**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


Washington,
      D.C. 20549




**Form
      10-Q**





(Mark
      One)





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





For
      the
      quarterly period ended **September
      30, 2007**





o
            TRANSITION
                REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE
                ACT





For
      the
      transition period from ________________ to __ ____________





Commission
      file number: **0-13628**





**BEICANG
                IRON & STEEL, INC.**(Exact
                name of registrant as specified in it
                charter)








**Nevada**
            
            **13-3183646**(State or other jurisdiction of incorporation ororganization)
            
            (IRS Employer IdentificationNo.)





**8/F Beicang Building, 76 Jianshe North Road, Taiyuan City,**
              **Shanxi Province, People’s Republic of China 030013**(Address
                of principal executive offices)





**0086-351-4656727**(issuer’s
                telephone number)





(Former
                name, former address and former fiscal year, if changed since last
                report)





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 such shorter period
      that
      the issuer was required to file such reports), and (2) has been subject to
      such
      filing requirements for the past 90 days. Yes x No o





Indicate
      by check mark whether the registrant is a large accelerated filer, an
      accelerated filer, or a non-accelerated filer.





Large
                accelerated filer o
            Accelerated
                filer o
            Non-accelerated
                filer x





The
      registrant is a shell company (Check one): Yes o No x





**APPLICABLE
      ONLY TO CORPORATE ISSUERS**





State
      the
      number of shares outstanding of each of the issuer’s classes of common stock, as
      of the latest practicable date: As of November 14, 2007, the issuer had
      999,066,260 shares of common stock, $.001 par value, outstanding.











**INDEX**





**Page****PART
                I - FINANCIAL INFORMATION****Item
                1.**
            **Financial
                Statements.**Unaudited
                Consolidated Financial StatementsFor
                the Three Months and Nine Months ended September 30, 2007 and
                2006Consolidated
                Balance Sheets
            2-3Consolidated
                Statements of Operations
            4Consolidated
                Statements of Changes in Stockholders' Equity
            5Consolidated
                Statements of Cash Flows
            6Notes
                to Consolidated Financial Statements
            7**Item
                2.**
            **Management’s
                Discussion and Analysis of Financial Condition and Results of
                Operation.**
            26**Item
                3.**
            **Quantitative
                and Qualitative Disclosures About Market Risk.**
            31**Item
                4.**
            **Controls
                and Procedures.**
            32**PART
                II - OTHER INFORMATION****Item
                1.**
            **Legal
                Proceedings.**
            32**Item
                1A.**
            **Risk
                Factors.**
            33**Item
                2.**
            **Unregistered
                Sales of Equity Securities and Use of Proceeds.**
            33**Item
                3.**
            **Defaults
                Upon Senior Securities.**
            33**Item
                4.**
            **Submission
                of Matters to a Vote of Security Holders.**
            33**Item
                5.**
            **Other
                Information.**
            33**Item
                6.**
            **Exhibits**
            34**Signatures**
            
            36







**PART
      I - FINANCIAL INFORMATION**





**Item
              1.**
            **Financial
                Statements**





BEICANG
          IRON & STEEL, INC. AND SUBSIDIARIES
  Consolidated
          Financial Statements
 For
          the
          Three Months and Nine Months Ended September 30, 2007 and
          2006
  
  Beicang
                    Iron & Steel, Inc. and SubsidiariesConsolidated
                    Balance SheetsAs
                    of September 30, 2007 and December 31, 2006(Amounts
                    expressed in U.S. Dollars)ASSETS
 September
                      30,
                  
                  December
                      31,2007
                  
                  2006(Unaudited)
                  
                  (Audited)Current
                    AssetsCash
                      and cash equivalents
                  
                  $
                  108,298
                  
                  $
                  475,975Bills
                      receivable
                  
                  
                  15,977
                  
                  
                  81,868Trade
                      receivables, net of allowance fordoubtful
                      accounts of $259,762 and $106,684at
                      September 30, 2007 and December 31, 2006respectively
                  
                  
                  1,533,046
                  
                  
                  1,703,276Trade
                      receivables - related parties (note 16)
                  
                  
                  2,750,113
                  
                  
                  2,845,982Inventories
                      (note 5)
                  
                  
                  1,299,116
                  
                  
                  1,295,334Prepayment
                      and deposits (note 6)
                  
                  
                  435,475
                  
                  
                  420,106Other
                      receivables (note 7)
                  
                  
                  77,058
                  
                  
                  62,818Prepaid
                      land use right, current portion (note 8)
                  
                  
                  9,656
                  
                  
                  10,073Due
                      from related parties (note 16)
                  
                  
                  -
                  
                  
                  3,377,370Total
                      current assets
                  
                  
                  6,228,739
                  
                  
                  10,272,802Prepaid
                      land use right,net
                      of current portion (note 8)
                  
                  
                  486,563
                  
                  
                  474,232Property,
                      plant and equipment, net (note 9)
                  
                  
                  6,773,446
                  
                  
                  4,967,210Construction
                      in progress
                  
                  
                  184,155
                  
                  
                  161,580Total
                      assets
                  
                  $
                  13,672,903
                  
                  $
                  15,875,824
 The
              accompanying notes are an integral part of these financial
              statements.
 2
 Beicang
                      Iron & Steel, Inc. and SubsidiariesConsolidated
                      Balance SheetsAs
                      of September 30, 2007 and December 31, 2006(Amounts
                      expressed in U.S. Dollars)LIABILITIES
                      AND STOCKHOLDERS' EQUITY
  September
                    30,
                
                December
                    31,2007
                
                2006(Unaudited)
                
                (Audited)Current
                    liabilitiesTrade
                    payables
                
                $
                1,281,133
                
                $
                2,619,526Trade
                    payables - related parties (note 16)
                
                
                1,258,877
                
                
                1,926,438Deposits
                    received from customers
                
                
                688,369
                
                
                207,408Accrued
                    expenses (note 10)
                
                
                1,017,367
                
                
                1,260,721Other
                    payables (note 11)
                
                
                3,746,187
                
                
                1,857,765Other
                    short-term loans (note 12)
                
                
                1,234,489
                
                
                1,855,069Value-added
                    tax payable
                
                
                732,113
                
                
                2,167,229Due
                    to related parties (note 16)
                
                
                3,138,001
                
                
                1,912,251Total
                    current liabilities
                
                
                13,096,536
                
                
                13,806,407Commitments
                    and Contingencies (Note 18 and 19)Stockholders'
                    EquityPreferred
                    stock - 50,000,000 authorized:Series
                    A, $0.001 par value; 23,000 sharesissued
                    and outstanding, 7% cumulative,each
                    convertible into 40 shares of commonstock
                    (note 13)
                
                $
                23
                
                $
                23Series
                    B, nil issued
                
                
                -
                
                
                -Common
                    stock, $0.001 par value, 1,000,000,000shares
                    authorized, 999,066,260 issued andoutstanding
                    (note 13)
                
                
                999,066
                
                
                999,066Additional
                    paid-in capital
                
                
                3,134,607
                
                
                3,134,607Statutory
                    reserves (note 14)
                
                
                24,713
                
                
                24,713Accumulated
                    other comprehensive income
                
                
                403,138
                
                
                175,491Accumulated
                    loss
                
                
                (3,985,180
                )
                
                (2,264,483
                )Total
                    Stockholders' Equity
                
                
                576,367
                
                
                2,069,417Total
                    Liabilities and Stockholders' Equity
                
                $
                13,672,903
                
                $
                15,875,824
 The
          accompanying notes are an integral part of these financial
          statements.
 3
 Beicang
                    Iron & Steel, Inc. and SubsidiariesConsolidated
                    Statements of (Operations) Income and Other Comprehensive
                    IncomeFor
                    the Nine Months Ended September 30, 2007 and 2006(Amounts
                    expressed in U.S. Dollars)
 Three
                    months ended September 30,
                
                Nine
                    months ended September 30,2007
                
                2006
                
                2007
                
                2006(unaudited)
                
                (unaudited)
                
                (unaudited)
                
                (unaudited)Revenue
                
                $
                1,349,725
                
                $
                5,160,380
                
                $
                9,181,704
                
                $
                17,141,662Revenue
                    - related parties
                
                
                7,370,045
                
                
                2,157,931
                
                
                16,909,644
                
                
                10,828,622Total
                    revenue
                
                
                8,719,770
                
                
                7,318,311
                
                
                26,091,348
                
                
                27,970,284Cost
                    of goods sold
                
                
                (8,777,489
                )
                
                (8,248,352
                )
                
                (25,503,269
                )
                
                (26,083,634
                )Gross
                    (loss) profit
                
                
                (57,719
                )
                
                (930,041
                )
                
                588,079
                
                
                1,886,650Operating
                    expensesSelling
                    expenses
                
                
                (74,875
                )
                
                (160,703
                )
                
                (1,174,819
                )
                
                (1,508,035
                )General
                    and administrative expenses
                
                
                (383,766
                )
                
                (154,905
                )
                
                (984,543
                )
                
                (579,639
                )Total
                    operating expenses
                
                
                (458,641
                )
                
                (315,608
                )
                
                (2,159,362
                )
                
                (2,087,674
                )Loss
                    from operations
                
                
                (516,360
                )
                
                (1,245,649
                )
                
                (1,571,283
                )
                
                (201,024
                )Other
                    income (expenses)Revenue
                    on by-product sales
                
                
                155,938
                
                
                92,257
                
                
                89,732
                
                
                241,173Sundry
                    income, net
                
                
                -
                
                
                42,760
                
                
                -
                
                
                43,259Finance
                    costs
                
                
                (38,813
                )
                
                (162,333
                )
                
                (239,146
                )
                
                (366,224
                )Total
                    other (expenses) income
                
                
                117,125
                
                
                (27,316
                )
                
                (149,414
                )
                
                (81,792
                )Losses
                    before income taxes
                
                $
                (399,235
                )
                $
                (1,272,965
                )
                $
                (1,720,697
                )
                $
                (282,816
                )Income
                    taxes
                
                
                -
                
                
                30,278
                
                
                -
                
                
                -Net
                    loss
                
                
                (399,235
                )
                
                (1,242,687
                )
                
                (1,720,697
                )
                
                (282,816
                )Other
                    comprehensive income
                
                
                37,993
                
                
                55,451
                
                
                227,647
                
                
                220,515Comprehensive
                    loss
                
                $
                (361,242
                )
                $
                (1,187,236
                )
                $
                (1,493,050
                )
                $
                (62,301
                )Weight
                    average number of shares-Basic
                    and dilutied
                
                
                999,066,260
                
                
                999,066,260
                
                
                999,066,260
                
                
                999,066,260Loss
                    per share-Basic
                    and dilutied
                
                $
                (0.0004
                )
                $
                (0.0012
                )
                $
                (0.0017
                )
                $
                (0.0003
                )
 The
          accompanying notes are an integral part of these financial
          statements.
  4
 Beicang
                    Iron & Steel, Inc. and SubsidiariesConsolidated
                    Statements of Changes in Stockholders' EquityFor
                    the Nine Months Ended September 30, 2007 and 2006(Amounts
                    expressed in U.S. Dollars)
 (Accumulated
                
                Statutory
                    reserves
                
                AccumulatedAdditional
                
                loss)
                
                Statutory
                
                Statutory
                
                otherCommon
                      stock
                
                Preferred
                
                paid-in
                
                /Retained
                
                surplus
                
                common
                    welfare
                
                comprehensiveShares
                
                Amount
                
                stock
                
                capital
                
                earnings
                
                reserve
                
                reserve
                
                income
                
                TotalBalance
                    at December 31, 2005 (Audit)
                
                
                899,196,930
                
                $
                899,197
                
                $
                -
                
                $
                4,634,862
                
                $
                69,134
                
                $
                16,475
                
                $
                8,238
                
                $
                30,093
                
                $
                5,657,999Net
                    loss
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                (282,816
                )
                
                -
                
                
                -
                
                
                -
                
                
                (282,816
                )Effect
                    of foreign currency translation
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                220,515
                
                
                220,515Balance
                    at September 30, 2006 (Unaudited)
                
                
                899,196,930
                
                
                899,197
                
                
                -
                
                
                4,634,862
                
                
                (213,682
                )
                
                16,475
                
                
                8,238
                
                
                250,608
                
                
                5,595,698Effects
                    of merger
                
                
                99,869,330
                
                
                99,869
                
                
                23
                
                
                (1,501,117
                )
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                (1,401,225
                )Contribution
                    by stockholder
                
                
                -
                
                
                -
                
                
                -
                
                
                862
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                862Net
                    loss
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                (2,050,801
                )
                
                -
                
                
                -
                
                
                -
                
                
                (2,050,801
                )Effect
                    of foreign currency translation
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                (75,117
                )
                
                (75,117
                )Balance
                    at December 31, 2006 (Audited)
                
                
                999,066,260
                
                
                999,066
                
                
                23
                
                
                3,134,607
                
                
                (2,264,483
                )
                
                16,475
                
                
                8,238
                
                
                175,491
                
                
                2,069,417Net
                    loss
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                (1,720,697
                )
                
                -
                
                
                -
                
                
                -
                
                
                (1,720,697
                )Effect
                    of foreign currency translation
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                227,647
                
                
                227,647Balance
                    at September 30, 2007 (Unaudited)
                
                
                999,066,260
                
                $
                999,066
                
                $
                23
                
                $
                3,134,607
                
                $
                (3,985,180
                )
                $
                16,475
                
                $
                8,238
                
                $
                403,138
                
                $
                576,367
 The
            accompanying notes are an integral part of these financial
            statements.
 5
 Beicang
                    Iron & Steel, Inc. and SubsidiariesConsolidated
                    Statements Of Cash FlowsFor
                    the Nine Months Ended September 30, 2007 and 2006(Amounts
                    expressed in U.S. Dollars)
  Nine
                    months ended September 30,2007
                
                2006(unaudited)
                
                (unaudited)Cash
                    flows from operating activitiesNet
                    loss
                
                $
                (1,720,698
                )
                $
                (282,816
                )Adjustments
                    to reconcile net income to cashprovided
                    by operating activities:Depreciation
                
                
                380,179
                
                
                545,980Amortization
                
                
                7,731
                
                
                7,364Loss
                    on disposal of property,plant
                    and equipment
                
                
                1,412
                
                
                -(Increase)
                    Decrease in assetsDue
                    from related parties
                
                
                4,446,413
                
                
                (1,367,719
                )Bills
                    receivable
                
                
                68,061
                
                
                1,506,059Other
                    receivable
                
                
                (11,477
                )
                
                (62,207
                )Purchase
                    prepayment
                
                
                1,755
                
                
                (3,772,739
                )Inventories
                
                
                48,280
                
                
                (21,803
                )Accounts
                    receivable
                
                
                553,372
                
                
                (47,839
                )(Decrease)
                    Increase in liabilities:Due
                    to related parties
                
                
                198,023
                
                
                1,876,528Bills
                    payable
                
                
                -
                
                
                (1,567,249
                )Accounts
                    payable
                
                
                (2,154,468
                )
                
                3,302,388Other
                    payable
                
                
                1,781,862
                
                
                350,856Deposits
                    received from customers
                
                
                464,489
                
                
                (60,827
                )Tax
                    payable
                
                
                (1,497,809
                )
                
                135,965Accrued
                    expenses
                
                
                (289,567
                )
                
                (97,782
                )Net
                    cash provided by operating activities
                
                
                2,277,558
                
                
                444,159Cash
                    flows used in investing activitiesIncrease
                    in construction in progress
                
                
                (15,706
                )
                
                -Purchase
                    of plant and equipment
                
                
                (1,957,837
                )
                
                (830,885
                )Purchase
                    of land use rights
                
                
                -
                
                
                (37,769
                )Sales
                    proceeds from disposal of property,plant
                    and equipment
                
                
                -
                
                
                147,177Net
                    cash used in investing activities
                
                
                (1,973,543
                )
                
                (721,477
                )Cash
                    flows used in financing activitiesInjection
                    of additional paid-in capital
                
                
                -
                
                
                78,021Repayment
                    of other short-terms loan
                
                
                (1,020,916
                )
                
                (299,804
                )Increase
                    of other short-term loans
                
                
                336,379
                
                
                468,050Net
                    cash used in financing activities
                
                
                (684,537
                )
                
                246,267Effect
                    of foreign currency translation
                
                
                11,025
                
                
                3,032Net
                    decrease in cash
                
                
                (369,497
                )
                
                (28,019
                )Cash
                    and cash equivalents, beginning of period
                
                
                475,975
                
                
                158,348Cash
                    and cash equivalents, end of period
                
                $
                106,478
                
                $
                130,329Supplemental
                    disclosure informationFinance
                    costs paid
                
                $
                38,813
                
                $
                366,224Income
                    tax paid
                
                $
                -
                
                $
                -Major
                    non-cash transactionsBarter
                    sales of finished goods in return ofraw
                    materials for production
                
                $
                -
                
                $
                3,918,316
 The
          accompanying notes are an integral part of these financial
          statements.
  6
  Beicang
        Iron & Steel, Inc. and Subsidiaries
 Notes
        to
        Consolidated Financial Statements
 For
        the
        Nine Months Ended September 30, 2007 and 2006
  1.
              DESCRIPTION
                  OF BUSINESS AND ORGANIZATION
 
 Principal
        activities
 
 Beicang
        Iron & Steel Inc. (the “Company” or “Beicang” or “we” or “us”), is a Nevada
        corporation engaging in the business of producing ferrochromium alloy and
        pelletized ores through its subsidiaries and variable interest entities in
        the
        People’s Republic of China (“PRC”).
 
 Organization
 
 The
        Company was originally incorporated in the State of Colorado in 1983 under
        the
        name "Turco Computer Systems, Inc.". In February 2002, the Company changed
        its
        name to Alpha Spacecom, Inc. following a share exchange transaction. In June
        2005, the Company became a Nevada corporation after merging with its wholly
        owned subsidiary, Alpha Spacecom, Inc., a Nevada corporation.
 
 Since
        October 2004, the Company has been involved in an ongoing dispute concerning
        control, which has resulted in two separate lawsuits which are more fully
        described in note 19.
 
 On
        April
        8, 2006, the Company entered into a Merger Agreement (the “Merger Agreement”)
        with East Glory Investments Group, Ltd., a Cayman Islands company (hereinafter
        “EGIG”). Under the terms of the Merger Agreement, the Company issued an
        aggregate of 899,196,930 shares of common stock to the shareholders of EGIG,
        and
        in exchange, EGIG merged with and into the Company (the “Merger”), with the
        Company as the surviving company. Additionally, pursuant to the Merger
        Agreement, the Board and the holders of a majority of the Company’s capital
        stock approved amendments to the Company’s Articles of Incorporation by written
        consent, including: (1) a change of our corporate name from Alpha Spacecom,
        Inc.
        to the present name, Beicang Iron & Steel Inc., and (2) an increase in
        authorized common stock from 200,000,000 to 1,000,000,000 shares. The Articles
        of Merger to effectuate the Merger and the Amendment to the Company’s Articles
        of Incorporation to effectuate the name change and to increase in authorized
        shares were filed with Nevada’s Secretary of State on October 25, 2006. The
        Company’s name change and its new trading symbol (OTCBB: BEIC) became effective
        on the OTC Bulletin Board also on October 25, 2006.
 
 As
        a
        result of the Merger, the former stockholder of EGIG beneficially owns
        approximately 90% of the Company or the combined company’s issued and
        outstanding Common Stock.
 
 As
        a
        result of the effectiveness of the Merger, control has changed. Members of
        Alpha’s prior management tendered their resignation effective upon the
        effectiveness of the Merger. Prior to their resignation, they appointed Mr.
        Beicang Hou (former shareholder and director of EGIG) as sole officer and
        director.
 
 In
        accordance with the Accounting and Financial Reporting Interpretations and
        Guidance prepared by the staff of the U.S. Securities and Exchange Commission,
        the Merger has been accounted for as a reverse acquisition where Beicang
        (the
        legal acquirer) has been considered the accounting acquiree and the consolidated
        financial statements of the combined company are in substance those of EGIG,
        with the assets and liabilities, and revenues and expenses, of Beicang being
        included effective from the date of consummation of the Merger. The Company
        has
        been deemed to be a continuation of the business of EGIG. The outstanding
        stock
        prior to the Merger has been accounted for at their net book value and no
        goodwill has been recognized.
 
 Subsidiaries
        and Variable Interest Entities (VIEs)
 
 Pursuant
        to and concurrent with the Merger, the Company have acquired all the issued
        and
        outstanding common stock of Trinity Link Holdings Limited (hereinafter “Trinity
        Link”), which was in turn wholly owned by EGIG before the Merger. Trinity Link
        was incorporated under the laws of the British Virgin Islands on August 18,
        2005
        and holds all of the issued and outstanding share capital of Shanxi Bestlink
        Management Consulting Co. Ltd. (hereinafter “Bestlink”), which is a wholly
        foreign owned enterprise incorporated under the laws of the People's Republic
        of
        China (“PRC” or “China”) on December 30, 2005.
 
 7
 
 Beicang
        Iron & Steel, Inc. and Subsidiaries
 Notes
        to
        Consolidated Financial Statements
 For
        the
        Nine Months Ended September 30, 2007 and 2006
  Through
        a
        series of contractual arrangements, Bestlink operates, controls and beneficially
        owns the businesses of two companies in China that refine the raw materials
        for
        iron and steel: ****** Pinglu
        County Changhong Ferroalloy Co., Ltd. (“PL”) and Fanshi County Xinyu Iron
        Resources Co., Ltd. (“FS”). These contractual arrangements include an Operating
        and Service Agreement, an Option Agreement, and a Loan Agreement. Through
        the
        Operation and Service Agreement, Bestlink has the exclusive right to advise,
        consult, manage and operate each of PL and FS, and to collect and own 95%
        of
        each company's revenues less operating costs. In addition, these companies
        and
        their shareholders have granted Bestlink the exclusive right and option to
        acquire, to the extent permitted under PRC laws, all of the shares of PL
        and FS,
        or alternatively, all of the assets of PL and FS (“Option Agreement”). In order
        to further reinforce the rights of Bestlink to control and operate PL and
        FS,
        the Option Agreement contains provisions under which voting control over
        the
        outstanding shares of PL and FS are vested in Bestlink and the board of
        directors of the Bestlink. Bestlink has also agreed to provide loans to each
        of
        PL and FS (“Loan Agreement”). The shareholders of PL and FS are not only
        guaranteeing the loans, but have pledged all right, title and interest in
        their
        shares of PL and FS to Bestlink. Collectively, the Operating and Service
        Agreement, Option Agreement, and Loan Agreement are referred to herein as
        the
“Restructuring Agreements”.
 
 PL,
        incorporated under the laws of the PRC on March 3, 2003, is located in Pinglu
        County in the Southern part of Shanxi Province and produces ferrochromium
        alloy,
        the core furnace material in making stainless steel.
 
 FS,
        incorporated under the laws of the PRC on January 17, 2004, is located in
        Fanshi
        County in the Northern part of Shanxi Province and produces pelletized ore,
        a
        key component of iron manufacturing.
 
 As
        a
        result of the Restructuring Agreements, which obligates Bestlink to absorb
        a
        majority of the risk of loss from PL and FS's activities and enable Bestlink
        to
        receive a majority of its expected residual returns, the Company believes
        that
        PL and FS should be considered its variable interest entities (“VIE”) under FASB
        Interpretation No. 46(R) (“FIN 46R”), “Consolidation of Variable Interest
        Entities - An Interpretation of ARB No. 51”, because the equity investors in PL
        and FS do not have the characteristics of a controlling financial interest
        and
        the Company, through Bestlink, should be considered the primary beneficiary
        of
        PL and FS. Accordingly, the Company believes that PL and FS's results of
        operations, assets and liabilities should be consolidated.
 
 The
        Company's consolidated assets do not include any collateral for PL or FS's
        obligations. The carrying value of the total assets of PL and FS as of September
        30, 2007 was $12,283,150 and there was no pledge or collateral of its assets.
        Furthermore, PL or FS's creditors do not have recourse to the general credit
        of
        the Company.
 
 The
        entering into of those exclusive agreements by Bestlink, PL and FS and their
        shareholders on January 5, 2006 has been accounted for as recapitalization
        of PL
        and FS with no adjustment to the historical basis of the assets and liabilities
        of PL and FS and the operations were consolidated as though the transaction
        occurred as of the beginning of the first accounting period presented in
        these
        financial statements. For the purpose of presenting the financial statements
        on
        a consistent basis, the consolidated financial statements have been prepared
        as
        if Trinity Link and Bestlink had been in existence since the beginning of
        the
        earliest period and throughout the whole periods covered by these financial
        statements.
 
 8
 
 Beicang
        Iron & Steel, Inc. and Subsidiaries
 Notes
        to
        Consolidated Financial Statements
 For
        the
        Nine Months Ended September 30, 2007 and 2006
  2.
              GOING
                  CONCERN AND MANAGEMENT PLAN
 
 The
        financial statements have been prepared on a going concern basis, which
        contemplates the realization of assets and satisfaction of liabilities in
        the
        normal course of business. As of September 30, 2007, the Company had a net
        working capital deficiency of $6,867,797 that indicates the Company may need
        additional financing to meet cash requirements for its operations to continue
        as
        a going concern.
 
 The
        financial statements do not include any adjustments relating to the
        recoverability or classification of recorded amounts of assets or amounts
        or
        classification of liabilities that may be necessary should the Company be
        unable
        to continue as a going concern. The Company is considering different ways
        to
        raise additional capital including through the sale of its equity securities,
        through offerings of debt securities, or through borrowings from financial
        institutions. Management is in negotiations with investment bankers to raise
        funds in the capital market and believes that actions presently being taken
        to
        obtain additional funding provide the opportunity for the Company to continue
        as
        a going concern.
 
 3.
              SUMMARY
                  OF SIGNIFICANT ACCOUNTING
                  POLICIES
 
 a.  Basis
        of presentation and consolidation
 
 The
        accompanying consolidated financial statements have been prepared by the
        Company
        in accordance with accounting principles generally accepted in the United
        States
        of America (“US GAAP”).
 
 The
        consolidated financial statements include the accounts of the Company and
        its
        subsidiaries and variable interest entities (collectively the “Group”).
        Significant intercompany transactions have been eliminated on
        consolidation.
 
 b.  Use
        of
        estimates
 
 The
        preparation of financial statements in conformity with generally accepted
        accounting principles requires management to make estimates and assumptions
        that
        affect the reported amounts of assets and liabilities, 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. Because of
        the use
        of estimates inherent in the financial reporting process, actual results
        could
        differ from those estimates.
 
 c.  Fair
        values of financial instruments
 
 The
        Group
        values its financial instruments as required by Statement of Financial
        Accounting Standard (SFAS) No. 107, “Disclosures about Fair Value of Financial
        Instruments”. The estimated fair value amounts have been determined by the
        Group, using available market information and appropriate valuation
        methodologies. The estimates presented herein are not necessarily indicative
        of
        amounts that the Group could realize in a current market exchange.
 
 The
        Group's financial instruments primarily consist of cash, accounts receivable,
        other receivables, notes receivable, accounts payable, receipt in advance,
        accrued expenses, other payables, bank loans, short-term loans, government
        loans, and short-term related party loans.
 
 As
        of the
        balance sheet dates, the estimated fair values of the financial instruments
        were
        not materially different from their carrying values as presented due to the
        short maturities of these instruments and that the interest rates on the
        borrowings approximate those that would have been available for loans of
        similar
        remaining maturity and risk profile at respective period ends.
 9
 
 Beicang
          Iron & Steel, Inc. and Subsidiaries
 Notes
          to
          Consolidated Financial Statements
 For
          the
          Nine Months Ended September 30, 2007 and 2006
 d.  Cash
        and cash equivalents
 
 Cash
        and
        cash equivalents include cash on hand, demand deposits with banks and liquid
        investments with an original maturity of three months or less.
 
 e.  Trade
        and other receivables
 
 Trade
        receivable are recognized and carried at original invoiced amount less an
        allowance for any doubtful amounts. An estimate for doubtful debts is made
        when
        collection of the full amount is no longer probable. Bad debts are written
        off
        as incurred. The Company generally does not require collateral from its
        customers.
 
 The
        Group
        maintains allowances for doubtful accounts for estimated losses resulting
        from
        the failure of customers to make required payments. The Company reviews the
        accounts receivable on a periodic basis and makes allowances where there
        is
        doubt as to the collectibility of individual balances. In evaluating the
        collectibility of individual receivable balances, the Company considers many
        factors, including the age of the balance, the customer's payment history,
        its
        current credit-worthiness and current economic trends.
 
 f.  Inventories
 
 Inventories
        are stated at the lower of cost, as determined on a first-in, first-out basis,
        or market. Costs of inventories include purchase and related costs incurred
        in
        bringing the products to their present location and condition. Market value
        is
        determined by reference to the selling prices after the balance sheet date
        or to
        management estimates based on prevailing market conditions.
 
 g.  Property,
        plant and equipment
 
 Property,
        plant and equipment are recorded at cost. The cost of improvements that extend
        the life of plant, property and equipment are capitalized. These capitalized
        costs may include structural improvements, equipment and fixtures. All ordinary
        repair and maintenance costs are expensed as incurred.
 
 Depreciation
        for financial reporting purposes is provided using the straight-line method
        over
        the estimated useful lives of the assets: 10 years for plant and machinery;
        20
        years for buildings; 10 years for leasehold improvements; 10 years for office
        equipment; and 10 years for motor vehicles.
 
 h.  Construction
        in progress
 
 Construction
        in progress includes direct costs of construction of factory building. Interest
        incurred during the period of construction has not been capitalized as such
        interest is not specifically paid for construction of factory building.
        Construction in progress is not depreciated until such time as the assets
        are
        completed and put into operational use.
 
 i.  Prepaid
        land use rights
 
 The
        Group
        has recorded as prepaid land use rights the costs paid to acquire a long-term
        interest to utilize the land underlying the property facility. This type
        of
        arrangement is common for the use of land in the PRC. The prepaid land use
        rights are amortized on the straight-line method over the term of the land
        use
        rights of 50 years.
 10
 
 Beicang
          Iron & Steel, Inc. and Subsidiaries
 Notes
          to
          Consolidated Financial Statements
 For
          the
          Nine Months Ended September 30, 2007 and 2006
 j.  Impairment
        of long-lived assets
 
 The
        Group
        accounts for impairment of plant and equipment and amortizable intangible
        assets
        in accordance with SFAS No. 144, “Accounting for Impairment of Long-Lived Assets
        and Long-Lived Assets to be Disposed Of”, which requires the Group to evaluate a
        long-lived asset for recoverability when there is event or circumstance that
        indicate the carrying value of the asset may not be recoverable. An impairment
        loss is recognized when the carrying amount of a long-lived asset or asset
        group
        is not recoverable (when carrying amount exceeds the gross, undiscounted
        cash
        flows from use and disposition) and is measured as the excess of the carrying
        amount over the asset's (or asset group's) fair value.
 
 k.  Comprehensive
        income
 
 SFAS
        No.
        130, “Reporting Comprehensive Income”, requires disclosure of all components of
        comprehensive income and loss on an annual and interim basis. Comprehensive
        income and loss is defined as the change in equity of a business enterprise
        during a period from transactions and other events and circumstances from
        non-owner sources. The Company had other comprehensive income of $227,647
        and
        $220,515 for the periods ended September 30, 2007 and 2006, respectively
        which
        mainly arose from the changes in foreign currency exchange rates.
 
 l.  Segment
        information
 
 SFAS
        No.
        131, “Disclosures about Segments of an Enterprise and Related Information”,
        requires certain financial and supplementary information to be disclosed
        on an
        annual and interim basis for each reportable segment of an enterprise. The
        Group
        believes that it operates in one business segment - refinery of iron ores,
        and
        in one geographical segment - China, as all of the Group's current operations
        are carried out in China.
 
 m.  Revenue
        recognition
 
 Revenues
        of the Group include sales of products in China. Sales are recognized when
        the
        following four revenue criteria are met: persuasive evidence of an arrangement
        exists, delivery has occurred, the selling price is fixed or determinable,
        and
        collectibility is reasonably assured. Sales are presented net of value added
        tax
        (VAT). No return allowance is made as products delivered are not returnable
        upon
        delivery and acceptance by the customer.
 
 n.  Income
        taxes
 
 The
        Group
        accounts for income taxes in accordance with SFAS No. 109, "Accounting for
        Income Taxes". SFAS No. 109 requires an asset and liability approach for
        financial accounting and reporting for income taxes and allows recognition
        and
        measurement of deferred tax assets based upon the likelihood of realization
        of
        tax benefits in future years. Under the asset and liability approach, deferred
        taxes are provided for the net tax effects of temporary differences between
        the
        carrying amounts of assets and liabilities for financial reporting purposes
        and
        the amounts used for income tax purposes. A valuation allowance is provided
        for
        deferred tax assets if it is more likely than not these items will either
        expire
        before the Group is able to realize their benefits, or that future deductibility
        is uncertain.
 
 o.  Loss
        /
        earnings per share
 
 Loss
        /
        earnings per share 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 periods ended September 30, 2007 and
        2006,
        the diluted share base excludes incremental shares relating to convertible
        preferred stock since their effect was anti-dilutive.
 11
 
 Beicang
          Iron & Steel, Inc. and Subsidiaries
 Notes
          to
          Consolidated Financial Statements
 For
          the
          Nine Months Ended September 30, 2007 and 2006
 p.  Foreign
        currency translation
 
 The
        Company uses the United States dollars (“U.S. dollars” or “US$”) for financial
        reporting purposes. The Company's subsidiaries maintain their books and records
        in their functional currency, Chinese Renminbi (“RMB”), being the primary
        currency of the economic environment in which their operations are conducted.
        In
        general, the Group translates its assets and liabilities into U.S. dollars
        using
        the applicable exchange rates prevailing at the balance sheet date, and the
        statement of income is translated at average exchange rates during the reporting
        period. Adjustments resulting from the translation of the Group's financial
        statements are recorded as accumulated other comprehensive income.
 
 Until
        July 21, 2005, RMB had been pegged to US$ at the rate of RMB8.30: US$1.00.
        On
        July 21, 2005, the PRC government reformed the exchange rate system into
        a
        managed floating exchange rate system based on market supply and demand with
        reference to a basket of currencies. In addition, the exchange rate of RMB
        to
        US$ was adjusted to RMB8.11: US$1.00 as of July 21, 2005. The People's Bank
        of
        China announces the closing price of a foreign currency such as US$ traded
        against RMB in the inter-bank foreign exchange market after the closing of
        the
        market on each working day, which will become the unified exchange rate for
        the
        trading against RMB on the following working day. The daily trading price
        of US$
        against RMB in the inter-bank foreign exchange market is allowed to float
        within
        a band of 0.3% around the unified exchange rate published by the People's
        Bank
        of China. This quotation of exchange rates does not imply free convertibility
        of
        RMB to other foreign currencies. All foreign exchange transactions continue
        to
        take place either through the Bank of China or other banks authorized to
        buy and
        sell foreign currencies at the exchange rates quoted by the People's Bank
        of
        China. Approval of foreign currency payments by the Bank of China or other
        institutions requires submitting a payment application form together with
        invoices, shipping documents and signed contracts.
 
 The
        exchange rates used to translate amounts in RMB into US$ for the purposes
        of
        preparing the consolidated financial statements were as follows:
  September
                  30, 2007
              
              December
                  31, 2006
              
              September
                  30, 2006Balance
                  sheet items, except for the registered and paid-up capital, as
                  of period/
                  year end
              
              
              USD0.1331:RMB1
              
              
              USD0.1279:RMB1
              
              
              USD0.1266:RMB1Amounts
                  included in the statements of operations, statements of changes
                  in
                  stockholders' equity and statements of cash flows for the period/
                  year
              
              
              USD0.1309:RMB1
              
              
              USD0.1252:RMB1
              
              
              USD0.1250:RMB1
 
 No
        representation is made that RMB amounts have been, or would be, converted
        into
        US$ at the above rates.
 
 q.  Related
        parties
 
 Parties
        are considered to be related to the Group if the parties that, directly or
        indirectly, through one or more intermediaries, control, are controlled by,
        or
        are under common control with the Group. Related parties also include principal
        owners of the Group, its management, members of the immediate families of
        principal owners of the Group and its management and other parties with which
        the Group may deal if one party controls or can significantly influence the
        management or operating policies of the other to an extent that one of the
        transacting parties might be prevented from fully pursuing its own separate
        interests. A party which can significantly influence the management or operating
        policies of the transacting parties or if it has an ownership interest in
        one of
        the transacting parties and can significantly influence the other to an extent
        that one or more of the transacting parties might be prevented from fully
        pursuing its own separate interests is also a related party.
 12
 
 Beicang
          Iron & Steel, Inc. and Subsidiaries
 Notes
          to
          Consolidated Financial Statements
 For
          the
          Nine Months Ended September 30, 2007 and 2006
 r.  Recently
        issued accounting standards
 
 In
        June
        2006, the Financial Accounting Standards Board (“FASB”) ratified the provisions
        of Emerging Issues Task Force (“EITF”) Issue No. 06-3, “How Taxes Collected from
        Customers and Remitted to Governmental Authorities Should Be Presented in
        the
        Income Statement (That Is, Gross versus Net Presentation).” EITF Issue No. 06-3
        requires that the presentation of taxes within revenue-producing transactions
        between a seller and a customer, including but not limited to sales, use,
        value
        added, and some excise taxes, should be on either a gross (included in revenue
        and cost) or a net (excluded from revenue) basis. In addition, for any such
        taxes that are reported on a gross basis, a company should disclose the amounts
        of those taxes in interim and annual financial statements for each period
        for
        which an income statement is presented if those amounts are significant.
        The
        disclosure of those taxes can be done on an aggregate basis. EITF Issue No.
        06-3
        is effective for fiscal years beginning after December 15, 2006, which will
        be
        the Company’s fiscal 2007.
 
 In
        September 2006, the Securities and Exchange Commission issued Staff Accounting
        Bulletin No.108 (“SAB No. 108”), “Considering the Effects of Prior Year
        Misstatements when Quantifying Current Year Misstatements”. SAB No. 108 requires
        analysis of misstatements using both an income statement (rollover) approach
        and
        a balance sheet (iron curtain) approach in assessing materiality and provides
        for a one-time cumulative effect transition adjustment. SAB No. 108 is effective
        for the fiscal year beginning after November 15, 2006.
 
 In
        September 2006, FASB issued Statement of Financial Accounting Standards No.
        158
        (“SFAS 158”), “Employers’ Accounting for Defined Benefit Pension and Other
        Postretirement Plans - an amendment of FASB Statements No. 87, 88, 106, and
        132
        (R)”, which is effective for fiscal years beginning after December 15, 2006.
        SFAS 158 requires an employer to recognize the overfunded or underfunded
        status
        of a defined benefit postretirement plan (other than a multiemployer plan)
        as an
        asset or liability in its statement of financial position and to recognize
        changes in that funded status in the year in which the changes occur through
        comprehensive income of a business entity or changes in unrestricted net
        assets
        of a not-for-profit organization. SFAS 158 also requires an employer to measure
        the funded status of a plan as of the date of its year-end statement of
        financial position, with limited exceptions.
 
 The
        adoption of above pronouncements did not have a material effect on the Company's
        future reported financial position or results of operations.
 
 In
        September 2006, the Financial Accounting Standards Board (“FASB”) issued
        Statement of Financial Accounting Standards No. 157 (“SFAS 157”), “Fair Value
        Measurements”, which is effective for fiscal years beginning after November 15,
        2007 and for interim periods within those years. SFAS 157 defines fair value,
        establishes a framework for measuring fair value in generally accepted
        accounting principles (GAAP), and expands disclosures about fair value
        measurements. The Company’s management believes that this statement will not
        have a significant impact on the Company’s financial statements.
 
 In
        February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for
        Financial Assets and Financial Liabilities” (SFAS No. 159). SFAS No. 159 permits
        entities to choose to measure many financial assets and financial liabilities
        at
        fair value. Unrealized gains and losses on items for which the fair value
        option
        has been elected will be reported in earnings. SFAS No. 159 is effective
        for
        fiscal years beginning after November 15, 2007. The Company’s management
        believes that this statement will not have a significant impact on the Company’s
        financial statements.
 13
 
 Beicang
          Iron & Steel, Inc. and Subsidiaries
 Notes
          to
          Consolidated Financial Statements
 For
          the
          Nine Months Ended September 30, 2007 and 2006
 4.
              CONCENTRATIONS
                  OF CREDIT RISK AND MAJOR
                  CUSTOMERS
 
 Financial
        instruments which potentially expose the Company to concentrations of credit
        risk, consist of cash and accounts receivable as of September 30, 2007 and
        December 31, 2006. The Company performs ongoing evaluations of its cash position
        and credit evaluations to ensure collections and minimize losses.
 
 As
        of
        September 30, 2007 and December 31, 2006, the Company's bank deposits were
        all
        placed with banks in the PRC where there is currently no rule or regulation
        in
        place for obligatory insurance of bank accounts.
 
 For
        the
        periods ended September 30, 2007 and 2006, all of the Company's sales arose
        in
        the PRC. In addition, all accounts receivable as of September 30, 2007 and
        December 31, 2006 also arose in the PRC.
 
 Details
        of the customers accounting for 10% or more of the Company's revenue are
        as
        follows:
 
 September
                  30,
              
              September
                  30,2007
              
              2006(Unaudited)
              
              (Unaudited)Company
                  A
              
              $
              9,446,368
              
              $
              6,413,109Company
                  B
              
              
              2,886,591
              
              
              2,839,043Company
                  C
              
              
              -
              
              
              3,991,210
 
 Details
        of customers accounting for 10% or more of the Company's accounts receivable
        are
        as follows:
 
 September
                  30,
              
              December
                  31,2007
              
              2006(Unaudited)
              
              (Audited)Company
                  C
              
              $
              2,437,379
              
              $
              -Company
                  D
              
              
              388,078
              
              
              -Company
                  E
              
              
              -
              
              
              2,795,985
 14
 
 Beicang
          Iron & Steel, Inc. and Subsidiaries
 Notes
          to
          Consolidated Financial Statements
 For
          the
          Nine Months Ended September 30, 2007 and 2006
  5.
              INVENTORIES
 
 Inventories
        consist of the following:
  September
                  30,
                2007
              
              December
                  31,
                2006(Unaudited)
              
              (Audited)Raw
                  materials
              
              $
              266,596
              
              $
              832,692Finished
                  goods
              
              
              917,794
              
              
              356,199Consumables
              
              
              114,726
              
              
              106,443$
              1,299,116
              
              $
              1,295,334
  6.
              PREPAYMENT
                  AND DEPOSITS
 
 Prepayment
        and deposits consist of the following:
  September
                  30,
                2007
              
              December
                  31,
                2006(Unaudited)
              
              (Audited)Purchase
                  deposits for raw materials
              
              $
              332,412
              
              $
              409,504Other
              
              
              103,063
              
              
              10,602$
              435,475
              
              $
              420,106
 
 7.
              OTHER
                  RECEIVABLES
 
 Other
        receivables consist of the following:
 September
                    30,
                  2007
                
                December
                    31,
                  2006(unaudited)
                
                (audited)Non-interest
                    bearing, unsecured receivables
                
                $
                8,494
                
                $
                55,439Cash
                    advances to staff and salespersons fornormal
                    business purposes
                
                
                68,428
                
                
                6,253Others
                
                
                136
                
                
                1,126$
                77,058
                
                $
                62,818
 
 8.
              PREPAID
                  LAND USE RIGHT
 
 The
        Group
        has recorded as prepaid land use rights the costs paid to acquire a long-term
        interest to utilize the land underlying the property facility. This type
        of
        arrangement is common for the use of land in the PRC. The prepaid land use
        rights are being amortized on the straight-line method over the term of the
        land
        use rights of 50 years.
 15
 
 Beicang
            Iron & Steel, Inc. and Subsidiaries
 Notes
            to
            Consolidated Financial Statements
 For
            the
            Nine Months Ended September 30, 2007 and 2006
 The
        expected amortization of the prepaid land use rights over each of the next
        five
        years and thereafter are summarized as follows:
 
 Total
                  prepaid land use rights as of September 30, 2007
              
              $
              496,219Less:
                  Current portion
              
              
              (9,656
              )Long-term
                  portion
              
              $
              486,563
 
 Amortization
        expense was $7,731 and $7,364 for the period ended September 30, 2007 and
        2006,
        respectively.
 
 9.
              PROPERTY,
                  PLANT AND EQUIPMENT
 
 Property,
        plant and equipment consist of the following:
 September
                    30,
                  2007
                
                December
                    31,
                  2006(unaudited)
                
                (audited)Plant
                    and machinery
                
                $
                1,849,273
                
                $
                1,718,761Building
                
                
                5,898,707
                
                
                3,836,333Motor
                    vehicles
                
                
                184,881
                
                
                161,965Office
                    equipment
                
                
                207,109
                
                
                192,1548,139,970
                
                
                5,909,213Less:
                    Accumulated depreciation and impairment losses
                
                
                (1,366,524
                )
                
                (942,003
                )$
                6,773,446
                
                $
                4,967,210
 
 The
        depreciation expenses on property, plant and equipment were $380,179 and
        $545,980 for the periods ended September 30, 2007 and 2006,
        respectively.
  10.
              ACCRUED
                  EXPENSES
  Accrued
        expenses consist of the following:
  September
                  30,
                2007
              
              December
                  31,
                2006(unaudited)
              
              (audited)Social
                  securities insurance
              
              $
              347,865
              
              $
              334,218Accrued
                  welfare
              
              
              32,433
              
              
              168,254Loan
                  interest expenses
              
              
              231,088
              
              
              210,016Other
                  operating expenses
              
              
              405,981
              
              
              548,233$
              1,017,367
              
              $
              1,260,721
 
 The
        Company accrued staff welfare based on 14% of its payroll, for the purposes
        of
        expenditures for the employee facilities and collective welfare of the Company's
        employees in accordance with the accounting practice generally accepted in
        the
        PRC.
 
 The
        Company has not accrued compensated absences because the amount is
        immaterial.
 16
 
 Beicang
            Iron & Steel, Inc. and Subsidiaries
 Notes
            to
            Consolidated Financial Statements
 For
            the
            Nine Months Ended September 30, 2007 and 2006
 
 11.
              OTHER
                  PAYABLES
 
 Other
        payables consist of the following:
  September
                  30,
                2007
              
              December
                  31,
                2006(unaudited)
              
              (audited)Payables
                  for construction and machinery
              
              $
              142,842
              
              $
              132,928Non-interest
                  bearing, unsecured borrowings without fixed repayment date
              
              
              3,603,345
              
              
              1,724,837$
              3,746,187
              
              $
              1,857,765
  12.
              OTHER
                  LOANS
 
 Other
        loans consist of the following:
 September
                    30,
                  2007
                
                December
                    31,
                  2006(unaudited)
                
                (audited)24%
                    loans, without fixed repayment date
                
                $
                -
                
                $
                473,29718%
                    loans, without fixed repayment date
                
                
                612,526
                
                
                789,51115%
                    loans, without fixed repayment date
                
                
                616,253
                
                
                208,5078%
                    loans, without fixed repayment date
                
                
                -
                
                
                38,375Interest-free
                    loans, without fixed repayment date
                
                
                5,710
                
                
                345,379Total
                    other loans
                
                
                1,234,489
                
                
                1,855,069Less
                    current maturities
                
                
                (1,234,489
                )
                
                (1,855,069
                )Total
                    long-term loans
                
                $
                -
                
                $
                -
 
 All
        of
        the above other loans are unsecured and denominated in Renminbi.
 17
 
 Beicang
            Iron & Steel, Inc. and Subsidiaries
 Notes
            to
            Consolidated Financial Statements
 For
            the
            Nine Months Ended September 30, 2007 and 2006
  13.
              SHARE
                  CAPITAL
 
 (a)  Preferred
        stock
 
 The
        Company as of September 30, 2007 and December 31, 2006 had 20,000,000 shares
        of
        authorized preferred stock, out of which 23,000 shares remain designated
        as
        Series A, $0.001 par value, 7% cumulative convertible preferred stock ("Series
        A").
 
 Each
        Series A share has a par value of $0.001, is convertible into 40 shares of
        the
        Company's common stock with no further consideration, and yields dividends
        at
        7.0% per annum. Due to misplacement of records during management changes,
        the
        Company currently cannot verify the preferential rights, if any, of the Series
        A
        with regard to dividends or liquidation. Also due to lost records, although
        the
        amount cannot currently be verified absolutely, the Company may have as much
        as
        $271,000 in cumulative dividends in arrears. These dividends have not been
        declared by the Board of Directors. Voting rights of the Series A, if any,
        cannot currently be verified.
 
 (b)  Common
        stock
 
 Pursuant
        to the Merger Agreement as more fully described in note 1, the Company amended
        its Articles of Incorporation to increase the number of authorized common
        shares
        from 200,000,000 to 1,000,000,000, par value $0.001 per share. In connection
        with the Merger, the Company issued an aggregate of 899,196,930 shares of
        our
        common stock 899,196,930 shares of our Common Stock (representing 90% of
        all
        shares outstanding after this Merger) to the shareholders of EGIG and, in
        exchange, EGIG merged with and into the Company (the “Merger”), with the Company
        being the surviving company.
 
 14.
              STATUTORY
                  RESERVES
 
 As
        stipulated by the PRC's Company Law and as provided in the Company's VIEs'
        PL
        and FS's Articles of Association, PL and FS's net income after taxation can
        only
        be distributed as dividends after appropriation has been made for the
        following:
 (i)
                Making
                    up cumulative prior years' losses, if
                    any;
 
 (ii)
                Allocations
                    to the “Statutory surplus reserve” of at least 10% of income after tax, as
                    determined under PRC accounting rules and regulations, until
                    the fund
                    amounts to 50% of the Company's registered capital, which is
                    restricted
                    for set off against losses, expansion of production and operation
                    or
                    increase in registered capital;
 
 (iii)
                Allocations
                    of 5-10% of income after tax, as determined under PRC accounting
                    rules and
                    regulations, to the Company's “Statutory common welfare fund”, which is
                    restricted for capital expenditure for the collective benefits
                    of the
                    Company's employees; and
 
 (iv)
                Allocations
                    to the discretionary surplus reserve, if approved in the shareholders'
                    general meeting.
 18
 
 Beicang
              Iron & Steel, Inc. and Subsidiaries
 Notes
              to
              Consolidated Financial Statements
 For
              the
              Nine Months Ended September 30, 2007 and 2006
 On
          December 31, 2003, PL and FS established a statutory surplus reserve as
          well as
          a statutory common welfare fund and commenced to appropriate 10% and 5%,
          respectively of the PRC net income after taxation to these reserves. The
          amounts
          included in the statutory reserves consisted of surplus reserve of $16,475
          and
          common welfare fund of $8,238 as of both September 30, 2007 and December
          31,
          2006.
 15.
                INCOME
                    TAXES
 
 The
        Company is registered in the State of Nevada whereas its subsidiary, Trinity
        Link being incorporated in the British Virgin Islands is not subject to any
        income tax and conducts all of its business through its PRC subsidiary, Bestlink
        and VIEs, PL and FS (see note 1).
 
 Bestlink,
        PL and FS, being registered in the PRC, are subject to PRC's Enterprise Income
        Tax. Pursuant to the PRC Income Tax Laws, Enterprise Income Taxes (“EIT”) is
        generally imposed at a statutory rate of 33%, which comprises 30% national
        income tax and 3% local income tax.
 
 However,
        PL has been approved as a new enterprise in an underdeveloped area and granted
        a
        tax holiday for the years up to 2006.
 
 A
        reconciliation between the income tax computed at the U.S. statutory rate
        and
        the Group's provision for income tax is as follows:
  2007
              
              2006U.S.
                  statutory rate
              
              
              34
              %
              
              34
              %Foreign
                  income not recognized in the U.S.
              
              
              (34
              %)
              
              (34
              %)PRC
                  Enterprise Income Tax
              
              
              33
              %
              
              33
              %Tax
                  holiday
              
              
              -
              
              
              (33
              %)Tax
                  holiday not recognized
              
              
              33
              %
              
              -Provision
                  for income tax
              
              
              -
              
              
              -
 
 Bestlink,
        PL and FS had accumulated losses of $3,965,368 and $945,617 as of September
        30,
        2007, and December 31, 2006 respectively. A full valuation allowance has
        been
        provided for the deferred tax assets in respect of such losses, as it is
        more
        likely than not that such deferred tax assets will not be realized by sufficient
        future taxable profits.
  The
        net
        deferred tax amounts included in the Company's balance sheets as of September
        30, 2007 and December 31, 2006 are as follows:
  September
                  30,
                2007
              
              December
                  31,
                2006(Unaudited)
              
              (Audited)Deferred
                  tax assets arising from net operating losses
              
              $
              1,322,000
              
              $
              811,000Less:
                  Valuation allowance
              
              
              (1,322,000
              )
              
              (811,000
              )$
              -
              
              $
              -
 19
 
 Beicang
            Iron & Steel, Inc. and Subsidiaries
 Notes
            to
            Consolidated Financial Statements
 For
            the
            Nine Months Ended September 30, 2007 and 2006
 16.
                RELATED
                    PARTY TRANSACTIONS AND
                    ARRANGEMENTS
 (a)
                Related
                    party trade receivables and
                    payables
  Included
        in accounts receivable and payables at the balance sheet dates were trade
        receivables and trade payables to the following related parties:
  September
                  30,
                2007
              
              December
                  31,
                2006(Unaudited)
              
              (Audited)Trade
                  receivables:Pinglu
                  Changlong Tegang Lu Liao Co. Ltd., under control by Mr. Li Zhenguan,
                  a
                  director of PL
              
              $
              76,679
              
              $
              49,997Shanxi
                  RongChang Trade Co. Ltd., under control of Mr. Beicang Hou, a director
                  of
                  the Company
              
              
              236,055
              
              
              2,795,985Pinglu
                  Changsheng Stainless Steel Material Co. Ltd., under control of
                  Mr. Ren
                  Yaoting, a director of PL
              
              
              2,437,379
              
              
              -$
              2,750,113
              
              $
              2,845,982
 
 Trade
                  payables:Shanxi
                  RongChang Trade Co. Ltd., under control of Mr. Beicang Hou, a director
                  of
                  the Company
              
              $
              294,437
              
              $
              1,765,223Pinglu
                  Changsheng Stainless Steel Material Co. Ltd., under control of
                  Mr. Ren
                  Yaoting, a director of PL
              
              
              964,440
              
              
              161,215$
              1,258,877
              
              $
              1,926,438
 
 Trade
        accounts receivable from and payable to related parties arose from sales
        to and
        purchases from those related companies in the ordinary course of the Company's
        business.
 (b)
                Related
                    party receivables and
                    payables
 September
                    30,
                  2007
                
                December
                    31, 2006(Unaudited)
                
                (Audited)Amounts
                    due from related parties:Pinglu
                    Changsheng Stainless Steel Material Co. Ltd., under control of
                    Mr. Ren
                    Yaoting, a director of PL
                
                $
                -
                
                $
                3,033,603Mr.
                    Ren Yaoting, a director of PL
                
                
                -
                
                
                343,767$
                -
                
                $
                3,377,370
 
 Amounts
                    due to related parties:Shanxi
                    Changchi Enterprise Co. Ltd., under common control of Mr. Beicang
                    Hou, a
                    director of the Company
                
                $
                -
                
                $
                476,404Mr.
                    Beicang Hou, CEO and director of the Company
                
                
                3,138,001
                
                
                1,435,847$
                3,138,001
                
                $
                1,912,251
 20
 
 Beicang
              Iron & Steel, Inc. and Subsidiaries
 Notes
              to
              Consolidated Financial Statements
 For
              the
              Nine Months Ended September 30, 2007 and 2006
 Balances
        with related parties represent advances to or loans from the respective related
        parties, are interest free, unsecured, and have no fixed repayment date.
        It is
        expected that the balances will be received or repaid within one
        year.
 (c)
                Other
                    transactions
  Nine
                  months ended
                September
                  30,2007
              
              2006(Unaudited)
              
              (Unaudited)Sales
                  to related parties:Shanxi
                  Changchi Enterprise Co. Ltd., under control of Mr. Hou Beicang,
                  a director
                  of the Company
              
              $
              -
              
              $
              4,536,338Shanxi
                  Rongcang Trading Co. Ltd., under control of Mr. Hou Beicang, a
                  director of
                  the Company
              
              
              7,169,851
              
              
              -Pinglu
                  Changlong Tegang Lu Liao Co. Ltd., under control of Mr. Li Zhenguan,
                  a
                  director of PL
              
              
              463,098
              
              
              -Pinglu
                  Changsheng Stainless Steel Material Co. Ltd., under control of
                  Mr. Ren
                  Yaoting, a director of PL
              
              
              9,276,695
              
              
              -$
              16,909,644
              
              $
              4,536,338
 
 Nine
                  months ended
                September
                  30,2007
              
              2006Purchases
                  from related parties:
              
              (Unaudited)
              
              (Unaudited)Taiyuan
                  Changchi Enterpise (Group) Ltd., under control of Mr. Hou Beicang,
                  a
                  director of the Company
              
              $
              4,699,542
              
              $
              -Shanxi
                  Changchi Enterprise Co. Ltd., under control of Mr. Hou Beicang,
                  a director
                  of the Company
              
              
              -
              
              
              3,566,641Pinglu
                  Changsheng Stainless Steel Material Co. Ltd., under control of
                  Mr. Ren
                  Yaoting, a director of PL
              
              
              20,379,577
              
              
              -$
              25,079,119
              
              $
              3,566,641
 21
 
 Beicang
            Iron & Steel, Inc. and Subsidiaries
 Notes
            to
            Consolidated Financial Statements
 For
            the
            Nine Months Ended September 30, 2007 and 2006
  17.
              CURRENT
                  VULNERABILITY DUE TO CERTAIN
                  CONCENTRATIONS
 
 The
        Company's operations are all carried out in the PRC. Accordingly, the Company's
        business, financial condition and results of operations may be influenced
        by the
        political, economic and legal environments in the PRC, and by the general
        state
        of the PRC's economy.
 
 The
        Company's operations in the PRC are subject to specific considerations and
        significant risks not typically associated with companies in the North America
        and Western Europe. These include risks associated with, among others, the
        political, economic and legal environments and foreign currency exchange.
        The
        Company's results may be adversely affected by changes in governmental policies
        with respect to laws and regulations, anti-inflationary measures, currency
        conversion and remittance abroad, and rates and methods of taxation, among
        other
        things.
 
 18.
              COMMITMENTS
                  AND CONTINGENCIES
 
 Employee
        social insurance
 
 According
        to the prevailing laws and regulations of the PRC the Company's PRC VIEs,
        PL and
        FS are required to cover its employees with medical, retirement and unemployment
        insurance programs. Management believes that due to the transient nature
        of its
        employees, PL and FS do not need to provide all employees with such social
        insurance.
 
 In
        the
        event that any current or former employee files a complaint with the PRC
        government, PL and FS may be subject to making up the social insurance as
        well
        as administrative fines. As the Company believes that these fines would not
        be
        material, no provision has been made in this regard.
 
 Industrial
        accident
 
 In
        August
        2007, the operation unit of Fanshi County Xinyu Iron Resources Co., Ltd.
        was
        involved in a light industrial accident resulting in the operation being
        suspended by local government. As of September 30, 2007, the accident caused
        the
        Company up to $78,532 (RMB600,000) to settle the claims and expenses outside
        the
        court. Operation can only be resumed on application to the local government
        on
        the implementation of certain satisfactory industrial safely measures. Since
        the
        penalty liabilities pertinent to this accident cannot be reasonably estimated,
        no provision has been made in this regard.
 
 19.
              LEGAL
                  PROCEEDINGS
 
 The
        Company was a
        party
        in a legal proceedingbefore the Colorado State Court (the "Colorado
        Lawsuit") initiated in November 2004, and
        currently is a party before a legal proceedingbefore the U.S. District
        Court for the Central District of California (the "California Lawsuit")
        initiated in May 2005. The Colorado Lawsuit is entitled: *Alpha Spacecom, Inc. and Tridon Trust v. Xuedong Hu, Jian Wang, and Alpha
        Sky
        Investment LTD* . (Case
        Number 04 CV 9819). The California Lawsuit was entitled: *Alpha Spacecom, Inc. and Tridon Trust v. Xuedong Hu, the United States
        Securities and Exchange Commission and Does 1-10* (Case
        No. CV05 3295DT(RCx)). The Company became a plaintiff in both of these
        lawsuits at the direction of two former directors, Terrence Sien and Brian
        Brick. Both lawsuits concern events related to or that transpired from a
        share
        exchange transaction we entered into with Alpha Sky Investment Limited
        (“ASI”), a British Virgin Islands company in 2001 (the “ASI Share Exchange
        Transaction”).
 
 Tridon
        Trust (“Tridon”), a shareholder of the Company, was a plaintiff in the Colorado
        Lawsuit and is a plaintiff in the California Lawsuit,, and Paul Ebeling,
        a
        former officer and director of the Company, may occupy a position of management
        with Tridon. Two of the Company's former directors, Xuedong Hu and Jian
        Wang, were defendants in the Colorado Lawsuit, and Mr. Hu is also a
        defendant in the California Lawsuit.
 22
 
 Beicang
            Iron & Steel, Inc. and Subsidiaries
 Notes
            to
            Consolidated Financial Statements
 For
            the
            Nine Months Ended September 30, 2007 and 2006
 On
        or
        about September 28, 2004, Messrs. Brick and Sien, two of the Company's then
        directors, allegedly gave notice to the remaining two directors, Messrs.
        Wang
        and Hu, that the board would hold a special meeting October 1, 2004. Messrs.
        Hu
        and Wang deny they received any such notice.
 
 On
        October 1, 2004, a special meeting of the Company's board of directors was
        purported to have been convened by Messrs. Brick and Sien. They were the
        only
        directors who attended and they declared a quorum, despite the fact that
        only 2
        of the 4 directors were in attendance. At this alleged meeting, the attending
        directors voted in favor of resolutions "accepting" the resignations of Mesrs.
        Hu and Wang from their positions as directors. Messrs. Wang and Hu deny that
        they ever tendered such resignations and to date, no letters of resignation
        from
        them have been produced. The attending directors then proposed and voted
        in
        favor of resolutions removing Mr. Hu as our CEO and authorizing the filing
        of
        the Colorado Lawsuit on November 29, 2004, and adjourning and reconvening
        the
        board meeting to October 15, 2004.
 
 For
        a
        greater discussion concerning the backgrounds and procedural histories of
        both
        the Colorado Lawsuit and the California Lawsuit, please refer to our Current
        Report on Form 8-K that was filed with the Securities & Exchange Commission
        (“Commission”) on November 2, 2006, which is incorporated by reference
        herein.
 
 The
        Colorado Lawsuit.
 
 On
        March
        18, 2005, the Colorado District Court Judge entered an order in open court
        (the
“Order”), the substance of which is attached to the Company's Form 8-K filed
        with the SEC on or about April 7, 2005. In summary, the Order directed that
        a
        special meeting of the shareholders be held and affirmed Mr. Hu's right to
        vote
        at the meeting as a shareholder. The Order also dismissed two of the claims
        asserted in Tridon's complaint. The Order was reduced to writing (the “Written
        Order”), and the Judge signed the Written Order on March 30, 2005. On March 25,
        2005, Tridon filed a voluntary notice of dismissal of its claims in the Colorado
        Lawsuit. Subsequent to the Written Order on March 30, 2005, Tridon filed
        a
        motion asking the Court to vacate its Order and declare that it lacked
        jurisdiction as a result of the notice of dismissal. In the filings, Tridon
        claimed that its voluntary notice of dismissal removes the Court's authority
        to
        sign the Written Order, and that the Order was not valid until it was reduced
        to
        writing and signed. Mr. Hu, Mr. Wang, and ASI filed responses to the Tridon
        filings, arguing that the Written Order entered by the Court remains valid.
        On
        May 11, 2005, the Court issued a second order (the “Second Order”) stating that
        the Order was entered March 18, 2005, prior to Tridon's voluntary dismissal,
        and
        that the Court retained jurisdiction to sign and enforce the Written
        Order.
  Tridon
        filed a Notice of Appeal with the Colorado Court of Appeals (the “Appellate
        Court”) on September 15, 2005. As a result of the Notice of Appeal filed by
        Tridon, the caption of the case before the Colorado Court of Appeals became
        Alpha Spacecom, Inc. and Tridon Trust, Appellants; Xuedong Hu, Jian Wang,
        Alpha
        Sky Investment Company Limited, Appellees; Case Number 05 CA 1244, Colorado
        Court of Appeals. In its brief to the Appellate Court, Tridon argues that
        the
        lower court lacked any jurisdiction to sign the Written Order. In response,
        Mr.
        Hu, Mr. Wang and ASI submitted a brief asking the Appellate Court to affirm
        the
        lower court's orders.
 
 On
        February 22, 2007, the Appellate Court partially affirmed the Order, agreeing
        with the lower court with respect to the special meeting of the shareholders.
        The Company interpret this ruling to mean that the actions taken since the
        issuance of the Order, including the special meeting of the shareholders
        and the
        subsequent Merger with EGIG, were validly undertaken. However, the Appellate
        Court invalidated and vacated the portion of the Order dismissing Tridon's
        two
        causes of action. A copy of the Appellate Court's ruling is attached as an
        exhibit to our Current Report on Form 8-K filed with the Securities &
Exchange Commission (“Commission”) on March 16, 2007.
 23
 
 Beicang
            Iron & Steel, Inc. and Subsidiaries
 Notes
            to
            Consolidated Financial Statements
 For
            the
            Nine Months Ended September 30, 2007 and 2006


Plaintiffs
        filed a Notice of Appeal with the Colorado Court of Appeals (the “Appellate
        Court”) on June 15, 2005. On February 22, 2007, the Appellate Court partially
        affirmed the Order, agreeing with the lower court with respect to the special
        meeting of the shareholders and invalidating and vacating the portion of
        the
        Order dismissing the plaintiffs’ two causes of action. Subsequent to the Court
        of Appeals decision, the plaintiffs filed a Petition for Certiorari with
        the
        Colorado Supreme Court (2007 SC 432). The Colorado Supreme Court denied the
        Petition (en banc) on September 10, 2007. The Appellate Court then issued
        its
        mandate on September 18, 2007. On November 6, 2007, the Denver District Court
        complied with the Court of Appeals mandate and withdrew that portion of the
        orders it previously entered that were vacated by the Court of
        Appeals.


The
        California Lawsuit
 
 The
        California Lawsuit was filed by Tridon on May 3, 2005 with the Federal District
        Court located in Los Angeles, California, and originally sought damages for
        alleged fraud and misrepresentations leading up to the closing of the ASI
        Share
        Exchange Transaction and sought to rescind the agreement underlying the ASI
        Share Exchange Transaction. Alpha Spacecom Company Limited (“ASCL”), which was a
        subsidiary of the Company as a result of the ASI Share Exchange Transaction,
        was
        also named as a defendant.
 
 In
        response, Mr. Hu and ASCL filed a motion to dismiss Tridon's complaint in
        its
        entirety. Prior to the date set for hearing, the attorney representing Tridon
        filed a First Amended Complaint on behalf of Tridon and purportedly on behalf
        of
        the Company. The First Amended Complaint changed all of the claims alleged
        in
        the complaint, dismissed ASI and ASCL as defendants, and added the Company
        as a
        plaintiff and the Securities and Exchange Commission (“SEC”) as a defendant
        (although the SEC has since been dismissed as a defendant). The Company did
        not,
        however, authorize the California Lawsuit.
 
 The
        First
        Amended Complaint seeks to have the Court declare invalid the actions that
        were
        taken at a special meeting of the shareholders on September 13, 2005, based
        upon
        allegations that the Notice of Meeting & Proxy Statements issued by the
        Company for the special meeting was not properly sent to all shareholders
        of
        record and failed to contain a copy of our annual report. Additionally, while
        the First Amended Complaint does not ask the Court to make any determination
        of
        stock ownership, it nevertheless contains allegations regarding the ownership
        rights in approximately 9,555,553 shares of Series B preferred convertible
        stock
        (the “Series B Preferred Shares”) previously issued pursuant to the ASI Share
        Exchange Transaction. Specifically, the First Amended Complaint asserts that
        Mr.
        Ebeling, a former officer and director of the Company when it was known as
        Tridon Enterprises, obtained ownership of the Series B Preferred Shares.
        Mr.
        Ebeling is not a party to the California Lawsuit and has not filed any action
        in
        any court seeking to declare ownership in the Series B Preferred
        Shares.
  In
        response to the First Amended Complaint, Mr. Hu filed a motion seeking a
        judgment based upon the pleadings in the case, and asking the Court to dismiss
        the case based upon federal legal doctrines. The Court has continued the
        hearing
        for this motion, originally scheduled for September 18, 2006, to October
        2,
        2008, and has taken Mr. Hu's motion under advisement. Essentially, the Court
        stayed the California Lawsuit pending the final decision of the Appellate
        Court
        in the Colorado Lawsuit, and as of the date of the issuance of these financial
        statements, the stay is in effect.
 
 If
        the
        Court in the California Lawsuit ultimately finds for the plaintiffs, a range
        of
        remedies, including those under equitable (fairness) theories, may be imposed.
        At the present time, the Company does not know what relief might be imposed
        in
        that event, but it could include voiding the actions taken at the special
        meeting of the shareholders on September 15, 2005 as well as the Merger.
        The
        Company believes that shareholders and potential investors should not rely
        on
        Tridon's allegations, including those relating to the Series B Preferred
        Shares.
 24
 
 Beicang
            Iron & Steel, Inc. and Subsidiaries
 Notes
            to
            Consolidated Financial Statements
 For
            the
            Nine Months Ended September 30, 2007 and 2006
 The
        Series B Preferred Shares
 
 Mr.
        Ebeling's ownership claim over the Series B Preferred Shares was in direct
        conflict with the Court's orders that are in place in the Colorado Lawsuit.
        Mr.
        Ebeling claims to have acquired ownership of the Series B Preferred Shares
        through stock powers effective May 31, 2005. Prior to that time, two press
        releases were issued on March 18, 2005 and April 12, 2005, both without proper
        authorization from the Company. The March 2005 press release states that
        9.55
        million shares of the Series B Convertible Preferred Stock were returned
        by an
        individual to the Company and cancelled. The April 2005 press release states
        that the Series B Preferred Shares were returned to the Company on September
        21,
        2004. The Company believes that shareholders and potential investors should
        not
        to rely on the Schedule 13D filed by Mr. Ebeling with the SEC, prior press
        releases issued through PR Newswire or information contained the Company's
        web
        site, as it is not under the control of the current management.
 
 The
        Company has recently received a request to convert some shares of Series
        B
        Convertible Preferred stock from a representative associated with Tridon.
        As
        these shares do not appear to have been lawfully issued, the Company has
        declined to convert them to common stock and has requested these purported
        shareholders to provide information concerning the issuance of these shares.
        As
        of the date of the issuance of these financial statements, the Company has
        not
        received any response to its request.
 
 Except
        for the above, there are no other legal proceedings pending or threatened
        against the Company as of the date of the issuance of these financial
        statements.
  25


**Item
              2.**
            **Management’s
                Discussion and Analysis of Financial Condition and Results of
                Operation**


**General
        Forward Looking Statements**
 
 Certain
        statements in the Management’s Discussion and Analysis (“MD&A”), other than
        purely historical information, including estimates, projections, statements
        relating to our business plans, objectives and expected operating results,
        and
        the assumptions upon which those statements are based, are “forward-looking
        statements” within the meaning of the Private Securities Litigation Reform Act
        of 1995, Section 27A of the Securities Act of 1933 and Section 21E of
        the Securities Exchange Act of 1934. These forward-looking statements generally
        are identified by the words “believe,” “project,” “expect,” “anticipate,”
“estimate,” “intend,” “strategy,” “plan,” “may,” “should,” “will,” “would,”
“will be,” “will continue,” “will likely result,” and similar expressions.
        Forward-looking statements are based on current expectations and assumptions
        that are subject to risks and uncertainties which may cause actual results
        to
        differ materially from the forward-looking statements. A detailed discussion
        of
        risks and uncertainties that could cause actual results and events to differ
        materially from such forward-looking statements is included in the section
        entitled “Risk Factors” (refer to Part II, Item 1A). We undertake no
        obligation to update or revise publicly any forward-looking statements, whether
        as a result of new information, future events, or otherwise.
  As
        used in this Form 10-Q, unless the context requires otherwise, “we” or “us” or
“Beicang” or the “Company” means Beicang Iron & Steel, Inc. and its
        subsidiaries.
 
 **Overview**
 
 Beicang
        Iron & Steel, Inc. (“Beicang” or the “Company”), was incorporated in
        Colorado under the name “Turco Computer Systems, Inc.” in 1993. In February
        2002, we changed our name to “Alpha Spacecom, Inc.” In June 2005, we
        reincorporated as a Nevada corporation after merging with our wholly owned
        subsidiary, Alpha Spacecom, Inc., a Nevada corporation. In October 2006,
        we
        further changed our name to “Beicang Iron & Steel, Inc.” to reflect our
        current business operations. We are in the refinery business, producing
        ferrochromium alloy and pelletized ores, which are raw materials for making
        steel and iron.
 
 On
        April 8, 2006, we entered into a merger agreement (the “Merger Agreement”) with
        East Glory Investments Group, Ltd., a Cayman Islands company (hereinafter
        “EGIG”). Under the terms of the Merger Agreement, we issued an aggregate of
        899,196,930 shares of our common stock to the sole shareholder of EGIG in
        exchange for all of the issued and outstanding shares of EGIG’s common stock,
        and EGIG merged with and into the Company (the “Merger”), with the Company as
        the surviving entity. Upon the closing of the Merger, the former sole
        shareholder of EGIG beneficially owns approximately 90% of the issued and
        outstanding shares of our common stock.
 
 EGIG
        was incorporated under the laws of the Cayman Islands on July 26, 2005, and
        owns
        100% of Trinity Link Holdings Ltd. (“Trinity Link”), a British Virgin Islands
        company, which in turns owns 100% of Shanxi Bestlink Management Consulting
        Co.,
        Ltd. (“Bestlink”), which is a wholly foreign owned enterprise under the laws of
        the People’s Republic of China (the “PRC” or “China”). Pursuant to and
        concurrent with the Merger, we acquired all the issued and outstanding share
        capitals of both Trinity Link and Bestlink.
 
 Since
        their inceptions, EGIG, Trinity Link and Bestlink have not carried any
        substantive operations of their own. Through a series of contractual
        arrangements, however, Bestlink operates, controls and beneficially owns
        the
        businesses of two companies in China that refine the raw materials for iron
        and
        steel: Pinglu County Changhong Ferroalloy Co., Ltd. (“PL”), which produces
        ferrochromium alloy, and Fanshi County Xinyu Iron Resources Co., Ltd. (“FS”),
        which produces pelletized ores. Accordingly, we consolidate the results,
        assets
        and liabilities of PL and FS in the accompanying financial
        statements.
  26
  **Recent
        Developments**
 
 During
        the third quarter of 2007, after we completed lease negotiations with Yunneng
        Electric-power Industrial Co., Ltd. for the 12,500 KVA ore-heating furnace
        used
        by PL for the production of ferrochromium alloy, our purchasing power dropped
        because of an increase in price of raw materials. Our production capacity
        was
        not saturated, which accounts for PL’s losses during the third quarter of 2007.
        Our management believes that PL will have better results in the fourth quarter
        of 2007 when the price of raw materials normalizes and production increases
        to
        full capacity
 
 During
        the third quarter of 2007, FS completed its technique innovation program
        and
        equipment repairs and maintenance, increasing its production ability by about
        20% from 1,080 tons to 1,300 tons per day. However, the price of FS’ raw
        material, which is iron powder, remained at a high level; thus, we plan to
        begin
        production in the early part of next quarter to avoid operative
        losses.
 
 In
        August
        2007, FS’ operations unit was involved in a light industrial
        accident resulting in the operation being suspended by local government.
        Operations could only be resumed on application to the local government on
        the
        implementation of certain satisfactory industrial safety measures. At
        the end of the third quarter of 2007, the local government approved our
        application for operations to resume.
 
 **Currency
        Conversion and Exchange**
  The
        value of Chinese Renminbi (“RMB”) against the U.S. dollar and other currencies
        may fluctuate and is affected by, among other things, changes in political
        and
        economic conditions. Since 1994, the conversion of RMB into foreign currencies,
        including U.S. dollars, has been based on rates set by the People’s Bank of
        China (“PBOC”), which are set daily based on the previous day’s PRC interbank
        foreign exchange market rate and current exchange rates on the world financial
        markets. Since 1994, the official exchange rate for the conversion of RMB
        to
        U.S. dollars has generally been stable.
  On
        July 21, 2005, however, PBOC announced a reform of its exchange rate
        system. Under the reform, RMB is no longer effectively linked to US dollars
        but
        instead is allowed to trade in a tight 0.3% band against a basket of foreign
        currencies. If the RMB were to increase in value against the U.S. dollar,
        for
        example, mainland Chinese consumers would experience a reduction in the relative
        prices of goods and services, which may translate into a positive increase
        in
        sales. On the other hand, a decrease in the value of the RMB against the
        dollar
        would have the opposite effect and may adversely affect our results of
        operations. Any significant revaluation of RMB may materially and adversely
        affect our cash flows, revenues, earnings and financial position, and the
        value
        of, and any dividends payments. For example, an appreciation of RMB against
        the
        U.S. dollars would make any new RMB denominated investments or expenditures
        more
        costly to us, to the extent that we need to convert U.S. dollars into RMB
        for
        such purposes.
 
 **Critical
        Accounting Policies and Estimates**
 
 See
        Note 3 of the Notes to our Consolidated Financial Statements
        (unaudited).
 
 **Recent
        Accounting Pronouncements**
 
 In
        June 2006, the Financial Accounting Standards Board (FASB) issued FASB
        Interpretation No. 48, “Accounting for Uncertainty in Income Taxes — an
        interpretation of FASB Statement No. 109” (FIN 48). This interpretation
        prescribes a minimum recognition threshold and measurement attribute for
        the
        financial statement recognition and measurement of a tax position taken or
        expected to be taken in a tax return. This interpretation also provides guidance
        on recognition, measurement, classification, interest and penalties, accounting
        in interim periods, disclosure and transition. The interpretation is effective
        for fiscal years beginning after December 15, 2006 (i.e., the beginning of
        our
        fiscal year 2007). We do not expect that the adoption of FIN 48 will have
        a
        material impact on our consolidated financial statements.
  27
  In
        September 2006, the FASB issued Statement of Financial Accounting Standards
        No.
        157, “Fair Value Measurements” (SFAS 157). SFAS 157 defines fair value,
        establishes a framework for measuring fair value, and expands disclosures
        about
        fair value instruments. SFAS 157 does not require any new fair value
        measurements, but applies under other accounting pronouncements that require
        or
        permit fair value measurements. SFAS 157 is effective for financial statements
        issued for fiscal years beginning after November 15, 2007 (our fiscal 2008).
        We
        believe that implementation of SFAS 157 will have little or no impact on
        our
        consolidated financial statements.
 
 In
        September 2006, the SEC issued Staff Accounting Bulletin No. 108, Considering
        the Effects of Prior Year Misstatements when Quantifying Misstatements in
        Current Year Financial Statements (SAB 108), to address diversity in practice
        in
        quantifying financial statement misstatements. SAB 108 requires that we quantify
        misstatements based on their impact on each of our financial statements and
        related disclosures. On December 30, 2006, we adopted SAB 108. Our adoption
        of
        SAB 108 did not impact our consolidated financial statements.
 
 In
        September 2006, the Financial Accounting Standards Board (“FASB”) issued
        Statement of Financial Accounting Standards No. 157 (“SFAS 157”), “Fair Value
        Measurements”, which is effective for fiscal years beginning after November 15,
        2007 and for interim periods within those years. SFAS 157 defines fair value,
        establishes a framework for measuring fair value in generally accepted
        accounting principles (GAAP), and expands disclosures about fair value
        measurements. The Company’s management believes that this statement will not
        have a significant impact on the Company’s financial statements.
 
 In
        September 2006, the FASB issued Statement of Financial Accounting Standards
        No.
        158, “Employers' Accounting for Defined Benefit Pension and Other Postretirement
        Plans — an amendment of FASB Statements No. 87, 88, 106, and 132(R)” (SFAS 158).
        SFAS 158 requires plan sponsors of defined benefit pension and other
        postretirement benefit plans (collectively, “postretirement benefit plans”) to
        fully recognize the funded status of their postretirement benefit plans in
        the
        statement of financial position, measure the fair value of plan assets and
        benefit obligations as of the date of the fiscal year-end statement of financial
        position and provide additional disclosures. We believe that implementation
        of
        SFAS 157 will have little or no impact on our consolidated financial statements
        since we have no applicable plans.
 
 In
        February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for
        Financial Assets and Financial Liabilities” (SFAS No. 159). SFAS No. 159 permits
        entities to choose to measure many financial assets and financial liabilities
        at
        fair value. Unrealized gains and losses on items for which the fair value
        option
        has been elected will be reported in earnings. SFAS No. 159 is effective
        for
        fiscal years beginning after November 15, 2007. The Company’s management
        believes that this statement will not have a significant impact on the Company’s
        financial statements.
 
 **Results
        of Operations**
 
 ***Three
        Months Ended September 30, 2007 as Compared to Three Months Ended September
        30,
        2006***
  Three
                  Months Ended
                September
                  30,2007
              
              2006
              
              ChangeRevenues
              
              $
              8,719,770
              
              $
              7,318,311
              
              
              11.77
              %Cost
                  of goods sold
              
              
              (8,777,489
              )
              
              (8,248,352
              )
              
              6.4
              %Gross
                  profit (loss)
              
              
              (57,719
              )
              
              (930,041
              )
              
              (93.79
              )%Selling
                  expenses
              
              
              (74,875
              )
              
              (160,703
              )
              
              (53.4
              )%Research
                  and development expenses
              
              
              -
              
              
              -
              
              
              -General
                  and administrative expenses
              
              
              (383,766
              )
              
              (154,905
              )
              
              147.7
              %Net
                  profit (loss)
              
              
              (361,242
              )
              
              (1,187,236
              )
              
              69.57
              %
 
 ***Sales*** *.* During
        the third quarter of 2007, sales increased from approximately $7.3 million
        to
        approximately $8.7 million, representing an increase of 11.77% compared to
        the
        third quarter of 2006. The increase in sales was primarily attributable to
        PL,
        whose production increased during the third quarter of 2007.
  28
  ***Cost
        of Sales*** *.* Cost
        of sales increased from approximately $8.2 million to approximately $8.7
        million
        in the third quarter of 2007 as compared to the same period in 2006,
        representing an increase of approximately 6.4%. The increase in cost of sales
        was primarily attributable to PL for which the price of raw materials increased
        during the third quarter of 2007. We prevented our cost of sales from increasing
        by a greater amount by shutting down production by FS during the three months
        ended September 30, 2007 because the price of FS’ raw materials remained at a
        high level. Selling expenses, however, decreased from $160,703 in the third
        quarter of 2006 to $74,875 in the third quarter of 2007 because PL started
        to
        control its selling costs in the third quarter of 2007.
 
 ***Operating
        Expenses*** *.* Total
        operating expenses increased from $315,608 in the third quarter of 2006 to
        $458,641 in the third quarter of 2007, which is primarily attributable to
        the
        significant increase in our general and administrative expenses.
 
 General
        and administrative expenses increased 147.7% to $383,766 for the three months
        ended September 30, 2007, from $154,905 for the same period in 2006, in order
        to
        maintain our competitiveness in the marketplace despite the increase of raw
        materials costs for PL.
 
 We
        did not incur any research and development expenses during the third quarter
        of
        2007 as we had already made purchases for our research and development needs
        in
        the first three months of 2007. We did not incur any research and development
        expenses during the same period in 2006.
  ***Net
        Profit/(Loss).*** We
        recorded a net loss of $ 361,242 in the third quarter of 2007, as compared to net loss of $ 1,187,236 in the same period in 2006, representing a 69.75% increase in net
        profit.
 
 ***Nine
        Months Ended September 30, 2007 as Compared to Nine Months Ended September
        30,
        2006***
  Nine
                  Months Ended
                September
                  30,2007
              
              2006
              
              ChangeRevenues
              
              $
              26,091,348
              
              $
              27,083,650
              
              
              (3.66
              )%Cost
                  of goods sold
              
              
              25,503,269
              
              
              26,083,634
              
              
              (2.22
              )%Gross
                  profit
              
              
              588,079
              
              
              1,886,650
              
              
              (68.83
              )%Selling
                  expenses
              
              
              1,148,983
              
              
              1,508,035
              
              
              (23.8
              )%Research
                  and development expenses
              
              
              25,836
              
              
              -
              
              
              100
              %General
                  and administrative expenses
              
              
              984,543
              
              
              579,639
              
              
              69.85
              %Net
                  profit (loss)
              
              $
              1,493,050
              
              $
              62,301
              
              
              2296.51
              %
  ***Sales*** *.* During
        the nine months ended September 30, 2007, sales decreased from approximately
        $27
        million to approximately $26 million, representing a decrease of 3.66% compared
        to the same period in 2006. The decrease in sales was primarily attributable
        to
        FS, which ceased production during the second and third quarter of 2007 in
        light
        of the high costs of raw materials and instead underwent a technique innovation
        program and undertook equipment repairs and maintenance.
  29
 
  ***Cost
          of Sales*** *.* Cost
          of sales decreased from approximately $26 million to approximately $25.5
          million
          during the nine months ended September 30, 2007 as compared to the same
          period
          in 2006, representing a decrease of 2.22% primarily due to the overall
          decrease
          in sales as FS ceased production during the second and third quarter of
          2007.
          Cost of sales as a percentage of net sales increased from 93.25% in the
          nine
          months ended September 30, 2006 to 97.75% in the same period of 2007 because
          of
          PL’s increased raw materials costs during the nine months ended September
          30,
          2007.
 
 ***Operating
        Expenses*** *.* Total
        operating expenses increased from $2,087,674 to $2,159,362 in the nine months
        ended September 30, 2007, representing an increase of 3.4% primarily due
        to FS
        ceasing its production during from the second to third quarter of 2007 and
        instead undergoing a technique innovation program and equipment repairs and
        maintenance.
  Selling
        expenses decreased 23.8% to $1,174,819 in the nine months ended September
        30,
        2007, from $1,508,035 in the same period in 2006 as we continued our efforts
        to
        maintain our competitiveness in the marketplace. We also expended efforts
        to
        raise the price of our products in order to pass along some of the increases
        in
        raw material costs to our customers.
 
 Research
        and development expenses were $25,836 in the nine months ended September
        30,
        2007, from $0 in the first six months of 2006.
 
 General
        and administrative expenses increased 69.85 % to $ 984,543 in the nine months ended September 30, 2007, from $ 579,639 in the same period in 2006, largely due to expenses associated with being
        a
        public company and related professional expenses.
  ***Net
        Profit/(Loss).*** We
        recorded a net loss of $ 1,493,050 during the nine months ended September 30, 2007 as compared to net loss of
        $62,301 during the same period in 2006.
 
 **Liquidity
        and Capital Resources**
 
 ***Cash
        Flows*** *.* We funded our operations during the third quarter of 2007 primarily through
        shareholders’ paid in capital and raw materials provided by related parties,
        Shanxi Changchi Enterprise Limited (“Changchi”), which is under the control of
        Mr. Beicang Hou, our CEO and Chairman, and Pinglu Changsheng Stainless Steel
        Material Co., Ltd. (“Changsheng”), which is a related party of PL because Mr.
        Yaoting Ren, the general manager and small shareholder of PL, is a small
        shareholder in Changsheng. We had cash flows from operations of $2,277,558
        for
        the nine months ended September 30, 2007, as compared to net cash flow used
        in
        operations of $444,159 for the same period in 2006. Cash flows from operations
        for the nine months ended September 30, 2007 was primarily related to sales
        by
        PL.
 
 We
        used $1,973,543 in investing activities for the nine months ended September
        30,
        2007, as compared to $721,477 used in investing activities for the same period
        in 2006. Net cash flow used in investing activities related to the purchase
        of
        equipment and building activities of both PL and FS.
  For
        the nine months ended September 30, 2007, net cash used in financing activities
        was approximately $684,537 as compared to $246,267 in net cash flow provided
        by
        financing activities during the same period in 2006. Net cash flow used in
        financing activities related to the repayment of outstanding loans, which
        are
        primarily loans from related parties.
 
 ***Working
        Capital Requirements*** .
        At September 30, 2007, our current liabilities were $13,096,536, and our
        current
        assets were $6,228,739. Thus, current liabilities at September 30, 2007 exceeded
        current assets by $6,867,797. At December 31, 2006, our current liabilities
        were
        $13,806,407, and our current assets were $10,272,802. Thus, current liabilities
        at December 31, 2006 exceeded current assets by $3,533,605. The ratio of
        our
        current assets to our current liabilities was 210.2 % at September30, 2007
        and
        74.4% at December 31, 2006. At September 30, 2007, our current assets of
        $6,228,739 included $1,299,116 in inventory and $2,750,113 in trade
        receivables from related parties.
  30
  ***Off-Balance
        Sheet Arrangements*** .
        We do not have any off-balance sheet arrangements that have, or are reasonably
        likely to have, a material current or future effect on our financial condition,
        changes in financial condition, revenues or expenses, results of operations,
        liquidity, capital expenditures or capital resources.
  **Effect
        of Fluctuation in Foreign Exchange Rates**
 
 Our
        operating subsidiaries are located in China, and we buy all raw materials
        in
        China and sell all our products in China using RMB as the functional currency.
        During the nine month period ended September 30, 2007 and 2006, we had other
        comprehensive income of $227,647 and $220,515, respectively, as a result
        of
        changes in foreign currency exchange rates.
 
 **Inflation**
 
 Although
        management expects our operations to be influenced by general economic
        conditions, we do not believe that inflation had a material effect on the
        results of operations during the nine month period ended September 30,
        2007.




**Item
              3.**
            **Quantitative and
                Qualitative Disclosures About Market
                Risk**





We
      do not
      use derivative financial instruments in our investment portfolio and have no
      foreign exchange contracts. Our financial instruments consist of cash and cash
      equivalents, trade accounts receivable, accounts payable and long-term
      obligations. We consider investments in highly-liquid instruments purchased
      with
      a remaining maturity of 90 days or less at the date of purchase to be cash
      equivalents.




***Interest
      Rates*** .





Our
      exposure to market risk for changes in interest rates relates primarily to
      our
      short-term investments and short-term obligations; thus, fluctuations in
      interest rates would not have a material impact on the fair value of these
      securities. At September 30, 2007, we had approximately $1,234 in cash and
      cash
      equivalents. A hypothetical 7.29% decrease in either short term or long term
      interest rates would not have a material impact on our earnings or loss, or
      the
      fair market value or cash flows of these instruments.




***Foreign
      Exchange Rates*** .





Our
      sales
      are principally in Renminbi (“RMB”). The translation of RMB amounts into US
      dollars is for reference purposes only. The People’s Bank of China, or PBOC,
      sets and publishes daily a base exchange rate with reference primarily to the
      supply and demand of RMB against the US dollar in the market during the prior
      day. PBOC also takes into account other factors such as the general conditions
      existing in the international foreign exchange markets. Although Chinese
      governmental policies were introduced in 1996 to reduce restrictions on the
      convertibility of RMB into foreign currency for current amount items, conversion
      of RMB into any other currency for capital items, such as foreign direct
      investment, loans or security, requires the approval of the State Administration
      for Foreign Exchange. RMB which had been tightly pegged at RMB 8.28 for US
      $1
      for the previous decade, was revalued on July 21, 2005 to RMB 8.11 for US $1
      following the removal of the peg to the US dollar and partly in response to
      pressure from the United States government. PBOC also announced that the RMB
      would float according to a basket of foreign currencies, rather then being
      strictly pegged to the US dollar, and would trade within a narrow 0.3% band
      against this basket of currencies, which is dominated by the US dollar, Euro,
      Japanese Yen and South Korean Won, with a smaller proportion made up of the
      British pound, Thai Baht and Russian Ruble. The translation of RMB amounts
      in
      this report on Form 10-Q is not a representation that the RMB amounts could
      actually be converted into US dollars at that rate or at any other rate on
      that
      date or on any other date, and does not imply free convertibility of RMB to
      other foreign currencies. All foreign exchange transactions continue to take
      place either through PBOC or other banks authorized to buy and sell foreign
      currencies at the exchange rates quoted by PBOC. Approval of foreign currency
      payments by PBOC or other institutions requires submitting a payment application
      form together with invoices, shipping documents and signed contracts. As a
      result, we are exposed to risk of foreign exchange rate changes that will result
      from any change in the PRC governmental policies with regard to currency
      exchange and remittance abroad. However, see the Risk Factors titled
“Fluctuation in the value of RMB may have a material adverse effect on our
      business and/or an investment in our shares” in our most recent Annual Report on
      Form 10-KSB.


31


**Item
              4.**
            **Controls
                and Procedures.**





***Disclosure
      Controls and Procedures***





As
      of the
      end of the period covered by this quarterly report, we carried out an
      evaluation, under the supervision of, and with the participation of our
      management, including our Chief Executive Officer who is also our Chief
      Financial Officer, of the effectiveness of the Company’s disclosure controls and
      procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the
      Securities Exchange Act of 1934, as amended) as of the end of the period covered
      by this report. Based on that evaluation, our Chief Executive Officer, who
      is
      also our Chief Financial Officer, has concluded that, as of the end of the
      period covered by this report, our disclosure controls and procedures were
      effective to enable us to record, process, summarize and report information
      required to be included in our reports that we file or submit under the Exchange
      Act within the time periods required.





***Changes
      in Internal Control over Financial Reporting***





There
      were no changes in our internal control over financial reporting (as defined
      in
      Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as
      amended) during the quarter ended September 30, 2007 that have materially
      affected, or are reasonably likely to materially affect our internal control
      over financial reporting.





**PART
      II - OTHER INFORMATION**





**Item
              1.**
            **Legal
                Proceedings**





***Colorado
      Lawsuit***





We
      were a
      party to a legal proceeding before the Colorado State Court (the “Court”)
      initiated in November 2004 entitled: *Alpha
      Spacecom, Inc. and Tridon Trust v. Xuedong Hu, Jian Wang, and Alpha Sky
      Investment LTD* .
      (Case
      Number 04 CV 9819) (the “Colorado Lawsuit”). We became a plaintiff in this
      lawsuit at the direction of two former directors, Terrence Sien and Brian Brick.
      The lawsuit concerned events related to or that transpired from a share exchange
      transaction with Alpha Sky Investment Limited (“ASI”) pursuant to which we
      acquired from ASI all of its equity interests in both Accuhigh Investments
      Limited (“Accuhigh”) and Tidy Sum Investments Limited (“Tidy Sum”), in exchange
      for 10,000,000 shares of our convertible preferred stock, which shares were
      convertible into 900,000,000 shares of our common stock.





The
      Colorado Lawsuit primarily sought to remove from office the two directors and
      the CEO appointed as a result of the ASI Share Exchange Transaction, Xuedong
      Hu
      and Jian Wang. These directors and the CEO are no longer in office, as they
      resigned from their positions as a result of a merger with East Glory
      Investments Group, Ltd. on April 8, 2006.





On
      March
      18, 2005, the Colorado District Court Judge entered an order in open court
      (the
“Order”), directing that a special meeting of the shareholders be held and
      affirmed Mr. Hu’s right to vote at the meeting as a shareholder. The Order also
      dismissed two of the claims asserted in the plaintiffs’ complaint. The Order was
      reduced to writing (the “Written Order”), and the Judge signed the Written Order
      on March 30, 2005. On March 25, 2005, plaintiffs filed a voluntary notice of
      dismissal of their claims in the Colorado Lawsuit. Subsequent to the Written
      Order on March 30, 2005, plaintiffs filed a motion asking the Court to vacate
      its Order and declare that it lacked jurisdiction as a result of the notice
      of
      dismissal. On May 11, 2005, the Court issued a second order (the “Second Order”)
      stating that the Order was entered March 18, 2005, prior to the plaintiffs’
voluntary dismissal, and that the Court retained jurisdiction to sign and
      enforce the Written Order.


32




Plaintiffs
        filed a Notice of Appeal with the Colorado
        Court of Appeals (the “Appellate Court”) on June 15, 2005. On February 22, 2007,
        the Appellate Court partially affirmed the Order, agreeing with the lower
        court
        with respect to the special meeting of the shareholders and invalidating
        and
        vacating the portion of the Order dismissing the plaintiffs’ two causes of
        action. Subsequent to the Court of Appeals decision, the plaintiffs filed
        a
        Petition for Certiorari with the Colorado Supreme Court (2007 SC 432). The
        Colorado Supreme Court denied the Petition (en banc) on September 10, 2007.
        The
        Appellate Court then issued its mandate on September 18, 2007. On November
        6,
        2007, the Denver District Court complied with the Court of Appeals mandate
        and
        withdrew that portion of the orders it previously entered that were vacated
        by
        the Court of Appeals.


For
      a
      greater discussion concerning the backgrounds and procedural histories of the
      Colorado Lawsuit, please refer to our Current Report on Form 8-K that was filed
      with the Securities & Exchange Commission (“Commission”) on November 2,
      2006, which is incorporated by reference herein. We have also discussed recent
      developments in the Colorado Lawsuit in our Current Report on Form 8-K filed
      with the Commission on March 16, 2007 and our Annual Report on Form 10-KSB
      filed
      with the Commission on May 18, 2007, which are each incorporated by reference
      herein.





***California
      Lawsuit***





We
      are
      also a party to legal proceeding to a lawsuit related to the Colorado lawsuit
      entitled *Alpha
      Spacecom,Inc. and Tridon Trust v. Xuedong Hu, the United States Securities
      and
      Exchange Commission and Does 1-10* (Case
      No. CV05 3295DT(RCx)) that was initiated in May 2005 and is before the U.S.
      District Court for the Central District of California. There have been no
      material changes in this proceeding, which is more fully described in our Annual
      Report on Form 10-KSB filed with the Commission on May 18, 2007.





**Item
              1A.**
            **Risk
                Factors**





There
      have been no material changes in our business, operations or prospects that
      would require a change to the Risk Factor disclosure included in our most recent
      Annual Report on Form 10-KSB that have not already been disclosed.





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





None.





**Item
              3.**
            **Defaults
                upon Senior Securities.**





None.





**Item
              4.**
            **Submission
                of Matters to a Vote of Securities Holders.**





None.




**Item
              5.**
            **Other
                Information**.





None.


33






**Item
      6.**  **Exhibits**




ExhibitNumber
            
            Description2.1
            
            Share
                Exchange Agreement dated as of December 10, 2001. (Incorporated by
                reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K
                filed on December 21, 2001)2.2
            
            Agreement
                and Plan of Merger between the Company and Alpha Spacecom, Inc.,
                a Nevada
                corporation, dated as of June 16, 2005. (Incorporated by reference
                to
                Exhibit 2.2 of the Company’s Annual Report on Form 10-KSB for the fiscal
                year ended December 31, 2004 filed on July 26, 2005)2.3
            
            Merger
                Agreement between the Company and East Glory Investment Group, Ltd.
                dated
                April 8, 2006. (Incorporated by reference to Exhibit 2.3 of the Company’s
                Current Report on Form 8-K filed on April 12, 2006)3.1
            
            Articles
                of Incorporation, as amended and currently in effect. (Incorporated
                by
                reference to Exhibit No. 3.1 of the Company’s Annual Report on Form 10-KSB
                for the fiscal year ended December 31, 2004 filed on July 26,
                2005)3.2
            
            Bylaws.
                (Incorporated by reference to Exhibit No. 3.2 of the Company’s Annual
                Report on Form 10-KSB for the fiscal year ended December 31, 2004
                filed on
                July 26, 2005)3.3
            
            Articles
                of Merger as filed with the Nevada Secretary of State. (Incorporated
                by
                reference to Exhibit No. 3.3 of the Company’s Annual Report on Form 10-KSB
                for the fiscal year ended December 31, 2004 filed on July 26,
                2005)10.1
            
            Operating
                and Service Agreement for Fanshi County Xinyu Iron Resource Co.,
                Ltd.
                dated January 5, 2006 (Incorporated by reference to Exhibit 10.1
                of the
                Company’s Quarterly Report on Form 10-Q for the quarter ended June 30,
                2007 filed on August 20, 2007)10.2
            
            Option
                Agreement for Fanshi County Xinyu Iron Resource Co., Ltd. dated January
                5,
                2006 (Incorporated by reference to Exhibit 10.2 of the Company’s
                Quarterly Report on Form 10-Q for the quarter ended June 30, 2007
                filed on
                August 20, 2007)10.3
            
            Loan
                Agreement for Fanshi County Xinyu Iron Resource Co., Ltd. dated January
                5,
                2006 (Incorporated by reference to Exhibit 10.3 of the Company’s Quarterly
                Report on Form 10-Q for the quarter ended June 30, 2007 filed on
                August
                20, 2007)10.4
            
            Operating
                and Service Agreement for Pinglu County Changhong Ferroalloy Co.,
                Ltd.
                dated January 5, 2006 (Incorporated by reference to Exhibit 10.4
                of the
                Company’s Quarterly Report on Form 10-Q for the quarter ended June 30,
                2007 filed on August 20, 2007)10.5
            
            Option
                Agreement for Pinglu County Changhong Ferroalloy Co., Ltd. dated
                January
                5, 2006 (Incorporated by reference to Exhibit 10.5 of the Company’s
                Quarterly Report on Form 10-Q for the quarter ended June 30, 2007
                filed on
                August 20, 2007)10.6
            
            Loan
                Agreement for Pinglu County Changhong Ferroalloy Co., Ltd. dated
                January
                5, 2006 (Incorporated by reference to Exhibit 10.6 of the Company’s
                Quarterly Report on Form 10-Q for the quarter ended June 30, 2007
                filed on
                August 20, 2007)31.1
            
            Rule
                13a-14(a)/15d-14(a)(4) Certification by the Chief Executive Officer.
                (Filed herewith.)




34




31.2
            
            Rule
                13a-14(a)/15d-14(a)(4) Certification by the Chief Financial Officer.
                (Filed herewith.)32.1
            
            Section
                1350 Certification by the Chief Executive Officer and Chief Financial
                Officer. (Filed herewith.)




35


**SIGNATURES**





Pursuant
      to the requirements of the Securities Exchange Act of 1934, the registrant
      has
      duly caused this report to be signed on its behalf by the undersigned thereunto
      duly authorized.





**BEICANG
              IRON & STEEL, INC.**(Registrant)Date:
                November 26, 2007
            By:
            /s/
                Beicang HouBeicang
              HouChief
              Executive Officer,Chief
              Financial Officer,and
              sole Director




36