U.S. SECURITIES EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-QSB

(X)

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

(   )

TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For Quarter Ended June 30, 2004



Commission File Number:          0-13628

ALPHA SPACECOM, INC.

(Exact name of Registrant 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 including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to filing requirements for the past 90 days.



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



The number of shares of Common Stock, par value $0.001 per share, outstanding as of June 30, 2004 is 119,286,000.

Transitional Small Business Disclosure Format (check one):

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

---

ALPHA SPACECOM, INC.

INDEX TO FORM 10-QSB

June 30, 2004



|PART I.  Financial Information |                                                                                     
|------------------------------ | ------------------------------------------------------------------------------------
|                               |                                                                                     
|Item 1                         | Financial Statements (Unaudited)                                                    
|                               | Consolidated Balance Sheets                                                         
|                               | Consolidated Statements of Operations                                               
|                               | Consolidated Statements of Cash Flows                                               
|                               | Notes to Consolidated Financial Statements                                          
|                               |                                                                                     
|Item 2.                        | Managements Discussion and Analysis of Financial Condition and Results of Operation
|                               |                                                                                     
|Item 3.                        | Controls & Procedures                                                               
|PART II.  Other Information   
|                               |                                                                                     
|Item 1.                        | Legal Proceedings                                                                   
|Item 2.                        | Changes in Securities and Use of Proceeds                                           
|Item 3.                        | Defaults Upon Senior Securities                                                     
|Item 4.                        | Submission of Matters to a Vote of Security Holders                                 
|Item 5.                        | Other Information                                                                   
|Item 6.                        | Exhibits and Reports on Form 8-K                                                    
|                               | Signatures                                                                          







2

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PART I   FINANCIAL INFORMATION



Item 1    Financial Statements



ALPHA SPACECOM, INC. AND SUBSIDIARIES

(A Development Stage Company)



Consolidated Balance Sheets

(Unaudited)



|A S S E T S                                                                                                     |  | June 30,
2004
|--------------------------------------------------------------------------------------------------------------- |  | -------------
|                                                                                                                |  |              
|                                                                                                                |  | US$          
|                                                                                                                |  |              
|Current Assets:                                                                                                 |  |              
|Cash and cash equivalents                                                                                       |  | 438          
|Other receivables, deposits and prepayments                                                                     |  | -            
|                                                                                                                |  |              
|Total Current Assets                                                                                            |  | 438          
|                                                                                                                |  |              
|Property, plant and equipment, net                                                                              |  | 513          
|                                                                                                                |  |              
|                                                                                                                |  | 951          
|                                                                                                                |  |              
|LIABILITIES AND
SHAREHOLDERS DEFICIENCY                                                                        |  |              
|                                                                                                                |  |              
|Current Liabilities:                                                                                            |  |              
|Other accounts payable and accrued expenses                                                                     |  | 519,009      
|Deposit received on issue of stock                                                                              |  | 0            
|Advances from related parties                                                                                   |  | 1,398,121    
|Advance from shareholders                                                                                       |  | 176,729      
|Total Current Liabilities                                                                                       |  | 2,093,859    
|                                                                                                                |  |              
|Shareholders Deficiency:
Preferred stock: 20,000,000 shares authorized                                         |  |              
|Series A 7% cumulative convertible, par value
US$0.001; 23,000 shares issued and outstanding
as of June30, 2004 |  | 23           
|Series B convertible, US$0.001 par value;
9,833,331 shares, issued and outstanding as of
June 30, 2004          |  | 9,626        
|Common stock:                                                                                                   |  |              
|Par value US$0.001; 2,000,000,000 shares authorized;                                                            |  |              
|119,286,000 shares issued and outstanding                                                                       |  |              
|as of June 30, 2004                                                                                             |  | 119,286      
|Additional paid-in capital                                                                                      |  | 33,040       
|Accumulated deficit                                                                                             |  | (2,254,883)  
|                                                                                                                |  |              
|Total Shareholders Deficiency                                                                                  |  | (2,092,908)  
|                                                                                                                |  |              
|                                                                                                                |  | 951          



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



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ALPHA SPACECOM, INC. AND SUBSIDIARIES

(A Development Stage Company)



Consolidated Statements of Operations

(Unaudited)



Six Months Ended June 30, 2004 and 2003







|                                    |                                     | Three months ended
June 30 | Six months ended
June 30
|----------------------------------- | ----------------------------------- | -------------------------- | ------------------------
|                                    | Cumulative During Development Stage | 2004                       | 2003                    
|                                    | US$                                 | US$                        | US$                     
|                                    |                                     |                            |                         
|Income                              | -                                   | -                          | -                       
|                                    |                                     |                            |                         
|General and administrative
expenses | (1,840,115)                         | (46,000)                   | (68,539)                
|                                    |                                     |                            |                         
|Loss from operation                 | (1,840115)                          | (46,000)                   | (68,539)                
|                                    |                                     |                            |                         
|Other income                        |                                     |                            |                         
|                                    |                                     |                            |                         
|Cost of share exchange              | (415,013)                           | -                          | -                       
|                                    |                                     |                            |                         
|Other                               | 116                                 | -                          | -                       
|                                    |                                     |                            |                         
|Loss Before
Income Taxes            | (2,255,012)                         | (46,000)                   | (68,539)                
|                                    |                                     |                            |                         
|Income Taxes                        | -                                   | -                          | -                       
|                                    |                                     |                            |                         
|Net Loss                            | (2,255,012)                         | (46,000)                   | (68,539)                
|                                    |                                     |                            |                         
|Loss Per Common
Share - Basic       |                                     | (0.001)*                   | (0.001)*                







* - Below $0.001 per share







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



4



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ALPHA SPACECOM, INC. AND SUBSIDIARIES

(A Development Stage Company)



Consolidated Statements of Cash Flows

(Unaudited)



Six Months Ended June 30, 2004 and 2003





| |  | 2004 | 2003
| |  | ---- | ----



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



|Cash Flows from Operating Activities:                                       |             |          |          
|--------------------------------------------------------------------------- | ----------- | -------- | ---------
|Net loss                                                                    | (2,254,883) | (72,499) | (244,253)
|Adjustments to reconcile net loss to
net cash used in operating activities: |             |          |          
|Costs of share exchange                                                     | 107,093     | -        | -        
|Loss on disposal                                                            | 2,517       |          |          
|Depreciation and amortization                                               | 117,719     | 449      | 12,075   
|Allowance for bad debts                                                     | 2,777       | -        | -        
|Common stock issued in connection
with consulting services                  | 600         | -        | -        
|Changes in operating assets and liabilities:                                |             |          |          
|(Increase)/decrease in other receivables,                                   |             |          |          
|Deposits and prepayments                                                    | 0           | 2,071    | 6,888    
|Increase in other payables and                                              |             |          |          
|accrued expenses                                                            | 519,009     | 17,664   | 21,586   
|                                                                            |             |          |          
|Net Cash Used in Operating Activities                                       | (1,505,168) | (52,315) | (203,704)
|                                                                            |             |          |          
|Cash Flows from Investing Activities:                                       |             |          |          
|Acquisition of plant and equipment                                          | (120,749)   | -        | -        
|                                                                            |             |          |          
|Cash Flows from Financing Activities:                                       |             |          |          
|Increase in advances from related parties                                   | 2,286,011   | 52,315   | 203,403  
|Repayments to related parties                                               | (713,938)   | (2)      | -        
|Issuance of common stock                                                    | 54,282      | -        | -        
|                                                                            |             |          |          
|Net Cash Provided by Financing Activities                                   | 1,626,355   | 52,313   | 203,403  
|                                                                            |             |          |          
|Net Increase/(Decrease) in Cash                                             | 438         | (2)      | (301)    
|                                                                            |             |          |          
|Cash and Cash Equivalents  Beginning                                       | -           | 440      | 6,259    
|                                                                            |             |          |          
|Cash and Cash Equivalents  Ending                                          | $438        | $438     | $5,958   
|                                                                            |             |          |          
|                                                                            |             |          |          



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



5

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ALPHA SPACECOM, INC. AND SUBSIDIARIES

(A Development Stage Company)



Notes to Consolidated Financial Statements

Six Months Ended June 30, 2004 and 2003

(Unaudited)



NOTE 1  BASIS OF PRESENTATION



The consolidated financial statements include the accounts of Alpha Spacecom, Inc. 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.



The accompanying unaudited consolidated financial statements, which are for interim periods, do not include all disclosures provided in the annual consolidated financial statements.  These unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and the footnotes thereto contained in the Annual Report on Form 10-KSB for the year ended December 31, 2003 of Alpha Spacecom, Inc. and Subsidiaries, as filed with the Securities and Exchange Commission.



In the opinion of the Company, the accompanying unaudited consolidated financial statements contain all adjustments (which are of a normal recurring nature) necessary for a fair presentation of the financial statements.  The results for interim periods are not necessarily indicative of results to be expected for the complete fiscal year.





NOTE 2  ORGANIZATION AND BUSINESS



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.



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 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 with par value of $1.00 per share.  As of December 31, 2003, 1,000 shares of common stock were issued and outstanding.









6



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ALPHA SPACECOM, INC. AND SUBSIDIARIES

(A Development Stage Company)



Notes to Consolidated Financial Statements (Continued)

Six Months Ended June 30, 2004 and 2003

(Unaudited)







NOTE 2  ORGANIZATION AND BUSINESS (Continued)





Accuhigh Investments Limited (Accuhigh), a British Virgin Islands Company, was incorporated on June 12, 2001. It was incorporated with authorized share capital of 50,000 shares of common stock with a par value of US$1.00 per share.  As of December 31, 2003, 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, 2003, 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, one share of common stock was 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 then outstanding common shares was held by Tidy Sum Investment Limited in trust for the Accuhigh.



Alpha Sky entered into a Share Exchange Agreement dated December 10, 2001 to effectuate an exchange of shares with Alpha (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.  Brain 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.



7

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ALPHA SPACECOM, INC. AND SUBSIDIARIES

(A Development Stage Company)



Notes to Consolidated Financial Statements (Continued)

Six Months Ended June 30, 2004 and 2003

(Unaudited)



NOTE 2  ORGANIZATION AND BUSINESS (Continued)



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.



ASC 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.



On April 1, 2003, Wai Man Yu resigned from the Board and Jian Wang replaced the vacancy effective from May 26, 2003.



As of July 28, 2004 the Cooperation Agreement with China Film Group Corporation which was executed on July 28, 2003, expired.  See Note 7, Subsequent Event.



NOTE 3  TRANSLATION OF FOREIGN CURRENCIES



ASCs Assets and Liabilities are generally translated into U.S. Dollars at current exchange rates, and revenues and expenses are translated at average exchange rates for the year.  Resulting translation adjustments are reflected as a separate component of shareholders equity.  Foreign currency transaction gains and losses are included in consolidated operations.





NOTE 4  LOSS PER COMMON SHARE  BASIC



Loss per common share  basic (EPS) is computed by dividing the loss applicable to common stockholders 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.  As of June 30, 2004 and 2003, 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 119,286,000 and 103,800,000 respectively.



8

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ALPHA SPACECOM, INC. AND SUBSIDIARIES

(A Development Stage Company)



Notes to Consolidated Financial Statements (Continued)

Six Months Ended June 30, 2004 and 2003

(Unaudited)



NOTE 5  GOING CONCERN



The accompanying consolidated financial statements have been prepared in conformity with generally accepted accounting principles, 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 June 30, 2004, current liabilities exceed current assets by $2,107,833, and total liabilities exceed total assets by 2,107,320.



In view of these matters, the Companys continued existence is dependent upon the Companys ability to meet its financing requirements.



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 6 

RELATED PARTY TRANSACTIONS



The balances with related parties as of June 30, 2004 are as follows:



Directors

1,278,448

Shareholder of Alpha

119,673

$1,398,121





NOTE 7  SUBSEQUENT EVENT



The Company, through its subsidiary, Alpha Spacecom Company Limited (the Hong Kong company), had executed a cooperation agreement with China Film Group Corporation (see the last paragraph of Note 2 Organization and Business).  That agreement expired on July 28, 2004.  Alpha Spacecom Company Limited has been administratively dissolved in its jurisdiction.



Alpha Spacecom, Inc., a Colorado corporation, is in direct negotiations with China Film Group Corporation and is finalizing the formation of a joint venture for motion picture theater digital reconstruction and satellite digital cinema distribution throughout the Peoples Republic of China. The Joint Venture is expected to begin its business on or before September 6, 2004.  There can be no guarantee that the joint venture will be consummated and/or the September 6 commencement date met.









9

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ITEM 2.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 therewith. 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 believes 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-QSB 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



The Company,. through its subsidiary, Alpha Spacecom Company Limited (the Hong Kong company), had executed a cooperation agreement with China Film Group Corporation (see the last paragraph of Note 2 Organization and Business).  That agreement expired on July 28, 2004.  As of June 2004, Alpha Spacecom Company Limited has been administratively dissolved in its jurisdiction and is no longer authorized to conduct business.  At this time the Company will not pursue a new license from the Hong Kong government.  Management has determined that the administrative dissolution of Alpha Spacecom Company Limited will not have a material affect on the implementation of its business plan.



Alpha Spacecom, Inc., a Colorado corporation, is in direct negotiations with China Film Group Corporation and is finalizing the formation of a joint venture for motion picture theater digital reconstruction and satellite digital cinema distribution throughout the Peoples Republic of China. The Joint Venture is expected to begin its business on or before September 6, 2004.  There can be no guarantee that the joint venture will be consummated and/or the September 6 commencement date met.

10

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Results of Operations for the Six Months Ended June 30, 2004 Compared to the Six Months Ended June 30, 2003

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

Net Loss.Net operating loss decreased to $72,499 for the six months ended June 30, 2004 compared to $244,253 for the six months ended June 30, 2003 due to the managements imposition of tight control on general administrative expenses.

Results of Operations for the Quarter Ended June 30, 2004 Compared to June 30, 2003

Net Loss.Net operating loss decreased to $46,000 for the quarter ended June 30, 2004 compared to $68,539 for the quarter ended June 30, 2003 due to the managements imposition of tight control on general administrative expenses.

Financial Condition, Liquidity, Capital Resources

Net cash used in operations during the six months ended June 30, 2004 was $52,315, which was a $151,389 decrease or 74.3% from the six months ended June 30, 2003.  The decrease was due to decrease in project development expenses and office rental.

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 have closed the office in Beijing that was being used for the last few years, and will 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.

·

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.





11

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ITEM 3. CONTROLS AND PROCEDURES

(a)

Evaluation of Disclosure Controls and Procedures

Disclosure Controls and procedures are designed to ensure that information required to be disclosed in the reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SECs rules and forms.  Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the reports filed under the Exchange Act is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

As of June 30, 2004, the Company carried out an evaluation, under the supervision and with the participation of the Companys management, including the Companys Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Companys disclosure controls and procedures.  Based upon and as of the date of that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Companys disclosure controls and procedures are effective to ensure that the information required to be disclosed in the reports the Company files and submits under the exchange act is recorded, processed, summarized and reported as and when required.

(b)

Changes in Internal Controls

There were no changes in the Companys internal records or in other factors that could have significantly affected those controls subsequent to the date of the Companys most recent evaluation.



12

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PART II.  OTHER INFORMATION



Item 1.   Legal Proceedings



None.





Item 2.   Changes in 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:



31.1 Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002



32.1 Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002



(b)   Reports on Form 8-K:



None.



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SIGNATURES

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



Dated:  August 19, 2004

ALPHASPACECOM, INC.





By: /s/ Terence Sien

Name:   Terence Sien

Title:     Chief Financial Officer





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