U. S. Securities and Exchange Commission Washington, D. C. 20549  FORM 10-Q/A (Amendment No. 1)  [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2008  [   ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____ to _____  Commission File No. 0-51012  XINYINHAI TECHNOLOGY, LTD.(Name of Small Business Issuer in its Charter)Utah87-0427336(State or Other Jurisdiction of
incorporation or organization)(I.R.S.  Employer
Identification No.)  No. 16 Dalian Road, Centralized Park Haping Road, Harbin Development Zone, China    150060 (Address of Principal Executive Offices)86-451-868-11118(Registrants telephone number including area code)  Indicate  by check mark  whether the  Registrant  (1) has filed all reports required to be filed by Sections 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 [   ]  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. (Check One) Large accelerated filer Accelerated filer__  Non-accelerated filer Small reporting company [X] Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)  Yes [   ]       No [ X]  APPLICABLE ONLY TO CORPORATE ISSUERS:  Indicate the number of shares outstanding of each of the Registrant's classes of common stock, as of the latest practicable date:  May 14, 2008 Common Voting Stock: 19,184,029  Amendment No. 1  This amendment is being filed in order to correct a number of errors caused by incomplete editing of the original filing. No change to the financial statements has been made.


XINYINHAI TECHNOLOGY, LTD. CONDENSED CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 2008 AND DECEMBER 31, 2007 (Stated in US Dollars)  March 31,December 31,20082007(Unaudited)(Audited)ASSETSCurrent AssetsCash and cash equivalents$564,566$1,308,877Restricted cash (Note 6)142,800363,492Trade receivable (Net of allowance for doubtful accounts of $7,246for 2008 and $6,682 for 2007)2,960,1051,329,732Inventories (Note 7)1,611,9301,149,271Other receivable, deposits and prepayments445,859166,430Prepaid expenses (Note 8)385,258412,737Total Current Assets6,110,5184,730,539Property, plant and equipment, net (Note 9)6,930,6975,349,795Land use right984,96970,710Deposits for acquisition of property, plant and equipment-1,843,800TOTAL ASSETS$14,026,184$11,994,844LIABILITIES AND STOCKHOLDERS EQUITYCurrent LiabilitiesTrade payable$846,285$777,806Bills payable (Note 6)142,800363,492Customer deposits679,564286,935Other payable and accrued liabilities (Note 10)904,852920,448Income tax payable138,348-Value added tax payable134,313137,334TOTAL LIABILITIES2,846,1622,486,015COMMITMENTS AND CONTINGENCIESMINORITY INTERESTS (NOTE 3)1,093,994919,640STOCKHOLDERS EQUITYCommon stock21,18424,417Additional paid-in capital3,802,8433,799,610Retained earnings4,127,3653,504,343Statutory reserves1,081,131918,636Accumulated other comprehensive income1,053,505342,183TOTAL STOCKHOLDERS EQUITY10,086,0288,589,189TOTAL LIABILITIES AND STOCKHOLDERS EQUITY$14,026,184$11,994,844    See the accompanying notes to condensed consolidated financial statements. 3     XINYINHAI TECHNOLOGY, LTD. CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME FOR THE THREE MONTHS ENDED MARCH 31, 2008 AND 2007 (Stated in US Dollars)   Three months ended March 31,
(Unaudited)20082007Revenues (Note 3)$3,379,895$2,140,117Cost of sales(2,016,337)(1,250,048)Gross profit1,363,558890,069Operating expensesSelling and distribution expenses67,22796,405General and administrative expenses281,742597,113Total expenses348,969693,518Income from operations1,014,589196,551Interest income1,1305,018Income before income taxes and minority interest1,015,719201,569Income taxes (Note 4)(135,413)-Income before minority interest880,306201,569Minority interest(94,789)(55,108)Net income$785,517$146,461Other comprehensive incomeForeign currency translation adjustments711,32348,323Comprehensive income$1,496,840$194,784Earnings per share - basic and diluted (Note 5)0.0340.006Weighted average number of common stock outstanding22,925,34424,317,899     See the accompanying notes to condensed consolidated financial statements. 4     XINYINHAI TECHNOLOGY, LTD. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 2008 AND 2007 (Stated in US Dollars)  Three months ended March 31,
(Unaudited)20082007Cash flows from operating activitiesNet income$785,517$146,461Adjustments to reconcile net income to net cash (used in)/providedby operating activities:Depreciation and amortization96,388538,508Minority interest94,78955,108Changes in operating assets and liabilitiesRestricted cash245,995-Trade receivable(1,486,084)(675,432)Inventories(358,034)(354,146)Other receivable, deposits and prepayments(259,771)218,406Trade payable2,862215,021Bills payable(245,995)-Customers deposit360,627(33,096)Other payable and accrued liabilities(87,222)(33,040)Income tax payable135,413-Value added tax payable(14,287)(24,295)Net cash flows (used in)/provided by operating activities(729,802)53,495Cash flow from investing activitiesPayments to acquire property, plant and equipment andland use right(107,185)-Net cash flows used in investing activities(107,185)-Effect of foreign currency translation on cash and cash equivalents92,67619,121Net (decrease)/increase in cash and cash equivalents(744,31172,616Cash and cash equivalents, beginning of period1,308,8771,553,139Cash and cash equivalents, end of period$564,566$1,625,755Supplemental cash flow informationInterest paid$           -$           -Income taxes paid$           -$           -  See the accompanying notes to condensed consolidated financial statements. 5  XINYINHAI TECHNOLOGY, LTD. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 2008 AND 2007 (Unaudited) (Stated in US Dollars)   1. Corporation information  (a) Xinyinhai Technology, Ltd. (Xinyinhai or the Company) was incorporated in Utah on October 18, 1985.  It currently has two subsidiaries, Winner Sea Group Limited (Winner Sea) and Harbin Golden Sea Technology Printing Co., Ltd. (Harbin Golden Sea).  Winner Sea is a business company organized under the laws of the British Virgin Islands on January 12, 2006.  It has conducted no business and is a holding company whose only asset is 90% equity interest in Harbin Golden Sea.  Ms. Xie Guihong, a director of the Company, owns the remaining 10% equity interest in Harbin Golden Sea.  Harbin Golden Sea is a company located in Harbin City, Heilongjiang Province, the Peoples Republic of China (PRC).  Founded in 1998, Harbin Golden Sea has developed into a leading participant in the PRCs financial note printing industry.  It is one of the companies to which the PRC government has issued the Special Industry Operating Permit and the Government Securities and Documents Duplicating Permit, which are the licenses required in order to be engaged in printing bank vouchers in the PRC.  The Company ended its development stage after the share exchange transaction as detailed in note 1(b) to the financial statements.  (b) On June 29, 2006, the Company executed a share exchange agreement (the Share Exchange) with the stockholders of Winner Sea whereby the stockholders of Winner Sea exchanged all their Winner Sea shares for 18,000,000 shares of the Companys common stock, representing 98.3% of the then outstanding stock of the Company.  The purchase method under reverse takeover accounting has been applied for the Share Exchange.  These consolidated financial statements issued under the name of the legal parent, Xinyinhai, are a continuation of the financial statements of Winner Sea, which include Winner Seas majority owned subsidiary Harbin Golden Sea.  2. Description of business  The Company, through Harbin Golden Sea, is a leading participant in PRCs financial notes printing industry.  It provides printing services whose quality equals the highest standards worldwide and imports state-of-the-art printing equipment from overseas that is installed on its advanced software systems, such as anti-falsification software.  The Company also earns approximately 29% of its revenue for the current reporting period from its position as a distributor of plasma arc cutting machinery and consumable parts.  The plasma arc cutting systems are designed to provide metal workers with clean cuts for metal work that permits little tolerance for error, and are well-known worldwide.  The Company acquired an office building in 2007 that was planned to be used as a tourist destination, to take advantage of the rapid growth of the tourism industry in Harbin.  The Company is currently considering selling it.  6  XINYINHAI TECHNOLOGY, LTD. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 2008 AND 2007 (Unaudited) (Stated in US Dollars)    3. Summary of significant accounting policies  Basis of presentation and consolidation  The accompanying condensed consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America.  In the opinion of the management of the Company, all adjustments, which are of a normal recurring nature, necessary for a fair statement of the results for the three month periods have been made.  Results for the interim period presented are not necessarily indicative of the results that might be expected for the entire fiscal year.  These condensed financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Companys Form 10KSB as filed with the Securities and Exchange Commission on April 14, 2008.  The consolidated financial statements include the accounts of the Company and its subsidiaries.  All significant inter-company accounts and transactions have been eliminated in consolidation.  Use of estimates  In preparing financial statements in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the consolidated financial statements, as well as the reported amounts of revenues and expenses during the reporting periods.  These accounts and estimates include, but are not limited to, the valuation of accounts receivable, inventories and the estimation on useful lives of property, plant and equipment.  Actual results could differ from those estimates.  Trade receivables  The Company extends unsecured credit to its customers in the ordinary course of business but mitigates the associated risks by performing credit checks and actively pursuing past due accounts.  An allowance for doubtful accounts is established and recorded based on managements assessment of the credit history with the customers and current relationships with them.  The Companys management determined that no further provision for uncollectible accounts was required for the three months ended March 31, 2008.  Inventories  Inventories are stated at the lower of cost or market.  Cost is determined on a weighted average basis and includes all expenditures incurred in bringing the goods to the point of sale and putting them in a saleable condition.  In assessing the ultimate realization of inventories, the management makes judgments as to future demand requirements compared to current or committed inventory levels.   7  XINYINHAI TECHNOLOGY, LTD. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 2008 AND 2007 (Unaudited) (Stated in US Dollars)   3. Summary of significant accounting policies (Contd)  Property, plant and equipment  Property, plant and equipment are stated at cost less accumulated depreciation.  Cost represents the purchase price of the asset and other costs incurred to bring the asset into its existing use.  Depreciation is provided to write off the cost of the assets to the estimated residual value on a straight-line basis over their estimated useful lives as follows:  Depreciable lifeBuilding20 yearsPlant and machinery10 yearsFurniture, fixtures and equipment5 yearsMotor vehicles10 years
  Maintenance or repairs are charged to expense as incurred.  Upon sale or disposition, the applicable amounts of asset cost and accumulated depreciation are removed from the accounts and the net amount less proceeds from disposal is charged or credited to income.  Land use right  Land use right is stated at cost less accumulated amortization.  Amortization is provided using the straight-line method over the remaining terms of the lease of 40 years.  Minority interests  Minority interests result from the consolidation of 90% owned subsidiary, Harbin Golden Sea, where the Company has control over its operations.  Stock-based compensation  The Company adopted the SFAS No. 123R, "Share-Based Payment" using the modified prospective method.  Under SFAS 123R, equity instruments issued to service providers for their services are measured at the grant-date fair value and recognized in the statement of income and comprehensive income over the vesting period.    8  XINYINHAI TECHNOLOGY, LTD. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 2008 AND 2007 (Unaudited) (Stated in US Dollars)   3. Summary of significant accounting policies (Contd)  Revenue recognition  The Company derives revenues from the sales of printed products and re-sale of purchased third parties equipment.  The Company recognizes its revenues net of related business taxes and value added taxes and when persuasive evidence of an arrangement exists, transfer of title has occurred or services have been rendered, the selling price is fixed or determinable and collectibility is reasonably assured.  (a) The Company recognizes revenue from the sale of printed forms upon delivery to the customers and the transfer of title and risk of loss.  Because the majority of products are customized to meet customer specifications, product returns are not significant.  (b) Re-sale of purchased third parties equipment, plasma arc cutting machines, does not require significant modification or customization.  Revenue from sale of the equipment and associated spare parts is recognized at the time of delivery of products to customers and when the title and ownership are passed to the customers. Basic and diluted earnings per share  The Company reports basic earnings per share in accordance with SFAS No. 128, Earnings Per Share.  Basic earnings per share is computed using the weighted average number of shares outstanding during the periods presented.  The weighted average number of shares of the Company represents the common stock outstanding during the periods.  Recently issued accounting standards  In September 2006, the FASB issued SFAS No. 157 Fair Value Measurement. SFAS No. 157 defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. This Statement shall be effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. Earlier application is encouraged, provided that the reporting entity has not yet issued financial statements for that fiscal year, including any financial statements for an interim period within that fiscal year. The provisions of this statement should be applied prospectively as of the beginning of the fiscal year in which this statement is initially applied, except in some circumstances where the statement shall be applied retrospectively.  The adoption of SFAS 157 has no material effect on the Companys financial statements.  In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities - Including an Amendment of FASB Statement No. 115. SFAS 159 permits entities to choose to measure many financial instruments and certain other items at fair value. Entities that elect the fair value option will report unrealized gains and losses in earnings at each subsequent reporting date. The fair value option may be elected on an instrument-by-instrument basis, with few exceptions. SFAS 159 also establishes presentation and disclosure requirements to facilitate comparisons between companies that choose different measurement attributes for similar assets and liabilities. The requirements of SFAS 159 are effective for the fiscal year beginning January 1, 2008. The adoption of SFAS 159 has no material effect on the Companys financial statements.  9  XINYINHAI TECHNOLOGY, LTD. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 2008 AND 2007 (Unaudited) (Stated in US Dollars)   3. Summary of significant accounting policies (Contd)  Recently issued accounting standards (contd)  In December 2007, the FASB issued 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. The guidance will become effective for the fiscal year beginning after December 15, 2008. The Company is currently evaluating the impact of adopting SFAS 160 on its financial statements.  In December 2007, the FASB issued SFAS No. 141 (Revised) Business Combinations. SFAS 141 (Revised) establishes principles and requirements for how the acquirer of a business recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree. The statement also provides guidance for recognizing and measuring the goodwill acquired in the business combination and determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. The guidance will become effective for the fiscal year beginning after December 15, 2008. The Company is currently evaluating the impact of adopting SFAS 141 (Revised) on its financial statements.  In March 2008, the FASB issued SFAS No. 161 Disclosure about Derivative Instruments and Hedging Activities. SFAS 161 changes the disclosure requirements for derivative instruments and hedging activities. The guidance will become effective for the fiscal year beginning after November 15, 2008. Earlier application is encouraged, provided that the reporting entity has not yet issued financial statements for that fiscal year, including any financial statements for an interim period within that fiscal year.  This statement encourages, but does not require, comparative disclosures for earlier periods at initial adoption. The Company is currently evaluating the impact of adopting SFAS 161 on its financial statements.  4. Income taxes  The Company is subject to the United States of America tax law at tax rate of 34%.  If has no taxable income for income tax purposes for the three months ended March 31, 2008 and 2007.  The Company has not provided deferred taxes on undistributed earnings of its non-U.S. subsidiaries as of March 31, 2008, as it is the Companys current policy to reinvest these earnings in non-U.S. operations.  Winner Sea is not subject to income tax.  Income taxes are calculated at 12.5% on the estimated assessable profits of Harbin Golden Sea. The subsidiary enjoys a 50% tax reduction that was approved by the Taxation Bureau of Harbin City.  On January 1, 2007, the Company adopted FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes (FIN 48).  Pursuant to FIN 48, the Company identified and evaluated any potential uncertain tax positions.  The Company has concluded that there are no uncertain tax positions requiring recognition in the financial statements.  10  XINYINHAI TECHNOLOGY, LTD. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 2008 AND 2007 (Unaudited) (Stated in US Dollars)   5. Earnings per share - basic and diluted The basic and diluted earnings per share is calculated using the net income and the weighted average number of common stock outstanding during the reporting periods.  The basic and diluted earnings per share are the same as the warrants granted to external financial advisors were anti-dilutive.   6. Restricted cash and bills payable When the Company intends or is requested to settle its suppliers by issuance of bills, it is required to place deposits with banks equal to 100% of the bills amount at the time of issuance.  These deposits will be used to settle the bills at maturity.   7. Inventories March 31,December 31,20082007(Unaudited)(Audited)Raw materials$1,033,812$781,582Work in progress266,494216,170Finished goods311,624151,519$1,611,930$1,149,271
   8. Prepaid expenses March 31,December 31,20082007(Unaudited)(Audited)Prepaid consultancy fees$1,101,500$2,256,500Accumulated amortization(716,242)(854,138)385,2581,402,362Termination of consulting agreements (Note 8(a))-(989,625)$385,258$412,737
  (a) The Company and certain consultants agreed to terminate the consulting agreements whereby the consultants would return an aggregate of 3,233,870 shares of the Companys common stock previously granted to them to the Company.  These shares of common stock had been returned to the Company for cancellation in February 2008.  The cancellation was reflected in the financial statements for the year ended December 31, 2007 as the termination was in negotiation and concluded before December 31, 2007.  11  XINYINHAI TECHNOLOGY, LTD. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 2008 AND 2007 (Unaudited) (Stated in US Dollars)    8. Prepaid expenses (contd)  (b) The Company and certain consultants agreed to cancel the consulting agreements whereby the consultants would return an aggregate of 2,000,000 shares of the Companys common stock previously granted to them to the Company.  These shares of common stock had been returned to the Company for cancellation after March 31, 2008.   9. Property, plant and equipment, net March 31,December 31,20082007(Unaudited)(Audited)Buildings$5,705,040$4,183,196Plant and machinery2,117,8421,900,902Motor vehicles488,447450,479Furniture, fixtures and equipment38,49559,5468,349,8246,594,123Accumulated depreciation(1,419,127)(1,244,328)Property, plant and equipment, net$6,930,697$5,349,795
  As of March 31, 2008, included in buildings is the office building of $3,700,390 acquired in 2007 that was planned to be used as a tourist destination, to take advantage of the rapid growth of the tourism industry in Harbin.  The Company is currently considering selling the property.   10. Other payables and accrued liabilities March 31,December 31,20082007(Unaudited)(Audited)Payable for acquisition of building and land use right$849,660$783,615Other payables2,16042,357Accrued liabilities, statutory staff welfare and salaries53,03294,476$904,852$
   11. Defined contribution plan  The Company has a defined contribution plan for all its qualified employees in the PRC.  The Company and its employees are each required to make contributions to the plan at the rates specified in the plan.  The only obligation of the Company with respect to retirement scheme is to make the required contributions under the plan.  No forfeited contribution is available to reduce the contribution payable in future years.  The defined contribution plan contributions were charged to the statement of income and comprehensive income.  The Company contributed $1,461 and $934 for the three months ended March 31, 2008 and 2007 respectively.  12  XINYINHAI TECHNOLOGY, LTD. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 2008 AND 2007 (Unaudited) (Stated in US Dollars)   12. Segment information  The Company currently operates in two reportable segments, Sales of printed products and Re-sale of purchased equipment.  The accounting policies of the segments are the same as described in the summary of significant accounting policies.  The Company evaluates segment performance based on income from operations.  As a result, the components of operating income for one segment may not be comparable to another segment.  The following is a summary of the Companys segment information:  Printing ProductsEquipment TradingTotalThree months ended March 31,
(Unaudited)Three months ended March 31,
(Unaudited)Three months ended March 31,
(Unaudited)200820072008200720082007Revenues$2,400,563$1,752,417$979,332$387,700$3,379,895$2,140,117Segment profit/(loss)$1,080,268$594,244$56,484$(43,166)$1,136,752$551,078March 31,DecemberMarch 31,DecemberMarch 31,December200831, 2007200831, 2007200831, 2007(Unaudited)(Audited)(Unaudited)(Audited)(Unaudited)(Audited)Segment assets$9,488,837$7,761,404$337,050$301,484$9,825,887$8,062,888
  A reconciliation is provided for unallocated amounts relating to corporate operations which are not included in the segment information.  Three months ended March 31,
(Unaudited)20082007Total consolidated revenue$3,379,895$2,140,117Total income for reportable segments$1,136,752$551,078Unallocated amounts relating to operations:Amortization of prepaid expenses and professional fee(121,033)(349,509)Income before income taxes and minority interest$1,015,719$201,569
  March 31,December 31,20082007(Unaudited)(Audited)AssetsTotal assets for reportable segments$9,825,887$8,062,888Unallocated amounts relating to operations:Prepaid expenses385,258412,737Building and land use right3,776,5803,483,465Other receivable35,19932,462Cash and cash equivalents3,2603,292Total$14,026,184$11,994,844
  All of the Companys long-lived assets and customers are located in the PRC.  Accordingly, no geographic information is presented.  13    ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS  Results of Operations Our revenue in the first quarter of 2008 increased by 58% over the revenue realized in the first quarter of 2007.  The increase was attributable to both our printing business (37% increase) and our equipment distribution business (153% increase).  The increase in printing revenue resulted from our development of new customers and from our investment in added capacity during 2007, which enabled us to market our services more aggressively.  The increase in distribution revenue was primarily the result of our establishing additional selling agents throughout China, which has opened a much larger market for the plasma arc cutting machines that we sell. Continued revenue growth in our printing services business will require further capital investment.  During the recent quarter we completed the purchase of a 10,284m2facility, where we are currently developing expanded production facilities in order to meet the production requirements of our growing sales.  In addition, as Chinas banking industry rapidly modernizes, our customers demand additional product offerings similar to available to the banking industry in Europe and the U.S.  Our ability to meet that demand will determine the long term growth of our business.  Immediately, the development of these new products will require substantial capital investment.  For that purpose, we are currently exploring financing possibilities, but have not yet received a commitment for the funds. The 40% gross margin realized by our subsidiary, Harbin Golden Sea on sales in the first quarter of 2008, was lower than the 42% gross margin realized in the first quarter of 2007.  The reason for the fall-off was the sharp increase in revenue from equipment sales in 2008, since our gross margin on equipment sales is far lower than our gross margin on printing.  Our expectation for the future is that our gross margin from printing services will average approximately 40%, albeit within a range of 33% to 50%, depending on the components of the business.  If we obtain the funding necessary to expand our printing capacity, we expect the printing portion of its business to grow faster than the equipment sales business.  If that occurs, overall gross margin should increase towards the higher margins that printing has historically produced. Operating expenses as a percentage of revenue decreased from 32% in the first quarter of 2007 to 10% in the first quarter of 2008.  The primary reason for the decrease was the issuance of shares to consultants in the 4th quarter of 2006.  We utilized our equity in this manner in order to acquire the services of certain leaders in the printing industry.  However the issuance added a prepaid asset of $2,219,000 to our balance sheet, which we were required to amortize as expense over the duration of the consulting agreements.  This was the primary reason that we incurred depreciation and amortization charges of $538,508 in the first quarter of 2007.  Our depreciation and amortization charge for the first quarter of 2008, however, was only $96,338, as several of the consulting contracts expired in 2007 and, as to the remainder of the contracts, the Company and the consultants reached agreement at the end of 2007 to cancel future services.  14    Our efforts to improve the efficiency of our marketing operations continued to yield benefits.  During the first quarter of 2008, despite the 58% increase in revenue, our selling expenses decreased by 30% from the selling expenses recorded in the first quarter of 2007.  The disparity between our fixed costs and our revenue reflected our ability to increase our production without a proportionate increase in our administrative overhead.  Similarly we expect that if we obtain the funds needed to increase our printing production capacity, the resulting increase in our revenue will not require a corresponding increase in administrative expense, with the exception that new investment in equipment will cause an increase in depreciation expense. In 2006 our operating subsidiary qualified for a two year exemption from Chinese income taxes.  Commencing in 2008, we will be eligible for three years of taxation at 50% of the 25% statutory rate.  As a result of this government allowance, we incurred no income tax in the first quarter of 2007, but were taxed at a 12.5% rate in the first quarter of 2008, causing an expense of $135,413.  The tax burden per share during the first quarter of 2008 was $0.006 The operations of our subsidiary, Harbin Golden Sea, produced $947,890 in income during the first quarter of 2008.  However, because we own only 90% of Harbin Golden Sea, we deducted a minority interest of $94,789 on our Statement of Income and Comprehensive Income.  After that deduction and taking into account the income and expenses incurred by the parent corporation, our net income for the first quarter of 2008 was $785,517, representing $.034 per share.  In the first quarter of 2007 we realized only $146,461 in net income, or less than $.01 per share. Our business operates primarily in Chinese Renminbi, but we report our results in our SEC filings in U.S. Dollars.  The conversion of our accounts from RMB to Dollars results in translation adjustments, which are reported as a middle step between net income and comprehensive income.  The net income is added to the retained earnings on our balance sheet; while the translation adjustment is added to a line item on our balance sheet labeled accumulated other comprehensive income, since it is more reflective of changes in the relative values of U.S. and Chinese currencies than of the success of our business.  In the first quarter of 2008, the effect of converting our financial results to Dollars was to add $711,323 to our comprehensive income.  Liquidity and Capital Resources Since our subsidiary, Harbin Golden Sea, was organized in 1998, the growth of its operations has been funded by contributions to capital by our Chairman, Mrs. Tian.  With the $2.4 million that she invested, Harbin Golden Sea built its facilities and funded its operations, resulting in profitable operations for the past several years.  As a result, at March 31, 2008 we had working capital totaling $3,264,356 (an increase of $1,019,832 since the end of 2007) and no debt. During the first quarter of 2008, $729,802 in cash was used by our operations. The disparity between our net income and cash flow from operations was primarily attributable to the increase in our trade receivables resulting from the increase in sales during the three months ended March 31, 2008.  In addition, we increased our inventories by $358,034 during the quarter in anticipation of continued growth in sales.  15     Our cash position fell by $744,311 during the three months ended March 31, 2008.  We applied the greater portion of our cash reserves to our two recent real estate acquisitions:  a new production facility that we contracted to purchase for $1,843,800, and a 12 story office building in Harbin that we purchased for $3,483,465, of which we paid $2,699,850 during 2007.  We are currently considering whether to develop the Harbin office building as a tourist destination or to sell it.  If we decide to sell it, the proceeds will be applied to further developing our production capacity. Harbin Golden Seas business plan calls for significant investment in the growth of Harbin Golden Sea during 2008.  We have budgeted $1,500,000 to purchase equipment for our new production facility.  We also plan to invest in the development of additional product lines, although the amount that we apply to that purpose will depend on our success in obtaining investment capital.  To date, however, we have not received any commitment of funds. Our capital is sufficient to fund our operations at their current level for the foreseeable future.  Significant growth, however, will require that we obtain additional capital or incur debt.  Off-Balance Sheet Arrangements  We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition or results of operations.  Risk Factors That May Affect Future Results  You should carefully consider the risks described below before buying our common stock.  If any of the risks described below actually occurs, that event could cause the trading price of our common stock to decline, and you could lose all or part of your investment.  I.  Risks attendant to our business  We may not be able to adequately protect our intellectual property, which could cause us to be less competitive. We are continuously designing and developing new technology. We rely on a combination of copyright and trade secret laws and restrictions on disclosure to protect our intellectual property rights. Unauthorized use of our technology could damage our ability to compete effectively.  In China, monitoring unauthorized use of our products is difficult and costly.  In addition, intellectual property law in China is less developed than in the United States and historically China has not protected intellectual property to the same extent as it is protected in other jurisdictions, such as the United States. Any resort to litigation to enforce our intellectual property rights could result in substantial costs and diversion of our resources, and might be unsuccessful.  Currency fluctuations may adversely affect our business. We generate revenues and (with one exception) incur expenses and liabilities in Chinese RMB. However we report our financial results in the United States in U.S. Dollars.  As a result,  16    we are subject to the effects of exchange rate fluctuations between these currencies.  Recently, there have been suggestions made to the Chinese government that it should adjust the exchange rate and end the linkage that in recent years has held the RMB-U.S. dollar exchange rate constant. If the RMB exchange rate is adjusted or is allowed to float freely against the U.S. dollar, our revenues, which are denominated in RMB, may fluctuate significantly in U.S. dollar terms. We have not entered into agreements or purchased instruments to hedge our exchange rate risks.  Our business and growth will suffer if we are unable to hire and retain key personnel that are in high demand. Our future success depends on our ability to attract and retain highly skilled engineers, draftsmen, and technicians, as well as sales personnel experienced in international sales.  Qualified individuals are in high demand in China, and there are insufficient experienced personnel to fill the demand.  Therefore we may not be able to successfully attract or retain the personnel we need to succeed.  We may have difficulty establishing adequate management and financial controls in China. The Peoples Republic of China has only recently begun to adopt the management and financial reporting concepts and practices that investors in the United States are familiar with.  We may have difficulty in hiring and retaining employees in China who have the experience necessary to implement the kind of management and financial controls that are expected of a United States public company.  If we cannot establish such controls, we may experience difficulty in collecting financial data and preparing financial statements, books of account and corporate records and instituting business practices that meet U.S. standards.  Government regulations could increase our expenses. We market our printing services to the financial services industry, which is highly regulated in China.  The government of China has many regulations that govern the documents that we print, the way we print them, and the companies that are permitted to print them.  The government is considering additional regulations, as it strives to modernize the Chinese financial services industry.  One or more of those regulations could impose compliance costs on us that would adversely affect our profits.  Capital outflow policies in China may hamper our ability to pay dividends to shareholders in the United States. The Peoples Republic of China has adopted currency and capital transfer regulations. These regulations require that we comply with complex regulations for the movement of capital. Although Chinese governmental policies were introduced in 1996 to allow the convertibility of RMB into foreign currency for current account items, conversion of RMB into foreign exchange for capital items, such as foreign direct investment, loans or securities, requires the approval of the State Administration of Foreign Exchange. We may be unable to obtain all of the required conversion approvals for our operations, and Chinese regulatory authorities may impose greater restrictions on the convertibility of the RMB in the future. Because most of our future revenues will be in RMB, any inability to obtain the requisite approvals or any future restrictions on  17    currency exchanges will limit our ability to fund our business activities outside China or to pay dividends to our shareholders.  We have limited business insurance coverage. The insurance industry in China is still at an early stage of development. Insurance companies in China offer limited business insurance products, and do not, to our knowledge, offer business liability insurance. As a result, we do not have any business liability insurance coverage for our operations. Moreover, while business disruption insurance is available, we have determined that the risks of disruption and cost of the insurance are such that we do not require it at this time. Any business disruption, litigation or natural disaster might result in substantial costs and diversion of resources.  II.  Risks attendant to our management  The absence of independent directors on our board of directors may limit the quality of management decision making. Each of the four members of our Board of Directors is also an employee of Harbin Golden Sea.  There is no audit committee of the board and no compensation committee.  This situation means that the Board will determine the direction of our company without the benefit of an objective perspective and without the contribution of insights from outside observers.  This may limit the quality of the decisions that are made.  In addition, the absence of independent directors in the determination of compensation may result in the payment of inappropriate levels of compensation.  Our business development would be hindered if we lost the services of our Chairman. Tian Ling is the Chief Executive Officer of Xinyinhai Technology, Ltd. and of its operating subsidiary, Harbin Golden Sea Technology Printing Co., Ltd.  Mrs. Tian is responsible for strategizing not only our business plan but also the means of financing it.  If Mrs. Tian were to leave Xinyinhai or become unable to fulfill her responsibilities, our business would be imperiled.  At the very least, there would be a delay in the development of Xinyinhai until a suitable replacement for Mrs. Tian could be retained.  Xinyinhai is not likely to hold annual shareholder meetings in the next few years. Management does not expect to hold annual meetings of shareholders in the next few years, due to the expense involved.  The current members of the Board of Directors were appointed to that position by the previous directors.  If other directors are added to the Board in the future, it is likely that the current directors will appoint them.  As a result, the shareholders of Xinyinhai will have no effective means of exercising control over the operations of Xinyinhai.  Your ability to bring an action against us or against our directors, or to enforce a judgment against us or them, will be limited because we conduct all of our operations in China and because our management resides outside of the United States. We conduct all of our operations in China through our wholly-owned subsidiary. All of our directors and officers reside in China and all of the assets of those Chinese residents are  18    located outside of the United States. As a result, it may be difficult or impossible for you to bring an action against us or against these individuals in the United States in the event that you believe that your rights have been infringed under the securities laws or otherwise. Even if you are successful in bringing an action of this kind, the laws of the United States and of China may render you unable to enforce a judgment against our assets or the assets of our directors.  ITEM 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK  Not applicable.  ITEM 4. CONTROLS AND PROCEDURES  Evaluation of Disclosure Controls and Procedures.  Tian Ling, our Chief Executive Officer, and Du Song, our Chief Financial Officer, carried out an evaluation of the effectiveness of the Companys disclosure controls and procedures as of March 31, 2008.  Pursuant to Rule13a-15(e) promulgated by the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, disclosure controls and procedures means controls and other procedures that are designed to insure that information required to be disclosed by the Company in the reports that it files with the Securities and Exchange Commission is recorded, processed, summarized and reported within the time limits specified in the Commissions rules.  Disclosure controls and procedures include, without limitation, controls and procedures designed to insure that information the Company is required to disclose in the reports it files with the Commission is accumulated and communicated to our Chief Executive Officer and Chief Financial Officer as appropriate to allow timely decisions regarding required disclosure.  Based on his evaluation, Mrs. Tian and Ms. Du concluded that the Companys system of disclosure controls and procedures was effective as of March 31, 2008 for the purposes described in this paragraph.  Changes in Internal Controls.  There was no change in internal controls over financial reporting (as defined in Rule 13a-15(f) promulgated under the Securities Exchange Act or 1934) identified in connection with the evaluation described in the preceding paragraph that occurred during the Companys first fiscal quarter that has materially affected or is reasonably likely to materially affect the Companys internal control over financial reporting.  PART II   -   OTHER INFORMATION  Item 6. Exhibits  31.1 Rule 13a-14(a) Certification  Chief Executive Officer 31.2 Rule 13a-14(a) Certification  Chief Financial Officer 32 Rule 13a-14(b) Certification   19     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.    XINYINHAI TECHNOLOGY, LTD.  Date: May 15, 2008 By: /s/ Tian Ling  Tian Ling, Chief Executive Officer  By: /s/ Du Song  Du Song, Chief Financial Officer, Chief Accounting Officer   20