WAYTRONX,
      INC.





UNITED
      STATES SECURITIES AND EXCHANGE COMMISSION


WASHINGTON,
      D.C. 20549





FORM
      10-Q





QUARTERLY
      REPORT UNDER SECTION 13 OR 15(D)


OF
      THE
      SECURITIES EXCHANGE ACT OF 1934





For
      quarter ended March 31, 2008





Commission
      File Number 0-29195





WAYTRONX,
      INC.


(Name
      of
      Small Business Issuer in Its Charter)





Colorado
            (3990)
            84-1463284(State
                or jurisdiction of
            (Primary
                Standard Industrial
            (I.R.S.
                Employerincorporation
                or organization)
            Classification
                Code Number)
            Identification
                No.)





2332
      La
      Mirada Drive, Suite 400


Vista,
      CA
      92081-7861


(503)
      417-1700


(Address
      and Telephone Number of Principal Executive Offices and Principal Place of
      Business)





William
      J. Clough, CEO/President


Waytronx,
      Inc.


2332
      La
      Mirada Drive, Suite 400


Vista,
      CA
      92081-7861


(503)
      417-1700


(Name,
      Address and Telephone Number of Agent for Service)





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


YES x NO 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 12b-2 of the Exchange act.




Large
                accelerated filer o
            Accelerated
                filerNon-accelerated
                filer o (Do
                not
                check is a smaller reporting company)
            Smaller
                reporting company x





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act).


YES o  NO x





As
      of May
      9, 2008, there were 162,750,479 shares of the Company's common stock
      outstanding, 50,543 shares of Series A Convertible Preferred Stock outstanding,
      no shares of Series B Convertible Preferred Stock outstanding, and no shares
      of
      Series C Convertible Preferred Stock outstanding.





WAYTRONX,
      INC.





INDEX





Part
                IPageItem
                1
            Financial
                Statements
            3Condensed
                Balance Sheets (unaudited)
            3Condensed
                Statements of Operations (unaudited)
            4Condensed
                Statements of Cash Flows (unaudited)
            5Notes
                to the Condensed Financial Statements (unaudited)
            7Item
                2
            Management’s
                Discussion and Analysis ofFinancial
                Condition and Results of Operations
            11Overview
            11Intellectual
                Property
            12Critical
                Accounting Policies
            12Liquidity
                and Capital Resources
            13Results
                of Operations
            14Item
                3
            Quantitative
                and Qualitative Disclosures AboutMarket
                Risk
            15Item
                4T.
            Controls
                and Procedures
            15Part
                IIItem
                1
            Legal
                Proceedings.
            16Item
                1A
            Risk
                Factors
            16Item
                2
            Unregistered
                Sales of Equity Securities andUse
                of Proceeds
            16Item
                3
            Defaults
                Upon Senior Securities
            16Item
                4
            Submission
                of Matters to a Vote of Security Holders
            16Item
                5
            Other
                Information
            16Item
                6
            Exhibits
                and Reports on Form 8-K
            17Signatures
            17Exhibits
            18


2


**PART
      I. FINANCIAL INFORMATION**





**Item
      1. Financial Statements**





**Waytronx,
      Inc.**


**Condensed
      Balance Sheets**




March 31,
            
            December 31,2008
            
            2007(unaudited)Assets:Current
                assets:Cash
                and cash equivalents
            
            $
            36,400
            
            $
            42,639Accounts
                receivable, net of allowance of $19,803
            
            
            30,088
            
            
            7,000Inventories,
                net
            
            
            12,420
            
            
            88,350Prepaid
                expenses and other
            
            
            54,231
            
            
            20,160Total
                current assets
            
            
            133,139
            
            
            158,149Property
                and equipment, net
            
            
            13,640
            
            
            20,641Other
                assets:Technology
                rights, net
            
            
            4,261,864
            
            
            4,321,493Patent
                costs, net
            
            
            676,070
            
            
            654,861Deposits
                and other
            
            
            43,878
            
            
            58,710Notes
                receivable, net
            
            
            -
            
            
            91,500Total
                other assets
            
            
            4,981,812
            
            
            5,126,564Total
                assets
            
            $
            5,128,591
            
            $
            5,305,354Liabilities
                and stockholders' equityCurrent
                liabilities:Accounts
                payable
            
            $
            400,138
            
            $
            294,327Preferred
                stock dividends payable
            
            
            5,054
            
            
            5,054Accrued
                expenses
            
            
            191,301
            
            
            135,898Accrued
                compensation
            
            
            58,756
            
            
            90,858Deferred
                revenue
            
            
            2,010
            
            
            13,080Convertible
                notes payable, net of discounts of $55,165
            
            
            1,717,594
            
            
            1,594,834Total
                current liabilities
            
            
            2,374,853
            
            
            2,134,051Long
                term notes payable
            
            
            100,000
            
            
            100,000Long
                term notes payable, related party
            
            
            1,000,000
            
            
            1,000,000Total
                liabilities
            
            
            3,474,853
            
            
            3,234,051Commitments
                and contingencies (Note 6)
            
            
            -
            
            
            -Stockholders'
                equity:Preferred
                stock, par value $0.001; 10,000,000 shares authorized
            
            
            -
            
            
            -Convertible
                Series A, preferred stock, 5,000,000 shares authorized, 75,543 shares
                issued and outstanding liquidation preference of $75,543 at December
                31,
                2007
            
            
            51
            
            
            76Convertible
                Series B preferred stock, 30,000 shares authorized, and no shares
                outstanding at March 31, 2008 and December 31, 2007
            
            
            -
            
            
            -Common
                stock, par value $0.001; 200,000,000 shares authorized, 158,450,479
                and
                156,780,626 shares issued and outstanding at March 31, 2008 and December
                31, 2007, respectively
            
            
            158,451
            
            
            156,781Common
                stock issuable, par value $0.001; (1,100,000 shares at
                3/31/2008)
            
            
            1,000
            
            
            -Additional
                paid-in capital
            
            
            51,444,533
            
            
            50,832,165Subscription
                receivable
            
            
            (34,555
            )
            
            (200,000
            )Accumulated
                deficit
            
            
            (49,915,742
            )
            
            (48,717,719
            )Total
                stockholders' equity
            
            
            1,653,738
            
            
            2,071,303Total
                liabilities and stockholders' equity
            
            $
            5,128,591
            
            $
            5,305,354





See
      accompanying notes to financial statements


3


**Waytronx,
      Inc.**


**Condensed
      Statement of Operations**


**(unaudited)**





For the three months ended March 31,2008
            
            2007Revenues:Product
                Sales
            
            $
            60,645
            
            $
            49,393Total
                Revenue
            
            
            60,645
            
            
            49,393Cost
                of revenues
            
            
            82,083
            
            
            51,225Gross
                profit (loss)
            
            
            (21,438
            )
            
            (1,832
            )Operating
                expensesSelling,
                general and administrative
            
            
            603,999
            
            
            442,358Research
                and development
            
            
            341,184
            
            
            359,097Total
                operating expenses
            
            
            945,183
            
            
            801,455Loss
                from operations
            
            
            (966,621
            )
            
            (803,287
            )Other
                income (expense)Other
                income
            
            
            2,378
            
            
            11,500Other
                expense
            
            
            (91,500
            )
            
            -Investment
                income
            
            
            -
            
            
            1,402Interest
                expense - intrinsic value of convertible debt and amortization of
                debt
                discount
            
            
            (58,967
            )
            
            (132,607
            )Interest
                expense
            
            
            (83,313
            )
            
            (51,759
            )Total
                other income (expense), net
            
            
            (231,402
            )
            
            (171,464
            )Net
                loss
            
            
            (1,198,023
            )
            
            (974,751
            )Preferred
                stock dividends
            
            
            -
            
            
            -Net
                loss allocable to common stockholders
            
            $
            (1,198,023
            )
            $
            (974,751
            )Basic
                and diluted net loss per common share allocable to common
                stockholders
            
            $
            (0.01
            )
            $
            (0.01
            )Basic
                and diluted weighted average common shares outstanding
            
            
            159,559,925
            
            
            147,728,670





See
      accompanying notes to financial statements


4


**Waytronx,
      Inc.**


**Condensed
      Statements of Cash Flows**


**(unaudited)**





For the three months ended March 31,2008
            
            2007Cash
                flows from operating activities:Net
                loss
            
            $
            (1,198,023
            )
            $
            (974,751
            )Adjustments
                to reconcile net loss to net cash used in operating
                activities:Warrants
                and notes issued for compensation and services
            
            
            196,208
            
            
            3,292Non-cash
                interest expense, amortization of beneficial conversion value and
                warrant
                related debt discounts
            
            
            47,760
            
            
            132,607Amortization
                of technology rights
            
            
            59,629
            
            
            59,523Amortization
                of patent costs
            
            
            5,719
            
            
            -Amortization
                of website development
            
            
            3,578Compensation
                and services expense payable in common stock
            
            
            6,250
            
            
            6,250Depreciation
            
            
            7,001
            
            
            14,402Provision
                for doubtful accounts
            
            
            91,500
            
            
            -(Increase)
                decrease in assets:Accounts
                receivable and other receivables
            
            
            (23,088
            )
            
            4,238Inventory
            
            
            75,930
            
            
            (56,967
            )Prepaid
                expenses and other current assets
            
            
            (34,071
            )
            
            14,941Deposits
                and other assets
            
            
            11,254
            
            
            180Increase
                (decrease) in liabilities:Accounts
                payable
            
            
            105,811
            
            
            72,205Accrued
                expenses
            
            
            55,403
            
            
            -Accrued
                compensation
            
            
            (32,102
            )
            
            -Deferred
                revenues
            
            
            (11,070
            )
            
            -Net
                cash used in operating activities
            
            
            (632,311
            )
            
            (724,080
            )Cash
                flows from investing activities:Investment
                in technology rights
            
            
            -
            
            
            (50,000
            )Investment
                in patents
            
            
            (26,928
            )
            
            (30,498
            )Net
                cash used in investing activities
            
            
            (26,928
            )
            
            (80,498
            )Cash
                flows from financing activities:Proceeds
                from notes and loans payable, net of expenses
            
            
            -
            
            
            277,500Proceeds
                from notes and loans payable, related party
            
            
            75,000
            
            
            -Proceeds
                from sales of common stock and exercise of warrants and options,
                net of
                offering costs
            
            
            578,000
            
            
            2,409Net
                cash provided by financing activities
            
            
            653,000
            
            
            279,909Cash
                and cash equivalents at end of year
            
            
            (6,239
            )
            
            45,832Cash
                and cash equivalents at beginning of year
            
            
            42,639
            
            
            570,501Net
                  increase (decrease) in cash and cash
                  equivalents
            
            $
            36,400
            
            $
            (524,669
            )


5


**Waytronx,
      Inc.**


**Condensed
      Statements of Cash Flows (continued)**


**(unaudited)**





For the three months ended March 31,2008
            
            2007Supplemental
                disclosure of cash flow information:Interest
                paid
            
            $
            27,500
            
            $
            51,759Income
                taxes paid
            
            $
            -
            
            $
            -Supplemental
                disclosure of non-cash investing and financing activities:Discount
                on debt for intrinsic value of convertible notes payable
            
            $
            11,208
            
            $
            87,786Common
                stock issued for conversion of Series A preferred stock and
                dividends
            
            $
            25
            
            $
            15Common
                stock issued for services and compensation
            
            $
            125,000
            
            $
            1,333Common
                stock issued for the conversion of debt
            
            $
            -
            
            $
            127,500





See
      accompanying notes to financial statements


6


**Waytronx,
      Inc.**





**Notes
      to the Condensed Consolidated Financial Statements**


**(Unaudited)**





**1.**
            **BASIS
                OF PRESENTATION AND GOING
                CONCERN**





Waytronx,
      Inc. (formerly known as OnScreen Technologies, Inc.) has pioneered and is
      commercializing innovative thermal management solutions capable of
      revolutionizing the LED display, semiconductor and electronic packaging
      industries. Utilizing patented and patent-pending thermal technologies and
      architecture we have developed highly advanced, proprietary LED display
      solutions and cooling applications. Waytronx is primarily focused on the
      commercialization of their innovative thermal cooling technology,
      WayCool





The
      accompanying financial statements have been prepared on the assumption that
      Waytronx will continue as a going concern. As reflected in these financial
      statements, we had a net loss of $1,198,023 cash used in operations of $632,311
      for the three months ended March 31, 2008, and an accumulated deficit of
      $49,915,742 at March 31, 2008. The ability to continue as a going concern is
      dependent upon the ability to bring the WayCool products to market, generate
      increased sales, obtain positive cash flow from operations and raise additional
      capital. The financial statements do not include any adjustments that may result
      from the outcome of this uncertainty.





We
      are
      continuing to raise additional capital which we believe will provide sufficient
      cash to meet the funding required to commercialize our technology product lines
      during 2008. As we continue to expand and develop technology and product lines,
      additional funding will be required. There have been negative cash flows from
      operations and incurred net losses in the past and there can be no assurance
      as
      to the availability or terms upon which additional financing and capital might
      be available if needed.





The
      accompanying unaudited financial statements have been prepared in accordance
      with accounting principles generally accepted in the United States of America
      and the rules and regulations of the United States Securities and Exchange
      Commission for interim financial information which includes condensed financial
      statements. Accordingly, they do not include all the information and footnotes
      necessary for a comprehensive presentation of financial position and results
      of
      operations and should be read in conjunction with the Annual Report, Form 10-KSB
      for the year ended December 31, 2007.





It
      is
      management's opinion that all material adjustments (consisting of normal
      recurring adjustments) have been made which are necessary for a fair financial
      statement presentation. The results for the interim period are not necessarily
      indicative of the results to be expected for the year.





**2.**
            **USE
                OF ESTIMATES**





The
      preparation of financial statements in conformity with accounting principles
      generally accepted in the United States of America requires management to make
      estimates and assumptions that affect the reported amounts of assets and
      liabilities, disclosure of contingent assets and liabilities at the date of
      the
      financial statements, and the reported amounts of revenues and expenses during
      the reporting period. Actual results could differ from those estimates.
      Significant estimates in 2008 and 2007 include estimates used to review the
      Company’s long-lived assets for impairment, inventory valuation, valuations of
      non-cash capital stock issuances, valuations of derivatives and the valuation
      allowance on deferred tax assets.




7




**3.**
            **LOSS
                PER COMMON SHARE**





Common
      stock equivalents in the three months ended March 31, 2008 and 2007 were
      anti-dilutive due to the net losses sustained during these periods, thus the
      diluted weighted average common shares outstanding in these periods are the
      same
      as the basic weighted average common shares outstanding.





At
      March
      31, 2008 and 2007, 20,086,873 and 33,862,096, respectively, potential common
      stock shares are issuable upon the exercise of warrants and options and
      conversion of debt to common stock. These are excluded from computing the
      diluted net loss per share as the effect of such shares would be
      anti-dilutive.





**4.**
            **INCOME
                TAXES**





An
      income
      tax benefit has not been recognized for operating losses generated in the three
      month periods ended March 31, 2008 and 2007 based on uncertainties concerning
      the ability to generate taxable income in future periods. The tax benefit for
      the three months ended March 31, 2008 and 2007 is offset by a valuation
      allowance established against deferred tax assets arising from operating losses
      and other temporary differences, the realization of which could not be
      considered more likely than not. In future periods, tax benefits and related
      deferred tax assets will be recognized when management considers realization
      of
      such amounts to be more likely than not. ****





**5.**
            **STOCK-BASED
                EMPLOYEE COMPENSATION**





On
      January 1, 2006, the Company implemented Statement of Financial Accounting
      Standard 123 (revised 2004) (“SFAS 123(R)”), “Share-Based
      Payment” which replaced SFAS 123 “Accounting for Stock-Based Compensation” and
      superseded APB Opinion No. 25, “Accounting for Stock Issued to Employees.” SFAS
      123(R) requires the fair value of all stock-based employee compensation awarded
      to employees to be recorded as an expense over the related vesting period.
      The
      statement also requires the recognition of compensation expense for the fair
      value of any unvested stock option awards outstanding at the date of adoption.
      During 2006, all employee stock compensation was recorded at fair value using
      the Black Scholes Pricing Model. In adopting SFAS 123(R), the Company used
      the
      modified prospective application (“MPA”). MPA requires the Company to account
      for all new stock compensation to employees using fair value, and to use fair
      value for any portion of awards prior to January 1, 2006 for which the requisite
      service has not been rendered and the options remain outstanding as of January
      1, 2006. The Company recognized the compensation cost for the portion of the
      award where the requisite service was rendered on or after January 1, 2006.
      The
      fair value for these awards is determined based on the grant date.





On
      August
      25, 2005, the Board of Directors approved the 2005 Equity Incentive Plan (“2005
      Plan”) for 2,000,000 shares of the Company’s common stock. The 2005 Plan
      provides for the issuance of stock options to attract, retain and motivate
      employees, to encourage employees, directors and independent contractors to
      acquire an equity interest in the Company, to make monetary payments to certain
      employees based upon the value of the Company’s stock, and provide employees,
      directors and independent contractors with an incentive to maximize the success
      of the Company and further the interest of the shareholders. The 2005 Plan
      provides for the issuance of Incentive Stock Options and Non Statutory Options.
      The Administrator of the plan shall determine the exercise price per share
      at
      the time the option is granted, but the exercise price shall not be less than
      the fair market value on the date the option is granted. Stock options granted
      under the 2005 Plan have a maximum duration of 10 years.





8




On
      June
      26, 2000, the Company’s Board of Directors adopted the OnScreen Technologies,
      Inc. 2000 Stock Option Plan (the “Plan”). The Plan provides for the issuance of
      incentive stock options (ISO’s) to any individual who has been employed by the
      Company for a continuous period of at least six months. The Plan also provides
      for the issuance of Non Statutory Options (NSO’s) to any employee who has been
      employed by the Company for a continuous period of at least six months, and
      any
      director or consultant to the Company. The Company may also issue reload options
      as defined in the plan. The total number of common shares of common stock
      authorized and reserved for issuance under the Plan is 600,000 shares. The
      Board
      shall determine the exercise price per share in the case of an ISO at the time
      an option is granted and such price shall be not less than the fair market
      value
      or 110% of fair market value in the case of a ten percent or greater
      stockholder. In the case of a NSO, the exercise price shall not be less than
      the
      fair market value of one share of stock on the date the option is granted.
      Unless otherwise determined by the Board, ISO’s and NSO’s granted under the Plan
      have a maximum duration of 10 years.





There
      were no non-vested stock options at December 31, 2007, and no stock options
      were
      granted during the three months ended March 31, 2008:





The
      following information is presented for the stock option activity for the three
      months ended March 31, 2008:





#
                of shares
            
            Weighted
              Average
              Exercise
              Price
            
            Weighted
              Average
              Remaining
              Contract
              Life
            
            Aggregate
              Intrinsic
              ValueOutstanding
                at December 31, 2006:
            
            
            4,531
                000
            
            $
            0.14Forfeited
            
            
            (115,000
            )
            $
            0.72Granted
            
            
            -
            
            $
            0.00Outstanding
                at March 31, 2008
            
            
            4,416,000
            
            $
            0.12
            
            
            9.2.2
                years
            
            $
            16,165Outstanding
                exercisable at March 31, 2008
            
            
            4,416,000
            
            $
            0.12
            
            
            9.2.2
                years
            
            $
            16,165





The
      fair
      value of each stock option is estimated on the date of grant using a Black
      Scholes Pricing Model. There have been no options granted during
      2008.




9




**6.**
            **NOTES
                PAYABLE**





At
      December 31, 2007 eighteen-month secured convertible promissory notes totaling
      $1,650,000 were outstanding. During the three months ended March 31, 2008,
      unsecured convertible promissory notes totaling $75,000 were entered into that
      had bonus shares attached totaling 75,000 shares of common stock. These shares
      were valued at $10,530 using a Black Scholes Pricing Model. Interest accrues
      at
      12% per annum, payable monthly, until the maturity of these notes at which
      time
      the principal is due. The note holder has the right to convert the note to
      common stock at $0.25. per share at any time during the term of the note, and
      we
      recognized $11,208 in Additioanl Paid-in Capital related to the beneficial
      conversion feature of these notes due to their immediate vesting. Unamortized
      debt discount as of March 31, 2008 is $7,406.





**7.**
            **COMMITMENTS**





In
      August
      of 2007 the Company entered into an agreement with a consultant to provide
      strategic marketing services. For these services, through March of 2008, the
      Company pays a fee of $120,000 in quarterly installments. In addition, the
      consultant has the ability to earn up to 1,500,000 shares of the Company’s
      common stock for goals achieved per the agreement.





**8.**
            **PREFERRED
                STOCK**





During
      the three months ended March 31, 2008, 25,000 shares of Series A convertible
      preferred stock were converted into 100,000 shares of common stock at
      the request of certain Series A convertible preferred stock
      holders.





**9.**
            **OTHER
                EQUITY TRANSACTIONS**





During
      the three months ended March 31, 2008, 95,238 shares of common stock were issued
      to an employee in accordance with his employment agreement. These shares were
      valued at $25,000 using a thirty-day average price at December 31, 2007, in
      accordance with the agreement.





During the
      three
      months ended March 31, 2008, 390,000 shares of common stock were issued in
      relation to the exercise of warrants with proceeds of $78,000.





During
      the three months ended March 31, 2008, 200,000 shares of common stock were
      sold
      as part of a stock purchase agreement with proceeds of $50,000.





During
      the three months ended March 31, 2008, 500,000 shares of common stock were
      issued for services performed by consultants. $125,000 of consulting expense
      was
      recorded in relation to this transaction based on the fair market value of
      the
      stock on the date the stock was deemed earned.





During
      the three months ended March 31, 2008, $60,000 of compensation expense was
      recorded for stock to be issued based upon employment agreements for which
      the
      requisite service had been performed. 384,615 of these shares were
      issued.





During
      the three months ended March 31, 2008, 1,000,000 shares of stock were sold
      pursuant to a stock purchase agreement with proceeds of $250,000. An officer
      of
      Waytronx agreed to transfer the 1,000,000 registered shares to the purchasing
      parties and accept 1,000,000 restricted shares as reimbursement. Because of
      the
      difference in value between the registered versus restricted sales, Waytronx
      agreed to issue an additional 100,000 shares to the officer. These 1,100,000
      shares are issuable at March 31, 2008.




10




**10.**
            **SUBSEQUENT
                EVENTS**





During
      April and May of 2008, the Company entered into unsecured convertible promissory notes which total $625,000, with 625,000 related bonus
      shares of common stock. Interest accrues at 12% per annum, payable monthly,
      until a financing event takes place, at which time the principal is due. The
      note holder has the right to convert the note to the Company’s common stock at
      $0.25 per share.




During
      May of 2008 warrants were exercised for 2,000,000 shares of common stock, with
      proceeds of $20,000.




**Item
      2. Management’s Discussion and Analysis of Financial Condition and**


**Results
      of Operations.**





**General**





Management’s
      discussion and analysis contains various “forward looking statements.” Such
      statements consist of any statement other than a recitation of historical fact
      and can be identified by the use of forward-looking terminology such as “may,”
“expect,” “anticipate,” “estimate,” or “continue” or use of negative or other
      variations or comparable terminology.





Waytronx
      cautions that these forward-looking statements are further qualified by
      important factors that could cause actual results to differ materially, are
      necessarily speculative, and there are certain risks and uncertainties that
      could cause actual events or results to differ materially from those referred
      to
      in such forward-looking statements.





**Overview**





Waytronx,
      Inc. has pioneered and is commercializing innovative thermal management
      solutions capable of revolutionizing the semiconductor and electronic packaging
      industries. Utilizing its patent-pending thermal technologies and architecture,
      we have developed highly advanced, proprietary LED display solutions under
      the
      names RediAlertTM and Living WindowTM and cooling applications through its WayCool
      product line. Waytronx is focusing its efforts on the WayCool cooling
      technology, which involves the use of fluid displacement to move heat away
      from
      the source instead of traditional passive heat transference through solid
      materials.





During
      the three
      months ended March 31, 2008, Waytronx continued to incur significant losses
      from
      operations. A net loss of $1,198,023 was incurred for the three months ended
      March 31, 2008. This net loss is slightly higher than for the same period last
      year when a net loss of $974,751 was recorded, due mainly to higher selling,
      general and administrative costs to bring the WayCool technology to
      market.





Management
      has continued to raise the capital needed to fund the development and marketing
      of its products during 2008. During the three months ended March 31, 2008
      proceeds of $75,000 were received from unsecured convertible notes, $78,000
      from
      the exercise of warrants, and $500,000 from the sale of common stock. These
      funds have assisted in the continuing development of products, and in funding
      operations during development of the WaycoolTM products and the efforts to
      license the manufacture and sales of these products. It is anticipated that
      Waytronx will continue to develop and expand its technology and product lines
      which will require additional funding.





11




**Intellectual
      Property**





The
      Company relies on various intellectual property laws and contractual
      restrictions to protect its proprietary rights in products, logos and services.
      These include confidentiality, invention assignment, and nondisclosure
      agreements with employees, contractors, suppliers and strategic partners. The
      confidentiality and nondisclosure agreements with employees, contractors and
      suppliers are in perpetuity or for a sufficient length of time so as to not
      threaten exposure of proprietary information.





Waytronx continues to file and protect its intellectual property rights, trademarks
      and
      products through filings with the US Patent and Trademark Office and, as
      applicable, internationally.





**Critical
      Accounting Policies**





The
      preparation of financial statements in conformity with accounting principles
      generally accepted in the United States of America requires management to make
      estimates and assumptions that have a significant impact on the results reported
      in the financial statements. Some of the accounting policies require management
      to make difficult and subjective judgments, often as a result of the need to
      make estimates of matters that are inherently uncertain. Actual results may
      differ from these estimates under different assumptions or
      conditions.





Asset
      Impairment


Waytronx
      reviews its long-lived assets for impairment whenever events or changes in
      circumstances indicate that the carrying amount of the asset exceeds its fair
      value and may not be recoverable. In performing the review for recoverability,
      the future cash flows expected to result from the use of the asset and its
      eventual disposition are estimated. If the sum of the expected future cash
      flows
      (undiscounted and without interest charges) is less than the carrying amount
      of
      the asset, an impairment loss is recognized as the excess of the carrying amount
      over the fair value. Otherwise, an impairment loss is not recognized. Management
      estimates the fair value and the estimated future cash flows expected. Any
      changes in these estimates could impact whether there was impairment and the
      amount of the impairment.





Valuation
      of Non-Cash Capital Stock Issuances


Stock
      transactions based upon the fair value of the equity instruments. Various
      methods can be used to determine the fair value of the equity instrument,
      including the fair value of the consideration received, the quoted market price
      of the stock or a contemporaneous cash sale of the common or preferred stock.
      Each of these methods may produce a different result. Management uses the method
      it determines most appropriately reflects the stock transaction. If a different
      method was used it could impact the expense and equity stock accounts.





Patent
      Costs


Waytronx
      estimates the patents it has filed have a future beneficial value, therefore
      it
      capitalizes the costs associated with filing for its patents. At the time the
      patent is approved, the patent costs associated with the patent are amortized
      over the useful life of the patent. If the patent is not approved, at that
      time
      the costs will be expensed. A change in the estimate of the patent having a
      future beneficial value will impact the other assets and expense accounts.





12




Revenue
      Recognition


The
      recognition of revenues requires judgment, including whether a sale includes
      multiple elements, and if so, whether vendor-specific objective evidence (VSOE)
      of fair value exists for those elements. Customers receive certain elements
      of
      our products over a period of time. These elements include licensing rights
      to
      manufacture and sell our proprietary patent protected products. The ability
      to
      identify VSOE for those elements and the fair value of the respective elements
      could materially impact the amount of earned and unearned revenue. Waytronx
      does
      not have any history as to the costs expected to be incurred in granting
      licensing rights relating to its products. Therefore, revenues may be recorded
      that are not in proportion to the costs expected to be incurred in performing
      these services.





**Liquidity
      and Capital Resources**




General




Cash
      and
      cash equivalents at March 31, 2008 are $36,400, and there is a net working
      capital deficit of $2,241,714. Operations and investments in equipment have
      been
      funded through cash from operations, equity financings and borrowings from
      private parties as well as related parties.





Cash
      used in operations


Operating
      requirements generated a negative cash flow from operations of $632,311 for
      the
      three months ended March 31, 2008, versus $724,080 for the same period last
      year. The decrease in cash used in operations is a result of higher non-cash
      expenses related to compensation to employees and consultants, increases in
      payables and liabilities, partially offset by reductions in non-cash interest
      expense related beneficial conversion value and warrant related debt discounts
      as these items become fully expensed.





During
      the first three
      months of 2008 stock and warrants have been used as a form of payment to certain
      consultants and employees. For the first three months of 2008 and 2007, a total
      of $202,458 and $0.00, respectively, was recorded for compensation and services
      expense including amortization of deferred compensation related to equity given,
      or to be given, to employees and consultants for services provided.





As
      Waytronx focuses on the commercialization of its innovative thermal cooling
      technology during 2008, it will continue to fund research and development
      related to the WaycoolTM products as well as sales and marketing efforts.





Capital
      Expenditures and Investments


During
      the first three months of 2008 and 2007, there was no investment in fixed
      assets. We do not anticipate any significant capital expenditures during the
      remainder of 2008.





Waytronx
      invested approximately $27,000 in patent costs during the first three months
      of
      2008. It is expected that investment in patent costs will continue throughout
      2008 as patents are pursued in order to protect the rights to use its product
      developments.





13




Financing
      activities


During
      the first three months of 2008, $75,000 of proceeds was received from unsecured
      convertible notes, $78,000 from the exercise of warrants, and $500,000 from
      the
      sale of common stock. The Company plans on raising the capital needed to fund
      the further development and marketing of its products.





Recap
      of liquidity and capital resources


The
      report of our independent registered public accounting firm on our financial
      statements as of December 31, 20067 contains an explanatory paragraph expressing
      uncertainty with respect to our ability to continue as a going concern. Waytronx
      is not currently generating significant revenues to fund operations and had
      an
      accumulated deficit of $49,915,742 at March 31, 2008. There is not currently
      sufficient working capital to continue operations for the next 12
      months.





The
      Company is seeking to raise additional capital for the commercialization of
      its
      WayCool technology product lines which it believes will provide sufficient
      cash
      to meet short-term working capital requirements for the next twelve months.
      As
      we continue to expand and develop the technology and product lines, additional
      funding will be required. The Company will attempt to raise these funds through
      borrowing instruments or issuing additional equity.





Management
      expects the WayCool technology to be commercialized during 2008. There is no
      assurance that it will generate material revenues by that date or that revenues
      will be sufficient to cover all operating and other expenses. If revenues are
      not sufficient to cover all operating and other expenses, additional funding
      will be required. There is no assurance that such additional capital will be
      able to be raised. The failure to raise additional capital or generate product
      sales in the expected time frame will have a material adverse effect on the
      Company.





**Results
      of Operations**





Revenue


During
      the three months ended March 31, 2008 and 2007, revenue was $60,645, and
      $49,393, respectively. The revenue for the three months ended March 31, 2008
      is
      comprised of $58,975 from Living Window TM products
      and related add-ons, and $1,670 from other income. The revenue for the three
      months ended March 31, 2007 is comprised of $30,000 from RediAlert TM products, $14,823 from Living Window TM products
      and related add-ons and $4,570 from the sale of wireless modems.





Cost
      of revenue


The
      cost
      of revenue for the three months ended March 31, 2008 and 2007, was $82,083
      and
      $51,225, respectively.





Selling,
      General and Administrative Expenses


Selling,
      General and Administrative (SG&A) expenses include such items as wages,
      consulting, general office expenses, business promotion expenses and costs
      of
      being a public company, including legal and accounting fees, insurance, and
      investor relations.





For
      the
      three months ended March 31, 200 compared to the same period in 2007, SG&A
      expenses increased $161,641, primarily the result of higher costs related to
      the
      roll-out of WayCoolTM products.





Research
      and Development


The
      research and development costs are related to the technology for which Waytronix
      acquired the licensing rights. Research and development costs were $341,184
      and
      $359,097 for the three months ended March 31, 2008 and 2007,
      respectively.





14




Bad
      Debt


The
      bad
      debt expense relates to a note receivable from the settlement gain from Mobil
      Magic. Mobile Magic is in default on the note, and Waytronx has not received
      a
      payment on this note since January of 2008. The Company has reserved fully
      for
      the note and is pursuing collection of the balance due of $91,500 but the
      outcome of the collections process is uncertain.





Other
      Income


Investment
      Income remained relatively unchanged during the three months ended March 31,
      2008 compared to the same periods in 2007. The Company does not expect this
      item
      to be significant during the remainder of 2008.





Intrinsic
      value of convertible debt and amortization of debt discount


An
      expense of $47,760 and $132,607 was recorded for the three months ended March
      31, 2008 and 2007, respectively, for the intrinsic value of convertible debt
      and
      the amortization of debt discount. The lower expense in 2008 of $47,760 was
      due
      to a reduction in convertible debt.





Interest
      Expense


The
      interest expense of $83,313 and $51,759 for the three months ended March 31,
      2008 and 2007, respectively, is for interest on the secured convertible notes
      payable, and secured and unsecured promissory notes.




Preferred
      Stock Dividends


No
      preferred dividend expense was recorded by the Company during the three months
      ended March 31, 2008 and 2007, as during 2006 all Series A and Series B
      Convertible Preferred shareholders accepted the Company’s offer to receive all
      outstanding dividends through March 2006 in either cash or common shares at
      a
      per share price of $0.20.





**Item
      3.     Quantitative and Qualitative Disclosures About
      Market Risk**





A
      smaller
      reporting company is not required to provide the information required by this
      Item.





**Item
      4T. Controls and Procedures**





Within
      90
      days prior to the filing of this report, the Company carried out an evaluation,
      under the supervision and with the participation of its management, including
      the Chief Executive Officer and Chief Financial Officer, of the design and
      operation of its disclosure controls and procedures. Based on this evaluation,
      the Company’s Chief Executive Officer and Chief Financial Officer concluded that
      the Company’s disclosure controls and procedures are effective for the
      gathering, analyzing and disclosing the information the Company is required
      to
      disclose in the reports it files under the Securities Exchange Act of 1934,
      within the time periods specified in the SEC’s rules and forms. There have been
      no significant changes in the Company’s internal controls or in other factors
      that could significantly affect internal controls subsequent to the date of
      this
      evaluation.





(a)
      Our
      management, including the principal executive officer and principal financial
      officer, do not expect that our disclosure controls and procedures will prevent
      all error and fraud. A control system, no matter how well conceived and
      operated, can only provide reasonable, not absolute, assurance that the
      objectives of the control system are met. Further, the design of a control
      system must reflect the fact that there are resource constraints, and the
      benefits of controls must be considered relative to their costs. Because of
      the
      inherent limitations in all control systems, no evaluation of controls can
      provide absolute assurance that all control issues and instances of fraud,
      if
      any, within our Company have been detected. These inherent limitations include
      the realities that judgments in decision-making can be faulty, and that
      breakdowns can occur because of simple error or mistake. Additionally, controls
      can be circumvented by the individual acts of some persons, collusion of two
      or
      more people, or by management override of the control. The design of any system
      of controls also is based in part upon certain assumptions about the likelihood
      of future events, and there can be no assurance that any design will succeed
      in
      achieving its stated goals under all potential future conditions.





15




(b)   Changes
      in internal controls over financial reporting .





In
      addition, there were no significant changes in our internal control over
      financial reporting that could significantly affect these controls during the
      three months ended March 31, 2008. We have not identified any significant
      deficiency or material weaknesses in our internal controls, and therefore there
      were no corrective actions taken.





**PART
      II – OTHER INFORMATION**





**Item
      1. Legal Proceedings.**





None.





**Item
      1A:  Risk Factors.**





A
      smaller
      reporting company is not required to provide the information required by this
      Item.





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





**Common
      Stock Issued**





The
      Company relied on Section 4(2) of the Securities Act of 1933 as the basis for
      an
      exemption from registration for this issuance. During the three months ended
      March 31, 2008, the Company issued 390,000 shares of its common stock in
      relation to the exercise of warrants.





The
      Company relied on Section 4(2) of the Securities Act of 1933 as the basis for
      an
      exemption from registration for this issuance. During the three months ended
      March 31, 2008 the Company issued 979,853 shares of its common stock as
      compensation for services performed by consultants and employees.




The
      Company relied on Section 4(2) of the Securities
      Act of 1933 as the basis for an exemption from registration for this
      issuance.  During the three months ended March 31, 2008 the Copmany issued
      200,000 shares of its common stock sold per a stock purchase
      agreement.




The
      Company relied on Section 4(2) of the Securities
      Act of 1933 as the basis for an exemption from registration for this
      issuance.  During the three months ended March 31, 2008 the Company issued
      100,000 shares of its common stock sold related to the conversion of preferred
      A
      stock.





**Item
      3. Defaults Upon Senior Securities.**





None.





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





None





**Item
      5. Other Information.**





None





16




**Item
      6. Exhibits and Reports on Form 8-K**





(a)
      Exhibits




Exhibit Number
            Description 31.1
            Certification
                of Chief Executive Officer pursuant to Exchange Act Rules 13a-15(e)
                and
                15d-15(e), as adopted pursuant to Section 203 of the Sarbanes-Oxley
                Act of
                2002.


31.2
            Certification
                of Chief Financial Officer pursuant to Exchange Act Rules 13a-15(e)
                and
                15d-15(e), as adopted pursuant to Section 203 of the Sarbanes-Oxley
                Act of
                2002.


32.1
            Certification
                of Chief Executive Officer pursuant to 18U.S.C. Section 1350, as
                adopted
                pursuant to Section 906 of the Sarbanes-Oxley Act of
                2002.


32.2
            Certification
                of Chief Financial Officer pursuant to 18U.S.C. Section 1350, as
                adopted
                pursuant to Section 906 of the Sarbanes-Oxley Act of
                2002.





(b)
      Reports on Form 8-K





The
      Company filed a Current Report on Form 8-K on January 7, 2008 announcing the
      new
      OTC:BB trading symbol for Waytronx, Inc. of WYNX.





SIGNATURES





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




Signed
      and submitted t his
      13 th day of
      May 2008.


Waytronx,
                  Inc.(Registrant)by:
              /s/
                  William J. CloughWilliam
                  J. CloughChief
                  Executive Officer/Directorby:
              /s/
                  Cynthia M. WilsonCynthia
                  M. WilsonInterim
                  Chief Financial Officer


17