Message #1 From:
NewsBot Date: February 20, 2008 05:45:56 AM
Beicang Iron & Steel, Inc. and Subsidiaries
Beicang
Iron & Steel, Inc. and Subsidiaries
Notes
to
Consolidated Financial Statements
For
the
Nine Months Ended September 30, 2007 and 2006
1.
DESCRIPTION
OF BUSINESS AND ORGANIZATION
Principal
activities
Beicang
Iron & Steel Inc. (the “Company” or “Beicang” or “we” or “us”), is a Nevada
corporation engaging in the business of producing ferrochromium alloy and
pelletized ores through its subsidiaries and variable interest entities in
the
People’s Republic of China (“PRC”).
Organization
The
Company was originally incorporated in the State of Colorado in 1983 under
the
name "Turco Computer Systems, Inc.". In February 2002, the Company changed
its
name to Alpha Spacecom, Inc. following a share exchange transaction. In June
2005, the Company became a Nevada corporation after merging with its wholly
owned subsidiary, Alpha Spacecom, Inc., a Nevada corporation.
Since
October 2004, the Company has been involved in an ongoing dispute concerning
control, which has resulted in two separate lawsuits which are more fully
described in note 19.
On
April
8, 2006, the Company entered into a Merger Agreement (the “Merger Agreement”)
with East Glory Investments Group, Ltd., a Cayman Islands company (hereinafter
“EGIG”). Under the terms of the Merger Agreement, the Company issued an
aggregate of 899,196,930 shares of common stock to the shareholders of EGIG,
and
in exchange, EGIG merged with and into the Company (the “Merger”), with the
Company as the surviving company. Additionally, pursuant to the Merger
Agreement, the Board and the holders of a majority of the Company’s capital
stock approved amendments to the Company’s Articles of Incorporation by written
consent, including: (1) a change of our corporate name from Alpha Spacecom,
Inc.
to the present name, Beicang Iron & Steel Inc., and (2) an increase in
authorized common stock from 200,000,000 to 1,000,000,000 shares. The Articles
of Merger to effectuate the Merger and the Amendment to the Company’s Articles
of Incorporation to effectuate the name change and to increase in authorized
shares were filed with Nevada’s Secretary of State on October 25, 2006. The
Company’s name change and its new trading symbol (OTCBB: BEIC) became effective
on the OTC Bulletin Board also on October 25, 2006.
As
a
result of the Merger, the former stockholder of EGIG beneficially owns
approximately 90% of the Company or the combined company’s issued and
outstanding Common Stock.
As
a
result of the effectiveness of the Merger, control has changed. Members of
Alpha’s prior management tendered their resignation effective upon the
effectiveness of the Merger. Prior to their resignation, they appointed Mr.
Beicang Hou (former shareholder and director of EGIG) as sole officer and
director.
In
accordance with the Accounting and Financial Reporting Interpretations and
Guidance prepared by the staff of the U.S. Securities and Exchange Commission,
the Merger has been accounted for as a reverse acquisition where Beicang
(the
legal acquirer) has been considered the accounting acquiree and the consolidated
financial statements of the combined company are in substance those of EGIG,
with the assets and liabilities, and revenues and expenses, of Beicang being
included effective from the date of consummation of the Merger. The Company
has
been deemed to be a continuation of the business of EGIG. The outstanding
stock
prior to the Merger has been accounted for at their net book value and no
goodwill has been recognized.
Subsidiaries
and Variable Interest Entities (VIEs)
Pursuant
to and concurrent with the Merger, the Company have acquired all the issued
and
outstanding common stock of Trinity Link Holdings Limited (hereinafter “Trinity
Link”), which was in turn wholly owned by EGIG before the Merger. Trinity Link
was incorporated under the laws of the British Virgin Islands on August 18,
2005
and holds all of the issued and outstanding share capital of Shanxi Bestlink
Management Consulting Co. Ltd. (hereinafter “Bestlink”), which is a wholly
foreign owned enterprise incorporated under the laws of the People's Republic
of
China (“PRC” or “China”) on December 30, 2005.
