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:        March 31, 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 March 31, 2004 is 119,286,000.

Transitional Small Business Disclosure Format (check one):

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



---



ALPHA SPACECOM, INC.

INDEX TO FORM 10-QSB

September 30, 2003



|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                                                                                                       |  | March 31,
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                                                                                     |  | 1,528,850     
|                                                                                                                  |  |               
|Total Current Liabilities                                                                                         |  | 2,047,859     
|                                                                                                                  |  |               
|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 March 31, 2004 |  | 23            
|Series B convertible, US$0.001 par value;
9,833,331 shares, issued and outstanding as of
March 31, 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 March 31, 2004                                                                                              |  | 119,286       
|Additional paid-in capital                                                                                        |  | 33,040        
|Accumulated deficit (including deficit accumulated                                                                |  |               
|during the development stage of $2,209,011)                                                                       |  | (2,208,883)   
|                                                                                                                  |  |               
|Total Shareholders Deficiency                                                                                    |  | (2,046,908)   
|                                                                                                                  |  |               
|                                                                                                                  |  | 951           
|                                                                                                                  |  |               



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



3





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ALPHA SPACECOM, INC. AND SUBSIDIARIES

(A Development Stage Company)



Consolidated Statements of Operations

Three Months Ended March 31, 2004 and 2003

(Unaudited)



|                                    | 2004     | 2003      | Cumulative During Development Stage
|----------------------------------- | -------- | --------- | -----------------------------------
|                                    |          |           |                                    
|                                    | US$      | US$       | US$                                
|                                    |          |           |                                    
|Income                              | -        | -         | -                                  
|                                    |          |           |                                    
|General and Administrative Expenses | (26,499) | (175,714) | (1,794,115)                        
|                                    |          |           |                                    
|Loss from Operations                | (26,499) | (175,714) | (1,794,115)                        
|                                    |          |           |                                    
|Other income                        |          |           |                                    
|Cost of share exchange              | -        | -         | (415,013)                          
|                                    |          |           |                                    
|Other                               | -        | -         | 116                                
|                                    |          |           |                                    
|Loss Before Income Taxes            | (26,499) | (175,714) | (2,209,012)                        
|                                    |          |           |                                    
|Income Taxes                        | -        | -         | -                                  
|                                    |          |           |                                    
|Net Loss                            | (26,499) | (175,714) | (2,209,012)                        
|                                    |          |           |                                    
|                                    |          |           |                                    
|Loss Per Common Share  Basic       | (0.0002) | (0.002)   |                                    
|                                    |          |           |                                    
|                                    |          |           |                                    
|                                    |          |           |                                    
|                                    |          |           |                                    
|                                    |          |           |                                    





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

Three Months Ended March 31, 2004 and 2003

(Unaudited)





|                                                                            | 2004      | 2003       | Cumulative During Development Stage
|--------------------------------------------------------------------------- | --------- | ---------- | -----------------------------------
|                                                                            |           |            |                                    
|                                                                            | US$       | US$        | US$                                
|                                                                            |           |            |                                    
|Cash Flows from Operating Activities:                                       |           |            |                                    
|Net loss                                                                    | (26,499
) | (175,714
) | (2,209,012
)                       
|Adjustments to reconcile net loss to
net cash used in operating activities: |           |            |                                    
|Costs of share exchange                                                     | -         | -          | 415,013                            
|Loss on disposal                                                            | -         | -          | 2,517                              
|Depreciation and amortization                                               | 449       | 6,037      | 120,970                            
|Allowance for bad debts                                                     | -         | -          | 2,777                              
|Common stock issued in connection
with consulting services                  | -         | -          | 600                                
|Changes in operating assets and liabilities:                                |           |            |                                    
|Decrease in other receivables,                                              |           |            |                                    
|Deposits and prepayments                                                    | 2,071     | 6,888      | 13,068                             
|Increase in other payables and                                              |           |            |                                    
|accrued expenses                                                            | 17,664    | 7,289      | 371,628                            
|                                                                            |           |            |                                    
|Net Cash Used in Operating Activities                                       | (6,315
)  | (155,500
) | (1,282,439
)                       
|                                                                            |           |            |                                    
|Cash Flows from Investing Activities:                                       |           |            |                                    
|Acquisition of plant and equipment                                          | -         | -          | (120,749
)                         
|                                                                            |           |            |                                    
|Cash Flows from Financing Activities:                                       |           |            |                                    
|Advances from related parties                                               | 6,315     | 155,500    | 2,063,280                          
|Repayments to related parties                                               | (2
)      | -          | (713,936
)                         
|Issuance of common stock                                                    | -         | -          | 1,282                              
|Deposits received for issuance of
common stock                              | -         | -          | 53,000                             
|                                                                            |           |            |                                    
|Net Cash Provided by Financing Activities                                   | 6,313     | 155,500    | 1,403,626                          
|                                                                            |           |            |                                    
|Net Increase (Decrease) in Cash                                             | (2
)      | -          | 438                                
|                                                                            |           |            |                                    
|Cash and Cash Equivalents  Beginning                                       | 440       | 6,259      | -                                  
|                                                                            |           |            |                                    
|Cash and Cash Equivalents  Ending                                          | 438       | 6,259      | 438                                
|                                                                            |           |            |                                    
|                                                                            |           |            |                                    
|                                                                            |           |            |                                    



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

Three Months Ended March 31, 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 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, namely the Alphacom System.



6







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ALPHA SPACECOM, INC. AND SUBSIDIARIES

(A Development Stage Company)



Notes to Consolidated Financial Statements (Continued)

(Unaudited)









NOTE 2  ORGANIZATION AND BUSINESS (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 with par value of $1.00 per share.  As of December 31, 2003, 1,000 shares of common stock were issued and outstanding.



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)

(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.



On July 29, 2003, ASC signed a Cooperation Agreement with China Film Group Corporation (CFG) in Beijing whereby Alpha will form a joint venture with CFG (owned 51% by CFG and 49% by Alpha) to reconstruct and upgrade movie theater complexes to digital projection format and implement a home pay-per-view system, both of which will received digitized content via satellite transmission.  Alpha is required to make a $30,000,000 capital contribution to the joint venture.  See Notes 5 and 6.





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 income available 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 March 31, 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)

(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 March 31, 2004, current liabilities exceed current assets by $2,046,908, and total liabilities exceed total assets by the same amount.  In addition, as set forth in Notes 2 and 6 the Company has a capital commitment of $30,000,000.



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  CAPITAL COMMITMENT



At March 31, 2004, capital commitment not provided for in the financial statements amounted to US$30,000,000 representing capital contribution authorized and contracted for investment in a joint venture company in accordance with the Cooperation Agreement referred to in Note 2.



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



On July 29, 2003, the China Film Group Corporation (CFG), the largest film company in China signed a Cooperation Agreement with Alpha Spacecom Company Limited (Alpha). Under the Agreement, Alpha will form a Joint Venture (JV) with CFG that will



a.

Reconstruct and upgrade movie theaters to digital projection format, and

b.

Implement a home pay-per-view system in cooperation with cable television operators.



Both digital cinemas and pay-per-view services will receive digitized content via satellite transmission.  The joint capabilities and resources of Alpha and CFG will usher the entertainment and broadcasting business in China into a new era of advanced digital and satellite technology.



CFG is an operating state-owned company under the sponsorship of the China State Economic and Trade Commission and the State Administration of Radio, Film, and Television (SARFT) with the authorization from the China State Council.



10

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CFG is the market leader in the China media business: film and TV drama creation and production, foreign film imports, domestic and foreign film distribution, joint film production with foreign entities, film advertisement, film development and copy production.  A vertically integrated media company, CFG has high quality film creation and production personnel as well as state-of-the-art filmmaking facilities.



The Demand Side

Chinas rapid transformation into a market economy and continuing GDP growth rate of 7.5-8% have set on course the creation of the largest national consumer market in the world.  The basic needs of food, clothing and shelter having been met, the demand for high-quality entertainment, media as well as cultural products and services is steadily escalating. The 300 million movie viewers of China still await the availability of a larger range of attractive offerings at the 100,000 cinemas China-wide.



The State has gradually liberalized regulations which had limited the production of media content that could effectively compile against imported media content; the State has increased the volume of imported content, including the number of foreign films to 25 per year, in accordance with WTO requirements.  At the same time, the State has sought effective measures against piracy, which has deterred the creation, distribution, and transfer of media content in China.  In this context, the Alpha-CFG joint venture for digital cinema and Satellite Pay-Per-View (SPPV) can serve as a catalyst for change that will transform Chinas entertainment broadcasting and distribution: state-of-the-art anti-piracy technology and a management system that is conductive to protection for intellectual property.



The Supply Side

The supply side of entertainment media shows an oligopoly structure as in other media markets in the world.  Controlled by the State and regulated by SARFT, a few large state-owned companies dominate media content production and broadcasting.  Among these, CFG is by far the largest vertically integrated filmmaker, distributor and retailer in China.  Provincial and municipal operators make up the second and third tiers in China media industries.  CFGs repertoir of entertainment content exceeds the perhaps better internationally known CCTV Group (China Central Television Group).  CFGs asset includes the followings:



·

10,000+ hours of film content (domestic and imports films).

·

Dominant position as importer and distributors of foreign and domestic films.

·

Retail cinema operation which comprises some 100,000+ cinemas China-wide.



The entertainment and broadcasting business in China, considered one of the strategic industries, requires foreign investors to conduct business with qualified China-based partners.  Where broadcasting is the core business, including digital cinemas, present regulations limit foreign ownership in any joint venture to 49% or less.  Obtaining a license for broadcasting has not been easy even for major multinationals such as CNN, Reuters, and the News Corp.  The opportunity to partner with CFG in a joint venture therefore represents an exceptional way to enter the broadcasting business in China.  The joint venture with CFG possesses the competitive advantages:



·

Early mover advantage: the JV will receive the first license of digital cinema granted in China.



11

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·

Exclusive partnership with CFG provides assured access to the largest and most attractive content entertainment bank in China.

·

CFGs close ties with government assure best compliance with government regulations and also assure a position in the emerging oligopoly that will dominate the fast changing media industry in China.



Equity structure



The JV will be owned 51% by CFG and 49% by Alpha.



Capital contribution



CFG is required to contribute a total value of RMB200 million as the capital (RMB140 million in the form of cash, 35 sets of installed digital projection equipments, and digital film management system).



ASC is required to contribute USD30 million ( about RMB250 million) in the form of cash.



Life of the JV



The Agreement will remain valid for thirty (30) years from the date of the formation of the JV.



Business objective



In the first phase, the JV is aimed at converting major cinemas with traditional projection to a digital projection mode.  Digitization will reduce the cost of operations, increase box office receipts by improving the audio and visual effects for attracting higher attendance rates and charging higher ticket prices, and address the piracy issues.  China has more than 100,000 cinemas nationwide.  More than 5,000 are classified as 3-stars or above.  The JV will first digitize 165 from the pool of 5,000 cinemas in the major cities in China.  By mid 2003, CFG has already modernized 35 cinemas in China, though full digital broadcasting via satellite awaits operation of the JV, based on the expertise from Alpha.



JVs business license and rights



The JV will have the following rights and licenses:



a.

The exclusive right for transmitting digitized movies distributed by CFG.

b.

The first license, in all China, for transmitting media programs through satellite grant by SARFT.

c.

The right to operate commercial advertisement at the beginning and break time of the digitized movies.

d.

The right to instruct the cinemas on the ticket price for all digitized movies.

e.

The right to operate value-added programs such as live performances and special events at the digital cinemas.

f.

The right to select cinemas for digitization.



12

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Results of Operations For the Quarter Ended March 31, 2004 Compared to March 31, 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 $26,499 for the quarter ended March 31, 2004 compared to $175,714 for the quarter ended March 31, 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 quarter ended March 31, 2004 was $6,315, which was a $149,185 decrease or 95.9% from the quarter ended March 31, 2003.  The decrease was due to decrease in project development expenses and office rental.  Net cash received from financing activities was $6,313, which was $149,187 less than that received during the same period in 2003.

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.



13

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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 March 31, 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.



14

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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



31.2 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.



15

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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:  May 21, 2004

ALPHASPACECOM, INC.





By: /s/ Terence Sien

Name:   Terence Sien

Title:     Chief Financial Officer





16



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