**UNITED
        STATES**
 **SECURITIES
        AND EXCHANGE COMMISSION**
 WASHINGTON,
        D.C. 20549
  **FORM
        10-Q**
  (Mark
        One)
  **x
        QUARTERLY REPORT
        PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGEACT OF
        1934**
  **FOR
        THE QUARTERLY PERIOD ENDED MARCH 31, 2008.**
  OR
  **o
        TRANSITION REPORT UNDER
        SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACTOF 1934**
  **FOR
        THE TRANSITION FROM _______ TO ________.**
  *COMMISSION
        FILE NUMBER 000-27159*
  **SUNWAY
        GLOBAL, INC.**
 (Exact
        Name of Registrant as Specified in its Charter)
 
 Nevada
              
              26-1650042(State
                  or other jurisdiction of
              
              (I.R.S.
                  Employerincorporation
                  or organization)
              
              Identification
                  No.)
 
 Daquing
        Hi-Tech Industry Development Zone, Daquing, Heilongjiang, People’s Republic of
        China, 163316
 (Address
        of principal executive offices) (Zip Code)
 
 Issuer's
        telephone Number: 86-459-604-6043
  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 filero
              Accelerated
                  fileroNon-accelerated
                  filero
              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
  **APPLICABLE
        ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGSDURING THE PRECEDING FIVE
        YEARS**
  Indicate
        by check mark whether the registrant filed all documents and reports required
        to
        be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution
        of securities under a plan confirmed by a court. Yes o No o
  **APPLICABLE
        ONLY TO CORPORATE ISSUERS**
  State
        the
        number of shares outstanding of each of the issuer's classes of common equity,
        as of the latest practicable date: As of May 14, 2008, there
        were 14,083,629 outstanding shares of the Registrant's Common Stock, 
$0.001par
        value.
  
  **TABLE
        OF CONTENTS**
 
 PagePART
                  IItem
                  1.
              Financial
                  Statements
              1Item
                  2.
              Management’s
                  Discussion and Analysis of Financial Condition and Results of
                  Operation
              24Item
                  3.
              Quantitative
                  and Qualitative Disclosures About Market Risk
              27Item
                  4T
              Controls
                  and Procedures
              27PART
                  IIItem
                  1.
              Legal
                  Proceedings
              28Item
                  1A.
              Risk
                  FactorsItem
                  2.
              Unregistered
                  Sales of Equity Securities and Use of Proceeds
              28Item
                  3.
              Defaults
                  Upon Senior Securities
              28Item
                  4.
              Submission
                  of Matters to a Vote of Security Holders
              28Item
                  5.
              Other
                  Information
              28Item
                  6.
              Exhibits
              28SIGNATURES
              29
  
  **PART
        IFINANCIAL INFORMATION**
  **ITEM
        1. FINANCIAL STATEMENTS**
 
 CONTENTS
              
              PAGESBALANCE
                  SHEETS
              
              2
                  -
                  3STATEMENTS
                  OF INCOME
              
              4STATEMENTS
                  OF STOCKHOLDERS’ EQUITY
              
              5
                  -
                  6STATEMENTS
                  OF CASH FLOWS
              
              7
                  -
                  8NOTES
                  TO FINANCIAL STATEMENTS
              
              9-24
  1
  **SUNWAY
        GLOBAL INC.**
 
 **CONSOLIDATED
        BALANCE SHEETS**
 **AS
        AT MARCH 31, 2008 AND DECEMBER 31, 2007**
 **(Stated
        in US Dollars)**
 
 Notes
              
              March 31, 2008
              
              December 31, 2007(Unaudited)
              
              (Audited)**ASSETS**Current
                  assetsCash
                  and cash equivalents
              
              
              
              
              $
              6,456,669
              
              $
              5,820,100Restricted
                  cash
              
              
              
              
              
              467,954
              
              
              491,049Trade
                  receivables, net
              
              
              6
              
              
              2,208,760
              
              
              1,525,201Inventories
              
              
              9
              
              
              876,207
              
              
              766,933Advances
                  to suppliers
              
              
              
              
              
              421,542
              
              
              1,331,159Prepayments
              
              
              
              
              
              595,282
              
              
              125,333Tender
                  deposits
              
              
              
              
              
              -
              
              
              131,013Travel
                  advances to directors
              
              
              7
              
              
              39,137
              
              
              30,824Advances
                  to employees
              
              
              8
              
              
              398,153
              
              
              548,364Total
                  current assets
              
              
              
              
              $
              11,463,704
              
              $
              10,769,976Amount
                  due from a related company
              
              
              4
              
              
              830
              
              
              585,678Amount
                  due from a director
              
              
              5
              
              
              726,133
              
              
              1,028,474Deposit
                  for acquisition of computer software
              
              
              
              
              
              1,281,650
              
              
              -Property,
                  plant and equipment, net
              
              
              10
              
              
              5,396,525
              
              
              4,449,619Intangible
                  assets, net
              
              
              11
              
              
              7,021,134
              
              
              6,933,491**TOTAL
                  ASSETS**
              
              
              
              
              $
              25,889,976
              
              $
              23,767,238**LIABILITIES
                  AND****STOCKHOLDERS’
                  EQUITY**Current
                  liabilitiesAccounts
                  payable
              
              
              
              
              $
              39,823
              
              $
              245,917Income
                  tax payable
              
              
              
              
              
              282,820
              
              
              157,877Turnover
                  and other taxes
              
              
              
              
              
              235,056
              
              
              143,857Expected
                  warranty expenses
              
              
              12
              
              
              57,651
              
              
              55,351Customers
                  deposits
              
              
              
              
              
              -
              
              
              208,274Accrued
                  liabilities
              
              
              
              
              
              374,037
              
              
              323,464Other
                  payables
              
              
              
              
              
              30,367
              
              
              35,984Total
                  current liabilities
              
              
              
              
              $
              1,019,754
              
              $
              1,170,724**TOTAL
                  LIABILITIES**
              
              
              
              
              $
              1,019,754
              
              $
              1,170,724
 
 See
        notes
        to consolidated financial statements
  2
 
 **SUNWAY
                  GLOBAL INC.****CONSOLIDATED
                  BALANCE SHEETS****AS
                  AT MARCH 31, 2008 AND DECEMBER 31, 2007****(Stated
                  in US Dollars)**
  Notes
                  
                  March 31, 2008
                  
                  December 31, 2007(Unaudited)
                  
                  (Audited)**STOCKHOLDERS’ EQUITY**Series A Convertible PreferredStock $0.001 par value 400,000 shares
                      authorized; Nil and 246,176 shares 
                      issued and outstanding at March 31, 2008
                      and December 31, 2007 respectively
                  
                  
                  
                  
                  $
                  -
                  
                  $
                  246Series B Convertible PreferredStock $0.001 par value 400,000 
                      shares authorized; 165,432shares issued and outstanding 
                      at March 31, 2008 and December 31, 2007
                  
                  
                  13
                  
                  
                  165
                  
                  
                  165Common stock at $0.001 par value
                      100,000,000 shares authorized;
                      13,935,489 and 223,658 shares issued and 
                      outstanding at March 31, 2008
                      and December 31, 2007 respectively
                  
                  
                  
                  
                  
                  13,935
                  
                  
                  224Additional paid-in capital
                  
                  
                  
                  
                  
                  16,339,368
                  
                  
                  16,352,833Statutory reserves
                  
                  
                  
                  
                  
                  2,165,287
                  
                  
                  2,165,287Retained earnings
                  
                  
                  
                  
                  
                  4,653,943
                  
                  
                  3,317,141Accumulated other comprehensive income
                  
                  
                  
                  
                  
                  1,697,524
                  
                  
                  760,618$
                  24,870,222
                  
                  $
                  22,596,514**TOTAL LIABILITIES AND****STOCKHOLDERS’ EQUITY**
                  
                  
                  
                  
                  $
                  25,889,976
                  
                  $
                  23,767,238
  See notes to consolidated financial statements
  3
 
 **SUNWAY GLOBAL INC.****CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME****FOR THE THREE-MONTHS ENDED MARCH 31, 2008 AND 2007****(Stated in US Dollars)(Unaudited)**
 
 Three months ended March 31,2008
              
              2007NotesNet revenues
              
              
              17
              
              $
              3,563,425
              
              $
              2,467,228Cost of net revenues
              
              
              17
              
              
              (1,141,745
              )
              
              (644,247
              )Gross profit
              
              
              
              
              $
              2,421,680
              
              $
              1,822,981Selling expenses
              
              
              
              
              
              (162,555
              )
              
              (10,592
              )General and administrative expenses
              
              
              
              
              
              (648,924
              )
              
              (255,644
              )Interest expenses
              
              
              
              
              
              -
              
              
              (3,040
              )Interest income
              
              
              
              
              
              143
              
              
              1,457Income from continuing activities before income taxes
              
              
              
              
              $
              1,610,344
              
              $
              1,555,162Income taxes
              
              
              15
              
              
              (273,542
              )
              
              (233,274
              )Net income
              
              
              
              
              $
              1,336,802
              
              $
              1,321,888Foreign currency translation
              
              
              
              
              
              936,906
              
              
              297,428Unrealized gain on investments
              
              
              
              
              
              -
              
              
              667,065Comprehensive income
              
              
              
              
              $
              2,273,708
              
              $
              2,286,381Net income per share:-Basic
              
              
              14
              
              $
              0.16
              
              $
              5.91-Diluted
              
              
              14
              
              $
              0.06
              
              $
              5.91Weighted average number of common stock-Basic
              
              
              14
              
              $
              8,360,349
              
              $
              223,653-Diluted
              
              
              14
              
              $
              22,645,485
              
              $
              223,653
 
 See notes to consolidated financial statements
  4
 
 **SUNWAY GLOBAL INC.****CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY****FOR THE YEAR ENDED DECEMBER 31, 2007 AND THREE-MONTHS ENDED****MARCH 31, 2008****(Stated in US Dollars)(Unaudited)**
 
 Additional
              
              
              
              
              
              AccumulatedPreferred
              
              Preferred
              
              No.
              
              
              
              paid
              
              
              
              
              
              otherSeries
              
              Series
              
              shares
              
              Common
              
              in
              
              Statutory
              
              Retained
              
              comprehensiveA
              
              B
              
              outstanding
              
              stock
              
              capital
              
              reserves
              
              earnings
              
              income
              
              TotalBalance, January 1, 2007
              
              $
              246
              
              $
              -
              
              
              221,612
              
              $
              224
              
              $
              4,476,665
              
              $
              1,161,382
              
              $
              4,973,541
              
              $
              432,707
              
              $
              11,044,765Reversal of realized gain on
                    investment
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              (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
              
              
              -
              
              
              165
              
              
              -
              
              
              -
              
              
              11,676,968
              
              
              -
              
              
              (6,700,000
              )
              
              -
              
              
              4,977,133Foreign currency translation
                  adjustment
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              751,448
              
              
              751,448Balance, December 31,2007
              
              $
              246
              
              $
              165
              
              
              221,612
              
              $
              224
              
              $
              16,352,833
              
              $
              2,165,287
              
              $
              3,317,141
              
              $
              760,618
              
              $
              22,596,514Balance, January 1, 2008
              
              $
              246
              
              $
              165
              
              
              221,612
              
              $
              224
              
              $
              16,352,833
              
              $
              2,165,287
              
              $
              3,317,141
              
              $
              760,618
              
              $
              22,596,514Conversion of Preferred Series A
                  into Common Stock
              
              
              (246
              )
              
              -
              
              
              13,713,877
              
              
              13,711
              
              
              (13,465
              )
              
              -
              
              
              -
              
              
              -
              
              
              -Net income
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              1,336,802
              
              
              -
              
              
              1,336,802Foreign currency translation adjustment
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              936,906
              
              
              936,906Balance, March 31,2008
              
              $
              -
              
              $
              165
              
              
              13,935,489
              
              $
              13,935
              
              $
              16,339,368
              
              $
              2,165,287
              
              $
              4,653,943
              
              $
              1,697,524
              
              $
              24,870,222
 
 See notes to consolidated financial statements
  5
 
 **SUNWAY GLOBAL INC.****CONSOLIDATED STATEMENTS OF CASH FLOWS****FOR THE THREE-MONTHS MARCH 31, 2008 AND 2007****(Stated in US Dollars)(Unaudited)**
 
 Three months ended March 31,2008
              
              2007Cash flows from operating activitiesNet income
              
              $
              1,336,802
              
              $
              1,321,888Depreciation
              
              
              177,687
              
              
              146,495Amortization
              
              
              196,280
              
              
              41,869Adjustments
                  to reconcile net income to net cash provided by operating
                  activities:Restricted
                  cash
              
              
              23,095
              
              
              -Trade
                  receivables, net
              
              
              (620,159
              )
              
              (696,888
              )Inventories
              
              
              (77,394
              )
              
              (115,922
              )Advances
                  to suppliers
              
              
              964,951
              
              
              (460,618
              )Prepayments
              
              
              383,008
              
              
              (54,242
              )Travel
                  advances to directors
              
              
              (39,137
              )
              
              -Advances
                  to employees
              
              
              (398,153
              )
              
              -Accounts
                  payable
              
              
              (214,661
              )
              
              1,325Income
                  tax payable
              
              
              118,380
              
              
              (15,131
              )Turnover
                  and other taxes
              
              
              85,220
              
              
              196,530Loans
                  from unrelated parties
              
              
              1,572,360
              
              
              -Amount
                  due from a director
              
              
              (726,133
              )
              
              -Customers
                  deposits
              
              
              (216,932
              )
              
              (7,515
              )Accrued
                  liabilities
              
              
              37,127
              
              
              (24,481
              )Other
                  payables
              
              
              (7,113
              )
              
              (13,738
              )Net
                  cash provided by operating activities
              
              $
              2,595,228
              
              $
              319,572Cash
                  flows from investing activitiesPurchase
                  of plant and equipment
              
              $
              (939,630
              )
              $
              (1,877
              )Deposit
                  for acquisition of computer software
              
              
              (1,281,650
              )
              
              -Net
                  cash used in investing activities
              
              $
              (2,221,280
              )
              $
              (1,877
              )Cash
                  flows from financing activities
              
              $
              -
              
              $
              -
  6
  
 **SUNWAY
                  GLOBAL INC.****CONSOLIDATED
                  STATEMENTS OF CASH FLOWS (Continued)****FOR
                  THE THREE-MONTHS MARCH 31, 2008 AND 2007****(Stated
                  in US Dollars)(Unaudited)**
 
 Three months ended March 31,2008
              
              2007Net
                  in cash and cash equivalents sourced
              
              $
              373,948
              
              $
              317,695Effect
                    of foreign currency translation oncash and cash
                    equivalents
              
              
              262,621
              
              
              23,251Cash
                  and cash equivalents-beginning of year
              
              
              5,820,100
              
              
              1,749,048Cash
                  and cash equivalents-end of year
              
              $
              6,456,669
              
              $
              2,089,994
 Supplementary
                  cash flow information:Tax
                  paid
              
              $
              1,364,381
              
              $
              937,036Interest
                  received
              
              
              143
              
              
              1,457Interest
                  paid
              
              
              -
              
              
              3,040
  See
        notes
        to consolidated financial statements
  7
  **SUNWAY
        GLOBAL INC.**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 **FOR
        THE THREE-MONTHS ENDED MARCH 31, 2008 AND 2007**
 **(Stated
        in US Dollars** **)(Unaudited)**
 
 **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.
  8
  **SUNWAY
        GLOBAL INC.**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 **FOR
        THE THREE-MONTHS ENDED MARCH 31, 2008 AND 2007**
 **(Stated
        in US Dollars)(Unaudited)**
 
 **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. 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
              %*Beijing
                  Sunway New-force Medical Treatment Tech 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.
  9
  **SUNWAY
        GLOBAL INC.**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 **FOR
        THE THREE-MONTHS ENDED MARCH 31, 2008 AND 2007**
 **(Stated
        in US Dollars)(Unaudited)**
 
 **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
        long-lived assets held and used by the Group are reviewed for impairment
        whenever events or changes in circumstances indicate that the carrying amount
        of
        assets may not be recoverable. It is reasonably possible that these assets
        could
        become impaired as a result of technology or other industry changes.
        Determination of recoverability of assets to be held and used is by comparing
        the carrying amount of an asset to future net undiscounted cash flows to
        be
        generated by the assets.
 
 If
        such
        assets are considered to be impaired, the impairment to be recognized is
        measured by the amount by which the carrying amount of the assets exceeds
        the
        fair value of the assets. Assets to be disposed of are reported at the lower
        of
        the carrying amount or fair value less costs to sell.
 
 During
        the reporting years, there was no impairment loss.
  10
  **SUNWAY
        GLOBAL INC.**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 **FOR
        THE THREE-MONTHS ENDED MARCH 31, 2008 AND 2007**
 **(Stated
        in US Dollars)(Unaudited)**
 
 **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.
 
 Outstanding
        accounts balances are reviewed individually for collectability. The Company
        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, the
        Company has not charged off any balances as it has yet to exhaust all means
        of
        collection.
 
 *(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.
 
 **March 31, 2008**
              
              **December 31,**
                **2007**Bank of
                  Communications, Branch of DaqingCity
                  Economic Zone
              
              
              5,523,397
              
              
              5,398,866Agricultural
                  Bank of China
              
              
              514,746
              
              
              -Daqing
                  City Commercial Bank
              
              
              75,858
              
              
              72,690HSBC
              
              
              298,362
              
              
              348,362Cash
                  on hand
              
              
              44,306
              
              
              1826,456,669
              
              
              5,820,100
 **
 *(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.
  11
 
 **SUNWAY
        GLOBAL INC.**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 **FOR
        THE THREE-MONTHS ENDED MARCH 31, 2008 AND 2007**
 **(Stated
        in US Dollars)(Unaudited)**
 
 **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.
 
 *(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)*
            *Advertising* 
 The
        Group
        expensed all advertising costs as incurred. Advertising expenses included
        in
        selling expenses were $20,979 and $5,996 for the three-months ended March
        31,
        2008 and 2007 respectively.
 
 *(r)*
            *Shipping
                and handling* 
 All
        shipping and handling are expensed as incurred. Shipping and handling expenses
        included in selling expenses were $3,881 and $4,267  for
        the
        three-months ended March 31, 2008 and 2007 respectively.
 
 *(s)*
            *Research
                and development* 
 All
        research and development costs are expensed as incurred. The research and
        development costs included in general and administrative expenses were $377
        and
        $3,085 and for the three-months ended March 31, 2008 and 2007
        respectively.
 
 *(t)*
            *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 $10,118 and $7,045 for the three-months ended March 31, 2008
        and
        2007 respectively.
  12
  **SUNWAY
        GLOBAL INC.**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 **FOR
        THE THREE-MONTHS ENDED MARCH 31, 2008 AND 2007**
 **(Stated
        in US Dollars)(Unaudited)**
 
 **2.**
              **SUMMARY
                  OF SIGNIFICANT ACCOUNTING POLICIES (****Continued****)**
 
 *(u)*
            *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.
 
 *(v)*
            *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:
 
 **March 31,**
                **2008**
              
              **December 31,**
                **2007**
              
              **March 31,**
                **2007**Twelve
                  months ended
              
              
              -
              
              
              7.3141
              
              
              -RMB
                  : USD exchange rateThree
                  months ended
              
              
              7.0222
              
              
              -
              
              
              7.7410RMB
                  : USD exchange rateAverage
                  three months ended
              
              
              7.1757
              
              
              -
              
              
              7.7714RMB
                  : USD exchange rate
  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.
  13
  **SUNWAY
        GLOBAL INC.**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 **FOR
        THE THREE-MONTHS ENDED MARCH 31, 2008 AND 2007**
 **(Stated
        in US Dollars)(Unaudited)**
 
 **2.**
              **SUMMARY
                  OF SIGNIFICANT ACCOUNTING POLICIES (****Continued****)**
 
 *(w)*
            *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.  *(x)*
            *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.
 
 *(y)*
            *Recent
                accounting pronouncements* 
 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.
  14
 
 **SUNWAY
        GLOBAL INC.**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 **FOR
        THE THREE-MONTHS ENDED MARCH 31, 2008 AND 2007**
 **(Stated
        in US Dollars)(Unaudited)**
 
 **2.**
              **SUMMARY
                  OF SIGNIFICANT ACCOUNTING POLICIES (****Continued****)**
 
 *(y)*
              *Recent
                  accounting pronouncements
                  (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.
  15
  **SUNWAY
        GLOBAL INC.**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 **FOR
        THE THREE-MONTHS ENDED MARCH 31, 2008 AND 2007**
 **(Stated
        in US Dollars)(Unaudited)**
 
 **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 March 31, 2008 and December
        31,
        2007. The Group performs ongoing evaluations of its cash position and credit
        evaluations to ensure collections and minimize losses.
 
 As
        of
        March 31, 2008 and December 31, 2007, 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
        three-months ended March 31, 2008 and 2007, all of the Group’s sales were
        generated from the PRC. In addition, all accounts receivable as of March
        31,
        2008 and December 31, 2007 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:
 
 For the three-months ended March 31,2008
              
              2007Customer
                  A
              
              $
              529,567
              
              $
              -Customer
                  B
              
              
              453,616
              
              
              -Customer
                  C
              
              
              438,983
              
              
              -Customer
                  D
              
              
              370,697
              
              
              -Customer
                  E
              
              
              -
              
              
              382,816Customer
                  F
              
              
              -
              
              
              310,756
 
 Details
        of customers accounting for 10% or more of the Group’s accounts receivable
 are
        as
        follows:
 
 March 31, 2008
              
              December 31, 2007Customer
                  A
              
              $
              633,135
              
              $
              275,851Customer
                  B
              
              
              -
              
              
              269,861Customer
                  D
              
              
              223,930
              
              
              235,149Customer
                  H
              
              
              -
              
              
              221,510Customer
                  I
              
              
              -
              
              
              159,005Customer
                  J
              
              
              -
              
              
              146,688Customer
                  K
              
              
              244,923
              
              
              -
  16
  **SUNWAY
        GLOBAL INC.**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 **FOR
        THE THREE-MONTHS ENDED MARCH 31, 2008 AND 2007**
 **(Stated
        in US Dollars)(Unaudited)**
 
 **4.**
              **AMOUNT
                  DUE FROM A RELATED COMPANY**
 
 Amount
        due from Rise Elite International Ltd (Rise Elite), a related company where
        Mr.
        Liu Bo, the director of the Group is shareholder. The amount is unsecured,
        interest free and repayable on demand. The amount is hold by Rise Elite because
        of a recent development of representative offices in sundry location of China
        and this arrangement would be a better working capital arrangement.
 
 **5.**
              **AMOUNT
                  DUE FROM A DIRECTOR**
 
 Amount
        due from Mr. 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.
 
 **6.**
              **TRADE
                  RECEIVABLES, NET**
   March 31, 2008
              
              December 31, 2007Trade
                  receivable, gross
              
              $
              2,216,972
              
              $
              1,533,085Provision
                  for doubtful debts
              
              
              (8,212
              )
              
              (7,884
              )$
              2,208,760
              
              $
              1,525,201
  All
        of
        the above accounts receivable are due within one year of aging.
 
 An
        analysis of the allowance for doubtful accounts for the three-months ended
        March
        31, 2008 and December 31, 2007 is as follows:
  March 31, 2008
              
              December 31, 2007Balance
                  at beginning of period/year
              
              $
              7,884
              
              $
              7,377Foreign
                  exchange adjustment
              
              
              328
              
              
              507Balance
                  at end of period/year
              
              $
              8,212
              
              $
              7,884
 
 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 collectability
        of
        outstanding accounts. The Group evaluates the credit risks of its customers
        utilizing historical data and estimates of future performance.
  17
 
 **SUNWAY
        GLOBAL INC.**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 **FOR
        THE THREE-MONTHS ENDED MARCH 31, 2008 AND 2007**
 **(Stated
        in US Dollars)(Unaudited)**
 
 **7.**
              **TRAVEL
                  ADVANCES TO DIRECTORS**
 
 Travel
        advances were made to Directors to enable their execution of operational
        duties
        such as marketing and sales promotion. The following table provides an analysis
        of the outstanding accounts.
 
 March 31, 2008
              
              December 31, 2007Bo
                  Liu
              
              $
              14,389
              
              $
              4,244Qichai
                  Zhao
              
              
              -
              
              
              700Deli
                  Liang
              
              
              -
              
              
              6,568Weishan
                  Sun
              
              
              24,748
              
              
              19,312$
              39,137
              
              $
              30,824
 
 **8.**
              **ADVANCES
                  TO EMPLOYEES**
 
 Advances
        to employees are advances for purchases and traveling. They are unsecured,
        interest free and repayable on demand.
 
 **9.**
              **INVENTORIES**
 
 Inventories
        comprise the followings:
  March 31, 2008
              
              December 31, 2007Finished
                  goods
              
              $
              538,386
              
              $
              161,005Raw
                  materials
              
              
              337,821
              
              
              605,928$
              876,207
              
              $
              766,933
 
 **10.**
              **PROPERTY,
                  PLANT AND EQUIPMENT, NET**
 
 Property,
        plant and equipment,net comprise the followings:
  March 31, 2008
              
              December 31, 2007At
                  costBuilding
              
              $
              1,412,774
              
              $
              1,356,392Machinery
                  and equipment
              
              
              1,073,065
              
              
              1,022,960Moldings
              
              
              4,052,476
              
              
              2,992,166Computer
                  software
              
              
              2,023,582
              
              
              1,942,823Office
                  equipment and motorvehicles
              
              
              83,784
              
              
              80,439$
              8,645,681
              
              $
              7,394,780Less:
                  accumulated depreciation
              
              
              (3,249,156
              )
              
              (2,945,161
              )$
              5,396,525
              
              $
              4,449,619
  18
  **SUNWAY
        GLOBAL INC.**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 **FOR
        THE THREE-MONTHS ENDED MARCH 31, 2008 AND 2007**
 **(Stated
        in US Dollars)(Unaudited)**
 
 **10.**
              **PROPERTY,
                  PLANT AND EQUIPMENT,
                  NET(Continued)**
 
 Depreciation
        and amortization expense is included in the statement of income and comprehensive
        income as follows:
 
 For the three-months ended March 31,2008
              
              2007Cost
                  of sales
              
              $
              163,266
              
              $
              145,200General
                  and administrative expenses
              
              
              14,421
              
              
              1,295$
              177,687
              
              $
              146,495
  **11.**
              **INTANGIBLE
                  ASSETS, NET**
 
 Intangible
        assets, net are as follows:
  March 31, 2008
              
              December 31, 2007Land
                  use rights, at cost
              
              $
              1,321,908
              
              $
              1,269,151Less:
                  accumulated amortization
              
              
              (67,972
              )
              
              (58,508
              )$
              1,253,936
              
              $
              1,210,643Technology-based
                  design,
                  at cost
              
              $
              6,169,363
              
              $
              5,923,149Less:
                  accumulated amortization
              
              
              (402,165
              )
              
              (200,301
              )$
              5,767,198
              
              $
              5,722,848$
              7,021,134
              
              $
              6,933,491
 
 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 three-months
        ended 2008 and 2007 were $196,280 and $41,869 respectively.
  19
  **SUNWAY
        GLOBAL INC.**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 **FOR
        THE THREE-MONTHS ENDED MARCH 31, 2008 AND 2007**
 **(Stated
        in US Dollars)(Unaudited)**
 
 **12.**
              **WARRANTY
                  LIABILITIES**
 
 An
        analysis of the warranty liabilities as at March 31, 2008 and December 31,
        2007
        is as follows:
  2008
              
              2007Balance
                  at beginning of period/year
              
              $
              55,351
              
              $
              22,811Addition
                  of warranty liabilities
              
              
              -
              
              
              55,918Warranty
                  expense for the year
              
              
              -
              
              
              (23,378
              )Foreign
                  currency difference
              
              
              2,300
              
              
              -Balance
                  at end of period/year
              
              $
              57,651
              
              $
              55,351
 
 **13.**
              **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
  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.
  20
  **SUNWAY
        GLOBAL INC.**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 **FOR
        THE THREE-MONTHS ENDED MARCH 31, 2008 AND 2007**
 **(Stated
        in US Dollars)(Unaudited)**
 
 **13.**
              **SERIES
                  B CONVERTIBLE PREFERRED STOCK AND ASSOCIATED
                  WARRANTS**
  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.
  **14.**
              **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:
  For the three-months ended March 31,2008
              
              
              2007Earnings:Earnings
                    for the purpose of basicearnings per share
              
              $
              1,336,802
              
              $
              1,321,888Effect
                    of dilutive potential commonstock
              
              
              -
              
              
              -Earnings
                    for the purpose of basic earnings per share
              
              $
              1,336,802
              
              $
              1,321,888Number
                  of shares:Weighted
                      average number of common stock for the purpose of
                      basic earnings per share
              
              
              8,360,349
              
              
              223,653Effect
                    of dilutive potential common stock
              
              
              14,285,136
              
              
              -Weighted
                      average number of common stock for the purpose of
                      dilutive earnings per share
              
              
              22,645,485
              
              
              223,653
  21
  **SUNWAY
        GLOBAL INC.**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 **FOR
        THE THREE-MONTHS ENDED MARCH 31, 2008 AND 2007**
 **(Stated
        in US Dollars)(Unaudited)**
 
 **15.**
              **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:
 
 Three
                  months ended March 31,2008
              
              2007U.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
              %
  **16.**
              **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.
  22
  **SUNWAY
        GLOBAL INC.**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 **FOR
        THE THREE-MONTHS ENDED MARCH 31, 2008 AND 2007**
 **(Stated
        in US Dollars)(Unaudited)**
 
 **17.**
              **SEGMENT
                  INFORMATION**
 
 The
        Group
        currently is engaged in the manufacturing and selling of logistic transport
        systems. The Group has contracted with customers with four types of product
        altogether, workstation type A, workstation type B, workstation type C and
        Sunway Automatic Dispensing and Packing (“SADP”). These three types of
        workstation are of the same function but with different product design.
 
 Net
        revenues and cost of revenues by product:
 
 *For the three*
                *months ended*
                *March 31, 2008*
              
              *Workstation*
              
              *Workstation*
              
              *Workstation**Type A*
              
              *Type B*
              
              *Type C*
              
              *SADP*
              
              *Consolidated*Net
                  revenues
              
              $
              653,597
              
              $
              2,024,198
              
              $
              356,064
              
              $
              529,566
              
              $
              3,563,425Cost
                    of netrevenues
              
              
              (177,442
              )
              
              (628,720
              )
              
              (134,920
              )
              
              (200,663
              )
              
              (1,141,745
              )$
              476,155
              
              $
              1,395,478
              
              $
              221,144
              
              $
              328,903
              
              $
              2,421,680
 
 *For the three*
                *months ended*
                *March 31, 2007*
              
              *Workstation*
              
              *Workstation*
              
              *Workstation**Type A*
              
              *Type B*
              
              *Type C*
              
              *SADP*
              
              *Consolidated*Net
                  revenues
              
              $
              1,067,194
              
              $
              1,400,034
              
              $
              -
              
              $
              -
              
              $
              2,467,228Cost
                    of netrevenues
              
              
              (283,369
              )
              
              (360,878
              )
              
              -
              
              
              -
              
              
              (644,247
              )$
              783,825
              
              $
              1,039,156
              
              $
              -
              
              $
              -
              
              $
              1,822,981
 
 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.
  23
  **ITEM
        2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
        OPERATION**
 
 Forward-Looking
        Statements
 
 The
        information in this report contains forward-looking statements. All statements
        other than statements of historical fact made in this report are forward
        looking. In particular, the statements herein regarding industry prospects
        and
        future results of operations or financial position are forward-looking
        statements. These forward-looking statements can be identified by the use
        of
        words such as "believes," "estimates," "could," "possibly," "probably,"
        anticipates," "projects," "expects," "may," "will," or "should" or other
        variations or similar words. No assurances can be given that the future results
        anticipated by the forward-looking statements will be achieved. Forward-looking
        statements reflect management's current expectations and are inherently
        uncertain. Our actual results may differ significantly from management's
        expectations.
 
 The
        following discussion and analysis should be read in conjunction with our
        financial statements, included herewith. This discussion should not be construed
        to imply that the results discussed herein will necessarily continue into
        the
        future, or that any conclusion reached herein will necessarily be indicative
        of
        actual operating results in the future. Such discussion represents only the
        best
        present assessment of our management.
  **Overview**
  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 three months ended March 31, 2008
        to the
        three month period ended March 31, 2007. We have already sell our new core
        product—a medicine dispensation and packaging system also designed for use in
        hospitals and pharmacies—in the first quarter of 2008.
  **Three-month
        periods ended March 31, 2008 and March 31, 2007**
 
 **Results
        of Operations**
 
 In
        the
        three months ended March 31, 2008, company net income slight increased. Although
        company net revenues and gross profit rose substantially as compared with
        the
        same period in the same period of 2007,but operating expenses also increased
        during these periods , bring on company net income slight increased. These
        increases are due in large part to increased sales of Daqing Sunway’s pneumatic
        tube transport systems and new product ó a
        medicine dispensation and packaging system. 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 increase in operating expense is
        due new
        products marketing expense.
 The
        following table summarizes the results of our operations during the three
        months
        ended March 31, 2008 and 2007, respectively, and provides information regarding
        the dollar and percentage increase or (decrease) from the three months ended
        March 31, 2008 and 2007.
  Three Months Ended March 31,2008
              
              2007
              
              Change
              
              Change
                  rateNet
                  Revenues
              
              $
              3,563,425
              
              $
              2,467,228
              
              $
              1,096,197
              
              
              44.43
              %Cost
                  of net revenues
              
              $
              1,141,745
              
              $
              644,247
              
              $
              497,498
              
              
              77.22
              %Gross
                  Profit
              
              $
              2,421,680
              
              $
              1,822,981
              
              $
              598,699
              
              
              32.84
              %Gross
                  Margin
              
              
              67.96
              %
              $
              73.89
              %
              
              
              
              
              -5.93
              %Operating
                  Income
              
              $
              1,610,201
              
              $
              1,556,745
              
              $
              53,456
              
              
              3.43
              %Net
                  Income
              
              $
              1,336,802
              
              $
              1,321,888
              
              $
              14,914
              
              
              1.13
              %Net
                  profit margin
              
              
              37.51
              %
              
              53.58
              %
              
              
              
              
              -16.07
              %
 
 **Net
        revenue**
 Net
        revenue for the first quarter of 2008, which resulted entirely from sales
        of
        pneumatic material transport system workstations (“PTS”) and Automatic Medicine
        Dispensing and Packing System (“SADP’), were $3,563,425, an increase of 44.43%
        as compared with the net revenue of $2,467,228 in the first quarter of 2007.
        In
        the first quarter of 2008, we sold 622 workstations, an increase of 14.34%
        as
        compared with 544 workstations sold in the first quarter of 2007; at the
        same
        time, we also sold two our new product.
 
 The
        following table breaks down application categories as percentage of total
        sales.
  24
 
 Three Months Ended March 31,2008
              2007sales
              
              
              % of total sales
              
              
              sales
              
              
              % of total salesPTS
              
              $
              3,033,859
              
              
              85.14
              %
              $
              2,467,228
              
              
              100.00
              %SADP
              
              $
              529,566
              
              
              14.86
              %
              $
              -
              
              
              -Total
                  sales
              
              $
              3,563,425
              
              
              100.00
              %
              $
              2,467,228
              
              
              100.00
              %
 
 **Gross
        Profit**
 
 Gross
        profit increased 32.84% to $2,421,680 for the three months ended March 31,
        2008,
        as compared to $1,822,981 for the three months ended March 31, 2007. Our
        gross
        profit margin fell 5.93% from 73.89% as of the three months ended March 3,
        2007
        to 67.96% as of the same period of 2008, 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:
 
 Three Months Ended March 31,2008
              
              2007US$
              
              Gross profit
                margin
              
              US$
              
              Gross profit
                marginGross
                  Profit
              
              $
              2,421,680
              
              
              67.96
              %
              $
              1,822,981
              
              
              73.89
              %
 
 **Income
        from Operations**
 
 Operating
        income increased 3.34% to $1,610,201 for the three months ended March 31,
        2008, as compared with $1,556,745 for the three months ended March 31, 2007.
        The
        increase was primarily a result of the higher revenue by the higher cost
        reduces
        during the three months ended March 31, 2008 as compared to the same period
        of
        2007.
 
 **Cost
        of Sales**
 
 Cost
        of
        sales increased to $1,141,745 for the three months ended March 31, 2008,
        representing 77.22% increase as compared with $644,247 for the same period
        of
        2007. This increase is due primarily to increased revenues, raw materials
        prices
        and depreciation cost from the three months ended March 31, 2008 to the same
        period of 2007. The Raw materials prices increased 8.02% for the three months
        ended March 31, 2008, as compared to the same period of 2007.
 
 The
        table
        below presents information about our cost of sales for the periods
        indicated:
 
 Three Months Ended March 31,2008
              
              2007
              
              ChangeCost of sales
              
              $
              1,141,745
              
              $
              644,247
              
              
              77.22
              %
 
 **Operating
        Expenses**
 
 Operating
        expenses were $811,479 for the three months ended March 31, 2008, an increase
        of
        204.80% as compared to $266,236 for the same period of 2007. This increase
        was
        composed by two reasons: (1) selling expenses increased $151,963, or 1,434.70%
        to $162,555 in the three months ended March 31, 2008 from $10,592 for the
        same
        period of 2007; and (2) general & administration increased $393,280, or
        153.84% to $648,924 in the three months ended March 31, 2008 from $255,644
        for
        the same period of 2007. In the three months ended March 31, 2008, we increased
        exhibition fees for promoting our new products, which totaled $60,147, compared
        with $10,191 for the same period of 2007. Also, in the three months ended
        March
        31, 2008, we increased salary and benefits of management. Reflecting this
        change, costs related to salary and benefits increased 65.74% in the three
        months ended March 31, 2008, compared with the same period of 2007; and
        amortization of intangible assets increased $154,411, or 368.80% to $196,280
        in
        the three months ended March 31, 2008 from $41,869 as of the same period
        of
        2007; and cost of direct sales offices were increased from null as of the
        three
        months ended March 31, 2007 to $84,787 as of the same period of
        2008.
  25
  The
        table
        below presents information about our operating expenses for the periods
        indicated:
 
 Three Months Ended March 31,2008
              
              2007
              
              changeSelling
                  expenses
              
              $
              162,555
              
              $
              10,592
              
              
              1434.70
              %General
                  & Administrative Expenses
              
              $
              648,924
              
              $
              255,644
              
              
              153.84
              %Total
                  operating expenses
              
              $
              811,479
              
              $
              266,236
              
              
              204.80
              %
 
 **Net
        Income**
 
 Net
        income was $1,336,802 for the three months ended March 31, 2008, an increase
        of
        1.13% from $1,321,888 for the same period of 2007, The
        slight increase is primarily due to i) substantial net revenue increase,
        ii) sustained gross margin in spite of extremely volatile raw material prices;
        iii) partially offset by higher operating expenses and depreciation
        cost .
 
 **Cash
        and Cash Equivalents**
 
 Cash
        and
        Cash Equivalents increased to $6,456,669 as of the three months ended March
        31,
        2008, as compared to $5,820,100 as of the fiscal year ended December 31,
        2007.
        This increase was mainly due to slight increase of net income in the first
        quarter of 2008.
 
 **Accounts
        Receivable**
 
 Accounts
        Receivable increased 44.82% to $2,208,760 as of the three months ended March
        31,
        2008, compared with $1,525,201 as of in the fiscal year ended December 31,
        2007.
        This increase in accounts receivable was primarily attributable to a substantial
        increase in workstation and new product-Automatic Medicine Dispensing and
        Packing System sales in the first quarter of 2008.
 
 **Inventory**
 
 Inventory
        consists of raw materials and finished goods. As of the three months ended
        March
        31, 2008, the recorded value of our inventory has increased 14.25% to $876,207
        from $766,933 as of the fiscal year ended December 31, 2007. This increase
        is
        mainly due to a increase in finished goods from $161,005 as of December 31,
        2007
        to $538,386 as of March 31, 2008, an increase of 234.39%. In addition raw
        materials decreased from $605,928 as of December 31, 2007 to $337,821 as
        of
        March 31, 2008, a decrease of 44.25%, which was due to increased sales and
        designed capacity.
 
 The
        table
        below presents information about our inventory for the periods
        indicated:
  Item
              
              
              March 31, 2008
              
              
              December 31,
                2007
              
              
              changeRaw material
              
              $
              337,821
              
              $
              605,928
              
              
              -44.25
              %Finished
                  goods
              
              $
              538,386
              
              $
              161,005
              
              
              234.39
              %Total
              
              $
              876,207
              
              $
              766,933
              
              
              14.25
              %
 
 **Accounts
        payable**
 
 Accounts
        payable amounted to $39,823 as of the three months ended March 31, 2008,
        a
        decrease of 83.81% from $245,917 as of the fiscal year ended December 31,
        2007.
        This decrease is mainly due to cash purchase raw material.
  **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.
  On
        June
        6, 2007 in closing, we raised $6.7 million in gross proceeds through private
        placement offering of our series B convertible preferred stock. We received
        $4,976,335 in net proceeds after deducting placement agent discounts and
        commissions and payment of professional and other related expenses.
  **** As
        is
        customary in our industry, we provide payment terms to most of our customers
        that exceed terms that we receive from our suppliers. Therefore, the Company’s
        liquidity needs have generally consisted of working capital necessary to
        finance
        receivables and raw material inventory. Capital expenditures have historically
        been necessary to expand the production capacity of the Company’s manufacturing
        operations.
 
 The
        table
        below presents information about our cash flow for the periods
        indicated:
 
 Three Months Ended March 31,2008
              
              2007
              
              ChangeNet cash provided by (used in)
                  operating activities
              
              $
              2,595,228
              
              $
              319,572
              
              $
              2,275,656Net
                  cash provided by (used in) investing activities
              
              $
              (2,221,280
              )
              $
              (1,877
              )
              $
              (2,219,403
              )Net
                  cash provided by (used in) financing activities
              
              $
              0
              
              $
              0
              
              $
              0Effect
                  of foreign currency translation on cash and cash equivalents
              
              $
              262,621
              
              $
              23,251
              
              $
              239,370cash
                  and cash equivalents at beginning of year
              
              $
              5,820,100
              
              $
              1,749,048
              
              $
              4,071,052Cash
                  and cash equivalents-end of year
              
              $
              6,456,669
              
              $
              2,089,994
              
              $
              4,366,675
  26
  **Operating
        Activities**
 
 For
        the
        three months ended March 31, 2008, net cash provided by operating activities
        was
        $2,595,228. This was primarily attributable to our net income of $1,336,802,
        adjusted by an add-back of non-cash expenses mainly consisting of depreciation
        and amortization of $373,967 offset by a $884,459 increase in working capital.
        Specifically, the working capital increase was primarily due to i) a $620,159
        accounts receivable decrease driven by revenue growth; ii)a $23,095 restricted
        cash increase; iii) a $77,349 inventories decrease, principally finished
        goods,
        to support planned expansion and sales growth; iv) a $964,951 increase in
        advance to suppliers to buy raw materials; vi) a $54,282 decrease in prepayments
        , travel advances to directors and advances to employees, consisting primarily
        of prepayments for raw materials supplies in advance of shipment and working
        capital of direct sales office; partially offset by a $865,180 increase in
        accounts payable, tax payable, loans from unrelated parties, amount due from
        a
        director, accrued liabilities, other payables, and accrued
        liabilities.
 
 **Investing
        Activities**
 
 For
        the
        three months ended March 31, 2008, net cash used in investing activities
        was
        $2,221,280 and was primarily attributable to
        i) a
        $939,630 capital expenditure for purchase of new plant and equipment; ii)
        a
        $1,281,650 capital expenditure for Deposit for acquisition of computer
        software.
 
 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 9 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.
 
 We
        have
        no off-balance sheet arrangements and have not entered into any transactions
        involving unconsolidated, limited purpose entities.
  **ITEM
        3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
        RISK.**
  N/A.
  **ITEM
        4T. CONTROLS AND PROCEDURES.**
 
 **Evaluation
        of Disclosure Controls and Procedures**
  Our
        management is responsible for establishing and maintaining a system of
        disclosure controls and procedures (as defined in Rule 13a-15(e)) under the
        Exchange Act) that is designed to ensure that information required to be
        disclosed by the Company in the reports that we file or submit under the
        Exchange Act is recorded, processed, summarized and reported, within the
        time
        specified in the Commission's rules and forms. Disclosure controls and
        procedures include, without limitation, controls and procedures designed
        to
        ensure that information required to be disclosed by an issuer in the reports
        that it files or submits under the Exchange Act is accumulated and communicated
        to the issuer's management, including its principal executive officer or
        officers and principal financial officer or officers, or persons performing
        similar functions, as appropriate to allow timely decisions regarding required
        disclosure.
  Pursuant
        to Rule 13a-15(b) under the Exchange Act the Company carried out an evaluation
        with the participation of the Company’s management, including Liu Bo, the
        Company’s Chief Executive Officer (“CEO”) and Samuel Sheng, the Company’s Chief
        Financial Officer (“CFO”), of the effectiveness of the Company’s disclosure
        controls and procedures (as defined under Rule 13a-15(e) under the Exchange
        Act)
        as of the three months ended March 31, 2008. Based upon that evaluation,
        the
        Company’s CEO and CFO concluded that the Company’s disclosure controls and
        procedures are effective to ensure that information required to be disclosed
        by
        the Company in the reports that the Company files or submits under the Exchange
        Act, is recorded, processed, summarized and reported, within the time periods
        specified in the SEC’s rules and forms, and that such information is accumulated
        and communicated to the Company’s management, including the Company’s CEO and
        CFO, as appropriate, to allow timely decisions regarding required
        disclosure.
  **Changes
        in internal controls**
  Our
        management, with the participation our Chief Executive Officer and Chief
        Financial Officer, performed an evaluation as to whether any change in our
        internal controls over financial reporting  occurred during the 2008
        Quarter ended March 31, 2008.  Based on that evaluation, our Chief
        Executive Officer and our Chief Financial Officer concluded that no change
        occurred in the Company's internal controls over financial reporting during
        the
        2008 Quarter ended March 31, 2008 that has materially affected, or is reasonably
        likely to materially affect, the Company's internal controls over financial
        reporting.
  27
  **PART
        II**
  **OTHER
        INFORMATION**
  **ITEM
        1 - LEGAL PROCEEDINGS**
  To
        our
        knowledge, there is no material litigation pending or threatened against
        us.
  **ITEM
        1A. RISK FACTORS**
  N/A
  **ITEM
        2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS**
  **None**
  **ITEM
        3 - DEFAULTS UPON SENIOR SECURITIES**
  To
        our
        knowledge, there is no material defaults upon senior securities.
  **ITEM
        4 - SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS**
  **ITEM
        5 - OTHER INFORMATION**
  There
        were no matters required to be disclosed on Form 8-K during the first quarter
        ended March 31, 2007 which were not disclosed on such form.
  **ITEM
        6 - EXHIBITS.**
 
 **Exhibit
                  No.**
              
              **Description
                  of Exhibit**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.
  28
  **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.
  **DATE:
        May 14, 2008**
 
 **SUNWAY
                  GLOBAL, INC.**Dated:
                    May 14, 2008
              By:
              /s/*Liu
                  Bo*Liu
                  BoChief
                  Executive OfficerDated:
                    May 14, 2008
              By:
              /s/*Samuel Sheng*Samuel
                  ShengChief
                  Financial Officer
  29