UNITED
        STATES
 SECURITIES
        AND EXCHANGE COMMISSION
 Washington,
        D.C. 20549
  Form
        10-KSB
  GENERAL
        FORM FOR REGISTRATION OF SECURITIES OF SMALL BUSINESS ISSUERS
 Under
        Section 12(b) or (g) of the Securities Exchange Act of 1934
 
 Scrap
        China Corporation
 (Name
        of
        Small business Issuer in its charter)
 
 Utah
              
              81
                  - 0674073(State
                  or other jurisdiction of incorporation or organization)
              
              (I.R.S.
                  Employer Identification No.)
 
 175
                  East 400 South Suite 900, Salt Lake City, Utah
              
              84111
              
              801-531-0404(Address
                  of principal executive offices)
              
              (Zip
                  Code)
              
              (Issuer's
                  telephone number)
 
 www.scrapchina.com
 (Web
        Address)
 
 State
        the
        number of shares outstanding of the issuer’s classes of common equity, as of the
        latest practicable date: August 15, 2006 - 7,710,843
           
 
 
 
 
 
 **SCRAP
        CHINA CORPORATION**
 **INDEX**
 
 **Table
        of Contents**
 **Part
                      One**
                  **Page**Item
                      1.
                  Description
                      of Business
                  2Item
                      2.
                  Description
                      of Property
                  4Item
                      3:
                  Legal
                      Proceedings
                  4Item
                      4:
                  Submission
                      of Matters to a Vote of Security Holders
                  5**Part
                      Two**Item
                      5:
                  Market
                      for Common Equity and Related Stockholder Matters
                  5Item
                      6:
                  Managements
                      Discussion and Analysis or Plan of Operation
                  6Item
                      7:
                  Financial
                      Statements
                  7Item
                      8:
                  Changes
                      In and Disagreements with Accountants on Accounting and Financial
                      Disclosure
                  13Item
                      8A:
                  Controls
                      and Procedures
                  13Item
                      8B:
                  Other
                      Information
                  14**Part
                      Three**Item
                      9:
                  Directors
                      and Executive Officers, Promoters and Control Persons: Compliance
                      with
                      Section 16(a) of the Exchange Act
                  14Item
                      10:
                  Executive
                      CompensationItem
                      11.
                  Security
                      Ownership of Certain Beneficial Owners and Management and Related
                      Stockholder Matters
                  16Item
                      12:
                  Certain
                      Relationships and related transactions
                  17Item
                      13:
                  Description
                      of Exhibits
                  18Item
                      14:
                  Principal
                      Accountant Fees and Services
                  18
 
  
 
 
 
 
 
 
 
  
 
 
 1
 
 
 **FORWARD
        LOOKING STATEMENTS**
 
 Scrap
        China Corporation (the "Company", "we" or "us") cautions readers that certain
        important factors may affect our actual results and could cause such results
        to
        differ materially from any forward-looking statements that may have been
        made in
        this Form 10-KSB or that are otherwise made by or on behalf of us. For this
        purpose, any statements contained in the Form 10-KSB that are not statements
        of
        historical fact may be deemed to be forward-looking statements.
 
 Without
        limiting the generality of the foregoing, words such as "may," "expect,"
        "believe," "anticipate," "intend," "could," "estimate," "plan" or “continue" or
        the negative other variations thereof or comparable terminology are intended
        to
        identify forward-looking statements. Factors that may affect our results
        include, but are not limited to, our limited history of non-profitability,
        our
        dependence on a limited number of customers and key personnel, the need for
        additional financing and our dependence on certain industries. We are also
        subject to other risks detailed herein or detailed from time to time in our
        filings with the Securities and Exchange Commission.
 
 **PART
        ONE**
 
 **Item
                  1:**
              **Description
                  of Business**
 
 **Company
        History**
 
 In
        the
        year 2000, RecycleNet Corporation recognized the need for specific geographic
        web portals within its business and it established an online presence to
        correspond with each continent. The management of RecycleNet Corporation
        believed that the growing potential for business in Asia demanded separate
        attention and therefore, implemented a strategy to establish a Secondary
        Commodity Clearinghouse service in China.
 
 On
        June
        15, 2005, Scrap China Corporation (“the Company”) was organized under the laws
        of the State of Utah as a wholly-owned subsidiary of RecycleNet Corporation.
        The
        Company is considered a development stage enterprise and is in the process
        of
        raising capital to fund operations. As such, the Company has, since inception,
        spent most of its efforts in developing its business plan and in raising
        capital
        to fund its operations. The Company has relied upon cash flows from equity
        issuances and advances from RecycleNet Corporation to sustain operations.
        The
        Company’s plan is to set up a base of operations in China and to obtain all
        necessary permits and licenses required to import scrap materials into
        China.  The Company will then be able to formulate its business plan and
        project finance requirements. The Company has had no revenues from any source
        to
        date.
 
 On
        November 30, 2005 RecycleNet Corporation announced the spin-off of Scrap
        China
        Corporation effective January 20, 2006. The spin-off was in the form of a
        pro-rata share dividend to RecycleNet Corporation common shareholders. On
        January 20, 2006, the common shareholders of record of RecycleNet Corporation
        received one share of Scrap China Corporation for every ten shares of RecycleNet
        Corporation. The remaining undistributed share balance of 2,289,157 shares,
        was
        returned to the Scrap China Corporation treasury at no cost from RecycleNet
        Corporation. The balance of issued and outstanding shares of Scrap China
        Corporation as of June 30, 2006 was 7,710,843.
 
 
 
 2
 
 
 RecycleNet
        Corporation trades publicly as OTC: GARM and is a "Reporting Company" under
        the
        Securities Exchange Act of 1934.
 
 
 **Business
        Condition** ****** — The
        Company is a new company with no operating history. It has not yet been able
        to
        develop and execute its business plan. This situation raises substantial
        doubt
        about its ability to continue as a going concern. The Company plans to fund
        its
        operations by issuing equity securities or loans from related parties. Success
        in these efforts is not assured. The financial statements do not include
        any
        adjustments relating to the recoverability and classification of asset carrying
        amounts or the amount and classification of liabilities that might result
        should
        the Company be unable to continue as a going concern.
 
 
 **Bankruptcy
        or Receivership or Similar Proceedings**
 
 None
 
 
 **Outline
        of Business Plan**
 
 Scrap
        China Corporation is a development stage company. The Company plans to operate
        a
        Secondary Commodity Clearinghouse service to import scrap materials into
        China.
        This is a service to facilitate buyers and sellers of scrap or waste materials
        to exchange goods. These materials include, but are not limited to, scrap
        metal,
        scrap paper, scrap plastic, scrap glass, etc. The Company anticipates generating
        revenue by charging a transaction fee on the materials traded to the scrap
        consumers. The Company’s plan is to assess the viability of setting up a base of
        operations in China and to obtain all necessary permits, registrations or
        licenses required to facilitate the import of scrap materials into China.
        The
        Company will then be able to formulate its business plan and project finance
        requirements. In the interim, seed capital has been provided by the former
        parent company, RecycleNet Corporation.
 
 
 
 **Effect
        of Government Regulations**
 
 The
        Company is unaware of any existing or probable government regulations in
        the USA
        that would have any material negative impact on our business.
 
 The
        Company is in the preliminary stages of determining which permits, registrations
        or licenses are required to import goods into China and the costs associated
        with them. There are a number of permits, registrations and licenses that
        may be
        required by either the Company, or by any buyer or seller that the Company
        deals
        with, in order to be in compliance with any Chinese rules, regulations and
        environmental laws. The Company does not anticipate any difficulties in
        completing this process or any difficulties in obtaining any necessary
        documentation that may be required.
 
 
 3
 To
          date
          the Company has determined that the following permits, registrations or
          licenses
          may be required in China:
 
 1.
                General
                    Administration for Quality Supervision, Inspectionand
                    Quarantine - AQSIQ
 2.
                Compulsory
                    Certificate - CCC
 **Employees**
 
 Scrap
        China Corporation currently has no employees.
  
 **Competition**
 
 The
        management of Scrap China Corporation is unaware of any direct competition
        in
        the Secondary Commodity Clearinghouse market. This service will assist buyers
        and sellers of scrap or waste materials to exchange goods. These materials
        include, but are not limited to, scrap metal, scrap paper, scrap plastic,
        scrap
        glass, etc. Management has identified hundreds of consumers and traders of
        scrap
        materials in China that they believe to be potential customers. The Company
        does
        not anticipate having any one principal supplier or buyer that they would
        be
        dependent on.
 
 **Reports
        to Security Holders**
 
 The
        Company is a "reporting company" under the Securities Exchange Act of 1934
        and
        is required to file annual, quarterly and periodic reports with the Securities
        and Exchange Commission, such as Forms 10-KSB, 10-QSB, and 8-K. The reports
        are
        available at the Commission's Public Reference Room at 450 Fifth Street,
        NW,
        Washington, DC 20549, telephone 1-800-SEC-0330 and may be retrieved
        electronically via the Internet at www.sec.gov.
 
 The
        Company intends to prepare and deliver to its security holders an annual
        report
        each year, which will include audited financial statements.
 
 
 **Item
                  2:**
              **Description
                  of Property**
 
 **Facilities**
 
 Currently,
        the company does not own, lease or occupy its own facilities. All operations
        are
        conducted from the offices occupied by RecycleNet Corporation, the former
        parent
        company of Scrap China Corporation.
   **Item
                  3:**
              **Legal
                  Proceedings**
 
 Neither
        the Company nor any of its officers, directors or greater than 10% beneficial
        shareholders are involved in any litigation or legal proceedings involving
        the
        business of the Company.
 
 
 4
   **Item
                    4:**
                **Submission
                    of Matters to a Vote of Security Holders**
 
 No
          matters were submitted to a vote of the Company's security holders during
          the
          fourth quarter of fiscal year ended June 30, 2006.
 **PART
        TWO**
 
 
 **Item
                  5:**
              **Market
                  for Common Equity and Related Stockholder
                  Matters**
 
 As
        of
        June 30, 2006, the number of holders of record of the Company's common shares
        was 708. The Company has not declared or paid any cash dividends. It is not
        anticipated that any cash dividends will be declared or paid in the near
        future.
        There are no contractual or other restrictions that limit the ability of
        the
        Company to pay dividends on its common shares and none are anticipated in
        the
        future.
 
 **Description
        of Securities**
 
 The
        Company has authorized 250,000,000 common shares. There are no provisions
        in the
        Articles of Incorporation of the Company that would delay, defer, or prevent
        a
        change in control of the Company. The Company has no debt securities issued.
 
 
 **Recent
        Sales of Unregistered Securities**
 
 On
        June
        15, 2005, upon inception of the Company, 10,000,000 common shares (100%)
        were
        purchased by RecycleNet Corporation for US $10,000. There were no discounts
        or
        commissions paid in relation to this transaction.
 The
        exemption the Company relied upon for this transaction is section 4(2) under
        the
        Securities Act of 1933.  The officers and boards of directors of both
        companies are identical, and the directors of RecycleNet Corporation are
        fully
        familiar with the business and financial prospects of the Company in its
        operations in China.  The shares represented by the certificate issued by
        the Company to RecycleNet Corporation bears a legend prohibiting any transfer
        absent future registration under the 1933 Act or an available exemption there
        under.
 
 On
        November 30, 2005 RecycleNet Corporation, announced the spin-off of Scrap
        China
        Corporation, a wholly owned subsidiary. The spin-off was in the form of a
        pro-rata share dividend to RecycleNet Corporation common shareholders. On
        January 20, 2006, the common shareholders of record of RecycleNet Corporation
        received one share of Scrap China Corporation for every ten shares of RecycleNet
        Corporation. The remaining undistributed share balance of 2,289,157 shares,
        was
        returned to the Scrap China Corporation treasury at no cost from RecycleNet
        Corporation. The balance of issued and outstanding shares of Scrap China
        Corporation as of June 30, 2006 was 7,710,843.
 
 No
        other
        offers or sales have been made by the Company and none are intended at the
        present time.
 
 
 5
 
 
 **Item
                  6:**
              **Managements
                  Discussion and Analysis or Plan of
                  Operation**
 
 **Plan
        of Operation**
 
 Scrap
        China Corporation is a development stage company. The Company’s plan is to set
        up a base of operations in China and to obtain all necessary permits,
        registrations or licenses  required
        to facilitate the import of scrap materials into China. The Company will
        then be
        able to formulate its business plan and project finance requirements.
 
 On
        June
        15, 2005, upon inception of the Company, initial seed capital of $10,000.
        was
        provided by the parent company, RecycleNet Corporation by purchasing 10,000,000
        common shares (100%). The funds provided were used toward establishing a
        base of
        operations in China. Additional funds, if required, over the next twelve
        months,
        will be provided by RecycleNet Corporation and will be treated as an advance
        to
        a related party. These advances are due on demand and bear no interest. The
        Company does not anticipate spending more than $100,000. over the next twelve
        months.
 
 The
        Company does not anticipate the purchase of any significant equipment or
        buildings during the development stage.
 
 The
        Company does not expect any significant change in employees.
 
 **Off-Balance
        Sheet Arrangements**
 
 None
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 6
 
 
 **Item
                  7:**
              **Financial
                  Statements**
 
 **Scrap
        China Corporation**
 **(A
        Development Stage Enterprise)**
 **INDEX
        TO FINANCIAL STATEMENTS**
 
 
 **TABLE
        OF CONTENTS**
 
 
 **Page**Report
                  of Independent Registered Public Accounting Firm
              8Financial
                  Statements:Balance
                  Sheets - June 30, 2006 and 2005
              9Statements
                  of Operations for the Year Ended June 30, 2006 and for the Period
                  from
                  June 15, 2005 (Date of Inception) through June 30, 2005 and for
                  the Period
                  from June 15, 2005(Date of Inception) through June 30,
                  2006
              9Statements
                  of Stockholders’ Equity (Deficit) for the Period from June 15, 2005 (Date
                  of Inception) through June 30, 2005 and for the Year Ended June
                  30,
                  2006
              10Statements
                  of Cash Flows for the Year Ended June 30, 2006 and for the Period
                  from
                  June 15, 2005 (Date of Inception) through June 30, 2005 and for
                  the Period
                  from June 15, 2005(Date of Inception) through June 30,
                  2006
              10Notes
                  to Financial Statements
              11
 
 
 
 
 
 7
 
 
 
 **H****ANSEN****,
                  B****ARNETT****&
                  M****AXWELL**A
                  Professional Corporation
              
              **Registered
                  with the Public Company**CERTIFIED
                  PUBLIC ACCOUNTANTS
              
              **Accounting
                  Oversight Board**ANDBUSINESS
                  CONSULTANTS5
                  Triad Center, Suite 750
                Salt
                  Lake City, UT 84180-1128Phone:
                  (801) 532-2200Fax:
                  (801) 532-7944www.hbmcpas.com
  
 
 **REPORT
        OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**
 
 
 
 To
        the
        Board of Directors and Stockholder
 Scrap
        China, Corporation
 
 
 We
        have
        audited the balance sheets of Scrap China Corporation (a development stage
        enterprise) as of June 30, 2006 and 2005 and the related statements of
        operations, stockholders’ equity (deficit) and cash flows for the year ended
        June 30, 2006 and for the period from June 15, 2005 (date of inception) through
        June 30, 2005 and for the period from June 15, 2005 (date of inception) through
        June 30, 2006. These financial statements are the responsibility of the
        Company’s management. Our responsibility is to express an opinion on these
        financial statements based on our audits.
 
 We
        conducted our audits in accordance with the standards of the Public Company
        Accounting Oversight Board (United States). Those standards require that
        we plan
        and perform the audit to obtain reasonable assurance about whether the financial
        statements are free of material misstatement. An audit includes examining,
        on a
        test basis, evidence supporting the amounts and disclosures in the financial
        statements, assessing the accounting principles used and significant estimates
        made by management, as well as evaluating the overall financial statement
        presentation. We believe that our audits provides a reasonable basis for
        our
        opinion.
 
 In
        our
        opinion, the financial statements referred to above present fairly, in all
        material respects, the financial position of Scrap China Corporation as of
        June
        30, 2006 and 2005 and the results of its operations and its cash flows year
        ended June 30, 2006 and for the period from June 15, 2005 (date of inception)
        through June 30, 2005 and for the period from June 15, 2005 (date of inception)
        through June 30, 2006 in conformity with accounting principles generally
        accepted in the United States of America.
 
 The
        accompanying financial statements have been prepared assuming that the Company
        will continue as a going concern. As discussed in Note 2 to the financial
        statements, the Company’s lack of operating history raises substantial doubt
        about its ability to continue as a going concern. Management’s plans regarding
        those matters are also described in Note 2. The financial statements do not
        include any adjustments that might result from the outcome of this
        uncertainty.
 
 /s/
                  Hansen, Barnett &
                  Maxwell**HANSEN,
                  BARNETT & MAXWELL**
 
 Salt
        Lake
        City, Utah
 August
        1,
        2006
 
 
 
 8
 
 
 **SCRAP
        CHINA CORPORATION**
 **(A
        Development Stage Enterprise)**
 **BALANCE
        SHEETS**
 
 
 **June
                  30,**
              
              **2006**
              
              **2005****ASSETS****Current
                  Assets**Cash
              
              $
              450
              
              $
              168Prepaid
                  expenses
              
              
              -
              
              
              4,000**Total
                  Assets**
              
              $
              450
              
              $
              4,168**LIABILITIES
                  AND STOCKHOLDERS' EQUITY (DEFICIT)****Current
                  Liabilities**Accrued
                  liabilities
              
              $
              5,000
              
              $
              3,500Payable
                  to related party
              
              
              87,116
              
              
              -**Total
                  Current Liabilities**
              
              
              92,116
              
              
              3,500**Stockholders'
                  Equity (Deficit)**Common
                  shares - 250,000,000 shares authorized; 7,710,843 and 10,000,000
                  shares
                  issued and outstanding, respectively
              
              
              7,711
              
              
              10,000Additional
                  paid-in capital
              
              
              2,289
              
              
              -Deficit
                  accumulated during development stage
              
              
              (101,666
              )
              
              (9,332
              )**Total
                  Stockholders' Equity (Deficit)**
              
              
              (91,666
              )
              
              668**Total
                  Liabilities and Stockholders' Equity (Deficit)**
              
              $
              450
              
              $
              4,168
 
 
 
 **SCRAP
        CHINA CORPORATION**
 **(A
        Development Stage Enterprise)**
 **STATEMENTS
        OF OPERATIONS**
 
 **For
                  the period**
              
              **For
                  the period****June
                  15, 2005**
              
              **June
                  15, 2005****For
                  the year**
              
              **(date
                  of inception)**
              
              **(date
                  of inception)****ended
                  June 30,**
              
              **through
                  June 30,**
              
              **through
                  June 30,****2006**
              
              **2005**
              
              **2006****Sales**
              
              $
              -
              
              $
              -
              
              $
              -**Operating
                  Expenses**Selling,
                  general and administrative expenses
              
              
              92,334
              
              
              9,332
              
              
              101,666**Total
                  Operating Expenses**
              
              
              92,334
              
              
              9,332
              
              
              101,666**Net
                  Loss**
              
              $
              (92,334
              )
              $
              (9,332
              )
              $
              (101,666
              )**Basic
                  and Diluted Net Loss per Share**
              
              $
              (0.01
              )
              $
              (0.00
              )**Weighted-Average
                  Common Shares Outstanding**
              
              
              9,153,325
              
              
              10,000,000
 
 
 
 
 
 
 9
 
 
 
 **SCRAP
        CHINA CORPORATION**
 **(A
        Development Stage Enterprise)**
 **STATEMENTS
        OF STOCKHOLDERS’ EQUITY (DEFICIT)**
 
 **Common
                  Shares**
              
              **Additional**Paid-in
              
              **Accumulated**
              
              **Total
                  Stockholders' Equity****Shares**
              
              **Amount**
              
              **Capital**
              
              **Deficit**
              
              **(Deficit)**Issuance
                  of Common Shares to RecycleNet Corporation - June 15, 2005; $0.001
                  per
                  share
              
              
              10,000,000
              
              $
              10,000
              
              $
              -
              
              $
              -
              
              $
              10,000Net
                  loss for the period ended June 30, 2005
              
              
              -
              
              
              -
              
              
              -
              
              
              (9,332
              )
              
              (9,332
              )**Balance
                  - June 30, 2005**
              
              
              10,000,000
              
              
              10,000
              
              
              -
              
              
              (9,332
              )
              
              668Return
                  of Shares from Spin-off of Corporation - February 15, 2006; no
                  cost
              
              
              (2,289,157
              )
              
              (2,289
              )
              
              2,289
              
              
              -
              
              
              -Net
                  loss for the year ended June 30, 2006
              
              
              -
              
              
              -
              
              
              -
              
              
              (92,334
              )
              
              (92,334
              )**Balance
                  - June 30, 2006**
              
              
              7,710,843
              
              $
              7,711
              
              $
              2,289
              
              $
              (101,666
              )
              $
              (91,666
              )
 
 
 
 **SCRAP
        CHINA CORPORATION**
 **(A
        Development Stage Enterprise)**
 **STATEMENTS
        OF CASH FLOWS**
 **For
                  the period**
              
              **For
                  the period****June
                  15, 2005**
              
              **June
                  15, 2005****For
                  the year**
              
              **(date
                  of inception)**
              
              **(date
                  of inception)****ended
                  June 30,**
              
              **through
                  June 30,**
              
              **through
                  June 30,****2006**
              
              **2005**
              
              **2006****Cash
                  Flows from Operating Activities:**Net
                  loss
              
              $
              (92,334
              )
              $
              (9,332
              )
              $
              (101,666
              )Changes
                  in assets and liabilities:Prepaid
                  expenses
              
              
              4,000
              
              
              (4,000
              )
              
              -Accrued
                  liabilities
              
              
              1,500
              
              
              3,500
              
              
              5,000Payable
                  to related party
              
              
              87,116
              
              
              -
              
              
              87,116**Net
                  Cash Provided by (Used in) Operating Activities**
              
              
              282
              
              
              (9,832
              )
              
              (9,550
              )**Cash
                  Flows from Investing Activities:**
              
              
              -
              
              
              -
              
              
              -**Cash
                  Flows from Financing Activities:**Proceeds
                  from sale of common stock
              
              
              -
              
              
              10,000
              
              
              10,000**Net
                  Cash Provided by Financing Activities**
              
              
              -
              
              
              10,000
              
              
              10,000**Net
                  Change in Cash**
              
              
              282
              
              
              168
              
              
              450**Cash
                  at Beginning of Period**
              
              
              168
              
              
              -
              
              
              -**Cash
                  at End of Period**
              
              $
              450
              
              $
              168
              
              $
              450
 
 
 
 
 
 10
  
 **SCRAP
        CHINA CORPORATION**
 **(A
        Development Stage Enterprise)**
 **NOTES
        TO FINANCIAL STATEMENTS**
 
 
 **Note
        1 - Nature of Business**
 
 **Organization
        and Nature of Operations** ***—*** On June
        15, 2005, Scrap China Corporation (“the Company”) was organized under the laws
        of the State of Utah. The Company is considered a development stage enterprise
        and is in the process of raising capital to fund operations. As such, the
        Company has, since inception, spent most of its efforts in developing its
        business plan and in raising capital to fund its operations. The Company
        has
        relied upon cash flows from equity issuances and advances from RecycleNet
        Corporation to sustain operations. The Company’s plan is to set up a base of
        operations in China and to obtain all necessary permits and licenses required
        to
        import scrap materials into China.  The Company will then be able to
        formulate its business plan and project finance requirements. The Company
        has
        had no revenues from any source to date.
 
 On
        November 30, 2005 RecycleNet Corporation, of which Scrap China Corporation
        was a
        wholly-owned subsidiary, announced the spin-off of Scrap China Corporation
        effective January 20, 2006. The spin-off was in the form of a pro-rata share
        dividend to RecycleNet Corporation common shareholders. On January 20, 2006,
        the
        common shareholders of record of RecycleNet Corporation received one share
        of
        Scrap China Corporation for every ten shares of RecycleNet Corporation. The
        remaining undistributed share balance of 2,289,157 shares, was returned to the
        Scrap China Corporation treasury at no cost from RecycleNet Corporation.
        From
        the date of the spin-off, Scrap China Corporation now functions as its own
        fully
        reporting entity.
 
 **Note
        2 - Summary of Significant Accounting Policies**
 
 **Use
        of Estimates** ***—*** The
        preparation of financial statements in conformity with accounting principles
        generally accepted in the United States of America requires management to
        make
        estimates and assumptions that affect certain reported amounts of assets
        and
        liabilities and disclosure of contingent assets and liabilities at the date
        of
        the financial statements and the reported amounts of revenues and expenses
        during the reporting period. Actual results could differ from those
        estimates .
 
 **Fair
        Value of Financial Instruments** —
The
        carrying amounts reported in the accompanying financial statements for current
        assets and current liabilities approximate fair values because of the immediate
        or short-term maturities of these financial instruments.
 
 **Business
        Condition** ****** —
The
        Company is a new company with no operating history. It has not yet been able
        to
        develop and execute its business plan. This situation raises substantial
        doubt
        about its ability to continue as a going concern. The Company plans to fund
        its
        operations by issuing equity securities or loans from related parties. Success
        in these efforts is not assured. The financial statements do not include
        any
        adjustments relating to the recoverability and classification of asset carrying
        amounts or the amount and classification of liabilities that might result
        should
        the Company be unable to continue as a going concern.
 
 
 11
 
 
 **Income
        Taxes** —
The
        Company recognizes an asset or liability for the deferred tax consequences
        of
        all temporary differences between the tax basis of assets or liabilities
        and
        their reported amounts in the financial statements that will result in taxable
        or deductible amounts in future years when the reported amounts of the asset
        or
        liabilities are recovered or settled. Deferred tax assets or liabilities
        are
        measured using the enacted tax rates that will be in effect when the differences
        are expected to reverse. Deferred tax assets are reviewed periodically for
        recoverability and valuation allowances are provided as necessary.
 
 **Net
        Loss Per Share** ****** —
Basic
        and diluted loss per common share is computed on the basis of the
        weighted-average number of common shares outstanding during the period. There
        were no potentially-issuable common stock equivalents outstanding at June
        30,
        2006 or 2005.
 
 
 **Note
        3 - Stockholders’ Equity**
 
 The
        Company is authorized to issue 250,000,000 common shares with a par value
        of
        $0.001 per share. The board of directors is authorized to designate one or
        more
        series within the class of common shares and to designate relative preferences,
        limitations and rights.
 
 In
        June
        2005, the Company issued 10,000,000 shares of common stock to RecycleNet
        Corporation for cash proceeds of $10,000 or $0.001 per share, making the
        Company
        a wholly owned subsidiary of RecycleNet Corporation.
 
 On
        November 30, 2005 RecycleNet Corporation announced the spin-off of Scrap
        China
        Corporation effective January 20, 2006. The spin-off was in the form of a
        pro-rata share dividend to RecycleNet Corporation shareholders. On January
        20,
        2006, the shareholders of record of RecycleNet Corporation received one share
        of
        Scrap China Corporation for every ten shares of RecycleNet Corporation. The
        remaining undistributed share balance of 2,289,157 shares, was returned to
        the
        Scrap China Corporation treasury at no cost from RecycleNet
        Corporation.
 
 From
        the
        date of the spin-off, Scrap China Corporation now functions as its own fully
        reporting entity.
 
 
 **Note
        4 - Related Party Transactions**
 
 As
        at
        June 30, 2006, the Company had a $87,116 payable to a related party. During
        the
        year ended June 30, 2006, RecycleNet Corporation paid certain expenses for
        travel, management and legal and accounting expenses on behalf of Scrap China
        Corporation. The Company anticipates that additional funds, if required,
        would
        be provided by RecycleNet Corporation; however, there is no assurance that
        future advances will be made. These advances are due on demand and bear no
        interest.
 
 
 12
  **Note
        5** ***-*** **Income
        Taxes**
 
 There
        was
        no provision for, or benefit from, income tax during the year ended June
        30,
        2006 or for the period from June 15, 2005 (date of inception) through June
        30,
        2005. The components of the net deferred tax asset as of June 30, 2006, are
        as
        follows:
 Operating
                  loss carryforwards
              
              $
              37,921Total
                  Deferred Tax Assets
              
              
              37,921Valuation
                  allowance
              
              
              (37,921
              )**Net
                  Deferred Tax Asset**
              
              $
              -
 
 As
        of
        June 30, 2006, the Company had net operating loss carryforwards of $101,666
        that
        begin to expire in 2025. The following is a reconciliation of the amount
        of
        benefit that would result from applying the federal statutory rate to pretax
        loss with the provision for income taxes for the fiscal year ended June 30,
        2006:
 Tax
                  at statutory rate (34%)
              
              $
              (31,394
              )Change
                  in valuation allowance
              
              
              34,440State
                  tax benefit, net of federal tax effect
              
              
              (3,046
              )**Provision
                  for Income Taxes**
              
              $
              -
    
 **Item
                  8:**
              **Changes
                  In and Disagreements with Accountants on Accounting and Financial
                  Disclosure**
 
 There
        are
        currently no disagreements or changes pending with the Company’s Registered
        Public Accounting Firm.
 
 **Item
                  8A.**
              **Controls
                  and Procedures**
 
 As
        of the
        end of the period covered by this report, the Company conducted an evaluation,
        under the supervision and with the participation of the principal executive
        officer and principal financial officer, of the Company’s disclosure controls
        and procedures (as defined in Rules 13a-15(e) and 15d015(e) under the Securities
        Exchange Act of 1934 (the “Exchange Act”)). Based on this evaluation, the
        principal executive officer and principal financial officer concluded that
        the
        Company’s disclosure controls and procedures are effective to ensure that
        information required to be disclosed by the Company in reports that it files
        or
        submits under the Exchange Act is recorded, processed, summarized and reported
        within the time periods specified in Securities and Exchange Commission rules
        and forms.
 
 
 
 13
 
 
 There
        was
        no change in the Company’s internal control over financial reporting during the
        Company’s most recently completed fiscal quarter that has materially affected,
        or is reasonably likely to materially affect, the Company’s internal control
        over financial reporting.
 
 **Item
                  8B:**
              **Other
                  Information**
 
 None
 
 
 
 
 **PART
        THREE**
 
 
 **Item
                  9:**
              **Directors
                  and Executive Officers, Promoters and Control Persons: Compliance
                  with
                  Section 16(a) of the Exchange
                  Act.**
 
 **Directors
        and Officers of the Company**
  Name
              
              Age
              
              Position
              
              Term
                  of OfficePaul
                  Roszel
              
              49
              
              Chairman
                  of the Board, President, Director
              
              Inception
                  to PresentRichard
                  R. Ivanovick C.A.
              
              65
              
              Chief
                  Financial Officer, Director
              
              Inception
                  to PresentKeith
                  A. Deck
              
              69
              
              Director
              
              Inception
                  to Present
 
 For
        the
        past five years Mr. Roszel has been responsible for the ongoing development
        and
        promotion of the former parent company, RecycleNet Corporation. Mr.
        Roszel is the founding director, Chairman of the Board and President, of
        RecycleNet Corporation. Mr. Roszel has over 25 years of hands on experience
        in
        the recycling industry. He has been actively involved in the development
        and
        implementation of collection, processing, transportation and sales/marketing
        programs for secondary commodities.
 
 Over
        the
        past five years Mr. Ivanovick, as Chief Financial Officer and a Director
        of
        RecycleNet Corporation, a position he has held since 1999, has been directly
        responsible for the preparation of  financial
        reporting, documents and compliance under the Sarbanes Oxley Act of 2002
        and the
        Securities Exchange Act of 1934. Mr. Ivanovick, is a registered Chartered
        Accountant. He has also been President of Marsh Tire Service Ltd. since 1977,
        a
        company involved in automobile service, sales and leasing in the Guelph,
        Ontario
        Canada area.
 
 
 
 14
 
 
 For
        the
        past five years Keith A. Deck, has been a Director of RecycleNet Corporation.
        Mr. Deck is a retired executive with experience in the Automotive and Electrical
        Manufacturing areas of business. From 1989 to 1999 Mr. Deck was the General
        Manager of the Rocktell and Autocom plant operations of Linamar Corporation
        in
        Guelph, Ontario Canada. Limamar Corporation is a publicly traded company
        on the
        Toronto Stock Exchange in Canada.
 
 **Involvement
        in Certain Legal Proceedings**
 None
 
 **Audit
        Committee**
 The
        Company is a development stage enterprise and currently does not have an
        audit
        committee or an independent audit committee financial expert.
 
 **Beneficial
        Ownership Reporting Compliance**
 Based
        on
        a review of Forms 3 and 4 submitted to the registrant during and with respect
        to
        the fiscal year ending June 30, 2006, Mr. Keith Deck, a director of the Company
        had not filed the Form 3 on a timely basis.  The number of late reports was
        one (the Form 3) and the number of transactions was one - the amount of Scrap
        China Corporation securities beneficially owned by Mr. Deck is 81,200 common
        shares.
 
 **Code
        of Ethics**
 The
        Company is a development stage enterprise and has not yet adopted a written
        code
        of ethics.
 
 **Indemnification
        of Directors and Officers**
 
 Section
        16-10a-901 through 909 of the Utah Revised Business Corporation Act authorizes
        a
        corporation's board of directors or a court to award indemnification to
        directors and officers in terms sufficiently broad to permit such
        indemnification under certain circumstances for liabilities (including
        reimbursement for expenses incurred, including counsel fees) arising under
        the
        Securities Act of 1933. A director of a corporation may only be indemnified
        if:
        (1) the conduct was in good faith; and (2) the director reasonably believed
        that
        the conduct was in or not opposed to the corporation's best interest; and
        (3) in
        the case of any criminal proceeding, the director had no reasonable cause
        to
        believe the conduct was unlawful. A corporation may not indemnify a person
        under
        the Utah Act unless and until the corporation's board of directors has
        determined that the applicable standard of conduct set forth above has been
        met.
 
 The
        Company's Articles of Incorporation do not provide for any additional or
        different indemnification procedures other than those provided by the Utah
        Act,
        nor has the Company entered into any indemnity agreements with its current
        directors and officers regarding the granting of other or additional or
        contractual assurances regarding the scope of the indemnification allowed
        by the
        Utah Act. At present, there is no pending litigation or proceeding involving
        a
        director, officer or employee of the Company regarding which indemnification
        is
        sought, nor is the Company aware of any threatened litigation that may result
        in
        claims of indemnification. The Company has not obtained director's and officer's
        liability insurance, although the board of directors of the Company may
        determine to investigate and, possibly, acquire such insurance in the
        future.
 
 
 
 15
 
 
 **Promoters
        of the Company** ****
 
 The
        promoter of the Company is Mr. Paul Roszel. Mr. Roszel is the founding Director
        and CEO of RecycleNet Corporation, the former parent company of Scrap China
        Corporation.
 
 
 **Item
                  10:**
              **Executive
                  Compensation**
 
 The
        following table shows compensation earned during the period from June 15,
        2005
        (date of inception) through June 30, 2006 by the Officers and Directors of
        the
        Company.   No other miscellaneous compensation was paid or stock options
        granted during this period.
 
 
 Summary
                  Compensation Table
  Name
                  & Principal Positions
              
              Fiscal
                  Year
              
              SalaryPaul
                  Roszel, President & Chairman
              
              2005
              
              $        
                  02006
              
              $        
                  0Richard
                  R. Ivanovick, CFO
              
              2005
              
              $        
                  02006
              
              $        
                  0Keith
                  A. Deck, Director
              
              2005
              
              $        
                  02006
              
              $        
                  0
  
 **Item
                  11:**
              **Security
                  Ownership of Certain Beneficial Owners and Management and Related
                  Stockholder Matters**
 
 At
        this
        time there is no public trading market.
 
 The
        following tables sets forth, as of the date herein, the share ownership of
        each
        person known by the Company to be the beneficial owner of 5% or more of the
        Company's shares, each officer and director individually and all directors
        and
        officers of the Company as a group.
 
 Title
                  of Class
              Name
                  & Address
                of
                  Beneficial Owner
              Amount&
                  Nature of
                Beneficial
                  Ownership
              Percent
                of
                  ClassCommon
              Inter-Continental
              3,858,785
              50.04%Recycling,
                  Inc. (Note 1)7
                  Darren PlaceGuelph,
                  Ontario CanadaCommon
              Paul
                  Roszel (Note 2)
              266,812
              3.46%7
                  Darren PlaceGuelph,
                  Ontario CanadaCommon
              Richard
                  R. Ivanovick
              410,562
              5.32%23
                  Cottontail PlaceCambridge,
                  Ontario CanadaCommon
              Keith
                  A. Deck
              81,200
              1.05%46
                  Sherwood Dr.Guelph,
                  Ontario Canada
 
 Note
        (1)
        Inter-Continental Recycling Inc. is owned and beneficially held by Mr. Paul
        Roszel, a director of the Company, and his immediate family.
 Note
        (2)
        Mr. Roszel owns and beneficially holds 266,812 shares. In addition, he may
        be
        deemed to be a beneficial owner of the 3,858,785 common shares held by
        Inter-Continental Recycling, Inc.
 
 
 16
 
 
 **Item
                  12:**
              **Certain
                  Relationships and Related transactions**
 
 
 All
        Directors of Scrap China Corporation are Directors in the former parent company,
        RecycleNet Corporation. RecycleNet Corporation trades publicly as OTC: GARM
        and is
        a
        "Reporting Company" under the Securities Exchange Act of 1934 and files annual,
        quarterly and periodic reports with the Securities and Exchange Commission,
        such
        as Forms 10-KSB, 10-QSB, and 8-K. The reports are available at the Commission's
        Public Reference Room at 450 Fifth Street, NW, Washington, DC 20549, telephone
        1-800-SEC-0330 and may be retrieved electronically via the Internet at www.sec.gov .
 
 The
        Company has an agreement with RecycleNet Corporation to provide various services
        for the Company.
 
 All
        management and staff are retained on an unwritten contract basis under a
        related
        party transaction with RecycleNet Corporation. Because of the affiliation
        between RecycleNet Corporation and the Company, the agreement between them
        has
        no definite duration and will continue as necessary for the conduct of business
        by the Company. RecycleNet Corporation wiil assign and provide employees
        to the
        Company as long as the Company requires them and can pay the associated costs.
        RecycleNet Corporation provides services to and for the Company by employees
        of
        RecycleNet Corporation. There is no mark-up or other charge incurred by the
        Company from RecycleNet Corporation and the Company pays the same amount
        for
        services for the RecycleNet Corporation employees as does RecycleNet
        Corporation. The management/staff charges for the years ended June 30, 2006
        and
        2005 were $35,245 and $1,700 respectively.
 
 As
        at
        June 30, 2006, the Company had a $87,116 payable to RecycleNet Corporation.
        This
        resulted from expenses incurred for travel, management and legal and accounting
        expenses paid on behalf of Scrap China Corporation. Additional funds, if
        required, will be provided by RecycleNet Corporation and will be treated
        as a
        payable to a related party. These advances are due on demand and bear no
        interest.










17
 
 
 Inter-Continental
        Recycling Inc. owns 3,858,785 common shares of Scrap China Corporation.
        Inter-Continental Recycling, Inc. is controlled 100% by Mr. Paul Roszel,
        a
        director of the company and his immediate family.
 
 **Item
                  13:**
              **Index
                  to Exhibits**
 
 Exhibit
        3.1 - Articles of Incorporation (1)
 
 Exhibit
        20 - Resolution of Board of directors re Acquisition of Shares (1)
 
 Exhibit
        31.1 - Certification of the Chief Executive Officer pursuant to Section 302
        of
        the Sarbanes-Oxley Act of 2002
 
 Exhibit
        31.2 - Certification of the Chief Financial Officer pursuant to Section 302
        of
        the Sarbanes-Oxley Act of 2002
 
 Exhibit
        32.1 - Certification of Chief Executive Officer pursuant to U.S.C Section
        1350
        as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
        2002
 
 Exhibit
        32.2 - Certification of Chief Financial Officer pursuant to U.S.C Section
        1350
        as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
        2002
 _________________________________
 (1) Incorporated
        by reference herein filed as exhibits to the Company’s Registration Statement on
        Form 10SB previously filed with the SEC on August 18, 2005 and subsequent
        amendments thereto.
 
 
 
 
 **Item
                  14:**
              **Principal
                  Accountant Fees and
                  Services**
 
 Hansen,
        Barnett & Maxwell served as the Company’s Independent Registered Public
        Accounting Firm for the year ended June 30, 2006 and for the period from
        June
        15, 2005 (date of inception) through June 30, 2005, and is expected to serve
        in
        that capacity for the current year. Principal accounting fees for professional
        services rendered for the Company by Hansen, Barnett & Maxwell for the years
        ended June 30, 2006 and 2005 are summarized as follows:
 **2006**
                
                **2005**Audit
                
                $
                11,000
                
                $
                2,000Audit
                    related
                
                
                -
                
                
                -Tax
                
                
                -
                
                
                -All
                    other
                
                
                -
                
                
                -Total
                
                $
                11,000
                
                $
                2,000
 
 ***Audit
        Fees*** **.** Audit
        fees were for professional services rendered in connection with the Company’s
        annual financial statement audits and quarterly reviews of financial statements
        and review of and preparation of consents for registration statements for
        filing
        with the Securities and Exchange Commission.
  ***Tax
        Fees.*** Tax fees
        related to services for tax compliance and consulting.
 
 ***Audit
        Committee*** .
        The
        Company is a development stage enterprise and currently does not have an
        audit
        committee or an independent audit committee financial expert.
  
 18
 
 
 **SIGNATURES**
 
 
 Pursuant
        to the requirements of the Exchange Act of 1934, the registrant has duly
        caused
        this report to be signed on its behalf by the undersigned, thereunto duly
        authorized.
 
 
 Scrap
        China Corporation
 
 
 /s/
        Paul
        Roszel
 Paul
        Roszel, President /Chairman of the Board of Directors
 September
        28, 2006
 
 /s/
        Richard
        Ivanovick
 Richard
        Ivanovick, C.A., Chief Financial and Accounting Officer
 September
          28, 2006
                       19