- Amended Quarterly Report (10-Q/A)

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q /A

(Amendment No. 1)

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

For the quarterly period ended September 30, 2008

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. 5 th Street, 28 th 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 o No x

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	o

Non-Accelerated Filer	o	Smaller Reporting Company	x

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

Yes x No o

10,720,268 shares of the registrant's Common Stock, $.0001 per share, were outstanding as of November 12, 2008.

AMERICAN METAL & TECHNOLOGY, INC.

TABLE OF CONTENTS

FORM 10-Q /A

	PART I FINANCIAL INFORMATION

Item Number		Page

Item 1.	Financial Statements	3

	Consolidated Balance Sheet as of September 30, 2008 (Unaudited)	3

	Consolidated Statements of Income and Other Comprehensive Income for the Three Months and Nine Months Ended September 30, 2008 and 2007 (Unaudited)	4

	Consolidated Statements of Cash Flows for The Three Months and Nine Months Ended September 30, 2008 and 2007 (Unaudited)	5

	Notes to Financial Statements	6 - 16

Item 2.	Management’s Discussion and Analysis of Financial Condition or Plan of Operation	17

Item 3.	Qualitative and Quantitative Disclosures About Market Risk	22

Item 4T.	Controls and Procedures	23

	PART II OTHER INFORMATION	23

Item 1.	Legal Proceedings	23

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	23

Item 3.	Defaults upon Senior Securities	23

Item 4.	Submission of Matters to a Vote of Security Holders	23

Item 5.	Other Information	23

Item 6.	Exhibits and Reports on Form 8-K	24

	Signatures	24

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

AMERICAN METAL & TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
AS OF SEPTEMBER 30, 2008
(UNAUDITED)

ASSETS
Current Assets
Cash and cash equivalents	$	6,433,189
Accounts receivable - net		3,629,696
Investment in marketable securities		73,828
Other receivables		145,909
Advances to suppliers		961,826
Inventories		732,938
Total Current Assets		11,977,387

Property, Plant And Equipment, net		4,405,240

Construction in Progress		1,748,805

Intangible Assets, net		701,136

Total Assets	$	18,832,569

LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities
Accounts payable	$	1,165,856
Accrued liabilities and other payables		76,208
Amount due to related parties		1,260,132
Unearned revenue		25,079

Total Current Liabilities		2,527,274

Commitments		-

Shareholders' Equity
Common stocks; $0.0001 par value, 30,000,000 shares authorized, 10,720,268 shares issued and outstanding		1,072
Additional paid in capital		7,786,114
Deferred expense-warrants		(45,841	)
Statutory reserve		1,294,597
Accumulated other comprehensive income		1,904,758
Retained earnings		5,364,594

Total Stockholders' Equity		16,305,294

Total Liabilities and Shareholders' Equity	$	18,832,569

The accompanying notes are an integral part of the consolidated financial statements.

AMERICAN METAL & TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME
FOR THE THREE MONTH AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 2008 AND 2007
(UNAUDITED)

	Three month periods ended						Nine month periods ended
	September 30						September 30
	2008			2007			2008			2007

Net sales	$	4,353,422		$	2,738,896		$	14,336,775		$	7,210,970
Cost of goods sold		(3,027,594	)		(1,781,008	)		(9,772,407	)		(4,817,465	)
Gross profit		1,325,829			957,888			4,564,369			2,393,505
Operating expenses
Selling expenses		(9,887	)		(5,262	)		(40,604	)		(19,520	)
Impairment of goodwill		(120,128	)		-			(120,128	)		-
Operating and administrative expenses		(512,989	)		(391,833	)		(1,354,247	)		(936,545	)
Total operating expenses		(643,004	)		(397,095	)		(1,514,979	)		(956,065	)
Income from operations		682,825			560,793			3,049,390			1,437,440
Other income (expense)
Interest income		206,021			5,408			206,021			7,490
Gain on disposal of marketable securities		45,416			-			45,416			-
Other expense		(28,349	)		-			(28,349	)		(2,418	)
Total other income		223,087			5,408			223,087			5,072
Income before minority interests		905,912			566,201			3,272,477			1,442,512
Minority interests		(9,693	)		(6,777	)		(9,693	)		(6,644	)
Net income		915,605			572,978			3,282,170			1,449,156
Other comprehensive items:
Unrealized loss from marketable securities		(39,479	)		-			(117,401	)		-
Foreign currency translation adjustment		127,650			170,380			1,028,067			362,752
Comprehensive income	$	1,003,776		$	743,358		$	4,192,836		$	1,811,908
Basic weighted average shares outstanding		10,430,606			9,386,993			10,411,993			8,012,302
Basic net earnings per share	$	0.09		$	0.06		$	0.32		$	0.18
Diluted weighted average shares outstanding		10,430,606			9,405,873			10,411,993			8,042,613
Diluted net earnings per share	$	0.09		$	0.06		$	0.32		$	0.18

The accompanying notes are an integral part of the consolidated financial statements.

AMERICAN METAL & TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 2008 AND 2007
(UNAUDITED)
	2008			2007
Cash flows from operating activities:
Net Income	$	3,282,170		$	1,449,156
Adjustments to reconcile net income to
net cash provided by operating activities:
Minority interest		(9,693	)		(6,644	)
Impairment of goodwill		120,128
Issuance of warrants for services		54,955			-
Gain on disposal of marketable securities		(45,416	)		-
Bad debt expenses		(40,444	)		-
Depreciation and amortization		298,230			218,104
(Increase)/decrease in assets:
Accounts receivable		(2,096,776	)		392,902
Note receivable		-			(61,154	)
Other receivables		34,359			56,679
Inventory		(140,659	)		(26,379	)
Advance to suppliers		83,070			218,005
Prepaid expenses		-			-
Accounts payable		357,393			193,380
Other payable and accrued expenses		(40,597	)		27,839
Unearned revenue		10,871			54,117

Net Cash Provided By Operating Activities		1,867,589			2,516,005

Cash flows from investing activities:
Additions to construction in progress		(1,306,389	)		-
Cash paid for acquisition of minority interest		(92,566	)		-
Purchase of equipment and leasehold improvements		(1,384,585	)		(2,130	)

Net Cash Used in Investing Activities		(2,783,540	)		(2,130	)

Cash flows from financing activities:
Cash received on stock issuance		-			3,275,562
Purchase of marketable securities		(44,621	)		-
Proceeds (Payments) from (to) related party loan		908,665			(234,339	)

Net Cash Provided By Financing Activities		864,044			3,041,223

Net Increase (decrease) in Cash and Cash Equivalents		(51,907	)		5,555,098

Effects of Exchange Rate Change in Cash		447,903			127,738

Cash and Cash Equivalents-Beginning Balance		6,037,193			787,444

Cash and Cash Equivalents-Ending Balance	$	6,433,189		$	6,470,280

Supplement disclosure of cash flow information:
Income taxes paid	$	-		$	4,638
Interest expenses paid	$	-		$	485
Non Cash Transaction:
Numbers of share issued due to reorganization	$	-		$	1,223,295,573
Numbers of share issued due to acquisition of minority interest	$	383,555		$	-

The accompanying notes are an integral part of the consolidated financial statements.

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

AMERICAN METAL & TECHNOLOGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Organization and description of business - continued

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

On December 3, 2007, 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 shall receive one (1) share of common stock of the Company for every one hundred fifty (150) shares of common stock currently held, with no change in the par value of shares of common stock.

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

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

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 nine month period ended September 30, 2008 are not necessarily indicative of the results to be expected for the full fiscal year ending December 31, 2008.

AMERICAN METAL & TECHNOLOGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2. Summary of significant accounting policies - continued

Principal of consolidation

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

Subsidiaries		Percentage Of Ownership
American Metal Technology Group, (“AMTG") Co., Ltd.	U.S.	100	%
American Metal Technology (Lang Fang) Co., Ltd.	P.R.C.	100	%

Beijing Tong Yuan Heng Feng (Technology) Co., Ltd.

P.R.C.

100

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

Use of estimates

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

Cash and cash equivalents and concentration of credit risk

For Statement of Cash Flows purposes, the Company considers all cash on hand and in banks, including accounts in book overdraft positions, certificates of deposit and other highly-liquid investments with maturities of three months or less, when purchased, to be cash and cash equivalents. As of September 30, 2008, cash and cash equivalent amounted to $6,433,189. The cash is deposited with four banks in China and is not insured.

Accounts receivable

The Company's policy is to maintain reserves for potential credit losses for accounts receivable. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves. As of September 30, 2008, the Company had accounts receivable of $3,629,696, net of allowance of $37,165.

Advances to suppliers

The Company makes advances to certain vendors for the purchase of material. As of September 30, 2008, the advances to suppliers amounted to $961,826.

Revenue recognition

The Company's revenue recognition policies are in compliance with Staff accounting bulletin (SAB) 104. Sales revenue is recognized at the date of shipment to customers when a formal arrangement exists, the price is fixed or determinable, the delivery is completed, no other significant obligations of the Company exist and collectability is reasonably assured. Payments received before all of the relevant criteria for revenue recognition are satisfied are recorded as unearned revenue. Unearned revenue as of September 30, 2008 amounted to $25,079.

AMERICAN METAL & TECHNOLOGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2. Summary of significant accounting policies - continued

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 $105,000 and translation adjustment of $2,009,758 as of September 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 September 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 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.

AMERICAN METAL & TECHNOLOGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2. Summary of significant accounting policies - continued

SFAS No. 131 has no effect on the Company's consolidated financial statements as the Company operates in one reportable business segment - manufacture and marketing high-precision investment casting and metal fabrication products in China.

Recent accounting pronouncements

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

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

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

FASB Statement No. 161 achieves these improvements by requiring disclosure of the fair values of derivative instruments and their gains and losses in a tabular format. It also provides more information about an entity’s liquidity by requiring disclosure of derivative features that are credit risk–related. Finally, it requires cross-referencing within footnotes to enable financial statement users to locate important. 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.

AMERICAN METAL & TECHNOLOGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2. Summary of significant accounting policies - continued

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

3. Marketable Securities

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

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

Marketable securities classified as available for sale consisted of the following as of September 30, 2008:

Marketable Securities	Cost		Market Value at September 30, 2008		Unrealized loss for the nine month period ended September 30, 2008			Accumulated Unrealized Loss

Various	$	178,828	$	73,828	$	117,401	$	105,000

As of September 30, 2008, the Company evaluated its marketable securities holdings by valuing the securities according to the quoted price of the securities on the stock exchange.

4. Other receivables

Other receivable of $145,909 is comprised of notes receivable of $117,822 and other receivable amounting $28,087 as of September 30, 2008. Both are due from unrelated parties, unsecured, due on demand, and interest free.

5. Inventories

Inventories consisted of the followings at September 30, 2008:

	2008
Supplies and raw materials	535,188
Work in process	141,909
Finished goods	55,841
Totals	732,938

AMERICAN METAL & TECHNOLOGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

6. Property, Plant and Equipment

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

Building and improvements	986,022
Vehicle	114,970
Machinery and equipments	4,298,672
Totals	5,399,664
Less: accumulated depreciation	(994,424)
	4,405,240

Depreciation expenses for the nine month period ended September 30, 2008 and 2007 were $256,925 and $182,327, respectively.

7. Intangible assets

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

Land use right, net	615,650
Permits, net	85,486
Total	701,136

Land use right:

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

American Metal Technology (Lang Fang) Co., Ltd. acquired land use rights during the year ended 2004 for a total amount of $669,185. The land use right is for fifty years. The intangible assets consist of the followings as of September 30, 2008:

	2008
Intangible assets	669,185
Less: accumulated amortization	53,535
	615,650

Permits:

Permits amounted to $85,486 as of September 30, 2008 and are amortized over 5 years:

	2008
Prepaid expenses	$	197,275
Less: accumulated amortization		111,789
	$	85,486

AMERICAN METAL & TECHNOLOGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

7. Intangible assets - continued

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

Total amortization expenses for the nine month period ended September, 2008 and 2007 amounted to $41,305 and $35,777 respectively. Amortization expenses for next five years after September 30, 2008 are as follows:

1 year after September 30, 2008	$	52,839
2 year after September 30, 2008		52,839
3 year after September 30, 2008		19,960
4 year after September 30, 2008		13,384
5 year after September 30, 2008		13,384
Total	$	152,404

8. Other payable and accrued expenses

Other payable and accrued expenses amounted to $76,208 as of September 30, 2008. Other payable and accrued expenses include taxes payables $15,111 and other accrued expenses $61,097.

9. Due to related parties

Due to related parties amounted to $1,260,132 as of September 30, 2008. Due to related parties includes $1,209,532 due to an entity, 35% of which is owned by Mr. Gao, our President and CEO and $50,600 due to Mr. Gao. Due to related parties payable is 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 2 nd 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.

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 $368,529 and $93,880 for the nine months ended September 30, 2008 and 2007, respectively.

AMERICAN METAL & TECHNOLOGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 nine month period ended September 30, 2008. The following table summarizes the options outstanding as of September 30, 2008:

	Options Outstanding		Weighted Average Exercise Price		Aggregate Intrinsic Value
Outstanding, 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, September 30, 2008

Warrants

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

AMERICAN METAL & TECHNOLOGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

11. Options and warrants - continued

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 September 30, 2008:

	Warrants outstanding			Weighted Average Exercise Price		Aggregate Intrinsic Value
Outstanding, 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, September 30, 2008	50,000	$	5	$	-

The weighted average remaining contractual life of warrants outstanding is 3.5 years as of September 30, 2008.

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.

AMERICAN METAL & TECHNOLOGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

12. Current vulnerability due to certain concentrations - continued

Major customers and major vendors

One major customer accounted for 71% of the net revenue for the nine months ended September 30, 2008. The Company had accounts receivable of $3,195,049 from the customer as of September 30, 2008.

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

Mr. Gao, our President and Chief Executive Officer and a Director, and Xin Yan Yuan, our Secretary and a Director own 35% and 21.6%, respectively of a company now known as Beijing Sande Technology (Holding) Co., Ltd. (“Beijing Sande”) which is a Chinese Corporation which, in turn, owns approximately 20% of Beijing Micro Matic Machinery, Ltd, which is the 71% customer referred to above. The controlling interest of approximately 80% of Beijing Micro Matic Machinery, Ltd. is owned by Denmark Micro Matic International SA, (“Denmark Micro”) an entity registered in Denmark.

Three major vendors provided 69% of the Company’s purchase of raw materials for the nine months ended September 30, 2008. The Company had $483,752 of accounts payable to those vendors as of September 30, 2008.

One major customer accounted for 66% of the net sales for the nine months ended September 30, 2007. The Company had no accounts receivable from such customer as of September 30, 2007.

One vendor provided 64% of the Company's purchase of raw materials for the nine months ended September 30, 2007. The Company had $222,367 of accounts payable to these vendors as of September 30, 2007.

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

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

During the nine months ended September 30, 2008, the Company expensed $54,955 and deferred $45,841 in the consolidated financial statements.

14. Acquisition of Minority Interest

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

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

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

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

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 September 30, 2008, the Company had net accounts receivable of $3,629,696, net of allowance of $37,165.

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.

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 an impairment of goodwill in the amount of $120,128 and $0 for the nine months ended September 30, 2008 and September 30, 2007.

Foreign currency translation

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 $105,000 and translation adjustment of $2,009,758 as of September 30, 2008.

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

Income taxes

RESULTS OF OPERATIONS

We design and manufacture high-precision casting and machined parts based on blueprints supplied by its customers. To set us apart from competition, we streamlined production cycle by providing a one stop solution to include all three integral processes in making high precision parts, which are molding design and fabrication, high precision investment casting and CNC machining process. Our products are almost exclusively component parts for use in final products, which are either assembled or manufactured outside China or are manufactured and assembled in China exported to foreign markets. 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.

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 entails a 53,819 square foot manufacturing space, 5 turning centers and 60 CNC Mazak Lathe, 19 of which were delivered and became operational in the three months ended December 31, 2007 and the three months ended March 31, 2008 and the last of which became operational on or about April 7, 2008. All of the new high-precision lathe machines are equal in size and capacity to the Company's existing machines.

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 foot of manufacturing space (a two story building) and 47,361 square foot 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.

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

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

Revenue

Revenue for the three months ended September 30, 2008 was $4,353,422 an increase of 59% as compared to $2,738,896 for the three months ended September 30, 2007. Gross profit for the three months ended September 30, 2008, was $1,325,829, or approximately 30% of revenues, compared to $957,888, or 35% of revenues, for the same period in 2007.

Revenue for the nine months ended September 30, 2008 was $14,336,775 an increase of 99% as compared to $7,210,970 for the nine months ended September 30, 2007. Gross profit for the nine months ended September 30, 2008, was $4,564,369, or 32% of revenues, compared to $2,393,505 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 an overall rise in commodity prices. 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 machines. 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 $643,004 for the three month period ended September 30, 2008, a net increase of $245,909 compared to $397,095 for the three month period ended September 30, 2007.

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

Total expenses, comprised mostly of general and administrative expenses were approximately $1,514,979 for the nine month period ended September 30, 2008, a net increase of $558,914 compared to $956,065 for the nine month period ended September 30, 2007.

The increase in operating expenses for the three month and nine month periods ended September 30, 2008 was mainly due to increased depreciation and amortization cost from the new MAZAK lathes which 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 September 30, 2008 was $206,021 as compared to net interest income of $5,408 for the three months ended September 30, 2007.

Net interest income for the nine months ended September 30, 2008 was $206,021 as compared to net interest income of $7,490 for the nine months ended September 30, 2007

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

Other Income (Expense)

Other expense for the three months ended September 30, 2008 was $28,349 as compared to other expense of $0 for the three months ended September 30, 2007.

Other expense for the nine months ended September 30, 2008 was $28,349 as compared to other expense of $2,418 for the nine months ended September 30, 2007.

Net Income

We had net income of $915,605 for the three months ended September 30, 2008 an increase of 59.8% as compared to net income of $572,978 for the three months ended September 30, 2007.

We had net income of $3,282,170 for the nine months ended September 30, 2008, an increase of 126% as compared to net income of $1,449,156 for the nine months ended September 30, 2007

The increase was mainly due to an increase in revenue which increased 59% and 99% compared with the three months and nine months ended September 30, 2007, respectively, and an increase in gross profit which increased 38% and 91% compared with the three months and nine months ended September 30, 2007, respectively.

LIQUIDITY AND CAPITAL RESOURCES

Our cash and cash equivalents were $6,433,189 on September 30, 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 nine month period ended September 30, 2008, net cash provided by operating activities was $1,867,589, and net cash provided from financing activities was $864,044.

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

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

Material Commitments

None.

Purchase of Significant Equipmen t

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 $.5 and $1 million for additional machinery and equipment.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

As of September 30, 2008 we have investments of $73,828 in marketable securities. During the three months and nine months ended September 30, 2008, we recorded a gain of $569 and $45,416 on such securities. Although these investments represent less than one (1%) percent of our total assets, and, accordingly, do not 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.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK - continued

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.

ITEM 4T. CONTROLS AND PROCEDURES

After we filed our Form 10-KSB for the fiscal year ended December 31, 2007, we were notified by the Securities and Exchange Commission (“SEC”) that the statement which we filed with respect to our evaluation of our disclosure controls and procedures was not in compliance with SEC regulations for reasons which include, but are not limited to, our failure to provide our Management’s Annual Report on Internal Control over Financial Reporting (the “Report”) and to specifically refer to the framework utilized to evaluate the effectiveness of our internal control over financial reporting. Due to these omissions, our principal executive and financial officer determined that the Company’s Form 10-KSB for the fiscal year ended December 31, 2007 was not in compliance with SEC regulations and concluded that as of December 31, 2007 its disclosure controls and procedures were ineffective 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. Accordingly, we are filing an amended Form 10-KSB with the Report and a reference to the framework utilized in management’s evaluation.

In view of the fact that we had not filed the amended Form 10-KSB for the fiscal year ended December 31, 2007 as of the fiscal quarter ended September 30, 2008, our principal executive and financial officer, after evaluating the effectiveness of our “disclosure controls and procedures” (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e) and 15d-15(e)), has concluded that as of the fiscal quarter ended September 30, 2008 our disclosure controls and procedures were ineffective 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 and Principal Financial 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 control over financial reporting identified during the period covered by this report which have materially affected, or were reasonably likely to materially affect, our internal control over financial reporting.

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

Description

31	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

33	Equity Purchase Agreement*

(B) Reports on Form 8-K

(1)	Filed July 22, 2008, the Company announced its financial results for the second quarter ended June 30, 2008 as well as revised estimated for the full year ending December 31, 2008.
(2)	Filed on September 23, 2008, the Company entered in an Equity Purchase Agreement.

* Incorporated by reference to our Form 8-K filed with the US Securities and Exchange Commission on September 23, 2008.

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.