SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
D.C. 20549


FORM
10-K





(Mark
One)





xANNUAL REPORT UNDER
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934





For the
fiscal year ended December 31, 2008





or





oTRANSITION REPORT UNDER
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934




For the
transition period from ____________





Commission
File Number 033-19048-NY







AMERICAN METAL &
TECHNOLOGY, INC.


(Exact
name of registrant as specified in its charter)







Delaware
                  
                  22-2856171(State
      or Other Jurisdiction of
                    Incorporation
      or Organization)
                  
                  IRS
      Employer Identification
Number)





633
      W. 5th Street, 28th Floor Los Angeles, CA 90071(Address
      of Principal Executive Offices, including Zip Code)





(213) 223-2321(Registrant’s
      telephone number, including area code)





Securities
registered under Section 12(b) of the Act: None





Securities
registered under Section 12(g) of the Act:





Title
      of each class to be so registered
              Name
      of each exchange on which each class is to be
registeredCommon
      stock, par value $.0001
              OTC
      Bulletin Board





Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act.




Yes oNo x




Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act.




Yes
xNo o










1




Indicate
by check mark whether the registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.




Yes xNo
o




Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best
of registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. x





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of “accelerated
filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.
(Check one):




Large accelerated filer
                o
                Accelerated filer
                oNon-accelerated filer
                o
                Small
      Business Issuer
                x


Indicate
by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Act.




Yes oNo x




As of the
last business day of the registrant’s most recently completed second fiscal
quarter, the aggregate market value of the voting and non-voting common equity
held by non-affiliated computed by reference to the price at which the common
equity was last sold was approximately $32,352,357.





As at
March 31, 2009, there were 10,720,268 shares of Common Stock, $0.001 par value
per share issued.




Documents
Incorporated By Reference -None


















2





TABLE
      OF CONTENTSPART
      I
                        PAGEItem
      1. Description of Business
                        4Item
      2. Description of Property
                        8Item
      3. Legal Proceedings
                        8Item
      4. Submission of Matters to a Vote of Security
    Holders
                        8PART
      II
                        8Item
      5. Market for Common Equity and Related Stockholder Matters and Small
      Business Issuer Purchases of Equity Securities
                        8Item
      6.  Selected Financial Data
                        10Item
      7.  Management's Discussion and Analysis or Plan of
      Operation
                        10Item
      7A.  Quantitative and Qualitative Disclosures About Market Risk
      Disclosure
                        14Item
      8. Financial Statements and Supplementary Data
                        14Item
      9. Changes In and Disagreements with Accountants On Accounting and
      Financial Disclosure
                        14Item
      9A(T). Controls and Procedures
                        14Item
      9B. Other Information
                        15PART
      IIIItem
      10. Directors, Executive Officers, Promoters and Control Persons;
      Compliance with Section 16(a) Of the Exchange Act
                        15Item
      11. Executive Compensation
                        16Item
      12. Security Ownership of Certain Beneficial Owners and Management and
      Related Stockholder Matters
                        16Item
      13. Certain Relationships and Related Transactions, and Director
      Independence
                        17Item
      14. Principal Accounting Fees and Services
                        17PART
      IVItem
      15.  Exhibits, Financial Statement
    Schedules
                        18SIGNATURES
                        19Exhibit
      31.1 (Certification required under the Section 302 of the Sarbanes-Oxley
      Act of 2002)Exhibit
      32.1 (Certification required under the Section 906 of the Sarbanes-Oxley
      Act of 2002)







3





PART
I





DISCLOSURE
OF FORWARD-LOOKING STATEMENTS





Statements
in this Form 10-K that are not statements of historical or current fact
constitute "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Such forward-looking statements
involve known and unknown risks, uncertainties and other unknown factors that
could cause our actual results to be materially different from the historical
results or from any future results expressed or implied by such forward-looking
statements. In addition to statements that explicitly describe such risks and
uncertainties, readers are urged to consider statements labeled with the terms
"believes," "belief," "intends," "anticipates" or "plans" to be uncertain and
forward-looking. The forward-looking statements contained herein are also
subject generally to other risks and uncertainties that are described from time
to time in our reports filed with the Securities and Exchange
Commission.







ITEM
1.  DESCRIPTION OF BUSINESS




Our
Business




On June
1, 2007, American Metal & Technology, Inc. formally changed its name from
Murray United Development Corporation to American Metal & Technology, Inc.
(the “Company”).  Murray United Development Corporation was
incorporated on October 13, 1987 under the laws of the State of
Delaware.  The Company through its wholly owned subsidiary American
Metal Technology Group, a Nevada corporation (“AMTG”), and through
AMTG’s wholly owned subsidiaries, Beijing Tong Yuan Heng Feng Technology
Co., Ltd. ("BJTY") and American Metal Technology (Lang Fang) Co., Ltd.,
("AMLF"), primarily specializes in precision casting, machining, mold design and
manufacturing in the People's Republic of China ("China"). We manufacture
investment casting and machined products, including valves, pipe fittings,
regulators, dispensers, machinery spare parts, marine hardware, water treatment
parts, automotive and airplane accessories, electronic circuit board for home
appliances and motion controllers, and other equipment parts based upon
blueprints supplied to us by our customers. We use a wide range of ferrous and
non-ferrous materials such as stainless steel, carbon steel, low alloy steel and
aluminum. Our factory is certified with ISO9001 and ISO14001
standards.





Beijing
Tong Yuan Heng Feng Technology Co., Ltd. ("BJTY") was incorporated on December
11, 2001 with its principal place of business in Beijing, China. Since its
organization, BJTY has been a manufacturer of precision metal parts for original
equipment manufacturers ("OEMs").





American
Metal Technology (Lang Fang) Co., Ltd., ("AMLF") was incorporated as a wholly
owned subsidiary by AMTG on August 2, 2004 in Lang Fang city, Hebei, China. AMLF
was formed to expand the production and operation of BJTY. Following the
incorporation, AMLF had purchased the rights to use a total area of 30,291.3
square meters (approximately 326,053 square foot) of land from the Chinese
government. The land is located at east side of Meison Street and north of Lang
Fang development zone garden in Lang Fang, Hebei, China. The term of the
land-use-rights is fifty (50) years from September 1, 2004 to September 1, 2054.
The land is semi-developed in terms of readied access to supplies of water,
electricity, heat, natural gas and internet connections. AMLF has completed its
construction of a two story manufacturing plant with a total occupational space
of 5,000 square meters (53,819 square foot).





We own
and operate 60 Mazak CNC lathes, 4 machining centers with 4 axis, and 20 other
machines, including CNC milling machine, laser sculptor, in-center grinding,
with 2D Video Measurement, ultrasonic cleaning line and other high technology
functions. CNC Lathes are manufactured by Yamazaki Mazak Corporation (Japan), a
machine tool maker in Japan, which is a global manufacturer of CNC machine tools
with operations in Japan, the US, England, and Singapore. We are able to
manufacture parts between 0.003 - 35 kg in weight, +/- 1° of normal angle
tolerance up to +/-0.5° of special angle tolerance and Ra1.6 - Ra 3.2° in
surface roughness.
 
 In
December 2008, the Company purchased 9 sets of casting machines, worth $107,352
(730,000 RMB).  These machines are expected to increase foundry and
casting capacity.  As of the date of this Annual Report, these
machines are not operational.  We are in the process of installing the
machines.





We have a
dedicated management team with over fifty years of combined experience in the
casting and metal fabrication industries. As of March 31, 2009, we had 225
employees.





We
manufacture our products through a process called "Investment Casting Process",
also called the "lost wax process" and through a process called "CNC Machining
Process".








Overview
of our Investment Casting Process





Investment
casting, often called lost wax casting, is regarded as a precision casting
process to fabricate near-net-shaped metal parts that could readily be put into
their final form. The investment process can be performed from a variety of
metal alloys such as stainless steels, carbon alloy steels, tool alloys, monel
alloys, hastelly c alloys, nickel base alloys, cobalt base alloys, aluminum
alloys and brass alloys. Although its history lies to a great extent in the
production of art items such as statues, jewelry and etc., the most
common use of investment casting in more recent history has been the production
of components requiring complex, often thin-wall castings. Our investment
casting process begins with the injection of high temperature melted wax into a
ceramic shell mold to form a pattern. The formed pattern is based on customer's
technical drawing and is within the same basic geometrical shape and dimension
as the finished metal cast part. Because the pattern is made of wax, it can be
melted away very easily. Once a wax pattern is produced, we then dip the pattern
in a mixture of ceramic slurry. This would result in the pattern covered with
sand stucco. We then allow it to dry. The dipping and stuccoing process is
repeated until a shell of 6 to 8 mm (1/4 to 3/8 in) is formed.






4




ITEM
1.  DESCRIPTION OF BUSINESS-
continued
  Our
Business-
continued





Once the
ceramic has dried, we would place the entire assembly in a steam autoclave to
remove most of the wax. A steam autoclave is a piece of equipment that can
produce pressurized high temperature steam in a closed chamber for melting wax.
After autoclaving, the remaining amount of wax that soaked into the ceramic
shell is burned out in a furnace. At this point, all of the residual wax pattern
and material is removed, and the ceramic mold remains. Next, we would preheat
the mold to a specific temperature and fill it with molten metal, creating the
metal casting. Then, we will allow the metal casting to cool down. Once the
metal casting has cooled and set, we'll remove the mold shell from the casting.
At this point, the investment metal casting process is completed. The last step
is to conduct qualification check and other tests, such as leakage inspections
according to customer specification. Depending on the specific design
requirements, we may need to perform CNC machining to bring the castings to
their precise final form.







Overview
of our CNC Machining Process





CNC
stands for computer numerical control. CNC Machining is the process by which
material is removed from a work-piece with Computer Numerical Control ("CNC")
equipment that cuts away unwanted material. The CNC machining process is a
versatile system that allows us to control the motion of tools and parts through
computer programs that use numeric data. Machining is possible on virtually any
material. Parts are machined directly from our 3D CAD models. 3D CAD
(computer-aided design) refers to the use of computer systems to design detailed
three-dimensional models of physical objects, such as mechanical parts,
buildings, and molecules.





The CNC
machines in our facilities include machining centers (mills) and turning centers
(lathes). A CNC machining center is a numerically controlled computer mill that
cuts metal with a multiple-tooth cutting tool called a milling cutter. The
work-piece is fastened to the milling machine table and is fed against the
revolving milling cutter. The work-piece can be fed to the milling cutter either
horizontally or vertically. The milling cutters can have cutting teeth on the
edge or sides or both. The cutting teeth can be straight or spiral. CNC turning
center is a computer numerically controlled lathe with the capability to hold a
number of cutting tools. The CNC turning center is designed to remove metal by
moving cutting tools against a rotating work-piece. The work-piece is rotated
around its axis and a cutting tool is fed parallel to the axis to create a
cylinder or at right angles to the axis to create a face. The rotating
work-piece can be either parallel or vertical to the floor.







Industry





Everyday
tasks such as dialing on the telephone, turning on a light, starting an
automobile, or using a computer would not be possible without metal casting
components. Telephone equipment parts, the steel plate in light switches,
automobile starters and many other automobile parts, metal hinges on desktop
computers, or door handles, knots and taps, dispensers and regulators etc., are
all made by using the investment casting process. The metal casting industry has
been integral to the U.S. economic growth and has helped the U.S. to become the
world benchmark in fields such as manufacturing, science, medicine, and
aerospace. Nearly all manufactured goods and capital equipments contain one or
more of the cast components or rely on casting components for their manufacture.
The metal casting industry produces both simple and complex components of
unlimited variety, whether they are produced once as a prototype or thousands of
times for use in a manufactured product. In addition to producing components of
larger products, foundries may also do machining, assembling, and coating of the
castings. Major end-use applications for castings include automobiles and
trucks, farm and construction equipment, railroads, pipes and fittings, valves,
and engines.





The basic
metals casting process consists of pouring or injecting molten metal into a mold
or a die containing a cavity of the desired shape. The most commonly used method
for small and medium-sized castings is green sand molding, accounting for
approximately 60 percent of castings produced. Other methods, accounting for
approximately 40 percent, include die casting, shell molding, permanent molding,
investment casting, lost foam casting, and squeeze casting.







Our
Strategies




We are
committed to the development of new manufacturing techniques, and to bring new
and technological advanced metal fabricated products to the global market.
Management believes that our future growth and profitability depend on our
ability to maintain product quality, control production costs, increase
production capacity, improve our marketing and distribution channels, increase
product offerings, and to effectively react to market changes.








5




ITEM
1.  DESCRIPTION OF BUSINESS-
continued
  Our
Strategies-
continued
  Capitalize
on our cost structure and logistical advantages:





Our
business objectives are to maintain current growth rate while expanding customer
base both domestically and to the international market. When introducing our
products and services to the international market, we hope to take advantage of
the low overhead costs and inexpensive labor available in China based upon the
location of our principal manufacturing facility in Beijing, and our future
facilities in Hebei, China. In the event we are successful in attracting foreign
customers, the close proximity of the factory complex to the Tianjin sea port,
one of the main seaports in China, should provide us convenient transportation
of our products to those foreign customers. There are, however, limitations in
having all our manufacturing facility in China. There would be additional
shipping, handling, and possible tariff costs associated with potential overseas
customers. This may make finding international clients difficult as it would
increase their overall costs.





Change
our product line in response to market demand:




Our
strategy is to respond to changes in market conditions by changing product lines
respectively. Management believes the demand market is changing rapidly. In
order for us to capture the most profitable products in the future, we plan to
setup a professional market intelligence team to monitor and respond to market
changes and reported to the management on a timely basis.





Maintain
high product quality:




Management
believes that identifying each customer's needs and efficiently addressing its
needs are vital to maintaining a competitive advantage to the success of the
business. Management believes that our commitment to services levels and
attention to detail and quality has the effect of providing customers with a
sense of confidence and security that their product requirements will be met and
their products will be delivered on time. The factory complex in Beijing, China,
at which we conducted all of our manufacturing operations, was designed paying
particular attention to factory layout, cleanliness, incoming material control,
in-process quality control, finished goods quality control and final quality
examination.





Competition




The metal
casting industry is highly competitive in China. Markets for metal castings are
increasingly competitive and casting customers are placing greater emphasis on
high-quality, competitively priced castings. There is increasing demand for
lighter-weight, high-strength ferrous and nonferrous cast metal components and
castings that meet demanding design specifications. Casting processes must
continually evolve and improve to remain competitive in today's
marketplace.




Management
believes there is significant room for expansion for AMTG and our subsidiaries
in the metal casting and metal fabrication industry worldwide. We are in a
multi-billion dollar metal casting industry. At least ninety percent of all
manufactured goods contain one or more cast metal components. Metal castings
components are integral in the U.S. transportation, energy, aerospace,
manufacturing, and national defense.




In 2003,
there were approximately 12,000 metal foundries and metal casting manufacturers
in China. We also compete with many international companies. There are an
estimated 2,950 metal casting companies in the United States as of year 2002. An
example of one of our Chinese competitors is Beijing Hithertop Precision Casting
Co., Ltd. ("Hithertop"), with $14.5 million in sales, Hithertop is a privately
owned high-tech export-oriented metal casting manufacturer. It occupies a total
plant area of 53,000m2. Hithertop is located in South-east suburb of Beijing,
35km southeast off the Beijing International Airport and 75km northwest of
Tianjin International Seaport. Other than competing on the same geographical
area in the city of Beijing, Hithertop is competing with our metal casting parts
in the Food and Beverage industry as well as metal casting components in other
industries.





An
example of one of our foreign competitors is Timken Company ("Timken") a U.S
based Corporation, which is a leading global manufacturer of engineered metal
parts and a provider of related products and services with operations in 27
countries. The company reported gross revenue of $5.2 billion in 2007 and
employed approximately 27,000 at year-end. Timken has been competing with us in
China through its subsidiaries in Yantai and Wuxi, China. As a result, our
competitive advantage on low labor cost structure in China over foreign
competitors may be significantly diminished by Timken's presence in Yantai, and
Wuxi. Timken also have far greater financial and other resources available to
them and possess extensive manufacturing, distribution and marketing
capabilities far greater than those we possess. A majority of the customer
orders we receive so far are for dispenser, regulators and similar food and
beverage equipment parts.





We also
compete with other beverage equipment dispensing companies worldwide. An example
of one of our foreign competitors is Lancer Corporation, which designs,
engineers, manufactures and markets fountain soft drink, beer and citrus
beverage dispensing systems, and other equipment for use in the foodservice and
beverage industry. Lancer is a vertically integrated manufacturer, employing
approximately 1,500 associates in the United States, Mexico, Australia, New
Zealand, and Far East, Western Europe and Russia. Lancer competes its products
in China via Lancer Hong Kong, and its authorized distributors in Shanghai,
China. The Company reported sales of $124.2 million in fiscal year 2004 and a
net income of $10.1 million. Some of Lancer's production lines are similar to
products we have been manufacturing for our customers. Lancer offer more variety
in its production line and have far greater financial and other resource, such
as marketing and distribution, available to them.





An
example of one of our local competitor is Rising Instrument Co., Ltd, which
specializes in designing, researching, processing, manufacturing and selling all
kinds of pressure gauge, thermometer etc. Rising Instrument is located in
Ningbo, China. Their products include gas regulators and other equipment parts
that are used to control liquid pressure in dispensing systems. Rising is in the
same geographically and economic environment as we do and also enjoys the same
low labor cost. Rising competes with us in terms of gas regulators and offers
more variety than we do.






6




ITEM
1.  DESCRIPTION OF BUSINESS-
continued
  Environmental
Matters





China
adopted its Environmental Protection Law in 1989, and the State Council and the
State Environmental Protection Agency promulgate regulations as required from
time to time. The Environmental Protection Law addresses issues relating to
environmental quality, waste disposal and emissions, including air, water and
noise emissions. Environmental regulations have not had a material impact on our
results of operations. Our current production does not produce waste that
requires to be delivered to a waste disposal site approved by the local
government. We have not incurred any related cost. However, we expect that
environmental standards and their enforcement in China will, as in many other
countries, become more stringent over time, especially as technical advances
make achievement of higher standards more feasible. We believe we are in
compliance of this regulation and are not subject to enforcement of these
rules.







Seasonality





Our
business is not affected by seasonality.








Employees and
Consultants





As of
March 31, 2009, we had 225 full time employees.  The Company has
reduced approximately one-third of its work force over the past few months due
to a significant decrease in sales orders resulting from the global economic
downturn.




On March
15, 2008, the Company signed a letter of engagement with CCG Investor Relations
Partners LLC.  According to the terms of the agreement, CCG agreed to
assist the company in the execution of its investor relations strategy. The
agreement was for a twelve-month period and the Company agreed to pay $7,000 per
month to CCG and issue warrants to purchase 50,000 shares of the Company's
common stock at an exercise price of $5 per share. These warrants were recorded
at the fair value of $100,796 based on 70% volatility, 4.12% discount rate and
0% annual rate of quarterly dividends.  The Company expensed the fair value
of these warrants over the term of the agreement. As of September 1, 2008, we
terminated our agreement with CCG Investor Relations Partners LLC.







Penny
Stock





If the
trading price of our Common Stock remains below $5.00 per share, trading in our
securities may be subject to the requirements of the Securities and Exchange
Commission's rules with respect to securities trading below $5.00, which are
referred to as "penny stocks". These rules require the delivery prior to any
transaction of a disclosure schedule explaining the penny stock market and all
associated risks and impose various sales practice requirements on
broker-dealers who sell "penny stocks" to persons other than established
customers and accredited investors, which are generally defined as institutions
or an investor individually or with their spouse, who has a net worth exceeding
$1,000,000 or annual income, individually exceeding $200,000 or, with their
spouse, exceeding $300,000. For these types of transactions the broker-dealer
must make a special suitability determination for the purchaser and have
received the purchaser's written consent to the transaction prior to the sale.
In addition, broker-dealers must disclose commissions payable to both the
broker-dealer and the registered representative and current quotations for the
securities they offer. The additional burdens imposed upon broker-dealers by
such requirements may discourage broker-dealers from effecting transactions in
our Common Stock, which could severely limit its market price and
liquidity.




Notwithstanding
the foregoing, the Company, as first announced in a press release dated December
6, 2007, submitted an application for listing upon the NASDAQ Capital Market,
and as of the date of this report NASDAQ’s continued review of our file is
pending subject to the increase in our stock price to $4.00.  If we
are approved for listing upon the NASDAQ Capital Market, of which there can be
no assurance, we shall issue a press release announcing such fact.








REPORTS
TO SECURITY HOLDERS





We have
not in the past provided an annual report to our shareholders and do not intend
to do so.  However, if we are approved for listing upon the NASDAQ
Capital Market, and in accordance with the applicable rules for listed
companies, we shall commence providing to our shareholders an annual report. We
are subject to the disclosure rules of Regulation S-K under the Securities Act
of 1933 and the Securities Exchange Act of 1934 with respect to smaller
reporting companies and are therefore required to file a Form 10-K annually and
Forms 10-Q quarterly. In addition, we are required to file Forms 8-K and other
information statements from time to time as required.





The
public may read and copy any materials we file with the Securities and Exchange
Commission, ("SEC"), at the SEC's Public Reference Room at 100 F Street N.E.
Washington, D.C. 20549  The public may obtain information on the
operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The
SEC maintains an internet site (http://www.sec.gov). That contains reports,
proxy and information statements, and other information regarding issuers that
file electronically with SEC.






7





ITEM
2.  PROPERTIES





There is
no private ownership of land in the People’s Republic of China.  All
land ownership is held by the Chinese government, its agencies and collectives.
Land use rights can be obtained from the government, and are typically
renewable.





In 2004,
our subsidiary, American Metal Technology (Lang Fang) Co., Ltd. acquired land
use right for fifty years to 30,291 square meters of land in Langfang,
China.   The land is located at east side of Meison Street and
north of Lang Fang development zone garden in Lang Fang, Hebei, China. The term
of the land-use-rights is fifty (50) years commencing on September 1, 2004 and
ending on September 1, 2054.  This land is also utilized by our other
subsidiary Beijing Tong Yuan Heng Feng Technology Co., Ltd.  The
subsidiaries operate in a 53,819 square foot manufacturing plant with monthly
output capacity of 1,000,000 parts.





On
February 5, 2008, we announced in a press release our intention to expand the
foregoing facility.  We intended to invest an estimated $3 million in
the new development which will include two buildings totaling approximately
10,916 square meters. We have completed construction of the first building,
which is a factory with a workspace of 6,654.84 square meters.  It
entails  a 4,500 square meter metal casting shop, a 1,000 square meter
electronic shop, a 500 square meter mould shop, and a 600 square meter inventory
and assorted sets shop. The second building, which has not been completed, will
be a  4,260.84 square meter four level staff dormitory which will
accommodate 600 staff members. All of the manufacturing facilities are ISO 9001
certified.  This expansion will increase by 50% our annual capacity
for casting products from 2,400 tons to 3,600 tons, and enhance the capabilities
for the development and manufacturing of circuit board solutions.





As of the
date of this report, the Company has determined to halt the expansion projects
for an undetermined period of time due to current market
conditions.







ITEM
3.  LEGAL PROCEEDINGS





We are
not presently a party to any pending legal proceedings.







ITEM
4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS





No
matters were submitted to a vote of our security holders during the fiscal
quarter ended December 31, 2008.








PART
II





ITEM
5.  MARKET FOR THE REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER
MATTERS AND SMALL BUSINESS ISSUER PURCHASES OF SECURITIES





Our
Common Stock has been traded in on the over-the-counter market since March 24,
1988 and is quoted on the OTC Bulletin Board under the symbol AMGY. The range of
high and low bid quotations as reported by the National Quotation Bureau, Inc.,
without adjustment for retail markup, markdown or commissions, for the periods
indicated below are:





Years
Ended December 31, 2008 and December 31, 2007 (all stock prices reflect
retroactively the 1-for-150 reverse stock split, which became effective December
3, 2007).





2008
                    
                    
                    2007High
                    
                    
                    Low
                    
                    
                    High
                    
                    
                    Low1st
      Quarter
                    
                    $
                    6.49
                    
                    
                    $
                    3.16
                    
                    
                    $
                    2.55
                    
                    
                    $
                    1.502nd
      Quarter
                    
                    $
                    3.65
                    
                    
                    $
                    3.00
                    
                    
                    $
                    16.51
                    
                    
                    $
                    1.353rd
      Quarter
                    
                    $
                    3.11
                    
                    
                    $
                    .75
                    
                    
                    $
                    8.10
                    
                    
                    $
                    4.954th
      Quarter
                    
                    $
                    .90
                    
                    
                    $
                    .46
                    
                    
                    $
                    9.75
                    
                    
                    $
                    3.11





Reporting
by the National Quotation Bureau, Inc. of quotations for our Common Stock does
not evidence an established public trading market for such stock, and holders of
our Common Stock may not be able to liquidate their investment at acceptable
prices. Moreover, such quotations reflect inter-dealer prices without retail
mark-up, mark-down or commission and may not be indicative of actual trading
transactions.










8





ITEM 5.  MARKET
FOR THE REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND SMALL
BUSINESS ISSUER PURCHASES OF SECURITIES -
continued




As of
December 31, 2008 there were a total of 827 holders of record of our Common
Stock. We have not paid any dividends on our Common Stock during either of the
past two fiscal years and have no intention of paying dividends during the
forthcoming fiscal year.




On
December 6, 2007, we announced in a press release that we had submitted an
application for listing upon the NASDAQ Capital Market, and as of the date of
this report NASDAQ’s continued review of our file is pending subject to the
increase in our stock price to $4.00.  If we are approved for listing
upon the NASDAQ Capital Market, of which there can be no assurance, we shall
issue a press release announcing such fact.







RECENT
SALES OF UNREGISTERED SECURITIES





On May
22, 2007, pursuant to the terms of the Stock Purchase Agreement dated as of
November 6, 2006 (the Agreement) with American Metal Technology Group, a Nevada
corporation (AMTG), as reported on Form 8-K filed on January 10, 2007, the
Company issued 8,088,637 shares to the stockholders and consultants of AMTG
(7,615,922 shares to AMTGs former shareholders, including 133,333 shares of
common stock issued to AMTG as investment upon completion of the due diligence
period pursuant to the Agreement, and redistributed proportionally to AMTGs
shareholder on May 22, 2007, and 472,715 shares to AMTGs consultants).
These shares represented more than eighty five (85%) of the Company’s issued and
outstanding shares of voting capital stock on a fully diluted basis, and
therefore the former shareholders of AMTG and its consultants effectively have
control of the Company. AMTG is now a wholly owned subsidiary of the Company.
The shares issued were issued without registration pursuant to Section 4(2) of
the Securities Act of 1933 for U.S. investors, or pursuant to Regulation S for
all non-U.S. investors, and are therefore "restricted" securities. Such shares
may not therefore be transferred without either the registration of such shares
with the Securities and Exchange Commission or an exemption from such
registration requirements pursuant to the Securities Act of 1933, as
amended.





In
addition and also pursuant to the terms of the Agreement, on May 22, 2007 the
Company issued 66,667 shares to Anthony Campo, in partial consideration for
the cancellation of indebtedness to him. The shares issued to Mr. Campo were
issued without registration pursuant to Section 4(2) of the Securities Act of
1933 and are therefore "restricted" securities. Such shares may not therefore be
transferred without either the registration of such shares with the Securities
and Exchange Commission or an exemption from such registration requirements
pursuant to the Securities Act of 1933, as amended.





Pursuant
to a private placement conducted in accordance with Regulation S of the
Securities Act of 1933, as amended, the Company raised $3,275,543 through the
issuance of 1,092,169 shares of common stock at $3.00 per
share.  The offering closed on August 3, 2007.  The proceeds
of the offering were distributed as follows:  (i) $2,500,000 million
was distributed to the Company’s subsidiary company AMLF to engage in second
phase construction to upgrade manufacturing equipment; (ii) $600,000 was
distributed to our creditors in partial repayment of indebtedness; and (iii) the
balance of $175,543 for general working capital.





On
September 22, 2008, the Company entered in an Equity Purchase Agreement ("the
Agreement") with Wen Ge Ren (the "Seller"), a shareholder owning a 5% stock
interest in Beijing Tong Yuan Heng Feng Technology Co., Ltd ("BJTY"), which is
95% owned through the Company's wholly owned subsidiary American Metal
Technology Group. Pursuant to the Agreement, the Company shall pay to the Seller
US $390,299. The Seller has agreed to accept from the Company the equivalent of
US $92,566.46 or RMB 629,451.91 and balance of US $297,732.57 pursuant to the
issuance of such number of shares of restricted Common Stock based upon the
amount equal to 75% of the average of the closing bid price of the Company's
Common Stock for the five-day trading period commencing on September 18, 2008.
The Company shall deliver to the Seller the cash consideration and duly executed
share certificates representing the underlying shares registered in the name of
the Seller within 60 days from the date of signature.  The Company
delivered the cash consideration and issued 317,581 shares to the Seller prior
to September 30, 2008.





On
October 31, 2008, the Board of Directors adopted resolutions, authorizing
incentive compensation to key members of its management if the Company has four
million ($4,000,000) dollars or more in net income for the fiscal year of 2008,
excluding expenses relating to the incentive compensation, as reflected in the
audited Financial Statements of the Company as filed with the Securities and
Exchange Commission.  The incentive compensation shall be paid by the
issuance of shares of common stock by the Company as follows: (A) 533,333 shares
of common stock determined by multiplying the initial four million ($4,000,000)
dollars of net income by ten (10%) percent and dividing the product by an agreed
value of $0.75 per share and (B) such number of additional shares of common
stock determined by multiplying the amount of net profit in excess of four
million ($4,000,000) dollars by twenty (20%) percent and dividing such product
by an agreed value of $0.75 per share.




The Board
of Directors determined that the Company’s net income, prior to expenses
relating to the incentive compensation, for the fiscal year 2008 was $4,236,735.
Accordingly, based upon a formula set forth in the October 31, 2008 Consent and
the Board’s determination that the net income of the Company for the fiscal year
of 2008 was four million two hundred thirty six thousand seven hundred thirty
five ($4,236,735) dollars before deducting the expense of the incentive
compensation, the incentive compensation shall be paid by the issuance of
596,462 shares of common stock by the Company which were calculated as follows:
(A) 533,333 shares of common stock, determined by multiplying the initial four
million ($4,000,000) dollars of net income by ten (10%) percent and dividing the
product, four hundred thousand ($400,000) dollars, by an agreed value of $0.75
per share and (B) 63,129 shares of common stock determined by multiplying two
hundred thirty six thousand seven hundred and thirty five ($236,735) dollars,
the amount of net profit in excess of four million ($4,000,000) dollars, by
twenty (20%) percent and dividing the product, forty seven thousand and three
hundred forty seven ($47,347) dollars, by an agreed value of $0.75 per
share.






9





ITEM
6.  SELECTED FINANCIAL DATA





Not
applicable.








ITEM
7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.





The
following discussion and analysis provides information which we believe is
relevant to an assessment and understanding of our results of operations and
financial condition. This discussion should be read in conjunction with the
financial statements and notes thereto appearing elsewhere herein.





Critical Accounting Policies
and Estimates




The
preparation of financial statements and related disclosures in conformity with
U.S. generally accepted accounting principles and the Company's discussion and
analysis of its financial condition and operating results require the Company's
management to make judgments, assumptions, and estimates that affect the amounts
reported in its consolidated financial statements and accompanying notes.
Note 2 "Summary of Significant Accounting Policies" of Notes to
Consolidated Financial Statements in this Form10KSB describes the significant
accounting policies and methods used in the preparation of the Company's
consolidated financial statements. Management bases its estimates on historical
experience and on various other assumptions it believes to be reasonable under
the circumstances, the results of which form the basis for making judgments
about the carrying values of assets and liabilities. Actual results may differ
from these estimates and such differences may be material.




Management
believes the Company's critical accounting policies and estimates are those
related to revenue recognition, allowance for doubtful accounts, inventory
valuation, impairment of long-lived assets, foreign currency translation and
income taxes. Management considers these critical policies because they are both
important to the portrayal of the Company's financial condition and operating
results, and they require management to make judgments and estimates about
inherently uncertain matters. The Company's senior management has reviewed these
critical accounting policies and related disclosures with the Company's Board of
Directors.






Revenue
recognition




The
Company's revenue recognition policies are in compliance with Staff accounting
bulletin (SAB) 104. Sales revenue is recognized at the date of shipment to
customers when a formal arrangement exists, the price is fixed or determinable,
the delivery is completed, no other significant obligations of the Company exist
and collectability is reasonably assured. Payments received before all of the
relevant criteria for revenue recognition are satisfied are recorded as unearned
revenue. Unearned revenue as of December 31, 2008 amounted to
$8,645.




The
Company's revenue consists of invoiced value of goods, net of a value-added tax
(VAT). No product return or sales discount allowance is made as products
delivered and accepted by customers are normally not returnable and sales
discount is normally not granted after products are delivered.






Allowance
for doubtful accounts




The
Company's policy is to maintain reserves for potential credit losses for
accounts receivable. Management reviews the composition of accounts receivable
and analyzes historical bad debts, customer concentrations, customer credit
worthiness, current economic trends and changes in customer payment patterns to
evaluate the adequacy of these reserves. As of December 31, 2008, the Company
had net accounts receivable of $2,470,732, net of an allowance of
$62,716.






Inventory
valuation




Inventories
are valued at the lower of cost or market value using weighted average method.
Management compares the cost of inventory with the market value and an allowance
is made for writing down the inventory to its market value, if
lower.







10




ITEM
7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.-
continued




Critical
Accounting Policies and Estimates-
continued




Impairment
of long-lived assets




The
Company applies the provisions of Statement of Financial Accounting Standard No.
144, "Accounting for the
Impairment or Disposal of Long-Lived Assets" ("FAS No. 144"), issued by the
Financial Accounting Standards Board ("FASB"). FAS No. 144 requires
that long-lived assets be reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable through the estimated undiscounted cash flows expected to result
from the use and eventual disposition of the assets. Whenever any such
impairment exists, an impairment loss will be recognized for the amount by which
the carrying value exceeds the fair value.





The
Company tests long-lived assets, including property, plant and equipment and
intangible assets subject to periodic amortization, for recoverability at least
annually or more frequently upon the occurrence of an event or when
circumstances indicate that the net carrying amount is greater than its fair
value. Assets are grouped and evaluated at the lowest level for their
identifiable cash flows that are largely independent of the cash flows of other
groups of assets. The Company considers historical performance and future
estimated results in its evaluation of potential impairment and then compares
the carrying amount of the asset to the future estimated cash flows expected to
result from the use of the asset. If the carrying amount of the asset exceeds
estimated expected undiscounted future cash flows, the Company measures the
amount of impairment by comparing the carrying amount of the asset to its fair
value. The estimation of fair value is generally measured by discounting
expected future cash flows as the rate the Company utilizes to evaluate
potential investments. The Company estimates fair value based on the information
available in making whatever estimates, judgments and projections are considered
necessary. There was no impairment of long-lived assets for the years ended
December 31, 2008 and December 31, 2007.






Critical Accounting Policies
and Estimates




Foreign
currency translation




The
reporting currency of the Company is the US dollar. The Company uses their local
currency, Renminbi (RMB), as their functional currency. Results of operations
and cash flow are translated at average exchange rates during the period, and
assets and liabilities are translated at the unified exchange rate at the end of
the period. Translation adjustments resulting from this process are included in
accumulated other comprehensive income in the statement of shareholders' equity.
Transaction gains and losses that arise from exchange rate fluctuations on
transactions denominated in a currency other than the functional
currency are included in the results of operations as
incurred.




Translation
adjustments resulting from this process are included in accumulated other
comprehensive income in the consolidated statement of shareholders' equity and
amounted to $1,865,844 as of December 31, 2008.






Income
taxes




The
Company utilizes SFAS No. 109, "Accounting for Income
Taxes," which requires the recognition of deferred tax assets and
liabilities for the expected future tax consequences of events that have been
included in the financial statements or tax returns. Under this method, deferred
income taxes are recognized for the tax consequences in future years of
differences between the tax bases of assets and liabilities and their financial
reporting amounts at each period end based on enacted tax laws and statutory tax
rates applicable to the periods in which the differences are expected to affect
taxable income. Valuation allowances are established, when necessary, to reduce
deferred tax assets to the amount expected to be realized. At December 31, 2008
and 2007, there was no significant book to tax differences.






RESULTS OF
OPERATIONS




Overview





Our
products are almost exclusively components parts for use in final products,
which are either assembled or manufactured outside China or are manufactured and
assembled in China exported to foreign markets.  We estimate that, in
2008, approximately 20% of our products were exported for assembly outside China
and 80% were assembled in China then exported to foreign markets.  Our
primary focus during 2007 and 2008 has been to increase demand for our castings
and machined parts outside China, and we experienced significant growth in
existing and new markets with existing and new customers.  We believe
there is substantial additional demand for our products and
services.





To
capitalize on the increased demand for our products, we commenced significant
capital expansion and capital improvement efforts, utilizing most of the net
proceeds received from our equity financing in 2007 to expand and enhance our
manufacturing capabilities. By the end of first quarter ended March 31, 2008, we
completed the first phase of the expansion plan. Phase one entails a 53,819
square foot manufacturing space, 5 turning centers and 60 CNC Mazak Lathe, 19 of
which were delivered and became
operational in the three months ended December 31, 2007 and the three months
ended March 31, 2008 and the last of which became operational on or about April
7, 2008.  All of the new high-precision lathe machines are equal in size
and capacity to the Company's existing machines.






11




ITEM
7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.-
continued




RESULTS
OF OPERATIONS-
continued


In
February 2008, we announced that we were planning to invest $3 million to build
additional facilities at our Langfang manufacturing center. The new facilities
marked the second phase of a four-phase plan to transform the Company’s capacity
and capabilities for the foreseeable future. This second phase of our four-phase
expansion plan will add two buildings totaling approximately 10,916 square
meters, increasing annual capacity for casting products by 50% to 3,600 tons
from 2,400 tons.





During
the first quarter of the fiscal year ends on December 31, 2009, we completed
construction of the first building, which is a factory with a workspace of
6,654.84 square meters.  The factory entails  a 4,500 square
meter metal casting shop, a 1,000 square meter electronic shop, a 500 square
meter mould shop, and a 600 square meter inventory and assorted sets shop. The
second building will be a 4,260.84 square meter four level staff dormitory which
will accommodate 600 staff members. We have not completed the construction of
the second building.





On September 22, 2008, the Company entered in an Equity Purchase
Agreement ("the Agreement") with Wen Ge Ren (the "Seller"), a shareholder owning
a 5% stock interest in Beijing Tong Yuan Heng Feng Technology Co., Ltd ("BJTY"),
which is 95% owned through the Company's wholly owned subsidiary American Metal
Technology Group. Pursuant to the Agreement, the Company shall pay to the Seller
US $390,299. The Seller has agreed to accept from the Company the equivalent of
US $92,566.46 or RMB 629,451.91 and balance of US $297,732.57 pursuant to the
issuance of such number of shares of restricted Common Stock based upon the
amount equal to 75% of the average of the closing bid price of the Company's
Common Stock for the five-day trading period commencing on September 18, 2008.
The Company shall deliver to the Seller the cash consideration and duly executed
share certificates representing the underlying shares registered in the name of
the Seller within 60 days from the date of signature.  The Company
delivered the cash consideration and issued 317,581 shares to the Seller prior
to September 30, 2008.




As of
December 31, 2008, we had 323 employees working at our factories compared
to 256 at the same time in the prior year. Prior to December 2008, the
Company operated with three shifts per day for seven days each
week.  Due to the global economic downturn, in December 2008, the
Company shifts were reduced to one shift per day.  From January 2009
through the date of this Annual Report, the Company has been operating one shift
per day.





As of
March 2009, the Company’s sales dropped approximately 80% as compared to
December 2008.  We experienced a 70% decline in our orders from our
European customers.  We anticipate that during 2009 we will achieve
40% of the sales which we received during the fiscal year ended December 31,
2008.  Depending upon the condition of the economy, we may experience
a net loss for 2009.







Year
ended December 31, 2008 compared with the year ended December 31,
2007




Revenue





Revenue
for the year ended December 31, 2008, was $18,539,583 an increase of 73.97% as
compared to $10,656,958 for the year ended December 31, 2007. Revenue
increased for the year ended December 31, 2008, as compared with year
ended December 31, 2007, largely as a result of an increase from 40 CNC
MAZAK lathes in 2007 and an additional turning center, which resulted in an
operating capacity increase of 37.5%, to 60 CNC MAZAK lathes for the year
ended December 31, 2007. Gross profit margin for the year ended December
31, 2008, was $5,724,006, or 30.87% of revenues, compared to $3,090,013, or
28.99% of revenues for the same period in 2007. The increase was mainly due
to greater throughput as a result of increased capacity during the fourth
quarter.







Expenses
from Operations





Total
expenses, comprised mostly of general and administrative expenses
and one-time expenses with respect to the upgrade of the equipment at
the manufacturing facility owned by our subsidiary AMLF, were approximately
$2,044,607 for the year ended December 31, 2008, a net increase of
$1,017,931compared to $1,026,676 for the full year  ended December 31,
2007.




The
increase in operating expenses for the year ended December 31, 2008, was mainly
due to our increased business volume.







Interest
Income and Expense




Net
interest income for the year ended December 31, 2008 was $235,118 as compared to
net interest income of $24,666 for the year ended December 31, 2007.  The
increase was mainly due to our investment in a year- long CD at an interest rate
of 7.65% which matured on March 28, 2009.   In August 2008, we
invested  $2.94 million, or 20 million RMB, in another CD with an
interest rate of 4.14% which matures in August 2009.





12




ITEM
7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.-
continued
  RESULTS
OF OPERATIONS-
continued
  Other Income
(Expense)




Other income
(expense) for the year ended December 31, 2008 was (31,121) as compared
to other expense of  $71,401 for the year ended December 31,
2007.







Net
Income




We had
net income of $3,884,822 for the year ended December 31, 2008 an increase
of 79.48% as compared to net income of $2,164,503 for the year ended
December 31, 2007. The increase was mainly due to an increase in revenue which
increased 73.97% compared with the year ended 2007, and an increase in gross
profit margin which increased 30.87% compared with the year ended
2007.






LIQUIDITY
AND CAPITAL RESOURCES





Liquidity
and capital resources




Due to
the market demand for our products, we plan to maintain a
higher-than-average debt to equity ratio to better position ourselves in this
fast growing market. We met our liquidity needs through the revenue derived
pursuant to the sale of our precision metal castings and electronic circuit
boards manufactured at facilities controlled by our subsidiary corporations in
the People’s Republic of China, and the issuance of shares of our common stock
for cash. Cash balance amounted to $7,591,947 and $6,037,193 as of December
31, 2008 and December 31, 2007, respectively.   The increase in
our cash balance is a result of $1,554,454 of net cash raised from the sale of
our shares of common stock for cash, as well as additional revenue derived from
new customers in the United States and Europe and effective management to lower
product defects.








Operating
activities




Net cash
provided by operating activities for the year ended December 31, 2008 was
$4,534,369compared to $2,359,781 provided in the year ended December 31, 2007.
This change was mainly due to the new customers in the United States and
Europe.





Our net
income for the year ended December 31, 2008 was $3,884,822, an increase of
55.72% compared to $2,164,503 for the year ended December 31, 2007. Net accounts
receivable for the year ended December 31, 2008 was $2,470,732 compared to
$1,332,664 for the year ended December 31, 2007. The increases in both net
income and net accounts receivable were mainly due to the increased revenues
from the new customers in the United States and Europe.






Investing
activities




Net cash
used by investing activities was $(3,891,245) for the year ended December 31,
2008 compared to $(480,298) used in the same period of 2007. The change in net
cash used by investing activities is mainly a result of $(1,288,773) cash
used in the purchase of equipment in 2008, a decrease of $(1,251,672) compared
to $(37,101) in 2007 and $(2,436,369) with respect to our 2nd phase
construction, and $(73,537) cash used in short-term investment we
made in the fiscal year 2008, and $(92,566) cash used for the acquisition of a
minority interest in a subsidiary.







Financing
activities




Net cash
provided by financing activities was $473,489 for the year ended December
31, 2008 compared to $3,091,415 in the same period of 2007. The
increase was primarily a result of the sale of 163,825,350 (1,092,169
after reverse split) shares of common stock pursuant to a private offering
conducted in accordance with Regulation S of the Securities Act of 1934 at $.02
per share. The proceeds of the offering were $3,275,543.  The
proceeds of the offering were distributed as follows:  (i) $2,500,000 was
distributed to the Company's subsidiary company AMLF to engage in second phase
of construction to upgrade manufacturing equipment; (ii) $600,000 was
distributed to our creditors in partial repayment of indebtedness; and (iii) the
balance of $175,543 for general working capital.








Off-Balance
Sheet Arrangements





We have
no off-balance sheet arrangements.







13




ITEM
7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.-
continued




LIQUIDITY
AND CAPITAL RESOURCES-
continued





Material
Commitments





We have
no material commitments during the next twelve (12) months.







Purchase of Significant
Equipment





We do not
intend to purchase any significant equipment during the next twelve (12)
months.






ITEM
7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
DISCLOSURE




Not
Applicable.






ITEM
8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA





The
financial statements required by this item are set forth beginning on page
F-1.







ITEM
9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURES





We did
not have any disagreements on accounting and financial disclosure with our
accounting firm during the reporting period.






ITEM 9A(T). CONTROLS AND
PROCEDURES




Evaluation
of Disclosure Controls and Procedures





Our
principal executive and financial officer, has evaluated the effectiveness of
our “disclosure controls and procedures” (as defined in the Securities Exchange
Act of 1934 Rules 13a-15(e) and 15d-15(e)) and concluded that our disclosure
controls and procedures are effective to provide reasonable assurance that
information required to be disclosed by us in the reports that we file or submit
under the Exchange Act (i) is accumulated and communicated to our management,
including our Chief Executive Officer, as appropriate to allow timely decisions
regarding required disclosure and (ii) is recorded, processed, summarized and
reported within the time periods specified in the Commission’s rules and
forms.




There
have been no changes in our internal controls or in other factors that could
materially affect, or were reasonable likely to materially affect these controls
during or subsequent to the year ended December 31, 2008.







Management’s
Annual Report on Internal Control Over Financial Reporting





Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting as defined in Rule 13a-15(f) or 15d-15(f)
promulgated under the Securities Exchange Act of 1934. Our internal control over
financial reporting is a process designed to provide reasonable assurance with
respect to the reliability of financial reporting and the preparation and fair
presentation of financial statements for external purposes in accordance with
generally accepted accounting principles and includes those policies and
procedures which:





●
            Pertain
      to the maintenance of records that in reasonable detail accurately and
      fairly reflect the transactions and dispositions of our
      assets;





●
            Provide
      reasonable assurance that transactions are recorded as necessary to permit
      preparation of financial statements in accordance with generally accepted
      accounting principles, and that our receipts and expenditures are being
      made only in accordance with authorizations of our management and
      directors; and





●
            Provide
      reasonable assurance regarding prevention or timely detection of
      unauthorized acquisition, use or disposition of our assets that could have
      a material effect on the financial
statements.




14
  ITEM 9A(T). CONTROLS AND
PROCEDURES-
continued
  Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Projections of any evaluation of effectiveness
to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.





Our
management assessed the effectiveness of our internal control over financial
reporting as of December 31, 2008 based upon the criteria set forth in the
Internal Control - Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO).   Based upon
this assessment, no material weaknesses were discovered and our management has
concluded that our internal control over financial reporting was effective as of
December 31, 2008.




This
Annual Report does not include an attestation report of our registered public
accounting firm with respect to internal control over financial reporting.
Management’s report was not subject to attestation by our registered public
accounting firm pursuant to temporary
rules of the Securities and Exchange Commission which permit us to provide only
our management’s report in this Annual Report.




Changes in Internal Control
over Financial Reporting





There
have been no changes in our internal control over financial reporting identified
during the year ended December 31, 2008 which have materially affected, or were
reasonably likely to materially affect, our internal control over financial
reporting.






ITEM 9B. OTHER
INFORMATION





None.








PART
III





ITEM
10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CORPORATE
GOVERNANCE





On May
22, 2007, the our Board of Directors accepted the resignation of Dwight Foster
as Chief Executive Officer and Anthony Campo as Executive Vice President,
Secretary Treasurer, Chief Financial Officer, effective May 22, 2007. In
addition, we accepted the resignations from the Board of Directors of Mr.
Foster, Mr. Campo, and Mr. Carmine Vano. The resignation came pursuant to the
terms provided in the Stock Purchase Agreement dated November 6, 2006, to
reflect the change in ownership.





Our Board
of Directors was simultaneously filed by the Board of Directors of AMTG, which
consisted Mr. Chen Gao, Ms. Xin Yan Yuan and Ms. Li Wei Gao. The Board
subsequently appointed Chen Gao as President and CEO, and Xin Yan Yuan as
Secretary.





Our
present executive officers and directors, their ages and present positions are
as follows:





Name
                              
                              Age
                              
                              Position
                              
                              First
      Year Elected/AppointedChen
      Gao
                              
                              55
                              
                              President,
      CEO, Director
                              
                              2007Xin
      Yan Yuan
                              
                              53
                              
                              Secretary,
      Director
                              
                              2007Li
      Wei Gao
                              
                              57
                              
                              Director
                              
                              2007





All of
our directors will hold office until the next meeting of shareholders and until
their successors have been duly elected and qualified.  All of our
executive officers will hold office until the next annual meeting of the
directors and until their successors have been duly appointed and
qualified.





Chen Gao,
age 55, has served as our president and chief executive officer since May 22,
2007, upon the closing of the Stock Purchase Agreement which resulted in the
reverse acquisition of American Metal Technology Group; president, treasurer and
director of our subsidiary, American Metal Technology Group from Jan 28, 2004 to
December 31, 2005; served as Chairman and director of our subsidiary Beijing
Tong Yuan Heng Feng Technology Co., Ltd. from Jan 2002 to present, served as
Chairman and director of American Technology (Lang Fang) Co., Ltd. from August
2004 to present; served as Chairman and President of Beijing Mai Ke Luo
Machinery Co., Ltd. from May 1994 to present. Beijing Mai Ke Luo Machinery Co.,
Ltd. is a beverage equipment manufacturer in China; served as Chairman of
Beijing Sande Technology (Holding) Co., Ltd, a beverage equipment and parts
manufacturer from Jan 1993 to present. Mr. Gao was the accounting manager for
Beijing Beichen Group Wuzhou Hotel, a hotel management company, from Sep 1987 to
Dec 1992.




Xin Yan
Yuan, age 53, has served as our secretary since May 22, 2007, upon the closing
of the Stock Purchase Agreement which resulted in the reverse acquisition of
American Metal Technology Group; as director of our subsidiary American Metal
Technology Group since October 2004; served as Vice Chairman and director of our
subsidiary Beijing Tong Yuan Heng Feng Technology Co., Ltd. from Jan 2002 to
present, served as director of American Metal Technology (Lang Fang) Co., Ltd.
from August 2004 to present served as Director and Vice President of Beijing Mai
Ke Luo Machinery Co., Ltd., a beverage equipment manufacturer in China from May
1994 to present, and has served as President of Beijing Sande Technology
(Holding) Co., Ltd, a beverage equipment and parts manufacturer from Jan 1993 to
present.




Li Wei
Gao, age 57, has served as a director since May 22, 2007, upon the closing of
the Stock Purchase Agreement which resulted in the reverse acquisition of
American Metal Technology Group; and has served as president and director of
American Metal Technology Group since January 1, 2006 to present.




15
  ITEM 10. DIRECTORS,
EXECUTIVE OFFICERS, PROMOTERS AND CORPORATE GOVERNANCE-
continued





Section 16(a) Beneficial
Ownership Reporting Compliance





Not
applicable.





Changes in Nomination
Procedures





Not
applicable.





Code of
Ethics





The
Company has not yet adopted a code of ethics for its principal executive
officer, principal financial officer, principal accounting officer or controller
due to the small number of executive officers involved with the Company. The
Board of Directors will continue to evaluate, from time to time, whether a code
of ethics should be developed and adopted.








ITEM
11.  EXECUTIVE COMPENSATION





The
following table sets forth certain information as to our principal executive
officer and principal financial officer and our other three highest paid
officers and directors for our fiscal years ended December 31, 2008 and 2007. No
other compensation was paid to any such officers or directors other than the
compensation set forth below.




SUMMARY
      COMPENSATION TABLEName
      and Principal Position
                                                    Year
                                                    Salary
                                                      ($)
                                                    Bonus(1)
                                                      ($)
                                                    Stock
      Awards
                                                      ($)
                                                    Option
                                                      Awards
                                                      ($)
                                                    Non-Equity
                                                      Incentive
      Plan Compensation
                                                      ($)
                                                    Nonqualified
                                                      Deferred
                                                      Compensation
                                                      Earnings
                                                      ($)
                                                    All
      Other
                                                      Compensation
                                                      ($)
                                                    Total
                                                      ($)Chen
      Gao
                                                    2008
                                                    0
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    0President
                                                    2007
                                                    0
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    0Xin
      Yan Yuan
                                                    2008
                                                    0
                                                    0
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    0Secretary
                                                    2007
                                                    0
                                                    0
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    0Li
      Wei Gao
                                                    2008
                                                    0
                                                    0
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    02007
                                                    0
                                                    0
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    0





(1)           On
October 31, 2008, the Board of Directors adopted resolutions, authorizing
incentive compensation to key members of its management if the Company has four
million ($4,000,000) dollars or more in net income for the fiscal year of 2008,
excluding expenses relating to the incentive compensation. The incentive
compensation shall be paid by the issuance of shares of common stock by the
Company as follows: (A) 533,333 shares of common stock determined by multiplying
the initial four million ($4,000,000) dollars of net income by ten (10%) percent
and dividing the product by an agreed value of $0.75 per share and (B) such
number of additional shares of common stock determined by multiplying the amount
of net profit in excess of four million ($4,000,000) dollars by twenty (20%)
percent and dividing such product by an agreed value of $0.75 per
share.  The Board of Directors determined that the Company’s net
income, prior to expenses relating to the incentive compensation, for the fiscal
year 2008 was $4,236,735. Accordingly, based upon the foregoing formula and the
Board’s determination that the net income of the Company for the fiscal year of
2008 was four million two hundred thirty six thousand seven hundred thirty five
($4,236,735) dollars before deducting the expense of the incentive compensation,
the incentive compensation shall be paid by the issuance of 596,462 shares of
common stock by the Company which were calculated as follows: (A) 533,333 shares
of common stock, determined by multiplying the initial four million ($4,000,000)
dollars of net income by ten (10%) percent and dividing the product, four
hundred thousand ($400,000) dollars, by an agreed value of $0.75 per share and
(B) 63,129 shares of common stock determined by multiplying two hundred thirty
six thousand seven hundred and thirty five ($236,735) dollars, the amount of net
profit in excess of four million ($4,000,000) dollars, by twenty (20%) percent
and dividing the product, forty seven thousand and three hundred forty seven
($47,347) dollars, by an agreed value of $0.75 per share.  The amount
of incentive compensation disclosed herein does not include the allocation of
the incentive compensation because the Company has not determined such
allocation as of the date of this Annual Report.
  Employment
Agreements: None








ITEM
12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS.





Securities
authorized for issuance under equity compensation plans.




None.






16




ITEM 12. SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS.-
continued




Security
ownership of certain beneficial owners




We have
provided below information as of March 31, 2009 concerning the beneficial
ownership of our Common Stock by (i) all persons whom we know to own
beneficially 5% or more of our Common Stock, (ii) each of our directors and
executive officers individually, and (iii) all of our directors and executive
officers as a group.




Title
      or Class
                                  
                                  Name
      and Address of Beneficial Owner (1)
                                  
                                  Amount
      of Beneficial Ownership (3)
                                  
                                  
                                  Percent
      of Class (3)Common
      Stock
                                  
                                  Chen
      Gao
                                  
                                  
                                  1,532,272
                                  
                                  
                                  
                                  14.73
                                  %Common
      Stock
                                  
                                  Xin
      Yan Yuan
                                  
                                  
                                  1,159,556
                                  
                                  
                                  
                                  11.17
                                  %Common
      Stock
                                  
                                  Li
      Wei Gao
                                  
                                  
                                  0
                                  
                                  
                                  
                                  0.00
                                  %Common
      Stock
                                  
                                  Anthony
      Campo (2)
                                  
                                  
                                  751,541
                                  
                                  
                                  
                                  7.22
                                  %Common
      Stock
                                  
                                  All
      executive officers and directors
                                  
                                  
                                  2,691,828
                                  
                                  
                                  
                                  25.9
                                  %





(1) A person is
deemed to be the beneficial owner of securities over which such person has or
shares voting or investment power or which may be acquired by such person within
60 days from the date of this Report upon the exercise of options, or
convertible securities. Each beneficial owner's percentage ownership is
determined by assuming that options, or convertible securities that are held by
such person (but not those held by any other person) and which are exercisable
or convertible within 60 days of this Report have been exercised or
converted.





(2) In addition
to 751,541 shares owned individually by Mr. Campo, includes (i) 14,333 shares
held by Mr. Campo's wife, and (ii) 138,483 shares held by Mr. Campo's
children.




(3)           The
amount of beneficial ownership and the percent of class figures indicated above
do not reflect the 596,462 shares of common stock for the incentive compensation
disclosed in Item 11 of this Annual Report because the Company has not
determined the allocation of such shares as of the date of this Annual
Report.






ITEM
13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS





Mr. Gao,
our President and Chief Executive Officer and a Director, and Xin Yan Yuan, our
Secretary and a Director own 35% and 21.6%, respectively of a company now known
as Beijing Sande Technology (Holding) Co., Ltd. (“Beijing Sande”) which is a
Chinese Corporation which, in turn, owns approximately 20% of Beijing Micro
Matic Machinery, Ltd, which is one of our largest customers.  The
controlling interest of approximately 80% of Beijing Micro Matic Machinery, Ltd.
is owned by Denmark Micro Matic International SA, (“Denmark Micro”) an entity
registered in Denmark.





Mr. Gao
and Ms. Yuan, individually or jointly, do not have any direct interest or
control of Beijing Micro Matic Machinery, Ltd.  In view of Beijing
Sande’s 20% interest in Beijing Micro Matic Machinery, Ltd., and Mr. Gao and Ms.
Yuan’s 35% and 21.6% interest in Beijing Sande, Mr. Gao and Ms. Yuan indirectly
hold approximately 7% and 4% of Beijing Micro Matic Machinery,
Ltd.  Our management does not believe that this interest is material,
provided, however, that Beijing Sande has the right to appoint one of seven
directors of Beijing Micro Matic Machinery, Ltd.







ITEM
14. PRINCIPAL ACCOUNTING FEES AND SERVICES.





OUR
INDEPENDENT ACCOUNTANT





On May
23, 2007, our Board of Directors selected as our independent accountant the
Certified Public Accounting firm of Kabani & Company, Inc. of Los Angeles,
California.  Kabani and Company, Inc. audited our financial statements
for the fiscal years ended December 31, 2008.  and December 31,
2007.





1. AUDIT
FEES.





Our audit
fees for the years ended December 31, 2008 and 2007 were as
follows:




2008
                    
                    
                    2007$
                    60,000
                    
                    
                    $
                    45,000







17




ITEM 14. PRINCIPAL ACCOUNTING
FEES AND SERVICES.-
continued




2. TAX
FEES.





Our tax
return fees for the years ended December 31, 2008 and 2007 were as
follows:





2008
                    
                    
                    2007$
                    0
                    
                    
                    $
                    0






3. ALL
OTHER FEES.





2008
                                  
                                  
                                  2007$
                                  16,000
                                  
                                  
                                  $
                                  3,500





For the
year ended December 31, 2008, we were billed for accounting services other than
those associated with the Audit Fees disclosed herein.




For the
year ended December 31, 2007, we were billed for services provided regarding the
review of our SB-2 registration statement which was effective November 30, 2007
and review of our response to comment letters received from the United State
Securities and Exchange Commission on May 30, 2007 and December 20,
2007.








PRE-APPROVAL
POLICIES AND PROCEDURES





Our
financial statements for the fiscal year ended December 31, 2007 have been
audited by our independent accountants, Kabani and Company,
Inc.   Each year our Board of Directors pre-approves all audit
and tax related services prior to the performance of such services. The
percentage of hours expended on the audit by persons other than full-time,
permanent employees of Kabani and Company, Inc. was zero.





ITEM
15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES





(a)
Exhibits and Financial Statements:





1.  Financial
Statements





The
following financial statements are included on pages F-1 to F-27 of the
Financial Statements filed as part of this Annual Report:




(i)
            Report
      of Independent Accountants(ii)
            Balance
      Sheets as of December 31, 2008 and December 31, 2007(iii)
            Statements
      of Income for the fiscal years ended December 31, 2008 and
      2007(iv)
            Statements
      of Cash Flows for the fiscal years ended December 31, 2008 and
      2007(v)
            Statements
      of Changes in Stockholders' Equity for the fiscal years ended
      December 31, 2008 and 2007(vi)
            Notes
      to Financial Statements





2.  Financial
Statement Schedules. All financial statement schedules have been omitted since
the information is either not applicable or required or is included in the
financial statements or notes thereof.








18




ITEM 15. EXHIBITS,
FINANCIAL STATEMENT SCHEDULES-
continued




3. The
following exhibits, which are required by Item 601 of Regulation S-K, are
incorporated by reference to previously filed documents.





Exhibit
                  ExhibitNumber
                  Description31.1
                  Certification pursuant to Section 13a-14 of CEO
      and Principal Financial Officer32.1
                  Certification pursuant to Section 1350 of CEO and
      Principal Financial
Officer






SIGNATURES





In
accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.




American
      Metal & Technology, Inc.(Registrant)By:
            /s/ 
      Chen GaoChen Gao,
      President and CEODate:
      April 15, 2009






In
accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.




By:
            /s/ 
      Chen GaoChen
      Gao, DirectorDate:
      April 15, 2009By:
            /s/ 
      Xin Yan YuanXin
      Yan Yuan, DirectorDate:
      April 15, 2009By:
            /s/ 
      Li Wei GaoLi
      Wei Gao, DirectorDate:
      April 15, 2009













19





AMERICAN
METAL & TECHNOLOGY, INC.




CONSOLIDATED
FINANCIAL STATEMENTS


WITH
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


FOR
THE YEARS ENDED DECEMBER 31, 2008 AND 2007








TABLE
      OF CONTENTSPAGEReport
      of Independent Registered Public Accounting Firm
                  F-2Consolidated
      Financial Statements:
                  F-3Consolidated
      Balance Sheets as of December 31, 2008
                  F-3Consolidated
      Statements of Income and Other Comprehensive Income for the years ended
      December 31, 2008 and 2007
                  F-4Consolidated
      Statements of Cash Flows for the years ended December 31, 2008 and
      2007
                  F-5Consolidated
      Statements of Stockholders' Equity for the years ended December 31, 2008
      and 2007
                  F-6Notes
      to Consolidated Financial Statements
                  F-7
      - F-15














F-1








REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM








To Board
of Directors and Shareholders


American
Metal & Technology, Inc. and Subsidiaries





We have
audited the accompanying balance sheet of American Metal & Technology, Inc.
and Subsidiaries as of December 31, 2008 and 2007, and the related statements of
income and other comprehensive income, stockholders’ equity and cash flows for
each of the two years in the period ended December 31, 2008. These financial
statements are the responsibility of the Company’s management. Our
responsibility is to express an opinion on these financial statements based on
our audits.





We
conducted our audits of these statements in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.





In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of American Metal & Technology,
Inc. and Subsidiaries, as of December 31, 2008 and 2007, and the results of its
operations and its cash flows for each of the two years in the period ended
December 31, 2008, in conformity with accounting principles generally accepted
in the United States of America.














/S/Kabani
& Company, Inc.


CERTIFIED
PUBLIC ACCOUNTANTS





Los
Angeles, California


March 4,
2009





F-2








AMERICAN
      METAL & TECHNOLOGY, INC. AND SUBSIDIARIESCONSOLIDATED
      BALANCE SHEETSAS
      OF DECEMBER 31, 2008 AND 2007ASSETS2008
                                      
                                      
                                      2007Current
      AssetsCash
      and cash equivalents
                                      
                                      $
                                      7,591,947
                                      
                                      
                                      $
                                      6,037,193Accounts
      receivable - net
                                      
                                      
                                      2,470,732
                                      
                                      
                                      
                                      1,332,664Investment
      in marketable securities
                                      
                                      
                                      93,906
                                      
                                      
                                      
                                      93,196Other
      receivables
                                      
                                      
                                      352,250
                                      
                                      
                                      
                                      134,275Advances
      to suppliers
                                      
                                      
                                      390,368
                                      
                                      
                                      
                                      974,799Inventories
                                      
                                      
                                      1,079,741
                                      
                                      
                                      
                                      547,579Total
      Current Assets
                                      
                                      
                                      11,978,944
                                      
                                      
                                      
                                      9,119,706Property,
      Plant And Equipment, net
                                      
                                      
                                      4,160,737
                                      
                                      
                                      
                                      3,020,972Construction
      in Progress
                                      
                                      
                                      2,884,437
                                      
                                      
                                      
                                      377,240Intangible
      Assets, net
                                      
                                      
                                      684,639
                                      
                                      
                                      
                                      692,167Total
      Assets
                                      
                                      $
                                      19,708,757
                                      
                                      
                                      $
                                      13,210,085LIABILITIES
      AND SHAREHOLDERS' EQUITYCurrent
      LiabilitiesAccounts
      payable
                                      
                                      $
                                      1,544,995
                                      
                                      
                                      $
                                      743,070Accrued
      liabilities and other payables
                                      
                                      
                                      95,684
                                      
                                      
                                      
                                      75,765Accrued
      bonuses
                                      
                                      
                                      351,913
                                      
                                      
                                      
                                      -Amount
      due to related parties
                                      
                                      
                                      813,082
                                      
                                      
                                      
                                      333,670Unearned
      revenue
                                      
                                      
                                      8,645
                                      
                                      
                                      
                                      12,938Total
      Current Liabilities
                                      
                                      
                                      2,814,319
                                      
                                      
                                      
                                      1,165,443Minority
      Interests
                                      
                                      
                                      -
                                      
                                      
                                      
                                      337,291Commitments
                                      
                                      
                                      -
                                      
                                      
                                      
                                      -Shareholders'
      EquityCommon
      stocks; $0.0001 par value, 30,000,000 shares authorized,
                                        10,720,268
      and 10,402,687 shares issued and outstanding as of December 31, 2008 and
      2007, respectively
                                      
                                      
                                      1,072
                                      
                                      
                                      
                                      1,040Additional
      paid in capital
                                      
                                      
                                      7,786,114
                                      
                                      
                                      
                                      5,039,216Deferred
      expense-warrants
                                      
                                      
                                      (20,435
                                      )
                                      
                                      
                                      -Statutory
      reserve
                                      
                                      
                                      1,412,586
                                      
                                      
                                      
                                      912,019Accumulated
      other comprehensive income
                                      
                                      
                                      1,865,844
                                      
                                      
                                      
                                      994,092Retained
      earnings
                                      
                                      
                                      5,849,257
                                      
                                      
                                      
                                      4,760,983Total
      Stockholders' Equity
                                      
                                      
                                      16,894,438
                                      
                                      
                                      
                                      11,707,351Total
      Liabilities and Shareholders' Equity
                                      
                                      $
                                      19,708,757
                                      
                                      
                                      $
                                      13,210,085The
      accompanying notes are an integral part of the consolidated financial
      statements.













F-3





AMERICAN
      METAL & TECHNOLOGY, INC. AND SUBSIDIARIESCONSOLIDATED
      STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOMEFOR
      THE YEARS ENDED DECEMBER 31, 2008 AND 20072008
                          
                          
                          2007Net
      sales
                          
                          $
                          18,539,583
                          
                          
                          $
                          10,656,958Cost
      of goods sold
                          
                          
                          (12,815,577
                          )
                          
                          
                          (7,566,945
                          )Gross
      profit
                          
                          
                          5,724,006
                          
                          
                          
                          3,090,013Operating
      expensesSelling
      expenses
                          
                          
                          (48,780
                          )
                          
                          
                          (31,425
                          )Impairment
      of goodwill
                          
                          
                          (120,128
                          )
                          
                          
                          -Operating
      and administrative expenses
                          
                          
                          (1,875,699
                          )
                          
                          
                          (995,251
                          )Total
      operating expenses
                          
                          
                          (2,044,607
                          )
                          
                          
                          (1,026,676
                          )Income
      from operations
                          
                          
                          3,679,399
                          
                          
                          
                          2,063,337Other
      income (expense)Interest
      income
                          
                          
                          235,118
                          
                          
                          
                          24,666Loss
      on disposal of marketable securities
                          
                          
                          (8,267
                          )
                          
                          
                          -Other
      Income (expense)
                          
                          
                          (31,121
                          )
                          
                          
                          71,401Total
      other income
                          
                          
                          195,730
                          
                          
                          
                          96,067Income
      before minority interests
                          
                          
                          3,875,129
                          
                          
                          
                          2,159,404Minority
      interests
                          
                          
                          (9,693
                          )
                          
                          
                          (5,099
                          )Net
      income
                          
                          
                          3,884,822
                          
                          
                          
                          2,164,503Other
      comprehensive items:Unrealized
      gain (loss) from marketable securities
                          
                          
                          (70,783
                          )
                          
                          
                          12,401Foreign
      currency translation adjustment
                          
                          
                          942,535
                          
                          
                          
                          717,677Comprehensive
      income
                          
                          $
                          4,756,574
                          
                          
                          $
                          2,894,580Basic
      and diluted weighted average shares outstanding *
                          
                          
                          10,489,695
                          
                          
                          
                          8,998,568Basic
      and diluted net earnings per share *
                          
                          $
                          0.37
                          
                          
                          $
                          0.24*Basic
      and diluted shares are the same because there are no anti dilutive
      effectThe
      accompanying notes are an integral part of the consolidated financial
      statements.








F-4





AMERICAN
      METAL & TECHNOLOGY, INC. AND SUBSIDIARIESCONSOLIDATED
      STATEMENTS OF CASH FLOWSFOR
      THE YEARS ENDED DECEMBER 31, 2008 AND 20072008
                      
                      
                      2007Cash
      flows from operating activities:Net
      Income
                      
                      $
                      3,884,822
                      
                      
                      $
                      2,164,503Adjustments
      to reconcile net income tonet
      cash provided by operating activities:Minority
      interest
                      
                      
                      (9,693
                      )
                      
                      
                      (5,099
                      )Impairment
      of goodwill
                      
                      
                      120,128
                      
                      
                      
                      -Issuance
      of warrants for services
                      
                      
                      80,361
                      
                      
                      
                      -Loss
      on disposal of marketable securities
                      
                      
                      8,267
                      
                      
                      
                      -Bad
      debt expenses
                      
                      
                      -
                      
                      
                      
                      70,311Depreciation
      and amortization
                      
                      
                      429,253
                      
                      
                      
                      300,035(Increase)/decrease
      in assets:Accounts
      receivable
                      
                      
                      (1,027,838
                      )
                      
                      
                      (416,062
                      )Note
      receivable
                      
                      
                      -
                      
                      
                      
                      32,841Other
      receivables
                      
                      
                      (173,801
                      )
                      
                      
                      143,594Inventory
                      
                      
                      (485,361
                      )
                      
                      
                      (34,645
                      )Advance
      to suppliers
                      
                      
                      640,134
                      
                      
                      
                      (268,590
                      )Increase/(decrease)
      in liabilities:Accounts
      payable
                      
                      
                      736,979
                      
                      
                      
                      488,642Other
      payable and accrued expenses
                      
                      
                      (15,700
                      )
                      
                      
                      (104,419
                      )Accrued
      bonuses
                      
                      
                      351,913
                      
                      
                      
                      -Accrued
      expenses
                      
                      
                      -
                      
                      
                      
                      (21,344
                      )Unearned
      revenue
                      
                      
                      (5,095
                      )
                      
                      
                      10,015Net
      Cash Provided By Operating Activities
                      
                      
                      4,534,369
                      
                      
                      
                      2,359,781Cash
      flows from investing activities:Additions
      to construction in progress
                      
                      
                      (2,436,369
                      )
                      
                      
                      (353,814
                      )Cash
      paid for short-term investment
                      
                      
                      (73,537
                      )
                      
                      
                      (89,383
                      )Cash
      paid for acquisition of minority interest
                      
                      
                      (92,566
                      )
                      
                      
                      -Purchase
      of equipment and leasehold improvements
                      
                      
                      (1,288,773
                      )
                      
                      
                      (37,101
                      )Net
      Cash (Used in) Investing Activities
                      
                      
                      (3,891,245
                      )
                      
                      
                      (480,298
                      )Cash
      flows from financing activities:Cash
      received on stock issuance
                      
                      
                      -
                      
                      
                      
                      3,275,543Proceeds
      (Payments) from (to) related party loan
                      
                      
                      473,489
                      
                      
                      
                      (184,128
                      )Net
      Cash Provided By Financing Activities
                      
                      
                      473,489
                      
                      
                      
                      3,091,415Net
      Increase in Cash and Cash Equivalents
                      
                      
                      1,116,613
                      
                      
                      
                      4,970,898Effects
      of Exchange Rate Change in Cash
                      
                      
                      438,141
                      
                      
                      
                      278,851Cash
      and Cash Equivalents-Beginning Balance
                      
                      
                      6,037,193
                      
                      
                      
                      787,444Cash
      and Cash Equivalents-Ending Balance
                      
                      $
                      7,591,947
                      
                      
                      $
                      6,037,193Supplement
      disclosure of cash flow information:Income
      taxes paid
                      
                      $
                      -
                      
                      
                      $
                      -Interest
      expenses paid
                      
                      $
                      -
                      
                      
                      $
                      488Non
      Cash Transaction:Numbers
      of share issued due to reorganization
                      
                      $
                      -
                      
                      
                      $
                      1,223,295,573Numbers
      of share issued due to acquisition of minority interest
                      
                      $
                      383,555
                      
                      
                      $
                      -Acquisition
      of subsidiary from a related party via payable
                      
                      $
                      50,000
                      
                      
                      $
                      -The
      accompanying notes are an integral part of the consolidated financial
      statements.








F-5




AMERICAN
      METAL & TECHNOLOGY, INC. AND SUBSIDIARIESCONSOLIDATED
      STATEMENTS OF SHAREHOLDERS' EQUITYFOR
      THE YEARS ENDED DECEMBER 31, 2008 AND 2007Common
      Stock
                                        
                                        Additional
      Paid In Capital
                                        
                                        
                                        Deferred
      expense Warrants
                                        
                                        Statutory
      Reserve
                                        
                                        Retained
      Earning
                                        
                                        Accumulated
      Other Income
                                        
                                        Total
      Equity#
      of shares
                                        
                                        amountBALANCE,
      DECEMBER 31, 2006
                                        
                                        
                                        7,615,922
                                        
                                        
                                        $
                                        762
                                        
                                        
                                        $
                                        1,763,952
                                        
                                        
                                        $
                                        -
                                        
                                        
                                        $
                                        532,560
                                        
                                        
                                        $
                                        2,975,939
                                        
                                        
                                        $
                                        264,014
                                        
                                        
                                        $
                                        5,537,227Issuance
      of common stock due to reorganization
                                        
                                        
                                        1,827,738
                                        
                                        
                                        
                                        183
                                        
                                        
                                        
                                        (183
                                        )
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -Net
      income
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        2,164,503
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        2,164,503Transfer
      to statutory reserve
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        379,459
                                        
                                        
                                        
                                        (379,459
                                        )
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -Stock
      cancellation
                                        
                                        
                                        (133,333
                                        )
                                        
                                        
                                        (13
                                        )
                                        
                                        
                                        13
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        --Common
      stock issued
                                        
                                        
                                        1,092,169
                                        
                                        
                                        
                                        109
                                        
                                        
                                        
                                        3,275,434
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        3,275,543-Rounding
      of stock split
                                        
                                        
                                        191
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -Unrealized
      Gain from available for sale securities
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        12,401
                                        
                                        
                                        
                                        12,401Cumulative
      translation adjustment
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        717,677
                                        
                                        
                                        
                                        717,677BALANCE,
      DECEMBER 31, 2007
                                        
                                        
                                        10,402,687
                                        
                                        
                                        
                                        1,040
                                        
                                        
                                        
                                        5,039,216
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        912,019
                                        
                                        
                                        
                                        4,760,983
                                        
                                        
                                        
                                        994,092
                                        
                                        
                                        
                                        11,707,351Net
      income
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        3,884,822
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        3,884,822-Transfer
      of RE to APIC
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        2,245,981
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        (2,245,981
                                        )
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -Transfer
      to statutory reserve
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        500,567
                                        
                                        
                                        
                                        (500,567
                                        )
                                        
                                        
                                        -
                                        
                                        
                                        
                                        --Issuance
      of warrants for services
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        100,796
                                        
                                        
                                        
                                        (100,796
                                        )
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -Amortization
      of warrants for services
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        80,361
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        80,361Issuance
      of stock for acquisition of minority interest
                                        
                                        
                                        317,581
                                        
                                        
                                        
                                        32
                                        
                                        
                                        
                                        400,120
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        400,152Deemed
      dividend
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        (50,000
                                        )
                                        
                                        
                                        -
                                        
                                        
                                        
                                        (50,000
                                        )Unrealized
      loss from available for sale securities
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        (70,783
                                        )
                                        
                                        
                                        (70,783
                                        )-Cumulative
      translation adjustment
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        942,535
                                        
                                        
                                        
                                        942,535-BALANCE,
      DECEMBER 31, 2008
                                        
                                        
                                        10,720,268
                                        
                                        
                                        $
                                        1,072
                                        
                                        
                                        $
                                        7,786,114
                                        
                                        
                                        $
                                        (20,435
                                        )
                                        
                                        $
                                        1,412,586
                                        
                                        
                                        $
                                        5,849,257
                                        
                                        
                                        $
                                        1,865,844
                                        
                                        
                                        $
                                        16,894,438The
      accompanying notes are an integral part of the consolidated financial
      statements.






F-6
 AMERICAN
METAL & TECHNOLOGY, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS




1.
Organization and description of business





On June
1, 2007, American Metal & Technology, Inc. (AMTI, "We, "Us, "Our"or the
"Company") formally
changed its name from Murray United Development Corporation to American Metal
& Technology, Inc.





Murray
United Development Corporation was incorporated on October 13, 1987 under the
laws of the State of Delaware. It was organized to further develop and exploit
commercially certain technology for a rotary internal combustion engine that
would utilize alternative fuels. The patent and related rights to the use of the
technology have been assigned to the Company. These rights were subsequently
assigned pursuant to the terms of the Stock Purchase Agreement dated November 6,
2006 discussed below.




The
Company entered into a Stock Purchase Agreement on November 6, 2006 (the
"Agreement") with American Metal Technology Group, a Nevada corporation
(“AMTG"), pursuant to which the Company acquired one hundred (100%) percent of
AMTG's outstanding common stock from the AMTG Stockholders and AMTG became
a wholly-owned subsidiary of the company in a two step reverse
takeover transaction on May 22, 2007.  In connection with this
transaction, and in addition to the 173,253,434 shares of common stock
outstanding immediately prior to closing, the Company issued 1,213,295,563
shares to the stockholders and consultants of AMTG (1,142,388,273 shares to
AMTG's former shareholders, including 20,000,000 shares of common stock issues
to AMTG as investment upon completion of the due diligence period to
the Agreement, and redistributed proportionally to AMTG's shareholders as
of May 22, 2007, and 70,907,300 shares to AMTG's consultants).  These
shares represent more than eighty five (85%) of the Company's issued and
outstanding shares of voting capital stock on a fully diluted basis, and
therefore the former shareholders of AMTG and its consultants effectively have
control of the Company.  In addition, as a condition of the closing of the
Agreement, the Company issued an additional 10,000,000 shares of common stock to
a former officer and director of the Company in connection with the cancellation
of all indebtedness to him, and his assumption of all liabilities and the
assignment all assets of the Company immediately prior to closing.
  AMTG is now a wholly owned subsidiary of the Company.




The
exchange of shares with AMTG has been accounted for as a reverse acquisition
under the purchase method of accounting since the shareholders of AMTG obtained
control of the consolidated entity. Accordingly, the merger of the two companies
has been recorded as a recapitalization of AMTG, with AMTG being treated as the
continuing entity.  The historical financial statements presented herein
are those of AMTG. The continuing company has retained December 31 as its fiscal
year end.





Reflecting
the change of ownership, the Company filed a Certificate of Amendment
to its Certificate of Incorporation to change its name to American Metal
& Technology, Inc., which became effective June 1,
2007.





The
Company now through AMTG via its subsidiaries, Beijing Tong Yuan Heng Feng
Technology Co., Ltd. and American Metal Technology (Lang Fang) Co., Ltd., is
mainly in the business of manufacturing and sales of high-precision investment
casting and metal fabrication products in the People's Republic of China (“China”). The Company's
production involves high-precision investment casting and machined products,
including valves, pipe fittings, etc.





AMTG was
incorporated on January 13, 2004 under the laws of the state of Nevada. On June
1, 2004, AMTG entered into an equity purchase agreement with Beijing Sande
Technology (Holding) Co., Ltd. (“BST”) to acquire 80%
ownership of Beijing Tong Yuan Heng Feng Technology Co., Ltd. (“BJTY”). As a result, AMTG
issued 7,200 shares of his pre-split common stock to BST in exchange for 80%
ownership of BJTY. On August 2, 2004, AMTG incorporated American Metal
Technology (Lang Fang) Co., Ltd. (“AMLF”) in Hebei, China, for
the purpose of expanding the production facility of BJTY. On August   8,
2004, AMTG and AMLF together entered into an equity purchase agreement with
Beijing Sande Shang Mao Co., Ltd. (BSS)for the remaining 20% of
BJTY. As a result, AMTG which issued 1,800 shares of pre-split common stock to
BSS and AMLF becomes the owner of 20% shareholder of BJTY. AMTG later acquired
the 20% ownership of BJTY from AMLF and owns 100% of BJTY. On November 12, 2004,
AMTG effectuated a forward split of all the outstanding shares of common stock
on a 1,000 for 1 basis. On November 2005, AMTG sold 5% of BJTY to an unrelated
party for $240,000. As set forth below, the Company repurchased such shares
pursuant to an Equity Purchase Agreement Executed on September 22,
2008.





On
December 3, 2007, the Company implemented a reverse stock split at the ratio of
one (1) for one hundred fifty (150), such that stockholders shall receive one
(1) share of common stock of the Company for every one hundred fifty (150)
shares of common stock currently held, with no change in the par value of shares
of common stock.




The
reverse stock split reduced the number of shares of Common Stock outstanding
from approximately 1,560,374,357 shares to approximately 10,402,496 shares. In
connection with the implementation of the reverse stock split, the board of
directors and shareholders each approved by written consent as of November 15,
2007 to amend the Certificate of Incorporation (the "Amendment") of the Company
to decrease the number of authorized shares from two billion (2,000,000,000)
shares of common stock and one hundred million (100,000,000) shares of preferred
stock to thirty million (30,000,000) shares of common stock and ten
million (10,000,000) shares of preferred stock. The par value of the Company's
stock shall remain at $.0001 per share for both the common and preferred
shares.




F-7
 AMERICAN
METAL & TECHNOLOGY, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS




1. Organization and
description of business-
continued




On
September 22, 2008, the Company entered in an Equity Purchase Agreement ("the
Agreement") with Wen Ge Ren (the "Seller"), a shareholder owning a 5% stock
interest in Beijing Tong Yuan Heng Feng Technology Co., Ltd ("BJTY"), which is
95% owned through the Company's wholly owned subsidiary American Metal
Technology Group. Pursuant to the Agreement, the Company shall pay to the Seller
US $390,299. The Seller has agreed to accept from the Company the equivalent of
US $92,566.46 or RMB 629,451.91 and balance of US $297,732.57 pursuant to the
issuance of such number of shares of restricted Common Stock based upon the
amount equal to 75% of the average of the closing bid price of the Company's
Common Stock for the five-day trading period commencing on September 18, 2008.
The Company shall deliver to the Seller the cash consideration and duly executed
share certificates representing the underlying shares registered in the name of
the Seller within 60 days from the date of signature. The Company delivered the
cash consideration and issued 317,581 shares to the Seller prior to September
30, 2008.




On
October 31, 2008, the Board of Directors adopted resolutions, authorizing
incentive compensation to key members of its management if the Company has four
million ($4,000,000) dollars or more in net income for the fiscal year of 2008,
excluding expenses relating to the incentive compensation, as reflected in the
audited Financial Statements of the Company as filed with the Securities and
Exchange Commission.






2.
Summary of significant accounting policies




Principal of
consolidation





The
consolidated financial statements of American Metal Technology, Inc. reflect the
activities of the following subsidiaries:





Subsidiaries
                                                                          Percentage
                                                                            Of
      OwnershipAmerican
      Metal Technology Group, (“AMTG") Co., Ltd.
                                                                          U.S.
                                                                          100
                                                                          %American
      Metal Technology (Lang Fang) Co., Ltd.
                                                                          P.R.C.
                                                                          100
                                                                          %Beijing
      Tong Yuan Heng Feng (Technology) Co., Ltd.
                                                                          P.R.C.
                                                                          100
                                                                          %Lighting
      Power Global Limited
                                                                          B.V.I.
                                                                          100
                                                                          %





The
accompanying financial statements have been prepared in accordance with
accounting principles generally accepted in the United States of America. All
significant inter-company transactions and accounts have been eliminated in the
consolidation.





Use of
estimates





The
preparation of consolidated financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the consolidated financial statements and the amount of revenues and
expenses during the reporting periods. Management makes these estimates using
the best information available at the time the estimates are made. However,
actual results could differ materially from those results.




Cash and cash
equivalents




For
Statement of Cash Flows purposes, the Company considers all cash on hand and in
banks, including accounts in book overdraft positions, certificates of deposit
and other highly-liquid investments with maturities of three months or less,
when purchased, to be cash and cash equivalents. As of December 31, 2008 and
2007, cash and cash equivalent amounted to $7,591,947 and $6,037,193
respectively. The cash is deposited with four banks in China and is not
insured.





Accounts
receivable




The
Company's policy is to maintain reserves for potential credit losses for
accounts receivable. Management reviews the composition of accounts receivable
and analyzes historical bad debts, customer concentrations, customer credit
worthiness, current economic trends and changes in customer payment patterns to
evaluate the adequacy of these reserves. As of December 31, 2008 and 2007, the
Company had accounts receivable of $2,470,732 and $1,332,664, net of allowance
of $62,716 and $73,310 respectively.






F-8
 AMERICAN
METAL & TECHNOLOGY, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS
  2. Summary of significant
accounting policies-
continued
  Advances to
suppliers





The
company advances to certain vendors for the purchase of material. As of December
31, 2008 and 2007, the advances to suppliers amounted to $390,368 and $974,799
respectively.





Revenue
recognition




The
Company's revenue recognition policies are in compliance with Staff accounting
bulletin (SAB) 104. Sales revenue is recognized at the date of shipment to
customers when a formal arrangement exists, the price is fixed or determinable,
the delivery is completed, no other significant obligations of the Company exist
and collectability is reasonably assured. Payments received before all of the
relevant criteria for revenue recognition are satisfied are recorded as unearned
revenue. Unearned revenue as of December 31, 2008 and 2007 amounted to $8,645
and $12,938 respectively.




The
Company's revenue consists of invoiced value of goods, net of a value-added tax
(VAT). No product return or sales discount allowance is made as products
delivered and accepted by customers are normally not returnable and sales
discount is normally not granted after products are delivered.





Foreign currency
translation





The
reporting currency of the Company is the US dollar. The Company uses their local
currency, Renminbi (RMB), as their functional currency. Results of operations
and cash flow are translated at average exchange rates during the period, and
assets and liabilities are translated at the unified exchange rate at the end of
the period. Translation adjustments resulting from this process are included in
accumulated other comprehensive income in the statement of shareholders' equity.
Transaction gains and losses that arise from exchange rate fluctuations on
transactions denominated in a currency other than the functional currency are
included in the results of operations as incurred.




Translation
adjustments resulting from this process are included in accumulated other
comprehensive income in the consolidated statement of shareholders' equity.
Accumulated other comprehensive income amounted to $1,865,844 and $994,092 as of
December 31, 2008 and 2007, respectively. Accumulated other comprehensive income
is comprised of unrealized loss from available for sale securities of $(58,382)
and foreign currency translation gain of $1,924,226 as of December 31,
2008.   Accumulated other comprehensive income included
unrealized gain from marketable securities of $12,401 and foreign currency
translation gain of $981,691 as of December 31, 2007.





Income
taxes





The
Company utilizes SFAS No. 109, "Accounting for Income Taxes," which requires the
recognition of deferred tax assets and liabilities for the expected future tax
consequences of events that have been included in the financial statements or
tax returns. Under this method, deferred income taxes are recognized for the tax
consequences in future years of differences between the tax bases of assets and
liabilities and their financial reporting amounts at each period end based on
enacted tax laws and statutory tax rates applicable to the periods in which the
differences are expected to affect taxable income. Valuation allowances are
established, when necessary, to reduce deferred tax assets to the amount
expected to be realized. At December 31, 2008 and 2007, there was no significant
book to tax differences.





Local PRC Income
Tax





The
Company is governed by the Income Tax Law of the PRC concerning subsidiaries
located in PRC. Under the Income Tax Laws of the PRC, Chinese enterprises are
generally subject to an income tax at an effective rate of 33% (30% state income
taxes plus 3% local income taxes) on income reported in the statutory financial
statements after appropriate tax adjustments.





The
Company does not have any significant deferred tax asset or liabilities in the
PRC tax jurisdiction.





Beginning
January 1, 2008, the new Enterprise Income Tax (EIT) law replaced the existing
laws for Domestic Enterprises (DES) and Foreign Invested Enterprises (FIEs). The
new standard EIT rate of 25% replaced the 33% rate previously applicable to both
DES and FIEs. The Company evaluated the effect of the new EIT law on its
financial position, and the two years tax exemption, three years 50% tax
reduction tax holiday for production-oriented FIEs will be
continued.  The Company is exempted from income tax in Peoples
Republic of China, for the years ended December 31, 2008 and 2007.





Segment
reporting




Statement
of Financial Accounting Standards No. 131 ("SFAS 131"), "Disclosure about
Segments of an Enterprise and Related Information" requires use of the
"management approach" model for segment reporting. The management approach model
is based on the way a company's management organizes segments within the company
for making operating decisions and assessing performance. Reportable segments
are based on products and services, geography, legal structure, management
structure, or any other manner in which management disaggregates a
company.




F-9
 AMERICAN
METAL & TECHNOLOGY, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS
  2. Summary of significant
accounting policies-
continued
  SFAS No.
131 has no effect on the Company's consolidated financial statements as the
Company operates in one reportable business segment - manufacture and marketing
high-precision investment casting and metal fabrication products in
China.





Recent accounting
pronouncements





In
December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in
Consolidated Financial Statements”, which is an amendment of Accounting Research
Bulletin (“ARB”) No. 51.  This statement clarifies that a
noncontrolling interest in a subsidiary is an ownership interest in the
consolidated entity that should be reported as equity in the consolidated
financial statements.  This statement changes the way the consolidated
income statement is presented, thus requiring consolidated net income to be
reported at amounts that include the amounts attributable to both parent and the
noncontrolling interest.  This statement is effective for the fiscal
years, and interim periods within those fiscal years, beginning on or after
December 15, 2008.  Based on current conditions, the Company does not
expect the adoption of SFAS 160 to have a significant impact on its results of
operations or financial position.




In
December 2007, the FASB issued SFAS No. 141 (revised 2007), “Business
Combinations.”  This statement replaces FASB Statement No. 141,
“Business Combinations.” This statement retains the fundamental requirements in
SFAS 141 that the acquisition method of accounting (which SFAS 141 called
the purchase method) be used for all business combinations and for an acquirer
to be identified for each business combination. This statement defines the
acquirer as the entity that obtains control of one or more businesses in the
business combination and establishes the acquisition date as the date that the
acquirer achieves control. This statement requires an acquirer to recognize the
assets acquired, the liabilities assumed, and any noncontrolling interest in the
acquiree at the acquisition date, measured at their fair values as of that date,
with limited exceptions specified in the statement. This statement applies
prospectively to business combinations for which the acquisition date is on or
after the beginning of the first annual reporting period beginning on or after
December 15, 2008. The Company does not expect the adoption of SFAS 141 (R) to
have a significant impact on its results of operations or financial
position.





In March,
2008, the FASB issued FASB Statement No. 161, “Disclosures about Derivative
Instruments and Hedging Activities”. The new standard is intended to improve
financial reporting about derivative instruments and hedging activities by
requiring enhanced disclosures to enable investors to better understand their
effects on an entity’s financial position, financial performance, and cash
flows. It is effective for financial statements issued for fiscal years and
interim periods beginning after November 15, 2008, with early application
encouraged. The new standard also improves transparency about the location and
amounts of derivative instruments in an entity’s financial statements; how
derivative instruments and related hedged items are accounted for under
Statement 133; and how derivative instruments and related hedged items affect
its financial position, financial performance, and cash flows.




FASB
Statement No. 161 achieves these improvements by requiring disclosure of the
fair values of derivative instruments and their gains and losses in a tabular
format. It also provides more information about an entity’s liquidity by
requiring disclosure of derivative features that are credit risk–related.
Finally, it requires cross-referencing within footnotes to enable financial
statement users to locate important.  The adoption of SFAS 161 did not
have a significant impact on its results of operations or financial
position.





In May
2008, FASB issued SFASB No. 163, Accounting for Financial Guarantee Insurance
Contracts-an interpretation of FASB Statement No. 60.  The scope of
the statement is limited to financial guarantee insurance (and reinsurance)
contracts.  The pronouncement is effective for fiscal years beginning
after December 31, 2008.  The company does not believe this
pronouncement will impact its financial statements.







3.
Marketable Securities




The
Company’s securities are classified as available-for-sale and, as such, are
carried at fair value. The securities comprised of shares of common stock of
third party customers and securities purchased. Securities classified as
available-for-sale may be sold in response to changes in interest rates,
liquidity needs, and for other purposes. The Company does not currently have any
held-to-maturity or trading securities.





Unrealized
holding gains and losses for available-for-sale securities are excluded from
earnings and reported as a separate component of stockholder’s equity. Realized
gains and losses for securities classified as available-for-sale are reported in
earnings based upon the adjusted cost of the specific security
sold.





Marketable
securities classified as available for sale consisted of the following as of
December 31, 2008 and 2007:





December
      31, 2008
                                      
                                      
                                      December
      31, 2007Marketable
      Securities
                                      
                                      Various
                                      
                                      
                                      VariousCost
                                      
                                      $
                                      152,288
                                      
                                      
                                      $
                                      80,795Market
      Value
                                      
                                      
                                      93,906
                                      
                                      
                                      
                                      93,196Accumulated
      Unrealized Gain (Loss)
                                      
                                      
                                      (58,382
                                      )
                                      
                                      
                                      12,401Unrealized
      Gain (Loss) for the year ended
                                      
                                      $
                                      (70,783
                                      )
                                      
                                      $
                                      12,401




As of
December 31, 2008, the Company evaluated its marketable securities holdings by
valuing the securities according to the quoted price of the securities on the
stock exchange.




F-10
 AMERICAN
METAL & TECHNOLOGY, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS


4.
Other receivables





Other
receivables consisted of the followings at December 31, 2008 and
2007.  The receivables are due from unrelated parties, interest free,
unsecured, and due on demand.





2008
                                
                                
                                2007Note
      receivable
                                
                                $
                                117,259
                                
                                
                                $
                                132,222Tax
      receivable
                                
                                
                                194,638
                                
                                
                                
                                -Others
                                
                                
                                40,353
                                
                                
                                
                                2,053Totals
                                
                                $
                                352,250
                                
                                
                                $
                                134,275






5.
Inventories





Inventories
consisted of the followings at December 31, 2008 and 2007:





2008
                              
                              
                              2007Supplies
      and raw materials
                              
                              $
                              522,008
                              
                              
                              $
                              336,279Work
      in process
                              
                              
                              539,386
                              
                              
                              
                              34,812Finished
      goods
                              
                              
                              18,347
                              
                              
                              
                              176,488Totals
                              
                              $
                              1,079,741
                              
                              
                              $
                              547,579






6.
Property, Plant and Equipment




Property,
Plant and Equipment consist of the following at December 31, 2008 and
2007:





2008
                                  
                                  
                                  2007Building
      and improvements
                                  
                                  $
                                  981,311
                                  
                                  
                                  $
                                  917,801Vehicle
                                  
                                  
                                  112,930
                                  
                                  
                                  
                                  36,695Machinery
      and equipments
                                  
                                  
                                  4,174,913
                                  
                                  
                                  
                                  2,746,152Totals
                                  
                                  
                                  5,269,154
                                  
                                  
                                  
                                  3,700,648Less:
      accumulated depreciation
                                  
                                  
                                  1,108,417
                                  
                                  
                                  
                                  679,676$
                                  4,160,737
                                  
                                  
                                  $
                                  3,020,972





Depreciation
expenses for the year ended December 31, 2008 and 2007 were $374,828 and
$263,892, respectively.







7.
Construction in Progress:





As of
December 31, 2008 and December 31, 2007, construction in progress, representing
construction for additional facilities at its Langfang manufacturing center,
amounted to $2,884,437 and $377,240, respectively.







8.
Intangible assets





The
intangible assets comprised of following at December 31, 2008 and
2007:





2008
                          
                          
                          2007Land
      use right, net
                          
                          $
                          609,378
                          
                          
                          $
                          582,398Permits,
      net
                          
                          
                          75,261
                          
                          
                          
                          109,769Total
                          
                          $
                          684,639
                          
                          
                          $
                          692,167




Land
use right:




Per the
People's Republic of China's governmental regulations, the Government owns all
land. However, the government grants the user a “land use right” (the Right) to
use the land. The Company has recognized the amounts paid for the acquisition of
rights to use land as intangible asset and amortizing over a period of fifty
years.




F-11
 AMERICAN
METAL & TECHNOLOGY, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS




8. Intangible assets-
continued




American
Metal Technology (Lang Fang) Co., Ltd. acquired land use rights during the year
ended 2004 for a total amount of $665,987. The land use right is for fifty
years. The intangible assets consist of the followings as of December 31, 2008
and 2007:


2008
                          
                          
                          2007Intangible
      assets
                          
                          $
                          665,987
                          
                          
                          $
                          622,885Less:
      accumulated amortization
                          
                          
                          (56,609
                          )
                          
                          
                          (40,487
                          )$
                          609,378
                          
                          
                          $
                          582,398





Permits:




Permits
amounted to $75,261 and $109,769 as of December 31, 2008 and 2007 respectively
and are amortized over 5 years:





2008
                            
                            
                            2007Prepaid
      expenses
                            
                            $
                            196,333
                            
                            
                            $
                            185,982Less:
      accumulated amortization
                            
                            
                            (121,072
                            )
                            
                            
                            (76,213
                            )$
                            75,261
                            
                            
                            $
                            109,769





Intangible
assets of the Company are reviewed annually as to whether their carrying value
has become impaired. The Company considers assets to be impaired if the carrying
value exceeds the future projected cash flows from related operations. The
Company also re-evaluates the periods of amortization to determine whether
subsequent events and circumstances warrant revised estimates of useful lives.
As of December 31, 2008 the Company expects these assets to be fully
recoverable.





Total
amortization expenses for the year ended December 31, 2008 and 2007 amounted to
$54,425 and $36,143 respectively. Amortization expenses for next five years
after December 31, 2008 are as follows:




1 year after December 31, 2008
                      
                      $
                      53,0002
      year after December 31, 2008
                      
                      
                      49,0003
      year after December 31, 2008
                      
                      
                      13,0004
      year after December 31, 2008
                      
                      
                      13,0005
      year after December 31, 2008
                      
                      
                      13,000Total
                      
                      $
                      141,000







9.
Other payable and accrued expenses





Other
payable and accrued expenses consisted of the followings at December 31, 2008
and 2007:





2008
                              
                              
                              2007Payable
      to other companies
                              
                              $
                              12,731
                              
                              
                              $
                              -Taxes
      payable
                              
                              
                              -
                              
                              
                              
                              20,612Accrued
      expenses
                              
                              
                              82,953
                              
                              
                              
                              55,153Totals
                              
                              $
                              95,684
                              
                              
                              $
                              75,765








10.
Due to related parties




Due to
related parties amounted to $813,082 and $333,670 as of December 31, 2008 and
2007. Due to related parties include $762,482 due to an entity, 33% of which is
owned by the President and CEO of the Company and $50,600 due to the President
and CEO of the Company as of December 31, 2008. Due to related parties include
$333,070 due to an affiliate owned by the CEO of BJTY and AMLF and $600 due to
shareholder as of December 31, 2007. Due to related parties payable are due on
demand, interest free, and unsecured.







11.
Stockholders’ equity





Additional
paid in capital





The local
government in Lang Fang required the Company’s subsidiary American Metal
Technology (Lang Fang) Co., Ltd, to increase its investments in Lang Fang with
respect to its 2nd phase
construction. On May 8, 2008, the Board of Directors authorized the transfer of
$2,245,981 from the Company’s Retained Earnings to Paid in Capital.





F-12
 AMERICAN
METAL & TECHNOLOGY, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS


11. Stockholders’
equity-
continued




Statutory
reserve





As
stipulated by the Company Law of the People's Republic of China (PRC), net
income after taxation can only be distributed as dividends after appropriation
has been made for the following:




i)
            Making
      up cumulative prior years' losses, if
any;




ii)
            Allocations
      to the "Statutory surplus reserve" of at least 10% of income after tax, as
      determined under PRC accounting rules and regulations, until the fund
      amounts to 50% of the Company's registered
  capital;




iii)
            Allocations
      of 5-10% of income after tax, as determined under PRC accounting rules and
      regulations, to the Company's "Statutory common welfare fund", which is
      established for the purpose of providing employee facilities and other
      collective benefits to the Company's employees; and Statutory common
      welfare fund is no longer required per the new cooperation law executed in
      2006.




iv)
            Allocations
      to the discretionary surplus reserve, if approved in the shareholders'
      general meeting.





In
accordance with the Chinese Company Law, the Company has allocated 10% of its
net income to surplus. The amount allocated to the statutory reserve amounted to
$500,567 and $379,459 for the year ended December 31, 2008 and 2007,
respectively.





The total statutory reserve, as of
December 31, 2008 and 2007, amounted to $1,412,586 and $912,019
respectively.





Deemed
dividend





On July
11, 2008, the Company acquired from the Chairman and the President of Company,
fifty thousand (50,000) shares of common stock, representing 100% of the issued
and outstanding shares, of Lighting Power Global Limited, a British Virgin
Island company, incorporated on May 29, 2008, pursuant to the BVI Business
Company Act, 2004, resulting in the Company becoming the sole shareholder of
Lighting Power Global Limited.  The Company agreed to reimburse the
Chairman and the President for any loans made and/or expenses incurred with
respect to the acquisition and ownership of the shares of common stock of
Lighting Power Global Limited, which amounted to $50,000.  The company
recorded deemed dividend and related party payable in the amount of $50,000 at
December 31, 2008.







12.
Options and warrants




Stock
Options




In April
2002 the Company issued options to purchase 40,000 shares of common stock
at $3.00 per share. The options were issued to an employee under a non qualified
option plan. As of April, 2007, all options have expired. No options were issued
during the year ended December 31, 2008.




Warrants




As a
result of the exercises and expiration of warrants, the Company has no Class A
and Class B warrants as of December 31, 2007.  99,320 Class B
warrants, and 3,333 underwriter's B warrants expired on March 12,
2007.




On March
15, 2008, the Company issued to CCG Investor Relations Partners LLC warrants to
purchase 50,000 shares to assist the Company in the execution of its investor
relations strategy.




The
assumptions used in calculating the fair value of warrants granted using the
Black-Scholes option pricing model are as follows:




Risk-free
      interest rate
                    
                    
                    4.12
                    %Expected
      life of the warrants
                    
                    4
      yearExpected
      volatility
                    
                    
                    70
                    %Expected
      dividend yield
                    
                    
                    0
                    %





These
warrants were recorded at the fair value of $100,796.  The Company has been
expensing the fair value of these warrants over the term of the
agreement.




During
the year ended December 31, 2008, the Company expensed $80,361 and deferred
$20,435 in the consolidated financial statements.






F-13
 AMERICAN
METAL & TECHNOLOGY, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS
 12. Options and
warrants-
continued




The
following table summarizes the warrants outstanding as of December 31,
2008:




Warrants
                      outstanding
                    
                    
                    Weighted
      Average Exercise Price
                    
                    
                    Aggregate
                      Intrinsic
      ValueOutstanding,
      December 31, 2007
                    
                    
                    -
                    
                    
                    $
                    -
                    
                    
                    $
                    -Granted
      (3/15/2008)
                    
                    
                    50,000
                    
                    
                    $
                    5
                    
                    
                    $
                    -Forfeited/Canceled
                    
                    
                    -
                    
                    
                    $
                    -
                    
                    
                    
                    -Exercised
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -Outstanding,
      December 31, 2008
                    
                    
                    50,000
                    
                    
                    $
                    5
                    
                    
                    $
                    -





The
weighted average remaining contractual life of warrants outstanding is 3.25
years as of December 31, 2008.







13.
Current vulnerability due to certain concentrations




BJTY and
AMLF’s operations are all carried out in the PRC. Accordingly, the Company’s
business, financial condition and results of operations may be influenced by the
political, economic and legal environments in the PRC, and by the general state
of the PRC's economy.




The
Company’s operations in the PRC are subject to specific considerations and
significant risks not typically associated with companies in the North America
and Western Europe. These include risks associated with, among others, the
political, economic and legal environments and foreign currency exchange. The
Company's results may be adversely affected by changes in governmental policies
with respect to laws and regulations, anti-inflationary measures, currency
conversion and remittance abroad, and rates and methods of taxation, among other
things.




Major customers and major
vendors




One major
customer accounted for 75% of the net revenue for the year ended December 31,
2008. The Company had $1,947,738 accounts receivable from this customer as of
December 31, 2008. One major customer accounted 53% of the net revenue for the
year ended December 31, 2007. The company had no accounts receivable from the
customer as of December 31, 2007





A majority of our customers
ultimately sell our products to users in Europe which subjects us to a
substantial risk of an economic downturn to Europe.




Our
President and Chief Executive Officer and a Director, and the Secretary of the
Company and a Director own 35% and 21.6%, respectively of a company now known as
Beijing Sande Technology (Holding) Co., Ltd. (“Beijing Sande”) which is a
Chinese Corporation which, in turn, owns approximately 20% of Beijing Micro
Matic Machinery, Ltd, which is the 75% customer referred to
above.  The controlling interest of approximately 80% of Beijing Micro
Matic Machinery, Ltd. is owned by Denmark Micro Matic International SA,
(“Denmark Micro”) an entity registered in Denmark.





Three
vendors provided 74% of the Company’s purchase of raw materials for the year
ended December 31, 2008. The Company had $972,556 accounts payable to those
vendors as of December 31, 2008. One vendor provided 66% of the company’s
purchase of raw materials for year ended December 31, 2007. The company had
$452.713 accounts payable to this vendor as of December 31, 2007.





The
Company extends credit to its customers based upon its assessment of their
credit worthiness and generally does not require collateral. Credit losses have
not been significant.







14.
Commitments




Consulting
agreements:




On March
15, 2008, the Company signed a letter of engagement with CCG Investor Relations
Partners LLC.  According to the terms of the agreement, CCG agreed to
assist the company in the execution of its investor relations strategy. The
agreement was for a twelve-month period and the Company agreed to pay $7,000 per
month to CCG and issue warrants to purchase 50,000 shares of the Company's
common stock at an exercise price of $5 per share. These warrants were recorded
at the fair value of $100,796 based on 70% volatility, 4.12% discount rate and
0% annual rate of quarterly dividends.  The Company has been expensing the
fair value of these warrants over the term of the agreement.




During
the year ended December 31, 2008, the Company expensed $80,361 and deferred
$20,435 in the consolidated financial statements.




F-14
 AMERICAN
METAL & TECHNOLOGY, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS




15. Minority
interest




On
September 22, 2008, the Company entered in an Equity Purchase Agreement ("the
Agreement") with Wen Ge Ren (the "Seller"), a shareholder owning a 5% stock
interest in Beijing Tong Yuan Heng Feng Technology Co., Ltd ("BJTY"), which is
95% owned through the Company's wholly owned subsidiary American Metal
Technology Group. Pursuant to the Agreement, the Company shall pay to the Seller
US $390,299. The Seller has agreed to accept from the Company the equivalent of
US $92,566.46 or RMB 629,451.91 and balance of US $297,732.57 pursuant to the
issuance of such number of shares of restricted Common Stock based upon the
amount equal to 75% of the average of the closing bid price of the Company's
Common Stock for the five-day trading period commencing on September 18, 2008.
The Company shall deliver to the Seller the cash consideration and duly executed
share certificates representing the underlying shares registered in the name of
the Seller within 60 days from the date of signature. The Company delivered the
cash consideration and issued 317,581 shares to the Seller prior to September
30, 2008.




The acquisition of minority
interest by the Company resulted in goodwill of $120,128. The Company evaluated
the valuation of goodwill as on September 30, 2008 and determined, based upon
the net loss generated by BJTY, that the goodwill has been impaired.
Therefore, the Company recorded an impairment of goodwill of $120,128 for the
year ended December 31, 2008.





















F-15