**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**Washington,      D.C. 20549**

**FORM      10-K/A**

**(Amendment      No. 1)**

**(Mark      one)**

| **x** | **ANNUAL                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE                ACT OF                1934** |
|-------|---------------------------------------------------------------------------------------------------------------------------------------|

**For      the fiscal year ended June 30, 2008**

**OR**

|  ̈ | **TRANSITION                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE                ACT OF                1934 (No Fee Required)** |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

**For      the transition period from __________ to __________**

**Commission      File Number 000-23039**

**CHINA      PRECISION STEEL, INC.**

| **Delaware**                                   |   | **14-1623047**                     |
|------------------------------------------------|--------|------------------------------------|
| (State                or other jurisdiction of |   | (I.R.S.                Employer    |
| incorporation                or organization)  |   | Identification                No.) |

| **18th                Floor, Teda Building****87                Wing Lok Street,** **Sheungwan,                Hong Kong,****People’s                Republic of China**(Address                of principal executive offices) |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **+1-852-2543-2290**                                                            |
|---------------------------------------------------------------------------------|
| (Registrant’s                telephone number, including area code)  |

**Securities      registered pursuant to Section 12(b) of the Act:**

|                                              |   | **Name                of Exchange**          |
|---------------------------------------------------|--------|----------------------------------------------|
| **Title                of Class**                 |   | **On                Which Registered**       |
| **Common                Stock, par value $0.001** |   | **The                NASDAQ Capital Market** |

**Securities      registered pursuant to Section 12(g) of the Act: None.**

**x**

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**x**

**x**

 

**x**

| Large accelerated filer o  Accelerated filer **x**  Non-accelerated filer o  Smaller reporting company o |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**x**

**Annual      Meeting and Record Dates**

**Our      Website**

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**CHINA      PRECISION STEEL, INC.**

**FORM      10-K/A**

**FOR      THE FISCAL YEAR ENDED JUNE 30, 2008**

**TABLE      OF CONTENTS**

|                        |   |                                                                                                                         |   | **PAGE** |
|-----------------------------|--------|------------------------------------------------------------------------------------------------------------------------------|--------|----------|
| **PART                III** |   |                                                                                                                         |   |     |
|                        |   |                                                                                                                         |   |     |
| ITEM                10.     |   | DIRECTORS,                EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE                                                        |   | 4        |
| ITEM                11.     |   | EXECUTIVE                COMPENSATION                                                                                        |   | 8        |
| ITEM                12.     |   | SECURITY                OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED                STOCKHOLDER MATTERS |   | 13       |
| ITEM                13.     |   | CERTAIN                RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR                INDEPENDENCE                      |   | 15       |
| ITEM                14      |   | PRINCIPAL                ACCOUNTING FEES AND SERVICES                                                                        |   | 16       |
|                        |   |                                                                                                                         |   |     |
| **PART                IV**  |   |                                                                                                                         |   |     |
|                        |   |                                                                                                                         |   |     |
| ITEM                15      |   | EXHIBITS                AND FINANCIAL STATEMENT SCHEDULES                                                                    |   | 17       |
| SIGNATURES             |   |                                                                                                                         |   |     |

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**EXPLANATORY      NOTE **

**PART      III**

**ITEM      10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE**

| **Name**                            |   | **Age** |   | **Position with the****Company**                  |   | **Term as Director of****Company** |   | **Arrangements for****Selection as Director** |
|-------------------------------------|--------|---------|--------|-------------------------------------------------------------|--------|---------------------------------------------------|--------|--------------------------------------------------------------|
| Wo                Hing Li (1)  |   | 62      |   | Director,                Chief Executive Officer, President |   | December                28, 2006-present          |   | None.                                                        |
| Tung                Kuen Tsui       |   | 62      |   | Director                                                    |   | December                28, 2006-present          |   | None.                                                        |
| David                Peter Wong     |   | 51      |   | Director                                                    |   | December                28, 2006-present          |   | None.                                                        |
| Che                Kin Lui          |   | 45      |   | Director                                                    |   | December                28, 2006-present          |   | None.                                                        |
| Hai                Sheng Chen       |   | 44      |   | Director,                Vice-President                     |   | December                28, 2006-present          |   | None.                                                        |
| Leada                Tak Tai Li     |   | 28      |   | Chief                Financial Officer                      |   | December                28, 2006-present          |   | None.                                                        |
| Dan                Carlson          |   | 41      |   | Non-Executive                Director                       |   | February                19, 2008 - present        |   | None.                                                        |

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| **Name**                      |   | ** Position with the Company and Principal Occupations**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|-------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Wo Hing Li          |   | Mr.                Wo Hing Li has been the Executive Director and President of the Company                since December 28, 2006. In addition, he has been the Chairman and                Executive Director of Partner Success Holdings Limited (“PSHL”), a British                Virgin Islands Business Company and wholly-owned subsidiary of CPSL,                and                its subsidiaries since May 2002 and the Executive Director of Shanghai                Chengtong Precision Strip Company Limited (“Chengtong”), a wholly-owned                subsidiary of PSHL , since June 2004. From April 2004 until March                2006,                Mr. Li served as a Non-Executive Director of China Petrotech Holdings                Limited, an oil software and exploration company listed on the Singapore                Stock Exchange. Since October 2001, Mr. Li has served as a director                of                Medical China Limited, a company listed on the GEM Board of the Hong                Kong                Stock Exchange. From 1997 to 2001, Mr. Li served as a director of                Teda                (HK) Holdings Limited. Mr. Li served in various positions within                the Grand                Finance Group between 1984 and 1997, serving the last seven years                as the                General Manager of its subsidiary, Grand International (China) Investment                Holding Co., Limited. Mr. Li has a Master’s Degree in Business                Administration from the Murdoch University of Australia, and a PhD                in                Management through a program co-organized by the University of                International Business & Economics of China and the European                University of Ireland. |
|                          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| Tung                Kuen Tsui |   | Tung                Kuen Tsui has been retired since 1998. From 1995 to 1998, Mr. Tsui                served                as a Senior Credit Controller for PricewaterhouseCoopers. Prior to                working                as the Senior Credit Controller, Mr. Tsui held a variety of positions                with                PricewaterhouseCoopers since 1971, including Senior Manager, Information                Systems. Mr. Tsui has a Master of Business Administration from the                University of Macau. Mr. Tsui graduated as an Associate Member of                Chartered Institute of Secretaries and Administrators in the United                Kingdom.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |

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| David                  Peter Wong   |   | David                  Peter Wong is the Chief Financial Officer of Private Wealth Partners,                  LLC,                  an SEC-registered investment adviser based in California, and has                  been                  since November 2005. Mr. Wong served as the Corporate Controller                  for                  H&Q Asia Pacific, an Asian private equity firm from November 2002                  to                  October 2005. Mr. Wong was the Corporate Controller of Hellman&                  Friedman, a private equity firm from January 2002 to September                  2002. Mr.                  Wong is a U.K. Chartered Accountant with six years of public accounting                  experience with Ernst & Young in London and PriceWaterhouseCoopers in                  Hong Kong. Mr. Wong has a Bachelor of Arts degree in Economics                  and                  Geography from the University of Leeds in the United                  Kingdom.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|------------------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                     |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   Che                  Kin Lui |   | Che                  Kin Lui has been the Chief Financial Officer of Mirach Energy Limite                  (formerly known as China Petrotech Holdings Limited), an oil software                  and                  exploration company listed on the Singapore Stock Exchange, since                  April                  2007. Mr. Lui served as a consultant for Synthesis Consultancy                  Limited                  from July 2002 until March 2007. From June 1999 to July 2002, Mr.                  Lui                  served as a manager for MVP (HK) Industries Limited, a company                  engaged in                  manufacturing household tools. Mr. Lui has a Master’s Degree in Business                  Administration from the University of Ballarat, Australia, and                  a diploma                  in Business Administration from Hong Kong Shue Yan                  College.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|                                     |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| Hai                  Sheng Chen          |   | Mr.                  Hai Sheng Chen is an Executive Director and General Manager of                  the                  Company. Mr. Chen has been the General Manager and an Executive                  Director                  of Chengtong since its formation in July 2002 as well as an Executive                  Director of Shanghai Tuorong Precision Strip Company, Limited since                  June                  2001. From July 2001 to July 2002, Mr. Chen was the Managing Director                  of                  Shanghai Krupp Stainless Steel Co. Limited, a steel processing                  company.                  From August 1999 to May 2001, Mr. Chen was the Deputy General Manager                  of                  PuDong Steel Co. Limited, a subsidiary of the BaoSteel Group, a                  steel                  processing company. Mr. Chen has an Executive Master’s Degree in Business                  Administration from China Europe International Business School                  and a                  Bachelors Degree in Metallic Pressure Processing from the Beijing                  University of Science and Technologies.                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|                                     |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| Leada                  Tak Tai Li        |   | Ms.                  Leada Tak Tai Li has been the Chief Financial Officer of the Company                  since                  December 28, 2006. From October 2005 until December 28, 2006, Ms.                  Li was                  the Chief Financial Officer of PSHL. From June 2004 until October                  2005,                  Ms. Li was an assistant to the Chairman of STAR Pharmaceutical                  Limited, a                  company engaged in the production and sales of pharmaceuticals,                  assisting                  with group activities and financial reporting. From November 2003                  until                  May 2004, Ms. Li was an accountant with KPMG Hong Kong, a company                  engaged                  in audit, assurances and consulting services, conducting commercial                  due                  diligence on businesses in China. From January 2002 until September                  2002,                  Ms. Li was an investment advisor conducting research and analysis                  with the                  private equity firm Suez Asia Holdings (Hong Kong) Ltd. In 2003,                  Ms. Li                  received her Master’s Degree in Accounting and Finance from Napier                  University in the U.K.; she received a Bachelors Degree in Commerce                  from                  the University of Melbourne in 2001.                                                                                                                                                                             |
|                                     |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| Dan                  Carlson             |   | Mr.                    Carlson has served as a non-executive member of our Board of                    Directors                    since February 2008. He currently serves as a Co-manager and                    General                    Partner of Strategic Alliance Capital, a fund dedicated to Alternative                    Public Offerings and PIPE transactions. Prior to joining Strategic                    Alliance, Mr. Carlson has 18 years’ experience working in various                    capacities in the money management industry. From 2001 to 2002                    he served                    as the Head of Trading at Husic Capital Management, where he                    assisted in                    managing several billion dollars of pension fund assets and assisted                    in                    the management and risk management of hedge fund products. Prior                    to                    joining Husic Capital, Mr. Carlson served from served from July                    2000                    through December 2001 as an Analyst and Head of Trading at Azure                    Capital                       Partners, a Venture Capital/Crossover fund investing in the                    technology                    industry. Mr. Carlson started in the asset management industry                    with RCM                    Capital Management, where he was a Senior Trader from 1995 to                    2000. Mr.                    Carlson graduated in 1989 from Tufts University with a degree                    in                    Economics. |

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**Committees      of the Board of Directors**

***Meetings      of the Board and Committees****.* 

***Nominations      and Governance Committee.***

*http://www.chinaprecisionsteelinc.com*
** **

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***Audit      Committee.***

*http://www.chinaprecisionsteelinc.com*

***Compensation      Committee***
*.*

*http://www.chinaprecisionsteelinc.com*

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**Stockholder      Communication with the Board of Directors**
* *

**Independence      of Directors.**

**Company      Code of Conduct and Ethics.**
* *
*** ***
* *

**ITEM      11. EXECUTIVE COMPENSATION**

**Compensation      Discussion and Analysis**

***Overview***

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***Compensation      Philosophy***

** **

***Setting      Executive Compensation***

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***Base      Salary***

***Annual      Incentive Compensation***

*Bonuses*

*Equity      Awards*

** **

***Tax      and Accounting Implications***

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***Employment      and Severance Agreements***

***Summary      Compensation Table***

**SUMMARY      COMPENSATION TABLE**

| Name and PrincipalPosition                   |   | Year   |   | Salary($)  |   | Bonus($) |   | StockAwards($)(1) |   | OptionAwards($)(2) |   | Total($) |   |
|--------------------------------------------------------|--------|--------|--------|-----------------|--------|----------|--------|-------------------|--------|--------------------|--------|----------|--------|
| Wo Hing Li,                                  |   |   | 2007   |            |   | 140,000  |   |              | 0      |               |   | 0        |   |   | 0 |   |   | 140,000 |   |
| President                & Chief Executive Officer |   |   | 2008   |            |   | 140,000  |   |              | 35,000 |               |   | 0        |   |   | 0 |   |   | 175,000 |   |
|                                                   |   |   |   |            |   |     |   |              |   |               |   |     |   |   |   |   |   |   |   |
| Leada                Tak Tai Li,                       |   |   | 2007   |            |   | 60,000   |   |              | 0      |               |   | 0        |   |   | 0 |   |   | 60,000 |   |
| Chief                    Financial Officer             |   |   | 2008   |            |   | 60,000   |   |              | 15,000 |               |   | 0        |   |   | 0 |   |   | 75,000 |   |

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| (1) | The                valuation of stock based compensation is based in accordance with                Statement of Financial Accounting Standards No. 123R (revised 2004),                “Share-Based Payment”. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Plan-Based      Awards**

**Outstanding      Equity Awards at June 30, 2008**

**Option      Exercises and Stock Vested**

**Pension      Benefits**

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**Nonqualified      Deferred Compensation**

**Payment      Upon Termination or Change-in-Control**

**Value      Realized from Stock Options and Stock Appreciation Awards**

**Subsidiary      Option Grants to Directors and Named Executive Officers**

**Director      Compensation**

**Compensation      Committee Report**

*http://www.chinaprecisionsteelinc.com*

| Respectfully                submitted,        |
|-----------------------------------------------|
|                                          |
| /s/                The Compensation Committee |
| *Che                Kin Lui, Chairman*        |
| *David                Peter Wong*             |
| *Tung                Kuen Tsui*               |

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*The      Compensation Committee Report above does not constitute “soliciting material”and will not be deemed “filed” or incorporated by reference into any of our      filings under the Securities Act of 1933 or the Securities Exchange Act of      1934      that might incorporate our SEC filings by reference, in whole or in part,      notwithstanding anything to the contrary set forth in those      filings,*
*except      to the extent that the Company specifically incorporates it by reference into      such filing.*

**Compensation      Committee Interlocks and Insider Participation**

**ITEM      12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND      MANAGEMENT**

| Name                and Address of Beneficial                Owner                                                                                                                                      |   | Office,                if Any |                                        | Title                of Class |   | Amount                andNature                ofBeneficialOwnership                (1) |   | Percent of Class(2) |           |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------|---------------------------------------------|-------------------------------|--------|-----------------------------------------------------------------------------------------|--------|-------------------------------|----------------|
| **Officers                and Directors**                                                                                                                                                               |   |
| Wo                Hing Li                                                                                                                                                                               |   |                          | CEO,                President, and Chairman |                          |   | Common Stock $0.01 par value                                        |   |                          | 15,349,240     |   |   | 33.4 | % |
|                                                                                                                                                                                                    |   |                          |                                        |                          |   |                                                                                    |   |                          |           |   |   |   |   |
| Leada                Tak Tai Li                                                                                                                                                                         |   |                          | Chief                Financial Officer      |                          |   | Common                Stock $0.01 par value                                             |   |                          | 200,000        |   |   | 0.4 | % |
|                                                                                                                                                                                                    |   |                          |                                        |                          |   |                                                                                    |   |                          |           |   |   |   |   |
| Hai                Sheng Chen                                                                                                                                                                           |   |                          | Director                                    |                          |   | Common                Stock $0.01 par value                                             |   |                          | 0              |   |   | * |   |
|                                                                                                                                                                                                    |   |                          |                                        |                          |   |                                                                                    |   |                          |           |   |   |   |   |
| Che                Kin Lui                                                                                                                                                                              |   |                          | Director                                    |                          |   | Common                Stock $0.01 par value                                             |   |                          | 0              |   |   | * |   |
|                                                                                                                                                                                                    |   |                          |                                        |                          |   |                                                                                    |   |                          |           |   |   |   |   |
| Tung                Kuen Tsui                                                                                                                                                                           |   |                          | Director                                    |                          |   | Common                Stock $0.01 par value                                             |   |                          | 0              |   |   | * |   |
|                                                                                                                                                                                                    |   |                          |                                        |                          |   |                                                                                    |   |                          |           |   |   |   |   |
| David                Peter Wong                                                                                                                                                                         |   |                          | Director                                    |                          |   | Common                Stock $0.01 par value                                             |   |                          | 0              |   |   | * |   |
|                                                                                                                                                                                                    |   |                          |                                        |                          |   |                                                                                    |   |                          |           |   |   |   |   |
| All                officers and directors as a group (6 persons named above)                                                                                                                            |   |                          |                                             |                          |   | Common                Stock $0.01 par value                                             |   |                          | 15,549,240     |   |   | 33.8 | % |
|                                                                                                                                                                                                    |
| **5%                Securities Holder**                                                                                                                                                                 |
| Wo                Hing Li                                                                                                                                                                               |   |                          | CEO,                President, and Chairman |                          |   | Common                Stock $0.01 par value                                             |   |                          | 15,349,240     |   |   | 33.4 | % |
|                                                                                                                                                                                                    |   |                          |                                        |                          |   |                                                                                    |   |                          |           |   |   |   |   |
| Hudson                Bay Overseas Fund, Ltd.                (3)120                Broadway, 40th FloorNew                York, New York 10271Attention:                Yoav RothMay                Lee |   |                          |                                        |                          |   | Common                Stock $0.01 par value                                             |   |                          | 2,711,110      |   |   | 5.8 | % |
|                                                                                                                                                                                                    |   |                          |                                        |                          |   |                                                                                    |   |                          |           |   |   |   |   |
| Sander                Gerber (4)c/o                Hudson Bay Fund, LP 120                Broadway, 40th FloorNew                York, New York 10271                                              |   |                          |                                        |                          |   | Common                Stock $0.01 par value                                             |   |                          | 3,851,110      |   |   | 8.2 | % |
|                                                                                                                                                                                                    |   |                          |                                        |                          |   |                                                                                    |   |                          |           |   |   |   |   |
| Yoav                Roth (4)c/o                Hudson Bay Fund, LP 120                Broadway, 40th FloorNew                York, New York 10271                                                  |   |                          |                                        |                          |   | Common                Stock $0.01 par value                                             |   |                          | 3,851,110      |   |   | 8.2 | % |
|                                                                                                                                                                                                    |   |                          |                                        |                          |   |                                                                                    |   |                          |           |   |   |   |   |
| Charles                Winkler (4)c/o                Hudson Bay Fund, LP 120                Broadway, 40th FloorNew                York, New York 10271                                            |   |                          |                                        |                          |   | Common                Stock $0.01 par value                                             |   |                          | 3,851,110      |   |   | 8.2 | % |
|                                                                                                                                                                                                    |   |                          |                                        |                          |   |                                                                                    |   |                          |           |   |   |   |   |
| **Total                shares held by all affiliates**                                                                                                                                                  |   |                          |                                             |                          |   | **Common                Stock $0.01 par value**                                         |   |                          | **15,549,240** |   |   | **33.8** | **%** |

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| (1) | Beneficial                Ownership is determined in accordance with the rules of the Securities                and                Exchange Commission and generally includes voting or investment power                with                respect to securities. Each of the beneficial owners listed above                has                direct ownership of and sole voting power and investment power with                respect to the shares of our common stock, as known to management. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | As                of June 30, 2008, a total of 46,472,955 shares of our Common Stock                are                considered to be outstanding pursuant to SEC Rule 13d-3(d)(1). For                each                Beneficial Owner above, any options exercisable within 60 days have                been                included in the denominator. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Sander                Gerber, Yoav Roth and Charles Winkler share voting and investment                power                over, but disclaim beneficial ownership over the 2,711,110 shares                of our                Common Stock held by Hudson Bay Overseas Fund, Ltd. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | Sander                Gerber, Yoav Roth and Charles Winkler also share voting and investment                power over, but disclaim beneficial ownership over 1,140,000 shares                of our                Common Stock held by the Hudson Bay Fund,                LP. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Change      in Control**

**Section      16(A) Beneficial Ownership Reporting Compliance**

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**ITEM      13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR      INDEPENDENCE**

**Review      and Approval of Related Person Transactions.**

| ·  | the                nature of the related person’s interest in the transaction;                                                                                |
|--------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·  | the                material terms of the transaction, including, without limitation,                the                amount and type of transaction;              |
| ·  | the                importance of the transaction to the related person;                                                                                             |
| ·  | the                importance of the transaction to the company;                                                                                                    |
| ·  | whether                the transaction would impair the judgment of a director or executive                officer to act in the best interest of the company; and  |
| ·       | any                other matters deemed appropriate.                                                                                                                     |

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**ITEM      14. PRINCIPAL ACCOUNTANT FEES AND SERVICES**

|                              |   | **2008** |    | **2007** |   |
|-----------------------------------|--------|----------|---------|----------|--------|
| Audit                Fees         |   |     | 115,159 |     |   | 69,213.89 |   |
| Audit                Related Fees |   |     | 15,855  |     |   | 7,993.00 |   |
| Tax                Fees           |   |     | 7,500   |     |   | - |   |
| All                Other Fees     |   |     | 55,000  |     |   | - |   |
| Total                             |   |     | 193,514 |     |   | 77,206.89 |   |

*Audit      Fees*

*Audit      Related Fees*

*Tax      Fees*

*All      Other Fees*

Before      auditors are engaged to provide us audit or non-audit services, such engagement      is (without exception, required to be) approved by the Audit Committee of our      Board of Directors.

**Report      of the Audit Committee**

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| Respectfully                submitted,      |
|---------------------------------------------|
|                                        |
| /s/                The Audit Committee      |
| *David                Peter Wong, Chairman* |
| *Che                Kin Lui*                |
| *Tung                Kuen Tsui*             |

*The      Audit Committee Report above does not constitute “soliciting material” and will      not be deemed “filed” or incorporated by reference into any of our filings under      the Securities Act of 1933 or the Securities Exchange Act of 1934 that might      incorporate our SEC filings by reference, in whole or in part, notwithstanding      anything to the contrary set forth in those filings,*
*except      to the extent that the Company specifically incorporates it by reference into      such filing.*

**PART      IV**

**ITEM      15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES**

| **EXHIBIT****NO.** |   | **DESCRIPTION**                                                                                                                                                                                                                                              |
|--------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|               |   |                                                                                                                                                                                                                                                         |
| 3.1                |   | Amended                and Restated Articles of Incorporation (incorporated herein by reference                to the Company’s Form 8-K, dated January 4, 2007, Exhibit                3.1)                                                           |
|               |   |                                                                                                                                                                                                                                                         |
| 3.2                |   | Second                Amended and Restated Bylaws (incorporated herein by reference to                the                Company’s Form 10-KSB, dated March 31, 1999, Exhibit                3.1.II)                                                   |
|               |   |                                                                                                                                                                                                                                                         |
| 4.1                |   | Specimen                Certificate for Common Stock (incorporated herein by reference to                the                Company’s Form 10-Q for the quarterly period ended December 31, 2006,                dated February 13, 2007, Exhibit 3.1) |
|               |   |                                                                                                                                                                                                                                                         |
| 4.2                |   | Form                of Warrant (incorporated herein by reference to the Company’s Form 8-K,                dated February 16, 2007, Exhibit                4.1)                                                                                        |

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| 4.3    |   | Warrant,                dated February 22, 2007, to Belmont Capital Group Limited (incorporated                herein by reference to the Company’s Form 8-K, dated February 16, 2007,                Exhibit 4.2)                                                                                                                                                        |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                            |
| 4.4    |   | Warrant,                dated February 22, 2007, to CCG Elite Investor Relations                (incorporated herein by reference to the Company’s Form 8-K, dated                February 16, 2007, Exhibit 4.3)                                                                                                                                                    |
|   |   |                                                                                                                                                                                                                                                                                                                                                                            |
| 10.1   |   | Redemption                Agreement, dated December 28, 2006 (incorporated herein by reference                to                the Company’s Form 8-K, dated January 4, 2007, Exhibit                10.1)                                                                                                                                                               |
|   |   |                                                                                                                                                                                                                                                                                                                                                                            |
| 10.2   |   | Tax                Indemnity Agreement, dated December 28, 2006 (incorporated herein                by                reference to the Company’s Form 8-K, dated January 4, 2007, Exhibit                10.2)                                                                                                                                                            |
|   |   |                                                                                                                                                                                                                                                                                                                                                                            |
| 10.3   |   | 2006                Long Term Incentive Plan (incorporated herein by reference to the                Company’s Form 8-K, dated January 4, 2007, Exhibit                10.3)                                                                                                                                                                                              |
|   |   |                                                                                                                                                                                                                                                                                                                                                                            |
| 10.4   |   | 2006                Director Stock Plan, dated March 1, 2006 (incorporated herein by                reference                to the Company’s Definitive Proxy Statement, dated November 27, 2006,                Annex 3)                                                                                                                                                |
|   |   |                                                                                                                                                                                                                                                                                                                                                                            |
| 10.5   |   | Equipment                Mortgage Agreement between Chengtong and Raiffeisen Zentralbank Österreich                AG, dated January 12, 2005 (incorporated herein by reference to the                Company’s Form 8-K, dated January 4, 2007, Exhibit                10.4)                                                                                        |
|   |   |                                                                                                                                                                                                                                                                                                                                                                            |
| 10.6   |   | Mortgage                Agreement on Immovables between Shanghai Tuorong Precision Strip                Company                Limited and Raisffesien Zentralbank Öesterreich AG, dated January 12, 2005                (incorporated herein by reference to the Company’s Form 8-K, dated January                4, 2007, Exhibit 10.5)                            |
|   |   |                                                                                                                                                                                                                                                                                                                                                                            |
| 10.7   |   | Letter                of Offer between Chengtong and Raiffeisen Zentralbank Österreich AG, dated                October 14, 2004 (incorporated herein by reference to the Company’s Form                8-K, dated January 4, 2007, Exhibit 10.6)                                                                                                                    |
|   |   |                                                                                                                                                                                                                                                                                                                                                                            |
| 10.8   |   | Amendment                No. 1 to Letter of Offer between Chengtong and Raiffeisen Zentralbank                Österreich AG, dated December 28, 2004 (incorporated herein by reference                to the Company’s Form 8-K, dated January 4, 2007, Exhibit                10.7)                                                                                 |
|   |   |                                                                                                                                                                                                                                                                                                                                                                            |
| 10.9   |   | Amendment                No. 2 to Letter of Offer between Chengtong and Raiffeisen Zentralbank                Österreich AG, dated May 10, 2005 (incorporated herein by reference                to the                Company’s Form 8-K, dated January 4, 2007, Exhibit                10.8)                                                                       |
|   |   |                                                                                                                                                                                                                                                                                                                                                                            |
| 10.10  |   | Amendment                No. 3 to Letter of Offer between Chengtong and Raiffeisen Zentralbank                Österreich AG,  dated July 26, 2005 (incorporated herein by reference                to the Company’s Form 8-K, dated January 4, 2007, Exhibit                10.9)                                                                               |
|   |   |                                                                                                                                                                                                                                                                                                                                                                            |
| 10.11  |   | Debt                Reduction Agreement, dated February 13, 2007, by and among the Company,                Wo                Hing Li and Partner Success Holdings Limited (incorporated herein                by                reference to the Company’s Form 8-K, dated February 13, 2007, Exhibit                10.1)                                                |
|   |   |                                                                                                                                                                                                                                                                                                                                                                            |
| 10.12  |   | Deed                of Release, dated February 13, 2007, from Wo Hing Li, in favor of                the                Company, Partner Success Holdings Limited and Shanghai Chengtong                Precision                Strip Company Limited (incorporated herein by reference to the Company’s                Form 8-K, dated February 13, 2007, Exhibit 10.2) |
|   |   |                                                                                                                                                                                                                                                                                                                                                                            |
| 10.13  |   | Amendment                to the Debt Reduction Agreement, dated February 20, 2007, by and                among the                Company, Wo Hing Li and Partner Success Holdings Limited (incorporated                herein by reference to the Company’s Form 8-K, dated February 16, 2007,                Exhibit 10.4)                                              |
|   |   |                                                                                                                                                                                                                                                                                                                                                                            |
| 10.14  |   | Form                of Stock Purchase Agreement, by and among the Company and the Investors,                dated February 16, 2007 (incorporated herein by reference to the                Company’s                Form 8-K, dated February 16, 2007, Exhibit 10.1)                                                                                                     |
|   |   |                                                                                                                                                                                                                                                                                                                                                                            |
| 10.15  |   | Form                of Limited Standstill Agreement (incorporated herein by reference                to the                Company’s Form 8-K, dated February 16, 2007, Exhibit                10.2)                                                                                                                                                                      |
|   |   |                                                                                                                                                                                                                                                                                                                                                                            |
| 10.16  |   | Form                of Subscription Agreement, dated November 1, 2007 (incorporated herein                by                reference to the Company’s Form 8-K filed on November 1, 2007, Exhibit                10.1)                                                                                                                                                   |
|   |   |                                                                                                                                                                                                                                                                                                                                                                            |
| 10.17  |   | Form                of Placement Agency Agreement, dated October 31, 2007 (incorporated                herein                by reference to the Company’s Form 8-K filed on November 1, 2007, Exhibit                10.2)                                                                                                                                               |

----

| 10.18* |   | Executive                Employment Agreement, dated January 1, 2007, between the Company                and Hai                Sheng Chen                                                                                                                                                                                      |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                            |
| 10.19* |   | Executive                Employment Agreement, dated January 1, 2007, between the Company                and Leada                Tak Tai Li                                                                                                                                                                                    |
|   |   |                                                                                                                                                                                                                                                                                                                            |
| 10.20* |   | Executive                Employment Agreement, dated January 1, 2007, between the Company                and Wo                Hing Li                                                                                                                                                                                          |
|   |   |                                                                                                                                                                                                                                                                                                                            |
| 21     |   | Subsidiaries                of the Registrant (Incorporated herein by reference to the Company’s                Annual Report on Form 10-K for the year ended June 30, 2008, filed                on                September 15, 2008, Exhibit 21)                                                                  |
|   |   |                                                                                                                                                                                                                                                                                                                            |
| 22     |   | Published                report regarding matters submitted to vote of security holders                (Incorporated herein by reference to the Company’s Quarterly Report on                Form 10-Q for the quarter ended December 31, 2006, dated February                13,                2007, Exhibit 99.1) |
|   |   |                                                                                                                                                                                                                                                                                                                            |
| 31.1*  |   | Certification                of President pursuant to Rule 13a-14(a)/15d-14(a) of the Securities                Exchange Act.                                                                                                                                                                                                   |
|   |   |                                                                                                                                                                                                                                                                                                                            |
| 31.2*  |   | Certification                of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of                the                Securities Exchange Act.                                                                                                                                                                      |
|   |   |                                                                                                                                                                                                                                                                                                                            |
| 32*    |   | Certification                of President and Chief Financial Officer Pursuant to 18 U.S.C. Section                1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act                of                2002.                                                                                                    |

----

----

**SIGNATURES**

|   | **CHINA                PRECISION STEEL, INC.**              |
|--------|-------------------------------------------------------------|
|   |                                                        |
|   | By:                                                         | /s/                Wo Hing Li  |
|   | Name: Wo                Hing Li                        |
|   | Title:                  Chief Executive Officer   |
|   | (Principal                Executive Officer)                |
|   |                                                        |
|   | By:                                                         | /s/                Leada Tak Tai Li |
|   | Name: Leada                Tak Tai Li                  |
|   | Title:                  Chief Financial Officer   |
|   | (Principal                Financial and Accounting Officer) |
|   |                                                        |

| **SIGNATURE**                            |   | **TITLE**                                                             |   | **DATE**                        |
|------------------------------------------|--------|-----------------------------------------------------------------------|--------|---------------------------------|
|                                     |   |                                                                  |   |                            |
|                                     |   | Chief                Executive Officer (Principal Executive Officer), |   |                            |
| /s/                Wo Hing Li            |   | President                and Director                                 |   | October                28, 2008 |
| Wo                Hing Li                |   |                                                                  |   |                            |
|                                     |   | Chief                Financial Officer,                               |   |                            |
|                                     |   | Secretary                and Treasurer                                |   |                            |
| /s/                Leada Tak Tai Li      |   | (Principal                Financial Officer)                          |   | October                28, 2008 |
| Leada                Tak Tai Li          |   |                                                                  |   |                            |
|                                     |   |                                                                  |   |                            |
| /s/                Hai Sheng Chen        |   | General                Manager, Director                              |   | October                28, 2008 |
| Hai                Sheng Chen            |   |                                                                  |   |                            |
|                                     |   |                                                                  |   |                            |
| /s/                Che Kin Lui           |   | Director                                                              |   | October                28, 2008 |
| Che                Kin Lui               |   |                                                                  |   |                            |
|                                     |   |                                                                  |   |                            |
| /s/                David Peter Wong      |   | Director                                                              |   | October                28, 2008 |
| David                Peter Wong          |   |                                                                  |   |                            |
|                                     |   |                                                                  |   |                            |
| /s/                Tung Kuen Tsui   |   | Director                                                              |   | October                28, 2008 |
| Tung                Kuen Tsui            |   |                                                                  |   |                            |

----

| **EXHIBIT****NO.** |   | **DESCRIPTION**                                                                                                                                                                                                                                                                                                                                                                                |
|--------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|               |   |                                                                                                                                                                                                                                                                                                                                                                                           |
| 3.1                |   | Amended                and Restated Articles of Incorporation (incorporated herein by reference                to the Company’s Form 8-K, dated January 4, 2007, Exhibit                3.1)                                                                                                                                                                                             |
|               |   |                                                                                                                                                                                                                                                                                                                                                                                           |
| 3.2                |   | Second                Amended and Restated Bylaws (incorporated herein by reference to                the                Company’s Form 10-KSB, dated March 31, 1999, Exhibit                3.1.II)                                                                                                                                                                                     |
|               |   |                                                                                                                                                                                                                                                                                                                                                                                           |
| 4.1                |   | Specimen                Certificate for Common Stock (incorporated herein by reference to                the                Company’s Form 10-Q for the quarterly period ended December 31, 2006,                dated February 13, 2007, Exhibit 3.1)                                                                                                                                   |
|               |   |                                                                                                                                                                                                                                                                                                                                                                                           |
| 4.2                |   | Form                of Warrant (incorporated herein by reference to the Company’s Form 8-K,                dated February 16, 2007, Exhibit 4.1)                                                                                                                                                                                                                                         |
|               |   |                                                                                                                                                                                                                                                                                                                                                                                           |
| 4.3                |   | Warrant,                dated February 22, 2007, to Belmont Capital Group Limited (incorporated                herein by reference to the Company’s Form 8-K, dated February 16, 2007,                Exhibit 4.2)                                                                                                                                                                       |
|               |   |                                                                                                                                                                                                                                                                                                                                                                                           |
| 4.4                |   | Warrant,                dated February 22, 2007, to CCG Elite Investor Relations                (incorporated herein by reference to the Company’s Form 8-K, dated                February 16, 2007, Exhibit 4.3)                                                                                                                                                                   |
|               |   |                                                                                                                                                                                                                                                                                                                                                                                           |
| 10.1               |   | Redemption                Agreement, dated December 28, 2006 (incorporated herein by reference                to                the Company’s Form 8-K, dated January 4, 2007, Exhibit                10.1)                                                                                                                                                                              |
|               |   |                                                                                                                                                                                                                                                                                                                                                                                           |
| 10.2               |   | Tax                Indemnity Agreement, dated December 28, 2006 (incorporated herein                by                reference to the Company’s Form 8-K, dated January 4, 2007, Exhibit                10.2)                                                                                                                                                                           |
|               |   |                                                                                                                                                                                                                                                                                                                                                                                           |
| 10.3               |   | 2006                Long Term Incentive Plan (incorporated herein by reference to the                Company’s Form 8-K, dated January 4, 2007, Exhibit                10.3)                                                                                                                                                                                                             |
|               |   |                                                                                                                                                                                                                                                                                                                                                                                           |
| 10.4               |   | 2006                Director Stock Plan, dated March 1, 2006 (incorporated herein by                reference                to the Company’s Definitive Proxy Statement, dated November 27, 2006,                Annex 3)                                                                                                                                                               |
|               |   |                                                                                                                                                                                                                                                                                                                                                                                           |
| 10.5               |   | Equipment                Mortgage Agreement between Chengtong and Raiffeisen Zentralbank Österreich                AG, dated January 12, 2005 (incorporated herein by reference to the                Company’s Form 8-K, dated January 4, 2007, Exhibit                10.4)                                                                                                       |
|               |   |                                                                                                                                                                                                                                                                                                                                                                                           |
| 10.6               |   | Mortgage                Agreement on Immovables between Shanghai Tuorong Precision Strip                Company                Limited and Raisffesien Zentralbank Öesterreich AG, dated January 12, 2005                (incorporated herein by reference to the Company’s Form 8-K, dated January                4, 2007, Exhibit 10.5)                                           |
|               |   |                                                                                                                                                                                                                                                                                                                                                                                           |
| 10.7               |   | Letter                of Offer between Chengtong and Raiffeisen Zentralbank Österreich AG, dated                October 14, 2004 (incorporated herein by reference to the Company’s Form                8-K, dated January 4, 2007, Exhibit 10.6)                                                                                                                                   |
|               |   |                                                                                                                                                                                                                                                                                                                                                                                           |
| 10.8               |   | Amendment                No. 1 to Letter of Offer between Chengtong and Raiffeisen Zentralbank                Österreich AG, dated December 28, 2004 (incorporated herein by reference                to the Company’s Form 8-K, dated January 4, 2007, Exhibit                10.7)                                                                                                |
|               |   |                                                                                                                                                                                                                                                                                                                                                                                           |
| 10.9               |   | Amendment                No. 2 to Letter of Offer between Chengtong and Raiffeisen Zentralbank                Österreich AG, dated May 10, 2005 (incorporated herein by reference                to the                Company’s Form 8-K, dated January 4, 2007, Exhibit                10.8)                                                                                      |
|               |   |                                                                                                                                                                                                                                                                                                                                                                                           |
| 10.10              |   | Amendment                No. 3 to Letter of Offer between Chengtong and Raiffeisen Zentralbank                Österreich AG,  dated July 26, 2005 (incorporated herein by reference                to the Company’s Form 8-K, dated January 4, 2007, Exhibit                10.9)                                                                                              |
|               |   |                                                                                                                                                                                                                                                                                                                                                                                           |
| 10.11              |   | Debt                Reduction Agreement, dated February 13, 2007, by and among the Company,                Wo                Hing Li and Partner Success Holdings Limited (incorporated herein                by                reference to the Company’s Form 8-K, dated February 13, 2007, Exhibit                10.1)                                                               |
|               |   |                                                                                                                                                                                                                                                                                                                                                                                           |
| 10.12              |   | Deed                of Release, dated February 13, 2007, from Wo Hing Li, in favor of                the                Company, Partner Success Holdings Limited and Shanghai Chengtong                Precision                Strip Company Limited (incorporated herein by reference to the Company’s                Form 8-K, dated February 13, 2007, Exhibit                10.2) |

----

| 10.13  |   | Amendment                to the Debt Reduction Agreement, dated February 20, 2007, by and                among the                Company, Wo Hing Li and Partner Success Holdings Limited (incorporated                herein by reference to the Company’s Form 8-K, dated February 16, 2007,                Exhibit 10.4) |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                               |
| 10.14  |   | Form                of Stock Purchase Agreement, by and among the Company and the Investors,                dated February 16, 2007 (incorporated herein by reference to the                Company’s                Form 8-K, dated February 16, 2007, Exhibit 10.1)                                                        |
|   |   |                                                                                                                                                                                                                                                                                                                               |
| 10.15  |   | Form                of Limited Standstill Agreement (incorporated herein by reference                to the                Company’s Form 8-K, dated February 16, 2007, Exhibit                10.2)                                                                                                                         |
|   |   |                                                                                                                                                                                                                                                                                                                               |
| 10.16  |   | Form                of Subscription Agreement, dated November 1, 2007 (incorporated herein                by                reference to the Company’s Form 8-K filed on November 1, 2007, Exhibit                10.1)                                                                                                      |
|   |   |                                                                                                                                                                                                                                                                                                                               |
| 10.17  |   | Form                of Placement Agency Agreement, dated October 31, 2007 (incorporated                herein                by reference to the Company’s Form 8-K filed on November 1, 2007, Exhibit                10.2)                                                                                                  |
|   |   |                                                                                                                                                                                                                                                                                                                               |
| 10.18* |   | Executive                Employment Agreement, dated January 1, 2007, between the Company                and Hai                Sheng Chen                                                                                                                                                                                         |
|   |   |                                                                                                                                                                                                                                                                                                                               |
| 10.19* |   | Executive                Employment Agreement, dated January 1, 2007, between the Company                and Leada                Tak Tai Li                                                                                                                                                                                       |
|   |   |                                                                                                                                                                                                                                                                                                                               |
| 10.20* |   | Executive                Employment Agreement, dated January 1, 2007, between the Company                and Wo                Hing Li                                                                                                                                                                                             |
|   |   |                                                                                                                                                                                                                                                                                                                               |
| 21     |   | Subsidiaries                of the Registrant (Incorporated herein by reference to the Company’s                Annual Report on Form 10-K for the year ended June 30, 2008, filed                on                September 15, 2008, Exhibit 21)                                                                     |
|   |   |                                                                                                                                                                                                                                                                                                                               |
| 22     |   | Published                report regarding matters submitted to vote of security holders                (Incorporated herein by reference to the Company’s Quarterly Report on                Form 10-Q for the quarter ended December 31, 2006, dated February                13,                2007, Exhibit 99.1)    |
|   |   |                                                                                                                                                                                                                                                                                                                               |
| 31.1*  |   | Certification                of President pursuant to Rule 13a-14(a)/15d-14(a) of the Securities                Exchange Act.                                                                                                                                                                                                      |
|   |   |                                                                                                                                                                                                                                                                                                                               |
| 31.2*  |   | Certification                of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of                the                Securities Exchange Act.                                                                                                                                                                         |
|   |   |                                                                                                                                                                                                                                                                                                                               |
| 32*    |   | Certification                of President and Chief Financial Officer Pursuant to 18 U.S.C. Section                1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act                of                2002.                                                                                                       |

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----