
        allowance for any uncollectible amounts. An allowance for doubtful accounts
        is
        maintained for all customers based on a variety of factors, including the
        length
        of time the receivables are past due, significant one-time events and historical
        experience. Bad debts are written off as incurred. During the reporting years,
        there were no bad debts.
 
 *(l)*
              *Cash
                  and cash equivalents*
 
 The
        Company considers all highly liquid investments purchased with original
        maturities of three months or less to be cash equivalents. The Company maintains
        bank accounts only in the PRC. The Company does not maintain any bank accounts
        in the United States of America.
 
 **2007**
              
              **2006**Bank
                  of Communications, Branch of DaqingCity
                  Economic Zone
              
              
              5,398,866
              
              
              1,630,320Daqing
                  City Commercial Bank
              
              
              72,690
              
              
              100,573HSBC
              
              
              348,362
              
              
              -Cash
                  on hand
              
              
              182
              
              
              18,1555,820,100
              
              
              1,749,048
 
 *(m)*
              *Restricted
                  cash*
 
 Restricted
        cash are pledged deposits in an escrow account for investor relations
        purpose.
 
 *(n)*
              *Revenue
                  recognition*
  Revenue
          represents the invoiced value of goods sold recognized upon the delivery
          of
          goods to customers. Revenue is recognized when all of the following criteria
          are
          met:
 -
                Persuasive
                    evidence of an arrangement exists;
 -
                Delivery
                    has occurred or services have been rendered, and;
 -
                The
                    seller’s price to the buyer is fixed or
                    determinable.
 
 Contract
        revenues are recognized when the manufacturing and installation of the medical
        equipments is completed. Generally, the company receives total contract sum
        from
        clients in 3 installments. Deposit of 30% is received from client when the
        contract is signed. Second payment of 30% is received when the project
        commenced. The final sum of the remaining portion is received after the
        construction is completed within 4 months.
  F-12
  
 **SUNWAY
        GLOBAL INC.**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 **FOR
        THE YEARS ENDED DECEMBER 31, 2007 AND 2006**
 **(Stated
        in US Dollars)**
 
 **2.**
              **SUMMARY
                  OF SIGNIFICANT ACCOUNTING POLICIES (****Continued****)**
 
 *(o)*
              *Warranty
                  liabilities*
 
 The
        Company warrants its products against defects in design, materials, and
        workmanship generally for three to five years. A provision for estimated
        future
        costs relating to warranty expense are recorded when products are shipped,
        and
        the provision is based upon our own historical claim experience.
 
 *(p)*
              *Costs
                  of sales*
 
 Cost
        of
        sales consists primarily of material costs, employee compensation, depreciation
        and related expenses, which are directly attributable to the production of
        products. All inbound freight charges, purchasing and receiving costs,
        inspection costs, warehousing costs, internal transfer costs, and the other
        costs of distribution network are also included. Write-down of inventory
        to
        lower of cost or market is also recorded in cost of revenues.
 
 *(q)*
              *Leases*
 
 The
        Group
        did not have lease which met the criteria of capital lease. Leases which
        do not
        qualify as capital lease are classified as operating lease. Operating lease
        rental payment included in general and administrative expenses were nil
        and nil
        for
        the years ended December 31, 2007 and 2006 respectively.
 
 *(r)*
              *Advertising*
 
 The
        Group
        expensed all advertising costs as incurred. Advertising expenses included
        in
        selling expenses were $72,835 and $212,504 for the years ended December 31,
        2007
        and 2006 respectively.
 
 *(s)*
              *Shipping
                  and handling*
 
 All
        shipping and handling are expensed as incurred. Shipping and handling expenses
        included in selling expenses were $35,577 and $25,148 for the years ended
        December 31, 2007 and 2006 respectively.
 
 *(t)*
              *Research
                  and development*
 
 All
        research and development costs are expensed as incurred. The research and
        development costs included in general and administrative expenses were $175,567
        and $289,838 for the years ended December 31, 2007 and 2006
        respectively.
 
 (u)
              *Retirement
                  benefits*
 
 Retirement
        benefits in the form of contributions under defined contribution retirement
        plans to the relevant authorities are charged to the statements of income
        as
        incurred. The retirement benefit expenses included in general and administrative
        expenses were $26,970 and $19,522 for the years ended December 31, 2007 and
        2006
        respectively.
  F-13
  
 **SUNWAY
        GLOBAL INC.**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 **FOR
        THE YEARS ENDED DECEMBER 31, 2007 AND 2006**
 **(Stated
        in US Dollars)**
 
 **2.**
              **SUMMARY
                  OF SIGNIFICANT ACCOUNTING POLICIES (****Continued****)**
 
 (v)
              *Income
                  taxes*
 
 The
        Group
        accounts for income tax using an asset and liability approach and allows
        for
        recognition of deferred tax benefits in future years. Under the asset and
        liability approach, deferred taxes are provided for the net tax effects of
        temporary differences between the carrying amounts of assets and liabilities
        for
        financial reporting purposes and the amounts used for income tax purposes.
        A
        valuation allowance is provided for deferred tax assets if it is more likely
        than not these items will either expire before the Group is able to realize
        their benefits, or that future realization is uncertain.
 
 *(w)*
              *Foreign
                  currency translation*
 
 The
        accompanying financial statements are presented in United States dollars.
        The
        reporting currency of the Group is the U.S. dollar ($). SWT and Sunway use
        its
        local currency, Renminbi (RMB), as its functional currency. Results of
        operations and cash flow are translated at average exchange rates during
        the
        period, and assets and liabilities are translated at the end of period exchange
        rates. Translation adjustments resulting from this process are included in
        accumulated other comprehensive income in stockholders’ equity. Transaction
        gains and losses that arise from exchange rate fluctuations from transactions
        denominated in a currency other than the functional currency are included
        in the
        results of operations as incurred.
 
 The
        PRC
        government imposes significant exchange restrictions on fund transfers out
        of
        the PRC that are not related to business operations. These restrictions have
        not
        had a material impact on the Group because it has not engaged in any significant
        transactions that are subject to the restrictions.
 
 The
        exchange rates used to translate amounts in RMB into USD for the purposes
        of
        preparing the consolidated financial statements were as follows:
 **2007**
              
              **2006**Year
                  end RMB : USD exchange rate
              
              
              7.31410
              
              
              7.81750Average
                  yearly RMB : USD exchange rate
              
              
              7.61720
              
              
              7.98189
  The
        RMB
        is not freely convertible into foreign currency and all foreign exchange
        transactions must take place through authorized institutions. No representation
        is made that the RMB amounts could have been, or could be, converted into
        USD at
        the rates used in translation.
 
 *(x)*  *Statutory
        reserves*
 
 As
        stipulated by the PRC’s Company Law and as provided in the SWT, and Sunway’s
        Articles of Association, SWT and Sunway’s net income after taxation can only be
        distributed as dividends after appropriation has been made for the
        following:
 
 (i)
              Making
                  up cumulative prior years’ losses, if
                  any;
 (ii)
              Allocations
                  to the “Statutory surplus reserve” of at least 10% of income after tax, as
                  determined under PRC accounting rules and regulations, until the
                  fund
                  amounts to 50% of the Company's registered capital, which is restricted
                  for set off against losses, expansion of production and operation
                  or
                  increase in registered capital;
 (iii)
              Allocations
                  of 5-10% of income after tax, as determined under PRC accounting
                  rules and
                  regulations, to the Company's “Statutory common welfare fund”, which is
                  restricted for capital expenditure for the collective benefits
                  of the
                  Company's employees; and
 (iv)
              Allocations
                  to the discretionary surplus reserve, if approved in the shareholders’
                  general meeting.
  F-14
  **SUNWAY
        GLOBAL INC.**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 **FOR
        THE YEARS ENDED DECEMBER 31, 2007 AND 2006**
 **(Stated
        in US Dollars)**
 
 **2.**
              **SUMMARY
                  OF SIGNIFICANT ACCOUNTING POLICIES (****Continued****)**
 
 (y)
              *Comprehensive
                  income*
 
 Comprehensive
        income is defined to include all changes in equity except those resulting
        from
        investments by owners and distributions to owners. Among other disclosures,
        all
        items that are required to be recognized under current accounting standards
        as
        components of comprehensive income are required to be reported in a financial
        statement that is presented with the same prominence as other financial
        statements. The Group’s current component of other comprehensive income is the
        foreign currency translation adjustment and the unrealised gain on investment
        held for resale.
 
 *(z)*
              *Recent
                  accounting pronouncements*
 
 In
        September 2006, the FASB issued SFAS 157, Fair Value Measurements, which
        defines
        fair value, establishes a framework for measuring fair value in generally
        accepted accounting principles, and expands disclosures about fair value
        measurements. SFAS 157 applies under other accounting pronouncements that
        require or permit fair value measurements, where fair value is the relevant
        measurement attribute. The standard does not require any new fair value
        measurements. SFAS 157 is effective for financial statements issued for fiscal
        year beginning after November 15, 2007, and interim periods within that fiscal
        year. The Company is currently evaluating the impact of SFAS 157 on its
        operation and financial conditions.
 
 In
        September 2006, the SEC issued SAB No. 108, which provides guidance on the
        process of quantifying financial statement misstatements. In SAB No. 108,
        the
        SEC staff establishes an approach that requires quantification of financial
        statement errors, under both the iron-curtain and the roll-over methods,
        based
        on the effects of the error on each of the Company’s financial statements and
        the related financial statement disclosures. SAB No.108 is generally effective
        for annual financial statements in the first fiscal year ending after November
        15, 2006. The transition provisions of SAB No. 108 permit existing public
        companies to record the cumulative effect in the first year ending after
        November 15, 2006 by recording correcting adjustments to the carrying values
        of
        assets and liabilities as of the beginning of that year with the offsetting
        adjustment recorded to the opening balance of retained earnings. The Company
        does not anticipate that the adoption of this standard will have a material
        impact on these consolidated financial statements
 
 In
        February 2007, FASB issued Statement of Financial Accounting Standards No.
        (“SFAS”) 159, “The Fair Value Option for Financial Assets and Financial
        Liabilities - Including an Amendment of FASB Statement No. 115” (“SFAS 159”).
        SFAS 159 permits entities to choose to measure many financial instruments
        and
        certain other items at fair value. Entities that elect the fair value option
        will report unrealized gains and losses in earnings at each subsequent reporting
        date. The fair value option may be elected on an instrument-by-instrument
        basis,
        with a few exceptions. SFAS 159 also establishes presentation and disclosure
        requirements to facilitate comparisons between entities that choose different
        measurement attributes for similar assets and liabilities. The requirements
        of
        SFAS 159 are effective for our fiscal year beginning on January 1, 2008.
 The
        Company does not anticipate that the adoption of this standard will have
        a
        material impact on these consolidated financial statements.
  F-15
 
 **SUNWAY
        GLOBAL INC.**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 **FOR
        THE YEARS ENDED DECEMBER 31, 2007 AND 2006**
 **(Stated
        in US Dollars)**
 
 **2.**
              **SUMMARY
                  OF SIGNIFICANT ACCOUNTING POLICIES (****Continued****)**
 
 In
        December 2007, the SEC issued Staff Accounting Bulletin No. 110 (“SAB 110”). SAB
        110 permits companies to continue to use the simplified method, under certain
        circumstances, in estimating the expected term of “plain vanilla” options beyond
        December 31, 2007. SAB 110 updates guidance provided in SAB 107 that previously
        stated that the Staff would not expect a company to use the simplified method
        for share option grants after December 31, 2007. Adoption of SAB 110 is not
        expected to have a material impact on the Company’s consolidated financial
        statements
 
 In
        December 2007, the Financial Accounting Standards Board issued Statement
        of
        Financial Accounting Standard (“SFAS”) No. 160, "Noncontrolling Interests in
        Consolidated Financial Statements, an amendment of ARB No. 51”. SFAS 160
        establishes accounting and reporting standards for the noncontrolling interest
        in a subsidiary and for the deconsolidation of a subsidiary. SFAS 160 is
        effective for fiscal years, and interim periods within those fiscal years,
        beginning on or after December 15, 2008. As such, the Company is required
        to
        adopt these provisions at the beginning of the fiscal year ended December
        31,
        2009. The Company is currently evaluating the impact of SFAS 160 on its
        consolidated financial statements but does not expect it to have a material
        effect
 
 In
        December 2007, the Financial Accounting Standards Board issued Statement
        of
        Financial Accounting Standard (“SFAS”) No. 141(R), "Business Combinations”. SFAS
        141(R) establishes principles and requirements for how the acquirer recognizes
        and measures in its financial statements the identifiable assets acquired,
        the
        liabilities assumed, an any noncontrolling interest in the acquiree, recognizes
        and measures the goodwill acquired in the business combination or a gain
        from a
        bargain purchase, and determines what information to disclose to enable users
        of
        the financial statements to evaluate the nature and financial effects of
        the
        business combination. SFAS 141(R) is effective for fiscal years, and interim
        periods within those fiscal years, beginning on or after December 15, 2008.
        As
        such, the Company is required to adopt these provisions at the beginning
        of the
        fiscal year ended December 31, 2009. The Company is currently evaluating
        the
        impact of SFAS 141(R) on its consolidated financial statements but does not
        expect it to have a material effect.
  F-16
  **SUNWAY
        GLOBAL INC.**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 **FOR
        THE YEARS ENDED DECEMBER 31, 2007 AND 2006**
 **(Stated
        in US Dollars)**
 
 **3.**
              **CONCENTRATIONS
                  OF CREDIT RISK AND MAJOR
                  CUSTOMERS**
 
 Financial
        instruments which potentially expose the Group to concentrations of credit
        risk,
        consists of cash and accounts receivable as of December 31, 2007 and 2006.
        The
        Group performs ongoing evaluations of its cash position and credit evaluations
        to ensure collections and minimize losses.
 
 As
        of
        December 31, 2007 and 2006, the Group’s bank deposits were all placed with banks
        in the PRC where there is currently no rule or regulation in place for
        obligatory insurance of bank accounts.
 
 For
        the
        years ended December 31, 2007 and 2006, all of the Group’s sales were generated
        from the PRC. In addition, all accounts receivable as of December 31, 2007
        and
        2006 also arose in the PRC.
 
 The
        maximum amount of loss due to credit risk that the Group would incur if the
        counter parties to the financial instruments failed to perform is represented
        the carrying amount of each financial asset in the balance sheet.
 
 Normally
        the Group does not obtain collateral from customers or debtors.
 
 Details
        of the customers accounting for 10% or more of the Group’s revenue are as
        follows:
 
 2007
              
              2006Customer
                  A
              
              $
              1,323,321
              
              $
              -Customer
                  B
              
              
              1,295,752
              
              
              1,451,893Customer
                  C
              
              
              -
              
              
              1,123,550Customer
                  D
              
              
              -
              
              
              1,051,725Customer
                  E
              
              
              -
              
              
              959,378Customer
                  F
              
              
              -
              
              
              897,814
 
 Details
        of customers accounting for 10% or more of the Group’s accounts receivable
 are
        as
        follows:
 
 2007
              
              2006Customer
                  A
              
              $
              275,851
              
              $
              -Customer
                  B
              
              
              269,861
              
              
              -Customer
                  F
              
              
              -
              
              
              163,436Customer
                  G
              
              
              235,149
              
              
              -Customer
                  H
              
              
              221,510
              
              
              -Customer
                  I
              
              
              159,005
              
              
              -Customer
                  J
              
              
              146,688
              
              
              -Customer
                  K
              
              
              -
              
              
              148,766Customer
                  L
              
              
              -
              
              
              140,684
  F-17
  **SUNWAY
        GLOBAL INC.**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 **FOR
        THE YEARS ENDED DECEMBER 31, 2007 AND 2006**
 **(Stated
        in US Dollars)**
 
 **4.**
              **SHORT
                  TERM INVESTMENTS**
 
 On
        October 22, 2006, the Company invested in Bank of Communication Growth Fund
        (PRC) at a cost of $1,279,181 (RMB 10,000,000). The market value of this
        investment increased to $1,702,718 (RMB 13,311,000) as of December 31,
        2006.
 
 As
        at
        December 31, 2006, the appreciation in value of $423,537 (RMB 3,311,000)
        was
        recorded as “unrealized investment gain” and included in the stockholders’
equity.
 
 As
        at
        July 15, 2007, the Group disposed of the investments and realized a gain
        of
        $1,316,888 (RMB10,031,000).
 
 On
        July
        12, 2007, the Company invested in Bank of Communications Schroders Monetary
        Investment Fund (PRC) at a cost of $3,413,328 (RMB 26,000,000). As at October
        31, 2007, the Group disposed of the investments and realized a gain of $30,101
        (RMB229,287).
 
 
 **5.**
              **AMOUNT
                  DUE FROM A RELATED COMPANY**
 
 Amount
        due from Beijing Sunway New-force Medical Treatment Tech Co.,Ltd (Beijing
        Sunway), a related company where Mr Liang Deli, the director of the Group
        is
        shareholder. The amount is unsecured, interest free and repayable on demand.
        The
        amount is hold by Beijing Sunway because of a recent development of
        representative offices in sundry location of China and this arrangement would
        be
        a better working capital arrangement.
 
 
 **6.**
              **AMOUNT
                  DUE FROM A DIRECTOR**
 
 Amount
        due from Liu Bo, the director of the company is unsecured, interest free
        and
        repayable on demand. The amount is hold by Beijing Sunway because of proposed
        development of representative offices in sundry location of China and this
        arrangement would be a better working capital arrangement.
  F-18
  **SUNWAY
        GLOBAL INC.**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 **FOR
        THE YEARS ENDED DECEMBER 31, 2007 AND 2006**
 **(Stated
        in US Dollars)**
 
 **7.**
              **TRADE
                  RECEIVABLES, NET**
 2007
              
              2006Trade
                  receivable, gross
              
              $
              1,533,085
              
              $
              1,475,340Provision
                  for doubtful debts
              
              
              (7,884
              )
              
              (7,377
              )$
              1,525,201
              
              $
              1,467,963
 All
        of
        the above accounts receivable are due within one year of aging.
 
 An
        analysis of the allowance for doubtful accounts for the years ended December
        31,
        2007 and 2006 is as follows:
 2007
              
              2006Balance
                  at beginning of year
              
              $
              7,377
              
              $
              4,284Addition
                  of the provision
              
              
              -
              
              
              2,891Foreign
                  exchange adjustment
              
              
              507
              
              
              202Balance
                  at end of year
              
              $
              7,884
              
              $
              7,377
 
 Allowance
        was made when collection of the full amount is no longer probable. Management
        reviews and adjusts this allowance periodically based on historical experience,
        current economic climate as well as its evaluation of the collectibility
        of
        outstanding accounts. The Group evaluates the credit risks of its customers
        utilizing historical data and estimates of future performance.
 
 
 **8.**
              **TRAVEL
                  ADVANCES TO SHAREHOLDERS**
 
 Travel
        advances were made to certain shareholders. These shareholders are also the
        management of the Company, and these allowances are used to enable their
        execution of operational duties such as marketing and sales promotion. The
        following table provides an analysis of the outstanding accounts.
 2007
              
              2006Bo
                  Liu
              
              $
              4,244
              
              $
              2,794Qichai
                  Zhao
              
              
              700
              
              
              655Deli
                  Liang
              
              
              6,568
              
              
              -Weishan
                  Sun
              
              
              19,312
              
              
              3,008$
              30,824
              
              $
              6,457
   **9.**
              **ADVANCES
                  TO EMPLOYEES**
 
 Advances
        to employees are advances for purchases and traveling. They are unsecured,
        interest free and repayable on demand.
  F-19
 
 **SUNWAY
        GLOBAL INC.**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 **FOR
        THE YEARS ENDED DECEMBER 31, 2007 AND 2006**
 **(Stated
        in US Dollars)**
 
 **10.**
              **INVENTORIES**
 
 Inventories
        comprise the followings:
 2007
              
              2006Finished
                  goods
              
              $
              161,005
              
              $
              200,852Raw
                  materials
              
              
              605,928
              
              
              175,856$
              766,933
              
              $
              376,708
 
 
 **11.**
              **PROPERTY,
                  PLANT AND EQUIPMENT, NET**
 
 Property,
        plant and equipment comprise the followings:
 
 2007
              
              2006At
                  costBuilding
              
              $
              1,356,392
              
              $
              1,269,048Machinery
                  and equipment
              
              
              1,022,960
              
              
              902,789Moldings
              
              
              2,992,166
              
              
              2,679,885Computer
                  software
              
              
              1,942,823
              
              
              1,407,099Office
                  equipment andmotor
                  vehicles
              
              
              80,439
              
              
              56,029$
              7,394,780
              
              $
              6,314,850Less:
                  accumulateddepreciation
              
              
              (2,945,161
              )
              
              (1,599,700
              )$
              4,449,619
              
              $
              4,715,150
 
 Depreciation
        and amortization expense is included in the statement of income and
 comprehensive
        income as follows:
 
 2007
              
              2006Cost
                  of sales
              
              $
              598,077
              
              $
              233,573General
                  andadministrative
                  expenses
              
              
              588,126
              
              
              640,803$
              1,186,203
              
              $
              874,376
 
  F-20
  **SUNWAY
        GLOBAL INC.**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 **FOR
        THE YEARS ENDED DECEMBER 31, 2007 AND 2006**
 **(Stated
        in US Dollars)**
 
 **12.**
              **INTANGIBLES**
 
 Intangible
        assets are as follows:
 2007
              
              2006Land
                  use rights, at cost
              
              $
              1,269,151
              
              $
              1,187,426Less:
                  accumulated amortization
              
              
              (58,508
              )
              
              (29,476
              )$
              1,210,643
              
              $
              1,157,950Technology-based
                  design,
                  at cost
              
              $
              5,923,149
              
              $
              -Less:
                  accumulated amortization
              
              
              (200,301
              )
              
              -$
              5,722,848
              
              $
              -$
              6,933,491
              
              $
              1,157,950
 
 Patent
        of
        the Pneumatic Tube System has been registered with the PRC government under
        Serial No. 264-2004 2005 with a registration fee of $347 (RMB 2,800) which
        was
        expensed in 2003. This amount was immaterial for capitalization.
 
 The
        Group
        acquired the rights to use a parcel of land totaling 26,522 square meters,
        for a
        consideration of $1,149,788 (RMB 9,282,700), located at Daqing Hi-Tech Industry
        Development Zone, Daqing, Heilongjiang in the People’s Republic of China 163316
        for a term of 46 years from September 16, 2005 to June 13, 2052. The land
        has
        been used to build the Group’s facility.
 
 Amortization
        expense included in the general and administrative expenses for the years
        ended
        2007 and 2006 were $218,260 and $24,745respectively.
 
  **13.**
              **SHORT
                  TERM BANK LOANS**
 
 The
        Group
        was granted a loan of $383,754 (RMB 3,000,000) on April 28, 2006 for a term
        from
        April 28, 2006 to November 30, 2007 at an interest rate of 5.76% per annum
        to be
        secured by a mortgage of the Group’s real property being the office facility as
        registered under property permit reference number NA216750.
 
 The
        loan
        agreement stipulated a repayment of $191,877 (RMB 1,500,000) on December
        21,
        2006; therefore, the loan balance outstanding at December 31, 2006 amounted
        to
        $191,877 (RMB 1,500,000).
  F-21
  **SUNWAY
        GLOBAL INC.**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 **FOR
        THE YEARS ENDED DECEMBER 31, 2007 AND 2006**
 **(Stated
        in US Dollars)**
 
 **14.**
              **WARRANTY
                  LIABILITIES**
 
 An
        analysis of the warranty liabilities for the years ended December 31, 2007
        and
        2006 is as follows:
 2007
              
              2006Balance
                  at beginning of year
              
              $
              22,811
              
              $
              -Addition
                  of warranty liabilities
              
              
              55,918
              
              
              22,811Warranty
                  expense for the year
              
              
              (23,378
              )
              
              -Balance
                  at end of year
              
              $
              55,351
              
              $
              22,811
 
 
 **15.**
              **COMMITMENTS
                  AND CONTINGENCIES**
 
 The
        Group
        has entered into a tenancy agreement for factory expiring through 2008. Total
        rental expenses for the year ended December 31, 2007 and 2006 amounted to
        $14,016 and nil respectively.
 
 As
        at
        December 31, 2007, the Group’s commitments for minimum lease payments under
        these leases for the next one year and thereafter are as follows:
 December
                  31,2008
              
              $
              8,466$
              8,466
 
  F-22
  **SUNWAY
        GLOBAL INC.**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 **FOR
        THE YEARS ENDED DECEMBER 31, 2007 AND 2006**
 **(Stated
        in US Dollars)**
 
 
 **16.**
              **SERIES
                  B CONVERTIBLE PREFERRED STOCK AND ASSOCIATED
                  WARRANTS**
  On
        June
        5, 2007, the Company entered into a purchase agreement, whereby the company
        agreed to sell 165,432 shares of the Company’s Series B Preferred shares and
        various stock purchase warrants to purchase up to 18,686,054 shares of the
        Company’s common shares. The exercise price, expiration date and number of share
        eligible to be purchased with the warrants is summary in the following
        table:
  **Investment**
                **Amount**
              
              **Preferred
                  B**
              
              **A
                  Warrant**
              
              **B
                  Warrant**
              
              **J
                  Warrant**
              
              **C
                  Warrant**
              
              **D
                  Warrant****Vision
                  Opportunity Master Fund, Ltd.**
              
              
              6,500,000
              
              
              160,494
              
              
              4,814,815
              
              
              2,407,407
              
              
              4,362,416
              
              
              4,362,416
              
              
              2,181,208**Columbia
                  China Capital Group, Inc.**
              
              
              200,000
              
              
              4,938
              
              
              148,148
              
              
              74,074
              
              
              134,228
              
              
              134,228
              
              
              67,114
 
 **Series
                  of Warrant**
              **Number
                  of shares**
              **Exercise
                  Price**
              **Expiry
                  Date****Series
                  A**
              4,962,963
              $
                  1.76
              6
                  /5 /2012**Series
                  B**
              2,481,481
              2.30
              6
                  /5 /2012**Series
                  J**
              4,496,644
              1.49
              6
                  /5 /2008**Series
                  C**
              4,496,644
              1.94
              6
                  /5 /2012**Series
                  D**
              2,248,322
              2.53
              6
                  /5 /2012
 
  On
        June
        6, 2007, we issued to Kuhns Brothers, Inc. and its designees an aggregate
        of
        17,646 shares of Series A Preferred and a Series J warrant to purchase an
        aggregate of 496,296 shares of common stock of the Company at $1.62 per share
        in
        connection with the reverse merger transaction pursuant to the placement
        agent
        agreement with the Kuhns Brothers, Inc.
  The
        Series B preferred stock has liquidation rights senior to common stock and
        Series A preferred stock. In the event of a liquidation of the Company, holders
        of Series B preferred stock are entitled to receive a distribution equal
        to
        $40.50 per share of Series B preferred stock prior to any distribution to
        the
        holders of common stock and Series A preferred stock. The Series B preferred
        stock is entitled to non-cumulative dividends only upon declaration of dividends
        by the Company. To date, no dividends have been declared or accrued. The
        Series
        B preferred stock will participate based on their respective as-if conversion
        rates if the Company declares any dividends. After the Amendment were filed
        effect the Reverse Split, each share of Series B preferred stock would be
        convertible into 30 shares of Common Stock for $1.35 each, which both may
        be
        adjusted from time to time pursuant to the conversion rate. The holders of
        Series B preferred stock shall be entitled to voting rights by applicable
        law
        and the right to vote together with the holders of Common and Series A Preferred
        Stock.
   F-23
  **SUNWAY
        GLOBAL INC.**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 **FOR
        THE YEARS ENDED DECEMBER 31, 2007 AND 2006**
 **(Stated
        in US Dollars)**
 **16.**
                **SERIES
                    B CONVERTIBLE PREFERRED STOCK AND ASSOCIATED WARRANTS
                    (continued)**
  The
        gross
        proceeds of the transaction were $6.7 million. The proceeds from the transaction
        were allocated to the Series B preferred stock, warrants and beneficial
        conversion feature based on the relative fair value of the securities. The
        value
        of the Preferred Series B was determined by reference to the market price
        of the
        common shares into which it converts, and the gross value of the warrants
        was
        calculated using the Black -Scholes model with the following assumptions:
        expected life of 1 year, volatility of 117% and an interest rate of
        4.99%.
  The
        Company recognized a beneficial conversion feature discount on the Series
        B
        preferred stock at its intrinsic value, which was the fair value of the common
        stock at the commitment date for the Series B preferred stock investment,
        less
        the effective conversion price but limited to the $6.7 million of proceeds
        received from the sale. The Company recognized the $6.7 million beneficial
        conversion feature as an increase in paid in capital in the accompanying
        consolidated balance sheets on the date of issuance of the Series B preferred
        shares since the Series B preferred shares were convertible at the issuance
        date.
  The
        agreement, also provided that if a Registration Statement is not effective
        within a certain period of time or the common shares are not listed on the
        NASDAQ or American exchange by December 31, 2008, the Company will pay the
        holders of the shares a penalty that can range from $67,000 to $670,000 and
        certain principal shareholders would issue up to 1,000,000 additional shares
        to
        the purchasers of the Preferred Series B shares. The company is accounting
        for
        these penalties in accordance with FAS 5 - Accounting
        for Contingencies, whereby
        the penalty will not be recorded as a liability until and if it is probable
        the
        penalty will be incurred. No penalty has been recorded in the accompanying
        financial statements for this contingency.
  
 **17.**
              **EARNINGS
                  PER SHARE**
 
 The
        calculation of the basic and diluted earnings per share attributable to the
        common stock holders is based on the following data:
 Earnings:
              
              2007
              
              2006Earnings
                  for the purpose of basicearnings
                  per share
              
              $
              6,047,505
              
              $
              4,029,553Effect
                  of dilutive potential commonstock
              
              
              -
              
              
              -Earnings
                  for the purpose of basicearnings
                  per share
              
              $
              6,047,505
              
              $
              4,029,553Number
                  of shares:Weighted
                  average number ofcommon
                  stock for the purpose of basicearnings
                  per share
              
              
              223,658
              
              
              223,658Effect
                  of dilutive potential common stock-
                  conversion of Series Aconvertible
                     preferred stock
              
              
              9,628,340
              
              
              --
                  conversion of Series Bconvertible
                  preferred stock
              
              
              4,962,960
              
              
              -Weighted
                  average number of commonstock
                  for the purpose of dilutiveearnings
                  per share
              
              
              14,814,958
              
              
              223,658
  F-24
  **SUNWAY
        GLOBAL INC.**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 **FOR
        THE YEARS ENDED DECEMBER 31, 2007 AND 2006**
 **(Stated
        in US Dollars)**
 
 **18.**
              **INTEREST
                  INCOME/(EXPENSES), NET**
 
 Interest
        income/(expenses), net for the years ended December 31, 2007 and 2006 are
        as
        follows:
 
 2007
              
              2006Interests
                  on bank borrowings
              
              $
              (9,442
              )
              $
              (28,863
              )Bank
                  charges
              
              
              (689
              )
              
              (404
              )Bank
                  deposit interest income
              
              
              61,983
              
              
              24,092$
              51,852
              
              $
              (5,175
              )
 
 
 **19.**
              **INCOME
                  TAXES**
 
 The
        Company is registered in the State of Nevada whereas its subsidiary, WTL
        being
        incorporated in the British Virgin Islands is not subject to any income tax
        and
        conducts all of its business through its PRC subsidiary, SWT and Sunway (see
        note 1).
 
 SWT
        and
        Sunway, being registered in the PRC, are subject to PRC’s Enterprise Income Tax.
        Pursuant to the PRC Income Tax Laws, Enterprise Income Taxes (“EIT”) is
        generally imposed at a statutory rate of 33%, which comprises 30% national
        income tax and 3% local income tax.
 
 However,
        Sunway is a high technology company, and in accordance with the relevant
        regulations regarding the favorable tax treatment for high technology companies,
        Sunway is entitled to a reduced tax rate of 15% as long as Sunway located
        and
        registered in the high and advance technology development zone.
 
 A
        reconciliation between the income tax computed at the U.S. statutory rate
        and
        the Group’s provision for income tax is as follows:
 
 2007
              
              2006U.S.
                  statutory rate
              
              
              34
              %
              
              34
              %Foreign
                  income not recognized in the U.S.
              
              
              (34
              %)
              
              (34
              %)PRC
                  Enterprise Income Tax
              
              
              33
              %
              
              33
              %Tax
                  holiday
              
              
              (18
              %)
              
              (18
              %)Provision
                  for income tax
              
              
              15
              %
              
              15
              %
 
 
 **20.**
              **FAIR
                  VALUE OF FINANCIAL
                  INSTRUMENTS**
 
 The
        fair
        value of a financial instrument is the amount at which the instrument could
        be
        exchanged in a current transaction between willing parties. The carrying
        amounts
        of financial assets and liabilities, such as cash and cash equivalents, trade
        accounts receivable, other receivables, accounts payable, and other payables,
        approximate their fair values because of the short maturity of these instruments
        and the availability of the market rates of interest.
  F-25
  **SUNWAY
        GLOBAL INC.**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 **FOR
        THE YEARS ENDED DECEMBER 31, 2007 AND 2006**
 **(Stated
        in US Dollars)**
 
 **21.**
              **SEGMENT
                  INFORMATION**
 
 The
        Group
        currently is engaged in the manufacturing and selling of logistic transport
        systems. The Group has contracted with customers with two types of product
        altogether, workstation type A and workstation type B. These two types of
        workstation are of the same function but with different product design.
 
 Net
        revenues and cost of revenues by product:
 
 ***2007***
              
              *Workstation*
              
              *Workstation**Type
                  A*
              
              *Type
                  B*
              
              *Consolidated*Net
                  revenues
              
              $
              4,221,531
              
              $
              7,643,607
              
              $
              11,865,138Cost
                  of netrevenues
              
              
              (1,229,000
              )
              
              (2,244,411
              )
              
              (3,473,411
              )$
              2,992,531
              
              $
              5,399,196
              
              $
              8,391,727
 
 ***2006***
              
              *Workstation*
              
              *Workstation**Type
                  A*
              
              *Type
                  B*
              
              *Consolidated*Net
                  revenues
              
              $
              6,149,169
              
              $
              2,764,970
              
              $
              8,914,139Cost
                  of netrevenues
              
              
              (1,666,407
              )
              
              (720,589
              )
              
              (2,386,996
              )$
              4,482,762
              
              $
              2,044,381
              
              $
              6,527,143
 The
        Group’s operations are located in the PRC. All revenue is from customers in the
        PRC. All of the Group’s assets are located in the PRC. Sales of workstations are
        carried out in the PRC. Accordingly, no analysis of the Group's sales and
        assets
        by geographical market is presented.
 
 **22.**
              **RESTATEMENTS**
 
 During
        the course of internal evaluation, our accounting staff found misstatements
        in
        our previously reported financial statements for the fiscal years ended December
        31, 2007, and 2006 that required correction relating to: (1) the improper
        use of
        exchange rates of shareholders’ equity items. In specific, additional paid-in
        capital, statutory reserves, and retained earnings were overstated by $253,500,
        $37,309 and $128,861 respectively, and accumulated other comprehensive income
        was understated by $410,498 and (2) other misstatements identified, which
        were
        individually not material, including amounts related to cash and cash
        equivalents ,travel advances to directors, and interest expenses items. 
The impacts of the above have made the changes in figures as of December
        31,
        2007 by a decrease in additional paid-in capital by $253,500, a decrease
        in
        statutory reserves by $37,309, a decrease in retained earnings by $128,861,
        and
        an increase of accumulated other comprehensive income by
        $419,670.
  F-26
  
 **SUNWAY
                  GLOBAL INC.****BALANCE
                  SHEETS**
 Original
              
              RestatedDecember
                  31,2007
              
              2007**ASSETS**Current
                  assetsCash
                  and cash equivalents
              
              $
              5,820,100
              
              $
              5,820,100Restricted
                  cash
              
              
              491,049
              
              
              -Short
                  term investments
              
              
              -
              
              
              -Trade
                  receivables, net
              
              
              1,525,201
              
              
              1,525,201Inventories
              
              
              766,933
              
              
              766,933Advances
                  to suppliers
              
              
              1,331,159
              
              
              1,331,159Prepayments
              
              
              125,333
              
              
              125,333Tender
                  deposits
              
              
              131,013
              
              
              131,013Travel
                  advances to shareholders
              
              
              30,824
              
              
              30,824Advances
                  to employees
              
              
              548,364
              
              
              548,364Total
                  current assets
              
              $
              10,769,976
              
              $
              10,278,927Restricted
                  cash
              
              
              -
              
              
              491,049Amount
                  due from a related company
              
              
              585,678
              
              
              585,678Amount
                  due from a director
              
              
              1,028,474
              
              
              1,028,474Property,
                  plant and equipment, net
              
              
              4,449,619
              
              
              4,449,619Intangibles,
                  net
              
              
              6,933,491
              
              
              6,933,491**TOTAL
                  ASSETS**
              
              $
              23,767,238
              
              $
              23,767,238**LIABILITIES
                  AND****STOCKHOLDERS’
                  EQUITY**Current
                  liabilitiesShort
                  term bank loans
              
              $
              -
              
              $
              -Accounts
                  payable
              
              
              245,917
              
              
              245,917Income
                  tax payable
              
              
              157,877
              
              
              157,877Turnover
                  and other taxes
              
              
              143,857
              
              
              143,857Expected
                  warranty expenses
              
              
              55,351
              
              
              55,351Customers
                  deposits
              
              
              208,274
              
              
              208,274Accrued
                  liabilities
              
              
              323,464
              
              
              323,464Other
                  payables
              
              
              35,984
              
              
              35,984Total
                  current liabilities
              
              $
              1,170,724
              
              $
              1,170,724**TOTAL
                  LIABILITIES**
              
              $
              1,170,724
              
              $
              1,170,724
  F-27
  
 **SUNWAY
                  GLOBAL INC.**
 
 **BALANCE
                  SHEETS (Continued)**
 Original
              
              RestatedDecember
                  31,2007
              
              2007**STOCKHOLDERS’
                  EQUITY**Series
                  A Convertible PreferredStock
                  $0.001 par value 400,000shares
                  authorized; 246,176shares
                  issued and outstandingat
                  Dec 31, 2007 and 2006
              
              $
              246
              
              $
              246Series
                  B Convertible PreferredStock
                  $0.001 par value 400,000shares
                  authorized; 165,432shares
                  issued and outstandingat
                  Dec 31, 2007 and 2006
              
              
              165
              
              
              165Common
                  stock at $0.001 parvalue,
                  100,000,000 shares;authorized
                  223,658 sharesissued
                  and outstanding atDec
                  31, 2007 and 2006
              
              
              224
              
              
              224Additional
                  paid-in capital
              
              
              16,352,833
              
              
              16,099,333Statutory
                  reserves
              
              
              2,165,287
              
              
              2,127,978Retained
                  earnings
              
              
              3,317,141
              
              
              3,188,280Accumulated
                  othercomprehensive
                  incomeUnrealised
                  gain on investment
              
              
              -
              
              
              -Foreign
                  currency translation
              
              
              760,618
              
              
              1,180,288$
              22,596,514
              
              $
              22,596,514**TOTAL
                  LIABILITIES AND****STOCKHOLDERS’
                  EQUITY**
              
              $
              23,767,238
              
              $
              23,767,238
  F-28
  
 **SUNWAY
                  GLOBAL INC.****BALANCE
                  SHEETS**
 Original
              
              RestatedDecember
                  31,2006
              
              2006**ASSETS**Current
                  assetsCash
                  and cash equivalents
              
              $
              1,757,388
              
              $
              1,749,048Restricted
                  cash
              
              
              -
              
              
              -Short
                  term investments
              
              
              1,702,718
              
              
              1,702,718Trade
                  receivables, net
              
              
              1,467,963
              
              
              1,467,963Inventories
              
              
              376,708
              
              
              376,708Advances
                  to suppliers
              
              
              294,535
              
              
              294,535Prepayments
              
              
              334,658
              
              
              334,658Tender
                  deposits
              
              
              42,924
              
              
              42,924Travel
                  advances to shareholders
              
              
              7,288
              
              
              6,457Advances
                  to employees
              
              
              54,992
              
              
              54,992Total
                  current assets
              
              $
              6,039,174
              
              $
              6,030,003Amount
                  due from a related company
              
              
              -
              
              
              -Amount
                  due from a director
              
              
              -
              
              
              -Property,
                  plant and equipment, net
              
              
              4,715,150
              
              
              4,715,150Intangibles,
                  net
              
              
              1,157,950
              
              
              1,157,950**TOTAL
                  ASSETS**
              
              $
              11,912,274
              
              $
              11,903,103**LIABILITIES
                  AND****STOCKHOLDERS’
                  EQUITY**Current
                  liabilitiesShort
                  term bank loans
              
              $
              191,877
              
              $
              191,877Accounts
                  payable
              
              
              57,289
              
              
              57,289Income
                  tax payable
              
              
              249,844
              
              
              249,843Turnover
                  and other taxes
              
              
              110,886
              
              
              110,886Expected
                  warranty expenses
              
              
              22,811
              
              
              22,811Customers
                  deposits
              
              
              67,157
              
              
              67,157Accrued
                  liabilities
              
              
              164,537
              
              
              164,537Other
                  payables
              
              
              3,108
              
              
              3,110Total
                  current liabilities
              
              $
              867,509
              
              $
              867,510**TOTAL
                  LIABILITIES**
              
              $
              867,509
              
              $
              867,510
  F-29
  **SUNWAY
                  GLOBAL INC.****BALANCE
                  SHEETS (Continued)**
 Original
              
              RestatedDecember
                  31,2006
              
              2006**STOCKHOLDERS’
                  EQUITY**Series
                  A Convertible PreferredStock
                  $0.001 par value 400,000shares
                  authorized; 246,176shares
                  issued and outstandingat
                  Dec 31, 2007 and 2006
              
              $
              246
              
              $
              246Series
                  B Convertible PreferredStock
                  $0.001 par value 400,000shares
                  authorized; 165,432shares
                  issued and outstandingat
                  Dec 31, 2007 and 2006
              
              
              -
              
              
              165Common
                  stock at $0.001 parvalue,
                  100,000,000 shares;authorized
                  223,658 sharesissued
                  and outstanding atDec
                  31, 2007 and 2006
              
              
              224
              
              
              224Additional
                  paid-in capital
              
              
              4,476,665
              
              
              4,223,000Statutory
                  reserves
              
              
              1,161,382
              
              
              1,124,073Retained
                  earnings
              
              
              4,973,541
              
              
              4,844,680Accumulated
                  othercomprehensive
                  income
              
              
              432,707
              
              
              -Unrealised
                  gain on investment
              
              
              -
              
              
              423,537Foreign
                  currency translation
              
              
              -
              
              
              419,668$
              11,044,765
              
              $
              11,035,593**TOTAL
                  LIABILITIES AND****STOCKHOLDERS’
                  EQUITY**
              
              $
              11,912,274
              
              $
              11,903,103
 
 F-30
 
 **SUNWAY
                  GLOBAL INC.****STATEMENTS
                  OF INCOME**
 Original
              
              RestatedFor
                  Year Ended December 31,2007
              
              2007Net
                  revenues
              
              $
              11,865,138
              
              $
              11,865,138Cost
                  of net revenues
              
              
              (3,473,411
              )
              
              (3,473,411
              )Gross
                  profit
              
              $
              8,391,727
              
              $
              8,391,727Selling
                  expenses
              
              
              (234,792
              )
              
              (234,792
              )General
                  and administrative expenses
              
              
              (2,327,207
              )
              
              (2,327,207
              )Operating
                  income
              
              $
              5,829,728
              
              $
              5,829,728Interest
                  income/(expenses), net
              
              
              51,852
              
              
              51,852Gain
                  on disposal of investments
              
              
              1,346,989
              
              
              1,346,989Income
                    before income taxes
              
              $
              7,228,569
              
              $
              7,228,569Income
                  taxes
              
              
              (1,181,064
              )
              
              (1,181,064
              )Net
                  income
              
              $
              6,047,505
              
              $
              6,047,505Foreign
                  currency translation
              
              
              713,324
              
              
              760,620Unrealized
                  gain on investments
              
              
              -
              
              
              -Reclassification
                  adjustment
              
              
              (423,537
              )
              
              (423,537
              )Comprehensive
                  income
              
              $
              6,337,292
              
              $
              6,384,588Net
                  income per share:-Basic
              
              $
              27.04
              
              $
              27.04-Diluted
              
              $
              0.41
              
              $
              0.41Weighted
                  average number of common stock-Basic
              
              $
              223,653
              
              $
              223,658-Diluted
              
              $
              14,814,953
              
              $
              14,814,958
  F-31
  **SUNWAY
                  GLOBAL INC.****STATEMENTS
                  OF INCOME**
 Original
              
              RestatedFor
                  Year Ended December 31,2006
              
              2006Net
                  revenues
              
              $
              8,914,139
              
              $
              8,914,139Cost
                  of net revenues
              
              
              (2,386,996
              )
              
              (2,386,996
              )Gross
                  profit
              
              $
              6,527,143
              
              $
              6,527,143Selling
                  expenses
              
              
              (238,212
              )
              
              (238,212
              )General
                  and administrative expenses
              
              
              (1,405,232
              )
              
              (1,463,418
              )Operating
                  income
              
              $
              4,883,699
              
              $
              4,825,513Interest
                  income/(expenses), net
              
              
              33,421
              
              
              (5,175
              )Loss
                  on disposal of fixed assets
              
              
              (58,186
              )
              
              -Income
                    before income taxes
              
              $
              4,858,934
              
              $
              4,820,338Income
                  taxes
              
              
              (790,785
              )
              
              (790,785
              )Net
                  income
              
              $
              4,068,149
              
              $
              4,029,553Foreign
                  currency translation
              
              
              261,267
              
              
              299,863Unrealized
                  gain on investments
              
              
              423,537
              
              
              423,537Reclassification
                  adjustment
              
              
              -
              
              
              -Comprehensive
                  income
              
              $
              4,752,953
              
              $
              4,752,953Net
                  income per share:-Basic
              
              $
              18.19
              
              $
              18.02-Diluted
              
              $
              18.19
              
              $
              18.02Weighted
                  average number of common stock-Basic
              
              $
              223,653
              
              $
              223,658-Diluted
              
              $
              223,653
              
              $
              223,658
  F-32
 **SUNWAY
                  GLOBAL INC.**
 **STATEMENT
        OF CASH FLOWS**
 Original
              
              RestatedFor
                  Year Ended December 31,2007
              
              2007Cash
                  flows from operating activitiesNet
                  income
              
              $
              6,047,505
              
              $
              6,047,505Depreciation
              
              
              1,186,203
              
              
              1,186,203Amortization
              
              
              218,260
              
              
              218,260Profit
                  on disposal of investments
              
              
              (1,346,989
              )
              
              (1,346,989
              )Provision
                  for bad debs
              
              
              -
              
              
              -Loss
                  on disposal of fixed assets
              
              
              -
              
              
              -Adjustments
                  to reconcile net incometo
                  net cash provided by operating activities:Restricted
                  cash
              
              
              (491,049
              )
              
              -Trade
                  receivables, net
              
              
              42,054
              
              
              42,054Inventories
              
              
              (349,802
              )
              
              (349,802
              )Advances
                  to suppliers
              
              
              (975,910
              )
              
              (975,910
              )Prepayments
              
              
              223,112
              
              
              223,112Tender
                  deposits
              
              
              (81,747
              )
              
              (81,747
              )Travel
                  advances to shareholders
              
              
              (21,764
              )
              
              (21,764
              )Advances
                  to employees
              
              
              (470,106
              )
              
              (470,106
              )Accounts
                  payable
              
              
              178,921
              
              
              178,921Income
                  tax payable
              
              
              (104,819
              )
              
              (104,819
              )Turnover
                  and other taxes
              
              
              24,330
              
              
              24,330Expected
                  warranty expenses
              
              
              29,737
              
              
              29,737Customers
                  deposits
              
              
              131,064
              
              
              131,064Accrued
                  liabilities
              
              
              141,730
              
              
              141,730Other
                  payables
              
              
              31,362
              
              
              31,362Net
                  cash provided by operating activities
              
              $
              4,412,092
              
              $
              4,903,141Cash
                  flows from investing activitiesSale
                  of plant and equipment
              
              $
              -
              
              $
              -
 Restricted
                  cash
              
              
              -
              
              
              (491,049
              )
 Sale
                  of short term investments
              
              
              6,073,136
              
              
              6,073,136Advances
                  to related company
              
              
              (562,406
              )
              
              (562,406
              )Advances
                  to a director
              
              
              (988,757
              )
              
              (988,757
              )Purchase
                  of short term investments
              
              
              (3,413,328
              )
              
              (3,413,328
              )Purchase
                  of plant and equipment
              
              
              (619,627
              )
              
              (619,627
              )Purchase
                  of intangibles assets
              
              
              (5,687,457
              )
              
              (5,687,457
              )Net
                  cash used in investing activities
              
              $
              (5,198,439
              )
              $
              (5,689,488
              )Cash
                  flows from financing activitiesProceeds
                  from vision re: Debentures
              
              $
              199,202
              
              $
              199,202Preference
                  Stock
              
              
              4,977,133
              
              
              4,977,133Bank
                  borrowings
              
              
              -
              
              
              -Bank
                  loan repayments
              
              
              (196,923
              )
              
              (196,923
              )Net
                  cash provided by financing activities
              
              $
              4,979,412
              
              $
              4,979,412
  F-33
  
 **SUNWAY
                  GLOBAL INC.**
 **STATEMENT
        OF CASH FLOWS (Continued)**
 
 Original
              
              RestatedFor
                  Year Ended December 31,2007
              
              2007Net
                  in cash and cash equivalents sourced
              
              $
              4,193,065
              
              $
              4,193,065Effect
                  of foreign currency translation oncash
                  and cash equivalents
              
              
              (130,353
              )
              
              (122,013
              )Cash
                  and cash equivalents-beginning of year
              
              
              1,757,388
              
              
              1,749,048Cash
                  and cash equivalents-end of year
              
              $
              5,820,100
              
              $
              5,820,100
 
 
 2007
              
              2007Supplementary
                  cash flow information:Tax
                  paid
              
              $
              1,117,678
              
              $
              1,117,678Interest
                  received
              
              
              61,983
              
              
              61,983Interest
                  paid
              
              
              9,442
              
              
              9,442
 
 F-34
 
 **SUNWAY
                  GLOBAL INC.**
 **STATEMENT
        OF CASH FLOWS**
 
 Original
              
              RestatedFor
                  Year Ended December 31,2006
              
              2006Cash
                  flows from operating activitiesNet
                  income
              
              $
              4,068,149
              
              $
              4,029,553Depreciation
              
              
              874,376
              
              
              874,376Amortization
              
              
              24,745
              
              
              24,745Profit
                  on disposal of investments
              
              
              -
              
              
              -Provision
                  for bad debs
              
              
              2,891
              
              
              2,891Loss
                  on disposal of fixed assets
              
              
              58,186
              
              
              58,186Adjustments
                  to reconcile net incometo
                  net cash provided by operating activities:Restricted
                  cash
              
              
              -
              
              
              -Trade
                  receivables, net
              
              
              (578,245
              )
              
              (578,245
              )Inventories
              
              
              205,365
              
              
              205,365Advances
                  to suppliers
              
              
              48,209
              
              
              48,209Prepayments
              
              
              (68,507
              )
              
              (68,507
              )Tender
                  deposits
              
              
              (42,040
              )
              
              (42,040
              )Travel
                  advances to shareholders
              
              
              (3,588
              )
              
              (3,588
              )Advances
                  to employees
              
              
              (53,859
              )
              
              (53,859
              )Accounts
                  payable
              
              
              (286,297
              )
              
              (286,297
              )Income
                  tax payable
              
              
              154,564
              
              
              154,564Turnover
                  and other taxes
              
              
              50,234
              
              
              50,234Expected
                  warranty expenses
              
              
              22,341
              
              
              22,341Customers
                  deposits
              
              
              (331,002
              )
              
              (331,002
              )Accrued
                  liabilities
              
              
              66,702
              
              
              66,702Other
                  payables
              
              
              (12,247
              )
              
              (12,247
              )Net
                  cash provided by operating activities
              
              $
              4,199,977
              
              $
              4,161,381Cash
                  flows from investing activitiesSale
                  of plant and equipment
              
              $
              48,359
              
              $
              48,359Sale
                  of short term investments
              
              
              -
              
              
              -Advances
                  to related company
              
              
              -
              
              
              -Advances
                  to a director
              
              
              (2,736
              )
              
              (2,736
              )Purchase
                  of short term investments
              
              
              (1,301,195
              )
              
              (1,301,195
              )Purchase
                  of plant and equipment
              
              
              (2,261,375
              )
              
              (2,261,375
              )Purchase
                  of intangibles assets
              
              
              -
              
              
              -Net
                  cash used in investing activities
              
              $
              (3,516,947
              )
              $
              (3,516,947
              )Cash
                  flows from financing activitiesProceeds
                  from vision re: Debentures
              
              $
              -
              
              $
              -Preference
                  Stock
              
              
              -
              
              
              -Bank
                  borrowings
              
              
              375,851
              
              
              375,851Bank
                  loan repayments
              
              
              (451,021
              )
              
              (451,021
              )Net
                  cash used in financing activities
              
              $
              (75,170
              )
              $
              (75,170
              )
  F-35
  
 **SUNWAY
                  GLOBAL INC.**
 **STATEMENT
        OF CASH FLOWS (Continued)**
 
 Original
              
              RestatedFor
                  Year Ended December 31,2006
              
              2006Net
                  in cash and cash equivalents sourced
              
              $
              607,860
              
              $
              569,264Effect
                  of foreign currency translation oncash
                  and cash equivalents
              
              
              (38,797
              )
              
              (8,541
              )Cash
                  and cash equivalents-beginning of year
              
              
              1,188,325
              
              
              1,188,325Cash
                  and cash equivalents-end of year
              
              $
              1,757,388
              
              $
              1,749,048
 
 
 2006
              
              2006Supplementary
                  cash flow information:Tax
                  paid
              
              $
              965,229
              
              $
              965,229Interest
                  received
              
              
              62,688
              
              
              24,092Interest
                  paid
              
              
              28,863
              
              
              28,863
 
 F-36
 
 **SUNWAY
        GLOBAL INC.**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 **FOR
        THE YEARS ENDED DECEMBER 31, 2007 AND 2006**
 **(Stated
        in US Dollars)**
 
 **23.**
              **SUBSEQUENT
                  EVENT**
 
 On
        February 7, 2008, 210,886 of Series A Preferred shares were automatically
        converted into12,653,160 shares of common stock upon the completion of a
        86.3505-for-one reverse stock split (the “Reverse Split”) which occurred upon
        filing with the Secretary of State of the State of Nevada. Of the total 210,886
        shares issued to Rise Elite, 99,383 shares were held in escrow to cover
        contingencies related to future earnings.
  **Name
                  of shareholder**
              
              **Number
                  of Pref. A shares**
              
              **Conversion**
                **Rate**
              
              **Total
                  Common Shares****Preferred
                  A Stock**Issued
                  to Rise Elite upon share exchange
              
              
              210,886
              
              
              60
              
              
              12,653,160Shares
                  Held in Escrow
              
              
              99,383
              
              
              60
              
              
              5,962,980**Total**
              
              
              **111,503**
              
              
              
              
              
              **6,690,180**


F-37


**ITEM
      9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
      AND** **FINANCIAL
      DISCLOSURE**





On
      May
      31, 2007, the Company’s board of directors approved the dismissal of Bagell
      Josephs Levine & Co. (“Bagell Josephs Levine”) as our registered independent
      certified public accounting firm effective on June 11, 2007. At the same time,
      the Company’s board of directors appointed Samuel H. Wong & Co., LLP (“SWC”)
      as its new registered independent certified public accounting
      firm.





The
      reason for the change in accounting firm was that Sunway’s operating businesses
      had previously been audited by SWC, and our new management elected to continue
      this existing relationship. During the fiscal years ended September 30, 2005
      and
      2006, there were no disagreements between our company and Bagell Josephs Levine
      on any matter listed under Item 304 Section (a)(1)(iv) A to E of Regulation
      S-B,
      including accounting principles or practices, financial statement disclosure
      or
      auditing scope or procedure which, if not resolved to the satisfaction of Bagell
      Josephs Levine would have caused Bagell Josephs Levine to make reference to
      the
      matter in its reports on our financial statements.





Bagell
      Josephs Levine’s audit opinions on the financial statements for the fiscal years
      ended September 30, 2005 and 2006 did not contain an adverse opinion or
      disclaimer of opinion, nor was either opinion qualified or modified as to
      uncertainty, audit scope or accounting principles, except that the reports
      of
      Bagell Josephs Levine for the fiscal years ended December 31, 2005 and 2006
      indicated conditions which raised substantial doubt about the Company's ability
      to continue as a going concern.





Prior
      to
      engaging Bagell Josephs Levine, Bagell Josephs Levine did not provide our
      company with either written or oral advice that was an important factor
      considered by our company in reaching a decision to change our independent
      registered public accounting firm from Bagell Josephs Levine to
      SWC.





On
      January 28, 2008, Sunway Global Inc. (the “Company”) notified SWC that it was
      being terminated as the Company’s independent registered public accounting firm.
      The decision to dismiss SWC ****** as the
      Company’s independent registered public accounting firm was approved by the
      Company’s Board of Directors on January 28, 2008. At the same time, the
      Company’s Board of Directors approved the engagement Albert Wong & Co. LLP
      (“Albert Wong & Co.”) as its independent registered public accounting firm
      for the Company’s fiscal year ended December 31, 2007.





The
      Company engaged SWC from May 31, 2007 through January 28, 2008 (the “Engagement
      Period”). During the Engagement Period, SWC did not issue any reports on the
      Company’s financial statements for either of the Company’s two most recent
      fiscal years that contained an adverse opinion or a disclaimer of opinion or
      was
      qualified or modified as to uncertainty, audit scope or accounting principles.
      During the Engagement Period, the Company did not have any disagreements with
      SWC on any matter of accounting principles or practices, financial statement
      disclosure or auditing scope or procedure, which disagreements, if not resolved
      to SWC’s satisfaction, would have caused them to make reference thereto in their
      reports on the Company’s financial statements for such years.





The
      Company has provided SWC with a copy of its disclosures on Form 8-K/A dated
      as
      of February 20, 2008 prior to the filing of these disclosures and has requested
      that SWC furnish a letter addressed to the Securities and Exchange Commission
      stating whether or not SWC agrees with the statements made herein above and,
      if
      not, stating in which respects SWC does not agree. The Company will file an
      amendment to this Report to file as an exhibit a copy of the requested letter
      from SWC upon receipt.





During
      the fiscal year ended December 31, 2007, the Company did not consult with Albert
      Wong & Co. regarding (i) the application of accounting principles to a
      specified transaction, either completed or proposed, or the type of audit
      opinion that might be rendered on the Company’s financial statements, and no
      written report or oral advice was provided to the Company that was an important
      factor to be considered by the Company in reaching a decision as to an
      accounting, auditing or financial reporting issue; or (ii) any matter or event
      that was the subject of disagreement, as that term is defined in Item
      304(a)(1)(v) of Regulation S-B and the related instructions to Item 304 of
      Regulation S-B.





Prior
      to
      engaging Albert Wong & Co., Albert Wong & Co. did not provide our
      company with either written or oral advice that was an important factor
      considered by our company in reaching a decision to change our independent
      registered public accounting firm from SWC to Albert Wong &
Co.





**ITEM
      9A – CONTROLS AND PROCEDURES**





**Evaluation
      of Disclosure Controls and Procedures**





The
      Company maintains a set of disclosure controls and procedures designed to ensure
      that information required to be disclosed by the Company in the reports filed
      under the Securities Exchange Act, is recorded, processed, summarized and
      reported within the time periods specified by the SEC's rules and forms.
      Disclosure controls are also designed with the objective of ensuring that this
      information is accumulated and communicated to the Company's management,
      including the Company's chief executive officer and chief financial officer,
      as
      appropriate, to allow timely decisions regarding required
      disclosure.




30




During
      the course of internal evaluation, our accounting staff found misstatements
      in
      our previously reported financial statements for the fiscal years ended December
      31, 2007, and 2006 that required correction relating to: (1) the improper use
      of
      exchange rates of shareholders’ equity items. In specific, additional paid-in
      capital, statutory reserves, and retained earnings were overstated by $253,500,
      $37,309 and $128,861 respectively, and accumulated other comprehensive income
      was understated by $410,498 and (2) other misstatements identified, which were
      individually not material, including amounts related to cash and cash
      equivalents ,travel advances to directors, and interest expenses items. 
The impacts of the above have made the changes in figures as of December 31,
      2007 by a decrease in additional paid-in capital by $253,500, a decrease in
      statutory reserves by $37,309, a decrease in retained earnings by $128,861,
      and
      an increase of accumulated other comprehensive income by $419,670.





Based
      upon their evaluation as of the end of the period covered by this report, the
      Company's chief executive officer and chief financial officer concluded that,
      the Company's disclosure controls and procedures are effective to ensure that
      information required to be included in the Company's periodic SEC filings is
      recorded, processed, summarized, and reported within the time periods specified
      in the SEC rules and forms.





**Management’s
      Report on Internal Control over Financial Reporting**





The
      Company’s management is responsible for establishing and maintaining adequate
      internal control over financial reporting. The Company’s internal control system
      was designed to provide reasonable assurance to our management and Board of
      Directors regarding the preparation and fair presentation of published financial
      statements.





The
      Company’s management assessed the effectiveness of our internal control over
      financial reporting as of December 31, 2007. In making this assessment, it
      used
      the criteria set forth by the Committee of Sponsoring Organizations of the
      Treadway Commission (COSO) in *Internal
      Control—Integrated Framework* Based on its assessment the Company’s management believes that, as of December
      31, 2007, the Company’s internal control over financial reporting is effective
      based on those criteria.





This
      annual report does not include an attestation report of the Company’s registered
      accounting firm regarding internal control over financial reporting. The
      management’s report was not subject to attestation by the Company’s registered
      public accounting firm pursuant to temporary rules of the Securities and
      Exchange Commission.




**Changes
      in Internal Control over Financial Reporting**





No
      changes in the Company's internal control over financial reporting have come
      to
      management's attention during the Company's last fiscal quarter that have
      materially affected, or are likely to materially affect, the Company's internal
      control over financial reporting.





**Limitations
      on Controls**





Management
      does not expect that our disclosure controls and procedures or our internal
      control over financial reporting will prevent or detect all error and fraud.
      Any
      control system, no matter how well designed and operated, is based upon certain
      assumptions and can provide only reasonable, not absolute, assurance that its
      objectives will be met. Further, no evaluation of controls can provide absolute
      assurance that misstatements due to error or fraud will not occur or that all
      control issues and instances of fraud, if any, within the Company have been
      detected.





**ITEM
      9B – OTHER INFORMATION**





In
      December 2006, Sun Weishan was appointed as the Company’s Chief Operating
      Officer and o n December 1, 2007 was appointed as the Company’s
      Secretary.


31




**PART
      III**




**ITEM
      10 – DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE
      GOVERNANCE**





Set
      forth
      below is certain information regarding our directors and executive
      officers.  Our Board of Directors is comprised of two directors. 
There are no family relationships between any of our directors or executive
      officers. Each of our directors is elected to serve until the next annual
      meeting of our shareholders and until his successor is elected and qualified
      or
      until such director’s earlier death, removal or termination.





The
      following table sets forth certain information with respect to our directors
      and
      executive officers.




**Directors
                and Executive Officers**
            
            **Position/Title**
            
            **Age**Liu
                Bo
            
            President,
                Chief Executive Officer and Director
            
            42Samuel
                Sheng
            
            Chief
                Financial Officer
            
            37Sun
                Weishan
            
            Chief
                Operating Officer and Secretary
            
            46Liang
                Deli
            
            Director
            
            45




There
      are
      no family relationships among our directors or executive officers.





Our
      directors hold office until the next annual meeting of our shareholders, and
      until their successors have been qualified after being elected or appointed.
      Our
      officers serve at the discretion of our Board of Directors.





Set
      forth
      below is biographical information about our current directors and executive
      officers:





*Liu
      Bo* , our
      President and Chief Executive Officer and a director, has been Chairman of
      the
      Board, CEO and a director of Daqing Sunway since March 1993. Sunway is an
      affiliate of Rise Elite and WTL. Mr. Liu has a Bachelors degree in the field
      of
      Automatic Systems Engineering from Qiqihaer University in Heilongjiang Province,
      China in 1986.





*Liang
      Deli* became a
      director upon the resignation of Richard Astrom in June 2007. He has been Vice
      President of Sunway since August 1997, and is under contract to serve in that
      position until 2017. Mr. Liang’s area of focus is Sunway’s technology and market
      operations. Mr. Liang received a Bachelors degree in the field of Automatic
      Systems Design and Control from Shenyang Industry University in Liaoning
      Province, China in 1983.





*Samuel
      Sheng* has been
      Chief Financial Officer since November 2007. Mr. Sheng has held numerous
      management positions requiring expertise in financial and accounting matters.
      From 2004 until his appointment with the Company, he served as the Chief
      Financial Officer of American Lorain Corp, and from 2002 through 2004 he served
      as President and Chief Financial Officer of Linyi Jiangxing Steel Ltd.





*Sun*  *Weishan* has been
      Secretary and Chief Operating Officer since December 2007. Prior to joining
      the
      Company, from April 2001 to December 2006 Mr. Sun served as Executive Director,
      Vice President, Assistant General Manager, and Secretary of the Board of
      Directors for Daqing Sunway. Mr. Sun graduated from Yenshan University and
      Daqing Petroleum Institute with degrees in mechanical engineering and chemical
      engineering, respectively.





To
      our
      knowledge, during the last five years, none of our directors and executive
      officers (including those of our subsidiaries) has:





·
            Had
                a bankruptcy petition filed by or against any business of which such
                person was a general partner or executive officer either at the time
                of
                the bankruptcy or within two years prior to that
                time.





·
            Been
                convicted in a criminal proceeding or been subject to a pending criminal
                proceeding, excluding traffic violations and other minor
                offenses.





·
            Been
                subject to any order, judgment or decree, not subsequently reversed,
                suspended or vacated, of any court of competent jurisdiction, permanently
                or temporarily enjoining, barring, suspending or otherwise limiting
                his
                involvement in any type of business, securities or banking
                activities.




·
            Been
                found by a court of competent jurisdiction (in a civil action), the
                SEC,
                or the Commodities Futures Trading Commission to have violated a
                federal
                or state securities or commodities law, and the judgment has not
                been
                reversed, suspended or vacated.





32




**Audit
      Committee Financial Expert**





Our
      board
      of directors currently acts as our audit committee. Because we only recently
      consummated the Reverse Merger and appointed the current members of our board
      of
      directors, our board of directors has not yet determined whether we have a
      member who qualifies as an "audit committee financial expert" as defined in
      Item
      401(e) of Regulation S-B, and is "independent" as the term is used in Item
      7(d)(3)(iv) of Schedule 14A under the Exchange Act. Our board of directors
      is in
      the process of searching for a suitable candidate for this
      position.





**Audit
      Committee**





We
      have
      not yet appointed an audit committee, and our board of directors currently
      acts
      as our audit committee. At the present time, we believe that the members of
      board of directors are collectively capable of analyzing and evaluating our
      financial statements and understanding internal controls and procedures for
      financial reporting. Our company, however, recognizes the importance of good
      corporate governance and intends to appoint an audit committee comprised
      entirely of independent directors, including at least one financial expert,
      during our 2008 fiscal year.




**Section
      16 Beneficial Ownership Compliance**





Section
      16(a) of the Securities and Exchange Act of 1934, as amended, requires our
      executive officers and directors, and persons who beneficially own more than
      10%
      of the Company’s common stock, to file initial reports of ownership and reports
      of changes in ownership of our common stock with the SEC.





Based
      solely on the reports received by the Company and on written representations
      from certain reporting persons, we believe that the directors, executive
      officers and persons who beneficially own more than 10% of the Company’s common
      stock during the fiscal year ended December 31, 2007 have been in compliance
      with Section 16(a), except that Liu Bo, Liang Deli and David Wang did not timely
      file Form 3s on one occasion with respect to the reverse merger that occurred
      on
      June 6, 2007, and Samuel Sheng and Sun Weishan did not timely file Form 3s
      with
      respect to their appointment as chief operating officer and chief financial
      officer on December 1, 2007 and November 31, 2007, respectively..




**ITEM
      11 – EXECUTIVE COMPENSATION**





The
      following table sets forth information concerning the total compensation that
      we
      have paid or that has accrued on behalf of our Chief Executive Officer and
      other
      executive officers during the years ended December 31, 2007 and
      2006.





**Summary
      Compensation Table**





The
      following is a summary of the compensation paid by us to the individuals who
      have served as our CEO and any executive officers who have received compensation
      in excess of $100,000 for the two years ended December 31, 2007 and
      2006.





Salary
              (cash or
              non-cash)
            
            Bonus
              (cash or
              non-cash)
            
            Stock
              Awards
            
            Option
              Awards
            
            Non-Equity
              Incentive Plan
              Compensation
            
            Non-Qualified
              Deferred
              Compensation
              Earnings
            
            All Other
              Compensation
            
            TotalName and Principal Position
            
            Year
            
            ($)
            
            ($)
            
            ($)
            
            ($)
            
            ($)
            
            ($)
            
            ($)
            
            ($)Liu
                Bo
              CEO
                and Director (current)
            
            
            2007
            
            
            63,158
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            63,1582006
            
            
            46,068
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            46,068Richard
                Astrom
              CEO
                (former)
            
            
            2007
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -2006
            
            
            13,734
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            13,734Samuel
                Sheng
              CFO
                (current)
            
            
            2007
            
            
            3,378
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            3,3782006
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -David
                Wang
              CFO
                (former)
            
            
            2007
            
            
            39,473
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            394732006
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -




33




**Outstanding
      Equity Awards at Fiscal Year-End**





As
      of our
      fiscal years ended December 31, 2007 and 2006, we did not have any stock option
      plan or stock incentive plan and there were no outstanding equity awards as
      of
      our fiscal years ended December 31, 2007 and 2006. No equity awards were granted
      during the year ended December 31, 2007.





**Employment
      Contracts and Termination of Employment and Change-In-Control
      Arrangements**





We
      have
      the following employment contracts with the named executive
      officers:





Sun
      Weishan has an employment agreement with the Company. Pursuant to this
      employment agreement, Mr. Sun shall receive an annual base salary of $40,540
      (RMB300,000) and may also receive a year-end performance bonus to be determined
      by the Board. Mr. Sun’s initial term as Secretary terminates December 30, 2010.
      If the Mr. Sun and the Company have not agreed to new employment terms within
      a
      month of expiration of the term, Mr. Sun’s terms of employment will be extended,
      and Mr. Sun will continue to serve as Secretary under the original terms of
      the
      employment agreement for up to three years thereafter.





Samuel
      Sheng has an employment agreement with the Company for a renewable three-year
      term beginning December 1, 2007. Pursuant to this employment agreement, Mr.
      Sheng shall receive an annual base salary of $40,540 (RMB300,000), subject
      to a
      year-end bonus to be determined by the Board of Directors.





**Director
      Compensation**





Other
      than as disclosed in the Summary Compensation Table above, Liang Deli received
      $46,068 for her services as a member of the Board of Directors for an initial
      term expiring on June 30, 2012. Our directors are also reimbursed for reasonable
      travel and other expenses incurred in connection with attending meetings of
      the
      board and its committees, if any.




**ITEM
      12- SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND** **RELATED
      STOCKHOLDER MATTERS**





The
      following table lists stock ownership of our common stock as of July 24,
      2008.  The information includes beneficial ownership by (i) holders of more
      than 5% of our common stock, (ii) each of our current directors and executive
      officers and (iii) all of our directors and executive officers as a
      group.





The
      information is determined in accordance with Rule 13d-3 promulgated under the
      Exchange Act based upon information furnished by the persons listed or contained
      in filings made by them with the Commission. Except as noted below, to our
      knowledge, each person named in the table has sole voting and investment power
      with respect to all shares of our common stock beneficially owned by
      them.





**Amount
      and Nature of Beneficial Ownership**




Name and Address of
              Beneficial Owner
            
            Director/Officer
            
            Amount and Nature of
              Beneficial Ownership (1)
            
            Percentage
              of Class (2)Rise
                Elite International Limited
            
            
            
            
            
            12,653,160
            (2)
            
            66.96
            %Vision
                Opportunity Master Fund, Ltd.
            
            
            
            
            
            5,205,369
            (3)
            
            28.22
            %Liu
                Bo
            
            
            President, Chief Scientific
              Officer and Director
            
            
            8,906,580
            (2)
            
            47.13
            %Liang
                Deli
            
            
            Vice President and
              Director
            
            
            969,240
            (2)(4)
            
            5.13
            %Samuel
                Sheng
            
            
            Chief FinancialOfficer
            
            
            -
            (5)
            
            -Sun
                Weishan
            
            
            Chief Operating Officer
              and Secretary
            
            
            -
            (5)
            
            -All
                directors and officers as a group
            
            
            
            
            
            9,875,820
            
            
            52.26
            %




34




(1)
      Applicable percentage ownership is based on 18,446,045 shares of common stock
      outstanding as of June 26, 2008, together with securities exercisable or
      convertible into shares of common stock within 60 days of June 26, 2008 for
      each
      stockholder. Beneficial ownership is determined in accordance with the rules
      of
      the Securities and Exchange Commission and generally includes voting or
      investment power with respect to securities. Shares of common stock that are
      currently exercisable or exercisable within 60 days of July 24, 2008 are deemed
      to be beneficially owned by the person holding such securities for the purpose
      of computing the percentage of ownership of such person, but are not treated
      as
      outstanding for the purpose of computing the percentage ownership of any other
      person.




(2)
      Liu
      Bo and Liang Deli are shareholders of Rise Elite, holding 70.39% and 7.66%
      ownership interest in Rise Elite, respectively. Neither Mr. Liu or Mr. Liang
      hold any shares in their own right.





(3)
      Adam
      Benowitz, Managing Member holds the power to vote and dispose of the subject
      shares.





(4)
      Liang
      Deli was appointed and Richard Astrom resigned as a director of the Company
      in connection with the consummation of the Share Exchange Agreement effective
      on
      the tenth day following the mailing of an information statement on Schedule
      14F-1 relating to the change in control of our board of directors, which we
      filed with the SEC on June 4, 2007..





(5)
      Samuel Sheng was appointed as Chief Financial Officer and Sun Weishan was
      appointed as Secretary to replace David Wang, who resigned as Chief Financial
      Officer and Secretary on November 6, 2007.




**ITEM
      13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND
      DIRECTOR****INDEPENDENCE**





**Certain
      Relationships and Related Transactions**





Except
      as
      in the transactions related to the June 2007 reverse merger set forth below,
      there have been no material transactions during the past two years between
      us
      and any officer, director or any shareholder owning greater than 5% of our
      outstanding shares, or any of their immediate family members:




*Share
      Exchange Agreement*





On
      June
      6, 2007, we acquired WTL through a share exchange transaction with WTL and
      Rise
      Elite, the owner of 100% of the outstanding voting stock of WTL. Our President
      and Chief Executive Officer, Liu Bo and our director, Liang Deli, hold 70.39%
      and 7.66% ownership interests, respectively, in Rise Elite. As part of the
      reverse merger transaction, Rise Elite and the Company consummated a share
      exchange transaction on June 5, 2007, in which Rise Elite exchanged all its
      ownership interest in SWT for 210,886 shares of our Series A Preferred pursuant
      to the Share Exchange Agreement. In addition, up to 166,667 shares of Series
      A
      Preferred will be issued to Rise Elite if the Company meets certain earnings
      targets in 2007. As a result of the transactions described in this report,
      Vision owns 97% of our Series B Preferred and 66.3% of our common
      stock.





*Securities
      Escrow Agreement*





Based
      on
      their ownership of shares of Rise Elite, Liang Deli and Liu Bo also had
      interests in the arrangement under the Securities Escrow Agreement, in which
      Rise Elite will either forfeit or take delivery of a number of shares of Series
      A Preferred based on whether the Company meets performance targets for 2007
      and
      2008.





*Shell
      Purchase Agreement*





Liu
      Bo,
      Liang Deli, and David Wang, our former Secretary and Chief Financial Officer,
      were officers and directors of Rise Elite. Each of them had an interest in
      the
      shell purchase transaction because in that transaction, Rise Elite, and
      indirectly its directors and officers, acquired the right to determine all
      of
      our directors. Mr. Wang subsequently resigned as Secretary and Chief Financial
      Officer on November 6, 2007.





Also
      under the Shell Purchase Agreement, Vision purchased, for $199,202 in cash,
      an
      outstanding debenture, payable by the Company in the amount of $199,202 with
      payment due in 2003, from its three holders, Sea Lion Investors LLC, Myrtle
      Holdings LLC, and Equity Planners LLC. The debenture was converted into
      12,734,689 shares of our Common Stock at the closing of the private financing
      transaction.





*Series
      B Purchase Agreement*





Under
      the
      Series B Purchase Agreement, Vision purchased 160,494 shares of our newly-issued
      Series B Preferred for $6.5 million, making Vision the holder of 97% of that
      class of stock.




35




*Lock-Up
      Agreement*





Under
      a
      Lock-Up Agreement dated June 5, 2007 by and between the Company and Rise Elite,
      Rise Elite agreed that it will not sell or transfer any shares of our common
      stock, Preferred Series A or Preferred Series B until at least 18 months after
      the effective date of the initial registration statement to register the shares
      of our common stock issuable upon conversion of our Series B Preferred, and
      it
      will not sell or transfer more than one-twelfth of its total holdings of our
      common stock, Preferred Series A or Preferred Series B during any one month
      until at least 24 months after the effective date of the registration
      statement.





*Other*





Vision
      received 7,990 of the shares of Series A Preferred to which Kuhns Brothers
      was
      entitled under the Placement Agent Engagement Agreement. Kuhns Brothers was
      engaged by us to provide financial advisory and other services to Sunway,
      including assistance in identifying a shell company that was an appropriate
      target for a reverse merger transaction through which Sunway could become a
      public company. Kuhns Brothers assigned these shares to Vision as an incentive
      to Vision to serve as lead investor in the private financing transaction.





**Director
      Independence**





The
      Company currently has two directors, Liu Bo and Liang Deli. Neither director
      qualifies as an “independent” director as that term is defined under the
      National Association of Securities Dealers Automated Quotation system. Our
      company, however, recognizes the importance of good corporate governance and
      intends to appoint an audit committee comprised entirely of independent
      directors, including at least one financial expert, during our 2008 fiscal
      year.





**ITEM
      14. PRINCIPAL ACCOUNTANT FEES AND SERVICES**





Audit
      Fees. The aggregate fees incurred by the Company’s independent registered public
      accounting firms, for professional services rendered for the audit of our annual
      financial statements for the years ended December 31, 2007 and December 31,
      2006, and for the reviews of the financial statements included in our Quarterly
      Reports on Form 10-QSB and other SEC filings during those fiscal years were
      approximately $15,000 (SWC) and $50,000 (Albert Wong),
      respectively.





Audit-Related
      Fees. The aggregate fees incurred by the Company’s independent registered public
      accounting firms were $ 22,610 ( SWC) and $1615 (Albert Wong), respectively,
      for
      audit-related services during the years ended December 31, 2007 and December
      31,
      2006.





Tax
      Fees.
      The Company did not incur any other fees from its independent registered public
      accounting firms for services rendered to the Company, other than the services
      covered in "Audit Fees" for the fiscal years ended December 31, 2007 and
      December 31, 2006.





All
      Other
      Fees. The Company did not incur any other fees from its independent registered
      public accounting firms for services rendered to the Company, other than the
      services covered in "Audit Fees" for the fiscal years ended December 31, 2007
      and December 31, 2006.





**ITEM
      15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES**





***Exhibits:***





**Exhibit**
              **No.**
            
            **Description
                of Exhibit**3.1
            
            Articles
                of Incorporation, as amended and corrected.*3.2
            
            Bylaws.**3.3
            
            Specimen
                of Common Stock certificate.*3.4
            
            Certificate
                of Designations authorizing the Series A Convertible Preferred Stock,
                as
                amended and corrected.*3.5
            
            Certificate
                of Designations authorizing the Series B Convertible Preferred Stock,
                as
                amended and corrected.*4.1
            
            Series
                B Stock Purchase Agreement, dated as of June 5, 2007, by and among
                the
                Company, Vision Opportunity Master Fund, Ltd. and each of the other
                investors party thereto.*4.2
            
            Registration
                Rights Agreement, dated as of June 5, 2007, by and between the Company
                and
                Vision Opportunity Master Fund, Ltd.*4.3
            
            Lock-Up
                Agreement, dated as of June 5, 2007, by and among the Company and
                Rise
                Elite.*4.4
            
            Form
                of Series A Warrant*4.5
            
            Form
                of Series B Warrant*4.6
            
            Form
                of Series C Warrant*4.7
            
            Form
                of Series D Warrant*4.8
            
            Form
                of Series J Warrant*4.9
            
            Form
                of Series E Warrant issued to Kuhns
                Brothers*




36




10.1
            
            Share
                Exchange Agreement, dated as of June 5, 2007, by and between the
                Company,
                Rise Elite and World Through Limited.*10.2
            
            Securities
                Purchase Agreement, dated as of June 5, 2007, by and between the
                Company,
                Rise Elite, Vision Opportunity Master Fund, Richard Astrom, Christopher
                Astrom, and certain other parties signatory thereto.10.3
            
            Form
                of Escrow Agreement, dated June 5, 2007, by and between the Company,
                Rise
                Elite, Vision and Loeb and Loeb LLP.***10.4
            
            Engagement
                Letter Agreement, dated September 1, 2006, by and
                between Sunway and Kuhns Brothers, Inc.*10.5
            
            Form
                of Securities Escrow Agreement, dated June 5, 2007, by and between
                the
                Company, Vision Opportunity Master Fund, Ltd., Rise Elite and Loeb
                and
                Loeb LLP.*10.6
            
            Form
                of Consignment Agreement, dated as of June 5, 2007, between Rise
                Elite and
                the Shareholders of Sunway.***10.7
            
            Form
                of Consignment Transfer Agreement, dated as of June 5, 2007, between
                Rise
                Elite and WTL.***10.8
            
            Exclusive
                Purchase Option Agreement, dated as of June 5, 2007, between shareholders
                of Sunway and WTL.***10.9
            
            Intellectual
                Property Transfer Agreement, dated as of June 5, 2007, between Sunway
                and
                SWT.***10.10
            
            Intellectual
                Property Licensing Agreement, dated as of June 5, 2007, between Sunway
                and
                SWT.***10.11
            
            Consigned
                Management Agreement, dated as of June 5, 2007, between SWT, Sunway,
                and
                the shareholders of Sunway.***10.12
            
            Loan
                Agreement, dated as of June 5, 2007, between Sunway and
                SWT.***10.13
            
            Equipment
                Lease Agreement, dated as of June 5, 2007, between Sunway and
                SWT.***10.14
            
            Amendment
                to Registration Rights Agreement dated July 24, 2007 by and between
                the
                Company, Vision Opportunity Master Fund, Ltd., and Columbia China
                Capital
                Group, Inc.21.1
            
            List
                of Subsidiaries*31.1
            
            Certification
                by Chief Executive Officer pursuant to Sarbanes Oxley Act of 2002
                Section
                302.31.2
            
            Certification
                by Chief Financial Officer pursuant to Sarbanes Oxley Act of 2002
                Section
                302.32.1
            
            Certification
                by Chief Executive Officer pursuant to Sarbanes-Oxley Act of 2002
                Section
                906.32.2
            
            Certification
                by Chief Financial Officer pursuant to Sarbanes-Oxley Act of 2002
                Section
                906.





*
      Incorporated by reference to the exhibit of the same number to our report on
      form 8-K filed with the SEC on June 12, 2007.


**
      Incorporated by reference to the exhibit of the same number to our report on
      form 8-K/A filed with the SEC on June 20, 2007.





***
      Incorporated by reference to the exhibit of the same number to our report on
      form 8-K/A filed with the SEC on June 27, 2007.


37





**SIGNATURES**




In
      accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused
      this report to be signed on its behalf by the undersigned, thereunto duly
      authorized.




SUNWAY
                GLOBAL, INC.August
                25, 2008
            By:
            /s/
                Liu BoLiu
                BoChief
                Executive Officer and Chairman (principal executive
              officer)





In
      accordance with the Exchange Act, this report has been signed below by the
      following persons on behalf of the registrant and in the capacities and on
      the
      dates indicated.





Name
            
            Title
            
            DateChief
                Executive Officer and Chairman of the
            
            August
                25, 2008/s/
                  Liu Bo
            
            Board
                of DirectorsLiu
                BoChief
                Financial Officer (principal financial
            
            August
                  25, 2008/s/
                  Samuel Sheng
            
            and
                accounting officer)Samuel
                Sheng/s/
                Liang Deli
            
            Director
            
            August
                  25, 2008Liang
                Deli




38