UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



FORM 10-KSB/A



ANNUAL REPORT UNDER SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934



FOR THE FISCAL YEAR ENDED DECEMBER 31, 2002



0-13628

(Commission file number)



ALPHA SPACECOM, INC.

Exact name of small business issuer as specified in its charter)





|COLORADO(State or other jurisdiction of
incorporation or organization) | 13-3183646(I.R.S. Employer Identification No.)
|---------------------------------------------------------------------- | ----------------------------------------------



Room 1305, 13/F Progress Commercial

Building, 7-17 Irving Street, Causeway Bay,

Hong Kong

(Address of principal executive offices) (Zip Code)



(852) 2972-2772

(Issuer's telephone number)



SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT: NONE



SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:



TITLE OF EACH CLASS

COMMON STOCK, $0.001 PAR VALUE

---

Check whether the issuer: (1) 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 we was required to file such reports), and (2) has been subject to such filing requirements for past 90 days.



|Yes
X | No
|----- | --

Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B is not contained in this form, and no disclosure will be contained to the best of registrants knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-SKB.  [X]

State issuers revenue for its most recent fiscal year  $

0

.

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity as sold, or the average bid and asked price of such common equity, as of a specified date within the past 60 days (See definition of affiliate in Rule 12b-2 of the Exchange Act.). $

3,189,600

.

Note.If determining whether a person is an affiliate will involve an unreasonable effort and expense, the issuer may calculate the aggregate market value of the common equity held by non-affiliates on the basis of reasonable assumptions, if the assumptions are stated.

ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS

DURING THE PAST FIVE YEARS

Check whether the issuer has filed all documents and reports required to be filed by Section 12, 13 or 15 (d) of the Exchange Act after the distribution of securities under a plan confirmed by a court.

|Yes | No
|--- | --

APPLICABLE ONLY TO CORPORATE REGISTRANTS

State the number of share outstanding of each of the issuers classes of common equity, as of the latest practicable date.   As of May 20, 2003 there were 106,101,000 shares of common stock issued and outstanding.

Transitional Small Business Disclosure Format (check one):

|Yes | No
X
|--- | ----



---

ALPHA SPACECOM, INC.
FORM 10-KSB/A
INDEX



PART II



Item 6.

MANAGEMENTS DISCUSSION AND ANALYSIS OF PLAN OF OPERATIONS

Item 7.

FINANCIAL STATEMENTS



SIGNATURES

CERTIFICATIONS

FINANCIAL STATEMENTS



---

PART II



Set forth below is a revised Managements Discussion and Analysis of Plan of Operations which replaces in its entirety the Managements Discussion and Analysis of Plan of Operations  contained in the filing made May 5, 2003.



ITEM 6.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF PLAN OF OPERATIONS.

The following discussion should be read in conjunction with our consolidated financial statements and the notes thereto appearing elsewhere in this Form 10-KSB/A.  Certain statements contained herein that are not related to historical results, including, without limitation, statements regarding our business strategy and objectives, future financial position, expectations about pending litigation and estimated cost savings, are forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended (the Securities Exchange Act) and involve risks and uncertainties.  Although we believe that the assumptions on which these forward-looking statements are based are reasonable, there can be no assurance that such assumptions will prove to be accurate and actual results could differ materially from those discussed in the forward-looking statements.  Factors that could cause or contribute to such differences include, but are not limited to, regulatory policies, competition from other similar businesses, and market and general policies, competition from other similar businesses, and market and general economic factors.  All forward-looking statements contained in this Form 10-KSB/A are qualified in their entity by this statement.

Overview

On December 10, 2001, pursuant to a Share Exchange Agreement, we acquired from Alpha Sky Investment Limited all of Alpha Skys equity interests in both Accuhigh Investments Limited, a British Virgin Islands company, and Tidy Sum Investments Limited, a British Virgin Islands company, in exchange for 10,000,000 shares of our convertible preferred stock which shares of convertible preferred stock are convertible into 900,000,000 shares of our common stock.

Since the Acquisition, we have been engaged in the business of developing a Ka and communication satellite system that will provide broadband telecommunications services to China.  For accounting purposes, the Acquisition was treated as a recapitalization of ASI with ASI as the acquirer.  As such, the financial statements contained herein are those of ASI.

Plan of Operations

We have been negotiating with the Chinese broadcasting authorities for the develop our Satellite-Pay-Per-View (SPPV) transmission business in China for the past two years.  We were close to finalizing the terms of an agreement with the Chinese broadcasting authorities when China joined the WTO in November 2001.  Subsequent to Chinas membership in the WTO, there were significant changes within many of the Chinese governmental agencies, including the broadcasting authority.  As a result of the changes in the broadcasting authority, we had to resubmit our business plan and proposal to the newly organized broadcasting authority.   As a result, there has be a delay in the implementation of our business plan.

Since April 2002, we have been in negotiations with the newly reorganized Chinese broadcasting authority and management believes that it is close to finalizing the terms of an agreement to begin construction of the SPPV network.  Management believes that they are close to reaching a final agreement with the Chinese broadcasting authorities, however, the deadly virus, SARS, outbreak in March 2003, has resulted in significant delays.  Management is confident that once the SARS issue is managed, a final agreement will be reached with the Chinese broadcasting authorities.

The SPPV network will be the first nationwide satellite pay-per-view system in China.  The overall project will be completed in two phases.  Phase one of the project will consist of a digital storage facility for the content that will be available over the SPPV network..  These digitized programs will initially be transmitted to proximately ten million cable TV subscribers in ten to twelve developed cities, including Beijing and Shanghai.  Phase two of the project will be the roll out of the SPPV network to all of China which management believes to be approximately ninety million cable TV subscribers.

The earnings for the year ended 2002 were negative as a result of managements strategy to invest in research and development for the start-up costs associated with the building out of the Companys communication satellite system.  The goal of these expenditures was to begin the development and building-out of a SPPV platform and for the development and construction of the Alphacom System.

Results of Operations For the Period Ended December 31, 2002 Compared to December 31, 2001

Revenues.We are in our development stage and we have not generated any revenues since we began our operations.

Net Loss.Net operating loss increased to $468,870 for the fiscal year ended December 31, 2002 compared to $419,830 for the fiscal year ended December 31, 2001 due to general administrative expenses, expenses related to being a public company and research and development expenses related to the build out of the Alphacom System.

Financial Condition, Liquidity, Capital Resources

Net cash used in operations during the fiscal year ended 2002 was $379,839, which was a $111,896 increase or 42% from the fiscal year ended 2001.  The increase is due to an increase in project development expenses, much of which is related to the resubmission of our proposal to the newly reorganized Chinese broadcasting authority after Chinas entrance into the WTO.  Net cash received from financing activities was $381,686, which was $108,863 more than that received during the same period in 2001.

We will continue to rely upon external financing sources to meet the cash requirements of our ongoing operations.  Management is currently seeking to raise additional funding in the form of equity or debt, or a combination thereof.  However, there is no guarantee that we will raise sufficient capital to execute our business plan.  To the extent that we are unable to raise sufficient capital, our business plan will require substantial modification and our operations will be curtailed.

Our auditors have issued their report, which contains an explanatory paragraph as to our ability to continue as a going concern. We are currently addressing our liquidity requirements by the following actions:

♦

We are considering a smaller facility in Beijing.  We currently lease a 3,300 square foot space and we may be able to conduct our operations in a smaller facility.

♦

We will continue to accept advances from management.

♦

We are considering allowing our employees to tele-commute to reduce cost.

♦

We will continue seeking investment capital through the issuance of both debt and equity securities in private placement to qualified investors.

♦

Once an agreement is finalized with the Chinese broadcasting authority, we are in a position to negotiate with financial institutions for various forms of funding arrangements.

♦

We are considering short term funding through bank borrowing and other means of debt financing.



There is no guarantee that any of these strategies will enable us to meet our obligations for the foreseeable future.

ITEM 7.

FINANCIAL STATEMENTS.

(a)

Financial Statements

The following financial statements are set forth at the end hereof.

1.

Report of Independent Auditors

2.

Consolidated Balance Sheets as of December 31, 2001 and December 31, 2002

3.

Consolidated Statements of Operations for the years ended December 31, 2002 and December 31, 2001

4.

Consolidated Statements of Changes in Stockholders' Equity through December 31, 2002

5.

Consolidated Statements of Cash Flows for the years ended December 31, 2002 and December 31, 2001

6.

Notes to Consolidated Financial Statements

---

SIGNATURES

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



|                  |  | ALPHA SPACECOM, INC.                            
|----------------- |  | ------------------------------------------------
|Date
June 4, 2003 |  | By: /s/ Xuedong Hu                              
|                  |  | Name: Xuedong Hu
Title:  Chief Executive Officer

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



|                  |  |                                                            
|----------------- |  | -----------------------------------------------------------
|Date
June 4, 2003 |  | By: /s/ Brian Brick                                        
|                  |  | Name: Brian Brick
Title:  Director, Chief Operating Officer





|                  |  |                                  
|----------------- |  | ---------------------------------
|Date
June 4, 2003 |  | By: /s/ Fung Sien                
|                  |  | Name:  Fung Sien
Title:  Director





|                  |  |                                  
|----------------- |  | ---------------------------------
|Date
June 4, 2003 |  | By: /s/ Wai Man Yu               
|                  |  | Name: Wai Man Yu
Title:  Director



---

CERTIFICATIONS

I, Xuedong Hu, certify that:

I have reviewed this annual report on Form 10-KSB/A of Alpha Spacecom, Inc.;

Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report.

The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

(a)

designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

(b)

evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the "Evaluation Date"); and

(c)

presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's Board of Directors (or persons performing the equivalent function):

(a)

all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and

(b)

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and

The registrant's other certifying officer and I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

|June 4, 2003 | /s/ Xuedong Hu
Name:  Xuedong Hu
Title:  Chief Executive Officer
|------------ | ----------------------------------------------------------------



---

CERTIFICATIONS

I, Terence Sien, certify that:

1.

I have reviewed this annual report on Form 10-KSB/A of Alpha Spacecom, Inc.;

2.

Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

3.

Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report.

4.

The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

(a)

designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

(b)

evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the "Evaluation Date"); and

(c)

presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5.

The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):

(a)

all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and

(b)

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and

6.

The registrant's other certifying officer and I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.



|June 4, 2003 | /s/ Terence Sien
Name:  Terence Sien
Title:  Chief Financial Officer
|------------ | --------------------------------------------------------------------



---





FINANCIAL STATEMENTS







ALPHA SPACECOM, INC. AND SUBSIDIARIES





DECEMBER 31, 2002









Report of Independent Auditors

Consolidated Balance Sheets as of December 31, 2001 and December 31, 2002

Consolidated Statements of Operations for the years ended December 31, 2002 and December 31, 2001

Consolidated Statements of Changes in Stockholders' Deficiency through December 31, 2002

Consolidated Statements of Cash Flows for the years ended December 31, 2002 and December 31, 2001

Notes to Consolidated Financial Statements

---

INDEPENDENT AUDITORS REPORT



To the Board of Directors and Shareholders

Alpha Spacecom Incorporated and Subsidiaries

Hong Kong



We have audited the accompanying consolidated balance sheets of Alpha Spacecom Incorporated and Subsidiaries (the Company), as of December 31, 2002 and 2001, and the related consolidated statements of operations, shareholders deficiency and cash flows for the years then ended and cumulative during development stage. These consolidated financial statements are the responsibility of the Companys management.  Our responsibility is to express an opinion on these consolidated financial statements based on our audits.



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



In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Alpha Spacecom Incorporated and Subsidiaries, as of December 31, 2002 and 2001 and the results of their operations and their cash flows for the years then ended, and cumulative during development stage in conformity with accounting principles generally accepted in the United States of America.



The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Notes 1 and 2, the Company has been in the development stage since its inception of December 9, 1998. However, the Company has sustained substantial operating losses during development stage.  In addition, the Companys total liabilities exceed total assets by $1,611,272.  In view of these matters, realization of a major portion of the assets is dependent upon the Companys ability to meet its future financing requirements and the success of future operations.  These factors raise substantial doubt about the Companys ability to continue as a going concern.  Managements plans in regards to those matters also are described in Note 2 to the consolidated financial statements.  The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.





/s/ Spear, Safer, Harmon & Co.

Spear, Safer, Harmon & Co.



Miami, Florida

May 6, 2003

---

ALPHA SPACECOM INCORPORATED AND SUBSIDIARIES

(A Development Stage Company)

Consolidated Balance Sheets

December 31, 2002 and 2001





|            | 2002 | 2001
|----------- | ---- | ----
|A S S E T S | US$  | US$ 



|Current Assets:                                                                                                          |              |             
|------------------------------------------------------------------------------------------------------------------------ | ------------ | ------------
|Cash and cash equivalents                                                                                                | 6,259        | 4,412       
|Other receivables, deposits and prepayments                                                                              | 33,169       | 44,995      
|                                                                                                                         |              |             
|Total Current Assets                                                                                                     | 39,428       | 49,407      
|                                                                                                                         |              |             
|Property, plant and equipment, net                                                                                       | 27,544       | 54,944      
|                                                                                                                         |              |             
|                                                                                                                         | 66,972       | 104,351     
|                                                                                                                         |              |             
|LIABILITIES AND
SHAREHOLDERS DEFICIENCY                                                                                 |              |             
|                                                                                                                         |              |             
|Current Liabilities:                                                                                                     |              |             
|Other accounts payable and accrued expenses                                                                              | 301,846      | 252,649     
|Deposits received on subscription to common stock                                                                        | 43,000       | -           
|Advances from related parties                                                                                            | 1,156,669    | 817,983     
|Advances from shareholder                                                                                                | 176,729      | 176,729     
|                                                                                                                         |              |             
|Total Current Liabilities                                                                                                | 1,678,244    | 1,247,361   
|                                                                                                                         |              |             
|Shareholders Deficiency:                                                                                                |              |             
|Preferred stock:  20,000,000 shares authorized:                                                                          |              |             
|Series A 7% cumulative convertible, US $0.001
par value; 23,000 and 25,000 shares issued and                             |              |             
|outstanding in 2002 and 2001, respectively                                                                               | 23           | 25          
|                                                                                                                         |              |             
|Series B convertible, U.S. $0.001 par value;                                                                             |              |             
|9,833,331and 10,011,000 issued and outstanding                                                                           |              |             
|in 2002 and 2001, respectively                                                                                           | 9,833        | 10,011      
|                                                                                                                         |              |             
|Common stock:                                                                                                            |              |             
|US $0.001 par value; 2,000,000,000 shares
authorized (100,000,000 shares as of
December 2001); 99,119,000 and 98,468,000 |              |             
|shares issued and outstanding in 2002 and 2001,
respectively                                                             | 99,119       | 98,468      
|Accumulated deficit (including deficit accumulated                                                                       |              |             
|during the development stage of $1,720,376)                                                                              | (1,720,247
) | (1,251,514
)
|                                                                                                                         |              |             
|Total Shareholders Deficiency                                                                                           | (1,611,272
) | (1,143,010
)
|                                                                                                                         |              |             
|                                                                                                                         | 66,972       | 104,351     
|                                                                                                                         |              |             

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

---

ALPHA SPACECOM INCORPORATED AND SUBSIDIARIES

(A Development Stage Company)



Consolidated Statements of Operations



Years Ended December 31, 2002 and 2001 and Cumulative During Development Stage











| | Cumulative During Development Stage | 2002 | 2001
| | ----------------------------------- | ---- | ----
| | US$                                 | US$  | US$ 



|Income                              | -            | -          | -         
|----------------------------------- | ------------ | ---------- | ----------
|                                    |              |            |           
|General and Administrative Expenses | (1,305,479
) | (468,870
) | (419,830
)
|                                    |              |            |           
|Loss from Operations                | (1,305,479
) | (468,870
) | (419,830
)
|                                    |              |            |           
|Other Income (Expenses):            |              |            |           
|Cost of share exchange              | (415,013
)   | -          | (415,013
)
|Other                               | 116          | 8          | 13        
|                                    |              |            |           
|                                    | (414,897
)   | 8          | (415,000
)
|                                    |              |            |           
|Loss Before Income Taxes            | (1,720,376
) | (468,862
) | (834,830
)
|                                    |              |            |           
|Income Taxes                        | -            | -          | -         
|                                    |              |            |           
|Net Loss                            | (1,720,376
) | (468,862
) | (834,830
)
|                                    |              |            |           
|                                    |              |            |           
|Loss Per Common Share  Basic       |              | .01        | .01       
|                                    |              |            |           
|                                    |              |            |           
|                                    |              |            |           
|                                    |              |            |           
|                                    |              |            |           
|                                    |              |            |           
|                                    |              |            |           



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



---

ALPHA SPACECOM INCORPORATED AND SUBSIDIARIES

(A Development Stage Company)

Consolidated Statements of Shareholders Deficiency

Years Ended December 31, 2002 and 2001







|                                             | Common Stock | Preferred
Stock | Additional
Paid-In Capital | Accumulated Deficit | Total        
|-------------------------------------------- | ------------ | --------------- | -------------------------- | ------------------- | -------------
|                                             | Alpha        | Tridon          | Tridon                     | Alpha               | Tridon       
|                                             | US $         | US $            | US $                       | US $                | US $         
|Balance at December 31, 2000                 | 1,000        | 79,795          | 53                         | 282                 | 12,319,816   
|                                             |              |                 |                            |                     |              
|Issuance of common stock in
connection with: |              |                 |                            |                     |              
|Conversion of preferred stock                | -            | 700             | (17
)                      | -                   | 151,800      
|Payment of dividends on                      |              |                 |                            |                     |              
|preferred stock                              | -            | 3,943           | -                          | -                   | 63,834       
|Repayment of loan from                       |              |                 |                            |                     |              
|Shareholder                                  | -            | 14,030          | -                          | -                   | 631,544      
|Effect of share exchange                     | (1,000
)     | -               | 10,000                     | (282
)              | (13,166,994
)
|Net loss  pre share exchange                | -            | -               | -                          | -                   | -            
|                                             |              |                 |                            |                     |              
|Net loss during the year                     | -            | -               | -                          | -                   | -            
|                                             |              |                 |                            |                     |              
|Balance at December 31, 2001                 | -            | 98,468          | 10,036                     | -                   | -            
|                                             |              |                 |                            |                     |              
|Issuance of common stock                     |              |                 |                            |                     |              
|in connection with:                          |              |                 |                            |                     |              
|Conversion of preferred stock                | -            | 51              | (2
)                       | -                   | -            
|Consulting services                          | -            | 600             | -                          | -                   | -            
|Retirement of preferred stock,               |              |                 |                            |                     |              
|at par value                                 | -            | -               | (178
)                     | -                   | -            
|                                             |              |                 |                            |                     |              
|Net loss during the year                     | -            | -               | -                          | -                   | -            
|                                             |              |                 |                            |                     |              
|Balance at December 31, 2002                 | -            | 99,119          | 9,856                      | -                   | -            
|                                             |              |                 |                            |                     |              
|                                             |              |                 |                            |                     |              



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



---

ALPHA SPACECOM INCORPORATED AND SUBSIDIARIES

(A Development Stage Company)



Consolidated Statements of Cash Flows



Years Ended December 31, 2002 and 2001 and Cumulative During Development Stage









| | Cumulative During Development Stage | 2002 | 2001
| | ----------------------------------- | ---- | ----
| | US$                                 | US$  | US$ 



|Cash Flows  from Operating Activities:                                      |              |            |           
|--------------------------------------------------------------------------- | ------------ | ---------- | ----------
|Net loss                                                                    | (1,720,376
) | (468,862
) | (834,830
)
|Adjustments to reconcile net loss to
net cash used in operating activities: |              |            |           
|Cost of share exchange                                                      | 415,013      | -          | 415,013   
|Depreciation and amortization                                               | 96,456       | 27,400     | 25,273    
|Allowance for bad debts                                                     | 2,777        | -          | 2,777     
|Common stock issued in connection                                           |              |            |           
|with consulting services                                                    | 600          | 600        | -         
|Changes in operating assets and
liabilities:                                |              |            |           
|Increase (decrease) in other                                                |              |            |           
|receivables, deposits and
prepayments                                       | (20,101
)    | 11,826     | (6,616
)  
|Increase in other accounts payable                                          |              |            |           
|and accrued expenses                                                        | 193,865      | 49,197     | 130,440   
|                                                                            |              |            |           
|Net Cash Used in Operating Activities                                       | (1,031,766
) | (379,839
) | (267,943
)
|                                                                            |              |            |           
|Cash Flows from Investing Activities:                                       |              |            |           
|Acquisition of property, plant                                              |              |            |           
|and equipment                                                               | (120,749
)   | -          | (2,244
)  
|                                                                            |              |            |           
|Cash Flows from Financing Activities:                                       |              |            |           
|Advances from related parties                                               | 1,714,065    | 676,098    | 530,480   
|Repayment of advances to related
parties                                    | (599,573
)   | (337,412
) | (257,657
)
|Deposits received on issuance of                                            |              |            |           
|common stock                                                                | 43,000       | 43,000     | -         
|Issuance of common stock                                                    | 1,282        | -          | -         
|                                                                            |              |            |           
|Net Cash Provided by Financing Activities                                   | 1,158,774    | 381,686    | 272,823   
|                                                                            |              |            |           
|Net Increase in Cash and Cash Equivalents                                   | 6,259        | 1,847      | 2,636     
|                                                                            |              |            |           
|Cash and Cash Equivalents  Beginning                                       | -            | 4,412      | 1,776     
|                                                                            |              |            |           
|Cash and Cash Equivalents  Ending                                          | 6,259        | 6,259      | 4,412     
|                                                                            |              |            |           



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

---

ALPHA SPACECOM INCORPORATED AND SUBSIDIARIES

(A Development Stage Company)



Consolidated Statements of Cash Flows (Continued)



Years Ended December 31, 2002 and 2001 and Cumulative During Development Stage









| |  | 2002 | 2001
| |  | ---- | ----
| |  | US$  | US$ 



|Supplementary Disclosures of Cash Flow |  |    |        
|-------------------------------------- |  | -- | -------
|Information:                           |  |    |        
|Non-cash investing and financing       |  |    |        
|activities:                            |  |    |        
|Issuance of common stock upon          |  |    |        
|conversion of preferred stock          |  | -  | 152,483
|Issuance of common stock in            |  |    |        
|connection with payment of             |  |    |        
|dividends on preferred stock           |  | -  | 67,777 
|Common stock issued in connection      |  |    |        
|with repayment of loan from            |  |    |        
|Shareholder                            |  | -  | 645,574
|                                       |  |    |        
|                                       |  |    |        
|Common stock issued in connection      |  |    |        
|with redemption of preferred stock     |  | 51 | -      
|                                       |  |    |        
|                                       |  |    |        
|                                       |  |    |        
|                                       |  |    |        
|                                       |  |    |        



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



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ALPHA SPACECOM INCORPORATED AND SUBSIDIARIES

(A Development Stage Company)



Notes to Consolidated Financial Statements



Years Ended December 31, 2002 and 2001



NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES



Basis of Presentation  The consolidated financial statements include the accounts of Alpha Spacecom Incorporated (formerly known as Tridon Enterprises Incorporated) and its wholly owned subsidiaries Accuhigh Investments Limited, Tidy Sum Investments Limited and Alpha Spacecom Company Limited (collectively the Company).  All significant inter-company accounts and transactions have been eliminated in consolidation.



Organization and Business  Pursuant to a resolution of the Board of Directors dated August 20, 2002, Tridon Enterprises Incorporated changed its name to Alpha Spacecom Incorporated and, in connection therewith, increased the number of shares of common stock authorized from 100,000,000 to 2,000,000,000.



The Company has been in the development stage since formation (December 9, 1998) and primarily through the operations of Alpha Spacecom Company Limited, is engaged in the business of developing a KA band communication satellite system that will provide broadband telecommunications services to the Peoples Republic of China (the PRC) and its neighboring Asia Pacific countries.  Accordingly, the Companys consolidated financial statements are presented as those of a development stage enterprise, as prescribed by Statement of Financial Accounting Standards No. 7, Accounting and Reporting by Development Stage Enterprises.



The Company has incurred cumulative losses through December 31, 2002 of $1,720,376. The Company expects to continue to incur significant operating losses and to generate negative cash flows from operating activities for at least the next couple of years while it continues to develop a KA Band Communication Satellite System. The Companys ability to eliminate operating losses and to generate positive cash flows from operations in the future will depend upon various factors such as: (1) the cost of developing the system, (2) changes in technology, (3) changes in governmental regulations, (4) the level of demand for broadband telecommunications services, (5) the product offering, pricing strategies and other competitive factors of the Companys competitors and (6) general economic conditions.  If the Company is unable to implement its business plan successfully, it may not be able to eliminate operating losses, generate positive cash flow or achieve or sustain profitability which would materially adversely affect its business, operations and financial results as well as its ability to raise capital through either debt or equity offerings.



Alpha Spacecom Company Limited has signed a memorandum of understanding with China Broadcasting Film Television Satellite Company (CBSat), a division of Chinas State Administration of Radio, Film and Television (SARFT) to develop, construct, launch, maintain and operate KA band satellites for distribution of news, sports, entertainment and Satellite Pay Per View (SPPV) services in the PRC. Alpha Spacecom Company Limited has also signed a memorandum of understanding with Lockheed Martin Commercial Space Systems (LMCSS) whereby LMCSS will provide design, supply, installation and integration of the ground network and satellites, referred to as the Alphacom System.



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NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)



Alpha Sky Investment Limited (Alpha Sky) was incorporated on August 19, 1998 in the British Virgin Islands with authorized share capital of 50,000 shares of common stock and par value of US $1.00 per share.  As of December 31, 2002 and 2001, 1,000 shares of common stock were issued and outstanding.



Accuhigh Investments Limited (Accuhigh), a British Virgin Island Company, was incorporated on June 12, 2001. It was incorporated with authorized share capital of 50,000 shares of common stock and par value of US $1.00 per share.  As of December 31, 2002 and 2001, one share of common stock was issued and outstanding.



Tidy Sum Investments Limited, a British Virgin Islands Company (Tidy), was incorporated on June 22, 2001 with authorized share capital of 50,000 shares of common stock; par value of US $1.00 per share. As of December 31, 2002 and 2001, one share of common stock was issued and outstanding.



Alpha Spacecom Company Limited (ASC, the operating company) was incorporated in Hong Kong on December 9, 1998, with authorized share capital of 10,000 shares of common stock with par value of HK $1.00 per share.  As of December 31, 2002 and 2001, two shares of common stock were issued and outstanding.



On July 10, 2001, Accuhigh acquired 100% of the shares of ASC, accounted for under the purchase method without any resultant goodwill.  In connection therewith, 1% of the outstanding common shares of ASC was held by Tidy Sum Investment Limited in trust for Accuhigh.



Cash and Cash Equivalents  Cash and cash equivalents include cash on hand and deposits with banks with an original maturity of three months or less.



Property, Plant and Equipment  Property, plant and equipment are stated at cost.



Depreciation is calculated on a straight-line basis to write-off the cost of each asset over its estimated useful life, usually five years.  Leasehold improvements are amortized over their respective lives or the life of the lease, whichever is shorter.



Translation of Foreign Currencies  ASCs assets and liabilities are generally translated into U.S. dollars at year end exchange rates, and revenues and expenses are translated at average exchange rates during the year.  Resulting translation adjustments are reflected as a separate component of shareholders deficiency.  Foreign currency transaction gains and losses are included in consolidated operations.



Income Taxes  Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases.  Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.



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NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)



Loss Per Common Share - Basic  Loss per common share  basic (EPS) is computed by dividing income available to common shareholders by the weighted-average number of common shares outstanding for the period.  Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock.  For the years ending December 31, 2002 and 2001, the diluted share base excludes incremental shares relating to convertible preferred stock since their effect was anti-dilutive.  The weighted-average number of common shares outstanding for computing EPS was approximately 99,000,000 and 98,000,000, respectively.



Research and Development  Research and Development costs are charged to operations when incurred.  The amounts charged to expense were $300,000 in 2002 (none for 2001).



Use of Estimates  The preparation of 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 financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.



Reclassifications  Certain amounts in the 2001 consolidated financial statements have been reclassified for comparative purposes to conform with the presentation in the 2002 consolidated financial statements.



Comprehensive Income  The Company adopted SFAS No. 130, Reporting Comprehensive Income, at inception.  SFAS No. 130 establishes standards for the reporting and display of comprehensive income, its components and accumulated balances in a full set of general purpose financial statements.  SFAS No. 130 defines comprehensive income to include all changes in equity except those resulting from investment by owners and distributions to owners.  Among other disclosures SFAS No. 130 requires that all items that are required to be recognized under current accounting standards as components of comprehensive income be reported in financial statements that is presented with the same prominence as other financial statements.  The Company currently does not have any comprehensive income.



Risk Consideration  As a majority of the Companys operations are conducted in the PRC, the Company is subject to special considerations and significant risks not typically associated with investments in equity securities of North American and Western European companies.  The Companys operations may be adversely affected by significant political, economic and social uncertainties in the PRC.  Although the PRC government has been pursuing economic reform policies for the past several years, no assurance can be given that the PRC government will continue to pursue such policies or that such policies may not be significantly altered, especially in the event of a change in leadership, social or political disruption or unforeseen circumstances affecting the PRCs political, economic and social life.  There is also no guarantee that the PRC governments pursuit of economic reforms will be consistent or effective.



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NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)



The Company expects that in the future substantially all of its revenues will be denominated in Renminbi (RMB).  A portion of such revenues will need to be converted into other currencies to meet foreign currency obligations such as the payment of any dividends declared.  Both the conversion of RMB into foreign currencies and the remittance of foreign currencies abroad require PRC government approval.  No assurance can be given that the operating subsidiaries within the Company will continue to be able to convert sufficient amounts of foreign currencies in the PRCs foreign exchange markets in the future for payment of dividends.



Recently Issued Accounting Pronouncements  In January 2003, the Financial Accounting Standards Board ("FASB") issued SFAS Interpretation No. 46, Consolidation of Variable Interest Entities ("FIN 46"), which changes the criteria by which one company includes another entity in its consolidated financial statements. FIN 46 requires a variable interest entity ("VIE") to be consolidated by a company if that company is subject to a majority of the risk of loss from the variable interest entity's activities or entitled to receive a majority of the entity's residual returns or both. The consolidation requirements of FIN 46 apply immediately to VIE's created after January 31, 2003, and apply in the first fiscal period beginning after June 15, 2003, for VIE's created prior to February 1, 2003. As the Company does not currently have an interest in a VIE, management does not expect that the adoption of FIN 46 will have a significant immediate impact on the financial condition or results of operations of the Company.



In November 2002, the FASB issued SFAS Interpretation No. 45 ("FIN 45"), Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees and Indebtedness of Others. FIN 45 elaborates on the disclosures to be made by the guarantor in its interim and annual financial statements about its obligations under certain guarantees that it has issued. It also requires that a guarantor recognize, at the inception of a guarantee, a liability for the fair value of the obligation undertaken in issuing the guarantee. The initial recognition and measurement provisions of this interpretation are applicable on a prospective basis to guarantees issued or modified after December 31, 2002, while the provisions of the disclosure requirements are effective for financial statements of interim or annual reports ending after December 15, 2002. The Company is currently evaluating the recognition provisions of FIN 45, but does not expect that the adoption of FIN 45 will have a significant immediate impact on the financial condition or results of operations of the Company, as the Company has made no guarantees.



In July 2001, the FASB issued SFAS No. 141, Business Combinations, and SFAS No. 142, Goodwill and Other Intangible Assets.  SFAS No. 141 requires that the purchase method of accounting be used for all business combinations initiated after June 30, 2001.  Use of the pooling-of-interests method is prohibited after that date.  SFAS No. 142 changes the accounting for goodwill and intangible assets with indefinite lives from an amortization method to an impairment-only approach and requires intangible assets with finite lives to be amortized over their useful lives. Thus, amortization of goodwill and intangible assets with indefinite lives will cease upon adoption of the statement.  SFAS No. 142 was required to be applied by the Company on January 1, 2002.  The Company determined that adoption of these pronouncements did not have an impact on the Companys financial position or results of operations.



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NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)



In August 2001, the FASB issued SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, which addresses accounting and financial reporting for the impairment or disposal of long-lived assets. This statement was effective for the Company on January 1, 2002.  The Company determined that adoption of this pronouncement did not have an impact on the Companys financial position or results of operations.



In April 2002, the FASB issued Statement No. 145 Rescission of FASB Statements No. 4, 44, and 62, Amendment of FASB Statement No. 13, and Technical Corrections (SFAS 145). SFAS 145 will require gains and losses on extinguishments of debt to be classified as income or loss from continuing operations rather than as extraordinary items as previously required under Statement of Financial Accounting Standards No. 4 (SFAS 4).  Extraordinary treatment will be required for certain extinguishments as provided in APB Opinion No. 30. SFAS 145 also amends Statement of Financial Accounting Standards No. 13 to require certain modifications to capital leases be treated as a sale-leaseback and modifies the accounting for sub-leases when the original lessee remains a secondary obligor (or guarantor).  SFAS 145 is effective for financial statements issued after May 15, 2002, and with respect to the impact of the reporting requirements of changes made to SFAS 4 for fiscal years beginning after May 15, 2002. The adoption of the applicable provisions of SFAS 145 did not have an effect on the Companys consolidated financial statements.



In June 2002, the FASB issued Statement No. 146, Accounting for Costs Associated with Exit or Disposal Activities. SFAS 146 nullifies Emerging Issues Task Force Issue No. 94-3 Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring).  SFAS 146 applies to costs associated with an exit activity that does not involve an entity newly acquired in a business combination or with a disposal activity covered by SFAS 144.  SFAS 146 is effective for exit or disposal activities that are initiated after December 31, 2002, with earlier application encouraged. The Company is currently reviewing SFAS 146 and intends to implement it no later than January 1, 2003.





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NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)



In October 2002, the FASB issued Statement No. 147 Acquisitions of Certain Financial Institutions  an amendment of FASB Statements No. 72 and 144 and FASB Interpretation No. 9 (SFAS 147).  SFAS 147 removes acquisitions of financial institutions from the scope of both Statement 72 and Interpretation 9 and requires that those transactions be accounted for in accordance with FASB Statements No. 141, Business Combinations, and No. 142, Goodwill and Other Intangible Assets. Thus, the requirement in paragraph 5 of Statement 72 to recognize (and subsequently amortize) any excess of the fair value of liabilities assumed over the fair value of tangible and identifiable intangible assets acquired as an unidentifiable intangible asset no longer applies to acquisitions within the scope of this Statement. In addition, this Statement amends FASB Statement No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, to include in its scope long-term customer-relationship intangible assets of financial institutions such as depositor- and borrower-relationship intangible assets and credit cardholder intangible assets. Consequently, those intangible assets are subject to the same undiscounted cash flow recoverability test and impairment loss recognition and measurement provisions that Statement 144 requires for other long-lived assets that are held and used.  SFAS 147 is effective October 1, 2002.  The adoption of the applicable provisions of SFAS 147 did not have an effect on the Companys consolidated financial statements.



In December 2002, the FASB issued Statement No. 148 Accounting for Stock-Based Compensation  Transition and Disclosure  an amendment of FASB Statement No. 123 (SFAS 148).  SFAS 148 provides alternate methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation.  In addition, this Statement amends the disclosure requirements of Statement 123 to require prominent disclosures in both annual and interim financial statements about the method of accounting for stock-based employee compensation and the effect of the method used on reporting results.  SFAS 148 is effective for fiscal years beginning after December 15, 2003.  The Company is currently reviewing SFAS 148.





NOTE 2  GOING CONCERN



The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplates continuation of the Company as a going concern.  However, the Company has sustained substantial operating losses in recent years and, additionally, the Company has used substantial amounts of working capital in its operations.  Further, at December 31, 2002, current liabilities exceed current assets by $1,638,816, and total liabilities exceed total assets by $1,611,272.



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NOTE 2  GOING CONCERN (Continued)



In view of these matters, realization of a major portion of the assets in the accompanying consolidated balance sheet as of December 31, 2002, is dependent upon continued operations of the Company, which in turn is dependent upon the Companys ability to meet its financing requirements and the success of its future operations.



Management believes that it has the ability to improve its cash position through financing activities, including possible private or public offerings of stock.  However, the uncertainty of a sustained financing and cash management program and continued losses from operations raise substantial doubt about the ability of the Company to continue as a going concern.





NOTE 3  SHARE EXCHANGE



Alpha Sky entered into a Share Exchange Agreement dated December 10, 2001 to effectuate an exchange of shares with Alpha Spacecom Incorporated (Alpha) (formerly known as Tridon Enterprises Incorporated (Tridon)) (the Registrant). Pursuant to the terms of the share exchange agreement, Alpha acquired from Alpha Sky all of its equity interest in Accuhigh Investments Limited and Tidy Sum Investments Limited in exchange for 10,000,000 shares of convertible preferred stock convertible into 900,000,000 shares of common stock of Alpha. The transaction resulted in Alpha Sky obtaining a majority voting interest in Alpha and Alpha Spacecom was treated as the acquired entity.  For accounting purposes, the transaction has been treated as an acquisition and re-capitalization of Alpha Spacecom with Alpha assuming approximately US $415,000 of liabilities in excess of net assets acquired which are presented as cost of share exchange in the accompany consolidated statement of operations.  The historical financial statements prior to December 10, 2001 are those of Alpha Sky.



In connection with the share exchange, Xuedong Hu, Fung Sien and Wai Man Yu, officers of Alpha Sky, were appointed as members of the board of directors.  Brian Brick resigned from the position of chief executive officer of Tridon.  The directors then elected Xuedong Hu as the chairman of the board and executive officer and appointed Mr. Brick as the chief operating officer of the Company.



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NOTE 4  PROPERTY, PLANT AND EQUIPMENT



Property, plant and equipment as of December 31, consist of the following:



| | 2002 | 2001
| | ---- | ----
| | US$  | US$ 



|At Cost:                      |         |        
|----------------------------- | ------- | -------
|Leasehold improvements        | 79,692  | 79,692 
|Computer equipment            | 22,031  | 22,031 
|Office equipment              | 16,305  | 16,305 
|Furniture and fixtures        | 2,721   | 20,714 
|                              |         |        
|                              | 120,749 | 138,742
|Less accumulated depreciation |         |        
|and amortization              | 93,205  | 83,798 
|                              |         |        
|                              | 27,544  | 54,944 
|                              |         |        



Depreciation expense as of December 31, 2002 and 2001 was $27,400 and $25,273, respectively.







NOTE 5  INCOME TAXES



The Company is subject to income taxes on an entity basis on income arising in or derived from the tax jurisdiction in which each entity is domiciled.



Under the current laws of the British Virgin Islands (the BVI), dividends and capital gains arising from the Companys investments in the BVI are not subject to income taxes and no withholding tax is imposed on payments of dividends to the Company.



Companies doing business and deriving income in Hong Kong are subject to Hong Kong profits tax at 16%.  In the future, the Companys subsidiary, ASC, may be subject to income taxes arising from operations.  The applicable income tax rate in the PRC is 33% (30% income tax and 3% local income tax).



No income taxes have been provided for ASC as it has incurred losses since the date of inception.



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NOTE 6  RELATED PARTY TRANSACTIONS



The balances with related parties as of December 31, are as follows:



| | 2002 | 2001
| | ---- | ----
| | US$  | US$ 



|Advances from related parties:       |           |        
|------------------------------------ | --------- | -------
|Directors                            | 997,596   | 658,910
|Shareholder of Alpha                 | 119,673   | 119,673
|Vertex Marketing                     | 39,400    | 39,400 
|                                     |           |        
|                                     | 1,156,669 | 817,983
|                                     |           |        
|Advances from a shareholder of Alpha | 176,729   | 176,729
|                                     |           |        



All balances with related parties are unsecured, interest free and payable on demand, except for advances from a shareholder of Alpha which are unsecured and bear interest at 9.5% per annum.





NOTE 7  LEASE COMMITMENTS



The Company leases land and buildings under various non-cancelable contracts through 2003.



Future minimum lease payments are as follows:



|     | US $    | 
|---- | ------- | 
|     |         | 
|2003 | $
3,333 | 
|     |         | 



Rental expenses for each of the years ended December 31, 2002 and 2001 were US $94,265 and US $95,456, respectively.