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 June 30, 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 X
                                                                      ---- -----

     As of June 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 - June 30, 1997 and  
          March 31, 1997...............................................      1

          Consolidated Statements of Operations - For the three 
          months ended June 30, 1997 and June 30, 1996.................      2

          Consolidated Statements of Cash Flows - For the three 
          months ended June 30, 1997 and June 30, 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.............................      7

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


 
<PAGE>


PART I - FINANCIAL INFORMATION

Item I - Financial Statements

                         S.W. LAM, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                    (US$,000)
                                   (Unaudited)
<TABLE>
                                                                             June 30,      March 31,
ASSETS                                                                         1997         1997
                                                                           ------------  ----------
<S>                                                                         <C>           <C>

Current Assets:
  Cash and cash equivalents                                                    $5,088         $94
  Accounts receivable, net of allowance for doubtful accounts                   5,105       5,106
  Inventory                                                                    10,926       8,509
  Prepayments and other current assets                                          1,034         142
  Due from a director                                                             679         475
                                                                           -----------   ---------
     Total Current Assets                                                      22,832      14,326

Property, plant and equipment, and capital leases, net                         10,219       7,083
                                                                           -----------   ---------
     Total Assets                                                             $33,051     $21,409
                                                                           ===========   =========

LIABILITIES AND STOCKHOLDERS' EQUITY                                       
                                                                           
Current Liabilities:                                                       
  Short-term bank borrowings                                                   $2,225      $2,275
  Long-term bank loans, current portion                                           348         197
  Capital lease obligations, current portion                                      222         229
  Accounts payable                                                              2,228       1,619
  Deposits from customers                                                         200       1,125
  Accrued liabilities                                                             273         267
  Convertible short term loan                                                  10,000           0
  Income tax payable                                                            6,008       5,846
                                                                           -----------   ---------
     Total Current Liabilities                                                 21,504      11,558
Long-term Liabilities
  Long-term bank loans, non-current portion                                                 1,290
                                                                                1,467
  Capital lease obligations, non current portion                                         
                                                                                  186         260
  Deferred taxation                                                               284         284
                                                                           -----------   ---------
      Total Liabilities                                                        23,441      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 June 30, 1997 and March 31, 1997                  13          13
  Additional paid-in capital                                                      847         846
  Retained Earnings                                                             8,597       7,008
  Cumulative translation adjustments                                              153         150
                                                                           -----------   ---------
    Total Stockholders' Equity                                                  9,610       8,017
                                                                           -----------   ---------
  Total liabilities and Stockholders' Equity                                  $33,051     $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)

                                                   Three Months Ended June 30,
                                                      1997             1996
                                                   -----------     -----------

 Revenue                                             13,927            6,880

 Cost of sales and services:                        (10,327)          (5,134)
                                                 ------------     ------------

 Gross Profit                                          3,600            1,746

Operating Expenses:
  Selling, general and administrative expenses       (1,409)            (823)
                                                 ------------     ------------
 Income from Operations                                2,191              923

Other Income (Expense):                                (461)                4
                                                 ------------     ------------
Income before Provision for Income Taxes               1,730              927

Provision for Income Taxes                             (142)            (319)
                                                 ------------     ------------

Net Income                                            $1,588             $608
                                                 ============     ============

Earnings per Share:
  Primary earning  per share                           $0.12            $0.05
                                                 ------------     ------------
  Primary common shares outstanding               12,800,000       12,000,000
                                                 ------------     ------------


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



                                       2
<PAGE>


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

                                                                                       For the Three Months Ended
                                                                                    June 30, 1997       June 30, 1996
                                                                                   ----------------    ----------------
<S>                                                                                  <C>                 <C>

Cash Flows from Operating Activities:
  Net Income                                                                           $1,588               $608
  Adjustments to reconcile net income to net cash provided by (used in) operating
activities:
      Depreciation of property, plant and equipment                                       614                277
      (Write back of ) Provision for deferred income tax                                    0                  0
 
      Decrease (Increase) In Operating Assets:
        Accounts receivable                                                                 1               (760)
        Inventory                                                                      (2,417)              (993)
        Prepayments and other current assets                                             (892)               (28)
        Due from a Director                                                              (204)               732

      Increase (Decrease) In Operating Liabilities:                                                 
        Accounts payable                                                                  609                671
        Deposits from customers                                                          (925)              (478)
        Accrued liabilities                                                                 6                (57)
        Income taxes payable                                                              162                312
                                                                                 --------------    ---------------
          Net cash provided by (used in) operating activities                          (1,458)               284
                                                                                 --------------    ---------------

Cash Flows from Investing Activities:
  Additions to property, plant and equipment                                           (3,748)              (427)
                                                                                 --------------    ---------------
      Net cash used in investing activities                                            (3,748)              (427)
                                                                                 --------------    ---------------

Cash Flows from Financing Activities:
Net proceeds from issuance of common stock                                                  0                  0
Payment of Dividends                                                                        0                  0
Net (decrease) increase in short term bank borrowings                                     (49)                90
Net (decrease) increase in convertible short term loans                                10,000                  0
Additions of capital lease obligations                                                    204                 91
Repayment of capital element of capital lease obligations                                (285)               (21)
Additions of long term bank loans                                                         388                  0
Repayment of long term bank loans                                                         (61)               (93)
                                                                                 --------------    ---------------
      Net cash provided by (used in) financing activities                              10,197                 67
                                                                                 --------------    ---------------

Effect of exchange rate changes on cash                                                     3               (140)
                                                                                 --------------    ---------------
Net increase (decrease) in cash                                                         4,994               (216)

Cash and Cash Equivalents, beginning of period                                             94                294
                                                                                 --------------    ---------------

Cash and Cash Equivalents, end of period                                               $5,088                $28
                                                                                 ==============    ===============

</TABLE>

       The accompanying notes are an integral part of these consolidated
                              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 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 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 without any obligation to subscribe for shares in the new company;
     or (2) if the  Restructuring  occurs  before March 31,  1999,  then for the
     redemption  amount of $10,000,000  plus a dividend,  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 shall be used for subscription shares in the new 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.



                                       4
<PAGE>


     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
<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)

The Company's  total  revenues  increased  $7,047 or 102.4% to $13,927,  for the
three months ended June 30, 1997 from $6,880 for the three months ended June 30,
1996. This increase  consisted of an increase in sales of $4,254 and subcontract
service income of $2,793.  The increase in sales revenues is attributable to the
introduction of new products,  additional marketing,  and the celebration of the
return of Hong Kong to China.  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 $5,193 or
101.1% to $10,327 for the three months ended June 30, 1997,  from $5,134 for the
three  months ended June 30, 1996.  The increase  resulted  from the increase in
revenues  during the quarter.  The cost of sales and services as a percentage of
revenue  decreased  slightly to 74.2% for the three  months  ended June 30, 1997
from 74.6% for the three months ended June 30, 1996.

Selling,  general and  administrative  expenses increased $586, or 71.2% for the
three  months  ended June 30, 1997 to $1,409 for the three months ended June 30,
1997,  from $823 for the three months  ended June 30, 1996.  The increase in the
expenses is attributable to the increased sales volume marketing  efforts of the
Company.
 
Other  expense  increased  $465 to $461 for the three months ended June 30, 1997
from income of $4 for the three  months ended June 30,  1996.  This  increase is
entirely  attributable  to an increase of $472 in  interest  expenses  which was
marginally offset by $7 of interest income.  The increase in interest expense is
attributable to the loan from Phenomenal Limited.

The  provision  for income taxes  decreased by $177 to $142 for the three months
ended June 30, 1997 from $319 for the three months ended June 30, 1996.  The tax
provisions as a percent of pre-tax income decreased to 8.2% for the three months
ended June 30, 1997 from 34.4% for the three  months  ended June 30,  1996.  The
decrease  resulted from an increase in revenue  derived from  territory of lower
tax rates.

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

The Company had a cash  balance of $5,088 and working  capital of $1,328 at June
30,  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 three months  ended June 30, 1997 net cash used in operating  activities
amounted to $1,458 as compared to net cash  provided by operating  activities of
$284 for the  corresponding  period of the prior year. This change resulted from
an increase in inventory,  prepaid expenses, loans to a director and a reduction
in deposits  which was  partially  offset by increased  earnings,  depreciation,
accounts payable and income taxes payable.

Net cash used in investing  activities amounted to $3,748 and $427 for the three
months ended June 30, 1997 and 1996  respectively.  This increase  resulted from
substantial additions to property, plant and equipment.

Net cash  provided by financing  activities  amounted to $10,197 and $67 for the
three  months  ended June 30,  1997 and 1996,  respectively.  This  increase  is
attributable to the $10,000 short term loan from Phenomenal Limited.

At June 30, 1997,  the Company had long term debt  totaling  $1,937  compared to
long term debt at March 31,  1997 of $1,834.  This $103,  or 5.6%,  increase  is
primarily attributable to an increase in 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.



                                       6
<PAGE>


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  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
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 without any obligation to subscribe for shares in the
new company; or (2) if the Restructuring  occurs before March 31, 1999, then for
the  redemption  amount of $10,000  plus a dividend,  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  shall be used for  subscription  shares in the new  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.

Management believes that based on its current financial condition, the Company's
cash and working capital is sufficient to meet the Company's  anticipated  needs
for at least the next twelve months.

                           PART II - OTHER INFORMATION


Item 6.      Exhibits and Reports on Form 8-K

    (a)      Exhibits

             10.1 Warrant Agreement with Phenomenal Limited

             10.2 Convertible Note with Phenomenal Limited

             10.3 Deed Amendment

             27.1 Financial Data Schedule

     (b)     Reports on Form 8-K

             None 




                                       7
<PAGE>

                                      

                                   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:   July 9, 1998                            By:  /s/ Lam Sai Wing
                                                    ----------------------------
                                                    Lam Sai Wing, President and
                                                    Chief Executive Officer

Dated:   July 9, 1998    
                                                 By:  /s/ Chan Yam Fai
                                                    ----------------------------
                                                    Chan Yam Fai, Jane
                                                    Chief Financial Officer



                                       8
<PAGE>