**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 **June
      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
                or organization)
            (IRS
                Employer
              Identification
                No.)





**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 August 10, 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.**
              
              3Beicang
                  Iron & Steel, Inc.
                Unaudited
                  Consolidated Condensed Financial Statements
                As
                  ofand
                  For the Three and Six Months ended June 30, 2007 and 2006
              
              3Consolidated
                  Balance Sheets
              
              5Consolidated
                  Statements of Operations
              
              7Consolidated
                  Statements of Changes in Stockholders' Equity
              
              8Consolidated
                  Statements of Cash Flows
              
              9Notes
                  to Consolidated Financial Statements (unaudited)
              
              10**Item
                  2. Management’s Discussion and Analysis of Financial Conditions 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**
              
              33**Item
                  1. Legal Proceedings.**
              
              33**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 Securities Holders.**
              
              33**Item
                  5. Other Information.**
              
              33**Item
                  6. Exhibits**
              
              33**Signatures**
              
              35




2


**PART
      I - FINANCIAL INFORMATION**





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




BEICANG
        IRON & STEEL, INC. AND SUBSIDIARIES
 
 UNAUDITED
        CONSOLIDATED FINANCIAL STATEMENTS
 
 FOR
        THE
        SIX MONTHS ENDED JUNE 30, 2007 AND 2006
  3
  BEICANG
                  IRON & STEEL, INC. AND SUBSIDIARIESINDEX
                  TO FINANCIAL STATEMENTS
  PagesUnaudited
                  Consolidated Balance Sheet
              
              
              5-6Unaudited
                  Consolidated Statements of (Operations) Income and Other Comprehensive
                  Income
              
              
              7Unaudited
                  Consolidated Statements of Changes in Stockholders' Equity
              
              
              8Unaudited
                  Consolidated Statements of Cash Flows
              
              
              9Notes
                  to Unaudited Consolidated Financial Statements
              
              
              10-25
  4
 **BEICANG
                      IRON & STEEL, INC. AND SUBSIDIARIES****CONSOLIDATED
                    BALANCE SHEET****AS
                    OF JUNE 30, 2007 AND DECEMBER 30, 2006****(Amounts
                    expressed in U.S. Dollars)**June
                    30,
                
                December
                    31,2007
                
                2006(unaudited)
                
                (audited)**ASSETS****Current
                    assets**Cash
                    and cash equivalents
                
                $
                141,496
                
                $
                475,975Bills
                    receivable
                
                
                157,563
                
                
                81,868Trade
                    receivables, net of allowance for doubtfulaccounts
                    of $259,762 and $106,684 at June 30,2007
                    and December 31, 2006 respectively
                
                
                955,949
                
                
                1,703,276Trade
                    receivables - related parties (note 16)
                
                
                2,265,257
                
                
                2,845,982Inventories
                    (note 5)
                
                
                1,666,852
                
                
                1,295,334Prepayment
                    and deposits (note 6)
                
                
                282,499
                
                
                420,106Other
                    receivables (note 7)
                
                
                97,316
                
                
                62,818Prepaid
                    land use right (note 8)
                
                
                10,340
                
                
                10,073Due
                    from related parties (note 16)
                
                
                844,820
                
                
                3,377,370**Total
                    current assets**
                
                
                6,422,092
                
                
                10,272,802Prepaid
                    land use right, net of current portion (note 8)
                
                
                481,609
                
                
                474,232Property,
                    plant and equipment, net (note 9)
                
                
                4,880,986
                
                
                4,967,210Construction
                    in progress
                
                
                181,611
                
                
                161,580**Total
                    assets**
                
                $
                11,966,298
                
                $
                15,875,824**LIABILITIES
                    AND STOCKHOLDERS' EQUITY****Current
                    liabilities**Trade
                    payables
                
                $
                928,395
                
                $
                2,619,526Trade
                    payables - related parties (note 16)
                
                
                771,452
                
                
                1,926,438Deposits
                    received from customers
                
                
                241,507
                
                
                207,408Accrued
                    expenses (note 10)
                
                
                1,066,397
                
                
                1,260,721Other
                    payables (note 11)
                
                
                2,378,536
                
                
                1,857,765Other
                    short-term loans (note 12)
                
                
                1,390,493
                
                
                1,855,069Value-added
                    tax payable
                
                
                1,084,353
                
                
                2,167,229Due
                    to related parties (note 16)
                
                
                3,167,556
                
                
                1,912,251**Total
                    current liabilities**
                
                
                11,028,689
                
                
                13,806,407**Commitments
                    and Contingencies (Notes 18 and 19)**
  5
  **BEICANG
                      IRON & STEEL, INC. AND SUBSIDIARIES****CONSOLIDATED
                      BALANCE SHEET (CONTINUED)****(Amounts
                      expressed in U.S. Dollars)**June
                      30,
                  
                  December
                      31,2007
                  
                  2006(unaudited)
                  
                  (audited)**Stockholders'
                      Equity**Preferred
                      stock - 50,000,000 authorized:Series
                      A, $0.001 par value; 23,000 shares issuedand
                      outstanding, 7% cumulative, each convertible into40
                      shares of common stock (note 13)
                  
                  $
                  23
                  
                  $
                  23Series
                      B, nil issued
                  
                  
                  -
                  
                  
                  -Common
                      stock, $0.001 par value, 1,000,000,000 sharesauthorized,
                      999,066,260 shares issued and outstanding (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
                  
                  
                  365,145
                  
                  
                  175,491Accumulated
                      loss
                  
                  
                  (3,585,945
                  )
                  
                  (2,264,483
                  )**Total
                      Stockholders' Equity**
                  
                  
                  937,609
                  
                  
                  2,069,417**Total
                      Liabilities and Stockholders' Equity**
                  
                  $
                  11,966,298
                  
                  $
                  15,875,824
  The
            accompanying notes are an integral part of these financial
            statements.
  6
  **BEICANG
                    IRON & STEEL, INC. AND SUBSIDIARIES****CONSOLIDATED
                    STATEMENTS OF (OPERATIONS) INCOME****AND
                    OTHER COMPREHENSIVE INCOME****FOR
                    THE SIX MONTHS ENDED JUNE 30, 2007 AND 2006****(Amounts
                    expressed in U.S. Dollars)**
  Three
                    months endedJune30,
                
                Six
                    months endedJune30,2007
                
                2006
                
                2007
                
                2006(unaudited)
                
                (unaudited)
                
                (unaudited)
                
                (unaudited)Revenue
                
                $
                3,621,105
                
                $
                5,910,833
                
                $
                7,831,979
                
                $
                12,093,186Revenue
                    - related parties
                
                
                2,996,848
                
                
                4,022,450
                
                
                9,539,599
                
                
                8,558,788Total
                    revenue
                
                
                6,617,953
                
                
                9,933,283
                
                
                17,371,578
                
                
                20,651,974Cost
                    of goods sold
                
                
                (6,365,488
                )
                
                (8,894,936
                )
                
                (16,725,780
                )
                
                (17,835,282
                )**Gross
                    profit**
                
                
                252,465
                
                
                1,038,347
                
                
                645,798
                
                
                2,816,692**Operating
                    expenses**Selling
                    expenses
                
                
                (853,176
                )
                
                (767,755
                )
                
                (1,099,944
                )
                
                (969,145
                )General
                    and administrative expenses
                
                
                (293,693
                )
                
                (97,430
                )
                
                (600,777
                )
                
                (802,922
                )Total
                    operating expenses
                
                
                (1,146,869
                )
                
                (865,185
                )
                
                (1,700,721
                )
                
                (1,772,067
                )**Profit
                    (loss) from operations**
                
                
                (894,404
                )
                
                173,162
                
                
                (1,054,923
                )
                
                1,044,625**Other
                    income (expenses)**Gain
                    on by-product sales
                
                
                90,770
                
                
                3,377
                
                
                496
                
                
                168,758Sundryincome
                    (expenses),
                    net
                
                
                (66,702
                )
                
                (19,343
                )
                
                (66,702
                )
                
                (19,343
                )Finance
                    costs
                
                
                (54,699
                )
                
                (135,785
                )
                
                (200,333
                )
                
                (203,891
                )Total
                    other expenses
                
                
                (30,631
                )
                
                (151,751
                )
                
                (266,539
                )
                
                (54,476
                )Profit(loss)before
                    income taxes
                
                
                (925,035
                )
                
                21,411
                
                
                (1,321,462
                )
                
                990,149Income
                    taxes
                
                
                -
                
                
                (30,278
                )
                
                -
                
                
                (30,278
                )**Net
                    profit (loss)**
                
                
                (925,035
                )
                
                (8,867
                )
                
                (1,321,462
                )
                
                959,871**Other
                    comprehensive income**
                
                
                187,710
                
                
                15,744
                
                
                189,654
                
                
                22,564**Comprehensive
                    income**
                
                $
                (737,325
                )
                $
                6,877
                
                $
                (1,131,808
                )
                $
                982,435**Weight
                    average number of shares**-
                    Basic
                
                
                
                
                
                
                
                
                999,066,260
                
                
                999,066,260-
                    Diluted
                
                
                
                
                
                
                
                
                999,066,260
                
                
                999,066,260**(Loss)
                    earnings per share**-
                    Basic
                
                
                
                
                
                
                
                $
                (0.0013
                )
                $
                0.0010-
                    Diluted
                
                
                
                
                
                
                
                $
                (0.0013
                )
                $
                0.0010
 The
          accompanying notes are an integral part of these financial
          statements.
  7
  **BEICANG
                  IRON & STEEL, INC. AND SUBSIDIARIES****CONSOLIDATED
                  STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY****(Amounts
                  expressed in U.S. Dollars)**
  Statutory
                  reservesAdditional
              
              (Accumulated
                  loss)
              
              Statutory
              
              Statutory
                  common
              
              AccumulatedotherCommon
                  stock
              
              Preferred
              
              paid-in
              
              /Retained
              
              surplus
              
              welfare
              
              comprehensiveShares
              
              Amount
              
              stock
              
              capital
              
              earnings
              
              reserve
              
              reserve
              
              income
              
              TotalBalance
                  at January 1, 2006 (Audited)
              
              
              899,196,930
              
              $
              899,197
              
              $
              -
              
              $
              4,634,862
              
              $
              69,134
              
              $
              16,475
              
              $
              8,238
              
              $
              30,093
              
              $
              5,657,999Effect
                  of merger
              
              
              99,869,330
              
              
              99,869
              
              
              23
              
              
              (1,501,117
              )
              
              
              
              
              -
              
              
              -
              
              
              -
              
              
              (1,401,225
              )Contribution
                  by stockholder
              
              
              -
              
              
              -
              
              
              -
              
              
              862
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              862Net
                  loss
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              (2,333,617
              )
              
              -
              
              
              -
              
              
              -
              
              
              (2,333,617
              )Effect
                  of foreign currencytranslation
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              145,398
              
              
              145,398Balance
                  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
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              (1,321,462
              )
              
              -
              
              
              -
              
              
              -
              
              
              (1,321,462
              )Effect
                  of foreign currencytranslation
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              189,654
              
              
              189,654Balance
                  at June 30, 2007 (Unudited)
              
              
              999,066,260
              
              $
              999,066
              
              $
              23
              
              $
              3,134,607
              
              $
              (3,585,945
              )
              $
              16,475
              
              $
              8,238
              
              $
              365,145
              
              $
              937,609
  The
        accompanying notes are an integral part of these financial
        statements.
  8
  **BEICANG
                    IRON & STEEL, INC. AND SUBSIDIARIES****CONSOLIDATED
                    STATEMENTS OF CASH FLOWS****FOR
                    THE SIX MONTHS ENDED JUNE 30, 2007 AND 2006****(Amounts
                    expressed in U.S. Dollars)**
  Six
                    months ended June 30,2007
                
                2006(unaudited)
                
                (unaudited)**Cash
                    flows from operating activities**Net
                    income (loss)
                
                $
                (1,321,462
                )
                $
                959,871Adjustments
                    to reconcile net income to cashprovided
                    by (used in) operating activities:Depreciation
                
                
                286,830
                
                
                211,762Amortization
                
                
                5,110
                
                
                4,519Loss
                    on disposal of property, plant and equipment
                
                
                1,399
                
                
                -(Increase)
                    Decrease in assetsBills
                    receivable
                
                
                (72,680
                )
                
                894,736Prepayment
                    and deposits
                
                
                147,003
                
                
                135,004Accounts
                    receivable, net
                
                
                1,539,925
                
                
                (1,555,992
                )Inventories,
                    net
                
                
                (333,352
                )
                
                (100,457
                )Other
                    receivables
                
                
                (32,456
                )
                
                50,045Due
                    from related parties
                
                
                4,041,157
                
                
                (2,571,678
                )(Decrease)
                    Increase in liabilities:Bills
                    payable
                
                
                -
                
                
                (1,562,735
                )Accounts
                    payable
                
                
                (2,932,127
                )
                
                709,506Receipts
                    in advance
                
                
                28,281
                
                
                (93,364
                )Accrued
                    expenses
                
                
                (224,871
                )
                
                774,292Other
                    payables
                
                
                466,170
                
                
                53,802Income
                    tax payble
                
                
                -
                
                
                30,278Value-added
                    tax payable
                
                
                (1,127,045
                )
                
                225,954Due
                    to related parties
                
                
                (219,350
                )
                
                366,562Net
                    cash provided by (used in) operating activities
                
                
                252,532
                
                
                (1,467,895
                )**Cash
                    flows from investing activities**Increase
                    in construction in progress
                
                
                (15,574
                )
                
                -Purchase
                    of plant and equipment
                
                
                (72,276
                )
                
                (497,140
                )Net
                    cash used in investing activities
                
                
                (87,850
                )
                
                (497,140
                )**Cash
                    flows from financing activities**Injection
                    of additional paid-in capital
                
                
                -
                
                
                222,035Repayment
                
                
                (1,012,330
                )
                
                -Increase
                    of other loans
                
                
                504,607
                
                
                2,450,278Net
                    cash provided by (used in) financing activities
                
                
                (507,723
                )
                
                2,672,313Effect
                    of foreign currency translation
                
                
                8,562
                
                
                4,939**Net
                    increase in cash**
                
                
                (334,479
                )
                
                712,217Cash
                    and cash equivalents, beginning of period
                
                
                475,975
                
                
                158,348Cash
                    and cash equivalents, end of period
                
                $
                141,496
                
                $
                870,565**Supplemental
                    disclosure information**Finance
                    costs paid
                
                $
                200,033
                
                $
                93,578Income
                    tax paid
                
                $
                -
                
                $
                -**Major
                    non-cash transactions**Barter
                    sales of finished goods in return of rawmaterials
                    for production.
                
                $
                -
                
                $
                233,631
 The
        accompanying notes are an integral part of these financial
        statements.
  9




1. DESCRIPTION
      OF BUSINESS AND ORGANIZATION


*Principal
          activities*
 
 Beicang
          Iron & Steel Inc. (the “Company” or “Beicang”), 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, it 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 of our Company, 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 Company’s Board and the holders of a majority of the Company’s
          capital stock approved amendments to its Articles of Incorporation by written
          consent, including: (1) a change of the Company’s corporate name from Alpha
          Spacecom, Inc. to the present name, Beicang Iron & Steel Inc., and (2) an
          increase in the authorized common stock of the Company from 200,000,000
          to
          1,000,000,000 shares. The Articles of Merger to effectuate the Merger and
          the
          Amendment to the 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 Beicang or the combined company’s issued and outstanding
          Common Stock.
 
 As
          a
          result of the effectiveness of the Merger, the control of the Company 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
          the
          Company’s 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. Beicang
          has been
          deemed to be a continuation of the business of EGIG. The outstanding stock
          of
          Beicang 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, Beicang has acquired all the issued
          and
          outstanding common stock of Trinity Link Holdings Limited (“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. (“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.
 
 10
  1. DESCRIPTION
          OF BUSINESS AND ORGANIZATION (Continued)
 
 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
          June 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.
 
 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 June 30, 2007, the Company had a net working
          capital deficiency of $4,606,597 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.
 
 11
  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 year/ 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.
  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.
 
 12
  3. SUMMARY
          OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 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.
 
 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 $189,654
          and
          $22,564 for the period ended June 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.
 
 13
  3. SUMMARY
          OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 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 period ended June 30, 2007 and 2006,
          the
          diluted share base excludes incremental shares relating to convertible
          preferred
          stock since their effect was anti-dilutive.
 
 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:
  June
                    30, 2007
                
                December
                    31, 2006
                
                June
                    30, 2006Balance
                    sheet items, except for the registered and paid-up capital, as
                    of period/
                    year end
                
                
                USD0.1313:RMB1
                
                
                USD0.1279:RMB1
                
                
                USD0.1252:RMB1Amounts
                    included in the statements of operations, statements of changes
                    in
                    stockholders' equity and statements of cash flows for the period/
                    year
                
                
                USD0.1298:RMB1
                
                
                USD0.1252:RMB1
                
                
                USD0.1246:RMB1
 
 No
          representation is made that RMB amounts have been, or would be, converted
          into
          US$ at the above rates.
  14
  3. SUMMARY
          OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
  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.
 
 r.
                Recently
                    issued accounting standards
 
 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.
 
 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.
  15
 
 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 June 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
          June 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 June 30, 2007 and 2006, all of the Company's sales arose
          in the
          PRC. In addition, all accounts receivable as of June 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:
 
 June
                    30,
                
                June
                    30,2007
                
                2006(unaudited)
                
                (unaudited)Company
                    A
                
                $
                5,973,643
                
                $
                2,742,739Company
                    B
                
                
                -
                
                
                3,086,321Company
                    C
                
                
                5,374,775
                
                
                -
 
 Details
          of customers accounting for 10% or more of the Company's accounts receivable
          are
          as follows:
 
 June
                    30,
                
                December
                    31,2007
                
                2006(unaudited)
                
                (audited)Company
                    D
                
                $
                1,942,335
                
                $
                -Company
                    E
                
                
                800,728
                
                
                -Company
                    F
                
                
                -
                
                
                2,795,985Company
                    G
                
                
                322,922
                
                
                -
  5.
                INVENTORIES
 
 Inventories
          consist of the following:
  June
                    30,
                  2007
                
                December
                    31,
                  2006(unaudited)
                
                (audited)Raw
                    materials
                
                $
                1,069,071
                
                $
                832,692Finished
                    goods
                
                
                498,689
                
                
                356,199Consumables
                
                
                99,092
                
                
                106,443$
                1,666,852
                
                $
                1,295,334
  6.
                PREPAYMENT
                    AND DEPOSITS
 
 Prepayment
          and deposits consist of the following:
  June
                    30,
                  2007
                
                December
                    31,
                  2006(unaudited)
                
                (audited)Purchase
                    deposits for raw materials
                
                $
                209,099
                
                $
                409,504Other
                
                
                73,400
                
                
                10,602$
                282,499
                
                $
                420,106
  16
  7.
                OTHER
                    RECEIVABLES
 
 Other
          receivables consist of the following:
 June
                    30,
                  2007
                
                December
                    31,
                  2006(unaudited)
                
                (audited)Non-interest
                    bearing, unsecured receivables
                
                $
                42,064
                
                $
                55,439Cash
                    advances to staff and salespersons for normal business
                    purposes
                
                
                14,562
                
                
                6,253Others
                
                
                40,690
                
                
                1,126$
                97,316
                
                $
                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.
 
 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 June 30, 2007
                
                $
                491,941Less:
                    Current portion
                
                
                (10,340
                )Long-term
                    portion
                
                $
                481,609
 
 Amortization
          expense was $5,110 and $4,519 for the period ended June 30, 2007 and 2006,
          respectively.
  9.
                PROPERTY,
                    PLANT AND EQUIPMENT
 
 Property,
          plant and equipment consist of the following:
  June
                    30,
                  2007
                
                December
                    31,
                  2006(unaudited)
                
                (audited)Plant
                    and machinery
                
                $
                1,802,147
                
                $
                1,718,761Building
                
                
                3,947,516
                
                
                3,836,333Motor
                    vehicles
                
                
                177,279
                
                
                161,965Office
                    equipment
                
                
                209,654
                
                
                192,1546,136,596
                
                
                5,909,213Less:
                    Accumulated depreciation and impairment losses
                
                
                (1,255,610
                )
                
                (942,003
                )$
                4,880,986
                
                $
                4,967,210
 
 The
          depreciation expenses on property, plant and equipment were $286,830 and
          $211,762 for the periods ended June 30, 2007 and 2006,
          respectively.
  17
  10.
                ACCRUED
                    EXPENSES
  Accrued
          expenses consist of the following:
  June
                    30,
                  2007
                
                December
                    31,
                  2006(unaudited)
                
                (audited)Social
                    securities insurance
                
                $
                343,060
                
                $
                334,218Accrued
                    welfare
                
                
                190,107
                
                
                168,254Loan
                    interest expenses
                
                
                220,865
                
                
                210,016Other
                    operating expenses
                
                
                312,365
                
                
                548,233$
                1,066,397
                
                $
                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.
  11.
                OTHER
                    PAYABLES
 
 Other
          payables consist of the following:
  June
                    30,
                  2007
                
                December
                    31,
                  2006(unaudited)
                
                (audited)Payables
                    for construction and machinery
                
                $
                143,926
                
                $
                132,928Non-interest
                    bearing, unsecured borrowings without fixed repayment date
                
                
                2,234,610
                
                
                1,724,837$
                2,378,536
                
                $
                1,857,765
  12.
                OTHER
                    LOANS
 
 Other
          loans consist of the following:
  June
                    30,
                  2007
                
                December
                    31,
                  2006(unaudited)
                
                (audited)24%
                    loans, without fixed repayment date
                
                $
                -
                
                $
                473,29718%
                    loans, without fixed repayment date
                
                
                -
                
                
                789,51115%
                    loans, without fixed repayment date
                
                
                724,527
                
                
                208,5078%
                    loans, without fixed repayment date
                
                
                665,966
                
                
                38,375Interest-free
                    loans, without fixed repayment date
                
                
                -
                
                
                345,379Total
                    other loans
                
                
                1,390,493
                
                
                1,855,069Less
                    current maturities
                
                
                (1,390,493
                )
                
                (1,855,069
                )Total
                    long-term loans
                
                $
                -
                
                $
                -
 
 All
          of
          the above other loans are unsecured and denominated in Renminbi.
  18
 
 13.
                SHARE
                    CAPITAL
  (a)
                    Preferred stock
 
 The
          Company as of June 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)
                (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.
 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 June 30, 2007 and December 31,
          2006.
  19
 
 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 $3,566,132 and $2,458,055 as of June
          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 June
          30,
          2007 and December 31, 2006 are as follows:
  June
                    30,
                  2007
                
                December
                    31,
                  2006(unaudited)
                
                (audited)Deferred
                    tax assets arising from net operating losses
                
                $
                1,169,000
                
                $
                811,000Less:
                    Valuation allowance
                
                
                (1,169,000
                )
                
                (811,000
                )$
                -
                
                $
                -
  20
 
 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:
  June
                    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
                
                $
                322,922
                
                $
                49,997Shanxi
                    RongChang Trade Co. Ltd., under control of Mr. Beicang Hou, a
                  director
                    of the Company
                
                
                -
                
                
                2,795,985Pinglu
                    Changsheng Stainless Steel Material Co. Ltd., under control
                  of
                    Mr. Ren Yaoting, a director of PL
                
                
                1,942,335
                
                
                -$
                2,265,257
                
                $
                2,845,982
 Trade
                    payables:Shanxi
                    Changchi Enterprise Co. Ltd., under control of Mr. Beicang Hou,
                    a
                  director
                    of the Company
                
                $
                605,972
                
                $
                1,765,223Shanxi
                    Haixin Material Trading Co. Ltd., under control of Mr. Beicang
                    Hou,
                  a
                    director of the Company
                
                
                165,480
                
                
                161,215$
                771,452
                
                $
                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
  June
                    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
                
                $
                -
                
                $
                3,033,603Pinglu
                    Changlong Tegang Lu Liao Co. Ltd., under control by Mr. Li Zhenguan,
                  a
                    director of PL
                
                
                668,125
                
                
                -Shanxi
                    Changchi Enterprise Co. Ltd., under control of Mr. Beicang Hou,
                    a director
                  of
                    the Company
                
                
                16,645
                
                
                -Mr.
                    Ren Yaoting, a director of PL
                
                
                160,050
                
                
                343,767$
                844,820
                
                $
                3,377,370
 Amount
                    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
                
                
                3,167,556
                
                
                1,435,847Mr.
                    Li Zhenguan, a director of PL
                
                
                -
                
                
                -$
                3,167,556
                
                $
                1,912,251
 
 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.
  21
 
 16.
                RELATED
                    PARTY TRANSACTIONS AND ARRANGEMENTS(Continued)
 
 (c)
                Other
                    transactions
 
 
 Six
                    months ended
                  June
                    30,2007
                
                2006(unaudited)
                
                (unaudited)Sales
                    to related parties:Shanxi
                    Changchi Enterprise Co. Ltd., under control of Mr. Beicang Hou,
                    a
                  director
                    of the Company
                
                $
                5,793,643
                
                $
                8,558,788Pinglu
                    Changlong Tegang Lu Liao Co. Ltd., under control of Mr. Li Zhenguan,
                  a
                    director of PL
                
                
                425,208
                
                
                -Pinglu
                    Changsheng Stainless Steel Material Co. Ltd., under control of
                    Mr. Ren
                  Yaoting,
                    a director of PL
                
                
                3,320,748
                
                
                -$
                9,539,599
                
                $
                8,558,788
  Six
                    months ended
                  June
                    30,2007
                
                2006Purchases
                    from related parties:
                
                (unaudited)
                
                (unaudited)Shanxi
                    Changchi Enterprise Co. Ltd., under control of Mr. Beicang Hou,
                  a
                    director of the Company
                
                $
                4,603,389
                
                $
                5,596,356Pinglu
                    Changsheng Stainless Steel Material Co. Ltd., under control of
                    Mr. Ren
                  Yaoting,
                    a director of PL
                
                
                8,480,420
                
                
                -$
                13,083,809
                
                $
                5,596,356
  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.
  22
 
 19.
                LEGAL
                    PROCEEDINGS
 
 We
          are presently a party in two legal proceedings, one before the
          Colorado State Court (the "Colorado Lawsuit") initiated in November 2004,
          and
          the other before 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 is 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)). We 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, is a plaintiff in both the
          Colorado Lawsuit and 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, are defendants
          in the Colorado Lawsuit, and Mr. Hu is also a defendant in the California
          Lawsuit.
  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 our 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 June 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.
 
 23
 
 19.
                LEGAL
                    PROCEEDINGS(Continue)
 
 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.
          We
          interpret this ruling to mean that the actions we have 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.
  On
          or
          about March 8, 2007, Tridon filed a Petition for Rehearing with the Appellate
          Court. As of the date of this report, the Petition for Rehearing is still
          pending. Tridon also filed a Petition for Rule To Show Cause with the Colorado
          Supreme Court on June 15, 2005 (Case No. 05SA180). On June 22, 2005, the
          Colorado Supreme Court denied the Tridon's petition.
 
 On
          June
          15, 2007, Messrs.
          Brick and Sien caused a
          Petition for Writ of Certiorari (the “Petition”) to be filed in the name of the
          Company and Triton Trust with the Colorado Supreme Court to revisit the
          issue of
          whether the lower court retains jurisdiction regarding Mr. Hu’s request for a
          shareholders’ meeting , despite
          the plaintiffs’ voluntary dismissal of this action. On June 22, 2007, Mr. Hu
          filed his Opposition to the Petition. A decision from the Colorado Supreme
          Court
          on this matter is not expected until at least after September 2007.
 
 **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). We 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 our shareholders on June 13, 2005, based
          upon
          allegations that the Notice of Meeting & Proxy Statements issued by us 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 our 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 is
          staying 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 outcome of the Colorado Lawsuit
          favors
          the defendants, the California Lawsuit can be dismissed.
 
 If
          the
          Court in either of the Colorado Lawsuit or 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, we do 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 June 15, 2005 as well
          as the
          Merger. As neither matter has been fully litigated at this time, however,
          the
          Company believes that shareholders and potential investors should not rely
          on
          Tridon's allegations, including those relating to the Series B Preferred
          Shares.
 
 **The
          Series B Preferred Shares**
 
 Mr.
          Ebeling's ownership claim over the Series B Preferred Shares is 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 us on June 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 our current management.
  24
  19.
                LEGAL
                    PROCEEDINGS(Continue)
 
 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.
 
 20.
                SUBSEQUENT
                    EVENT
 
 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. Operation can only be resumed
          on
          application to the local government on the implementation of certain
          satisfactory industrial safety measures.
 
 Management
          estimates that these measures can be implemented in September 2007 and
          operation
          can be resumed accordingly.




25




**Item
      2.**  **Management’s
      Discussion and Analysis of Financial Conditions 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.” 1993. In February 2002,
      the Company changed its name to “Alpha Spacecom, Inc.” In June 2005, the Company
      reincorporated as a Nevada corporation after merging with our wholly owned
      subsidiary, Alpha Spacecom, Inc., a Nevada corporation. In October 2006, the
      Company further changed its name to “Beicang Iron & Steel, Inc.” to reflect
      its 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
      company. Upon the closing of the Merger, the former sole shareholder of EGIG
      beneficially own 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 PRC. Pursuant to and concurrent with the Merger, we have 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, the Company consolidates the
      results, assets and liabilities of PL and FS in the accompanying financial
      statements.





26




**Recent
      Developments**





During
      the second quarter of 2007, we also completed lease negotiation with Yuncheng
      Yunneng Electric-power Industrial Co., Ltd. for the 12,500 KVA ore-heating
      furnace that was being used by PL for the production of ferrochromium alloy.
      The
      lease is from June 1, 2007 to December 31, 2007, to be renegotiated at the
      end
      of the lease term. The furnace adds 1,200 tons to PL’s monthly production. The
      average price of ferrochromium ore, however, increased approximately 41% from
      the first quarter of 2007 to the second quarter, resulting in increased
      production costs. If the price of raw material normalizes during the third
      quarter, we expect PL’s profitability to increase in light of the added
      production capability.




During
        the second quarter of 2007, FS ceased production of pelletized ores as the
        price
        of iron ore powder, a key raw material, rose steadily. Instead, FS underwent
        a
        technique innovation program and equipment repairs and maintenance, which
        we
        expect to complete sometime in the late third quarter of 2007. After completion,
        we plan to begin production immediately, with production capacity of pelletized
        ores anticipated at 1,300 tons per day, up from 1,080 tons previously. While
        the
        price of iron ore powder continued to increase through July 2007, we believe
        that the price will normalize during the third quarter when we expect to
        begin
        production.





In
      early
      August 2007, there was a light industrial accident at FS that resulted in
      the suspension of our operation by the local government. Since then, we have
      been working to implement certain industrial safety measures that would enable
      our operation to resume. We estimate that these safety measures can be fully
      implemented by September 2007 and our operation at FS can resume thereafter.





**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, or 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 Condensed 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 June 30, 2007 as Compared to Three Months
      Ended June 30, 2006**





Three
                Months Ended
              June
                30,2007
            
            2006
            
            ChangeRevenues
            
            $
            6,617,953
            
            $
            9,933,283
            
            
            (33
            )%Cost
                of goods sold
            
            
            (6,365,488
            )
            
            (8,894,936
            )
            
            (28
            )%Gross
                profit
            
            
            252,465
            
            
            1,038,347
            
            
            (76
            )%Selling
                expenses
            
            
            (853,176
            )
            
            (767,755
            )
            
            11
            %Research
                and development expenses
            
            
            0
            
            
            0
            
            
            0
            %General
                and administrative expenses
            
            
            (293,693
            )
            
            (97,430
            )
            
            201
            %Net
                profit (loss)
            
            $
            (925,035
            )
            $
            (8,867
            )
            
            (10,332)
            %




28




***Sales*** *.* During
      the second quarter of 2007, sales decreased from $9.93 million to $6.62 million,
      representing a decrease of 33% compared to the second quarter of 2006. The
      decrease in sales was primarily attributable to FS, which ceased production
      during the second quarter of 2007 in light of the
      high
      costs of raw material and instead underwent a technique innovation program
      and
      undertook equipment repairs and maintenance.





***Cost
      of Sales*** *.* Cost
      of
      sales decreased from $8.89 million to $6.37 million in the second quarter of
      2007 as compared to the same period in 2006, representing a decrease of 28%.
      Since FS shut down production during the three months ended June 30, 2007,
      we
      did not purchase any raw materials for pelletized ores, thereby reducing our
      overall cost of sales. Cost of sales as a percentage of net sales, increased
      from 89.5% for the second quarter of 2006 to 96.18% for the second quarter
      of
      2007 because while PL maintained production of ferrochromium alloy during this
      period, the price of certain raw materials, especially ferrochromium ore,
      increased significantly.





***Operating
      Expenses*** *.* Total
      operating expenses increased from $865,185 in the second quarter of 2006 to
      $1,146,869 in the second quarter of 2007, which are mostly attributable to
      the
      significant increase in our selling expenses.





Selling
      expenses increased 11% to be $853,176 for the three months ended June 30, 2007,
      from $767,755 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 second 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.





General
      and administrative expenses were $293,693 for the second quarter of 2007, from
      $97,430 for the same quarter in 2006, representing an increase of 201.44%
      because of increased spending in certain office expenses including travel and
      communication for financing and for developing our sales channels. In addition,
      expenses associated with being a public company and related professional
      expenses were more for the second quarter of 2007 as compared to the same period
      in 2006.




***Net
      Profit/(Loss).*** We
      recorded a net loss of $925,035 in the second quarter of 2007, as compared
      to
      net loss of $8,867 in the same period of 2006.





**Results
      of Operations - Six Months ended June 30, 2007 as Compared to Six Months Ended
      June 30, 2006**





Six
                Months Ended
              June
                30,2007
            
            2006
            
            ChangeRevenues
            
            $
            17,371,578
            
            $
            20,651,974
            
            
            (16
            )%Cost
                of goods sold
            
            
            (16,725,780
            )
            
            (17,835,282
            )
            
            (6
            )%Gross
                profit
            
            
            645,798
            
            
            2,816,692
            
            
            (77
            )%Selling
                expenses
            
            
            (1,099,944
            )
            
            (969,145
            )
            
            14
            %Research
                and development expenses
            
            
            (25,836
            )
            
            0
            
            
            100
            %General
                and administrative expenses
            
            
            (600,777
            )
            
            (802,922
            )
            
            25
            %Net
                profit (loss)
            
            $
            (1,321,462
            )
            $
            959,871
            
            
            (238)
            %




29




***Sales*** *.* During
      the six months ended June 30, 2007, sales decreased from $20.7 million to $17.4
      million, representing a decrease of 16% compared to the same period in 2006.
      The
      decrease in sales was primarily attributable to FS, which ceased production
      during the second quarter of 2007 in light of the
      high
      costs of raw material and instead underwent a technique innovation program
      and
      undertook equipment repairs and maintenance.





***Cost
      of Sales*** *.* Cost
      of
      sales decreased from $17.8 million to $16.7 million in the six-month period
      ended June 30, 2007 as compared to the same period in 2006, representing a
      decrease of 6% primarily due to the overall decrease in sales as FS ceased
      production during the second quarter of 2007. Cost of sales as a percentage
      of
      net sales, increased from 86% in the six months ended June 30, 2006 to 96%
      in
      the same period of 2007 because of PL’s increased raw materials costs during the
      second quarter of 2007.





***Operating
      Expenses*** *.* Total
      operating expenses decreased from $1,772,067 to $1,700,721 in the six months
      ended June 30, 2007, representing a decrease of 4.0% because FS ceased
      production during the second quarter of 2007 and instead underwent
      a technique innovation program and equipment repairs and
      maintenance.




Selling
      expenses increased 14% to $1,099,944 in the six months ended June 30, 2007,
      from
      $969,145 in the same period of 2006 as we continue our efforts to maintain
      our
      competitiveness in the marketplace, although we are also expending efforts
      to
      raise the price of our products in order pass along some of the increases in
      raw
      material costs to our customers.





Research
      and development expenses were $25,836 in the six months ended June 30, 2007,
      from $0 in the first six months of 2006, from purchases that we made for our
      research and development needs in the first three months of 2007 .





General
      and administrative expenses decreased 25% to be $600,777 in the six months
      ended
      June 30, 2007, from $802,922 in the same period of 2006, largely because FS
      ceased production during the second quarter of 2007. However, the expenses
      associated with being a public company and related professional expenses were
      more for the six months ended June 30, 2007 as compared to the same period
      in
      2006, thereby offsetting the overall decrease in general and administrative
      expenses.




***Net
      Profit/(Loss).*** We
      recorded a net loss of $1,321,462 during the six months ended June 30, 2007,
      or
      basic and diluted loss of $0.0013 per share, as compared to net profit of
      $959,871 in the same period of 2006, or basic and diluted profit of $0.0010
      per
      share.





**Liquidity
      and Capital Resources**





***Cash
      Flows*** *.* We have
      funded our operations through the second quarter of 2007 primarily through
      shareholder’s 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 flow from operations of $252,532 for
      the
      six months ended June 30, 2007, as compared to net cash flow used in operations
      of $1,467,895 for the same period of 2006. Cash flow from operations for the
      six
      months ended June 30, 2007 was primarily related to our sales at PL.





30




We
      used
      $87,850 in investing activities for the six months ended June 30, 2007, as
      compared to $497,140 used in investing activities for the same period of 2006.
      Net cash flow used in investing activities related to the purchase of equipments
      and building activities at both PL and FS.





For
      the
      six months ended June 30, 2007, net cash flow used in financing activities
      was
      approximately $507,723, as compared to $2,672,313 in net cash flow provided by
      financing activities during the same period of 2006. Net cash flow used in
      financing activities relate to the repayment of outstanding loans, which mainly
      are loans from related parties.





***Working
      Capital Requirements*** .
      Current
      liabilities exceed current assets at June 30, 2007 by approximately $4,606,597,
      an increase of $1,072,992 from December 31, 2006. The ratio of our current
      assets to our current liabilities was 58.2% at June 30, 2007 and it was 74.4%
      at
      December 31, 2006. At June 30, 2007, our current assets of approximately
      $6,422,092 included approximately $1,666,852 in inventory that was funded
      by advance from related parties and paid-in capital from shareholders.




***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 our Company buys all raw
      materials in China and sells all our products in China using RMB as the
      functional currency. The Company had other comprehensive income of $189,654
      and
      $22,564 for the six-month period ended June 30, 2007 and 2006, respectively,
      as
      a result of changes in foreign currency exchange rates.





**Inflation**





Although
      management expects that our operations are influenced by general economic
      conditions, we do not believe that inflation had a material effect on the
      results of operations during the six month period ended June 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 June 30, 2007, we had approximately $141,496 in cash and cash
      equivalents. A hypothetical of 1% to 2% 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.




31




***Foreign
      Exchange Rates*** .





Our
      sales
      are principally in 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 section titled “Risk Factors - Fluctuation in the value
      of RMB relative to other currencies may have a material adverse effect on our
      business and/or an investment in our shares.”




**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 June 30, 2007 that have materially affected,
      or are reasonably likely to materially affect our internal control over
      financial reporting.





32




**PART
      II - OTHER INFORMATION**





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





Other
      than as described below, there have been no material changes to the Legal
      Proceedings described in Form 10-KSB filed May 18, 2007:





**The
      Colorado Lawsuit.**





On
      June
      15, 2007, Terrence
      Sien and Brian Brick ,
      both of
      whom are former directors of the Company who initiated the Colorado Lawsuit
      in
      the name of the Company and Tridon Trust, a Company shareholder, caused a
      Petition for Writ of Certiorari (the “Petition”) to be filed in the name of the
      Company and Triton Trust with the Colorado Supreme Court to revisit the issue
      (the “Issue”) of whether the lower court retains jurisdiction regarding the
      request for a shareholders’ meeting by Xuedong
      Hu, who is also a former director of the Company, despite
      the plaintiffs’ voluntary dismissal of this action. The Issue was previously
      raised by Mr. Sien and Mr. Brick, again in the name of the Company and Tridon
      Trust, with both the trial court and the Colorado Court of Appeals, both of
      which had decided the Issue in favor of the defendants. On June 22, 2007, Mr.
      Hu
      filed his Opposition to the Petition. A decision from the Colorado Supreme
      Court
      on this matter is not expected until at least after September 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.





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




ExhibitNumber
            
            Description2.1
            
            Share
                Exchange Agreement dated as of December 10, 2001. (Incorporated by
                reference to Exhibit 2.1 of the Company’s Current Report on Form 8-K filed
                on December 21, 2001)




33




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 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 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 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. 3.1 of the 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 (Filed herewith)10.2
            
            Option
                Agreement for Fanshi County Xinyu Iron Resource Co., Ltd. dated January
                5,
                2006 (Filed herewith)10.3
            
            Loan
                Agreement for Fanshi County Xinyu Iron Resource Co., Ltd. dated January
                5,
                2006 (Filed herewith)10.4
            
            Operating
                and Service Agreement for Pinglu County Changhong Ferroalloy Co.,
                Ltd.
                dated January 5, 2006 (Filed herewith)10.5
            
            Option
                Agreement for Pinglu County Changhong Ferroalloy Co., Ltd. dated
                January
                5, 2006 (Filed herewith)10.6
            
            Loan
                Agreement for Pinglu County Changhong Ferroalloy Co., Ltd. dated
                January
                5, 2006 (Filed herewith)31.1
            
            Section
                302 Certification by the Corporation’s Chief Executive Officer and Chief
                Financial Officer. (Filed herewith.)32.1
            
            Section
                906 Certification by the Corporation’s Chief Executive Officer and Chief
                Financial Officer. (Filed
                herewith.)





34


**SIGNATURES**





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


**BEICANG
                IRON & STEEL, INC.**
              (Registrant)Date:
              August 20, 2007
            By:
            /s/
              Beicang HouBeicang
                Hou
              Chief
                Executive Officer,
              Chief
                Financial Officer,
              and
                sole Director




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