SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 10-Q


(Mark one)

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

                For the quarterly period ended December 31, 1997

                                       OR

[ ]  TRANSITION  REPORT  PURSUANT  TO SECTION  13 OR 15(d) OF THE  SECURITIES
     EXCHANGE ACT OF 1934


               For the transition period from ________to________.


                           Commission File No. 0-22049


                                 S.W. LAM, INC.
               --------------------------------------------------
             (Exact Name of Registrant as Specified in Its Charter)


            Nevada                                        62-1563911
--------------------------------               ---------------------------------
(State or other jurisdiction                   (IRS Employer Identification No.)
of incorporation or organization)                                      


             Unit 25-32, 2nd Floor, Block B, Focal Industrial Centre
                         Man Lok St., Hunghom, Hong Kong
             -------------------------------------------------------
                    (Address of principal executive offices)


                                 (852) 2766 3688
              ----------------------------------------------------
              (Registrant's Telephone Number, Including Area Code)


              ----------------------------------------------------
              (Former name, former address and formal fiscal year,
                         if changed since last report)


     Check  whether  the issuer (1) filed all  reports  required  to be filed by
section 13 or 15(d) of the  Exchange  Act during the past 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 No


     As of August 1, 1998,  12,800,000 shares of Common Stock of the issuer were
outstanding.



<PAGE>

                         S.W. LAM, INC. AND SUBSIDIARIES
                         -------------------------------
                                      INDEX



                                                                          Page
                                                                         Number
                                                                        --------
PART I - FINANCIAL INFORMATION

        Item 1.      Financial Statements

            Consolidated Balance Sheets - December 31, 1997 
               and  March 31, 1997......................................      1

            Consolidated Statements of Operations - For the three 
               and nine month periods ended December 31, 1997 and 
               December 31, 1996 .......................................      2

            Consolidated Statements of Cash Flows - For the nine 
               months ended December 31, 1997 and December 31, 1996.....      3

            Notes to Consolidated Financial Statements..................      4

   Item 2.  Management's Discussion and Analysis of Financial Condition 
               and Results of Operations................................      6

PART II - OTHER INFORMATION

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


SIGNATURES..............................................................      8


<PAGE>

PART I - FINANCIAL INFORMATION

Item I - Financial Statements

                         S.W. LAM, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                    (US$,000)
                                   (Unaudited)
<TABLE>
                                                                           December 31,           March 31,
ASSETS                                                                         1997                 1997
                                                                        ------------------    ---------------
<S>                                                                        <C>                 <C>    

Current Assets:
  Cash and cash equivalents                                                     $2,187                $94
  Accounts receivable, net of allowance for doubtful accounts                   10,471              5,106
  Inventory                                                                     11,946              8,509
  Prepayments and other current assets                                           1,824                142
  Due from a Director                                                              701                475
                                                                        ---------------        -------------
     Total Current Assets                                                       27,129             14,326
Property, plant and equipment, and capital leases, net                          14,297              7,083
                                                                        ---------------        -------------
  Total Assets                                                                 $41,426            $21,409
                                                                        ===============        =============

LIABILITIES AND STOCKHOLDERS' EQUITY                                     
                                                                         
Current Liabilities:                                                     
  Short-term bank borrowings                                                    $5,569             $2,275
  Long-term bank loans, current portion                                            351                197
  Capital lease obligations, current portion                                       171                229
  Accounts payable                                                               4,565              1,619
  Deposits from customers                                                           34              1,125
  Accrued liabilities                                                              336                267
  Convertible short-term loan                                                   10,000                  0
  Income tax payable                                                             6,448              5,846
                                                                        ---------------        -------------
     Total Current Liabilities                                                  27,474             11,558
Long-term Liabilities
  Long-term bank loans, non-current portion                                                         1,290
                                                                                 1,291
  Capital lease obligations, non current portion                                           
                                                                                   117                260
  Deferred taxation                                                                                   284
                                                                                   284
                                                                        ---------------        -------------
    Total Liabilities                                                           29,166             13,392
                                                                        ---------------        -------------
Stockholders' Equity:
  Preferred stock, authorized 25,000,000 shares $.001 par value, issued
   and outstanding 100,000 shares - Series A Preferred Stock                         0                  0
  Common stock, authorized 25,000,000 shares $.001 par value, issued
   and outstanding 12,800,000 at March 31, 1997 and December 31, 1997               13                 13
  Additional paid-in capital                                                       847                846
  Retained Earnings                                                             11,246              7,008
  Cumulative translation adjustments                                               154                150
                                                                        ---------------        -------------
    Total Stockholders' Equity                                                  12,260              8,017
                                                                        ===============        =============
  Total Liabilities and Stockholders' Equity                                   $41,426            $21,409
                                                                        ===============        =============

</TABLE>


The accompanying notes are an integral part of these financial statements.


                                       1
<PAGE>


                         S.W. LAM, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                        (US$,000, except per share data)
                                   (Unaudited)
<TABLE>

                                                            Three Months Ended                       Nine Months Ended
                                                                December 31,                            December 31,
                                                       ------------------------------    -----------------------------------
                                                           1997              1996                1997               1996
                                                       -----------       ------------    ---------------    ----------------
<S>                                                    <C>                 <C>            <C>                 <C>   

Revenue:                                                  17,707           12,665             47,093              29,545

Cost of sales and services:                              (13,833)          (9,612)           (36,142)            (22,350)
                                                      -----------    -------------       ------------       -------------

Gross Profit                                               3,874            3,053             10,951               7,195

Operating Expenses:
  Selling, general and administrative expenses            (1,591)          (1,388)            (4,750)             (3,072)
                                                      -----------    -------------       ------------       -------------
 Income from Operations                                    2,283            1,665              6,201               4,123

Other Income (Expense):                                     (795)               3             (1,381)                (59)
                                                      -----------    -------------       ------------       -------------
Income before Provision for Income Taxes                   1,488            1,668              4,820               4,064

Provision for Income Taxes                                  (306)            (640)              (582)             (1,413)
                                                      -----------    -------------       ------------       -------------

Net Income                                                $1,182           $1,028             $4,238              $2,651
                                                      ===========    =============       ============       =============

Earnings per share:
  Primary earning  per share                                $.09             $.09               $.33                $.22
                                                      ------------    -------------      -------------      --------------
  Primary common shares outstanding                   12,800,000       12,000,000         12,800,000          12,000,000
                                                      ------------    -------------      -------------      --------------
</TABLE>



   The accompanying notes are an integral part of these financial statements.



                                       2
<PAGE>

                         S.W. LAM, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                    (US$,000)
                                   (Unaudited)
<TABLE>

                                                                             For the Nine Months Ended
                                                                     December 31, 1997       December 31, 1996
                                                                    -------------------    --------------------
<S>                                                                   <C>                      <C>   

Cash Flows from Operating Activities:
  Net Income                                                               $4,238                 $2,651
  Adjustments to reconcile net income to net cash provided 
     by (used in) operating activities:
      Depreciation of property, plant and equipment                         1,764                    660
 
      Decrease (Increase) In Operating Assets:
        Accounts receivable                                                (5,364)                (1,863)
        Inventory                                                          (3,437)                   227
        Prepayments and other current assets                               (1,682)                   (37)
        Due from a Director                                                  (226)                   401

      Increase (Decrease) In Operating Liabilities:                                    
        Accounts payable                                                    2,946                    423
        Deposits from customers                                            (1,091)                (1,998)
        Accrued liabilities                                                    69                   (161)
        Income taxes payable                                                  602                  1,406
                                                                     -------------             ------------
          Net cash provided by operating activities                        (2,181)                 1,709
                                                                     -------------             ------------

Cash Flows from Investing Activities:
  Additions to property, plant and equipment                               (8,977)                (2,960)
                                                                     -------------             ------------
      Net cash used in investing activities                                (8,977)                (2,960)
                                                                     -------------             ------------

Cash Flows from Financing Activities:
Net proceeds from issuance of common stock                                      0                    524
Net (decrease) increase in short term bank borrowings                       3,294                    471
Net (decrease) increase in convertible short term loans                    10,000                      0
Additions of capital lease obligations                                         92                    331
Repayment of capital element of capital lease obligations                    (293)                   (85)
Additions of long term bank loans                                             388                    945
Repayment of long term bank loans                                            (233)                  (519)
                                                                     -------------             ------------
      Net cash provided by (used in) financing activities                  13,248                  1,667
                                                                     -------------             ------------

Effect of exchange rate changes on cash                                         3                    (34)
                                                                     -------------             ------------
Net increase (decrease) in cash                                             2,093                    382

Cash and Cash Equivalents, beginning of period                                 94                    244
                                                                     -------------             -------------

Cash and Cash Equivalents, end of period                                   $2,187                   $626
                                                                     =============             =============
</TABLE>


The accompanying notes are an integral part of these financial statements.

                                       3
<PAGE>



                         S.W. LAM, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)


1.   INTERIM PRESENTATION

     The interim consolidated  financial statements are prepared pursuant to the
     requirements  for  reporting  on Form 10-Q.  These  statements  include the
     accounts of S.W. Lam,  Inc. and all of its wholly owned and majority  owned
     subsidiary  companies.  The March 31, 1997  balance  sheet data was derived
     from  audited  financial  statements  but does not include all  disclosures
     required by generally accepted accounting principles. The interim financial
     statements  and  notes  thereto  should  be read in  conjunction  with  the
     financial  statements and notes included in the Company's Form 10-K for the
     year ended  March 31,  1997.  In the  opinion of  management,  the  interim
     financial  statements  reflect all adjustments of a normal recurring nature
     necessary  for a fair  statement  of the results  for the  interim  periods
     presented.  The current period  results of operations  are not  necessarily
     indicative of results which  ultimately  will be reported for the full year
     ending March 31, 1998.

2.   CURRENCY PRESENTATION AND FOREIGN CURRENCY TRANSLATION

     The translation of the financial  statements of group companies into United
     States  Dollars is  performed  for balance  sheet  accounts  using  closing
     exchange  rates in effect at the  balance  sheet date and for  revenue  and
     expense accounts using average exchange rate during each reporting  period.
     The gains or losses resulting from translation are included in shareholders
     equity separately as cumulative translation adjustments.

3.   SIGNIFICANT EVENTS

     a.   Note Payable

     In  consideration  for a loan of $10,000,000 from Phenomenal  Limited,  the
     Company's  wholly  owned  subsidiary  Quality  Prince  Limited  executed  a
     Convertible  Note ("Note") in the principal  amount of  $10,000,000  with a
     maturity of March 20, 1998.  The Note may be converted  into 2914 shares or
     such  other  number of shares as will  constitute  not less than  29.14% of
     Quality  Prince  Limited,  and bears  interest at the rate of three percent
     compounded  monthly,  provided  that if the Company is not in Default  with
     respect  to any  repayment  obligation  thereunder,  then the rate shall be
     reduced to 1.5% compounded monthly.

     b.   Warrants

     As additional consideration for the loan of $10,000,000, the Company issued
     Phenomenal Limited,  warrants  ("Warrants") to purchase 5,263,158 shares of
     the Company's common stock,  $.001 par value, at a purchase price of $2.19,
     exercisable  for a period  commencing  upon  the  date of the  grant of the
     Warrants  and ending on the earlier of (i) May 31, 1998 or (ii) the closing
     of  a  consolidation  or  merger  of  the  Company  (other  than  with  its
     wholly-owned  subsidiary),  or the transfer of all or substantially  all of
     the  Company's  assets to,  another  corporation  (unless the owners of the
     capital stock of the Company, prior to such transaction,  continue to own a
     majority of the capital stock of the surviving  corporation).  The Warrants
     may only be exercised in the event that the Note is not converted  pursuant
     to its terms.

4.   SUBSEQUENT EVENTS

     On June 4, 1998, the Company (and its subsidiaries) and Phenomenal  Limited
     executed an agreement  ("Deed  Amendment")  to modify the terms of the Note
     and the Warrants. Pursuant to the Deed Amendment, Phenomenal Limited agreed
     to an investment in the Company's  subsidiary,  Hang Fung Jewellery Company
     Limited  ("Hang  Fung  Jewellery")  in the  form  of  5,263,788  redeemable
     preference  shares (the  "Preferred  Shares"),  $.01 par value  issued at a
     premium of $1.8897726 as a substitution  for the Note. The Preferred Shares
     shall have no voting  rights  except with  respect to matters  which affect
     their rights, matters of dissolution or the issuance of additional shares.



                                       4
<PAGE>


     The Deed  Amendment  evidences the  Company's  intent to form a new holding
     company  for the  shares  of Hang  Fung  Jewellery  and Kai Hang  Jewellery
     Company Limited,  (the  "Restructuring")  currently owned by Quality Prince
     Limited;  and to list the  shares of the new  holding  company on The Stock
     Exchange of Hong Kong Limited (the  "Listing").  If the  Restructuring  and
     Listing occur before March 20, 1999, the Preferred  Shares must be redeemed
     and the redemption  amount of $10,000,000  plus any amount of dividend must
     be used to subscribe for shares in the newly listed holding company. If the
     Restructuring  and  Listing  have not  occurred  by  March  20,  1999,  the
     Preferred Shares must be redeemed as follows: (1) for the redemption amount
     of $10,000,000 plus a dividend (the "Aggregate  Redemption Amount") without
     any obligation to subscribe for shares in the new holding  company;  or (2)
     if the  Restructuring  occurs before March 31, 1999, then for the Aggregate
     Redemption Amount,  however all or part of the Aggregate  Redemption Amount
     must be used to  subscribe  for shares in the new holding  company.  If the
     Restructuring  has not occurred  before March 31, 1999,  then the Preferred
     Shares may not be redeemed until the  Restructuring  is completed not later
     than June 30, 1999, and all or part of the Aggregate Redemption Amount must
     be used for subscription  shares in the new holding company.  Regardless of
     whether  the  Restructuring  has  occurred,  the  Preferred  Shares  may be
     redeemed at any time after June 30, 1999,  provided  that all, part or none
     of the Aggregate Redemption Amount is used for such subscription shares.

     The Warrants,  originally  issued for an exercise period expired on May 31,
     1998 have been  extended by the Deed  Amendment to May 31, 1999 or the date
     of the Listing,  whichever is earlier and the number of warrant  shares was
     increased.  The  Warrants  may  only  be  exercised  as an  alternative  to
     subscription shares in the new holding company;  and likewise  subscription
     to shares in the new  holding  company is  forfeited  in the event that the
     Warrants are exercised.

5.   OTHER EXPENSE

     Other  expense  included  interest  provision  for a  convertible  note  of
     approximately  $146,000 and  $1,076,000 for the three and nine months ended
     December 31, 1997.  Pursuant to the Deed Amendment,  the  convertible  note
     holder agreed to waive all interest relating to the convertible note.




                                       5
<PAGE>

Item 2. Management's  Discussion and Analysis Of Financial Condition And Results
        Of Operations.

This report contains  forward-looking  statements  within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of Securities  Exchange Act of
1934.  Actual  results  could  differ  materially  from those  projected  in the
forward-looking statements.

Material Changes in Results Of Operations (US$,000)

Three Months Ended December 31, 1997 Compared to the Three Months Ended December
31, 1996

The Company's total revenues increased $5,042 or 39.8%, to $17,707 for the three
months ended  December 31, 1997 from $12,665 for the three months ended December
31,  1996.  This  increase  consisted  of an  increase  in sales of  $4,669  and
subcontract   service  income  of  $373.  The  increase  in  sales  revenues  is
attributable  to increased  marketing;  and the increase in subcontract  service
income is attributable to a slight increase in the number of supply contracts.

The cost of sales and  services  increased  $4,221 or 43.9%,  to $13,833 for the
three  months  ended  December  31, 1997 from $9,612 for the three  months ended
December 31, 1996. The increase resulted from an increase in revenues.  The cost
of sales and  services as a  percentage  of revenue  increased  to 78.1% for the
three  months  ended  December  31, 1997 from 75.9% for the three  months  ended
December 31, 1996.

Selling,  general and administrative expenses increased $203 or 14.6%, to $1,591
for the three  months  ended  December 31, 1997 from $1,388 for the three months
ended December 31, 1996. The increase in expenses is  attributable  to increased
sales and marketing efforts of the Company.

Other  expense  increased  $798 to $795 for the three months ended  December 31,
1997  compared to other  income of $3 for the three  months  ended  December 31,
1996. This increase is attributable to a decrease in other income of $89, and an
increase of $731 in interest  expense which was partially  offset by an increase
of $22 in interest income. The increase in interest expense is attributable to a
loan from Phenomenal Limited.

The  provision  for income taxes  decreased by $334 to $306 for the three months
ended  December 31, 1997 from $640 for the three months ended December 31, 1996.
The tax  provisions  as a percent of pre-tax  income  decreased to 20.6% for the
three  months  ended  December  31, 1997 from 38.4% for the three  months  ended
December 30, 1996.  The decrease  resulted  from an increase in revenue  derived
from jurisdictions with lower tax rates.

Nine Months Ended  December 31, 1997 Compared to the Nine Months Ended  December
31, 1996

The Company's total revenues increased $17,548 or 59.4%, to $47,093 for the nine
months ended  December 31, 1997 from $29,545 for the nine months ended  December
31,  1996.  This  increase  consisted  of an  increase  in sales of $12,498  and
subcontract  service  income of  $5,050.  The  increase  in sales  revenues  was
attributable to the introduction of new products and additional  marketing.  The
increase  in  subcontract  service  income is  attributable  to an  increase  in
marketing, new technology and an increase in the number of supply contracts. The
cost of sales and services  increased  $13,792 or 61.7%, to $36,142 for the nine
months ended  December 31, 1997 from $22,350 for the nine months ended  December
31, 1996. The increase resulted from the increase in revenues. The cost of sales
and services as a  percentage  of revenue  increased  1.1% to 76.7% for the nine
months ended December 31, 1997 from 75.6% for the nine months ended December 31,
1996.

Selling,  general and  administrative  expenses  increased  $1,678 or 54.6%,  to
$4,750 for the nine  months  ended  December  31,  1997 from $3,072 for the nine
months  ended  December 31, 1996.  The increase in expenses is  attributable  to
increased sales and marketing efforts of the Company.

Other expense  increased $1,322 to $1,381 for the nine months ended December 31,
1997 from  expense of $59 for the nine months  ended  December  31,  1996.  This
increase is attributable to a decrease in other income of $87 and an increase of
$1,329 in interest  expense which was partially  offset by an increase of $94 in
interest income. The increase in interest expense is attributable to a loan from
Phenomenal Limited.

The  provision  for income  taxes  decreased by $831 to $582 for the nine months
ended December 31, 1997 from $1,413 for the nine months ended December 31, 1996.
The tax  provisions  as a percent of pre-tax  income  decreased to 12.1% for the
nine  months  ended  December  31,  1997 from  34.8% for the nine  months  ended
December 31, 1996. The decrease resulted from a decrease in revenue derived from
jurisdictions with lower tax rates.



                                       6
<PAGE>

Material  Changes  in  Financial  Condition,  Liquidity  and  Capital  Resources
($US,000, except per share data)

The Company had a cash balance of $2,187 and a deficit  working  capital of $345
at December 31, 1997  compared to a cash  balance of $94 and working  capital of
$2,768 at March 31, 1997. The increase in cash is attributable to the receipt of
proceeds  from a short term loan of $10,000.  The  decrease  in working  capital
resulted from the increase in short term loans.

For the  nine  months  ended  December  30,  1997  net  cash  used in  operating
activities  amounted  to $2,181 as compared  to net cash  provided by  operating
activities of $1,709 for the corresponding period of the prior year. This change
resulted from an increase in accounts  receivable,  inventory,  prepaid expenses
and a reduction  in deposits  from  customers,  which were  partially  offset by
increased earnings, depreciation and accounts payable.

Net cash used in investing activities amounted to $8,977 and $2,960 for the nine
months ended  December 30, 1997 and 1996  respectively.  This increase  resulted
from substantial additions to property,  plant and equipment.  Net cash provided
by financing activities amounted to $13,248 and $1,667 for the nine months ended
December 30, 1997 and 1996,  respectively.  This increase is  attributable to an
increase  in  short-term  borrowings  and  the  $10,000  short  term  loan  from
Phenomenal Limited.

At December 31, 1997, the Company had long term debt totaling $1,692 compared to
long term debt at March 31,  1997 of $1,834.  This  $142,  or 7.7%  decrease  is
primarily  attributable  to repayments  which offset  additions of the Company's
bank loan.

In consideration  for a loan of $10,000 from Phenomenal  Limited,  the Company's
wholly owned  subsidiary  Quality  Prince  Limited  executed a Convertible  Note
("Note") in the  principal  amount of $10,000 with a maturity of March 20, 1998.
The Note may be  converted  into 2914  shares or such other  number of shares as
will  constitute  not less than  29.14% of  Quality  Prince  Limited,  and bears
interest at the rate of three percent compounded  monthly,  provided that if the
Company is not in Default with respect to any repayment  obligation  thereunder,
then the rate shall be reduced to 1.5% compounded monthly.

As  additional  consideration  for  the  loan  of  $10,000  the  Company  issued
Phenomenal  Limited,  warrants  ("Warrants") to purchase 5,263,158 shares of the
Company's  common  stock,  $.001  par  value,  at a  purchase  price  of  $2.19,
exercisable  for a period  commencing upon the date of the grant of the Warrants
and  ending  on the  earlier  of (i) May  31,  1998 or  (ii)  the  closing  of a
consolidation  or  merger  of the  Company  (other  than  with its  wholly-owned
subsidiary), or the transfer of all or substantially all of the Company's assets
to, another  corporation (unless the owners of the capital stock of the Company,
prior to such  transaction,  continue to own a majority of the capital  stock of
the surviving corporation). The Warrants may only be exercised in the event that
the Note is not converted pursuant to its terms.

On June 4, 1998,  the Company  (and its  subsidiaries)  and  Phenomenal  Limited
executed an agreement ("Deed Amendment") to modify the terms of the Note and the
Warrants.  Pursuant  to the Deed  Amendment,  Phenomenal  Limited  agreed  to an
investment in the Company's  subsidiary,  Hang Fung  Jewellery  Company  Limited
("Hang Fung Jewellery") in the form of 5,263,788  redeemable  preference  shares
(the "Preferred Shares"),  $.01 par value issued at a premium of $1.8897726 as a
substitution  for the Note.  The  Preferred  Shares shall have no voting  rights
except with respect to matters which affect their rights, matters of dissolution
or the issuance of additional shares.

The Deed Amendment  evidences the Company's intent to form a new holding company
for the shares of Hang Fung  Jewellery and Kai Hang Jewellery  Company  Limited,
(the "Restructuring") currently owned by Quality Prince Limited; and to list the
shares of the new holding  company on The Stock  Exchange  of Hong Kong  Limited
(the "Listing").  If the  Restructuring and Listing occur before March 20, 1999,
the Preferred Shares must be redeemed and the redemption  amount of $10,000 plus
any amount of dividend  must be used to subscribe for shares in the newly listed
holding company. If the Restructuring and Listing have not occurred by March 20,
1999, the Preferred  Shares must be redeemed as follows:  (1) for the redemption
amount of $10,000 plus a dividend (the "Aggregate  Redemption  Amount")  without
any obligation to subscribe for shares in the new holding company; or (2) if the
Restructuring  occurs before March 31, 1999,  then for the Aggregate  Redemption
Amount,  however all or part of the Aggregate  Redemption Amount must be used to
subscribe for shares in the new holding company.  If the  Restructuring  has not
occurred  before March 31, 1999,  then the Preferred  Shares may not be redeemed
until the  Restructuring  is completed not later than June 30, 1999,  and all or
part of the Aggregate  Redemption Amount must be used for subscription shares in
the new holding company.  Regardless of whether the  Restructuring has occurred,
the Preferred  Shares may be redeemed at any time after June 30, 1999,  provided
that  all,  part or none of the  Aggregate  Redemption  Amount  is used for such
subscription shares.

The Warrants,  originally  issued for an exercise period expired on May 31, 1998
have been  extended  by the Deed  Amendment  to May 31,  1999 or the date of the
Listing,  whichever is earlier and the number of warrant  shares was  increased.
The Warrants may only be exercised as an alternative to  subscription  shares in
the new holding company; and likewise  subscription to shares in the new holding
company is forfeited in the event that the Warrants are exercised.

                                       7
<PAGE>

Other  expense   included   interest   provision  for  a  convertible   note  of
approximately  $146,000  and  $1,076,000  for the  three and nine  months  ended
December 31, 1997. On June 4, 1998 the Company and the  convertible  note holder
agreed to waive all interest relating to the convertible note.

Management of the Company believes,  based on its current operating  agreements,
that  future  operating  cash flows  will be  positive,  and that the  Company's
working  capital is sufficient to meet the  Company's  anticipated  needs for at
least the following  twelve  months,  including the  performance of all existing
contracts of the Company.


                           PART II - OTHER INFORMATION

Item 6. Exhibits and Reports on Form 8-K

     (a)  Exhibits

          10.1 Warrant Agreement with Phenomenal Limited (1)

          10.2 Convertible Note with Phenomenal Limited (1)
 
          27.1 Financial Data Schedule

     (b)  Reports on Form 8-K

          None 

 --------------------

(1)  Incorporated  by  reference  to the  respective  exhibits  filed  with  the
     Registrant's Form 10Q for the period ended June 30, 1997.


                                   SIGNATURES


     In accordance  with the  requirements  of the Exchange Act, the  Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                              S.W. LAM, INC.


Dated:   August 20, 1998                      By: /s/ Lam Sai Wing
                                                  ------------------------------
                                                  Lam Sai Wing, President and
                                                  Chief Executive Officer

Dated:   August 20, 1998                      By: /s/ Chan Yam Fai
                                                  ------------------------------
                                                  Chan Yam Fai , Jane
                                                  Chief Financial Officer



                                       8