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 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 June 30, 2009 amounted to $458,855.

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, 2009, the Company had net accounts receivable of $1,333,787, net of allowance of $149,306.

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.

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

Impairment of long-lived assets - continued

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 and six months ended June 30, 2009 and June 30, 2008.

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.

Accumulated other comprehensive income amounted to $1,953,431 and $1,865,844 as of June 30, 2009 and December 31, 2008, respectively. Accumulated other comprehensive income was mainly from foreign currency translation gain as of June 30, 2009.

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, 2009 and 2008, 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 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 and exported to foreign markets. Our primary focus during 2008 and 2009 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. During the six months ended June 30, 2009, as further set forth below, due to the worldwide economic slowdown, we recognized that we would experience a reduction in revenue and have been working towards reducing our operating expenses.

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

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

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

RESULTS OF OPERATIONS - continued

During the first quarter of fiscal year 2009, we completed construction of the first building, which is a factory with a workspace of 6,654.84 square meters. The factory entails a 4,500 square meter metal casting shop, a 1,000 square meter electronic shop, a 500 square meter mould shop, and a 600 square meter inventory and assorted sets shop. The second building will be a 4,260.84 square meter four level staff dormitory which will accommodate 600 staff members. We have substantially completed the construction of the second building during the second quarter of fiscal year 2009, and expect to transfer from construction-in-progress to fixed assets in the third quarter once the total cost is confirmed and the title documents are completed.

As of December 31, 2008, we had 323 employees working at our factories compared to 256 at the same time in the prior year. Prior to December 2008, the Company operated with three shifts per day for seven days each week. Due to the global economic downturn, in December 2008, the Company reduced shifts to one shift per day. From January 2009 through the date of this Quarterly Report, the Company has been operating one shift per day. As of June 30, 2009, we had 260 full time employees.

For the three months and six months ended June 30, 2009, the Company's net sales dropped approximately 72% and 73% as compared to the three months and six months ended June 30, 2008, respectively. We experienced an approximate 70% decline in our orders from our European customers. We anticipate that during 2009 we will achieve 40% of the sales which we received during the fiscal year ended December 31, 2008. Depending upon the condition of the economy, we may experience a net loss for 2009.

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 paid 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 delivered the cash consideration and issued 317,581 shares to the Seller prior to September 30, 2008.

On October 31, 2008, the Board of Directors adopted resolutions, authorizing incentive compensation to key members of its management if the Company has four million ($4,000,000) dollars or more in net income for the fiscal year of 2008 excluding expenses relating to the incentive compensation, as reflected in the audited Financial Statements of the Company as filed with the Securities and Exchange Commission. The incentive compensation shall be paid by the issuance of shares of common stock by the Company as follows: (A) 533,333 shares of common stock determined by multiplying the initial four million ($4,000,000) dollars of net income by ten (10%) percent and dividing the product by an agreed value of $0.75 per share and (B) such number of additional shares of common stock determined by multiplying the amount of net profit in excess of four million ($4,000,000) dollars by twenty (20%) percent and dividing such product by an agreed value of $0.75 per share. As of June 30, 2009, such shares have not been issued.

On March 18, 2009, the Board of Directors authorized the Company to transfer and resell the Company's ownership of fifty thousand (50,000) shares of common stock, representing 100% of the issued and outstanding shares of Lighting Power Global Limited, a British Virgin Island company, to the Chairman and the President of Company, resulting in the President becoming the sole shareholder of Lighting Power Global Limited. The Board of Directors also authorized the Company to cancel any funds due to the President for any loans made and /or expenses incurred with respect to the original acquisition and ownership of the shares of common stock of Lighting Power Global Limited.

On July 1, 2009, AMTG entered into an amended loan agreement with an entity, 33% of which is owned by the President and CEO of the Company regarding the $1,213,536 due to the related party (see Note 10 - Due to related party). In view of the depreciation in the U.S. dollar, AMTG agreed to pay to the related party the agreed upon sum of $317,565, to compensate the related party for the loss in the value of the loan based upon the difference between the exchange rate at the time of the loan and the current exchange rate. Such agreement was authorized and approved by our Board of Directors. The additional charge of $317,565 had been accrued as of June 30, 2009. The total principal balance of $1,213,536 had been fully repaid on July 13, 2009, whereas the additional charge of $317,565 had been fully paid on August 5, 2009.

Revenue

Net sales for the three months ended June 30, 2009 was $1,437,804, a decrease of 71.7% as compared to $5,086,839 for the three months ended June 30, 2008. Gross profit for the three months ended June 30 2009, was $298,322, or approximately 20.7% of revenues, compared to $1,779,145, or 34.97% of revenues, for the same period in 2008.

Net sales for the six months ended June 30, 2009 was $2,722,027, a decrease of 73% as compared to $9,983,353 for the six months ended June 30, 2008. Gross profit for the six months ended June 30, 2009, was $693,697, or approximately 25% of revenues, compared to $3,238,540, or 32% of revenues, for the same period in 2008.

The decrease is primarily due to the approximate 70% decline in orders from our European customers. The decline in gross margin was resulted from higher fixed costs allocated to cost of goods sold due to decline in sale orders during the current period as compared to the same period prior year.

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

Expenses from Operations

Total expenses, comprised mostly of general and administrative expenses were $199,055 for the three-month period ended June 30, 2009, a decrease of $175,716, compared to $374,771 for the three month period ended June 30, 2008.

Total expenses, comprised mostly of general and administrative expenses were $834,177 for the six-month period ended June 30, 2009, a decrease of $37,798, compared to $871,975 for the six-month period ended June 30, 2008.

Interest Income and Expense

Net interest income for the three months ended June 30, 2009 was $2,227 as compared to net interest income of $1,621 for the three months ended June 30, 2008. This increase is primarily due to the increase in our cash and cash equivalents.

Net interest income for the six months ended June 30, 2009 was $112,926 as compared to net interest income of $7,349 for the six months ended June 30, 2008. This increase is primarily due to interest income recognized during the first quarter of fiscal year 2009 from the maturity of a CD.

Other Expense

Other expense for the three months ended June 30, 2009 was $319,928 as compared to $12,351 for the three months ended June 30, 2008. Other expense for the six months ended June 30, 2009 was $321,054 as compared to $11,310 for the six months ended June 30, 2008. The increase during the current periods was mainly due to accruing the additional charge of $317,565 for the balance due to a related party as discussed in Note 17 - Subsequent event.

Net (Loss) Income

We had net loss of $276,335 for the three months ended June 30, 2009 as compared to net income of $1,403,540 for the three months ended June 30, 2008. We also incurred net loss of $436,085 for the six months ended June 30, 2009 as compared to net income of $2,420,736 for the six months ended June 30, 2008. The losses observed during the current periods were mainly derived from the decreases in net sales and the increase in other expense.

LIQUIDITY AND CAPITAL RESOURCES

Our cash and cash equivalents were $8,274,701 on June 30, 2009. Through the fiscal year ended December 31, 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.

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, 2009, net cash provided by operating activities was $919,587 as compared to $955,101 for the six-month period ended June 30, 2008. Net cash provided from financing activities was $7,124 for the six-month period ended June 30, 2009 as compared to $25,000 for the six-month period ended June 30, 2008.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

Material Commitments

None.

Purchase of Significant Equipment

None.

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