**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


WASHINGTON,
      D.C. 20549




**FORM
      10-Q**




(Mark
      One)




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




**FOR
      THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2008.**




OR




**o** **TRANSITION
      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 is a large accelerated filer, an
      accelerated filer, a non-accelerated filer, or a smaller reporting company.
      See
      the definitions of “large accelerated filer,” “accelerated filer” and “smaller
      reporting company” in Rule 12b-2 of the Exchange Act.




Large
                accelerated filero
            Accelerated
                fileroNon-accelerated
                filero
            Smaller
                reporting companyx




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 November 10, 2008, there were
      18,499,736 outstanding shares of the Registrant's Common Stock, $0.001 par
      value.










**TABLE
      OF CONTENTS**





PagePART
                IItem
                1.
            Financial
                Statements
            
            2Item
                2.
            Management’s
                Discussion and Analysis of Financial Condition and Results of
                Operation
            
            31Item
                3.
            Quantitative
                and Qualitative Disclosures About Market Risk
            
            37Item
                4T
            Controls
                and Procedures
            
            37PART
                IIItem
                1.
            Legal
                Proceedings
            
            37Item
                1A.
            Risk
                Factors
            
            37Item
                2.
            Unregistered
                Sales of Equity Securities and Use of Proceeds
            
            37Item
                3.
            Defaults
                Upon Senior Securities
            
            37Item
                4.
            Submission
                of Matters to a Vote of Security Holders
            
            38Item
                5.
            Other
                Information
            
            38Item
                6.
            Exhibits
            
            38SIGNATURES
            
            39




1




**PART
      I**


**FINANCIAL
      INFORMATION**





**ITEM
      1. FINANCIAL STATEMENTS**










**SUNWAY
      GLOBAL INC.**





**FINANCIAL
      STATEMENTS**


**FOR
      THE NINE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007**


**(Stated
      in US dollars)(Unaudited)**




2




**SUNWAY
      GLOBAL INC.**








**CONTENTS**
            **PAGES**REPORT
                OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING 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., ACA., LL.B.,
              CPA(Practising)








To:
      The
      board of directors and shareholders 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 of Sunway
      Global Inc. and consolidated subsidiaries as of September 30, 2008, and for
      the
      three-month and nine-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 Public
      Company Accounting Oversight Board (United States). 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, China
            
            Albert Wong & Co.November 14, 2008
            
            Certified Public
              Accountants




4





**SUNWAY
                GLOBAL INC.****CONSOLIDATED
                BALANCE SHEETS****AS
                AT SEPTEMBER 30, 2008 AND DECEMBER 31, 2007****(Stated
                in US Dollars)**





Notes
            
            September
                30, 2008
            
            December
                31, 2007**ASSETS**
            
            
            
            (Unaudited)
            
            (Audited)Current
                assetsCash
                and cash equivalents
            
            
            
            
            $
            16,289,476
            
            $
            5,820,100Trade
                receivables, net
            
            
            6
            
            
            3,040,200
            
            
            1,525,201Advances
                to suppliers
            
            
            
            
            
            2,201,333
            
            
            1,331,159Prepayments
            
            
            
            
            
            40,000
            
            
            125,333Tender
                deposits
            
            
            
            
            
            203,858
            
            
            131,013Inventories
            
            
            9
            
            
            964,073
            
            
            766,933Travel
                advances to shareholders
            
            
            7
            
            
            64,891
            
            
            30,824Advances
                to employees
            
            
            8
            
            
            461,553
            
            
            548,364Total
                current assets
            
            
            
            
            $
            23,265,384
            
            $
            10,278,927Amount
                due from a related company
            
            
            4
            
            
            830
            
            
            585,678Amount
                due from a director
            
            
            5
            
            
            -
            
            
            1,028,474Restricted
                cash
            
            
            
            
            
            392,030
            
            
            491,049Deposit
                for acquisition of property, plant and equipment
            
            
            
            
            
            2,917,536
            
            
            -Property,
                plant and equipment, net
            
            
            10
            
            
            5,274,020
            
            
            4,449,619Intangible
                assets, net
            
            
            11
            
            
            6,781,364
            
            
            6,933,491**TOTAL
                ASSETS**
            
            
            
            
            $
            38,631,164
            
            $
            23,767,238**LIABILITIES
                AND STOCKHOLDERS’ EQUITY**Current
                liabilitiesTrade
                payables
            
            
            
            
            $
            61,574
            
            $
            245,917Income
                tax payable
            
            
            
            
            
            465,779
            
            
            157,877Turnover
                and other taxes
            
            
            
            
            
            475,717
            
            
            143,857Expected
                warranty liabilities
            
            
            12
            
            
            59,057
            
            
            55,351Customer
                deposits
            
            
            
            
            
            -
            
            
            208,274Accrued
                liabilities
            
            
            
            
            
            362,962
            
            
            323,464Other
                payables
            
            
            
            
            
            14,926
            
            
            35,984Total
                current liabilities
            
            
            
            
            $
            1,440,015
            
            $
            1,170,724**TOTAL
                LIABILITIES**
            
            
            
            
            $
            1,440,015
            
            $
            1,170,724





See
      accompanying notes to consolidated financial statements




5




**SUNWAY
                GLOBAL INC.****CONSOLIDATED
                BALANCE SHEETS (Continued)****AS
                AT SEPTEMBER 30, 2008 AND DECEMBER 31, 2007****(Stated
                in US Dollars)**





Notes
            
            September
                30, 2008
            
            December
                31, 2007(Unaudited)
            
            (Audited)**STOCKHOLDERS’
                EQUITY**Series
                A Convertible PreferredStock
                $0.001 par value; 400,000 sharesauthorized;
                Nil and 246,176 sharesissued
                and outstanding at September30,
                2008 and December 31, 2007 respectively
            
            
            
            
            $
            -
            
            $
            246Series
                B Convertible PreferredStock
                $0.001 par value; 400,000shares
                authorized; 160,494 and165,432
                shares issued andoutstanding
                at September 30, 2008and
                December 31, 2007 respectively
            
            
            13
            
            
            160
            
            
            165Common
                stock at $0.001 par value;100,000,000
                shares authorized;18,446,045
                and 223,658 shares issuedand
                outstanding at September 30, 2008and
                December 31, 2007 respectively
            
            
            
            
            
            18,446
            
            
            224Additional
                paid-in capital
            
            
            
            
            
            22,611,362
            
            
            16,099,333Statutory
                reserves
            
            
            
            
            
            2,127,978
            
            
            2,127,978Retained
                earnings
            
            
            
            
            
            9,605,503
            
            
            3,188,280Accumulated
                other comprehensive income
            
            
            
            
            
            2,827,700
            
            
            1,180,288$
            37,191,149
            
            $
            22,596,514**TOTAL
                LIABILITIES AND STOCKHOLDERS’ EQUITY**
            
            
            
            
            $
            38,631,164
            
            $
            23,767,238




See
      accompanying notes to consolidated financial statements




6




**SUNWAY
                GLOBAL INC.****CONSOLIDATED
                STATEMENTS OF INCOME****FOR
                THE NINE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007****(Stated
                in US Dollars)(Unaudited)**





Nine
                months ended September 30,Notes
            
            2008
            
            2007Net
                revenues
            
            
            18
            
            $
            14,074,768
            
            $
            9,724,853Cost
                of net revenues
            
            
            18
            
            
            (4,154,866
            )
            
            (2,777,975
            )Gross
                profit
            
            
            
            
            $
            9,919,902
            
            $
            6,946,878Selling
                expenses
            
            
            
            
            
            (279,167
            )
            
            (219,401
            )General
                and administrative expenses
            
            
            
            
            
            (2,135,759
            )
            
            (1,268,852
            )Income
                from operation
            
            
            
            
            $
            7,504,976
            
            $
            5,458,625Gain
                on disposal of investments
            
            
            
            
            
            -
            
            
            1,306,841Interest
                expenses
            
            
            
            
            
            -
            
            
            (9,462
            )Interest
                income
            
            
            
            
            
            44,698
            
            
            26,022Income
                before income taxes
            
            
            
            
            $
            7,549,674
            
            $
            6,782,026Income
                taxes
            
            
            15
            
            
            (1,132,451
            )
            
            (1,024,633
            )Net
                income
            
            
            
            
            $
            6,417,223
            
            $
            5,757,393Net
                income per share:-Basic
            
            
            
            
            $
            0.46
            
            $
            0.30-Diluted
            
            
            
            
            $
            0.22
            
            $
            0.30Weighted
                average number of common stock-Basic
            
            
            14
            
            
            14,003,444
            
            
            19,207,455-Diluted
            
            
            14
            
            
            28,690,904
            
            
            19,207,455





See
      accompanying notes to consolidated financial statements




7




**SUNWAY
                GLOBAL INC.****CONSOLIDATED
                STATEMENTS OF INCOME****FOR
                THE THREE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007****(Stated
                in US Dollars)(Unaudited)**





Three
                months ended September 30,2008
            
            2007Net
                revenues
            
            $
            6,025,075
            
            $
            4,065,642Cost
                of net revenues
            
            
            (1,790,475
            )
            
            (1,078,360
            )Gross
                profit
            
            $
            4,234,600
            
            $
            2,987,282Selling
                expenses
            
            
            (247,296
            )
            
            (170,812
            )General
                and administrative expenses
            
            
            (777,291
            )
            
            (603,635
            )Income
                from operation
            
            $
            3,210,013
            
            $
            2,212,835Gain
                on disposal of investments
            
            
            -
            
            
            1,306,841Interest
                expenses
            
            
            -
            
            
            (6,170
            )Interest
                income
            
            
            19,893
            
            
            24,422Income
                before income taxes
            
            $
            3,229,906
            
            $
            3,537,928Income
                taxes
            
            
            (484,486
            )
            
            (527,142
            )Net
                income
            
            $
            2,745,420
            
            $
            3,010,786Net
                income per share:-Basic
                and diluted
            
            $
            0.15
            
            $
            0.16-Diluted
            
            $
            0.10
            
            $
            0.16Weighted
                average number of common stock-Basic
            
            
            18,446,045
            
            
            19,207,455-Diluted
            
            
            27,587,392
            
            
            19,207,455





See
      accompanying notes to consolidated financial statements




8




**SUNWAY
                GLOBAL INC.****CONSOLIDATED
                STATEMENTS OF STOCKHOLDERS’ EQUITY****FOR
                THE YEAR ENDED DECEMBER 31, 2007 AND NINE MONTHS ENDED SEPTEMBER
                30,
                2008****(Stated
                in US Dollars)(Unaudited)**





AccumulatedPreferred
            
            Preferred
            
            No.
                of
            
            
            
            Additional
            
            
            
            
            
            otherSeries
            
            Series
            
            shares
            
            Common
            
            paid
                - in
            
            Statutory
            
            Retained
            
            comprehensiveA
            
            B
            
            outstanding
            
            stock
            
            capital
            
            reserves
            
            earnings
            
            income
            
            TotalBalance,
                January 1, 2007
            
            $
            246
            
            $
            165
            
            
            223,658
            
            $
            224
            
            $
            4,223,000
            
            $
            1,124,073
            
            $
            4,844,680
            
            $
            843,205
            
            $
            11,035,593Reversal
                of relaized gain on investment
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (423,537
            )
            
            (423,537
            )Net
                income
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            6,047,505
            
            
            -
            
            
            6,047,505Appropriation
                to statutory reserves
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            1,003,905
            
            
            (1,003,905
            )
            
            -
            
            
            -Issuance
                to Vision re: Debentures
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            199,200
            
            
            -
            
            
            -
            
            
            -
            
            
            199,200Issunace
                of Series B Convertible Preferred Stock
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            11,677,133
            
            
            -
            
            
            (6,700,000
            )
            
            -
            
            
            4,977,133Foregin
                currency translation adjustment
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            760,620
            
            
            760,620Balance,
                December 31, 2007
            
            $
            246
            
            $
            165
            
            
            223,658
            
            $
            224
            
            $
            16,099,333
            
            $
            2,127,978
            
            $
            3,188,280
            
            $
            1,180,288
            
            $
            22,596,514Balance,
                January 1, 2008
            
            $
            246
            
            $
            165
            
            
            223,658
            
            $
            224
            
            $
            16,099,333
            
            $
            2,127,978
            
            $
            3,188,280
            
            $
            1,180,288
            
            $
            22,596,514Conversion
                of Preferred Series Ainto
                Common Stock
            
            
            (246
            )
            
            -
            
            
            13,711,831
            
            
            13,712
            
            
            (13,466
            )
            
            -
            
            
            -
            
            
            -
            
            
            -Conversion
                of Preferred Series Binto
                Common Stock
            
            
            -
            
            
            (5
            )
            
            148,140
            
            
            148
            
            
            (143
            )
            
            -
            
            
            -
            
            
            -
            
            
            -Conversion
                of Warrant Series Jinto
                Common Stock
            
            
            -
            
            
            -
            
            
            4,362,416
            
            
            4,362
            
            
            6,525,638
            
            
            -
            
            
            -
            
            
            -
            
            
            6,530,000Net
                income
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            6,417,223
            
            
            -
            
            
            6,417,223Foreign
                currency translation adjustment
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            1,647,412
            
            
            1,647,412Balance,
                September 30, 2008
            
            $
            -
            
            $
            160
            
            
            18,446,045
            
            $
            18,446
            
            $
            22,611,362
            
            $
            2,127,978
            
            $
            9,605,503
            
            $
            2,827,700
            
            $
            37,191,149




See
      accompanying notes to consolidated financial statements




9




**SUNWAY
                GLOBAL INC.****CONSOLIDATED
                STATEMENTS OF CASH FLOWS****FOR
                THE NINE MONTHS ENDED SEPTEMBER 30, 2008 AND
                2007****(Stated
                in US Dollars)(Unaudited)**





Nine
                months ended September 30,2008
            
            2007Cash
                flows from operating activitiesNet
                income
            
            $
            6,417,223
            
            $
            5,757,393Depreciation
            
            
            588,069
            
            
            553,995Amortization
            
            
            638,114
            
            
            19,299Gain
                on disposal of investment
            
            
            -
            
            
            (1,306,841
            )Warranty
                expense
            
            
            -
            
            
            20,310Adjustments
                to reconcile net income to net cash provided by operating
                activities:Trade
                receivables, net
            
            
            (1,383,854
            )
            
            (935,915
            )Inventories
            
            
            (142,793
            )
            
            (201,717
            )Advances
                to suppliers
            
            
            (747,483
            )
            
            (1,001,819
            )Other
                receivables
            
            
            -
            
            
            (1,454,379
            )Prepayments
            
            
            90,978
            
            
            (204,852
            )Tender
                deposits
            
            
            (62,756
            )
            
            -Travel
                advances to shareholders
            
            
            (31,345
            )
            
            -Advances
                to employees
            
            
            120,991
            
            
            -Trade
                payables
            
            
            (194,875
            )
            
            89,334Income
                tax payable
            
            
            291,223
            
            
            -Turnover
                and other taxes
            
            
            315,610
            
            
            360,078Customers
                deposits
            
            
            (217,655
            )
            
            132,800Accrued
                liabilities and other payables
            
            
            (5,512
            )
            
            24,970Net
                cash provided by operating activities
            
            $
            5,675,935
            
            $
            1,852,656Cash
                flows from investing activitiesPurchase
                of plant and equipment
            
            $
            (1,103,720
            )
            $
            (369,135
            )Purchase
                of investment securities
            
            
            -
            
            
            (3,458,551
            )Sales
                of investment securities
            
            
            -
            
            
            2,664,547Deposit
                for acquisition of property, plant and equipment
            
            
            (2,917,536
            )
            
            -Decrease
                in restricted cash
            
            
            99,019
            
            
            -Increase
                in restricted cash
            
            
            -
            
            
            (661,442
            )Rental
                deposit
            
            
            -
            
            
            (1,995
            )Decrease
                in amount due from a related company
            
            
            611,191
            
            
            -Decrease
                in amount due from a director
            
            
            1,074,798
            
            
            -Net
                cash used in investing activities
            
            $
            (2,236,248
            )
            $
            (1,826,576
            )


Cash
                flows from financing activitiesProceeds
                from Vision re: Debentures
            
            $
            -
            
            $
            199,202Proceeds
                from issuance of Series B ConvertiblePreferred
                Stock
            
            
            -
            
            
            4,977,133Proceeds
                from exercise of Series J ConvertiblePreferred
                Stock
            
            
            6,530,000
            
            
            -Net
                cash provided by financing activities
            
            $
            6,530,000
            
            $
            5,176,335




10




**SUNWAY
                GLOBAL INC.****CONSOLIDATED
                STATEMENTS OF CASH FLOWS (Continued)****FOR
                THE NINE MONTHS ENDED SEPTEMBER 30, 2008 AND
                2007****(Stated
                in US Dollars)(Unaudited)**





Nine
                months ended September 30,2008
            
            2007Net
                in cash and cash equivalents sourced
            
            $
            9,969,687
            
            $
            5,202,415Effect
                of foreign currency translation on cash and cash
                equivalents
            
            
            499,689
            
            
            197,087Cash
                and cash equivalents-beginning of year
            
            
            5,820,100
            
            
            1,749,048Cash
                and cash equivalents-end of year
            
            $
            16,289,476
            
            $
            7,148,550


Supplementary
                cash flow information:Interest
                received
            
            $
            44,698
            
            $
            26,022Interest
                paid
            
            
            -
            
            
            9,462Tax
                paid
            
            
            1,101,281
            
            
            1,024,633




See
      accompanying notes to consolidated financial statements




11




**SUNWAY
      GLOBAL INC.**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**FOR
      THE NINE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007**


**(Stated
      in US Dollars** **)(Unaudited)**





**1.**
              **ORGANIZATION
                  AND PRINCIPAL
                  ACTIVITIES**





Sunway
      Global Inc. (the “Company”) (formerly known as National Realty and Mortgage,
      Inc.) was incorporated in the state of Nevada on October 18, 1971. Prior to
      June
      6, 2007 the Company has only nominal operations and assets.





On
      June
      6, 2007, the Company executed a reverse-merger with Rise Elite International
      Limited (“Rise Elite (BVI)”) by an exchange of shares whereby the Company issued
      210,886 shares of the Company’s Series A Convertible Preferred Stock, par value
      $0.001 per share in exchange for all shares in World Through Limited, a British
      Virgin Islands corporation (“World Through (BVI)”).





World
      Through (BVI) holds Sunway World Through Technology (Daqing) Co Ltd (“SWT” or
“WFOE”), which entered into a series of agreements with Daqing Sunway Technology
      Co., Ltd (“Sunway”) including but not limited to management, loan, purchase
      option, consignment, trademark licensing, non-competition. 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. Beijing
      Sunway New-force Medical Treatment Tech Co., Ltd (“Beijing Sunway”) was
      incorporated in Beijing, PRC on May 24, 2007, which was a wholly-owned
      subsidiary of “SWT”.





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.





On
      February 7, 2008, the Company changed its name from National Realty and
      Mortgage, Inc. to Sunway Global Inc.





**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.





The
      interim results of operations are not necessarily indicative of the results
      to
      be expected for the fiscal period ending September 30, 2008. The Company’s
      consolidated balance sheet as of December 31, 2007 has been taken from the
      Company’s audited consolidated 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 Company’s accounting policies and certain
      other disclosure are set forth in the notes to the consolidated financial
      statements contained in the Company’s Annual Report on Form 10-K for the year
      ended December 31, 2007. These financial statements should be read in
      conjunction with the Company’s audited consolidated financial statements and
      notes thereto.




12





**SUNWAY
      GLOBAL INC.**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**THE
      NINE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007**


**(Stated
      in US Dollars)(Unaudited)**





**2.**
            **SUMMARY
                OF SIGNIFICANT ACCOUNTING
                POLICIES**





*(a)*
            *Method
                of accounting (Continued)*





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 British Virgin Island, 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 four subsidiaries since its reverse-merger on October 3, 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%*Note:
                Deemed variable interest entity




13




**SUNWAY
      GLOBAL INC.**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**FOR
      THE NINE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007**


**(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)*
              *Intangible
                  assets*





Intangible
      assets 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 intangible assets are as follows:




Land use rights
            47
                yearsTechnology-based design
            10
                years




*(f)*
              *Accounting
                  for software systems*





The
      Company adopts FASB No. 86 for accounting of software systems, in that all
      expenditures incurred from start-up to completion of feasibility are expensed;
      development costs, after the feasibility study through system completion, are
      capitalized, and are depreciated over a useful life of three years. Expenditures
      incurred after completion are expensed as repairs and maintenance.




14


**SUNWAY
      GLOBAL INC.**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**FOR
      THE NINE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007**


**(Stated
      in US Dollars)(Unaudited)**





**2.**
            **SUMMARY
                OF SIGNIFICANT ACCOUNTING POLICIES (****Continued****)**





*(g)*
              *Property,
                  plant and equipment*





Property,
      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 property, plant and
      equipment are as follows:




Buildings
            20
                yearsMachinery and equipment
            6
                yearsMolding
            10
                yearsComputer software
            3
                yearsOffice equipment and motor vehicles
            6
                - 10
                years




The
      cost
      and related accumulated depreciation of assets sold or otherwise retired are
      eliminated from the accounts and any gain or loss is included in the statement
      of income.





*(h)*
              *Maintenance
                  and repairs*





The
      cost
      of maintenance and repairs is charged to the income statement 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 periods, 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 NINE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007**


**(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 three months or less to be cash equivalents. The Company maintains
      bank accounts only in the PRC. The Company does not maintain any bank accounts
      in the United States of America.





**September
                30, 2008**
            
            **December
                31, 2007**Bank
                of Communications, Branch of Daqing City Economic Zone
            
            
            8,451,668
            
            
            5,398,866Daqing
                City Commercial Bank
            
            
            4,527,891
            
            
            72,690Agricultural
                Bank of China
            
            
            1,016,470
            
            
            -HSBC
            
            
            2,286,293
            
            
            348,362Cash
                on hand
            
            
            7,154
            
            
            18216,289,476
            
            
            5,820,100





*(m)*
            *Restricted
                cash*





Restricted
      cash are pledged deposits in an escrow account for investor relations
      purpose.





*(n)*
            *Revenue
                recognition*





Net
      revenue is recognized when customer takes delivery and acceptance of products,
      the price is fixed or determinable as stated on sales contract, and the
      collectability is reasonably assured. Customers do not have a general right
      of
      return on products delivered, and management has not made allowance for
      estimated sales returns.





Contract
      revenues are recognized when the manufacturing and installation of the medical
      equipments is completed. Generally, the company receives total contract sum
      from
      clients in 3 installments. Deposit of 30% is received from client when the
      contract is signed. Second payment of 30% is received when the project
      commenced. The final sum of the remaining portion is received after the
      construction is completed within 4 months.




16


**SUNWAY
      GLOBAL INC.**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**FOR
      THE NINE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007**


**(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 three to five years. A provision for estimated future
      costs relating to warranty expense are recorded when products are shipped,
      and
      the provision is based upon our own historical claim experience.





*(p)*
            *Costs
                of sales*





Cost
      of
      sales consists primarily of material costs, employee compensation, depreciation
      and related expenses, which are directly attributable to the production of
      products. All inbound freight charges, purchasing and receiving costs,
      inspection costs, warehousing costs, internal transfer costs, and the other
      costs of distribution network are also included. Write-down of inventory to
      lower of cost or market is also recorded in cost of revenues.





*(q)*
            *Leases*




The
      Group
      did not have lease which met the criteria of capital lease. Leases which do
      not
      qualify as capital lease are classified as operating lease. Operating lease
      rental payment included in general and administrative expenses were $154,839
      and
      $1,857 for the nine months ended September 30, 2008 and 2007
      respectively.





*(r)*
            *Advertising*





The
      Group
      expensed all advertising costs as incurred. Advertising expenses included in
      selling expenses were
      $46,779 and  $72,729
      for the nine months ended September 30, 2008 and 2007 respectively.





*(s)*
            *Shipping
                and handling*





All
      shipping and handling are expensed as incurred. Shipping and handling expenses
      included in selling expenses
      were $16,477 and $22,730
      for the nine months ended September 30, 2008 and 2007 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
      $18,197 and $174,213 and for
      the nine months ended September 30, 2008 and 2007 respectively.





*(u)*
            *Retirement
                benefits*





Retirement
      benefits in the form of contributions under defined contribution retirement
      plans to the relevant authorities are charged to the statements of income as
      incurred. The retirement benefit expenses included in general and administrative expenses
      were $18,387 and $22,035 for the
      nine months ended September 30, 2008 and 2007 respectively.




17




**SUNWAY
      GLOBAL INC.**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**FOR
      THE NINE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007**


**(Stated
      in US Dollars)(Unaudited)**





**2.**
            **SUMMARY
                OF SIGNIFICANT ACCOUNTING POLICIES (****Continued****)**





*(v)*
            *Income
                taxes*





The
      Group
      accounts for income taxes using an asset and liability approach and allows
      for
      recognition of deferred tax benefits in future years. Under the asset and
      liability approach, deferred taxes are provided for the net tax effects of
      temporary differences between the carrying amounts of assets and liabilities
      for
      financial reporting purposes and the amounts used for income tax purposes.
      A
      valuation allowance is provided for deferred tax assets if it is more likely
      than not these items will either expire before the Group is able to realize
      their benefits, or that future realization is uncertain.





*(w)*
            *Foreign
                currency translation*





The
      accompanying financial statements are presented in United States dollars. The
      reporting currency of the Group is the U.S. dollar ($). SWT and Sunway use
      its
      local currency, Renminbi (RMB), as its functional currency. Results of
      operations and cash flow are translated at average exchange rates during the
      period, and assets and liabilities are translated at the end of period exchange
      rates. Translation adjustments resulting from this process are included in
      accumulated other comprehensive income in stockholders’ equity. Transaction
      gains and losses that arise from exchange rate fluctuations from transactions
      denominated in a currency other than the functional currency are included in
      the
      results of operations as incurred.





The
      PRC
      government imposes significant exchange restrictions on fund transfers out
      of
      the PRC that are not related to business operations. These restrictions have
      not
      had a material impact on the Group because it has not engaged in any significant
      transactions that are subject to the restrictions.





The
      exchange rates used to translate amounts in RMB into USD for the purposes of
      preparing the consolidated financial statements were as follows:





**September
                30, 2008**
            
            **December
                31, 2007**
            
            **September
                30, 2007**Twelve
                months endedRMB
                : USD exchange rate
            
            
            -
            
            
            7.3141
            
            
            -Nine
                months endedRMB
                : USD exchange rate
            
            
            6.8551
            
            
            -
            
            
            7.5176Average
                nine months endedRMB
                : USD exchange rate
            
            
            6.9989
            
            
            -
            
            
            7.6758Average
                three months endedRMB
                : USD exchange rate
            
            
            6.8529
            
            
            -
            
            
            7.5691




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 NINE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007**


**(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, Sunway and
      Beijing Sunway’s Articles of Association, SWT, Sunway and Beijing 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.





*(z)*
            *Recent
                accounting pronouncements*





In
      December 2007, the Financial Accounting Standards Board issued Statement of
      Financial Accounting Standard (“SFAS”) No. 160, "Noncontrolling Interests in
      Consolidated Financial Statements, an amendment of ARB No. 51”. SFAS 160
      establishes accounting and reporting standards for the noncontrolling interest
      in a subsidiary and for the deconsolidation of a subsidiary. SFAS 160 is
      effective for fiscal years, and interim periods within those fiscal years,
      beginning on or after December 15, 2008. As such, the Company is required to
      adopt these provisions at the beginning of the fiscal year ended December 31,
      2009. The Company is currently evaluating the impact of SFAS 160 on its
      consolidated financial statements but does not expect it to have a material
      effect





In
      December 2007, the Financial Accounting Standards Board issued Statement of
      Financial Accounting Standard (“SFAS”) No. 141(R), "Business Combinations”. SFAS
      141(R) establishes principles and requirements for how the acquirer recognizes
      and measures in its financial statements the identifiable assets acquired,
      the
      liabilities assumed, an any noncontrolling interest in the acquiree, recognizes
      and measures the goodwill acquired in the business combination or a gain from
      a
      bargain purchase, and determines what information to disclose to enable users
      of
      the financial statements to evaluate the nature and financial effects of the
      business combination. SFAS 141(R) is effective for fiscal years, and interim
      periods within those fiscal years, beginning on or after December 15, 2008.
      As
      such, the Company is required to adopt these provisions at the beginning of
      the
      fiscal year ended December 31, 2009. The Company is currently evaluating the
      impact of SFAS 141(R) on its consolidated financial statements but does not
      expect it to have a material effect.




19


**SUNWAY
      GLOBAL INC.**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**FOR
      THE NINE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007**


**(Stated
      in US Dollars)(Unaudited)**





**2.**
            **SUMMARY
                OF SIGNIFICANT ACCOUNTING POLICIES (****Continued****)**





*(z)*
            *Recent
                accounting pronouncements
                (continued)*





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
      May
      2008, the FASB issued SFAS No. 162, The Hierarchy of Generally Accepted
      Accounting Principles. SFAS 162 identifies the sources of accounting principles
      and the framework for selecting the principles to be used in the preparation
      of
      financial statements of nongovernmental entities that are presented in
      conformity with GAAP. SFAS 162 directs the GAAP hierarchy to the entity, not
      the
      independent auditors, as the entity is responsible for selecting accounting
      principles for financial statements that are presented in conformity with GAAP.
      SFAS 162 is effective 60 days following the SEC's approval of the Public Company
      Accounting Oversight Board amendments to remove the GAAP hierarchy from the
      auditing standards. SFAS 162 is not expected to have a material impact on the
      Company’s financial statements.




20


**SUNWAY
      GLOBAL INC.**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**FOR
      THE NINE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007**


**(Stated
      in US Dollars)(Unaudited)**





**3.**
              **CONCENTRATIONS
                  OF CREDIT RISK AND MAJOR
                  CUSTOMERS**





Financial
      instruments which potentially expose the Group to concentrations of credit
      risk,
      consists of cash and trade receivables as of September 30, 2008 and December
      31,
      2007. The Group performs ongoing evaluations of its cash position and credit
      evaluations to ensure collections and minimize losses.





As
      of
      September 30, 2008 and December 31, 2007, the Group’s bank deposits were all
      placed with banks in the PRC where there is currently no rule or regulation
      in
      place for obligatory insurance of bank accounts.





For
      the
      nine months ended September 30, 2008 and 2007, all of the Group’s sales were
      generated from the PRC. In addition, all accounts receivable as of September
      30,
      2008 and December 31, 2007 also arose in the PRC.





The
      maximum amount of loss due to credit risk that the Group would incur if the
      counter parties to the financial instruments failed to perform is represented
      the carrying amount of each financial asset in the balance sheet.





Normally
      the Group does not obtain collateral from customers or debtors.





Details
      of the customers accounting for 10% or more of the Group’s revenue are as
      follows:





For
                the nine months ended September 30,2008
            
            2007Customer
                A
            
            $
            1,550,252
            
            $
            -Customer
                B
            
            
            1,500,244
            
            
            -Customer
                C
            
            
            1,390,226
            
            
            -Customer
                D
            
            
            1,380,225
            
            
            989,479Customer
                G
            
            
            -
            
            
            1,003,158Customer
                J
            
            
            -
            
            
            1,103,474





Details
      of customers accounting for 10% or more of the Group’s trade receivables are as
      follows:





September
                30, 2008
            
            December
                31, 2007Customer
                B
            
            $
            339,304
            
            $
            159,005Customer
                C
            
            
            353,640
            
            
            -Customer
                D
            
            
            315,409
            
            
            221,510Customer
                G
            
            
            -
            
            
            235,149Customer
                H
            
            
            -
            
            
            269,861Customer
                J
            
            
            
            
            
            275,851




21


**SUNWAY
      GLOBAL INC.**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**FOR
      THE NINE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007**


**(Stated
      in US Dollars)(Unaudited)**





**4.**
              **AMOUNT
                  DUE FROM A RELATED
                  COMPANY**





Amount
      due from Rise Elite International Ltd (Rise Elite), a related company where
      Mr.
      Liu Bo, the director of the Company is shareholder. The amount is unsecured,
      interest free and repayable on demand. The amount is hold by Rise Elite because
      of a recent business development of representative offices in sundry location
      of
      China and this arrangement would be a better working capital arrangement.





**5.**
              **AMOUNT
                  DUE FROM A DIRECTOR**




Amount
      due from Mr. Liu Bo, the director of the Company is unsecured, interest free
      and
      repayable on demand. The amount is hold on behalf of Beijing Sunway New-force
      Medical Treatment Tech Co., Ltd by the director because of a recent business
      development of representative offices in sundry location of China and this
      arrangement would be a better working capital arrangement.




**6.**
              **TRADE
                  RECEIVABLES, NET**




September
                30, 2008
            
            December
                31, 2007Trade
                receivables, gross
            
            $
            3,048,612
            
            $
            1,533,085Provision
                for doubtful debts
            
            
            (8,412
            )
            
            (7,884
            )$
            3,040,200
            
            $
            1,525,201





All
      of
      the above trade receivable are due within one year of aging.





An
      analysis of the allowance for doubtful accounts for the nine months ended
      September 30, 2008 and December 31, 2007 is as follows:




September
                30, 2008
            
            December
                31, 2007Balance
                at beginning of period/year
            
            $
            7,884
            
            $
            7,377Foreign
                exchange adjustment
            
            
            528
            
            
            507Balance
                at end of period/year
            
            $
            8,412
            
            $
            7,884





Allowance
      was made when collection of the full amount is no longer probable. Management
      reviews and adjusts this allowance periodically based on historical experience,
      current economic climate as well as its evaluation of the collectability of
      outstanding accounts. The Group evaluates the credit risks of its customers
      utilizing historical data and estimates of future performance.




22




**SUNWAY
      GLOBAL INC.**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**FOR
      THE NINE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007**


**(Stated
      in US Dollars)(Unaudited)**





**7.**
              **TRAVEL
                  ADVANCES TO
                  SHAREHOLDERS**





Travel
      advances were made to shareholders. These shareholders are also 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 the details of the outstanding accounts.




September
                30, 2008
            
            December
                31, 2007Bo
                Liu
            
            $
            22,033
            
            $
            4,244Qichai
                Zhao
            
            
            7,294
            
            
            700Deli
                Liang
            
            
            -
            
            
            6,568Weishan
                Sun
            
            
            35,564
            
            
            19,312$
            64,891
            
            $
            30,824





**8.**
              **ADVANCES
                  TO EMPLOYEES**





Advances
      to employees are advances for purchases and traveling. They are unsecured,
      interest free and repayable on demand.





**9.**
              **INVENTORIES**





Inventories
      comprise the followings:




September
                30, 2008
            
            December
                31, 2007Finished
                goods
            
            $
            566,997
            
            $
            161,005Raw
                materials
            
            
            397,076
            
            
            605,928$
            964,073
            
            $
            766,933





**10.**
              **PROPERTY,
                  PLANT AND EQUIPMENT,
                  NET**





Property,
      plant and equipment, net comprise the followings:


September
                30, 2008
            
            December
                31, 2007At
                costBuilding
            
            $
            1,447,212
            
            $
            1,356,392Machinery
                and equipment
            
            
            1,106,434
            
            
            1,022,960Moldings
            
            
            4,151,260
            
            
            2,992,166Computer
                software
            
            
            2,033,887
            
            
            1,942,823Office
                equipment and motorvehicles
            
            
            274,088
            
            
            80,439$
            9,012,881
            
            $
            7,394,780Less:
                accumulated depreciation
            
            
            (3,738,861
            )
            
            (2,945,161
            )$
            5,274,020
            
            $
            4,449,619




23





**SUNWAY
      GLOBAL INC.**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**FOR
      THE NINE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007**


**(Stated
      in US Dollars)(Unaudited)**





**10.**
            **PROPERTY,
                PLANT AND EQUIPMENT, NET
                (Continued)**





Depreciation
      expense is included in the statement of income as follows:


For
                the nine months ended September 30,2008
            
            2007Cost
                of sales
            
            $
            577,959
            
            $
            552,540General
                and administrative expenses
            
            
            10,110
            
            
            1,455$
            588,069
            
            $
            553,995




**11.**
              **INTANGIBLE
                  ASSETS, NET**





The
      details of intangible assets, net are as follows:


September
                30, 2008
            
            December
                31, 2007Land
                use rights, at cost
            
            $
            1,354,131
            
            $
            1,269,151Less:
                accumulated amortization
            
            
            (84,035
            )
            
            (58,508
            )$
            1,270,096
            
            $
            1,210,643Technology-based
                design,
                at cost
            
            $
            6,319,747
            
            $
            5,923,149Less:
                accumulated amortization
            
            
            (808,479
            )
            
            (200,301
            )$
            5,511,268
            
            $
            5,722,848$
            6,781,364
            
            $
            6,933,491





Patent
      of
      the Pneumatic Tube System has been registered with the PRC government under
      Serial No. 264-2004 2005 with a registration fee of $347 (RMB 2,800) which
      was
      expensed in 2003. This amount was immaterial for capitalization.





The
      Group
      acquired the rights to use a parcel of land totaling 26,522 square meters,
      for a
      consideration of $1,149,788 (RMB 9,282,700), located at Daqing Hi-Tech Industry
      Development Zone, Daqing, Heilongjiang in the People’s Republic of China 163316
      for a term of 46 years from September 16, 2005 to June 13, 2052. The land has
      been used to build the Group’s facility.





Amortization
      expense included in the general and administrative expenses for the nine months
      ended 2008 and 2007 were $638,114 and $19,299 respectively.




24






**SUNWAY
      GLOBAL INC.**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**FOR
      THE NINE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007**


**(Stated
      in US Dollars)(Unaudited)**





**12.**
              **EXPECTED
                  WARRANTY LIABILITIES**





An
      analysis of the expected warranty liabilities as at September 30, 2008 and
      December 2007 is as follows:





2008
            
            2007Balance
                at beginning of period/year
            
            $
            55,351
            
            $
            22,811Addition
                of warranty liabilities
            
            
            -
            
            
            55,918Warranty
                expense for the year
            
            
            -
            
            
            (23,378
            )Foreign
                currency difference
            
            
            3,706
            
            
            -Balance
                at end of period/year
            
            $
            59,057
            
            $
            55,351





**13.**
              **SERIES
                  B CONVERTIBLE PREFERRED STOCK AND ASSOCIATED
                  WARRANTS**




On
      June
      5, 2007, the Company entered into a purchase agreement, whereby the company
      agreed to sell 165,432 shares of the Company’s Series B Preferred shares and
      various stock purchase warrants to purchase up to 18,686,054 shares of the
      Company’s common shares. The exercise price, expiration date and number of share
      eligible to be purchased with the warrants is summary in the following
      table:




**Investment**
              **Amount**
            
            **Preferred
                B**
            
            **A
                Warrant**
            
            **B
                Warrant**
            
            **J
                Warrant**
            
            **C
                Warrant**
            
            **D
                Warrant****Vision
                Opportunity Master Fund, Ltd.**
            
            
            6,500,000
            
            
            160,494
            
            
            4,814,815
            
            
            2,407,407
            
            
            4,362,416
            
            
            4,362,416
            
            
            2,181,208**Columbia
                China Capital Group, Inc.**
            
            
            200,000
            
            
            4,938
            
            
            148,148
            
            
            74,074
            
            
            134,228
            
            
            134,228
            
            
            67,114





**Series
                of Warrant**
            **Number
                of shares**
            **Exercise
                Price**
            **Expiry
                Date****Series
                A**
            4,962,963
            $
                1.76
            6
                /5 /2012**Series
                B**
            2,481,481
            2.30
            6
                /5 /2012**Series
                J**
            4,496,644
            1.49
            6
                /5 /2008**Series
                C**
            4,496,644
            1.94
            6
                /5 /2012**Series
                D**
            2,248,322
            2.53
            6
                /5 /2012







The
      Series B preferred stock has liquidation rights senior to common stock and
      Series A preferred stock. In the event of a liquidation of the Company, holders
      of Series B preferred stock are entitled to receive a distribution equal to
      $40.50 per share of Series B preferred stock prior to any distribution to the
      holders of common stock and Series A preferred stock. The Series B preferred
      stock is entitled to non-cumulative dividends only upon declaration of dividends
      by the Company. To date, no dividends have been declared or accrued. The Series
      B preferred stock will participate based on their respective as-if conversion
      rates if the Company declares any dividends. After the Amendment were filed
      effect the Reverse Split, each share of Series B preferred stock would be
      convertible into 30 shares of Common Stock for $1.35 each, which both may be
      adjusted from time to time pursuant to the conversion rate. The holders of
      Series B preferred stock shall be entitled to voting rights by applicable law
      and the right to vote together with the holders of Common and Series A Preferred
      Stock.




25


**SUNWAY
      GLOBAL INC.**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**FOR
      THE NINE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007**


**(Stated
      in US Dollars)(Unaudited)**





**13.**
            **SERIES
                B CONVERTIBLE PREFERRED STOCK AND ASSOCIATED**




**WARRANTS** **(Continued)**




The
      gross
      proceeds of the transaction were $6.7 million. The proceeds from the transaction
      were allocated to the Series B preferred stock, warrants and beneficial
      conversion feature based on the relative fair value of the securities. The
      value
      of the Preferred Series B was determined by reference to the market price of
      the
      common shares into which it converts, and the gross value of the warrants was
      calculated using the Black -Scholes model with the following assumptions:
      expected life of 1 year, volatility of 117% and an interest rate of
      4.99%.




The
      Company recognized a beneficial conversion feature discount on the Series B
      preferred stock at its intrinsic value, which was the fair value of the common
      stock at the commitment date for the Series B preferred stock investment, less
      the effective conversion price but limited to the $6.7 million of proceeds
      received from the sale. The Company recognized the $6.7 million beneficial
      conversion feature as an increase in paid in capital in the accompanying
      consolidated balance sheets on the date of issuance of the Series B preferred
      shares since the Series B preferred shares were convertible at the issuance
      date.




The
      agreement, also provided that if a Registration Statement is not effective
      within a certain period of time or the common shares are not listed on the
      NASDAQ or American exchange by December 31, 2008, the Company will pay the
      holders of the shares a penalty that can range from $67,000 to $670,000 and
      certain principal shareholders would issue up to 1,000,000 additional shares
      to
      the purchasers of the Preferred Series B shares. The company is accounting
      for
      these penalties in accordance with FAS 5 - Accounting
      for Contingencies, whereby
      the penalty will not be recorded as a liability until and if it is probable
      the
      penalty will be incurred. No penalty has been recorded in the accompanying
      financial statements for this contingency.




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, Vision Opportunity Master Fund Ltd. converted 246,176 shares
      of Preferred Series A into 13,711,831 shares of common stock




On
      June
      18, 2008, Columbia China Capital Group, Inc. converted 4,938 shares of Preferred
      Series B into 148,140 shares of common stock.




26


**SUNWAY
      GLOBAL INC.**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**FOR
      THE NINE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007**


**(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 nine months ended September 30,Earnings:
            
            2008
            
            2007Earnings
                for the purpose of basic earnings per share
            
            $
            6,417,223
            
            $
            5,757,393Effect
                of dilutive potential common stock
            
            
            -
            
            
            -Earnings
                for the purpose of dilutive earnings per share
            
            $
            6,417,223
            
            $
            5,757,393Number
                of shares:Weighted
                    average number of common stock for the purpose of basic earnings per
                    share
            
            
            14,003,444
            
            
            19,207,455Effect
                of dilutive potential common stock-
                  conversion of Series A convertible preferred stock
            
            
            1,851,598
            
            
            --
                  conversion of Series B convertible preferred
                  stock
            
            
            4,906,191
            
            
            --
                conversion of Warrant Series A
            
            
            2,311,283
            
            
            --
                conversion of Warrant Series B
            
            
            748,849
            
            
            --
                conversion of Warrant Series J
            
            
            1,848,402
            
            
            --
                conversion of Warrant Series C
            
            
            521,504
            
            
            --
                conversion of Warrant Series D
            
            
            2,499,633
            
            
            -Weighted
                  average number of common stock for the purpose of dilutive earnings
                  per
                  share
            
            
            28,690,904
            
            
            19,207,455




27


**SUNWAY
      GLOBAL INC.**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**FOR
      THE NINE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007**


**(Stated
      in US Dollars)(Unaudited)**





**15.**
              **INCOME
                  TAXES**





The
      Company, being registered in the State of Nevada and which conducts all of
      its
      business through its subsidiaries incorporated in PRC, is not subject to any
      income tax. The subsidiaries are SWT, Sunway and Beijing
      Sunway (see
      note 1).





SWT,
      Sunway and Beijing Sunway, being registered in the PRC, are subject to PRC’s
      Corporate Income Tax (“CIT”). Under applicable income tax laws and regulations,
      an enterprise located in PRC, including the district where our operations are
      located, is subject to a 25% and 33% respectively for the nine months ended
      September 30, 2008 and 2007.





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.





The
      Group
      uses the asset and liability method, where deferred tax assets and liabilities
      are determined based in the expected future tax consequences of temporary
      differences between the carrying amounts of assets and liabilities for financial
      and income tax reporting purposes. There are no material temporary differences
      and therefore no deferred tax asset or liabilities as at September 30, 2008
      and
      2007.





A
      reconciliation between the income tax computed at the U.S. statutory rate and
      the Group’s provision for income tax is as follows:





For
                the nine month ended
              September
                30,2008
            
            2007U.S.
                statutory rate
            
            
            34
            %
            
            34
            %Foreign
                income not recognized in the U.S.
            
            
            (34
            %)
            
            (34
            %)PRC
                CIT
            
            
            25
            %
            
            33
            %Tax
                holiday
            
            
            (10
            %)
            
            (18
            %)Provision
                for income taxes
            
            
            15
            %
            
            15
            %




The
      provision for income taxes consists of the following:





For
                the nine month ended
              September
                30,2008
            
            2007Current
                tax - PRC CIT
            
            $
            1,132,451
            
            $
            1,024,633Deferred
                tax provision
            
            
            -
            
            
            -Income
                tax expenses
            
            $
            1,132,451
            
            $
            1,024,633




28


**SUNWAY
      GLOBAL INC.**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**FOR
      THE NINE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007**


**(Stated
      in US Dollars)(Unaudited)**





**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.





**17.**
              **COMMITMENTS
                  AND CONTINGENCIES**





The
      Group
      has entered into a tenancy agreement for factory expiring through 2008. Total
      rental expenses for the nine months ended September 30, 2008 and 2007 amounted
      to $154,839 and $1,857 respectively.





As
      at
      September 30, 2008, the Group’s commitments for minimum lease payments under
      these leases for the next one year and thereafter are as follows:





September
                30, 2009
            
            $
            210,7812010
                and thereafter
            
            
            -$
            210,781





On
      August
      31, 2008, the Group entered a purchase agreement with a third party, to acquire
      land use rights and building at a consideration of US$7,293,840
      (RMB$50,000,000). The Group has paid US$2,917,536 (RMB$20,000,000) as a deposit.
      As at September 30, 2008 and 2007, the Group had a capital commitment of
      purchasing property, plant and equipment, with the amounts of $4,376,304
      (RMB$30,000,000) and nil respectively. The management of the Group expected
      the
      acquisition would be completed and paid the outstanding amount within 12 months
      after September 30, 2008.




29


**SUNWAY
      GLOBAL INC.**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**FOR
      THE NINE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007**


**(Stated
      in US Dollars)(Unaudited)**





**18.**
              **SEGMENT
                  INFORMATION**




The
      Group
      currently is engaged in the manufacturing and selling of logistic transport
      systems and operating in one segment. 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”).
      Workstation types A, B and C are of the same function but with different product
      design.





Net
      revenues and cost of revenues by product:




*For
                the nine**months
                ended*
            
            *Workstation*
            
            *Workstation*
            
            *Workstation**September
                30, 2008*
            
            *Type
                A*
            
            *Type
                B*
            
            *Type
                C*
            
            *SADP*
            
            *Consolidated*Net
                revenues
            
            $
            2,880,802
            
            $
            5,435,885
            
            $
            4,400,717
            
            $
            1,357,364
            
            $
            14,074,768Cost
                of net revenues
            
            
            (751,548
            )
            
            (1,555,025
            )
            
            (1,211,795
            )
            
            (636,498
            )
            
            (4,154,866
            )$
            2,129,254
            
            $
            3,880,860
            
            $
            3,188,922
            
            $
            720,866
            
            $
            9,919,902





*For
                the nine**months
                ended*
            
            *Workstation*
            
            *Workstation*
            
            *Workstation**September
                30, 2007*
            
            *Type
                A*
            
            *Type
                B*
            
            *Type
                C*
            
            *SADP*
            
            *Consolidated*Net
                revenues
            
            $
            3,415,536
            
            $
            6,309,317
            
            $
            -
            
            $
            -
            
            $
            9,724,853Cost
                of net revenues
            
            
            (977,743
            )
            
            (1,800,232
            )
            
            -
            
            
            -
            
            
            (2,777,975
            )$
            2,437,793
            
            $
            4,509,085
            
            $
            -
            
            $
            -
            
            $
            6,946,878








The
      Group’s operations are located in the PRC. All revenues are derived 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.




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**




As
      a
      result of the reverse merger, financing and related transactions described
      in our current report on Form 8-K/A filed with the SEC on June 27, 2007, the
      Company ceased to be a shell company and became a holding company for entities
      that, through contractual relationships, control the business of Daqing Sunway,
      a company organized under the laws of the PRC that designs, manufactures and
      sells logistic transport systems and medicine dispensing systems and equipment
      that are principally used by hospitals and other medical facilities in the
      PRC.
      Because Sunway’s operations are the only significant operations of the Company
      and its affiliates, this discussion and analysis focuses on the business results
      of Sunway, comparing its results in the three and nine months ended September
      30, 2008 to the three and nine months ended September 30, 2007. We began selling
      our new core product—a medicine dispensation and packaging system also designed
      for use in hospitals and pharmacies—in the first quarter of 2008.




**Three-month
      periods ended September 30, 2008 and September 30, 2007**





**Results
      of Operations**





In
      the
      three months ended September 30, 2008, company net revenues, gross profit and
      operation income rose substantially as compared with the same period of 2007,
      but operating expenses increased and gain on disposal decreased to null during
      these periods, bring on company net income decreased. These decreases are due
      to
      gain on disposal of investments. The cost of net revenue increased substantially
      during these periods. The increase in cost of net revenue is due to increases
      in
      raw materials prices and net revenue.





The
      following table summarizes the results of our operations during the three months
      ended September 30, 2008 and 2007, respectively, and provides information
      regarding the dollar and percentage increase or (decrease) from the three months
      ended September 30, 2008 and 2007.


Three
                  Months Ended September 30,2008
              
              2007
              
              Change
              
              Change
                  rateNet
                  Revenues
              
              $
              6,025,075
              
              $
              4,065,642
              
              $
              1,959,433
              
              
              48.19
              %Cost
                  of net revenues
              
              $
              1,790,475
              
              $
              1,078,360
              
              $
              712,115
              
              
              66.04
              %Gross
                  Profit
              
              $
              4,234,600
              
              $
              2,987,282
              
              $
              1,247,318
              
              
              41.75
              %Gross
                  Margin
              
              
              70.28
              %
              $
              73.48
              %
              
              
              
              
              -3.20
              %Operating
                  Income
              
              $
              3,210,013
              
              $
              2,212,835
              
              $
              997,178
              
              
              45.06
              %Net
                  Income
              
              $
              2,745,420
              
              $
              3,010,786
              
              $
              -265,366
              
              
              -8.81
              %Net
                  profit margin
              
              
              45.57
              %
              
              74.05
              %
              
              
              
              
              -28.49
              %




**Net
      revenue**





Net
      revenues for the three months ended September 30, 2008, which resulted entirely
      from sales of PTS and SADP, was $6,025,075, an increase of 48.19% as compared
      with the sales of $4,065,642 for the three months ended September 30, 2007.
      In
      the three months ended September 30, 2008, we sold 1015 workstations, an
      increase of 15.08% as compared with 882 workstations sold in the three months
      ended September 30, 2007. During the same period ended September 30, 2008,
      we
      also sold three units of SADP. The increase was primarily a result of more
      effective sales and marketing efforts.




31





The
      following table breaks down application categories as percentage of total net
      revenues.




Three
                  Months Ended September 30,2008
              
              2007Sales
              
              % of total sales
              
              Sales
              
              % of total salesPTS
              
              $
              5,193,310
              
              
              86.19
              %
              $
              4,065,642
              
              
              100.00
              %SADP
              
              $
              831,765
              
              
              13.81
              %Total
                  net revenues
              
              $
              6,025,075
              
              
              100.00
              %
              $
              4,065,642
              
              
              100.00
              %




**Gross
      Profit**





Gross
      profit increased 41.75% to $4,234,600 for the three months ended September
      30,
      2008, as compared to $2,987,282 for the three months ended September 30, 2007.
      Our gross profit margin drop 3.20% from 73.48% as of the three months ended
      September 30, 2007 to 70.28% as of the same period of 2008, mainly due to raw
      materials price rise.





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


Three
                  Months Ended September 30,2008
              
              2007US$
              
              Gross
                  profitmargin
              
              US$
              
              Gross
                  profitmarginGross
                  Profit
              
              $
              4,234,600
              
              
              70.28
              %
              $
              2,987,282
              
              
              73.48
              %







**Income
      from Operations**





Operating
      income increased 45.06% to $3,210,013 for the three months ended September
      30, 2008, as compared with $2,212,835 for the three months ended September
      30,
      2007. The increase was primarily net revenues rise and operations expenses
      slight drop.





**Cost
      of Net revenues**





Cost
      of
      net revenues increased to $1,790,475 for the three months ended September 30,
      2008, representing 66.04% increase as compared with $1,078,360 for the same
      period of 2007. The increase is primarily due to revenues increased and raw
      materials price rise.





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


Three
                  Months Ended September 30,2008
              
              2007
              
              ChangeCost
                  of net revenues
              
              $
              1,790,475
              
              $
              1,078,360
              
              
              66.04
              %





**Operating
      Expenses**





Operating
      expenses were $1,024,587 for the three months ended September 30, 2008, an
      increase of 32.30% as compared to $774,447 for the same period of 2007. The
      increase was composed of two reasons: i) selling expenses increased $76,484,
      or
      44.78% to $247,296 in the three months ended September 30, 2008 from $170,812
      for the same period of 2007; and ii) general and administration expenses
      increased $173,656, or 28.77% to $777,291 in the three months ended September
      30, 2008 from $603,635 for the same period of 2007. In the three months ended
      September 30, 2008, we increased direct sales offices expenses and amortization
      of intangible assets. Changes in costs related to direct sales offices expenses
      were $78,827 for the three months ended September 30, 2008, as compared to
      nil
      for the same period of 2007; and amortization of intangible assets increased
      3,776.15% in the three months ended September 30, 2008 compared with the same
      period of 2007.




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




Three
                Months Ended September 30,2008
            
            2007
            
            ChangeSelling
                expenses
            
            $
            247,296
            
            $
            170,812
            
            
            44.78
            %General
                and administrative expenses
            
            $
            777,291
            
            $
            603,635
            
            
            28.77
            %Total
                operating expenses
            
            $
            1,024,587
            
            $
            774,447
            
            
            32.30
            %




32




**Net
      Income**





Net
      income was $2,745,420 for the three months ended September 30, 2008, a decrease
      of 8.81% from $3,010,786 for the same period of 2007. This de crease
      is
      primarily due to gain
      on
      disposal, which decreased to nil in the three months ended September 30, 2008
      compared with the same period of 2007.





**Nine-month
      periods ended September 30, 2008 and September 30, 2007**





**Results
      of Operations**





In
      the
      nine months ended September 30, 2008, the Company’s net sales, gross profit and
      operating income all rose substantially as compared with the same period in
      the
      same period of 2007. These increases are due in large part to increased sales
      of
      PTS and SADP. Cost of sales and operating expense also increased during these
      periods, somewhat outpacing the increase in sales. The increase in cost of
      sales
      is due to increased sales and raw material price rises; the increase in
      operating expenses is due largely to increased amortization of intangible assets
      and salary. Because gain on disposal decreased to nil during these periods,
      growth in bring on company net income slowed.





The
      following table summarizes the results of our operations during the nine months
      ended September 30, 2008 and 2007, respectively, and provides information
      regarding the dollar and percentage increase or (decrease) from the nine months
      ended September 30, 2008 and 2007.




Nine
                  months Ended September 30,2008
              
              2007
              
              Change
              
              Change
                  rateNet
                  Revenues
              
              $
              14,074,768
              
              $
              9,724,853
              
              $
              4,349,915
              
              
              44.73
              %Cost
                  of net revenues
              
              $
              4,154,866
              
              $
              2,777,975
              
              $
              1,376,891
              
              
              49.56
              %Gross
                  Profit
              
              $
              9,919,902
              
              $
              6,946,978
              
              $
              2,972,924
              
              
              42.80
              %Gross
                  Margin
              
              
              70.48
              %
              $
              71.43
              %
              
              
              
              
              -0.95
              %Operating
                  Income
              
              $
              7,504,976
              
              $
              5,458,625
              
              $
              2,046,351
              
              
              37.49
              %Net
                  Income
              
              $
              6,417,223
              
              $
              5,757,393
              
              $
              659,830
              
              
              11.46
              %Net
                  profit margin
              
              
              45.59
              %
              
              59.20
              %
              
              
              
              
              -13.61
              %




**Net
      revenue**





Net
      revenue for the nine months ended September 30, 2008, which resulted entirely
      from sales of PTS and SADP, were $14,074,768, an increase of 44.73% as compared
      with the net revenues of $9,724,853 for the nine months ended September 30,
      2007. In the nine months ended September 30, 2008, we sold 2522 workstations,
      an
      increase of 19.07% as compared with 2,118 workstations sold in the nine months
      ended September 30, 2007; during the same period ended September 30, 2008,
      we
      also sold 5 units of SADP. The increase was primarily a result of more effective
      sales and marketing efforts.





The
      following table breaks down application categories as percentage of total
      sales.




Nine
                  months Ended September 30,2008
              
              2007Sales
              
              % of total sales
              
              Sales
              
              % of total salesPTS
              
              $
              12,717,404
              
              
              90.36
              %
              $
              9,724,853
              
              
              100.00
              %SADP
              
              $
              1,357,364
              
              
              9.64
              %Total
                  net revenues
              
              $
              14,074,768
              
              
              100.00
              %
              $
              9,724,853
              
              
              100.00
              %




**Gross
      Profit**





Gross
      profit increased 42.80% to $9,919,902 for the nine months ended September 30,
      2008, as compared to $6,946,878 for the nine months ended September 30, 2007.
      Our gross profit margin dropped 0.95% from 71.43% for the nine months ended
      September 30, 2007 to 70.48% as of the same period of 2008, mainly due to rises
      in raw material prices and a slight increase in cost of sales.




33





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




Nine
                months Ended September 30,2008
            
            2007US$
            
            Gross
                profitmargin
            
            US$
            
            Gross
                profitmarginGross
                Profit
            
            $
            9,919,902
            
            
            70.48
            %
            $
            6,946,878
            
            
            71.43
            %





**Income
      from Operations**





Income
      from operations increased 37.49% to $7,504,976 for the nine months ended
      September 30, 2008, as compared with $5,458,625 for the nine months ended
      September 30, 2007. The increase was primarily a result of the high revenue
      partially offset by the higher reduction in operationsduring the nine months
      ended September 30, 2008 as compared to the same period of 2007.





**Cost
      of Net revenues**





Cost
      of
      net revenues increased to $4,154,866 for the nine months ended September 30,
      2008, representing 49.56% increase as compared with $2,777,975 for the same
      period of 2007. The increase is due to increases in sales and raw material
      prices.





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




Nine
                months Ended September 30,2008
            
            2007
            
            ChangeCost
                of net revenues
            
            $
            4,154,866
            
            $
            2,777,975
            
            
            49.56
            %





**Operating
      Expenses**





Operating
      expenses were $2,414,926 for the nine months ended September 30, 2008, an
      increase of 62.27% as compared to $1,488,253 for the same period of 2007. The
      increase was primarily caused by two reasons: i) selling expenses increased
      $59,766, or 27.24% to $279,167 in the nine months ended September 30, 2008
      from
      $219,401 for the same period of 2007; and ii) general and administration
      expenses increased $866,907, or 68.32% to $2,135,759 in the nine months ended
      September 30, 2008 from $1,268,852 for the same period of 2007. In the nine
      months ended September 30, 2008, we increased salary and benefits of management.
      Reflecting this change, costs related to salary and benefits increased 44.51%
      in
      the nine months ended September 30, 2008, as compared with the same period
      of
      2007; and amortization of intangible assets increased $618,815, or 3,206% to
      $638,114 in the nine months ended September 30, 2008 from $19,299 as of the
      same
      period of 2007; and direct sales offices expenses were increased from nil as
      of
      the nine months ended September 30, 2007 to $292,204 as of the same period
      of
      2008.




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




Nine
                months Ended September 30,2008
            
            2007
            
            ChangeSelling
                expenses
            
            $
            279,167
            
            $
            219,401
            
            
            27.24
            %General
                & Administrative expenses
            
            $
            2,135,759
            
            $
            1,268,852
            
            
            68.32
            %Total
                operating expenses
            
            $
            2,414,926
            
            $
            1,488,253
            
            
            62.27
            %





**Net
      Income**





Net
      income was $6,417,223 for the nine months ended September 30, 2008, an increase
      of 11.46% from $5,757,393 for the same period of 2007. The increase is primarily
      due to i) substantial net revenues increase; ii) partially offset by higher
      operating expenses and nil investment yields. Earnings per share were $0.46
      and
      $0.22 on a diluted basis.




34




**Cash
      and Cash Equivalents**





Cash
      and
      Cash Equivalents increased to $16,289,476 as of the nine months ended September
      30, 2008, compared to $5,820,100 as of the fiscal year ended December 31, 2007.
      The increase was mainly due to i) net income increase; ii) the warrants J
      exercised $6.53 million at June 5, 2008; and iii) amortization and depreciation
      increase.





**Accounts
      Receivable**





Accounts
      receivable increased 99.33% to $3,040,200 as of the nine months ended September
      30, 2008, compared with $1,525,201 as of the fiscal year ended December 31,
      2007. This increase in accounts receivable was primarily attributable to a
      substantial increase in workstation and SADP systems, which began to be sold
      during the nine months ended September 30, 2008.





**Inventory**





Inventory
      consists of raw materials and finished goods. As of the nine months ended
      September 30, 2008, the recorded value of our inventory has increased 25.70%
      to
      $964,073 from $766,933 as of the fiscal year ended December 31, 2007. The
      increase is mainly due to increase in finished goods from $161,005 as of
      December 31, 2007 to $566,997 as of September 30, 2008, an increase of 252.16%,
      which was due to increased output of production. Raw materials inventory
      decreased from $605,928 as of December 31, 2007 to $397,076 as of September
      30,
      2008, a decrease of 34.47%. Due to the decrease
      in the expected prices of raw materials, we adjusted our inventory strategy
      by
      increasing the frequency of ordering and decreasing each order's quantity,
      which
      in turn kept our inventory of raw materials at a low level.





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




Item
            
            September
                30,2008
            
            December
                31,2007
            
            ChangeRaw
                material
            
            $
            397,076
            
            $
            605,928
            
            
            -34.47Finished
                goods
            
            $
            566,997
            
            $
            161,005
            
            
            252.16
            %Total
            
            $
            964,073
            
            $
            766,933
            
            
            25.70
            %





**Accounts
      payable**





Accounts
      payables amounted to $61,574 as of the nine months ended September 30, 2008,
      a
      decrease from $245,917 as of the fiscal year ended December 31, 2007. This
      decrease is mainly due to cash purchases of raw materials.





**Liquidity
      and Capital Resources**





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





On
      June
      6, 2007, we raised $6.7 million in gross proceeds through private placement
      offering of our series B convertible preferred stock. We received $4,976,335
      in
      net proceeds after deducting placement agent discounts and commissions and
      payment of professional and other related expenses.





On
      June
      5, 2008, we had received $6.53 million for the exercise of warrants
      J.





On
      September 9, 2008, we had received $50,000 for exercise of warrants
      J.





As
      is
      customary in our industry, we provide payment terms to most of our customers
      that exceed terms that we receive from our suppliers. Therefore, the Company’s
      liquidity needs have generally consisted of working capital necessary to finance
      receivables and raw material inventory. Capital expenditures have historically
      been necessary to expand the production capacity of the Company’s manufacturing
      operations.





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




Nine
                months Ended September 30,2008
            
            2007
            
            ChangeNet
                cash provided by (used in) operating activities
            
            $
            5,675,935
            
            $
            1,852,656
            
            $
            3,823,279Net
                cash provided by (used in) investing activities
            
            $
            (2,236,248
            )
            $
            (1,826,576
            )
            $
            (409,672
            )Net
                cash provided by (used in) financing activities
            
            $
            6,530,000
            
            $
            5,176,335
            
            $
            (1,353,665
            )Effect
                of foreign currency translation on cash and cash
                equivalents
            
            $
            499,689
            
            $
            197,087
            
            $
            302,602Beginning
                cash and cash equivalent
            
            $
            5,820,100
            
            $
            1,749,048
            
            $
            4,071,052Ending
                cash and cash equivalent
            
            $
            16,289,476
            
            $
            7,148,550
            
            $
            9,140,926




35




**Operating
      Activities**





For
      the
      nine months ended September 30, 2008, net cash provided by operating activities
      was $5,675,935. This was primarily attributable to our net income of $6,417,223,
      adjusted by an add-back of non-cash expenses mainly consisting of depreciation
      and amortization of $  1,226,183
      offset by a $  1,967,471
      decrease in working capital. Specifically, the working capital decrease was
      primarily due to i) a $1,383,854 trade receivables increase driven by revenue
      growth; ii) a $142,793 inventories increase, principally finished goods, to
      support planned expansion and sales growth; iii) a $747,483 increase in advance
      to suppliers to buy raw materials and software systems ; iv) a $62,756 increase
      in tender deposits by tender for client deposits; v)a $180,624 decrease in
      prepayments , travel advances to directors and advances to employees, consisting
      primarily of prepayments for raw materials supplies in advance of shipment
      and
      working capital of direct sales office; partially offset by a $188,791 increase
      in trade payables, tax payable, accrued liabilities and other
      payables.





**Investing
      Activities**





For
      the
      nine months ended September 30, 2008, net cash used in investing activities
      was
      $2,236,248. This was primarily attributable to i) a $1,103,720 capital
      expenditure for rebuild plant and equipment; ii) a $2,917,536 capital
      expenditure by an advances to payment for purchase Qingdao Liheng Weave Co.,
      Ltd; iii) a $99,019 decrease in restricted cash; iv) a $611,191 decrease in
      amount due from a related company; vi) a $1,074,798 decrease in amount due
      from
      a director.





**Financing
      activities**





For
      the
      nine months ended September 30, 2008, net cash used in financing activities
      was
      $6,530,000. This was primarily attributable to the warrants J that were
      exercised.





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 3 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.





**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 periods, there was no impairment loss incurred. Competitive pricing
      pressure and changes in interest rates, could materially and adversely affect
      our estimates of future net cash flows to be generated by our long-lived
      assets.





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




36




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





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





We
      have
      no off-balance sheet arrangements and have not entered into any transactions
      involving unconsolidated, limited purpose entities.





**ITEM
      3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
      RISK.**




N/A.





**ITEM
      4T. CONTROLS AND PROCEDURES.**





**Evaluation
      of Disclosure Controls and Procedures**




Our
      management is responsible for establishing and maintaining a system of
      disclosure controls and procedures (as defined in Rule 13a-15(e)) under the
      Exchange Act) that is designed to ensure that information required to be
      disclosed by the Company in the reports that we file or submit under the
      Exchange Act is recorded, processed, summarized and reported, within the time
      specified in the Commission's rules and forms. Disclosure controls and
      procedures include, without limitation, controls and procedures designed to
      ensure that information required to be disclosed by an issuer in the reports
      that it files or submits under the Exchange Act is accumulated and communicated
      to the issuer's management, including its principal executive officer or
      officers and principal financial officer or officers, or persons performing
      similar functions, as appropriate to allow timely decisions regarding required
      disclosure.




Pursuant
      to Rule 13a-15(b) under the Exchange Act the Company carried out an evaluation
      with the participation of the Company’s management, including Liu Bo, the
      Company’s Chief Executive Officer (“CEO”) and Samuel Sheng, the Company’s Chief
      Financial Officer (“CFO”), of the effectiveness of the Company’s disclosure
      controls and procedures (as defined under Rule 13a-15(e) under the Exchange
      Act)
      as of the nine months ended September 30, 2008. Based upon that evaluation,
      the
      Company’s CEO and CFO concluded that the Company’s disclosure controls and
      procedures are effective to ensure that information required to be disclosed
      by
      the Company in the reports that the Company files or submits under the Exchange
      Act, is recorded, processed, summarized and reported, within the time periods
      specified in the SEC’s rules and forms, and that such information is accumulated
      and communicated to the Company’s management, including the Company’s CEO and
      CFO, as appropriate, to allow timely decisions regarding required
      disclosure.




**Changes
      in internal controls**




Our
      management, with the participation our CEO and CFO, performed an evaluation
      as
      to whether any change in our internal controls over financial reporting 
occurred during the 2008 Quarter ended September 30, 2008.  Based on that
      evaluation, our CEO and our CFO concluded that no change occurred in the
      Company's internal controls over financial reporting during the 2008 Quarter
      ended September 30, 2008 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**




N/A





**ITEM
      2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
      PROCEEDS**




None.




37





**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**




There
      were no matters required to be disclosed on Form 8-K during the nine months
      ended September 30, 2008 which were not disclosed on such form.





**ITEM
      6 - EXHIBITS.**




**Exhibit
                No.**
            
            **Description
                of Exhibit**31.1
            
            Certification
                by Chief Executive Officer pursuant to Sarbanes Oxley Act of 2002
                Section
                302.31.2
            
            Certification
                by Chief Financial Officer pursuant to Sarbanes Oxley Act of 2002
                Section
                302.32.1
            
            Certification
                by Chief Executive Officer pursuant to Sarbanes-Oxley Act of 2002
                Section
                906.32.2
            
            Certification
                by Chief Financial Officer pursuant to Sarbanes-Oxley Act of 2002
                Section
                906.




38





**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:
                  November 14, 2008
            By:
            /s/
                Liu BoName:
                Liu BoTitle:
                Chief Executive Officer





Dated:
                  November 14, 2008
            By:
            /s/
Samuel
              ShengName:
                Samuel ShengTitle:
                Chief Financial Officer




39