UNITED
STATES
 SECURITIES
AND EXCHANGE COMMISSION
 WASHINGTON, D.C.
20549
  FORM
10-Q
  (Mark
One)
  xQUARTERLY REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
  FOR
THE QUARTERLY PERIOD ENDED JUNE 30, 2009
  OR
  oTRANSITION REPORT UNDER
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 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.)
 
 Daqing Hi-Tech Industry
Development Zone, Daqing, 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 has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).   Yes
□  No  □
  Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.
  Large
      accelerated filer o
              Accelerated
      filer oNon-accelerated
      filer o
              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 PROCEEDINGS
 DURING
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 August 14, 2009, there were 18,499,736
outstanding shares of the Registrant's Common Stock, $0.0000001 par
value.
  
  TABLE
OF CONTENTS
 
 PagePART
      IItem
      1.
              Financial
      Statements
              
              3Item
      2.
              Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operation
              
              31Item
      3.
              Quantitative
      and Qualitative Disclosures About Market Risk
              
              38Item
      4T
              Controls
      and Procedures
              
              38PART
      IIItem
      1.
              Legal
      Proceedings
              
              38Item
      1A.
              Risk
      Factors
              
              38Item
      2.
              Unregistered
      Sales of Equity Securities and Use of Proceeds
              
              38Item
      3.
              Defaults
      Upon Senior Securities
              
              39Item
      4.
              Submission
      of Matters to a Vote of Security Holders
              
              39Item
      5.
              Other
      Information
              
              39Item
      6.
              Exhibits
              
              39SIGNATURES
              
              40
 
 2
  PART I
 FINANCIAL
INFORMATION
  ITEM
1. FINANCIAL STATEMENTS
  SUNWAY GLOBAL
INC.
  CONTENTS
                
                PAGESREPORT
      OF INDEPENDENT REGISTERED PUBLICACCOUNTING
      FIRM
                
                4CONSOLIDATED
      BALANCE SHEETS
                
                5 -
      6CONSOLIDATED
      STATEMENTS OF INCOME
                
                7 -
      8CONSOLIDATED
      STATEMENTS OF STOCKHOLDERS’ EQUITY
                
                9CONSOLIDATED
      STATEMENTS OF CASH FLOWS
                
                10
      - 11NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS
                
                12 -
      30
 
 3
 
 ALBERT
      WONG & CO.
                CERTIFIED
      PUBLIC ACCOUNTANTS
                7th
      Floor, Nan Dao Commercial Building
                359-361
      Queen’s Road Central
                Hong
      Kong
                Tel
      : 2851 7954
                Fax:
      2545 4086
                
                ALBERT
      WONG
                B.Soc.,
      Sc., LL.B., P.C.LL., Barrister-at-law, C.P.A.(Practising).
 
 To:  The
board of directors and stockholders of
 Sunway
Global Inc.
  Report of Independent
Registered Public Accounting Firm
  We have
reviewed the accompanying interim consolidated balance sheets, related
consolidated statements of income, stockholders’ equity and cash flows statement
of Sunway Global Inc. and consolidated subsidiaries as of June 30, 2009, and for the
three-month and six-month periods then ended. These interim financial
information statements are the responsibility of the company's
management.
  We
conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures and making
inquiries of persons responsible for financial and accounting matters. It is
substantially less in scope than an audit conducted in accordance with generally
accepted auditing standards, the objective of which is the expression of an
opinion regarding the financial statements taken as a whole. Accordingly,
we do not express such an opinion.
  Based on
our review, we are not aware of any material modifications that should be made
to the accompanying interim financial statements for them to be in conformity
with accounting principles generally accepted in the United States of
America.
  /s/
      Albert Wong & Co.Hong
      Kong
                
                Albert
      Wong & Co.August
      14, 2009
                
                Certified
      Public Accountants
 4
 
 SUNWAY
      GLOBAL INC.CONSOLIDATED
      BALANCE SHEETSAS
      AT JUNE 30, 2009 AND DECEMBER 31, 2008(Stated
      in US Dollars)
 
 Notes
              
              
              June
      30,
                2009
              
              
              December
      31,
                2008ASSETS
              
              
              
              
              (Unaudited)
              
              
              (Audited)Current assetsCash
      and cash equivalents
              
              
              
              
              $
              7,584,827
              
              
              $
              15,189,941Trade
      receivables, net
              
              
              5
              
              
              
              3,072,723
              
              
              
              2,953,919Inventories
              
              
              8
              
              
              
              837,463
              
              
              
              590,738Advances
      to suppliers
              
              
              
              
              
              
              1,222,794
              
              
              
              547,952Prepayments
              
              
              
              
              
              
              61,644
              
              
              
              -Tender
      deposits
              
              
              
              
              
              
              27,030
              
              
              
              112,735Travel
      advances to directors
              
              
              6
              
              
              
              67,567
              
              
              
              38,733Advances
      to employees
              
              
              7
              
              
              
              294,010
              
              
              
              429,804Other
      receivables
              
              
              
              
              
              
              404,409
              
              
              
              -Total
      current assets
              
              
              
              
              
              $
              13,572,467
              
              
              $
              19,863,822Amount
      due from a related company
              
              
              4
              
              
              
              830
              
              
              
              830Restricted
      cash
              
              
              
              
              
              
              321,032
              
              
              
              378,366Property,
      plant and equipment, net
              
              
              9
              
              
              
              5,743,048
              
              
              
              5,069,871Intangible
      assets, net
              
              
              10
              
              
              
              9,483,878
              
              
              
              6,576,769Deposit
      for acquisition of computer software
              
              
              
              6,886,542
              
              
              
              1,750,751Deposit
      for the acquisition of subsidiary
              
              
              
              
              
              
              -
              
              
              
              7,725,445Deposit
      for property, plant and equipment
              
              
              
              
              
              
              1,906,159
              
              
              
              -Goodwill
              
              
              
              
              
              
              4,831,386
              
              
              
              -TOTAL
      ASSETS
              
              
              
              
              
              $
              42,745,342
              
              
              $
              41,365,854LIABILITIES
      ANDSTOCKHOLDERS’
      EQUITYCurrent
      liabilitiesAccounts
      payable
              
              
              
              
              
              $
              96,081
              
              
              $
              59,912Income
      tax payable
              
              
              
              
              
              
              128,929
              
              
              
              632,893Turnover
      and other taxes
              
              
              
              
              
              
              107,649
              
              
              
              406,839Expected
      warranty liabilities
              
              
              12
              
              
              
              50,466
              
              
              
              50,396Customers
      deposits
              
              
              
              
              
              
              247,522
              
              
              
              -Accrued
      liabilities
              
              
              
              
              
              
              293,558
              
              
              
              301,461Other
      payables
              
              
              
              
              
              
              253,520
              
              
              
              15,168Total
      current liabilities
              
              
              
              
              
              $
              1,177,725
              
              
              $
              1,466,669TOTAL
      LIABILITIES
              
              
              
              
              
              $
              1,177,725
              
              
              $
              1,466,669
 
 See
accompanying notes to consolidated financial statements
 
 5
 
 SUNWAY
      GLOBAL INC.CONSOLIDATED
      BALANCE SHEETS (Continued)AS
      AT JUNE 30, 2009 AND DECEMBER 31, 2008(Stated
      in US Dollars)
 
 Notes
              
              
              June
      30,
                2009
              
              December31,
                2008(Unaudited)
              
              
              (Audited)STOCKHOLDERS’
      EQUITYSeries
      B Convertible PreferredStock
      $0.0000001 par value; 400,000shares
      authorized; 160,494 shares issuedand
      outstanding at June 30, 2009and
      December 31, 2008  respectively
              
              
              13
              
              
              
              1
              
              
              
              1Common
      stock at $0.0000001 parvalue;
      100,000,000 shares authorized;18,499,736
      shares issued andoutstanding
      at June 30, 2009and
      December 31, 2008 respectively
              
              
              
              
              
              
              2
              
              
              
              2Additional
      paid-in capital
              
              
              
              
              
              
              22,679,965
              
              
              
              22,679,965Statutory
      reserves
              
              
              
              
              
              
              3,033,855
              
              
              
              2,127,978Retained
      earnings
              
              
              
              
              
              
              12,979,070
              
              
              
              12,247,049Accumulated
      other comprehensive income
              
              
              
              
              
              
              2,874,724
              
              
              
              2,844,190$
              41,567,617
              
              
              $
              39,899,185TOTAL
      LIABILITIES ANDSTOCKHOLDERS’
      EQUITY
              
              
              
              
              
              $
              42,745,342
              
              
              $
              41,365,854
  See
accompanying notes to consolidated financial statements
  6
  SUNWAY
      GLOBAL INC.CONSOLIDATED
      STATEMENTS OF INCOMEFOR
      THE SIX MONTHS ENDED JUNE 30, 2009 AND 2008(Stated
      in US Dollars)(Unaudited)
  Six
      months ended
                June
      30,Notes
              
              
              2009
              
              
              2008Net
      revenues
              
              
              18
              
              
              $
              5,668,342
              
              
              $
              8,090,863Cost
      of net revenues
              
              
              18
              
              
              
              (1,981,286
              )
              
              
              (2,376,675
              )Gross
      profit
              
              
              
              
              
              $
              3,687,056
              
              
              $
              5,714,188Selling
      expenses
              
              
              
              
              
              
              (361,302
              )
              
              
              (98,075
              )General
      and administrative expenses
              
              
              
              
              
              
              (1,384,831
              )
              
              
              (1,429,399
              )Income
      from operation
              
              
              
              
              
              $
              1,940,923
              
              
              $
              4,186,714Interest
      expenses
              
              
              
              
              
              
              (1,727
              )
              
              
              -Interest
      income
              
              
              
              
              
              
              41,927
              
              
              
              36,869Loss
      on disposal of fixed assets
              
              
              
              
              
              
              (9,552
              )
              
              
              -Income
      before income taxes
              
              
              
              
              
              $
              1,971,571
              
              
              $
              4,223,583Income
      taxes
              
              
              15
              
              
              
              (333,673
              )
              
              
              (672,462
              )Net
      income
              
              
              
              
              
              $
              1,637,898
              
              
              $
              3,551,121Net
      income per share:-Basic
              
              
              
              
              
              $
              0.09
              
              
              $
              0.30-Diluted
              
              
              
              
              
              $
              0.05
              
              
              $
              0.12Weighted
      average number of common stock-Basic
              
              
              14
              
              
              
              18,499,736
              
              
              
              11,757,733-Diluted
              
              
              14
              
              
              
              30,969,100
              
              
              
              29,064,297
 
 See
accompanying notes to consolidated financial statements
 
 7
  SUNWAY
      GLOBAL INC.CONSOLIDATED
      STATEMENTS OF INCOMEFOR
      THE THREE MONTHS ENDED JUNE 30, 2009 AND 2008(Stated
      in US Dollars)(Unaudited)
 
 Three
      months ended
                June
      30,Notes
              
              
              2009
              
              
              2008Net
      revenues
              
              
              18
              
              
              $
              2,734,631
              
              
              $
              4,499,670Cost
      of net revenues
              
              
              18
              
              
              
              (1,087,385
              )
              
              
              (1,236,310
              )Gross
      profit
              
              
              
              
              
              $
              1,647,246
              
              
              $
              3,263,360Selling
      expenses
              
              
              
              
              
              
              (180,950
              )
              
              
              (73,542
              )General
      and administrative expenses
              
              
              
              
              
              
              (750,917
              )
              
              
              (640,909
              )Income
      from operation
              
              
              
              
              
              $
              715,379
              
              
              $
              2,548,909Interest
      expenses
              
              
              
              
              
              
              (1,728
              )
              
              
              -Interest
      income
              
              
              
              
              
              
              18,735
              
              
              
              37,152Loss
      on disposal of fixed assets
              
              
              
              
              
              
              (9,556
              )
              
              
              -Income
      before income taxes
              
              
              
              
              
              $
              722,830
              
              
              $
              2,586,061Income
      taxes
              
              
              15
              
              
              
              (125,635
              )
              
              
              (400,774
              )Net
      income
              
              
              
              
              
              $
              597,195
              
              
              $
              2,185,287Net
      income per share:-Basic
      and diluted
              
              
              
              
              
              $
              0.03
              
              
              $
              0.14-Diluted
              
              
              
              
              
              $
              0.02
              
              
              $
              0.08Weighted
      average number of common stock-Basic
              
              
              
              
              
              
              18,499,736
              
              
              
              15,155,118-Diluted
              
              
              
              
              
              
              30,243,833
              
              
              
              28,619,524
 
 See
accompanying notes to consolidated financial statements
 
 8
 
 SUNWAY
      GLOBAL INC.CONSOLIDATED
      STATEMENTS OF STOCKHOLDERS’ EQUITYFOR
      THE YEAR ENDED DECEMBER 31, 2008 AND SIX MONTHS ENDED JUNE 30,
      2009(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, 2008
              
              $
              1
              
              
              $
              1
              
              
              
              223,658
              
              
              $
              1
              
              
              $
              16,099,965
              
              
              $
              2,127,978
              
              
              $
              3,188,280
              
              
              $
              1,180,288
              
              
              $
              22,596,514Conversion
      of Preferred Series Ainto
      Common Stock
              
              
              (1
              )
              
              
              -
              
              
              
              13,711,831
              
              
              
              -
              
              
              
              1
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -Conversion
      of Preferred Series Binto
      Common Stock
              
              
              -
              
              
              
              -
              
              
              
              148,140
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -Conversion
      of Warrant Series Jinto
      Common Stock
              
              
              -
              
              
              
              -
              
              
              
              4,416,107
              
              
              
              1
              
              
              
              6,579,999
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              6,580,000Net
      income
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              9,058,769
              
              
              
              -
              
              
              
              9,058,769Foreign
      currency translationadjustment
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              1,663,902
              
              
              
              1,663,902Balance,
      December 31,2008
              
              $
              -
              
              
              $
              1
              
              
              
              18,499,736
              
              
              $
              2
              
              
              $
              22,679,965
              
              
              $
              2,127,978
              
              
              $
              12,247,049
              
              
              $
              2,844,190
              
              
              $
              39,899,185Balance,
      January 1, 2009
              
              $
              -
              
              
              $
              1
              
              
              
              18,499,736
              
              
              $
              2
              
              
              $
              22,679,965
              
              
              $
              2,127,978
              
              
              $
              12,247,049
              
              
              $
              2,844,190
              
              
              $
              39,899,185Net
      income
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              1,637,898
              
              
              
              -
              
              
              
              1,637,898Appropriations
      to statutoryReserves
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              905,877
              
              
              
              (905,877
              )
              
              
              -
              
              
              
              -Foreign
      currency translationAdjustment
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              30,534
              
              
              
              30,534Balance,
      June  30,2009
              
              $
              -
              
              
              $
              1
              
              
              
              18,499,736
              
              
              $
              2
              
              
              $
              22,679,965
              
              
              $
              3,033,855
              
              
              $
              12,979,070
              
              
              $
              2,874,724
              
              
              $
              41,567,617
 
 See
accompanying notes to consolidated financial statements
 
 9
 
 SUNWAY
      GLOBAL INC.CONSOLIDATED
      STATEMENTS OF CASH FLOWSFOR
      THE SIX MONTHS ENDED JUNE 30, 2009 AND 2008(Stated
      in US Dollars)(Unaudited)
 
 Six
      months ended
                June
      30,2009
              
              
              2008Cash
      flows from operating activitiesNet
      income
              
              $
              1,637,898
              
              
              $
              3,551,121Depreciation
              
              
              474,148
              
              
              
              375,389Amortization
              
              
              407,773
              
              
              
              420,972Loss
      on disposal of fixed assets
              
              
              9,552
              
              
              
              -Adjustments
      to reconcile net incometo
      net cash provided by operating activities:Trade
      receivables, net
              
              
              (114,774
              )
              
              
              (851,682
              )Inventories
              
              
              (245,971
              )
              
              
              (34,545
              )Advances
      to suppliers
              
              
              (674,302
              )
              
              
              (623,758
              )Prepayments
              
              
              1,037,814
              
              
              
              114,059Tender
      deposits
              
              
              85,880
              
              
              
              1,233Travel
      advances to shareholders
              
              
              (28,788
              )
              
              
              (25,122
              )Advances
      to employees
              
              
              136,417
              
              
              
              107,267Other
      receivables
              
              
              (404,504
              )
              
              
              -Accounts
      payable
              
              
              36,096
              
              
              
              (252,954
              )Income
      tax payable
              
              
              (504,951
              )
              
              
              234,942Turnover
      and other taxes
              
              
              (299,819
              )
              
              
              103,875Customers
      deposits
              
              
              247,580
              
              
              
              (215,385
              )Accrued
      liabilities
              
              
              (8,285
              )
              
              
              27,375Other
      Payables
              
              
              (185,704
              )
              
              
              (25,438
              )Net
      cash provided by operating activities
              
              $
              1,606,060
              
              
              $
              2,907,349Cash
      flows from investing activitiesPurchase
      of plant and equipment
              
              $
              (185,311
              )
              
              $
              (914,693
              )Purchase
      of plant and equipment
              
              
              (2,173,206
              )
              
              
              -Sales
      of short term investment
              
              
              -
              
              
              
              (434,674
              )Restricted
      cash
              
              
              57,334
              
              
              
              61,215Advances
      to a related company
              
              
              -
              
              
              
              584,415Advances
      to a director
              
              
              -
              
              
              
              (624,299
              )Deposit
      for technology-based designs
              
              
              (5,134,586
              )
              
              
              -Deposit
      for property, plant and equipment
              
              
              (1,906,605
              )
              
              
              -Reversal
      of deposit for acquisition of subsidiary
              
              
              7,725,445
              
              
              
              -Acquisition
      of subsidiary, net of cash acquired
              
              
              (7,652,252
              )
              
              
              -Net
      cash used in investing activities
              
              $
              (9,269,181
              )
              
              $
              (1,328,036
              )
 Cash
      flows from financing activities
              
              $
              
              
              
              $Proceeds
      from exercise of Series J Convertible
              
              
              -
              
              
              
              6,530,000Net
      cash provided by financing activities
              
              $
              -
              
              
              $
              6,530,000
 
 10
 
 SUNWAY
      GLOBAL INC.CONSOLIDATED
      STATEMENTS OF CASH FLOWS (Continued)FOR
      THE SIX MONTHS ENDED JUNE 30, 2009 AND 2008(Stated
      in US Dollars)(Unaudited)
 
 Six
      months ended
                June
      30,2009
              
              
              2008Net
      in cash and cash equivalents sourced
              
              $
              (7,663,121
              )
              
              $
              8,109,313Effect
      of foreign currency translation oncash
      and cash equivalents
              
              
              58,007
              
              
              
              1,530,795Cash
      and cash equivalents–beginning of year
              
              
              15,189,941
              
              
              
              5,820,100Cash
      and cash equivalents–end of year
              
              $
              7,584,827
              
              
              $
              15,460,208
 Supplementary
      cash flow information:Interest
      received
              
              $
              41,927
              
              
              $
              36,869Interest
      paid
              
              
              1,727
              
              
              
              -Tax
      paid
              
              
              838,625
              
              
              
              672,462
  See
accompanying notes to consolidated financial statements
  11
 
 SUNWAY GLOBAL
INC.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 FOR
THE SIX MONTHS ENDED JUNE 30, 2009 AND 2008
 (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
$0.0000001 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.On March 16, 2008, SWT
acquired Beijing Sunway New-force Medical Treatment Tech Co., Ltd (“Beijing
Sunway”) as its wholly-owned subsidiary.  Beijing Sunway was
incorporated in Beijing, PRC on May 24, 2007.
 
 On
January 16, 2009, World Through (BVI) acquired Liheng Enterprise Company Limited
(“Liheng”) as its wholly-owned subsidiary. Liheng was incorporated in PRC on
June 6, 2003.
 
 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 (“US GAAP”) and have been consistently applied in
the presentation of financial statements.
  12
  SUNWAY
GLOBAL INC.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 FOR
THE SIX MONTHS ENDED JUNE 30, 2009 AND 2008
 (Stated
in US Dollars)(Unaudited)
 
 2.
              SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES
 
 (a)
              Method
      of Accounting (Continued)
 
 The
interim results of operations are not necessarily indicative of the results to
be expected for the fiscal period ending June 30, 2009. The Company’s
consolidation balance sheet as of December 31, 2008 has been taken from the
Company’s consolidation balance sheet as of the date. All other financial
statements contained herein are unaudited and, in the opinion of management,
contain all adjustments (consisting only of normal recurring accruals) necessary
for a fair presentation of financial position, results of operations and cash
flows for the period presented.
 
 The
preparation of financial statements in conformity with US GAAP requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosures of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates. This basis of accounting differs in certain material respects from
that used for the preparation of the books of account of the Company’s principal
subsidiaries, which are prepared in accordance with the accounting principles
and the relevant financial regulations applicable to enterprises with limited
liabilities established in the PRC and Hong Kong, the accounting standards used
in the places of their domicile. The accompanying condensed interim consolidated
financial statements reflect necessary adjustments not recorded in the books of
account of the Company's subsidiaries to present them in conformity with US
GAAP.
 
 (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 five subsidiaries since its reverse-merger on June 6, 2007. The
detailed identities of the consolidating subsidiaries would have been as
follows:
 
 Name of subsidiaries
              
              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
              %Liheng
      Enterprise Company Limited
              
              PRC
              
              
              100
              %*Note:
      Deemed variable interest entity
  13
  SUNWAY
GLOBAL INC.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 FOR
THE SIX MONTHS ENDED JUNE 30, 2009 AND 2008
 (Stated
in US Dollars)(Unaudited)
 
 2.
              SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
 
 (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.
 
 (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
                  
                  43-47
      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.
  14
  SUNWAY
GLOBAL INC.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 FOR
THE SIX MONTHS ENDED JUNE 30, 2009 AND 2008
 (Stated
in US Dollars)(Unaudited)
 
 2.
              SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
 
 (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 -
      10 yearsOffice
      equipment and motor vehicles
                
                5 -
      10 years
 
 The cost
and related accumulated depreciation of assets sold or otherwise retired are
eliminated from the accounts and any gain or loss is included in the statement
of income.
 
 (h)
              Maintenance
      and repairs
 
 The cost
of maintenance and repairs is charged to income as incurred, whereas significant
renewals and betterments are capitalized.
 
 (i)
                Accounting
      for the impairment of long-lived
assets
 
 The Group
periodically evaluates the carrying value of long-lived assets to be held and
used, including intangible assets subject to amortization, when events and
circumstances warrant such a review, pursuant to the guidelines established in
SFAS No. 144. The carrying value of a long-lived asset is considered impaired
when the anticipated undiscounted cash flow from such asset is separately
identifiable and is less than its carrying value. In that event, a loss is
recognised based on the amount by which the carrying value exceeds the fair
market value of the long-lived asset. Fair market value is determined primarily
using the anticipated cash flows discounted at a rate commensurate with the risk
involved. Losses on long-lived assets to be disposed of are determined in a
similar manner, except that fair market values are reduced for the cost to
dispose.
 
 During
the reporting period, there was no impairment loss.
 
 (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. The management regularly
evaluates the composition of its inventory to identify slow-moving and obsolete
inventories to determine if additional write-downs are
required.
 
 15
 
 SUNWAY
GLOBAL INC.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 FOR
THE SIX MONTHS ENDED JUNE 30, 2009 AND 2008
 (Stated
in US Dollars)(Unaudited)
 
 2.
              SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
 
 (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 six 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.
 
 June
      30,
                2009
              
              
              December
      31,
                2008Bank
      of Communications, Branch of DaqingCity
      Economic Zone
              
              $
              7,320,882
              
              
              $
              9,606,188Daqing
      City Commercial Bank
              
              
              -
              
              
              
              4,536,667Agricultural
      Bank of China
              
              
              52,729
              
              
              
              930,332China
      Construction Bank, Bejing Branch
              
              
              160,295
              
              
              
              -HSBC
              
              
              35,157
              
              
              
              109,151Cash
      on hand
              
              
              15,764
              
              
              
              7,603$
              7,584,827
              
              
              $
              15,189,941
 
 (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;
  ·
                The
      seller’s price to the buyer is fixed or determinable;
  and
  ·
                Collection
      is reasonably assured.
  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 4 installments. Deposit of 30% is received from client when the
contract is signed. Second payment of 30% is received when the project
commenced. Third payment of 35% is received after the construction is completed
within 4 months. The final sum of the remaining portion is received after the
construction is completed until one year.
  16
  SUNWAY
GLOBAL INC.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 FOR
THE SIX MONTHS ENDED JUNE 30, 2009 AND 2008
 (Stated
in US Dollars)(Unaudited)
 
 2.
              SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
  (o)
              Expected
      warranty liabilities
 
 The
Company warrants its products against defects in design, materials, and
workmanship generally for one year. A provision for estimated future costs
relating to warranty expense are recorded when products are shipped, and the
provision is based upon our own historical claim experience.
 
 (p)
              Cost
      of net revenues
 
 Cost of
net revenues consists primarily of material costs, employee compensation,
depreciation and related expenses, which are directly attributable to the
production of products.  All inbound freight charges, purchasing and
receiving costs, inspection costs, warehousing costs, internal transfer costs,
and the other costs of distribution network are also
included.  Write-down of inventory to lower of cost or market is also
recorded in cost of revenues.
 
 (q)
              Leases
 
 The Group
did not have lease which met the criteria of capital lease. Leases which do not
qualify as capital lease are classified as operating lease. Operating lease
rental payment included in general and administrative expenses were $37,719 and
$23,851, cost of sales were $9,864 and nil, selling expenses were $2,362 and nil
for the six months ended June 30, 2009 and 2008 respectively.
 
 (r)
              Advertising
 
 The Group
expensed all advertising costs as incurred.  Advertising expenses
included in selling expenses were $585 and $10,115 for the six months ended June
30, 2009 and 2008 respectively.
 
 (s)
              Shipping
      and handling
 
 All
shipping and handling are expensed as incurred.  Shipping and handling
expenses included in selling expenses, general and administrative expenses, and
cost of net revenues were $15,797 and $10,389 for the six months ended June 30,
2009 and 2008 respectively.
 
 (t)
                Research
      and development
 
 All
research and development costs are expensed as incurred. The research and
development costs included in general and administrative expenses were $51,141
and nil for the six months ended June 30, 2009 and 2008
respectively.
 
 (u)
                Retirement
      benefits
 
 Retirement
benefits in the form of contributions under defined contribution retirement
plans to the relevant authorities are charged to the statements of income as
incurred. The retirement benefit expenses included in general and administrative
expenses and selling expenses were $58,617 and $17,964 for the six months ended
June 30, 2009 and 2008 respectively.
  17
  SUNWAY
GLOBAL INC.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 FOR
THE SIX MONTHS ENDED JUNE 30, 2009 AND 2008
 (Stated
in US Dollars)(Unaudited)
 
 2.
              SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
 
 (v)
              Income
      taxes
 
 The Group
accounts for income tax using an asset and liability approach and allows for
recognition of deferred tax benefits in future years. Under the asset and
liability approach, deferred taxes are provided for the net tax effects of
temporary differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for income tax
purposes.  A valuation allowance is provided for deferred tax assets
if it is more likely than not these items will either expire before the Group is
able to realize their benefits, or that future realization is
uncertain.
 
 (w)
              Foreign
      currency translation
 
 The
accompanying financial statements are presented in United States dollars. The
reporting currency of the Group is the U.S. dollar ($). SWT, Sunway, Beijing
Sunway and Liheng 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:
 
 June
      30,
                2009
              
              
              December
      31,
                2008
              
              
              June
      30,
                2008Twelve
      months endedRMB
      : USD exchange rate
              
              
              -
              
              
              
              6.8542
              
              
              
              -Six
      months endedRMB
      : USD exchange rate
              
              
              6.8448
              
              
              
              -
              
              
              
              7.0726Average
      three months endedRMB
      : USD exchange rate
              
              
              6.8399
              
              
              
              -
              
              
              
              6.9696Average
      six months endedRMB
      : USD exchange rate
              
              
              6.8432
              
              
              
              -
              
              
              
              -
  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.
  18
  SUNWAY
GLOBAL INC.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 FOR
THE SIX MONTHS ENDED JUNE 30, 2009 AND 2008
 (Stated
in US Dollars)(Unaudited)
 
 2.    SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 (x)
              Statutory
      reserves
 
 As
stipulated by the PRC’s Company Law and as provided in the SWT, and Sunway’s
Articles of Association, SWT and Sunway’s net income after taxation can only be
distributed as dividends after appropriation has been made for the
following:
 
 (i)
                Making
      up cumulative prior years’ losses, if
any;
  (ii)
                Allocations
      to the “Statutory surplus reserve” of at least 10% of income after tax, as
      determined under PRC accounting rules and regulations, until the fund
      amounts to 50% of the Company's registered capital, which is restricted
      for set off against losses, expansion of production and operation or
      increase in registered
capital;
  (iii)
                Allocations
      of 5-10% of income after tax, as determined under PRC accounting rules and
      regulations, to the Company's “Statutory common welfare fund”, which is
      restricted for capital expenditure for the collective benefits of the
      Company's employees; and
  (iv)
                Allocations
      to the discretionary surplus reserve, if approved in the shareholders’
      general meeting.
 
 (y)
              Comprehensive
      income
 
 Comprehensive
income is defined to include all changes in equity except those resulting from
investments by owners and distributions to owners.  Among other
disclosures, all items that are required to be recognized under current
accounting standards as components of comprehensive income are required to be
reported in a financial statement that is presented with the same prominence as
other financial statements. The Group’s current component of other comprehensive
income is the foreign currency translation adjustment and the unrealised gain on
investment held for resale.
 
 (z)
              Recent
      accounting pronouncements
 
 In March
2008, the Financial Accounting Standards Board issued Statement of Financial
Accounting Standard (“SFAS”) No. 161 “Disclosures about Derivative Instruments
and Hedging Activities”. SFAS 161 is intended to improve financial reporting
about derivative instruments and hedging activities by requiring enhanced
disclosures to enable investors to better understand their effects on an
entity’s financial position, financial performance, and cash flows. It is
effective for financial statements issued for fiscal years and interim periods
beginning after November 15, 2008, with early application encouraged. The
Company is currently evaluating the impact of SFAS 161 on its consolidated
financial statements but does not expect it to have a material
effect.
 
 In April
2008, the FASB issued FASB Staff Position (FSP) FAS 142-3, Determination of the
Useful Life of Intangible Assets, which amends the factors that should be
considered in developing renewal or extension assumptions used to determine the
useful life of a recognized intangible asset under FASB Statement No. 142,
Goodwill and Other Intangible Assets. This Staff Position is effective for
financial statements issued for fiscal years beginning after December 15, 2008,
and interim periods within those fiscal years. Early adoption is prohibited.
Application of this FSP is not currently applicable to the Company as the
Company’s intangible assets consist of land used rights which has a fixed useful
life of 47 years.
  19
  SUNWAY
GLOBAL INC.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 FOR
THE SIX MONTHS ENDED JUNE 30, 2009 AND 2008
 (Stated
in US Dollars)(Unaudited)
 
 2.
              SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
 
 (z)
              Recent
      accounting pronouncements
 
 In May
2008, the FASB issued SFAS No. 163, Accounting for Financial Guarantee Insurance
Contracts, an interpretation of FASB Statement No. 60 (SFAS
163).  This statement clarifies accounting for financial guarantee
insurance contracts by insurance enterprises under FASB Statement No. 60,
Accounting and Reporting by Insurance Enterprises.  SFAS 163 is
effective for fiscal years and interim periods within those years, beginning
after December 15, 2008.  Because the Company does not issue financial
guarantee insurance contracts, it does not expect the adoption of this standard
to have an effect on its financial position or results of
operations.
 
 In May
2009, the FASB issued SFAS No. 165, “Subsequent Events.”  This
Statement sets forth: 1) the period after the balance sheet date during which
management of a reporting entity should evaluate events or transactions that may
occur for potential recognition or disclosure in the financial statements; 2)
the circumstances under which an entity should recognize events or transactions
occurring after the balance sheet date in its financial statements; and 3) the
disclosures that an entity should make about events or transactions that
occurred after the balance sheet date. This Statement is effective for interim
and annual periods ending after June 15, 2009. The company adopted this
Statement in the quarter ended June 30, 2009. This Statement is not expected to
have a material impact on the Company’s consolidated financial
results.
 
 In June
2009, the FASB issued SFAS No. 166 amends SFAS No. 140 by removing the exemption
from consolidation for Qualifying Special Purpose Entities (QSPEs). This
Statement also limits the circumstances in which a financial asset, or portion
of a financial asset, should be derecognized when the transferor has not
transferred the entire original financial asset to an entity that is not
consolidated with the transferor in the financial statements being presented
and/or when the transferor has continuing involvement with the transferred
financial asset. The adoption of these standards is not expected to have any
material impact on the Company’s Consolidated Financial Statements
 
 In June
2009, the FASB issued SFAS No. 167, “Amendments to FASB Interpretation No.
46(R),” SFAS No. 167 amends FASB Interpretation 46(R) to eliminate the
quantitative approach previously required for determining the primary
beneficiary of a variable interest entity and requires ongoing qualitative
reassessments of whether an enterprise is the primary beneficiary of a variable
interest entity. The adoption of these standards is not expected to have any
material impact on the Company’s Consolidated Financial Statements.
 
 In June
2009, the Financial Accounting Standards Board (FASB) issued Statement of
Financial Accounting Standards (SFAS) No. 168, “The FASB Accounting Standards
Codification TM and the Hierarchy of Generally Accepted Accounting Principles, a
replacement of FASB Statement No. 162” (the Codification). The Codification,
which was launched on July 1, 2009, became the single source of authoritative
nongovernmental U.S. GAAP, superseding existing FASB, American Institute of
Certified Public Accountants (AICPA), Emerging Issues Task Force (EITF) and
related literature. The Codification eliminates the GAAP hierarchy contained in
SFAS No. 162 and establishes one level of authoritative GAAP. All other
literature is considered non-authoritative. This Statement is effective for
financial statements issued for interim and annual periods ending after
September 15, 2009.  The implementation of this Statement is not
expected to have change to the company’s Consolidated Financial
Statements.
  20
  SUNWAY
GLOBAL INC.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 FOR
THE SIX MONTHS ENDED JUNE 30, 2009 AND 2008
 (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 trade receivables as of June 30, 2009 and December 31,
2008. The Group performs ongoing evaluations of its cash position and credit
evaluations to ensure collections and minimize losses.
 
 As of
June 30, 2009 and December 31, 2008, 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
six months ended June 30, 2009 and 2008, except Daqing Sunway’ sales were one
SADP from Europe, all of the Group’s sales were generated from 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 six months ended
                June
      30,2009
              
              
              2008Customer
      A
              
              $
              -
              
              
              $
              989,731Customer
      B
              
              
              659,506
              
              
              
              870,963Customer
      C
              
              
              547,131
              
              
              
              -Customer
      D
              
              
              368,163
              
              
              
              -Customer
      E
              
              
              705,645
              
              
              
              821,477Customer
      I
              
              
              331,776
              
              
              
              781,887
 
 Details
of customers accounting for 10% or more of the Group’s trade receivables are as
follows:
 
 June
      30,
                2009
              
              
              December
      31,
                2008Customer
      A
              
              $
              181,872
              
              
              $
              499,583Customer
      B
              
              
              360,856
              
              
              
              -Customer
      C
              
              
              347,592
              
              
              
              387,263Customer
      D
              
              
              239,950
              
              
              
              -Customer
      E
              
              
              390,413
              
              
              
              396,822Customer
      F
              
              
              283,198
              
              
              
              371,218Customer
      G
              
              
              212,900
              
              
              
              325,129Customer
      H
              
              
              200,957
              
              
              
              -
  21
  SUNWAY
GLOBAL INC.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 FOR
THE SIX MONTHS ENDED JUNE 30, 2009 AND 2008
 (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 a shareholder. The amount is unsecured,
interest free and repayable on demand.  The amount is held by Rise
Elite for the initial setup expenses.
 
 5.
              TRADE
      RECEIVABLES, NET
  June
      30,
                2009
              
              
              December
      31,
                2008Trade
      receivables, gross
              
              $
              3,081,148
              
              
              $
              2,962,333Provision
      for doubtful debts
              
              
              (8,425
              )
              
              
              (8,414
              )$
              3,072,723
              
              
              $
              2,953,919
  All of
the above trade receivables are due within one year of aging.
 
 An
analysis of the allowance for doubtful accounts for the six months ended June
30, 2009 and December 31, 2008 is as follows:
  June
      30,
                2009
              
              
              December
      31,
                2008Balance
      at beginning of period/year
              
              $
              8,414
              
              
              $
              7,884Foreign
      exchange adjustment
              
              
              11
              
              
              
              530Balance
      at end of period/year
              
              $
              8,425
              
              
              $
              8,414
 
 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.
 
 6.
              TRAVEL
      ADVANCES TO DIRECTORS
 
 Travel
advances were made to directors. These directors are also engaging in the
management of the company and these advances are used to enable their execution
of operational duties such as marketing and sales promotion.  The
following table provides an analysis of the outstanding
accounts.  They are unsecured, interest free and repayable on
demand.
 
 June
      30,
                2009
              
              
              December
      31,
                2008Bo
      Liu
              
              $
              39,598
              
              
              $
              23,495Deli
      Liang
              
              
              27,969
              
              
              
              15,238$
              67,567
              
              
              $
              38,733
 
 7.
              ADVANCES
      TO EMPLOYEES
 
 Advances
to employees are advances for purchases and traveling. They are unsecured,
interest free and repayable on demand.
 
 22
  SUNWAY
GLOBAL INC.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 FOR
THE SIX MONTHS ENDED JUNE 30, 2009 AND 2008
 (Stated
in US Dollars)(Unaudited)
 
 8.
              INVENTORIES
 
 Inventories
comprise the followings:
  June
      30,
                2009
              
              
              December
      31,
                2008Finished
      goods
              
              $
              271,622
              
              
              $
              218,448Work
      in progress
              
              
              16,235
              
              
              
              188,855Raw
      materials
              
              
              549,606
              
              
              
              183,435$
              837,463
              
              
              $
              590,738
 
 9.
              PROPERTY,
      PLANT AND EQUIPMENT, NET
 
 Property,
plant and equipment, net comprise the followings:
  June
      30,
                2009
              
              
              December
      31,
                2008At
      costBuilding
              
              $
              1,846,023
              
              
              $
              1,447,402Machinery
      and equipment
              
              
              679,586
              
              
              
              1,116,941Moldings
              
              
              4,161,305
              
              
              
              4,155,598Computer
      software
              
              
              2,098,505
              
              
              
              2,073,181Office
      equipment and motor vehicles
              
              
              385,166
              
              
              
              288,736$
              9,170,585
              
              
              $
              9,081,858Less:
      accumulated depreciation
              
              
              (4,043,401
              )
              
              
              (4,011,987
              )$
              5,127,184
              
              
              $
              5,069,871Construction
      in progress
              
              
              615,864
              
              
              
              -$
              5,743,048
              
              
              $
              5,069,871
  Depreciation
is included in the statement of income and as follows:
 
 For
      the six months ended
                June
      30,2009
              
              
              2008Cost
      of net revenues
              
              $
              438,129
              
              
              $
              368,794General
      and administrative expenses
              
              
              15,195
              
              
              
              6,595Selling
      expenses
              
              
              20,824
              
              
              
              -$
              474,148
              
              
              $
              375,389
 
 23


SUNWAY
GLOBAL INC.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 FOR
THE SIX MONTHS ENDED JUNE 30, 2009 AND 2008
 (Stated
in US Dollars)(Unaudited)
 
 10.
              INTANGIBLE
      ASSETS, NET
 
 Intangible
assets, net are as follows:
  June
      30,
                2009
              
              
              December
      31,
                2008Land
      use rights, at cost
              
              $
              2,485,002
              
              
              $
              1,354,308Technology-based
      design, at cost
              
              
              8,520,702
              
              
              
              6,320,577$
              11,005,704
              
              
              $
              7,674,885Less:
      accumulated amortization
              
              
              (1,521,826
              )
              
              
              (1,098,116
              )$
              9,483,878
              
              
              $
              6,576,769
 
 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 (RMB9,282,700), 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.
 
 The Group
acquired the rights to use a parcel of land totaling 9,082 square meters, for a
consideration of $89,552 (RMB613,035), located at Qingdao Hi-Tech Industry
Development Zone, Qingdao, Shandong in the People’s Republic of China for a term
of 48 years from November 3, 2006 to July 24, 2053. The land has been used to
build the Liheng’s facility.
 
 The
issuance of land certificate is in progress, we have already paid in cash. It is
totaling 10,841 square meters, for a consideration of $106,709 (RMB730,485),
located at Qingdao Hi-Tech Industry Development Zone, Qingdao, Shandong in the
People’s Republic of China. The land has been used to build the Lingheng’s
facility.
 
 Amortization
expense included in the general and administrative expenses for the six months
ended 2009 and 2008 were $407,773 and $420,972 respectively.
 
 11.
              GOODWILL
 
 June
      30,
                2009
              
              
              December
      31,
                2008Goodwill
              
              $
              4,831,386
              
              
              $
              -
 
 Goodwill
represents the excess of the cost of the purchases over the fair value of the
net acquired identifiable assets at the date of acquisition. Goodwill is related
to the acquisition of Liheng Enterprise Company Limited on January 16, 2009.
(Please also see Note 19) Management annually reviews the carrying value of
goodwill using the same of the discounted cash flows to determine if an
impairment charge is necessary. To date, the Company determined no impairment is
needed.'
 24
  SUNWAY
GLOBAL INC.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 FOR
THE SIX MONTHS ENDED JUNE 30, 2009 AND 2008
 (Stated
in US Dollars)(Unaudited)
 
 12.
              EXPECTED
      WARRANTY LIABILITIES
 
 An
analysis of the expected warranty liabilities as at June 30, 2009 and December
2008 is as follows:
 
 June
      30,
                2009
              
              
              December
      31,
                2008Balance
      at beginning of period/year
              
              $
              50,396
              
              
              $
              55,351Addition
      of warranty liabilities
              
              
              -
              
              
              
              -Warranty
      expense for the year
              
              
              -
              
              
              
              (8,533
              )Foreign
      currency difference
              
              
              70
              
              
              
              3,578Balance
      at end of period/year
              
              $
              50,466
              
              
              $
              50,396
 
 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 purchases 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 are summary in the following
table:
  Investment
                Amount
              
              Preferred
      B
              
              A
      Warrant
              
              B
      Warrant
              
              J
      Warrant
              
              C
      Warrant
              
              D
      WarrantVision
      Opportunity Master Fund, Ltd.
              
              
              6,500,000
              
              
              160,494
              
              
              4,814,815
              
              
              2,407,407
              
              
              4,362,416
              
              
              4,362,416
              
              
              2,181,208Columbia
      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
      DateSeries
      A
              
              
              4,962,963
              
              
              $
              1.76
              
              6
      /5 /2012Series
      B
              
              
              2,481,481
              
              
              
              2.30
              
              6
      /5 /2012Series
      J
              
              
              4,496,644
              
              
              
              1.49
              
              6
      /5 /2008Series
      C
              
              
              4,496,644
              
              
              
              1.94
              
              6
      /5 /2012Series
      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.
  25
  SUNWAY
GLOBAL INC.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 FOR
THE SIX MONTHS ENDED JUNE 30, 2009 AND 2008
 (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.
  Under the
agreement, Warrant J was expired on June 5, 2008. On that day, Vision
Opportunity Master Fund Ltd. converted all the Warrant J, totally 4,362,416
shares into 4,362,416 of common stock.
  On
February 7, 2008, 12 shareholders of Preferred Series A converted 228,530 shares
into 13,711,831 shares of common stock, in which Rise Elite International
Limited, Vision Opportunity Master Fund, Ltd and Kuhns Brothers, Inc converted
210,886, 7,990 and 2,647 shares of Preferred Series A into 12,653,160, 479,400
and 158,820 shares of common stock respectively.
  On June
18, 2008, Columbia China Capital Group, Inc. converted 4,938 shares of Preferred
Series B into 148,140 shares of common stock.
  On
November 10, 2008, Columbia China Capital Group, Inc. converted the Warrant J,
totally 53,691 shares into 53,691 of common stock.
  26
  SUNWAY
GLOBAL INC.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 FOR
THE SIX MONTHS ENDED JUNE 30, 2009 AND 2008
 (Stated
in US Dollars)(Unaudited)
 
 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 six months ended
                  June
      30,Earnings:
                
                2009
                
                
                2008Earnings
      for the purpose of basic earnings per share
                
                $
                1,637,898
                
                
                $
                3,551,121Effect
      of dilutive potential common stock
                
                
                -
                
                
                
                -Earnings for the purpose of
      dilutiveearnings per
      share
                
                $
                1,637,898
                
                
                $
                3,551,121Number
      of shares:Weighted average number
      ofcommon stock for the purpose of
      basicearnings per
      share
                
                
                18,499,736
                
                
                
                11,757,733Effect
      of dilutive potential common stock-conversion of Series
      Aconvertible preferred
      stock
                
                
                -
                
                
                
                2,787,570-conversion of Series
      Bconvertible preferred
      stock
                
                
                4,814,820
                
                
                
                4,952,379-conversion
      of Warrant Series A
                
                
                3,003,740
                
                
                
                2,424,318-conversion
      of Warrant Series B
                
                
                1,201,307
                
                
                
                822,708-conversion
      of Warrant Series J
                
                
                -
                
                
                
                3,763,183-conversion
      of Warrant Series C
                
                
                2,494,470
                
                
                
                1,961,291-conversion
      of Warrant Series D
                
                
                955,027
                
                
                
                595,115Weighted average number of
      commonstock for the purpose of
      dilutiveearnings per
      share
                
                
                30,969,100
                
                
                
                29,064,297


27
  SUNWAY
GLOBAL INC.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 FOR
THE SIX MONTHS ENDED JUNE 30, 2009 AND 2008
 (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, Sunway and Liheng.
(see note 1).
 
 SWT,
Sunway and Liheng, 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 25%.
 
 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:
 
 Six
      months ended
                June
      30,2009
              
              
              2008U.S.
      statutory rate
              
              
              34
              %
              
              
              34
              %Foreign
      income not recognized in the U.S.
              
              
              (34
              )%
              
              
              (34
              )%PRC
      Enterprise Income Tax
              
              
              25
              %
              
              
              33
              %Tax
      holiday
              
              
              (10
              )%
              
              
              (18
              )%Provision
      for income tax
              
              
              15
              %
              
              
              15
              %
 
 The
provision for income taxes consists of the following:
 
 Six
      months ended
                June
      30,2009
              
              
              2008Current
      tax – PRC EIT
              
              $
              333,673
              
              
              $
              672,462Deferred
      tax provision
              
              
              -
              
              
              
              -Income
      tax expenses
              
              $
              333,673
              
              
              $
              672,462
  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 receivables, 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.
  28
  SUNWAY
GLOBAL INC.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 FOR
THE SIX MONTHS ENDED JUNE 30, 2009 AND 2008
 (Stated
in US Dollars)(Unaudited)
 
 17.
              COMMITMENTS
      AND CONTINGENCIES
 
 The Group
has entered into a tenancy agreement for factory expiring through 2010. Total
rental expenses for the months ended June 30, 2009 and for the year ended
December 31, 2008 amounted to $49,945 and $70,922 respectively.
 
 As at
June 30, 2009, the Group’s commitments for minimum lease payments under these
leases for the next one year and thereafter are as follows:
 June
      30,2010
              
              $
              70,009$
              70,009
 
 As of
June 30, 2009, the Group had outstanding commitments with respect to the
construction in progress, amounted to $8,180.
 
 18.
              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 six months ended
              
              Workstation
              
              
              Workstation
              
              
              WorkstationJune
      30, 2009
              
              Type
      A
              
              
              Type
      B
              
              
              Type
      C
              
              
              SADP
              
              
              Other
              
              
              ConsolidatedNet
      revenues
              
              $
              2,044,292
              
              
              $
              601,327
              
              
              $
              2,504,453
              
              
              $
              434,901
              
              
              $
              83,369
              
              
              $
              5,668,342Cost
      of netrevenues
              
              
              (627,672
              )
              
              
              (174,297
              )
              
              
              (854,162
              )
              
              
              (254,402
              )
              
              
              (70,753
              )
              
              
              (1,981,286
              )$
              1,416,620
              
              
              $
              427,030
              
              
              $
              1,650,291
              
              
              $
              180,499
              
              
              $
              12,616
              
              
              $
              3,687,056
  For the six months ended
              
              Workstation
              
              
              Workstation
              
              
              WorkstationJune
      30, 2008
              
              Type
      A
              
              
              Type
      B
              
              
              Type
      C
              
              
              SADP
              
              
              Other
              
              
              ConsolidatedNet
      revenues
              
              $
              1,654,785
              
              
              $
              3,503,647
              
              
              $
              2,395,149
              
              
              $
              537,282
              
              
              $
              -
              
              
              $
              8,090,863Cost
      of netrevenues
              
              
              (428,782
              )
              
              
              (1,042,584
              )
              
              
              (700,954
              )
              
              
              (204,355
              )
              
              
              -
              
              
              
              (2,376,675
              )$
              1,226,003
              
              
              $
              2,461,063
              
              
              $
              1,694,195
              
              
              $
              332,927
              
              
              $
              -
              
              
              $
              5,714,188
  29
  SUNWAY
GLOBAL INC.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 FOR
THE SIX MONTHS ENDED JUNE 30, 2009 AND 2008
 (Stated
in US Dollars)(Unaudited)
 
 18.  SEGMENT
INFORMATION (Continued)
 
 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.
 
 19.
              ACQUISITIONS
 
 In order
to expand, on August 31, 2008, the Group entered an agreement with a third
party, Liheng Enterprise Company Limited, to acquire its 100% interest of it,
for a cash consideration of approximately $7.29 million (RMB$50,000,000). The
whole amount of $7,725,445 was paid and classified as “Deposit for the
acquisition of subsidiary” as at December 31, 2008. The transaction was planned
to be finished at December 1, 2008, but due to the PRC authority processing
delay, was completed on January 16, 2009.
 
 Details
of net assets acquired and goodwill are as follows:
 Purchase
      consideration
              
              $
              7,725,445Less:
      Fair value of net assets acquired (see below)
              
              
              (2,894,059
              )Goodwill
              
              $
              4,831,386
 
 The
assets and liabilities arising from the acquisition, provisionally determined,
are as follows:
 
 Fair
      valueCash
      and cash equivalents
              
              $
              73,193Property,
      plant and equipment
              
              
              955,208Land
      use rights
              
              
              1,133,323Other
      receivables
              
              
              1,127,949Turnover
      and other taxes
              
              
              28,477Other
      payables
              
              
              (424,091
              )Net
      assets acquired
              
              $
              2,894,059
 
 30
 
 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
  Since
June 27, 2007, the Company has operated as a holding company for entities that,
through contractual relationships, control the business of Daqing Sunway
Technology Co., Ltd. (“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. Currently our Company is the only
producer of two products in the PRC. We have served approximately 300 customers
in the PRC from our facilities in Daqing. We
generate our revenue from sales in two product categories: pneumatic transport
systems (“PTS”) and medicine dispensing systems (“SADP”).
  Affected
by the financial crisis and affected by equivocal reform of the medical
institutions in the PRC, bring about hospital’s investment declines, the company
sales declined in the second quarter of 2009, but we believe the global
liquidity crisis will affect all businesses. However, our strong balance sheet
and liquidity position should allow us to not only weather the current economic
environment but potentially benefit and continue to execute growth strategies
and pursue the numerous opportunities.
 
 This
discussion and analysis focuses on the business results of company, comparing
its results in the three and six month period ended June 30, 2009 to the three
and six month period ended June 30, 2008.
 
 Three-month
period ended June 30, 2009 and June 30, 2008
 
 Results
of Operations
 
 In the
three months ended June 30, 2009, the company’s net revenues, gross profit and
net income decreased significantly as compared with the same period of 2008, but
operating expenses increased during these periods. These decreases were
primarily attributable to (i) a decline in hospital-related investment due to
governmental reforms requiring pharmacies to be operated outside of and separate
from hospitals in the PRC; (ii) the departure of one of our sales managers, who
left to set up his own company; and (iii) our inability to boost morale in our
management personnel, who have been constrained in their efforts to attract new
investors by the large number of investor warrants outstanding.
 
 The
following table summarizes the results of our operations during the three months
ended June 30, 2009 and 2008, respectively, and provides information regarding
the dollar and percentage increase or (decrease) from the three months ended
June 30, 2009 and 2008.
  31
  Three
      Months Ended
                June
      30,2009
              
              2008
              
              Change
              
              Change
      rateNet
      Revenues
              
              $
              2,734,631
              
              $
              4,499,670
              
              $
              (1,765,039)
              
              
              (39.23)
              %Cost
      of net revenues
              
              $
              1,087,385
              
              $
              1,236,310
              
              $
              (148,925)
              
              
              (12.05)
              %Gross
      Profit
              
              $
              1,647,246
              
              $
              3,263,360
              
              $
              (1,616,114)
              
              
              (49.52)
              %Gross
      Margin
              
              
              60.24
              %
              $
              72.52
              %
              
              
              
              
              (12.28)
              %Operating
      Income
              
              $
              715,379
              
              $
              2,548,909
              
              $
              (1,833,530)
              
              
              (71.90)
              %Net
      Income
              
              $
              597,195
              
              $
              2,185,287
              
              $
              (1,588,092)
              
              
              (72.67)
              %Net
      profit margin
              
              
              21.84
              %
              
              48.57
              %
              
              
              
              
              (26.73)
              %
  Net
Revenue
  Net
revenue for the three months ended June 30, 2009, which resulted entirely from
sales, was $2,734,631, a decrease of 39.23% as compared with net revenue of
$4,499,670 for the three months ended June 30, 2008. In the three months ended
June 30, 2009, we sold 416 workstations, a decrease of 52.99% as compared with
885 workstations sold in the three months ended June 30, 2008. The decrease was
due primarily to (i) a decline in hospital-related investment due to
governmental reforms requiring pharmacies to be operated outside of and separate
from hospitals in the PRC; (ii) the departure of one of our sales managers, who
left to set up his own company; and (iii) our inability to boost morale in our
management personnel, who have been constrained in their efforts to attract new
investors by the large number of investor warrants outstanding.
  The following table breaks down application categories as
percentage of total net revenue.
  Three
      Months Ended June 30,2009
              
              2008sales
              
              % of total sales
              
              sales
              
              % of total salesPTS
              
              $
              2,216,111
              
              
              81.04
              %
              $
              4,499,670
              
              
              100.00
              %SADP
              
              $
              435,111
              
              
              15.91
              %
              $
              -
              
              
              -
              %OTHER
              
              
              83,409
              
              
              3.05
              %
              
              -
              
              
              -
              %Total
      net revenue
              
              $
              2,734,631
              
              
              100.00
              %
              $
              4,499,670
              
              
              100.00
              %
 
 Gross
Profit
 
 Gross
profit decreased 49.52% to $1,647,246 for the three months ended June 30, 2009,
as compared to $3,263,360 for the three months ended June 30, 2008. Our gross
profit margin dropped 12.28% from 72.52% as of the three months ended June 30,
2008 to 60.24% as of the same period of 2009, mainly due to a decrease in
product volume, which caused an increase in average fixed cost per
unit.
 
 The table
below presents information about our gross profit for the periods
indicated:
  Three
      Months Ended June 30,2009
              
              2008US$
              
              Gross
      profit
                margin
              
              US$
              
              Gross
      profit
                marginGross
      Profit
              
              $
              1,647,246
              
              
              60.24
              %
              $
              3,263,360
              
              
              72.52
              %
 
 Income
from Operations
 
 Operating
income decreased 71.90% to $715,379 for the three months ended June 30, 2009, as
compared to $2,548,909 for the three months ended June 30, 2008. The decrease
was primarily attributable to fewer sales and increased operation
expenses.
 
 Cost
of Net Revenue
 
 Cost of
net revenue decreased to $1,087,385 for the three months ended June 30, 2009,
representing a 12.05% decrease as compared with $1,236,310 for the same period
of 2008. The decrease is primarily due to fewer sales and a decrease in product
volume, which caused an increase in average fixed cost per unit.
  32
 
 The table
below presents information about our cost of net revenue for the periods
indicated:
 
 Three
      Months Ended June 30,2009
              
              2008
              
              ChangeCost
      of net revenue
              
              $
              1,087,385
              
              $
              1,236,310
              
              
              12.05
              %
 
 Operating
Expenses
 
 Operating
expenses were $931,867 for the three months ended June 30, 2009, an increase of
30.43% as compared with $714,451 for the same period of 2008. The increase was primarily due to two factors: (1) selling
expenses increased $107,408 or 146.05% to $180,950 in the three months ended
June 30, 2009 from $73,542 for the same period of 2008; and (2) general and
administrative expenses increased $110,008 or 17.16% to $750,917 in the three
months ended June 30, 2009 from $640,909 for the same period of 2008. In the
three months ended June 30, 2009, we have added to our sales force and hired a
general manager for our wholly-owned subsidiary, Beijing Sunway, all of which
has contributed to a sharp increase in selling and general and administrative
expenses.
 
 The table
below presents information about our operating expenses for the periods
indicated:
 
 Three Months Ended June
      30,2009
              
              2008
              
              ChangeSelling
      expenses
              
              $
              180,950
              
              $
              73,542
              
              
              146.05
              %General
      & Administrative expenses
              
              $
              750,917
              
              $
              640,909
              
              
              17.16
              %Total
      operating expenses
              
              $
              931,867
              
              $
              714,451
              
              
              30.43
              %
 
 Net
Income
 
 Net
income was $597,195 for the three months ended June 30, 2009, a 72.67% decrease
as compared with $2,185,287 for the same period of 2008. The decrease was
primarily attributable to  a drop in sales and sharp rise in operating
expenses.
 
 Earnings
Per Share
 
 Basic and
diluted earnings per share for the three months ended June 30, 2009 were $0.03
and $0.02 compared to $0.14 and $0.08 for the same period of 2008. The weighted
average number of shares outstanding to calculate basic EPS was 18,499,736 and
15,155,108 for the three months ended June 30, 2009 and June 30, 2008,
respectively. The weighted average number of shares outstanding to calculate
diluted EPS was 30,243,833 and 28,619,524 for the three months ended June 30,
2009 and June 30, 2008.
  Six-month period ended June 30, 2009 and June 30,
2008
 
 Results
of Operations
 
 In the
six months ended June 30, 2009, the company’s net revenues, gross profit and net
income decreased quickly as compared with the same period in the same period of
2008, but operating expenses increased slightly during these periods. These
decreases are primarily attributable to (i) ) a decline in hospital-related
investment due to governmental reforms requiring pharmacies to be operated
outside of and separate from hospitals in the PRC; (ii) the departure of one of
our sales managers, who left to set up his own company; and (iii) our inability
to boost morale in our management personnel, who have been constrained in their
efforts to attract new investors by the large number of investor warrants
outstanding.
  33
  The
following table summarizes the results of our operations during the six months
ended June 30, 2009 and 2008, respectively, and provides information regarding
the dollar and percentage increase or (decrease) from the six months ended June
30, 2009 and 2008.
  Six
      Months Ended June 30,2009
              
              2008
              
              Change
              
              Change
      rateNet
      Revenue
              
              $
              5,668,342
              
              $
              8,090,863
              
              $
              (2,422,521)
              
              
              (29.94)
              %Cost
      of net revenue
              
              $
              1,981,286
              
              $
              2,376,675
              
              $
              (395,389)
              
              
              (16.64)
              %Gross
      Profit
              
              $
              3,687,056
              
              $
              5,714,188
              
              $
              (2,027,132)
              
              
              (35.48)
              %Gross
      Margin
              
              
              65.05
              %
              $
              70.63
              %
              
              
              
              
              (5.58)
              %Operating
      Income
              
              $
              1,940,923
              
              $
              4,186,714
              
              $
              (2,245,791)
              
              
              (53.64)
              %Net
      Income
              
              $
              1,637,898
              
              $
              3,551,121
              
              $
              (1,913,223)
              
              
              (53.88)
              %Net
      profit margin
              
              
              28.90
              %
              
              43.89
              %
              
              
              
              
              (14.99)
              %
  Net
Revenue
  Net revenue for the six months ended
June 30, 2009, which resulted entirely from sales, was $5,668,342, a decrease of
29.94% as compared with net revenue of $8,090,863 for the six months ended June
30, 2008. In the six months ended June 30, 2009, we sold 982 workstations, a
decrease of 34.84% as compared with 1,507 workstations sold in the six months
ended June 30, 2008. The decrease was due to (i) a decline in hospital-related
investment due to governmental reforms requiring pharmacies to be operated
outside of and separate from hospitals in the PRC; (ii) the departure of one of
our sales managers, who left to set up his own company; and (iii) our inability
to boost morale in our management personnel, who have been constrained in their
efforts to attract new investors by the large number of investor warrants
outstanding. At the same time, we sold 4 SADP, an increase of 100% as compared
with 2 SADP in the six months ended June 30, 2008. The increase was due
primarily to our distinct price and service advantages as compared withforeignbrands.
  The
following table breaks down application categories as percentage of total net
revenue.
  Six
      Months Ended June 30,2009
              
              2008sales
              
              % of total sales
              
              sales
              
              % of total salesPTS
              
              $
              5,150,072
              
              
              90.86
              %
              $
              7,553,581
              
              
              93.36
              %SADP
              
              $
              434,901
              
              
              7.67
              %
              $
              537,282
              
              
              6.64
              %OTHER
              
              $
              83,369
              
              
              1.47
              %
              $
              -
              
              
              -
              %Total
      net revenue
              
              $
              5,668,342
              
              
              100.00
              %
              $
              8,090,863
              
              
              100.00
              %
 
 Gross
Profit
  Gross
profit decreased 35.48% to $3,687,056 for the six months ended June 30, 2009, as
compared to $5,714,188 for the six months ended June 30, 2008. Our gross profit
margin dropped 5.58% from 70.63% as of the six months ended June 30, 2008 to
65.05% as of the same period of 2009, mainly due to a decrease in product
volume, which raised our average fixed cost per unit, and an adjustment to our
pricing of SADP’s.
 
 The table
below presents information about our gross profit for the periods
indicated:
  Six
      Months Ended June 30,2009
              
              2008US$
              
              Gross
      profit
                margin
              
              US$
              
              Gross
      profit
                marginGross
      Profit
              
              $
              3,687,056
              
              
              65.05
              %
              $
              5,714,188
              
              
              70.63
              %
 
 Income
from Operations
 
 Operating
income decreased 53.64% to $1,940,923 for the six months ended June 30, 2009, as
compared to $4,186,714 for the six months ended June 30, 2008. The decrease was
primarily attributable to a drop in sales and increase in operation
expenses.
  34
 
 Cost
of Net Revenue
 
 Cost of
net revenue decreased to $1,981,286 for the six months ended June 30, 2009,
representing a 16.64% decrease as compared with $2,376,675 for the same period
of 2008. The decrease was primarily due to fewer sales decreased product volume,
which caused an increase in average fixed cost per unit.
 
 The table
below presents information about our cost of net revenue for the periods
indicated:
 
 Six
      Months Ended June 30,2009
              
              2008
              
              ChangeCost
      of net revenue
              
              $
              1,981,286
              
              $
              2,376,675
              
              
              (16.64)
              %
 
 Operating
Expenses
 
 Operating
expenses were $1,746,133 for the six months ended June 30, 2009, an increase as
compared with $1,527,474 for the same period of 2008. The increase was composed
by two reasons: (1) selling expenses increased $263,227 or 268.39% to $361,302
in the six months ended June 30, 2009 from $98,075 for the same period of 2008;
and (2) general and administrative expenses decreased $44,568 or 3.12% to
$1,384,831 in the six months ended June 30, 2009 from $1,429,399 for the same
period of 2008. In the six months ended June 30, 2009, we have increased our
sales force, which has led to a sharp rise in selling expenses.
 
 The table
below presents information about our operating expenses for the periods
indicated:
 
 Six Months Ended June
      30,2009
              
              2008
              
              ChangeSelling
      expenses
              
              $
              361,302
              
              $
              98,075
              
              
              268.39
              %General
      & Administrative expenses
              
              $
              1,384,831
              
              $
              1,429,399
              
              
              (3.12)
              %Total
      operating expenses
              
              $
              1,746,133
              
              $
              1,527,474
              
              
              14.32
              %
 
 Net
Income
 
 Net
income was $1,637,898 for the six months ended June 30, 2009, a decrease as
compared with $3,551,121 for the same period of 2008. The decrease was primarily
attributable to a drop in sales and sharp rise in operating
expenses.
 
 Earnings
Per Share
 
 Basic and
diluted earnings per share for the six months ended June 30, 2009 were $0.09 and
$0.05 compared to $0.30 and $0.12 for the same period of 2008. The weighted
average number of shares outstanding to calculate basic EPS was 18,499,736 and
11,757,733 for the six months ended June 30, 2009 and June 30, 2008,
respectively. The weighted average number of shares outstanding to calculate
diluted EPS was 30,969,100 and 29,064,297 for the six months ended June 30, 2009
and June 30, 2008, respectively.
 
 Trade
Receivables, net
 
 Trade
receivables, net increased 13.70% to $3,072,723 as of June 30, 2009, compared
with $2,953,919 as of December 31, 2008. The increase in trade receivables was
primarily attributable to a change in our sales policy.
 
 Inventory
 
 Inventory
consists of raw materials, finished goods and work in progress. As of June 30,
2009, the recorded value of our inventory has increased 41.77% to $837,463 from
$590,738 as of December 31, 2008. The increase in inventory was primarily
attributable our overestimations of market demands, and can be broken down into
an  increase in finished goods from $218,448 as of December 31, 2008
to $271,622 as of June 30, 2009, an increase of 24.34%. An increase in raw
material from $183,435 as of December 31, 2008 to $549,606 as of June 30, 2009,
an increase of 199.62%, and a decrease in work in progress from $188,855 as of
December 31, 2008 to $16,235 as of June 30, 2009, a decrease of
91.40%.
  35
 
 The table
below presents information about our inventory for the periods
indicated:
 
 Item
              
              June
      30,
                2009
              
              
              December
      31,
                2008
              
              
              ChangeFinished
      goods
              
              $
              271,622
              
              
              $
              218,447
              
              
              
              24.34
              %Work
      in progress
              
              $
              16,235
              
              
              $
              188,855
              
              
              
              (91.40
              )
      %Raw
    material
              
              $
              549,606
              
              
              $
              183,436
              
              
              
              199.62
              %Total
              
              $
              837,463
              
              
              $
              590,738
              
              
              
              41.77
              %
 
 Accounts
Payable
 
 Accounts
payable amounted to $96,081 as of June 30, 2009, an increase 36,169 as compared
with $59,912 as of December 31, 2008. The increase was primarily attributable to
much demand for raw material for SADP.
 
 Liquidity
and Capital Resources
 
 We have
historically financed our operations and capital expenditures principally
through private placements of debt and equity offerings and cash provided by
operations.
 
 The table
below presents information about our cash flow for the periods
indicated:
  Six
      months ended June 30,2009
              
              
              2008
              
              
              ChangeNet
      cash provided by (used in) operating activities
              
              $
              1,606,060
              
              
              $
              2,907,349
              
              
              $
              (1,301,289
              )Net
      cash provided by (used in) investing activities
              
              $
              (9,269,181
              )
              
              $
              (1,328,036
              )
              
              $
              (7,941,145
              )Net
      cash provided by (used in) financing activities
              
              $
              -
              
              
              $
              6,530,000
              
              
              $
              (6,530,000
              )Effect
      of foreign currency translation on cash and cash
    equivalents
              
              $
              58,007
              
              
              $
              1,530,795
              
              
              $
              (1,472,788
              )Beginning
      cash and cash equivalent
              
              $
              15,189,941
              
              
              $
              5,820,100
              
              
              $
              9,369,841Ending
      cash and cash equivalent
              
              $
              7,584,827
              
              
              $
              15,460,208
              
              
              $
              (7,875,381
              )
  Operating Activities
 
 For the
six months ended June 30, 2009, net cash provided by operating activities was
$1,606,060. This was primarily attributable to our net income of $1,637,898,
adjusted by an add-back of non-cash expenses mainly consisting of depreciation ,
amortization, and loss on disposal of fixed assets of $891,473 offset by a
$923,311 decrease in working capital. Specifically, the working capital increase
was primarily due to i) a $114,774 trade receivables increase driven by change
in sales policy; ii) a $245,971 inventories increase, principally raw material
and work in progress, because our manager overestimate demands of the market;
iii) a $674,302 increase in advance to suppliers to buy raw materials of SADP;
iv) a $826,819 decrease in prepayments , travel advances to shareholders,
other receivables, tender deposits and advances to employees, consisting
primarily of prepayments for raw materials supplies in advance of shipment,
working capital for sales staff and payment of client deposits; partially offset
by a $715,083 increase in accounts payable, tax payable, loans from unrelated
parties, amount due from a director, customers deposits, accrued liabilities
and other payables.
 
 Investing
Activities
 
 For the
six months ended June 30, 2009, net cash used in investing activities was
$9,269,181 and was primarily attributable to i) a $185,311 capital expenditure
for purchase of new plant and equipment; ii) a $2,173,206 capital expenditure
for purchase of new intangibles assets; iii) a $5,134,586 capital expenditure
for the purchase of technology-based designs, iv) a $57,334 in restricted cash;
v) a $73,193 reversal of deposit for the acquisition of Liheng Enterprise
Company Limited , and vi) a $1,906,605 deposit for moulding.
 
 Cash
and Cash Equivalents
 
 Our cash
and cash equivalents as at the beginning of June 30, 2009 were $7,584,827 and
decreased to $15,189,941 by the end of December 31, 2008.
 
 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 6 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.
  36
 
 Trends
 We are
not aware of any trends, events or uncertainties that have or are reasonably
likely to have a material impact on our short-term or long-term
liquidity.
  Inflation
 We
believe that inflation has not had a material or significant impact on our
revenue or our results of operations.
 
 Obligations
under Material Contracts
 
 We do not
have any material contractual obligations as of June 30, 2009.
 
 Critical
Accounting Policies
 
 Management's
discussion and analysis of its financial condition and results of operations is
based upon Sunway’s consolidated financial statements, which have been prepared
in accordance with United States generally accepted accounting principles.
Sunway’s financial statements reflect the selection and application of
accounting policies which require management to make significant estimates and
judgments. Management bases its estimates on historical experience and on
various other assumptions that are believed to be reasonable under the
circumstances. Actual results may differ from these estimates under different
assumptions or conditions. Sunway believes that the following reflect the more
critical accounting policies that currently affect Sunway’s financial condition
and results of operations.
 
 Impairment of long-lived
assets. We account for impairment of property, plant and equipment and
amortizable intangible assets in accordance with SFAS No. SFAS No. 144. The
carrying value of a long-lived asset is considered impaired when the anticipated
undiscounted cash flow from such asset is separately identifiable and is less
than its carrying value. In that event, a loss is recognized based on the amount
by which the carrying value exceeds the fair market value of the long-lived
asset. Fair market value is determined primarily using the anticipated cash
flows discounted at a rate commensurate with the risk involved. Losses on
long-lived assets to be disposed of are determined in a similar manner, except
that fair market values are reduced for the cost to dispose. During the
reporting years, there was no impairment loss incurred. Competitive pricing
pressure and changes in interest rates, could materially and adversely affect
our estimates of future net cash flows to be generated by our long-lived
assets.
  Inventories. Inventories
consist of finished goods and raw materials, and stated at the lower of cost or
market value. Substantially all inventory costs are determined using the
weighted average basis. Finished goods are comprised of direct materials, direct
labor and an appropriate proportion of overhead. The management regularly
evaluates the composition of its inventory to identify slow-moving and obsolete
inventories to determine if additional write-downs are
required.
 
 Trade receivable. Trade
receivables are recognized and carried at the original invoice amount less
allowance for any uncollectible amounts. An allowance for doubtful accounts is
maintained for all customers based on a variety of factors, including the length
of time the receivables are past due, significant one-time events and historical
experience.  Bad debts are written off as incurred.  During
the reporting years, there were no bad debts.
 
 Outstanding
accounts balances are reviewed individually for collectability. 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.
 
 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;●
                The seller’s price to the buyer is fixed or
      determinable, and●
                Collection is reasonably
  assured.
 
 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. A 30% deposit is received from
client when the contract is signed.  A 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.
  37
 
 Expected warranty
liabilities. The Company warrants its products against defects in design,
materials, and workmanship generally for one year. A provision for estimated
future costs relating to warranty expense are recorded when products are
shipped, and the provision is based upon our own historical claim
experience.
 
 Off-Balance
Sheet Arrangements
  We have
no off-balance sheet arrangements as of June 30, 2009.
 
 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 six months ended June 30, 2009. 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 CEO and CFO, performed an evaluation as
to whether any change in our internal controls over financial reporting 
occurred during the six months ended June 30, 2009.  Based on that
evaluation, our CEO and CFO concluded that no change occurred in the Company's
internal controls over financial reporting during the six months ended June 30,
2009 that has materially affected, or is reasonably likely to materially affect,
the Company's internal controls over financial reporting.
 
 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
  Not
Applicable.
  ITEM
2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
  None.
  38
  ITEM
3 - DEFAULTS UPON SENIOR SECURITIES
  To our
knowledge, there are no material defaults upon senior securities.
  ITEM
4 - SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS
 
 None.
  ITEM
5 - OTHER INFORMATION
  None.
  ITEM
6 - EXHIBITS.
 
 Exhibit
      No.
              
              Description
      of Exhibit31.1
              
              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.
 
 39
  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.
  SUNWAY
      GLOBAL, INC.Dated: August
      14, 2009
              By:
              /s/
      Liu BoName:
      Liu BoTitle:
      Chief Executive Officer
 
 Dated: August
      14, 2009
              By:
              /s/
      Samuel ShengName:
      Samuel ShengTitle:
      Chief Financial Officer
  40