SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
D.C. 20549


FORM
10-Q








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


For the
quarterly period ended June 30, 2008




or


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


For the
transition period from _____________ to ___________





Commission
File Number 33-19048-NY





AMERICAN METAL
& TECHNOLOGY, INC.


(Exact
Name of Small Business Issuer as specified in its charter)




Delaware
            22-2856171(State or other jurisdiction of incorporation or
    organization)
            (I.R.S. employer identification
no.)




633
      W. 5th
      Street, 28th
      Floor
              Los
      Angeles, CA 90071(Address of principal executive offices) (Zip Code)Registrant's telephone number, including area code: (213)
      223-2321







Indicate
by check mark whether the Issuer:





(1) Has
filed all reports required to be filed by Section 13 or 15(d) of the Exchange
Act during the past 12 months (or for such shorter period that the registrant
was required to file such reports):




Yes xNo o







Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.




Large
      Accelerated Filer
            o
            Accelerated
      Filer
            oNon-Accelerated
      Filer
            o
            Smaller
      Reporting Company
            x






(2) Has
been subject to such filing requirements for the past 90 days.




Yes xNo o







10,402,687
shares of the registrant's Common Stock, $.0001 per share, were outstanding as
of August  8, 2008.






1






AMERICAN
METAL & TECHNOLOGY, INC.


TABLE OF
CONTENTS


FORM
10-Q





PART
      I FINANCIAL INFORMATIONItem
      Number
            
            PageItem
      1.
            Financial
      Statements
            3Consolidated  Balance
      Sheet as of June 30, 2008 (Unaudited)
            3Consolidated
      Statements of Income and Other Comprehensive Income for the Three Months
      and Six Month Ended June 30, 2008 and
      2007  (Unaudited)
            4Consolidated
      Statements of Cash Flows for The Three Months and Six Months Ended June
      30, 2008 and 2007 (Unaudited)
            5Notes
      to Financial Statements
            6
      - 12Item
      2.
            Management’s
      Discussion and Analysis of Financial Condition or Plan of
      Operation
            13Item
      3.
            Qualitative
      and Quantitative Disclosures About Market Risk
            16Item
      4.
            Controls
      and Procedures
            17PART
      II OTHER INFORMATION
            17Item
      1.
            Legal
      Proceedings
            17Item
      2.
            Unregistered
      Sales of Equity Securities and Use of Proceeds
            17Item
      3.
            Defaults
      upon Senior Securities
            17Item
      4.
            Submission
      of Matters to a Vote of Security Holders
            17Item
      5.
            Other
      Information
            17Item
      6.
            Exhibits
      and Reports on Form 8-K
            17Signatures
            18


















2




PART
I. FINANCIAL INFORMATION




ITEM
1. FINANCIAL STATEMENTS





AMERICAN
      METAL & TECHNOLOGY, INC. AND SUBSIDIARIES
                CONSOLIDATED
      BALANCE SHEET
                AS
      OF JUNE 30, 2008
                (UNAUDITED)ASSETSCurrent
      AssetsCash
      and cash equivalents
              
              $
              6,260,629Accounts
      receivable - net
              
              
              2,605,028Investment
      in marketable securities
              
              
              109,939Other
      receivables
              
              
              109,749Advances
      to suppliers
              
              
              2,072,273Inventories
              
              
              588,542Total
      Current Assets
              
              
              11,746,160Property,
      Plant And Equipment, net
              
              
              4,470,851Construction
      in Progress
              
              
              114,295Intangible
      Assets, net
              
              
              707,139Total
      Assets
              
              $
              17,038,446LIABILITIES
      AND SHAREHOLDERS' EQUITYCurrent
      LiabilitiesAccounts
      payable
              
              $
              1,200,330Accrued
      liabilities and other payables
              
              
              96,041Amount
      due to related parties
              
              
              424,069Unearned
      revenue
              
              
              13,869Total
      Current Liabilities
              
              
              1,734,310Minority
      Interests
              
              
              324,006Commitments
              
              
              -Shareholders'
      EquityCommon
      stocks; $0.0001 par value, 30,000,000 shares authorized, 10,402,687 shares
      issued and outstanding
              
              
              1,040Additional
      paid in capital
              
              
              7,385,994Deferred
      expense-warrants
              
              
              (71,248
              )Statutory
      reserve
              
              
              1,187,716Accumulated
      other comprehensive income
              
              
              1,816,586Retained
      earnings
              
              
              4,660,041Total
      Stockholders' Equity
              
              
              14,980,131Total
      Liabilities and Shareholders' Equity
              
              $
              17,038,446The
      accompanying notes are an integral part of the consolidated financial
      statements.
   3


AMERICAN
      METAL & TECHNOLOGY, INC. AND SUBSIDIARIESCONSOLIDATED
      STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOMEFOR
      THE THREE MONTH AND SIX MONTH PERIODS ENDED JUNE 30, 2008 AND
      2007(UNAUDITED)Three
      month periods ended
              
              
              Six
      month periods endedJune
      30
              
              
              June
      302008
              
              
              2007
              
              
              2008
              
              
              2007Net
      sales
              
              $
              5,086,839
              
              
              $
              2,410,578
              
              
              $
              9,983,353
              
              
              $
              4,472,075Cost
      of goods sold
              
              
              (3,307,693
              )
              
              
              (1,633,663
              )
              
              
              (6,744,813
              )
              
              
              (3,036,457
              )Gross
      profit
              
              
              1,779,145
              
              
              
              776,915
              
              
              
              3,238,540
              
              
              
              1,435,618Operating
      expensesSelling
      expenses
              
              
              (14,459
              )
              
              
              (7,423
              )
              
              
              (30,717
              )
              
              
              (14,258
              )Operating
      and administrative expenses
              
              
              (360,312
              )
              
              
              (278,503
              )
              
              
              (841,258
              )
              
              
              (540,074
              )Total
      operating expenses
              
              
              (374,772
              )
              
              
              (285,926
              )
              
              
              (871,975
              )
              
              
              (554,332
              )Income
      from operations
              
              
              1,404,374
              
              
              
              490,989
              
              
              
              2,366,565
              
              
              
              881,285Other
      income (expense)Interest
      income
              
              
              1,621
              
              
              
              655
              
              
              
              7,349
              
              
              
              2,082Gain
      on disposal of marketable securities
              
              
              9,196
              
              
              
              -
              
              
              
              44,847
              
              
              
              -Other
      income (expense)
              
              
              (12,351
              )
              
              
              (347
              )
              
              
              (11,310
              )
              
              
              (2,418
              )Total
      other income (expense)
              
              
              (1,534
              )
              
              
              308
              
              
              
              40,886
              
              
              
              (336
              )Income
      before provision for income taxes and minority interest
              
              
              1,402,840
              
              
              
              491,297
              
              
              
              2,407,451
              
              
              
              880,950Provision
      for income taxes
              
              
              -
              
              
              
              4,638
              
              
              
              -
              
              
              
              4,638Income
      before minority interests
              
              
              1,402,840
              
              
              
              486,659
              
              
              
              2,407,451
              
              
              
              876,312Minority
      interests
              
              
              (700
              )
              
              
              (287
              )
              
              
              (13,285
              )
              
              
              132Net
      income
              
              
              1,403,540
              
              
              
              486,946
              
              
              
              2,420,736
              
              
              
              876,179Other
      comprehensive incomeUnrealized
      loss from marketable securities
              
              
              (11,733
              )
              
              
              -
              
              
              
              (77,923
              )
              
              
              -Foreign
      currency translation adjustment
              
              
              353,051
              
              
              
              101,079
              
              
              
              900,417
              
              
              
              192,372Comprehensive
      income
              
              $
              1,744,859
              
              
              $
              588,025
              
              
              $
              3,243,231
              
              
              $
              1,068,551Basic
      weighted average shares outstanding
              
              
              10,402,687
              
              
              
              8,432,323
              
              
              
              10,402,687
              
              
              
              8,041,191Basic
      net earnings per share
              
              $
              0.13
              
              
              $
              0.06
              
              
              $
              0.23
              
              
              $
              0.11Diluted
      weighted average shares outstanding
              
              
              10,402,687
              
              
              
              8,459,572
              
              
              
              10,402,687
              
              
              
              8,077,769Diluted
      net earnings per share
              
              $
              0.13
              
              
              $
              0.06
              
              
              $
              0.23
              
              
              $
              0.11The
      accompanying notes are an integral part of the consolidated financial
      statements.


4
  AMERICAN
      METAL & TECHNOLOGY, INC. AND SUBSIDIARIESCONSOLIDATED
      STATEMENTS OF CASH FLOWSFOR
      THE SIX MONTH PERIODS ENDED JUNE 30, 2008 AND 2007(UNAUDITED)2008
              
              
              2007Cash
      flows from operating activities:Net
      Income
              
              $
              2,420,736
              
              
              $
              876,179Adjustments
      to reconcile net income tonet
      cash provided by operating activities:Minority
      interest
              
              
              (13,285
              )
              
              
              132Issuance
      of warrants for services
              
              
              29,548
              
              
              
              -Gain
      on disposal of marketable securities
              
              
              (44,847
              )
              
              
              -Bad
      debt expenses
              
              
              (62,139
              )
              
              
              -Depreciation
      and amortization
              
              
              175,781
              
              
              
              116,446(Increase)/decrease
      in assets:Accounts
      receivable
              
              
              (1,092,336
              )
              
              
              (712,149
              )Note
      receivable
              
              
              -
              
              
              
              (74,555
              )Other
      receivables
              
              
              169,392
              
              
              
              (42,244
              )Inventory
              
              
              (6,023
              )
              
              
              (85,121
              )Advance
      to suppliers
              
              
              (1,006,569
              )
              
              
              537,737Prepaid
      expenses
              
              
              -
              
              
              
              139,282Increase/(decrease)
      in liabilities:Accounts
      payable
              
              
              398,592
              
              
              
              103,889Other
      payable and accrued expenses
              
              
              (13,857
              )
              
              
              (4,650
              )Unearned
      revenue
              
              
              107
              
              
              
              1,138Net
      Cash Provided By Operating Activities
              
              
              955,101
              
              
              
              856,085Cash
      flows from investing activities:Additions
      to construction in progress
              
              
              (73,811
              )
              
              
              -Purchase
      of equipment and leasehold improvements
              
              
              (1,017,774
              )
              
              
              (100,628
              )Net
      Cash Used in Investing Activities
              
              
              (1,091,585
              )
              
              
              (100,628
              )Cash
      flows from financing activities:Proceeds
      from advance payments
              
              
              -
              
              
              
              277,806Purchase
      of marketable securities
              
              
              (42,728
              )
              
              
              -Proceeds
      from loans
              
              
              25,000
              
              
              
              28,865Net
      Cash Provided By (Used in) Financing Activities
              
              
              (17,728
              )
              
              
              306,671Net
      Increase (decrease) in Cash and Cash Equivalents
              
              
              (154,212
              )
              
              
              1,062,127Effects
      of Exchange Rate Change in Cash
              
              
              377,648
              
              
              
              106,617Cash
      and Cash Equivalents-Beginning Balance
              
              
              6,037,193
              
              
              
              787,444Cash
      and Cash Equivalents-Ending Balance
              
              
              6,260,629
              
              
              
              1,956,188Supplement
      disclosure of cash flow information:Income
      taxes paid
              
              $
              -
              
              
              $
              4,638Interest
      expenses paid
              
              $
              -
              
              
              $
              841Non
      Cash Transaction:Shares
      Due To Reorganization
              
              $
              -
              
              
              $
              27,416The
      accompanying notes are an integral part of the consolidated financial
      statements.


5
 
 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. formally changed its name
from Murray United Development Corporation to American Metal & Technology,
Inc.





The
Company 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
primarily 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 1,800,000 shares of common stock, adjusted
for a subsequent reverse stock split, to BSS and AMLF became 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.




On
December 3, 2007, American Metal & Technology, Inc. (AMTI, "We, "Us, "Our"or the
"Company") implemented
a reverse stock split at the ratio of one (1) for one hundred fifty (150), such
that stockholders received one (1) share of common stock of the Company for
every one hundred fifty (150) shares of common stock 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
remained at $.0001 per share for both the common and preferred
shares.
 
 On April
7, 2008, American Metal & Technology, Inc. announced it purchased an
additional four CNC lathe machines during the first quarter ended March 31,
2008, bringing the total number of lathes to 60. All of the high-precision lathe
machines are equal in size and capacity to the Company's existing 56 machines.
Three of the machines were put
into production during the first quarter, and the fourth was delivered and
installed in April.
 
 On May
20, 2008, American Metal & Technology, Inc.’s management presented at Brean
Murray, Carret & Co.’s The All-Cap All-China Conference in New York City.
The conference featured formal group presentations and one-on-one meetings with
approximately 100 Chinese companies. The participating companies spanned the
market cap spectrum from large-cap companies to private, “soon-to-be-listed”
companies.




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




2.
Summary of significant accounting policies





The
accompanying unaudited financial statements of the Company have been prepared in
accordance with generally accepted accounting principles for interim financial
information.  Accordingly, they do not include all of the information
required by generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments (consisting of normal
recurring adjustments) considered necessary for a fair presentation have been
included. Operating results for the interim periods are not necessarily
indicative of the results for any future period. These statements should be read
in conjunction with the Company's audited financial statements and notes thereto
for the fiscal year ended December 31, 2007. The results of the six month period
ended June 30, 2008 are not necessarily indicative of the results to be expected
for the full fiscal year ending December 31, 2008.





Principles 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.
            95
            %





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.




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 June 30, 2008, the Company had
accounts receivable of $2,605,028, net of an allowance of $14,034.





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 collectibility 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 June 30, 2008 amounted to $13,869.




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 included unrealized loss from available
for sale securities of $65,522 and translation adjustment of $1,882,108 as of
June 30, 2008.


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




2.
Summary of significant accounting policies-
continued




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 June 30, 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
as of 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.





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.




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 160 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.


8
 AMERICAN
METAL & TECHNOLOGY, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS
  2.
Summary of significant accounting policies-
continued
  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 information. Based on current conditions,
the Company does not expect the adoption of SFAS 161 to have a significant
impact on its results of operations or financial
position.





In May
2008, FSAB issued SFASB No.162, The Hierarchy of Generally Accepted Accounting
Principles.  The pronouncement mandates that the GAAP hierarchy should
reside in the accounting literature as opposed to the audit
literature.  This has the practical impact of elevating FASB
Statements of Financial Accounting Concepts in the GAAP
hierarchy.  This pronouncement will become effective 60 days following
SEC approval.  The company does not believe this pronouncement will
impact its financial statements.





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 are 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
June 30, 2008:




Marketable
      Securities
              
              Cost
              
              
              Market
      Value at June 30, 2008
              
              
              Unrealized
      loss for the six month period ended June 30, 2008
              
              Accumulated
      Unrealized LossVarious
              
              $
              175,461
              
              
              $
              109,939
              
              
              $
              77,923
              
              $65,522
  As of
June 30, 2008, the Company evaluated its marketable securities holdings by
valuing the securities according to the quoted price of the securities on the
applicable stock exchange.








4.
Other receivables





Other
receivables of $109,749 comprised of notes receivable of $58,317 and other
receivable amounting $51,432 as of June 30, 2008.  Both are due from an
unrelated party, due on demand, unsecured, and interest free.







5.
Inventories





Inventories
consisted of the followings at June 30, 2008:





2008Supplies
      and raw materials
            
            
            440,064Work
      in process
            
            
            90,984Finished
      goods
            
            
            57,494Totals
            
            
            588,542







6.
Property, Plant and Equipment




Property,
Plant and Equipment consist of the following at June 30, 2008:





Building
      and improvements
            
            
            976,074Vehicle
            
            
            113,810Machinery
      and equipments
            
            
            4,255,670Totals
            
            
            5,345,554Less:
      accumulated depreciation
            
            
            874,7034,470,851





Depreciation
expenses for the six month period ended June 30, 2008 and 2007 were $147,618 and
$98,905, respectively.


9
 AMERICAN
METAL & TECHNOLOGY, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS




7.
Intangible assets





The
intangible assets comprised of following at June 30, 2008:


Land
      use right, net
              
              
              612,751Permits,
      net
              
              
              94,388Total
              
              
              707,139


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 an intangible asset and amortized over a period of fifty
years.




American
Metal Technology (Lang Fang) Co., Ltd. acquired land use rights during the year
ended 2004 for a total amount of $662,434. The land use right is for fifty
years. The intangible assets consist of the following as of June 30,
2008:





2008Intangible
      assets
            
            
            662,434Less:
      accumulated amortization
            
            
            49,683612,751




Permits:




Permits
amounted to $94,388 as of June 30, 2008 and are amortized over 5
years:





2008Prepaid
      expenses
            
            $
            195,285Less:
      accumulated amortization
            
            
            100,897$
            94,388





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 June 30, 2008 the Company expects these assets to be fully
recoverable.





Total
amortization expenses for the six month period ended June, 2008 and 2007
amounted to $28,163 and $17,541 respectively. Amortization expenses for next
five years after June 30, 2008 are as follows:


1 year after June 30, 2008
              
              $
              52,0002 year after June 30, 2008
              
              
              52,0003 year after June 30, 2008
              
              
              29,0004 year after June 30, 2008
              
              
              13,0005 year after June 30, 2008
              
              
              13,000Total
              
              $
              159,000






8.
Other payable and accrued expenses




Other
payable and accrued expenses amounted to $96,041 as of June 30, 2008. Other
payable and accrued expenses include taxes payables of $40,520 and other accrued
expenses of $55,521.








9.
Due to related parties




Due to
related parties amounted to $424,069 as of June 30, 2008. Due to related parties
includes $423,469 due to an entity, 33% of which is owned by Mr. Gao, our
President and CEO and $600 due to Mr. Gao. Due to related parties payable are
due on demand, interest free, and unsecured.





10.
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.


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




10.
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 surplus reserve amounted to
$275,697 and $244,286 for the six months ended June 30, 2008 and 2007,
respectively.







11. 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 six month period ended June 30, 2008. The following table summarizes
the options outstanding as of June 30, 2008:




Options
              Outstanding
            
            
            Weighted
      Average Exercise Price
            
            Aggregate
              Intrinsic
      ValueOutstanding,
      January 1, 2007
            
            
            40,000
            
            
            $
            3.00
            
            $
            -Reclassified
      from warrants
            
            
            -
            
            
            
            -
            
            
            -Granted
            
            
            -
            
            
            
            -
            
            
            -Forfeited/Canceled
            
            
            40,000
            
            
            
            -
            
            
            -Exercised
            
            
            -
            
            
            
            -
            
            
            -Outstanding,
      December 31, 2007
            
            
            -
            
            
            $
            -
            
            $
            -Reclassified
      from warrants
            
            
            -
            
            
            
            -
            
            
            -Granted
            
            
            -
            
            
            
            -
            
            
            -Forfeited/Canceled
            
            
            -
            
            
            
            -
            
            
            -Exercised
            
            
            -
            
            
            
            -
            
            
            -Outstanding,
      June 30, 2008
            
            
            -
            
            
            $
            -
            
            $
            -




Warrants




As a
result of the exercise 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
following table summarizes the warrants outstanding as of June 30,
2008:




Warrants
              outstanding
            
            
            Weighted
      Average Exercise Price
            
            
            Aggregate
              Intrinsic
      ValueOutstanding,
      January 1, 2007
            
            
            102,653
            
            
            $
            0.15
            
            
            $
            -Transferred
      to options
            
            
            -
            
            
            
            -
            
            
            
            -Granted
            
            
            -
            
            
            
            -
            
            
            
            -Forfeited/Canceled
      (March 12, 2007)
            
            
            102,653
            
            
            $
            0.15
            
            
            
            -Exercised
            
            
            -
            
            
            
            -
            
            
            
            -Outstanding,
      December 31, 2007
            
            
            -
            
            
            $
            -
            
            
            $
            -Transferred
      to options
            
            
            -
            
            
            
            -
            
            
            
            -Granted
      (3/15/2008)
            
            
            50,000
            
            
            $
            5
            
            
            $
            -Forfeited/Canceled
            
            
            -
            
            
            $
            -
            
            
            
            -Exercised
            
            
            -
            
            
            
            -
            
            
            
            -Outstanding,
      June 30, 2008
            
            
            50,000
            
            
            $
            5
            
            
            $
            -





The
weighted average remaining contractual life of warrants outstanding is 3.75
years as of June 30, 2008.




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




12.
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 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




Two major
customers accounted for 81% of the net revenue for the six months ended June 30,
2008. The Company had $2,358,636 accounts receivable from those customers as of
June 30, 2008.





Mr. Gao,
our President and Chief Executive Officer and a Director, and Xin Yaun Yuan, our
Secretary and a Director, own a 35% and 21.6% interest, respectively, in a
Chinese corporation, which, in turn, owns a 20% interest in the Company’s
largest customer, which accounts for in excess of 50% of the net revenue for the
six months ended June 30, 2008.  The
remaining 80% interest in such customer is owned by a non-affiliated entity in
which Mr. Gao or Ms. Yuan have no interest.





Three
vendors provided 56% of the Company’s purchase of raw materials for the six
months ended June 30, 2008. The Company had $675,330 accounts payable to those
vendors as of June 30, 2008.





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.







13.
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 letter of engagement, 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 quarter ended June 30, 2008, the Company expensed $29,548 and deferred
$71,248 in the consolidated financial statements.






14.
Minority interest




The
amount of $324,006 as of June 30, 2008, represents the 5% shareholder interest
in BJTY.




12


ITEM 2. MANAGEMENT’S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION OR PLAN OF OPERATION.





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 in this Form
10-Q.





Statements
in this Form 10-Q which 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.





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 Form 10-Q 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 collectibility 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 June 30, 2008 amounted
to $13,869.




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 June 30, 2008, the Company had
net accounts receivable of $2,605,028, net of an allowance of
$14,034




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.




13




ITEM 2. MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF OPERATION.-
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 three months or
six months ended June 30, 2008 and June 30, 2007.




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
included unrealized loss from available for sale securities of $65,522 and
translation adjustment of $1,882,108 as of June 30, 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 June 30, 2008 and
2007, there was no significant book to tax differences.


RESULTS OF
OPERATIONS





We design
and manufacture high-precision casting and machined parts based on blueprints
supplied by our customers. To set ourselves apart from our competition, we
streamline the production cycle by providing a one stop solution to include all
three integral process in making high precision parts, which are molding design
and fabrication, high precision investment casting and the CNC machining
process. Our products are almost exclusively component parts for use in final
products. Those final products which are either assembled or manufactured
outside China or are manufactured and assembled in China and exported to foreign
markets.   We have a dedicated management team with over fifty years
of combined experience in the casting and metal fabrication industries.  As
of June 30, 2008, we have 327 full time employees.  Our primary focus
during 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.




In
addition to the 53,819 square foot manufacturing facility in Hebei, China
utilized by our subsidiary corporations, we also rent an office in Beijing,
China, which is utilized by Mr. Gao and his assistants with respect to
international marketing and development of the Company.





To
capitalize on the increased demand for our products, we have undertaken
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. Specifically, we have a phased plan to
expand our capacity.  By the end of first quarter ended March 31,
2008, we completed the first phase of the expansion plan. Phase one entailed a
53,819 square foot manufacturing space, 5 turning centers and 60 CNC Mazak
Lathe, 10 of which were delivered and became operational in the three months
ended December 31, 2007, 9 of which were delivered and became operational in the
three months ended of March 31, 2008 and the last of which became operational on
or about April 1, 2008.




In March
2008, we announced we are planning to invest $3 million to build additional
facilities at our Langfang manufacturing center. The new facilities mark the
second phase of a three-phase plan to transform the Company’s capacity and
capabilities for the foreseeable future. This second phase of our three-phase
expansion plan will add two buildings totaling 71,041 square feet of
manufacturing space (a two story building) and 47,361 square feet for dormitory
space (a five story building), increasing annual capacity for molding design and
fabrication by 100%, casting products by 50% to 3,600 tons from 2,400 tons and
CNC lathe capacity by 25%.  Construction is due to be completed in
December 2008, with full production beginning in January 2009.






14




ITEM
2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF
OPERATION.-
continued




Revenue




Revenue
for the three months ended June 30, 2008 was $5,086,839 an increase of 111% as
compared to $2,410,578 for the three months ended June 30, 2007. Gross
profit for the three months ended June 30, 2008, was $1,779,145, or 34.98% of
revenues, compared to $776,915, or 32.23% of revenues, for the same period in
2007.




Revenue
for the six months ended June 30, 2008 was $9,983,353 an increase of 123% as
compared to $4,472,075 for the six months ended June 30, 2007. Gross
profit for the six months ended June 30, 2008, was $3,238,540, or 32.44% of
revenues, compared to $1,435,618, or 32.10% of revenues, for the same period in
2007.





The
increase in revenue was due to several factors, including, but not limited to,
greater production output as a result of increased capacity, effective
management to maximize the production capacity of our machinery, and price
increases that were imposed as a result of an overall rise in commodity prices
that was in turn passed on to our customers.  In particular, since
June 30, 2007, we have purchased and installed an additional 20 CNC MAZAK
lathes, (bringing our total to 60 lathes), including 1 machine installed in
April 2008.  The additional machines increased our production capacity
and accordingly, will increase revenues based upon orders which we were
previously unable to fill.  With continued efforts in implementing our
business plan to expand market share, we were able to fully utilize the new
production capacity with new orders and customers. We estimate that
approximately 50% of our increase in revenues is related to our increase in
machine capacity.  In addition, our management, after a careful and
thorough study of our production methods, made several changes to improve our
production and efficiency.  For example, we increased the turning
speed of the blade in our lathe machines in order to produce more products
within same time frame, and, whereas previously we employed one quality
inspector for every two machines, where required we now allocate one inspector
per machine.  Both of these changes provide us with greater
utilization of our machinery.  We estimate that approximately 20% of
our increase in revenue is related to such effective management to maximize our
production capacity.  Finally, our revenues increased as a result of
pricing changes related to the overall cost of commodities which we
utilize.  We passed this price increase onto our
customers.  We estimate that the remainder of our increase in revenue
and gross profit, or approximately 30%, is related to fluctuations in commodity
prices.





Expenses
from Operations





Total
expenses, comprised mostly of general and administrative expenses were
approximately $374,772 for the three month period ended June 30, 2008, a net
increase of $88,846 compared to $285,926 for the three month period ended June
30, 2007.





Total
expenses, comprised mostly of general and administrative expenses were
approximately $871,975 for the six month period ended June 30, 2008, a net
increase of $317,643 compared to $554,332 for the six month period ended June
30, 2007.




The
increase in operating expenses for the three month and six month periods ended
June 30, 2008 was mainly due to increased depreciation and amortization cost
from the new MAZAK lathes we purchased in 2007 and during the six months ended
June, 2008 and an increase in our workforce to operate the new
machines.





Interest
Income and Expense


Net
interest income for the three months ended June 30, 2008 was $1,621 as compared
to net interest income of $655 for the three months ended June 30,
2007.





Net
interest income for the six months ended June 30, 2008 was $7,349 as compared to
net interest income of $2,082 for the six months ended June 30,
2007





This
increase is primarily due to the increase in our cash and cash
equivalents.





Other
Income (Expense)




Other
income for the three months ended June 30, 2008 was $(12,351) as compared to
other expense of $(347) for the three months ended June 30, 2007.





Other
income for the six months ended June 30, 2008 was $(11,310) as compared to other
expense of $(2,418) for the six months ended June 30, 2007.





Net
Income




We had
net income of $1,403,540 for the three months ended June 30, 2008 an increase of
188% as compared to net income of $486,946 for the three months ended June 30,
2007.





We had
net income of $2,420,736 for the six months ended June 30, 2008, an increase of
176% as compared to net income of $876,179 for the six months ended June 30,
2008





The
increase was mainly due to an increase in revenue which increased 111% and 123%
compared with the three months and six months ended June 30, 2007,
respectively,  and an increase in gross profit which increased 129%
and 125% compared with the three months and six months ended June 30, 2007,
respectively.


15




ITEM
2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF
OPERATION.-
continued




LIQUIDITY
AND CAPITAL RESOURCES





Our cash
and cash equivalents were $6,260,629 on June, 2008.  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 during the full year ended 2007 of our common
stock for cash.


Ultimately,
our success is dependent upon our ability to generate revenues from the sale of
precision metal casting and electronic circuit boards manufactured in facilities
located in the People’s Republic of China.




During
the six month period ended June 30, 2008, net cash provided by operating
activities was $955,101, and net cash provided from financing activities was
$(17,728).





Off-Balance
Sheet Arrangements





We have
no off-balance sheet arrangements.




Material
Commitments





On March
15, 2008, we signed a letter of engagement with CCG Investor Relations Partners
LLC.  According to the terms of the letter of engagement, CCG agreed
to assist us in the execution of its investor relations strategy. The agreement
was for a twelve-month period and we agreed to pay $7,000 per month to CCG and
issue warrants purchasing 50,000 shares of our common stock at an exercise price
of $5 per share.




Purchase of Significant
Equipment





The
Company is currently executing a phased plan for growth.  The first phase
of the plan is now complete and the second phase is in process.  We
anticipate that the second phase will be complete  sometime during the
last quarter of 2008 or the first quarter 2009.  We contemplate during this
second phase the purchase of both machinery and equipment over the next 12
months and may include specialized casting equipment, CNC turning centers and
additional CNC lathe machines.  Ultimately however, any additional
machinery we purchase shall be based upon the current and projected needs at the
time of purchase.   At this stage the Company contemplates
spending approximately $3 million for construction for the phased growth, and
between approximately $0.5 and $1 million for additional machinery and
equipment.




ITEM
3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.





As of
June 30, 2008 we have investments of $109,939 in marketable
securities.  During the three months and six months ended June 30,
2008, we recorded a gain of $9,196 and $44,847 on such
securities.  Although these investments represent less than one (1%)
percent of our total assets, and, accordingly, do no represent a significant
component of our assets, there can be no assurance that there will not be
significant fluctuations in the equity markets that reduce the value of these
investments including, but not limited to, a total loss of the value of these
investments.





We
require substantial amounts of raw materials in our operations, including metals
and energy. We purchase all of our raw materials from outside sources, and our
metals purchases are from a select group of suppliers.  As a result,
our purchases of metals are concentrated with a few suppliers and any
interruptions in their ability to supply these materials could have a material
adverse effect on our financial position, results of operations and/or cash
flows. The availability and price of raw materials may also be subject to
shortages in supply, suppliers’ allocations to other purchasers, and
interruptions in production by suppliers (including by reason of labor strikes
or work stoppages at our suppliers’ plants).  In addition, although we
are subject to changes in exchange rates and worldwide price levels of raw
materials, our contracts with our suppliers provide that we are not responsible
for any 3-5% increase in commodity prices, including price increases resulting
from currency fluctuations.  Our management has in the past and
intends in the future to pass any additional increases in price to our
customers.





Our
subsidiary corporations in the People’s Republic of China conduct business in
the local currency and therefore, we are exposed to foreign currency exchange
risk resulting from fluctuations in foreign currencies. This risk could
adversely impact our results and financial condition. We believe our current
exposure to fluctuations in foreign currency exchange rates is immaterial, based
upon the aforementioned provisions with respect to price increases found in our
contracts with our suppliers. We have not entered into any foreign currency
exchange and option contracts to reduce our exposure to foreign currency
exchange risk and the corresponding variability in operating results as a result
of fluctuations in foreign currency exchange rates.






16




ITEM
4. CONTROLS AND PROCEDURES





Our
principal executive and financial officers, after evaluating the effectiveness
of our “disclosure controls and procedures” (as defined in the Securities
Exchange Act of 1934 Rules 13a-15(e) as of the most recently completed quarter,
have concluded that as of the end of the most recently completed quarter, our
disclosure controls and procedures were 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
affect these controls during or subsequent to the end of the most recently
completed quarter.







PART
II - OTHER INFORMATION




ITEM
1. LEGAL PROCEEDINGS.





We know
of no material, existing or pending legal proceedings against our company, nor
are we involved as a plaintiff in any material proceeding or pending litigation.
There are no proceedings in which any of our directors, officers or affiliates,
or any registered or beneficial shareholder, is an adverse party or has a
material interest adverse to our interest.






ITEM
2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS. -
None.






ITEM
3. DEFAULTS UPON SENIOR SECURITIES - None.







ITEM
4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - None.






ITEM
5. OTHER INFORMATION. - None







ITEM
6. EXHIBITS AND REPORTS ON FORM 8-K.


(A)
Exhibits




Exhibit
      Number
            Description31
            Certification pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002




32
            Certification pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002







(B)
Reports on Form 8-K





(1)
            Filed
      April 7, 2008, the Company announced the purchase of an additional 4 CNC
      lathe machines(2)
            Filed
      on May 12, 2008, the Company announced it financial results for the first
      quarter ended March 31, 2008(3)
            Filed
      July 22, 2008, the Company announced preliminary financial results for the
      second quarter ended June 30, 2008





17










SIGNATURES





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





AMERICAN METAL & TECHNOLOGY,
      INC.(Registrant)Date:
      August 11, 2008
            By:
            /s/
      Chen GaoChen
      GaoTitle:
      President and Chief Executive Officer

























18