**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**FORM        10-Q **

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

| **o** | **TRANSITION                  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE**                   **SECURITIES                  EXCHANGE ACT OF 1934** |
|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

*Commission        File No. *

**AAMAXAN        TRANSPORT GROUP, INC.**

| Delaware                                                        |   | 20-5772205                                             |
|-----------------------------------------------------------------|--------|--------------------------------------------------------|
| (State                  or other jurisdiction of incorporation) |   | I.R.S.                  Employer Identification Number |

***Former        fiscal year: February 1 - January 31***

| Large accelerated filer | o      |                                                                                   | Accelerated filer                  o |   |
|-----------------------------------|--------|----------------------------------------------------------------------------------------|-------------------------------------------|--------|
|                              |   |                                                                                   |                                      |   |
| Non-accelerated filer        | o      |  (Do not check if a smaller reporting company) | Smaller reporting company       | x      |

----

----

**AAMAXAN        TRANSPORT GROUP, INC.**

|                                                          | Page                                                                                                                                          |
|---------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------|
| PART I   FINANCIAL INFORMATION  |                                                                                                                                          |
|                                                          |                                                                                                                                          |   |
| Item 1.                                                  | Financial Statements                                                                                                                     | 1  |
|                                                          |                                                                                                                                          |   |
| Item 2.                                                  | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 27  |
|                                                          |                                                                                                                                          |   |
| Item 4.                                                  | Controls and Procedures                                                                                                             | 33  |
|                                                          |                                                                                                                                          |   |
| PART II    OTHER INFORMATION    |                                                                                                                                          |
|                                                          |                                                                                                                                          |   |
| Item 4.                                                  | Submission                  of Matters to a Vote of Security Holders                                                                          | 33  |
|                                                          |                                                                                                                                          |   |
| Item 6.                                                  | Exhibits                                                                                                                                      | 34  |
|                                                          |                                                                                                                                          |   |
| Signatures                                                    |                                                                                                                                          |   |
|                                                          |                                                                                                                                          |   |
| Exhibits/Certifications                                       |

----

**PART        I. FINANCIAL INFORMATION**

**Item        1. Financial Statements **

**AAMAXAN        TRANSPORT GROUP, INC.**

**REVIEWED        FINANCIAL STATEMENTS**

**FOR        THE THREE MONTHS ENDED MARCH 31, 2008 AND 2007**

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

**AAMAXAN        TRANSPORT GROUP, INC.**

| CONTENTS                                                                | PAGES                                    |
|------------------------------------------------------------------------------------------------------------|------------------------------------------|
|                                                                                                            |                                     |
| CONSOLIDATED                  BALANCE SHEETS                   3                                      | 1                  -                  2  |
|                                                                                                       |                                     |
| CONSOLIDATED                  STATEMENTS OF INCOME AND                                                     |                                     |
| COMPREHENSIVE                  INCOME                                                                      | 3                                        |
|                                                                                                       |                                     |
| CONSOLIDATED                  STATEMENTS OF STOCKHOLDERS’ EQUITY                   5            | 4                                        |
|                                                                                                       |                                     |
| CONSOLIDATED                  STATEMENTS OF CASH FLOWS                                                     | 5                  -                  6  |
|                                                                                                       |                                     |
| NOTES                  TO CONSOLIDATED FINANCIAL STATEMENTS                   7                  - 10 | 7                  -                  24 |

----

| **AAMAXAN                  TRANSPORT GROUP, INC.**              |
|-----------------------------------------------------------------|
|                                                            |
| **CONSOLIDATED                  BALANCE SHEETS**                |
| **AS                  AT MARCH 31, 2008 AND DECEMBER 31, 2007** |
| **(Stated                  in US Dollars)(Unaudited)**          |

|                                                |   | Note   |   | March                  31, 2008 |   | December                  31, 2007 |   |
|-----------------------------------------------------|--------|--------|--------|---------------------------------|--------|------------------------------------|--------|
|                                                |   |   |   |                            |   |                               |   |
| **ASSETS**                                          |   |   |   |                            |   |                               |   |
| Current                  assets                     |   |   |   |                            |   |                               |   |
| Cash                  and cash equivalents          |   |   |   |                            | $      | 3,527,410                          |   | $ | 2,299,772 |   |
| Accounts                  receivable, net           |   |   | 4      |                            |   | 3,506,494                          |   |   | 2,408,223 |   |
| Subscription                  receivables           |   |   | 5      |                            |   | 386,458                            |   |   | 371,035 |   |
| Other                  receivables                  |   |   | 6      |                            |   | 289,059                            |   |   | 197,435 |   |
| Inventories                                         |   |   | 7      |                            |   | 1,879,836                          |   |   | 1,206,676 |   |
| Advances                  to suppliers              |   |   |   |                            |   | 464,794                            |   |   | 1,125,088 |   |
| Prepayments                                         |   |   |   |                            |   | 40,104                             |   |   | 1,368 |   |
| Current                  portion of long term       |   |   |   |                            |   |                               |   |   |   |   |
| prepayments                                         |   |   | 10     |                            |   | 1,424,055                          |   |   | 1,367,222 |   |
|                                                |   |   |   |                            |   |                               |   |   |   |   |
| Total                  current assets               |   |   |   |                            | $      | 11,518,210                         |   | $ | 8,976,819 |   |
| Due                  from directors                 |   |   | 8      |                            |   | 50,708                             |   |   | 7,206 |   |
| Goodwill                  arising from acquisition  |   |   |   |                            |   | 42,332                             |   |   | 40,643 |   |
| Deposit                  for an unlisted investment |   |   | 9      |                            |   | 854,433                            |   |   | 820,333 |   |
| Long                  term prepayments              |   |   | 10     |                            |   | 3,655,075                          |   |   | 3,851,009 |   |
| Plant                  and equipment, net           |   |   | 11     |                            |   | 194,699                            |   |   | 184,330 |   |
| Intangible                  assets, net             |   |   | 12     |                            |   | 5,083,877                          |   |   | 5,023,174 |   |
|                                                |   |   |   |                            |   |                               |   |   |   |   |
|                                                |   |   |   |                            |   |                               |   |   |   |   |
| **TOTAL                  ASSETS**                   |   |   |   |                            | $      | 21,399,334                         |   | $ | 18,903,514 |   |
|                                                |   |   |   |                            |   |                               |   |   |   |   |
| **LIABILITIES                  AND**                |   |   |   |                            |   |                               |   |   |   |   |
| **STOCKHOLDERS’                  EQUITY**     |   |   |   |                            |   |                               |   |   |   |   |
| Current                  liabilities                |   |   |   |                            |   |                               |   |   |   |   |
| Accounts                  payable                   |   |   |   |                            | $      | 2,600,701                          |   | $ | 2,538,964 |   |
| Due                  to a shareholder               |   |   | 13     |                            |   | 56,962                             |   |   | 54,689 |   |
| Customers’                  deposits          |   |   |   |                            |   | 20,487                             |   |   | 49,325 |   |
| Accruals                                            |   |   |   |                            |   | 326,105                            |   |   | 316,545 |   |
| Other                  payables                     |   |   | 14     |                            |   | 668,628                            |   |   | 719,172 |   |
| Income                  tax payable                 |   |   |   |                            |   | 803,392                            |   |   | 909,579 |   |
|                                                |   |   |   |                            |   |                               |   |   |   |   |
| Total                  current liabilities          |   |   |   |                            | $      | 4,476,275                          |   | $ | 4,588,274 |   |
|                                                |   |   |   |                            |   |                               |   |   |   |   |
| **TOTAL                  LIABILITIES**              |   |   |   |                            | $      | 4,476,275                          |   | $ | 4,588,274 |   |

----

| **AAMAXAN                  TRANSPORT GROUP, INC.**              |
|-----------------------------------------------------------------|
|                                                            |
| **CONSOLIDATED                  BALANCE SHEETS (Continued)**    |
| **AS                  AT MARCH 31, 2008 AND DECEMBER 31, 2007** |
| **(Stated                  in US Dollars)(Unaudited)**          |

|                                                |   | Note   |   | March                  31, 2008 |   | December                  31, 2007 |   |
|-----------------------------------------------------|--------|--------|--------|---------------------------------|--------|------------------------------------|--------|
|                                                |   |   |   |                            |   |                               |   |
|                                                |   |   |   |                            |   |                               |   |
| Commitments                  and contingencies      |   |   | 18     |                            | $      | -                                  |   | $ | - |   |
|                                                |   |   |   |                            |   |                               |   |   |   |   |
| ** **Minority                  interests       |   |   |   |                            | $      | 217,227                            |   | $ | 217,715 |   |
|                                                |   |   |   |                            |   |                               |   |   |   |   |
| **STOCKHOLDERS’                  EQUITY**     |   |   |   |                            |   |                               |   |   |   |   |
| Preferred                  Stock - $0.001 par value |   |   |   |                            |   |                               |   |   |   |   |
| 10,000,000                  share authorized ;      |   |   |   |                            |   |                               |   |   |   |   |
| no                  shares issued or outstanding    |   |   |   |                            | $      | -                                  |   | $ | - |   |
| Common                  stock - $0.0001 par value   |   |   |   |                            |   |                               |   |   |   |   |
| 200,000,000                  shares authorized;     |   |   |   |                            |   | 1,523                              |   |   | 1,499 |   |
| 15,235,812                  and 14,991,812 shares   |   |   |   |                            |   |                               |   |   |   |   |
| outstanding                  respectively           |   |   |   |                            |   |                               |   |   |   |   |
| Additional                  paid-in capital         |   |   |   |                            |   | 7,941,013                          |   |   | 588,265 |   |
| Statutory                  reserves                 |   |   |   |                            |   | 2,529,527                          |   |   | 2,529,527 |   |
| Retained                  profits                   |   |   |   |                            |   | 4,628,096                          |   |   | 10,085,066 |   |
| Accumulated                  other comprehensive    |   |   |   |                            |   |                               |   |   |   |   |
| income                                              |   |   |   |                            |   | 1,605,673                          |   |   | 893,168 |   |
|                                                |   |   |   |                            |   |                               |   |   |   |   |
|                                                |   |   |   |                            |   |                               |   |   |   |   |
|                                                |   |   |   |                            | $      | 16,705,832                         |   | $ | 14,097,525 |   |
|                                                |   |   |   |                            |   |                               |   |   |   |   |
|                                                |   |   |   |                            |   |                               |   |   |   |   |
|                                                |   |   |   |                            |   |                               |   |   |   |   |
| **TOTAL                  LIABILITIES AND**          |   |   |   |                            |   |                               |   |   |   |   |
| **STOCKHOLDERS’                  EQUITY**     |   |   |   |                            | $      | 21,399,334                         |   | $ | 18,903,514 |   |
|                                                |   |   |   |                            |   |                               |   |   |   |   |
|                                                |   |   |   |                            |   |                               |   |   |   |   |

----

| **AAMAXAN                  TRANSPORT GROUP, INC.**                              |
|---------------------------------------------------------------------------------|
|                                                                            |
| **CONSOLIDATED                  STATEMENTS OF INCOME AND COMPREHENSIVE INCOME** |
| **FOR                  THE THREE-MONTHS ENDED MARHC 31, 2008 AND 2007**         |
| **(Stated                  in US Dollars)(Unaudited)**                          |

|                                                     | Note   |   | Three                  months ended March 31, |
|----------------------------------------------------------|--------|--------|-----------------------------------------------|
|                                                     |   |   | 2008                                          |   | 2007 |
|                                                     |   |   |                                          |   |   |
| Net                  revenues                            | 16     | $      | 10,190,623                                    | $ | 7,942,576 |
| Cost                  of sales                           |   |   | (6,460,885)                                   |   | (4,875,294) |
|                                                     |   |   |                                          |   |   |
|                                                     |   |   |                                          |   |   |
| Gross                  profit                            |   | $      | 3,729,738                                     | $ | 3,067,282 |
| Selling                  expenses                        |   |   | (632,834)                                     |   | (168,479) |
| General                  and administrative expenses     |   |   | (346,317)                                     |   | (311,562) |
|                                                     |   |   |                                          |   |   |
|                                                     |   |   |                                          |   |   |
| Income                  from operation                   |   | $      | 2,750,587                                     | $ | 2,587,241 |
| Loss                  on disposal of fixed assets        |   |   | (1,347)                                       |   | - |
| Interest                  income                         |   |   | 6,675                                         |   | 739 |
|                                                     |   |   |                                          |   |   |
|                                                     |   |   |                                          |   |   |
| Income                  from continuing operation before |   |   |                                          |   |   |
| income                  taxes                            |   | $      | 2,755,915                                     | $ | 2,587,980 |
| Income                  taxes                            | 17     |   | (786,208)                                     |   | (853,807) |
|                                                     |   |   |                                          |   |   |
|                                                     |   |   |                                          |   |   |
| Net                  income before minority interests    |   | $      | 1,969,707                                     | $ | 1,734,173 |
| Minority                  interests                      |   |   | 488                                           |   | (1,607) |
|                                                     |   |   |                                          |   |   |
|                                                     |   |   |                                          |   |   |
| Net                  income                              |   | $      | 1,970,195                                     | $ | 1,732,566 |
| Other                  comprehensive income:             |   |   |                                          |   |   |
| Foreign                  currency translation            |   |   |                                          |   |   |
| adjustment                                               |   |   | 712,505                                       |   | 213,309 |
|                                                     |   |   |                                          |   |   |
|                                                     |   |   |                                          |   |   |
| Comprehensive                  income                    |   | $      | 2,682,700                                     | $ | 1,945,875 |
|                                                     |   |   |                                          |   |   |
|                                                     |   |   |                                          |   |   |
|                                                     |   |   |                                          |   |   |
| Basic                  and diluted earnings per share    | 15     | $      | 0.13                                          | $ | 0.12 |
|                                                     |   |   |                                          |   |   |
|                                                     |   |   |                                          |   |   |
|                                                     |   |   |                                          |   |   |
| Basic                  and diluted weighted              |   |   |                                          |   |   |
| average                  share outstanding               | 15     |   | 15,235,812                                    |   | 14,991,812 |
|                                                     |   |   |                                          |   |   |

----

| **AAMAXAN                  TRANSPORT GROUP, INC.**                                                               |
|------------------------------------------------------------------------------------------------------------------|
|                                                                                                             |
| **CONSOLIDATED                  STATEMENTS OF STOCKHOLDERS’ EQUITY**                                       |
| **FOR                  THE YEARS ENDED DECEMBER 31, 2007 AND THREE-MOHTS ENDED MARCH 31,                  2008** |
| **(Stated                  in US Dollars)(Unaudited)**                                                           |

|                                 |   |                          |       |                                   |   |                                        |   |                  |   |                                         |   |           |   |     |      | Accumulated   |   |        |   |
|--------------------------------------|--------|-------------------------------|------------|----------------------------------------|--------|---------------------------------------------|--------|-----------------------|--------|----------------------------------------------|--------|----------------|--------|----------|-----------|-------------------------|--------|-------------|--------|
|                                 |   |                          |       |                                   |   | Series                  A convertible  |   | Additional       |   |                                              |   |           |   | other    |      |                    |   |
|                                 |   | Common                  stock |       | preferred                  stock  |   |  paid-in                          |   | Statutory   |   |                     Retained  |   | comprehensive  |   |     |      |
|                                 |   | No.                  of  |       |                                   |   | No.                  of                |   |                  |   | capital                                      |   | reserves  |   | earnings |      | income             |   | Total  |   |
|                                 |   | share                         |       | Amount                                 |   | share                                       |   | Amount                |   |                                         |   |           |   |     |      |                    |   |        |   |
| Balance,                  January 1, |   |                          | 14,991,812 |                                   | $      | 1,499                                       |   |                  | -      |                                         | $      | -              |   | $        | 233,804   |                    | $      | 1,394,556   |   | $ | 5,961,705 |   | $ | 269,473 |   | $ | 7,861,037 |   |
| 2007                                 |   |                          |       |                                   |   |                                        |   |                  |   |                                         |   |           |   |     |      |                    |   |        |   |   |   |   |   |   |   |   |   |   |
| Net                  income          |   |                          | -          |                                   |   | -                                           |   |                  | -      |                                         |   | -              |   |     | -         |                    |   | -           |   |   | 7,227,560 |   |   | - |   |   | 7,227,560 |   |
| Contribution                  from   |   |                          |       |                                   |   |                                        |   |                  |   |                                         |   |           |   |     |      |                    |   |        |   |   |   |   |   |   |   |   |   |   |
| shareholders                         |   |                          | -          |                                   |   | -                                           |   |                  | -      |                                         |   | -              |   |     | 354,461   |                    |   | -           |   |   | - |   |   | - |   |   | 354,461 |   |
| Appropriations                  to   |   |                          |       |                                   |   |                                        |   |                  |   |                                         |   |           |   |     |      |                    |   |        |   |   |   |   |   |   |   |   |   |   |
| statutory                  reserves  |   |                          | -          |                                   |   | -                                           |   |                  | -      |                                         |   | -              |   |     | -         |                    |   | 1,134,971   |   |   | (1,134,971 | ) |   | - |   |   | - |   |
| Dividends                            |   |                          | -          |                                   |   | -                                           |   |                  | -      |                                         |   | -              |   |     | -         |                    |   | -           |   |   | (1,969,228 | ) |   | - |   |   | (1,969,228 | ) |
| Foreign                  currency    |   |                          |       |                                   |   |                                        |   |                  |   |                                         |   |           |   |     |      |                    |   |        |   |   |   |   |   |   |   |   |   |   |
| translation                          |   |                          | -          |                                   |   | -                                           |   |                  | -      |                                         |   | -              |   |     | -         |                    |   | -           |   |   | - |   |   | 623,695 |   |   | 623,695 |   |
|                                 |   |                          |       |                                   |   |                                        |   |                  |   |                                         |   |           |   |     |      |                    |   |        |   |   |   |   |   |   |   |   |   |   |
|                                 |   |                          |       |                                   |   |                                        |   |                  |   |                                         |   |           |   |     |      |                    |   |        |   |   |   |   |   |   |   |   |   |   |
| Balance,                  December   |   |                          |       |                                   |   |                                        |   |                  |   |                                         |   |           |   |     |      |                    |   |        |   |   |   |   |   |   |   |   |   |   |
| 31,                  2007            |   |                          | 14,991,812 |                                   | $      | 1,499                                       |   |                  | -      |                                         | $      | -              |   | $        | 588,265   |                    | $      | 2,529,527   |   | $ | 10,085,066 |   | $ | 893,168 |   | $ | 14,097,525 |   |
|                                 |   |                          |       |                                   |   |                                        |   |                  |   |                                         |   |           |   |     |      |                    |   |        |   |   |   |   |   |   |   |   |   |   |
|                                 |   |                          |       |                                   |   |                                        |   |                  |   |                                         |   |           |   |     |      |                    |   |        |   |   |   |   |   |   |   |   |   |   |
| Balance,                  January    |   |                          |       |                                   |   |                                        |   |                  |   |                                         |   |           |   |     |      |                    |   |        |   |   |   |   |   |   |   |   |   |   |
| 1,                  2008             |   |                          | 14,991,812 |                                   | $      | 1,499                                       |   |                  | -      |                                         | $      | -              |   | $        | 588,265   |                    | $      | 2,529,527   |   | $ | 10,085,066 |   | $ | 893,168 |   | $ | 14,097,525 |   |
| Net                  income          |   |                          | -          |                                   |   | -                                           |   |                  | -      |                                         |   | -              |   |     | -         |                    |   | -           |   |   | 1,970,195 |   |   | - |   |   | 1,970,195 |   |
| Reverse                              |   |                          |       |                                   |   |                                        |   |                  |   |                                         |   |           |   |     |      |                    |   |        |   |   |   |   |   |   |   |   |   |   |
| acquisition                          |   |                          | 244,000    |                                   |   | 24                                          |   |                  | -      |                                         |   | -              |   |     | 7,352,748 |                    |   | -           |   |   | (7,427,165 | ) |   | - |   |   | (74,393 | ) |
| Foreign                  currency    |   |                          |       |                                   |   |                                        |   |                  |   |                                         |   |           |   |     |      |                    |   |        |   |   |   |   |   |   |   |   |   |   |
| translation                          |   |                          |       |                                   |   |                                        |   |                  |   |                                         |   |           |   |     |      |                    |   |        |   |   |   |   |   |   |   |   |   |   |
| adjustment                           |   |                          | -          |                                   |   | -                                           |   |                  | -      |                                         |   | -              |   |     | -         |                    |   | -           |   |   | - |   |   | 712,505 |   |   | 712,505 |   |
|                                 |   |                          |       |                                   |   |                                        |   |                  |   |                                         |   |           |   |     |      |                    |   |        |   |   |   |   |   |   |   |   |   |   |
|                                 |   |                          |       |                                   |   |                                        |   |                  |   |                                         |   |           |   |     |      |                    |   |        |   |   |   |   |   |   |   |   |   |   |
| Balance,                  March 31,  |   |                          |       |                                   |   |                                        |   |                  |   |                                         |   |           |   |     |      |                    |   |        |   |   |   |   |   |   |   |   |   |   |
| 2008                                 |   |                          | 15,235,812 |                                   | $      | 1,523                                       |   |                  | -      |                                         | $      | -              |   | $        | 7,941,013 |                    | $      | 2,529,527   |   | $ | 4,628,096 |   | $ | 1,605,673 |   | $ | 16,705,832 |   |
|                                 |   |                          |       |                                   |   |                                        |   |                  |   |                                         |   |           |   |     |      |                    |   |        |   |   |   |   |   |   |   |   |   |   |
|                                 |   |                          |       |                                   |   |                                        |   |                  |   |                                         |   |           |   |     |      |                    |   |        |   |   |   |   |   |   |   |   |   |   |

----

| **AAMAXAN                  TRANSPORT GROUP, INC.**                      |
|-------------------------------------------------------------------------|
|                                                                    |
| **CONSOLIDATED                  STATEMENTS OF CASH FLOWS**              |
| **FOR                  THE THREE MONTHS ENDED MARCH 31, 2008 AND 2007** |
| **(Stated                  in US Dollars)(Unaudited)**                  |

|                                                              |   | Three                  months ended March 31, |      |
|-------------------------------------------------------------------|--------|-----------------------------------------------|-----------|
|                                                              |   | 2008                                          |      | 2007 |   |
| Cash                  flows from operating activities             |   |                                          |      |   |   |
| Net                  income                                       |   | $                                             | 1,970,195 |   | $ | 1,732,566 |   |
| Depreciation                                                      |   |                                          | 8,000     |   |   | 6,819 |   |
| Amortization                                                      |   |                                          | 493,333   |   |   | 136,077 |   |
| Minority                  interests                               |   |                                          | (488      | ) |   | 1,607 |   |
| Loss                  on disposal of fixed assets                 |   |                                          | 1,347     |   |   | - |   |
| Adjustments                  to reconcile net income to net       |   |                                          |      |   |   |   |   |
| cash                  provided by (used in) operating activities: |   |                                          |      |   |   |   |   |
| Accounts                  receivable                              |   |                                          | (976,816  | ) |   | (506,487 | ) |
| Other                  receivables                                |   |                                          | (81,632   | ) |   | 61,328 |   |
| Inventories                                                       |   |                                          | (609,675  | ) |   | (247,645 | ) |
| Advances                  to suppliers                            |   |                                          | 691,938   |   |   | 2,678 |   |
| Prepayments                                                       |   |                                          | (37,852   | ) |   | (37,092 | ) |
| Accounts                  payable                                 |   |                                          | (42,866   | ) |   | 585,989 |   |
| Notes                  payables                                   |   |                                          | -         |   |   | 101,923 |   |
| Customers’                  deposits                        |   |                                          | (30,228   | ) |   | (136,346 | ) |
| Accruals                                                          |   |                                          | (3,522    | ) |   | (6,647 | ) |
| Other                  payables                                   |   |                                          | (78,718   | ) |   | (952,425 | ) |
| Income                  tax payable                               |   |                                          | (140,917  | ) |   | (69,700 | ) |
|                                                              |   |                                          |      |   |   |   |   |
|                                                              |   |                                          |      |   |   |   |   |
| Net                  cash provided by operating activities        |   | $                                             | 1,162,099 |   | $ | 672,645 |   |
|                                                              |   |                                          |      |   |   |   |   |
| Cash                  flows from investing activities             |   |                                          |      |   |   |   |   |
| Acquisition                  of a subsidiary                      |   | $                                             | -         |   | $ | (433,064 | ) |
| Purchase                  of plant and equipment                  |   |                                          | (11,995   | ) |   | - |   |
| Amount                  paid to a director                        |   |                                          | (42,279   | ) |   | 230,395 |   |
|                                                              |   |                                          |      |   |   |   |   |
|                                                              |   |                                          |      |   |   |   |   |
| Net                  cash used in investing activities            |   | $                                             | (54,274   | ) | $ | (202,669 | ) |

----

| **AAMAXAN                  TRANSPORT GROUP, INC.**                      |
|-------------------------------------------------------------------------|
|                                                                    |
| **CONSOLIDATED                  STATEMENTS OF CASH FLOWS (Continued)**  |
| **FOR                  THE THREE MONTHS ENDED MARCH 31, 2008 AND 2007** |
| **(Stated                  in US Dollars)(Unaudited)**                  |

|                                                            |   | Three                  months ended March 31, |      |
|-----------------------------------------------------------------|--------|-----------------------------------------------|-----------|
|                                                            |   | 2008                                          |      | 2007 |   |
| Cash                  flows from financing activities           |   |                                          |      |   |   |
| Bank                  borrowings                                |   | $                                             | -         |   | $ | 128,678 |   |
| Payables                  to holding company                    |   |                                          | -         |   |   | 70,773 |   |
| Dividend                  payables                              |   |                                          | -         |   |   | 1,286,776 |   |
| Dividend                  paid                                  |   |                                          | -         |   |   | (1,930,164 | ) |
|                                                            |   |                                          |      |   |   |   |   |
|                                                            |   |                                          |      |   |   |   |   |
| Net                  cash used in by financing activities       |   | $                                             | -         |   | $ | (443,937 | ) |
|                                                            |   |                                          |      |   |   |   |   |
|                                                            |   |                                          |      |   |   |   |   |
| Net                  cash and cash equivalents sourced          |   | $                                             | 1,107,825 |   | $ | 26,039 |   |
|                                                            |   |                                          |      |   |   |   |   |
| Effect                  of foreign currency translation on cash |   |                                          |      |   |   |   |   |
| and                  cash equivalents                           |   |                                          | 119,813   |   |   | 260,734 |   |
|                                                            |   |                                          |      |   |   |   |   |
| Cash                  and cash equivalents-beginning of year    |   |                                          | 2,299,772 |   |   | 1,896,853 |   |
|                                                            |   |                                          |      |   |   |   |   |
|                                                            |   |                                          |      |   |   |   |   |
| Cash                  and cash equivalents-end of year          |   | $                                             | 3,527,410 |   | $ | 2,183,626 |   |
|                                                            |   |                                          |      |   |   |   |   |

|                                                  |   |   |    |   |   |    |   |
|-------------------------------------------------------|--------|--------|---------|--------|--------|---------|--------|
| Supplementary                  cash flow information: |   |   |    |   |   |    |   |
| Interest                  received                    |   | $      | 6,675   |   | $      | 739     |   |
| Tax                  paid                             |   |   | 786,208 |   |   | 853,807 |   |

----

**AAMAXAN      TRANSPORT GROUP, INC.**

**NOTES      TO FINANCIAL STATEMENTS**

**FOR      THE THREE MONTHS ENDED MARCH 31, 2008 AND 2007**

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

| **1.  ** | **ORGANIZATION                AND****PRINCIPAL                ACTIVITIES** |
|--------------------|----------------------------------------------------------------------------|

----

**AAMAXAN      TRANSPORT GROUP, INC.**

**NOTES      TO FINANCIAL STATEMENTS**

**FOR      THE THREE MONTHS ENDED MARCH 31, 2008 AND 2007**

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

**1.**
**ORGANIZATION      AND PRINCIPAL ACTIVITIES (C**
**ontinued**
**)**

----

**AAMAXAN      TRANSPORT GROUP, INC.**

**NOTES      TO FINANCIAL STATEMENTS**

**FOR      THE THREE MONTHS ENDED MARCH 31, 2008 AND 2007**

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

**1.      ORGANIZATION AND PRINCIPAL ACTIVITIES (C**
**ontinued**
**)**

**2.      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

| *a)  * | *Method                of accounting* |
|------------------|---------------------------------------|

| *b)  * | *Use                of estimates* |
|------------------|-----------------------------------|

----

**AAMAXAN      TRANSPORT GROUP, INC.**

**NOTES      TO FINANCIAL STATEMENTS**

**FOR      THE THREE MONTHS ENDED MARCH 31, 2008 AND 2007**

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

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

| *c)  * | *Principles                of consolidation* |
|------------------|----------------------------------------------|

| ***Name                of Company***                                                          |   | ***Place                & date of Incorporation*** |   | ***Attributable                Equity Interest %*** |   | ***Registered******Capital*** |   | ***Common                stock*** |
|-----------------------------------------------------------------------------------------------|--------|--------------------------------------------------------|--------|-----------------------------------------------------|--------|-------------------------------|--------|-----------------------------------|
| Asia                Business Management Group Limited                                         |   | BVI/Aug                12, 1999                        |   | 100%                                                |   | -                             |   | $3                                |
|                                                                                          |   |                                                   |   |                                                |   |                          |   |                              |
| Anhante                (Beijing) Medical Technology Co., Ltd                                  |   | PRC/Jan                23, 2008                        |   | 100%                                                |   | $8,000,000                    |   |                              |
|                                                                                          |   |                                                   |   |                                                |   |                          |   |                              |
| *Shanghai                Medical Technology                Co., Ltd                           |   | PRC/June                28, 2005                       |   | 100%                                                |   | RMB6,300,000                  |   | -                                 |
|                                                                                          |   |                                                   |   |                                                |   |                          |   |                              |
| *Shanghai                Vantage Pharmaceutical Technology                Co., Ltd            |   | PRC/May                28, 2004                        |   | 95%                                                 |   | RMB1,000,000                  |   | -                                 |
|                                                                                          |   |                                                   |   |                                                |   |                          |   |                              |
| *Shanghai                Pharmaceutical & Hemo-tech International Co.,                Ltd |   | PRC/Aug                7, 2001                         |   | 84.84%                                              |   | RMB12,600,000                 |   | -                                 |

----

**AAMAXAN      TRANSPORT GROUP, INC.**

**NOTES      TO FINANCIAL STATEMENTS**

**FOR      THE THREE MONTHS ENDED MARCH 31, 2008 AND 2007**

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

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

| *d)  * | *Economic                and political risks* |
|------------------|-----------------------------------------------|

| *e)  * | *Plant                and equipment* |
|------------------|--------------------------------------|

| Machinery                and equipment | 5-10                years |
|----------------------------------------|---------------------------|
| Office                equipment        | 5                years    |
| Motor                vehicles          | 8                years    |

*f)*
*Intangible      assets*

----

**AAMAXAN      TRANSPORT GROUP, INC.**

**NOTES      TO FINANCIAL STATEMENTS**

**FOR      THE THREE MONTHS ENDED MARCH 31, 2008 AND 2007**

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

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

*g)*
*Accounting      for the impairment of long-lived assets*

*h)*
*Inventories*

| *i)  * | *Trade                receivables* |
|------------------|------------------------------------|

| *j)  * | *Cash                and cash equivalents* |
|------------------|--------------------------------------------|

----

**AAMAXAN      TRANSPORT GROUP, INC.**

**NOTES      TO FINANCIAL STATEMENTS**

**FOR      THE THREE MONTHS ENDED MARCH 31, 2008 AND 2007**

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

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

| *k)  * | *Foreign                currency translation* |
|------------------|-----------------------------------------------|

|                                      |   | **March                31, 2008** |   | **December                31, 2007** |   | **March                31, 2007** |
|-------------------------------------------|--------|-----------------------------------|--------|--------------------------------------|--------|-----------------------------------|
| Twelve                months ended        |   | -                                 |   | 7.3141                               |   | -                                 |
| RMB                : USD exchange rate    |   |                              |   |                                 |   |                              |
| Three                months ended         |   | 7.0222                            |   | -                                    |   | 7.7410                            |
| RMB                : USD exchange rate    |   |                              |   |                                 |   |                              |
| Average                three months ended |   | 7.1757                            |   | -                                    |   | 7.7714                            |
| RMB                : USD exchange rate    |   |                              |   |                                 |   |                              |

----

| *l)  * | *Revenue                recognition* |
|------------------|--------------------------------------|

| *m)  * | *Leases* |
|------------------|----------|

**AAMAXAN      TRANSPORT GROUP, INC.**

**NOTES      TO FINANCIAL STATEMENTS**

**FOR      THE THREE MONTHS ENDED MARCH 31, 2008 AND 2007**

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

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

| *n)  * | *Advertising* |
|------------------|---------------|

| *o)  * | *Retirement                benefit plans* |
|------------------|-------------------------------------------|

----

| *p)  * | *Income                taxes* |
|------------------|-------------------------------|

| *q)  * | *Cash                and concentration of risk* |
|------------------|-------------------------------------------------|

**AAMAXAN      TRANSPORT GROUP, INC.**

**NOTES      TO FINANCIAL STATEMENTS**

**FOR      THE THREE MONTHS ENDED MARCH 31, 2008 AND 2007**

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

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

| *r)  * | *Statutory                reserves* |
|------------------|-------------------------------------|

| *s)  * | *Comprehensive                income* |
|------------------|---------------------------------------|

----

| *t)  * | *Recent                accounting pronouncements* |
|------------------|---------------------------------------------------|

----

**AAMAXAN      TRANSPORT GROUP, INC.**

**NOTES      TO FINANCIAL STATEMENTS**

**FOR      THE THREE MONTHS ENDED MARCH 31, 2008 AND 2007**

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

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

| *(t)  * | *Recent                accounting pronouncements                (continued)* |
|-------------------|------------------------------------------------------------------------------|

----

**AAMAXAN      TRANSPORT GROUP, INC.**

**NOTES      TO FINANCIAL STATEMENTS**

**FOR      THE THREE MONTHS ENDED MARCH 31, 2008 AND 2007**

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

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

|                      |   | Three                months ended March 31, |      |
|---------------------------|--------|---------------------------------------------|-----------|
|                      |   | 2008                                        |      | 2007 |   |
|                      |   |                                        |      |   |   |
| Customer                A |   | $                                           | 1,038,646 |   | $ | 2,558,155 |   |

|                      |   | March                31, 2008 |   | December                31, 2007 |   |
|---------------------------|--------|-------------------------------|--------|----------------------------------|--------|
|                      |   |                          |   |                             |   |
| Customer                B |   | $                             | -      |                             | $      | 254,934 |   |
| Customer                C |   |                          | -      |                             |   | 275,566 |   |

----

**AAMAXAN      TRANSPORT GROUP, INC.**

**NOTES      TO FINANCIAL STATEMENTS**

**FOR      THE THREE MONTHS ENDED MARCH 31, 2008 AND 2007**

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

**4.      ACCOUNTS RECEIVABLES, NET**

|                                        |   | March                31, 2008 |      | December                31, 2007 |   |
|---------------------------------------------|--------|-------------------------------|-----------|----------------------------------|--------|
|                                        |   |                          |      |                             |   |
| Trade                receivable, gross      |   | $                             | 3,575,992 |                             | $      | 2,474,947 |   |
| Provision                for doubtful debts |   |                          | (69,498   | )                                |   | (66,724 | ) |
|                                        |   |                          |      |                             |   |   |   |
|                                        |   |                          |      |                             |   |   |   |
|                                        |   | $                             | 3,506,494 |                             |   | 2,408,223 |   |

|                                          |   | March                31, 2008 |   | December                31, 2007 |   |
|-----------------------------------------------|--------|-------------------------------|--------|----------------------------------|--------|
|                                          |   |                          |   |                             |   |
| Balance                at beginning of period |   | $                             | 66,724 |                             | $      | - |   |
| Addition                of bad debt expense   |   |                          |   |                             |   | 66,724 |   |
| Foreign                exchange adjustment    |   |                          | 2,774  |                             |   | - |   |
|                                          |   |                          |   |                             |   |   |   |
|                                          |   |                          |   |                             |   |   |   |
| Balance                at end of period       |   | $                             | 69,498 |                             | $      | 66,724 |   |
|                                          |   |                          |   |                             |   |   |   |

**5.      SUBSCRIPTION RECEIVABLES**

|                                          |   | March                31, 2008 |    | December                31, 2007 |   |
|-----------------------------------------------|--------|-------------------------------|---------|----------------------------------|--------|
|                                          |   |                          |    |                             |   |
| Chen                Zhong                     |   | $                             | 203,823 |                             | $      | 195,688 |   |
| Yang                Fong                      |   |                          | 163,410 |                             |   | 156,889 |   |
| Shanghai                City Hygiene Industry |   |                          |    |                             |   |   |   |
| Development                Centre             |   |                          | 19,225  |                             |   | 18,458 |   |
|                                          |   |                          |    |                             |   |   |   |
|                                          |   | $                             | 386,458 |                             | $      | 371,035 |   |
|                                          |   |                          |    |                             |   |   |   |

----

**AAMAXAN      TRANSPORT GROUP, INC.**

**NOTES      TO FINANCIAL STATEMENTS**

**FOR      THE THREE MONTHS ENDED MARCH 31, 2008 AND 2007**

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

**6.      OTHER RECEIVABLES**

|                                         |   | March                31, 2008 |    | December                31, 2007 |   |
|----------------------------------------------|--------|-------------------------------|---------|----------------------------------|--------|
|                                         |   |                          |    |                             |   |
| Rental                deposits               |   | $                             | 23,029  |                             | $      | 12,715 |   |
| Loans                to an unrelated company |   |                          | 228,042 |                             |   | 171,338 |   |
| Advances                to employee          |   |                          | 16,905  |                             |   | 1,383 |   |
| Others                                       |   |                          | 21,083  |                             |   | 11,999 |   |
|                                         |   |                          |    |                             |   |   |   |
|                                         |   | $                             | 289,059 |                             | $      | 197,435 |   |

| **7.  ** | **INVENTORIES** |
|--------------------|-----------------|

|                                              |   | March                31, 2008 |      | December                31, 2007 |   |
|---------------------------------------------------|--------|-------------------------------|-----------|----------------------------------|--------|
|                                              |   |                          |      |                             |   |
| Raw                materials                      |   | $                             | 23,446    |                             | $      | 22,510 |   |
| Materials                in consignment           |   |                          | 13,532    |                             |   | 12,992 |   |
| Finished                goods                     |   |                          | 1,934,245 |                             |   | 1,258,914 |   |
|                                              |   |                          |      |                             |   |   |   |
|                                              |   | $                             | 1,971,223 |                             | $      | 1,294,416 |   |
| Provision                for inventory write-down |   |                          | (91,387   | )                                |   | (87,740 | ) |
|                                              |   |                          |      |                             |   |   |   |
|                                              |   | $                             | 1,879,836 |                             | $      | 1,206,676 |   |

----

**AAMAXAN      TRANSPORT GROUP, INC.**

**NOTES      TO FINANCIAL STATEMENTS**

**FOR      THE THREE MONTHS ENDED MARCH 31, 2008 AND 2007**

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

| **8.  ** | **DUE                FROM DIRECTORS** |
|--------------------|---------------------------------------|

|                      |   | March                31, 2008 |   | December                31, 2007 |   |
|---------------------------|--------|-------------------------------|--------|----------------------------------|--------|
|                      |   |                          |   |                             |   |
| Chen                Zhong |   | $                             | 20,897 |                             | $      | 6,796 |   |
| Xu                Yifei   |   |                          | 29,811 |                             |   | 410 |   |
|                      |   |                          |   |                             |   |   |   |
|                      |   | $                             | 50,708 |                             | $      | 7,206 |   |

| **9.  ** | **DEPOSITS                FOR AN UNLISTED INVESTMENT** |
|--------------------|--------------------------------------------------------|

|           |   |                           |   | *Portion                of* |   |                                                                                         |
|----------------|--------|--------------------------------|--------|-----------------------------|--------|----------------------------------------------------------------------------------------------|
|           |   |                           |   | *nominal*                   |   |                                                                                         |
| *Place*        |   | *Form                of*       |   | *value                of*   |   |                                                                                         |
| *of*           |   | *business*                     |   | *registered*                |   | *Principal*                                                                                  |
| *registration* |   | *structure*                    |   | *capital*                   |   | *activities*                                                                                 |
|           |   |                           |   |                        |   |                                                                                         |
| PRC            |   | Limited                company |   | 20%                         |   | Production                of disposable medical polymer material and                products |

| **10.  ** | **LONG                TERM PREPAYMENTS** |
|---------------------|------------------------------------------|

|                                           |   | March                31, 2008 |       | December                31, 2007 |   |
|------------------------------------------------|--------|-------------------------------|------------|----------------------------------|--------|
|                                           |   |                          |       |                             |   |
| Dealership                of products in China |   | $                             | 5,079,130  |                             | $      | 5,218,231 |   |
| Current                portion                 |   |                          | (1,424,055 | )                                |   | (1,367,222 | ) |
|                                           |   |                          |       |                             |   |   |   |
|                                           |   |                          |       |                             |   |   |   |
|                                           |   | $                             | 3,655,075  |                             | $      | 3,851,009 |   |
|                                           |   |                          |       |                             |   |   |   |

----

**AAMAXAN      TRANSPORT GROUP, INC.**

**NOTES      TO FINANCIAL STATEMENTS**

**FOR      THE THREE MONTHS ENDED MARCH 31, 2008 AND 2007**

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

| **11.  ** | **PLANT                AND EQUIPMENT, NET** |
|---------------------|---------------------------------------------|

|                                          |   | March                31, 2008 |     | December                31, 2007 |   |
|-----------------------------------------------|--------|-------------------------------|----------|----------------------------------|--------|
| At                cost                        |   |                          |     |                             |   |
| Machinery                and equipment        |   | $                             | 37,595   |                             | $      | 36,094 |   |
| Office                equipment               |   |                          | 66,275   |                             |   | 54,020 |   |
| Motor                vehicles                 |   |                          | 221,381  |                             |   | 212,546 |   |
|                                          |   |                          |     |                             |   |   |   |
|                                          |   |                          |     |                             |   |   |   |
|                                          |   | $                             | 325,251  |                             | $      | 302,660 |   |
| Less:                accumulated depreciation |   |                          | (110,882 | )                                |   | (99,445 | ) |
| Less:                provision for impairment |   |                          | (19,670  | )                                |   | (18,885 | ) |
|                                          |   | $                             | 194,699  |                             | $      | 184,330 |   |

| **12.  ** | **INTANGIBLE                ASSETS, NET** |
|---------------------|-------------------------------------------|

|                                          |   | March                31, 2008 |      | December                31, 2007 |   |
|-----------------------------------------------|--------|-------------------------------|-----------|----------------------------------|--------|
|                                          |   |                          |      |                             |   |
| Patent                rights, at cost         |   | $                             | 5,924,069 |                             | $      | 5,687,644 |   |
| Less:                accumulated amortization |   |                          | (840,192  | )                                |   | (664,470 | ) |
|                                          |   |                          |      |                             |   |   |   |
|                                          |   |                          |      |                             |   |   |   |
|                                          |   | $                             | 5,083,877 |                             | $      | 5,023,174 |   |

----

**AAMAXAN      TRANSPORT GROUP, INC.**

**NOTES      TO FINANCIAL STATEMENTS**

**FOR      THE THREE MONTHS ENDED MARCH 31, 2008 AND 2007**

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

| **13.  ** | **DUE                TO A SHAREHOLDER** |
|---------------------|-----------------------------------------|

|                                      |   | March                31, 2008 |   | December                31, 2007 |   |
|-------------------------------------------|--------|-------------------------------|--------|----------------------------------|--------|
|                                      |   |                          |   |                             |   |
| Shanghai                Pharmacy Co., Ltd |   | $                             | 56,962 |                             | $      | 54,689 |   |

| **14.  ** | **OTHER                PAYABLES** |
|---------------------|-----------------------------------|

|                                                |   | March                31, 2008 |    | December                31, 2007 |   |
|-----------------------------------------------------|--------|-------------------------------|---------|----------------------------------|--------|
|                                                |   |                          |    |                             |   |
| Sales                rebates                        |   | $                             | 317,431 |                             | $      | 247,499 |   |
| Payables                to unrelated companies      |   |                          | 123,974 |                             |   | - |   |
| Sundry                PRC taxes payables            |   |                          | 158,720 |                             |   | 455,070 |   |
| Unrealized                subsidies from government |   |                          | 51,551  |                             |   | - |   |
| Sundry                                              |   |                          | 16,952  |                             |   | 16,603 |   |
|                                                |   |                          |    |                             |   |   |   |
|                                                |   |                          |    |                             |   |   |   |
|                                                |   | $                             | 668,628 |                             | $      | 719,172 |   |

| **15.  ** | **EARNINGS                PER SHARE** |
|---------------------|---------------------------------------|

| Earnings:                                        |   | March                31, 2008 |      | March                31, 2007 |   |
|--------------------------------------------------|--------|-------------------------------|-----------|-------------------------------|--------|
| Earnings                for the purpose of basic |   |                          |      |                          |   |   |   |
| and                dilutive earnings per share   |   | $                             | 1,970,195 |                          |   | 1,732,566 |   |

----

| Number                of shares                   |   |   |       |   |   |
|---------------------------------------------------|--------|--------|------------|--------|--------|
| Weighted                average number of common  |   |   |       |   |   |
| stock                for the purpose of basic and |   |   |       |   |   |
| dilutive                earnings per share        |   |   | 15,235,812 |   |   | 14,991,812 |   |

**AAMAXAN      TRANSPORT GROUP, INC.**

**NOTES      TO FINANCIAL STATEMENTS**

**FOR      THE THREE MONTHS ENDED MARCH 31, 2008 AND 2007**

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

| **16.  ** | **NET                REVENUES** |
|---------------------|---------------------------------|

|                                      |   | Three                months ended March 31, |       |
|-------------------------------------------|--------|---------------------------------------------|------------|
|                                      |   | 2008                                        |       | 2007 |   |
|                                      |   |                                        |       |   |   |
| Diagnosis                product revenues |   | $                                           | 10,165,463 |   | $ | 7,942,576 |   |
| Others                                    |   |                                        | 25,160     |   |   | - |   |
|                                      |   |                                        |       |   |   |   |   |
|                                      |   | $                                           | 10,190,623 |   | $ | 7,942,576 |   |

| **17.  ** | **INCOME                TAXES** |
|---------------------|---------------------------------|

| **18.  ** | **COMMITMENTS                AND CONTINGENCIES** |
|---------------------|--------------------------------------------------|

|                                 |   |   |    |
|--------------------------------------|--------|--------|---------|
| Year                ending March 31, |   |   |    |
| 2009                                 |   | $      | 180,633 |   |
| 2010                                 |   |   | 5,411   |   |
| 2011                                 |   |   | -       |   |
| 2012                                 |   |   | -       |   |
| 2013                and thereafter   |   |   | -       |   |
|                                 |   | $      | 186,044 |   |

----

**AAMAXAN      TRANSPORT GROUP, INC.**

**NOTES      TO FINANCIAL STATEMENTS**

**FOR      THE THREE MONTHS ENDED MARCH 31, 2008 AND 2007**

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

| **19.  ** | **FAIR                VALUE OF FINANCIAL                INSTRUMENTS** |
|---------------------|-----------------------------------------------------------------------|

**20.      SEGMENT INFORMATION**

**21.      SUBSEQUENT EVENTS**

** **
** **

----

**Item      2. **
**MANAGEMENT      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF      OPERATION**

**Disclaimer      Regarding Forward-looking Statements**

**Overview**

----

**Results      of Operations **

|                                      |   |                           |        |                           |   |                              |   | Percentage                        |      |
|-------------------------------------------|--------|--------------------------------|-------------|--------------------------------|--------|-----------------------------------|--------|-----------------------------------|-----------|
|                                      |   | First                Q of 2008 |        | First                Q of 2007 |   | Increase/                Decrease |   | Increase/                Decrease |      |
|                                      |   |                           |        |                           |   |                              |   |                              |      |
| Net                revenues               |   | $                              | 10,190,623  |                           | $      | 7,942,576                         |   | $                                 | 2,248.047 |   |   | 28.30 | % |
| Cost                of sales              |   |                           | ($6,460,885 | )                              |   | ($4,875,294                       | )      | $                                 | 1,585,591 |   |   | 32.52 | % |
| Gross                profit               |   | $                              | 3,729,738   |                           | $      | 3,067,282                         |   | $                                 | 662,456   |   |   | 21.60 | % |
| Selling                                   |   |                           | ($632,834   | )                              |   | ($168,479                         | )      | $                                 | 464,355   |   |   | 275.61 | % |
| General                and administrative |   |                           | ($346,317   | )                              |   | ($311,562                         | )      | $                                 | 34,755    |   |   | 11.15 | % |
| Operating                income           |   | $                              | 2,750,587   |                           | $      | 2,587,241                         |   | $                                 | 163,346   |   |   | 6.3 | % |
| Interest                income, net       |   | $                              | 6,675       |                           | $      | 739                               |   | $                                 | 6,296     |   |   | 751.04 | % |
| Income                before income taxes |   | $                              | 2,755,915   |                           | $      | 2,587,980                         |   | $                                 | 167,935   |   |   | 6.49 | % |
| Net                income                 |   | $                              | 1,970,195   |                           | $      | 1,732,566                         |   | $                                 | 237,629   |   |   | 13.72 | % |
| Comprehensive                income       |   | $                              | 2,608,307   |                           | $      | 1,945,875                         |   | $                                 | 662,432   |   |   | 34.04 | % |

**Net      Revenues**

**Cost      of Sales**

----

**Gross      Profit**

**Selling,      General and Administrative Expenses**

**Operating      Income**

**Income      taxes **

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|   | o | we                do not conduct any material business or maintain any branch office                in the                United States |
|--------|---|-----------------------------------------------------------------------------------------------------------------------------------------|

|   | o | the                earnings generated from our non-U.S. operating companies are generally                eligible for a deferral from United States taxation until such earnings                are repatriated to the United States,                and |
|--------|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | o | we                believe that we will not generate any significant amount of income                inclusions under the income imputation rules applicable to a United                States                company that owns "controlled foreign corporations" for United States                federal income tax purposes. |
|--------|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Minority      interests**

**Net      Income **

**Foreign      Currency Translation Adjustments**

----

**Inventory**

**Accounts      Receivable **

**Five      largest Creditors as of March 31, 2008**

| Creditors                                                     | Receivable                amountsøRMB÷  | Receivable                amountsøUS$÷ | Percentage                of Total receivables (%) |
|---------------------------------------------------------------|--------------------------------------------------------|--------------------------------------------------|----------------------------------------------------|
| Shanghai                Beiyi Commercial &Trade Co.Ltd.   | 3,016,987.43                                           | 420,779.28                                       | 12%                                                |
| No.455                Hospital                                | 2,262,740.57                                           | 315,584.46                                       | 9%                                                 |
| Nanjing                Dakang Medical Equipment Co.Ltd.       | 2,011,324.95                                           | 280,519.52                                       | 8%                                                 |
| Heilongjiang                Jichang Medical Equipment Co.Ltd. | 2,011,324.95                                           | 280,519.52                                       | 8%                                                 |
| Changchun                Jinli Medical Equipment Co.Ltd.      | 1,508,493.71                                           | 210,389.64                                       | 6%                                                 |
| Total                                                         | 10,810,871.65                                          | 1,507,792.42                                     | 43%                                                |

**Liquidity      and Capital Resources**

----

***Operating      Activities***

***Investing      Activities***

***Financing      Activities***

**Loans**

**Future      Cash Commitments**

**Critical      Accounting Policies and Estimates**

**Method      of Accounting**

----

**Use      of estimates**

**Item      4. Controls and Procedures.**

***Disclosure      Controls and Procedures***

***Changes      in Internal Controls over Financial Reporting***

**PART      II. OTHER INFORMATION**

**Item      4. Submission of Matters to a Vote of Security Holders.**

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**Item      6. Exhibits**

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|                                | AAMAXAN                  TRANSPORT GROUP, INC. |                                           |
|-------------------------------------|------------------------------------------------|------------------------------------------------|
|                                |                                           |                                           |   |
|                                |                                           |                                           |   |
| Date:                  May 20, 2008 | BY:                                       | /s/                  Chen Zhong                |   |
|                                |                                           | Chen                  Zhong                    |
|                                |                                           | Chief                  Executive Officer       |
|                                |                                           | (principal                  executive officer) |

|   | BY:                    | Michelle                  Zhao                                                         |   |
|--------|-----------------------------|----------------------------------------------------------------------------------------|--------|
|   |                        | Michelle                  Zhao                                                         |
|   |                        | Chief                  Financial Officer                                               |
|   |                        | (principal                  financial officer and accounting                  officer) |

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