UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

(Mark One)

[X]  ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE  SECURITIES  EXCHANGE ACT OF
     1934

                                    For the fiscal year ended: December 31, 2004

[_]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE ACT
     OF 1934

                                              Commission file number: 333-120431

                          CHINA DIGITAL WIRELESS, INC.
    -------------------------------------------------------------------------
                 (Name of Small Business Issuer in its Charter)

                Nevada                                   90-0093373
-----------------------------------------   ------------------------------------
    (State or other jurisdiction of         (I.R.S. Employer Identification No.)
     incorporation or organization)

          429 Guangdong Road
        Shanghai, China 200001                              N/A
-----------------------------------------   ------------------------------------
 (Address of principal executive offices)                (Zip Code)

Issuer's telephone number: (011) 86-21-6336-8686

Securities registered pursuant to Section 12(b) of the Act:  None

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

Check  whether  the  registrant  (1) filed all  reports  required to be filed by
Section 13 or 15(d) of the Securities  exchange Act of 1934 during the preceding
12 months (or for such shorter  period that the  registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past
90 days. Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-B is not contained  herein,  and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated  by reference  in Part III of this Form 10-KSB or any  amendment to
this Form 10-KSB. [X]

The issuer's  revenues for its most recent  fiscal year ended  December 31, 2004
were US$24,690,006.

The aggregate market value of the voting stock held by  non-affiliates  computed
by  reference  to the price at which the stock was sold,  or the average bid and
asked prices of such stock,  as of March 31, 2005, is $4,904,968.  The number of
shares of common stock outstanding as of March 31, 2005 was 17,018,692.

Transitional Small Business Disclosure Format (check one): Yes [ ] No [X]



<PAGE>

                          CHINA DIGITAL WIRELESS, INC.

                                   FORM 10-KSB

                                TABLE OF CONTENTS

                                                                            Page


PART I

Item 1.       Description of Business.........................................1
Item 2.       Description of Property........................................29
Item 3.       Legal Proceedings..............................................29
Item 4.       Submission Of Matters To A Vote Of Security Holders............29

PART II

Item 5.       Market For Common Equity And Related Stockholder Matters.......29
Item 6.       Management's Discussion And Analysis Or Plan Of Operation......30
Item 7.       Financial Statements...........................................37
Item 8.       Changes In And Disagreements With Accountants On Accounting
              And Financial Disclosure.......................................37
Item 8A.      Controls And Procedures........................................38
Item 8B.      Other Information..............................................38

PART III

Item 9.       Directors And Executive Officers...............................38
Item 10.      Executive Compensation.........................................38
Item 11.      Security Ownership Of Certain Beneficial Owners And Management
              And Related Stock Holder Matters...............................38
Item 12.      Certain Relationships And Related Transactions.................38
Item 13.      Exhibits.......................................................39
Item 14.      Principal Accountant Fees and Services.........................40


Consolidated Financial Statements............................................F-1





<PAGE>

                                     PART I

         When we use the terms  "we,"  "us,"  "our" and "the  company,"  we mean
China Digital  Wireless,  Inc., a Nevada  corporation,  and its subsidiary.  Our
principal  subsidiary is our  wholly-owned  subsidiary,  Sifang Holdings Company
Limited. Sifang Holdings Company Limited has a wholly-owned subsidiary, Shanghai
TCH Data Technology Co., Ltd.

         The  information  set forth in this  Report on Form  10-KSB  including,
without  limitation,  that  contained  in Item 6,  Management's  Discussion  and
Analysis or Results of Operation,  contains "forward looking  statements" within
the  meaning of Section  27A of the  Securities  Act of 1933,  as  amended,  and
Section 21E of the Securities Exchange Act of 1934, as amended. These statements
relate to future events or our future financial  performance,  and involve risks
and uncertainties. In some cases, you can identify forward-looking statements by
terminology  such  as  "may,"  "will,"  "could,"   "expect,"  "plan,"  "intend,"
"anticipate,"  "believe," "estimate," "predict,"  "potential," or "continue," or
the negative of such terms or other comparable terminology. These statements are
only  predictions.  Actual results may materially differ from those projected in
the  forward-looking  statements as a result of certain risks and  uncertainties
set forth in this report. Although management believes that the assumptions made
and  expectations  reflected in the  forward-looking  statements are reasonable,
there is no assurance that the underlying assumptions will, in fact, prove to be
correct  or  that  actual  future   results  will  not  be  different  from  the
expectations  expressed in this report.  In  evaluating  these  statements,  you
should  specifically  consider various factors,  including the risks outlined in
the "Risk Factors" section below.

ITEM 1.  DESCRIPTION OF BUSINESS

General

         Our  current  operations  include  providing  value  added  information
services  and  cellular  phone   distribution   through  our  Chinese  operating
subsidiary.

Overview

         Value-Added  Information  Services.  We render value-added  information
services  in  China  by  purchasing  content  from  third-party   providers  and
reformatting that content. Our value-added  information services enable wireless
receiver (mobile phone and pager) users in China to access financial information
and various  entertainment-related  services.  We contract  with our  affiliated
wireless service  providers to transmit the reformatted  content to customers of
China's various network operators.

         The  primary  focus  of  our  value-added  information  services  is on
providing wireless receiver users in China with access to financial information.
We derive the vast majority of our value-added information services revenue from
our financial information business.  Our financial information software,  Sifang
Gutong,  allows our customers to access stock and currency exchange  information
and execute  stock  trades.  We are one of the  largest  stock  information  and
trading value-added information service providers in China.

         We began providing our entertainment-related services, including icons,
screen savers, multiplayer games, Western horoscopes, jokes, and sports and
entertainment news during the latter part of 2003. These services are ancillary
to our financial information services and they represent only a small portion of
our value-added information services revenue at the present time.

         Leveraging our experience and understanding of the wireless value-added
services  market  in  China,  we have  consistently  purchased  and  reformatted
content,  applications and technologies that are popular in the Chinese wireless
market. To further enhance and differentiate our services, we have entered into,


                                       1
<PAGE>

and will continue to actively  pursue,  collaborative  relationships  with third
parties to customize, market and provide access to their content through various
wireless technologies to Chinese consumers. In addition, all of our services are
promoted by our sales force and supported by our customer  service team, each of
which is strategically based in Shanghai.

         In order to meet ownership requirements under Chinese law that restrict
us,  as a  foreign  company,  from  operating  in  certain  industries  such  as
value-added  telecommunication  and  Internet  services,  we have  entered  into
information  service and cooperation  agreements with two of our affiliates that
are  incorporated  in the People's  Republic of China:  Sifang  Information  and
Tianci. We hold no ownership  interest in Sifang  Information or Tianci.  Sifang
Information and Tianci contract with China Mobile Communications Corporation, or
China Mobile, and China United Telecommunications  Corporation, or China Unicom,
respectively,  to provide wireless value-added  information services to wireless
receiver  customers  in  China  via  China  Mobile  and  China  Unicom.   Sifang
Information  transmits  those  services to  customers  of China Mobile and China
Unicom on behalf of itself and Tianci  pursuant  to a signed  agreement  between
Sifang Information and Tianci.

         Business  History.   We  originally  began  operations  as  a  Colorado
corporation  known as  Boulder  Brewing  Company  ("Boulder  Brewing").  We were
incorporated  in  Colorado  on May 8, 1980 and  operated  as a  microbrewery  of
various  beers.  Boulder  Brewing  was  unable to become  profitable  within any
segment of its core business,  became illiquid,  and was forced to divest itself
of all of its assets.  Boulder  Brewing became dormant without any operations or
assets in the second  quarter  of 1990.

         In September 2001,  Boulder Brewing changed its state of  incorporation
from  Colorado  to Nevada and  changed  its name to Boulder  Acquisitions,  Inc.
("Boulder Acquisitions"). The articles of incorporation and bylaws of the Nevada
corporation  became the articles of  incorporation  and bylaws of the  surviving
corporation.  From the date of  reincorporation  until  June 23,  2004,  Boulder
Acquisitions had no material operations or assets.

         On June 23, 2004, we completed a stock  exchange  transaction  with the
stockholders of Sifang Holdings Co., Ltd. ("Sifang Holdings").  The exchange was
consummated  under  Nevada and Cayman  Islands  law  pursuant  to the terms of a
Securities  Exchange  Agreement dated effective as of June 23, 2004 by and among
Boulder  Acquisitions,  Sifang Holdings and the stockholders of Sifang Holdings.
Pursuant to the Securities  Exchange  Agreement,  we issued 13,782,636 shares of
our common  stock,  par value $0.001 per share,  to the  stockholders  of Sifang
Holdings,  representing  approximately  89.7% of our  post-exchange  issued  and
outstanding common stock, in exchange for 100% of the outstanding  capital stock
of Sifang  Holdings.  We  presently  carry on the  business of Sifang  Holdings'
wholly-owned  subsidiary,  Shanghai  TCH Data  Technology  Co.,  Ltd., a Chinese
corporation, or TCH.

         Effective   August  6,  2004,   we  changed   our  name  from   Boulder
Acquisitions,  Inc.  to  China  Digital  Wireless,  Inc.  The  name  change  was
undertaken  in order to  provide us with a name that is more  indicative  of the
business operations we conduct.

         Our business is primarily conducted through our wholly-owned subsidiary
Sifang  Holdings and its  wholly-owned  subsidiary TCH Data Technology Co., Ltd.
("TCH  Sifang  Holdings"),  which was  established  under the laws of the Cayman
Islands  on  February  9, 2004 for the  purpose  of  holding  100% of the equity
interest in TCH.  TCH was  established  as a foreign  investment  enterprise  in
Shanghai  under the laws of the  People's  Republic of China  ("PRC") on May 25,
2004,  with  registered  capital of $7.2 million.  Our current  operations  were
originally a business  division of Shanghai  Sifang  Information  Technology Co.
("Sifang Information").  Sifang Information is a Shanghai-based  privately owned
enterprise  established  under the laws of the PRC on August  14,  1998.  Sifang
Information  is engaged in the business of pager and mobile  phone  distribution
and provides value added  information  services to the customers in the Shanghai
metropolitan  area. In March 2004, Sifang  Information spun off its mobile phone
distribution  business and the majority of its value added information  services
business to TCH. As the  acquiring  entity under common  control,  TCH initially
recognized all the assets and liabilities  transferred at their carrying amounts
in the accounts of Sifang Information at the date of transfer under the guidance
of SFAS No. 141, Appendix D.

         On May 26,  2004,  Sifang  Information  exchanged  100%  of the  equity
interest in TCH for 100% of the equity  interest in Sifang  Holdings.  Since the
ultimate  owners  of the  three  entities  were the same  owners  and the  three
entities remained under common control,  the ownership exchange  transaction was
accounted for at historical  costs under the guidance of SFAS No. 141,  Appendix
D. Prior to May 26, 2004,  there were no  activities  in Sifang  Holdings.  As a
result of the  exchange  of  ownership  between TCH and Sifang  Holdings,  TCH's
historical  financial  statements became the historical  financial statements of
Sifang Holdings.

         As a result of the  spin-off,  TCH  engages in the  business  of mobile
phone  distribution  and  provides  pager and mobile  phone users with access to
certain value-added  information reformatted by TCH. TCH purchases mobile phones
from first tier distributors and sells them to retailers with a mark-up.  In the
process  of  providing   value-added   information   services   through  monthly
subscription  agreements  with various  users,  TCH purchases  trading  activity
information  from stock  exchanges,  comments and analysis on PRC stock  markets
provided  by  certain  reputable  security  and  investment  companies,  lottery
information,  weather forecast, and other value-added products and reformats the
aforementioned  information  through  decoding  and  recoding  and  then has the
reformatted   information   transmitted  by  Sifang  Information,   via  service
contracts,  to pager users.  The value-added  information is constantly saved on
TCH's  server in order for  mobile  phone  users to dial in via China  Mobile or
China Unicom.  By signing a monthly  subscription  agreement,  wireless receiver
users  agree to make  advance  payments  for our  services  for either  three or
six-month subscription periods.



                                       2
<PAGE>

         Distribution.   We  distribute  various  mobile  phone  brands  in  the
Shanghai,  China region. We distribute mobile phones  manufactured  primarily by
SAMSUNG Electronics Co., Ltd. ("Samsung"),  and to a lesser extent, by Motorola,
Inc.  ("Motorola").  We began distributing  Motorola mobile phones in early 2002
and Samsung mobile phones in November 2002. We began  discontinuing our Motorola
mobile  phone  distribution  business  on  June  30,  2004.  We  will  remain  a
distributor,  for the Shanghai  region,  of nine  different  mobile phone models
manufactured  by  Samsung,  and plan to  increase  our sales of  Samsung  mobile
phones.

         Six of the Samsung models we distribute  are  compatible  with the CDMA
network and three of the Samsung models we distribute  are  compatible  with the
GSM network.  We plan to pre-install  the end-user  portion of our Sifang Gutong
software in all of the Samsung mobile phones we distribute, and market our stock
information,  stock trading, and currency exchange services by placing brochures
touting those services in the packaging of those Samsung mobile phones before we
distribute  the phones to retailers.  We believe this process will increase name
recognition  of our  financial  information  and  stock  trading  services  with
wireless receiver users.

         There are three main first-tier wholesalers of Samsung phones in China:
Shanghai Taili Communication Equipment Co., Ltd., Shenzhen Tianyin Communication
Development  Co., Ltd., and Guangzhou  Yingtai Data Power  Technology  Co., Ltd.
These wholesalers  contract,  through local branches,  with  sub-wholesalers  to
distribute  each model in a defined area. We have contracts with Shanghai branch
offices of the three main  first-tier  wholesalers on whom we rely,  making us a
sub-wholesaler  distributor  of nine Samsung mobile phone models in the Shanghai
region. We sell approximately 52% of our mobile phones to three retailers.

         We have rebate  programs with Shanghai  Taili  Communication  Equipment
Co., Ltd. and Shenzhen  Tianyin  Communication  Development Co., Ltd. whereby we
are  credited  a certain  portion of the sales  price we paid to the  first-tier
wholesaler  if we are able to fulfill  certain  sales volume  prescribed by that
first-tier  wholesaler.  As a result, we are entitled to receive certain rebates
and credits for the inventory  held and sold by us within a specified  period of
time as set by the first-tier wholesaler offering the rebate program.

Our Business Strategy

         Our  objective is to maintain  and  strengthen  our position  both as a
provider of wireless  value-added  information  services and as a distributor of
mobile phones in the Shanghai region. In order to achieve our objective, we plan
to, among other things,  increase the number of subscribers  to our  value-added
information services by increasing the number of mobile phones we distribute and
pre-installing  those  phones  with the  end-user  portion of our Sifang  Gutong
software. Key strategies for achieving our goal are to:

         o        Continue to expand and  diversify  our  portfolio  of wireless
                  value-added information services,  including new SMS, 2.5G and
                  other next generation  services such as those  compatible with
                  3G,

         o        Increase investment in sales, marketing and branding,  both in
                  conjunction  with network  operators  and through  independent
                  activities,  in order to  promote  customer  awareness  of our
                  wireless value-added information services in China,

         o        Continue to strengthen our relationships with China Mobile and
                  China Unicom by increasing  our sales presence at the national
                  and local levels and through  joint  marketing  and  promotion
                  activities,



                                       3
<PAGE>

         o        Expand  our  marketing   channels  by  continuing  to  develop
                  integrated marketing campaigns with traditional media outlets,

         o        Continue to be a  sub-wholesaler  of Samsung mobile phones and
                  increase  the  number  of  models  of  mobile  phones  that we
                  distribute, and

         o        Work on  establishing  relationships  with  new  mobile  phone
                  manufacturers  and  wholesalers  in  order  to  diversify  our
                  distribution business.

Our Value-Added Information Services

Financial Services

         Our primary focus with regard to  value-added  information  services is
the  provision of financial  information  services  utilizing  our Sifang Gutong
software.  This  software,  developed  by  Chengao,  utilizes  the JAVA and BREW
platforms.  JAVA and BREW utilize the more  advanced 2.5G  technology  standard,
which enables high-capacity wireless data transmissions.  As a result,  services
offered  over these  platforms  are more  sophisticated  and offer users  higher
quality  graphics  and richer  content and  interactivity,  commanding a premium
price over our other  services.  Our Sifang Gutong  software  enables our mobile
phone  and  pager   customers   to  access   quotes  and   retrieve   customized
investment-related   information,  as  well  as  access  our  currency  exchange
information.

         Sifang Gutong  provides our mobile phone and pager  customers  with the
ability to receive  streaming  real-time quotes,  including stocks,  most active
issues,  largest gainers and losers,  and mutual funds for securities trading on
the Shenzhen and Shanghai stock exchanges.  Our Sifang Gutong software available
to mobile phone users includes a stock trading  function that enables our mobile
phone  customers to directly place orders to buy and sell  securities  listed on
the two aforementioned stock exchanges.  Our trading window corresponds with the
hours that  securities  markets are open from 9:30 a.m. to 11:30 a.m.,  and from
1:00 p.m. to 3:00 p.m., Beijing Time.

         We receive a  continuous  direct  feed of detailed  quote data,  market
information  and news. Our customers can create  customized  lists of stocks for
quick access to current  trading  information.  Through our  relationships  with
financial  information  companies such as Shanghai Stock Information Company, we
also provide access to breaking news, charts, market commentary and analysis.

         The value-added  financial information we offer can only be accessed by
a customer on whose  mobile  phone or pager the  end-user  portion of our Sifang
Gutong software has been installed.  We plan to pre-install the end-user portion
of our Sifang  Gutong  software  in all of the  Samsung  mobile  phones  that we
distribute.  With regard to mobile phones and pagers not  distributed  by us, we
will provide  installation  of our Sifang  Gutong  software  free of charge upon
request.

         Pursuant  to the  request of a Beijing  retailer,  we  entered  into an
agreement  with  Chengao and Sifang  Information  whereby  Chengao  installs the
end-user  portion of our Sifang Gutong  software into mobile phones owned by the
retailer.  The retailer  sells these phones at a premium price to consumers.  In
return for the premium price, the consumers receive our value-added  information
services for six months free of charge.  The retailer passes the premium back to
Chengao,  who retains a small  installation fee and then passes the remainder on
to us. This relationship  helps us market our value-added  information  services
and enables us to establish relationships with new customers.

Other Services

         We also provide  icons and screen  savers,  multiplayer  action  games,
Western horoscopes,  jokes and event-driven or entertainment news updates. These
services represent only a small portion of our value-added  information services


                                       4
<PAGE>

revenues  at the present  time.  However,  we believe  that  providing  wireless
receiver users in China access to  entertainment-related  services increases our
ability  to  retain  our  financial  information   subscribers  and  expand  our
subscriber base, and we expect the entertainment-related services portion of our
value-added information services business will grow over time.

         o        Horoscopes.  With this service, users can obtain daily Western
                  horoscopes via their mobile phones or pagers.

         o        Games. We offer interactive SMS, JAVA and WAP-based games that
                  can be played on the screens of mobile phones. These games are
                  designed to be easy to play on the dial pad of a mobile  phone
                  and  to  maximize  the  graphics  available  on  mobile  phone
                  screens. Our current game offerings include our popular titles
                  Ant Kingdom and English Island. Ant Kingdom,  designed for the
                  WAP  platform,  is a  role-playing  game set in the kingdom of
                  Ant.  Players  begin  play  as a  soldier,  and as  they  gain
                  experience  in the game,  gradually  build their  character to
                  higher levels such as captain,  officer and eventually,  king.
                  The goal of the game is to be the king. In English  Island,  a
                  JAVA-based  educational game,  players are given English words
                  and must spell them  correctly.  Every time a player  spells a
                  word  correctly,  the player's score  increases.  The faster a
                  player can spell words correctly,  the higher the score he can
                  achieve.

         o        Jokes.  We send  users of this  service a variety  of jokes on
                  demand or via automatic daily messages.

         o        News.  We  automatically  send periodic SMS messages on recent
                  event-driven    news,   sports   (especially    soccer),    or
                  entertainment  events to subscribers  of this service.  Mobile
                  phone users can also download  desired  information on demand.
                  We obtain our news content from  government  affiliated  media
                  companies, such as XinhuaNet and other local media.

Content Relationships

         Our content  collaborators  authorize the inclusion of their content in
one or more of our value-added information services for a fixed fee which we pay
directly to the provider.  Our agreements with our content collaborators usually
have a  one-year  term,  and  are  non-exclusive.  Currently,  our  key  content
collaborators are:

o        Shanghai Stock Information Company.
o        Xinhua News Agency (Shanghai).
o        Shanghai Wanguo Stock Information Company.
o        Shanghai Yibang Stock Information Company.
o        Shanghai Shiji Stock Information Company.
o        Korea Techall Co., Ltd. (which provides game content).
o        Shanghai Shenfa Software Co., Ltd. (which provides game content).

Marketing Relationships

         Sifang Information and Tianci, our affiliated  value-added mobile phone
service  providers,  have  marketing  relationships  with China Mobile and China
Unicom.  We sell and market our services  principally  through  China Mobile and
China Unicom.  We also sell and market  through Sifang  Information's  Web site,
www.sifang.net,  and promotional events, direct marketing, media advertising and
other activities.



                                       5
<PAGE>

         We are also focused on expanding our  marketing  channels by developing
integrated  marketing campaigns with traditional media outlets and multinational
corporations.  For example, we have been involved in several marketing campaigns
with Motorola  whereby our wireless  value-added  services are promoted in their
in-store  and media  advertising  in China,  and  Motorola  is in turn  promoted
through our services.

         We sell all of our paging value-added  information services through our
affiliated value-added paging service provider, Sifang Information.  We contract
directly with end users to settle all payments  from pager users.  We market our
paging  value-added  information  services  through  traditional  media outlets,
including newspapers and magazines, and directly to end-users.

Operator Channels

         General.  All  of  our  paging  value-added  information  services  are
provided  through the paging  network owned by Sifang  Information.  We contract
directly with the pager users to collect all fees generated from our value-added
information  services.  We have an information service and cooperation agreement
with Sifang  Information  that  provides  us  exclusive  access to their  paging
network for ten years. This agreement is automatically  renewable for additional
one  year  terms  unless  we  decide  to  terminate.  All  of our  mobile  phone
value-added  information  services  are provided to mobile phone users by Sifang
Information  through the networks of China Mobile and China Unicom.  Previously,
mobile phone users paid for our services by purchasing  pre-paid services cards.
Now, our services are billed to mobile phone  customers in one of two ways:  (1)
certain of our  customers pay for our services in advance when they purchase our
services  and  a  mobile  phone  together  in a  premium  package  (through  our
relationship with Chengao and Sifang  Information),  and (2) our other customers
(who do not  purchase  our  services as part of any such  premium  package)  are
billed by the mobile operators, who collect the fees for our services, including
both our data  access  and short  message  services,  from  their  mobile  phone
subscribers.  The mobile  operators then pass those fees (net of fees charged by
the mobile operator) to our affiliated  value-added  service  providers,  Sifang
Information and Tianci,  who in turn pass those fees to us in return for a small
fee  pursuant to the terms of  information  service and  cooperation  agreements
between us and each of them.

         Our  management  team utilizes our experience in China to develop close
ties  with  the  key  personnel  of the  mobile  operators  at the  central  and
provincial  levels.  As of December 31,  2004,  we had  approximately  two sales
professionals strategically located in provinces and municipalities concentrated
in the eastern and  southern  regions of China to work  closely  with the mobile
operators  at the  local  level,  where  pricing  and  important  marketing  and
operational  decisions are made.  Our sales  network  enables us to work closely
with operators to facilitate the approval required for new service offerings and
for related pricing and to enjoy enhanced marketing and promotional  support. We
are also able to gain insight  into  developments  in the local  markets and the
competitive  landscape,   as  well  as  new  market  opportunities.   Our  sales
professionals are well-incentivized; most of their compensation is tied to usage
of our services in the applicable region.

         Coordinated  Marketing  Campaigns.   Our  affiliated  wireless  service
providers  cooperate in marketing  campaigns with China Mobile and China Unicom.
These network operators distribute literature marketing us and our affiliates.

Non-Operator Channels

         We also focus on non-mobile  operator  sales and marketing  activities,
such as:

         o        promoting Sifang  Information's Web site,  www.sifang.net,  to
                  potential users as a fun,  easy-to-access place to request our
                  wireless content and applications,



                                       6
<PAGE>

         o        engaging  in direct  marketing  to mobile  phone users by, for
                  example,  including  advertising  inserts in users' bills from
                  Shanghai Mobile and Shanghai Unicom,

         o        engaging in direct marketing to stock market investors by, for
                  example,  including  advertising  inserts in investors'  bills
                  from  brokerage  companies  such as GF Securities  Co.,  Ltd.,
                  Guotai Junan Securities Co., Ltd.,  Everbright Securities Co.,
                  Ltd. and Guoxin Securities Co., Ltd.,

         o        utilizing our database of users to create  targeted  marketing
                  campaigns,

         o        advertising  in  traditional  media outlets such as newspapers
                  and magazines, and

         o        we plan to pre-install the Samsung mobile phones we distribute
                  with the end-user portion of our Sifang Gutong  software,  and
                  place brochures touting our stock  information,  stock trading
                  and  currency  exchange  services  in the  packaging  of those
                  phones, before distributing them to retailers.

Customer Research

         We spent $18,909 and $60,092 on marketing and advertising  fees for our
mobile phone  distribution  and value-added  service business in fiscal 2003 and
2004, respectively.  Our sales, marketing and product development activities are
supported by our  five-member  customer  research  department.  This  department
focuses our sales efforts in the following three distinct phases:

         Customer  Acquisition.  Our customer research  department  analyzes the
success rates of various national and local marketing  campaigns in which we are
involved,  including  by user  segment and cost per user,  in order to determine
which  campaigns are the most effective.  Using phone surveys,  focus groups and
analyses of usage patterns,  the department also considers demographic and other
market  factors to  identify  product  mixes and  product  categories  which are
suitable for the current market environment.

         Customer  Conversion.  To enhance  our  ability to convert  one-time or
occasional  customers into regular users of our services,  our customer research
department analyzes customer and product churn rates across the market,  average
revenue  per user  data and other  information.  In this  way,  it can  identify
different customer segments and develop targeted  marketing  campaigns for those
segments, including cross-selling and up-selling marketing campaigns.

         Customer Retention.  Our customer research department evaluates ways to
maximize user interest in our services through, for example,  providing feedback
to our  product  developers  to  improve  product  features  based  on  customer
information  and bundling older services with newly launched  services.  It also
creates various reward programs designed to enhance customer loyalty.

Customer Services

         We pride  ourselves in providing  high quality  customer  service.  Our
dedicated customer service center based in Shanghai provides our users real-time
support  and is  staffed by 20  full-time  professionals.  The center  currently
operates  everyday from 7:00 a.m. to 10:00 p.m. We strive to achieve the fastest
response times and highest customer satisfaction levels in the industry.

Competitive Landscape

         There  are  currently  three  broad   categories  of  wireless  service
providers in China:



                                       7
<PAGE>

         o        Portal service providers,  which have established expertise in
                  Internet  content and have  subsequently  branched into mobile
                  space.  The portals  serve as content  aggregators  offering a
                  variety  of  wireless  value-added  services.  These  national
                  portal operators include Sohu, NetEase, SINA, and Tom.com.

         o        Dedicated  service   providers,   whose  businesses  focus  on
                  offering  a variety of  wireless  content  directly  to mobile
                  users.  These providers  include  Linktone,  Newpalm and Mtone
                  Wireless.

         o        Niche service  providers,  which focus on a particular  market
                  segment or  application  that often  builds on a  pre-existing
                  sector competency.  These providers include Tencent,  Enorbus,
                  and Solute. We belong in this category because of our focus on
                  financial information services.

         We may  also  face  competition  from  international  wireless  service
providers.

         As the mobile  operators are becoming more  selective in choosing their
service  providers  to promote  high  quality  content,  ensure  high  levels of
customer service and limit the number of providers with which they have to deal,
scale is  becoming  more  important,  and we believe  the  industry  will likely
experience  consolidation  with the leading  nationwide  providers  gaining more
market share at the expense of smaller local providers. Nationwide providers may
also  acquire  some of  their  smaller  competitors  to  gain  access  to  local
relationships with the mobile operators in China or new product expertise.

         We  estimate   that  we  compete  with  between  ten  to  twenty  other
sub-wholesalers  for the rights to  distribute  Samsung  phones in the  Shanghai
region. The three main competitive factors the wholesalers  consider in granting
a sub-wholesaler the rights to distribute a particular model include:

         Available Cash Flow. Sub-wholesalers must be able to pay for the mobile
phones  they  desire  to  purchase  from  first-tier   wholesalers.   First-tier
wholesalers will be hesitant to grant rights to distribute a particular model to
a sub-wholesaler if that sub-wholesaler does not have sufficient capital to make
large  purchases.  We  believe  that  having  adequate  cash  flow  gives  us  a
competitive advantage.

         Relationships  with  Retailers.  The  wholesalers  look to the types of
relationships  sub-wholesalers  have with large  retailers  when deciding  which
sub-wholesaler  to  utilize.  We have  strong  relationships  with  three  large
retailers in Shanghai and sell  approximately  52% of our mobile phones to these
three retailers.

         Relationships  with Wholesalers.  We have  relationships with the three
major wholesalers of Samsung phones in China and have been  sub-wholesalers  for
those three wholesalers for more than a year.

Employees

         The following  table  summarizes  the  functional  distribution  of our
employees as of December 31, 2003 and 2004:

                                                  December 31,
              Department                     2003              2004

         Business Development                 5                 5
         Customer Research                    5                 5
         Customer Service                    20                 20
         Finance                              3                 3



                                       8
<PAGE>

                                                  December 31,
              Department                     2003              2004

         Human Resources                      2                 2
         Investor Relations                   2                 2
         Legal and Administrative             2                 2
         Sales and Marketing                 25                 25
         Product Development                 20                 20
         Technical Support                   10                 10

         Total                               94                 94



         All of our  personnel  are  employed  full-time  and  none of them  are
represented under collective  bargaining  agreements.  We consider our relations
with our employees to be good.

Wireless Technology Standards in China

         Several  different  wireless  technology  standards have been developed
which  operate at  different  frequencies  with both  analog and  digital  radio
signals.  First generation  wireless telephone systems employ analog technology,
while newer systems  employ digital  technology.  Digital  wireless  technology,
commonly  referred to as second  generation  technology,  or 2G,  multiplies the
number of users  that can be served by the same band of  spectrum  using  analog
technology. The wireless technologies most relevant in China currently include:

         o        Global System for Mobile  Communications,  or GSM -- initially
                  developed in order to facilitate  unification  and integration
                  of  telecommunications  within the  European  Union has become
                  widespread  throughout  most Asian  countries.  GSM technology
                  breaks  audio  signals  into  sequential  pieces  of data of a
                  defined length,  places each piece into an information conduit
                  at specific  intervals and then reconstructs the pieces at the
                  end of the conduit.  A key  component of the GSM system is the
                  SIM card. Data stored on the card identifies the subscriber to
                  the mobile network as well as the service  authorized for that
                  subscriber.  Since the identity of the  subscriber  is held on
                  the card, any mobile phone can be used in conjunction with the
                  SIM card.

         o        Code Division Multiple Access, or CDMA -- a digital technology
                  standard  which  has  been  used in  commercial  operation  by
                  several  operators  in  certain  countries  such as the United
                  States and Korea.  Unlike GSM, CDMA technology is a continuous
                  transmission  technology  which  uses a coding  system  to mix
                  discrete audio signals  together during  transmission and then
                  separates those signals at the end of transmission.

         Prior to the commercial  rollout of third generation,  or 3G, networks,
2.5G  technology  standards  have  been  developed  for  both  the GSM and  CDMA
technologies to offer higher data transmission speeds,  enabling the use of more
data intensive products. Current 2.5G wireless technologies include:

         o        General  Packet-Switched  Radio  Service,  or GPRS  --  offers
                  faster data  transmission with speeds ranging from 56 kilobits
                  per  second,  or Kbps,  to 114 Kbps  via a GSM  network.  GPRS
                  supports a wide range of bandwidths and is particularly suited
                  for sending and receiving small bursts of data, such as e-mail
                  and Web browsing,  as well as large volumes of data. GPRS also
                  makes it  possible  for  users  to make  telephone  calls  and
                  transmit data simultaneously.

         o        CDMA 1x RTT -- an advanced CDMA-based  technology which allows
                  transmission of data at speeds of up to 144 Kbps,  compared to
                  a maximum of 64 Kbps for second generation CDMA networks.



                                       9
<PAGE>

         3G   represents   several   technology   standards   developed  by  The
International  Telecommunications  Union.  Third generation  technology has been
developed for both the GSM standard and CDMA standard.

         Wireless  value-added  services  can be  offered  through  all of these
technology standards and most commonly include:

         o        Short Messaging  Services,  or SMS -- a service that enables a
                  user to send and receive text  messages  comprised of words or
                  numbers or an alphanumeric  combination.  SMS was created when
                  it was incorporated into the GSM standard.

         o        Wireless Application  Protocol,  or WAP -- a software protocol
                  standard  that defines a  standardized  means of  transmitting
                  Internet-based  content and data to handheld  devices  such as
                  mobile  phones and  pagers  with  secure  access to e-mail and
                  text-based  Web pages.  WAP supports  most  wireless  networks
                  including GSM and CDMA.

         o        Multimedia   Messaging  Services,   or  MMS  --  a  method  of
                  transmitting graphics, video clips, sound files and short text
                  messages over wireless  networks using the WAP protocol.  MMS,
                  however, is not the same as e-mail in that MMS is based on the
                  concept of  multimedia  messaging.  An MMS message is coded so
                  that  the  images,   sounds  and  text  are   displayed  in  a
                  predetermined order as one singular message.  Furthermore, MMS
                  does not support attachments as e-mail does.

         o        JAVA  --  a  general  programming   environment  that  creates
                  applications  for  the  Internet  or  any  other   distributed
                  networks.  JAVA applications are intended to be independent of
                  the hardware platform.

Market Overview

Wireless Value-Added Services as a Revenue Driver for the Mobile Operators

         As the wireless  market in China  continues to develop,  an  increasing
portion of the mobile  operators'  users have relatively low per capita incomes.
These  subscribers  generally yield lower levels of average revenue per user, or
ARPU,  because  they are  primarily  users of pre-paid  services.  In  addition,
China's wireless market is becoming increasingly competitive, as demonstrated by
the recent CDMA promotions by China Unicom,  as well as the intra-city  wireless
offerings by China's two fixed-line  operators,  China Telecom and China Netcom,
which  offer  users  limited  mobile  services  within a city based on  Personal
Handyphone  Service or Personal  Access System  technology.  In addition,  China
Telecom,  China Netcom and possibly other parties are expected to be awarded two
wireless  licenses,  although  the timing of such grants is unclear.  Both China
Telecom  and China  Netcom are large,  established  companies  with  significant
assets and the entry by them or other companies into the Chinese wireless market
could  lead to further  competition  among the  mobile  operators.  Due to these
pressures on the traditional  voice-related  businesses of the mobile operators,
SMS and other wireless value-added services have become a key differentiator and
increasingly important driver for the growth prospects of China Mobile and China
Unicom.  We believe  wireless  value-added  services will play a key role in the
mobile operators' competitive positioning when attracting and retaining users as
well as in their efforts to reverse declining ARPU levels.

         Against this competitive backdrop,  the market for wireless value-added
services in China has expanded significantly and is expected to continue to grow
at a fast pace.  Currently,  SMS services  continue to represent the bulk of the
wireless  value-added  services  market in China.  This  market is  increasingly
shifting towards next generation  technologies,  with mobile operators upgrading


                                       10
<PAGE>

their  networks to GPRS and CDMA 1x RTT and users  upgrading to next  generation
mobile  phones that can operate  with  technologies  such as MMS and WAP.  China
Mobile and China Unicom have recognized this  opportunity and are  collaborating
with  select  service   providers,   including  us,  to  further   develop  2.5G
applications and services.

Operators' Wireless Value-Added Services Initiatives in China

         China Mobile was the first to enter the market by introducing a popular
trial SMS program in  connection  with the Sydney  Olympic Games in August 2000.
China Mobile later  established  its  Monternet(TM)  platform in November  2000.
China  Unicom  started  its  Uni-Info  platform in May 2001.  Monternet(TM)  and
Uni-Info  offer  mobile  phone users a single  access point to order and pay for
wireless value-added services.

         From the  inception of  Monternet(TM)  and  Uni-Info,  China Mobile and
China  Unicom have  outsourced  almost all content  and  applications  for their
platforms,  meaning that these  operators,  much like NTT DoCoMo and SK Telecom,
rely almost entirely upon third-party  service  providers to drive their network
traffic,  supply  attractive  wireless  services and increase revenue from their
wireless value-added  services. In turn, the operators focus on the operation of
their networks.  For their part, wireless value-added service providers in China
rely on the two  operators,  China  Mobile  and China  Unicom,  for the  network
distribution  of  their  content  and  services,  billing  and  collection,  and
remittance  of  revenues.   Both   operators   have   established   similar  fee
arrangements.

         In addition to their working  relationships  with  third-party  service
providers,  China's  mobile  operators  will likely form closer  alliances  with
mobile  phone  vendors  in order to  standardize  user  friendly  access  to and
functionality for wireless value-added services in all mobile phones.

Government Regulation

         The  following  is a summary  of the  principal  governmental  laws and
regulations that are or may be applicable to wireless service  providers like us
in  China.  The  scope  and  enforcement  of many of the  laws  and  regulations
described  below  are  uncertain.  We  cannot  predict  the  effect  of  further
developments  in the Chinese legal system,  including  the  promulgation  of new
laws,  changes to existing laws or the  interpretation  or  enforcement of laws,
particularly with regard to wireless value-added services,  which is an emerging
industry in China.

Regulation of Telecommunication Services

         The telecommunications industry, including certain wireless value-added
services, is highly-regulated in China. Regulations issued or implemented by the
State  Council,  the  Ministry of  Information  Industries,  and other  relevant
government   authorities  cover  many  aspects  of  telecommunications   network
operation,  including entry into the  telecommunications  industry, the scope of
permissible   business   activities,   interconnection   and  transmission  line
arrangements, tariff policy and foreign investment.

         The principal  regulations  governing the  telecommunications  services
business in China include:

         o        Telecommunications   Regulations   (2000),   or  the   Telecom
                  Regulations.    The   Telecom   Regulations   categorize   all
                  telecommunications    businesses    in   China    as    either
                  infrastructure  telecommunications  businesses or  value-added
                  telecommunications  businesses.  The latter category  includes
                  SMS and other wireless value-added services. Under the Telecom
                  Regulations,  certain  services are  classified  as being of a
                  value-added nature and require the commercial operator of such
                  services   to   obtain   an   operating   license,   including
                  telecommunication information services, online data processing
                  and translation processing,  call centers and Internet access.
                  The Telecom  Regulations  also set forth extensive  guidelines
                  with  respect  to  different  aspects  of   telecommunications
                  operations in China.



                                       11
<PAGE>

         o        Regulations  for  the   Administration   of   Foreign-Invested
                  Telecommunications  Enterprises  (2002),  or  the  FI  Telecom
                  Regulations.  The FI Telecom  Regulations  set forth  detailed
                  requirements   with   respect  to   capitalization,   investor
                  qualifications  and application  procedures in connection with
                  the establishment of a  foreign-invested  telecom  enterprise.
                  Under  the  FI  Telecom  Regulations,   a  foreign  entity  is
                  prohibited  from owning  more than 50% of the total  equity in
                  any value-added  telecommunications business in China, subject
                  to certain geographic limitations.

         o        Administrative   Measures  for   Telecommunications   Business
                  Operating  License (2001),  or the Telecom  License  Measures.
                  Under the Telecom License  Measures,  an approved  value-added
                  telecommunications  service provider must conduct its business
                  in accordance with the specifications  recorded on its Telecom
                  Business Operating License.

         In addition to  regulations  promulgated  at the national  level by the
Chinese  government,  the Shanghai  municipal  government has issued provisional
regulations  requiring SMS service providers to obtain licenses from or register
with the local Ministry of Information Industries branch office before providing
SMS  service  within the city.  At this time,  it is  unclear  whether  national
regulations will be promulgated regulating SMS services.

         Our affiliates,  Sifang Information and Tianci, each have a value-added
telecommunication   services   license   issued   by  the   Shanghai   Municipal
Telecommunications  Administration  Bureau,  which is the  local  office  of the
Ministry  of  Information  Industries.  They are  each  also in the  process  of
applying for an inter-provincial value-added  telecommunication license with the
Ministry of Information Industries.

Other Laws and Their Application

         Regulation  of Internet  Content  Services.  As a wireless  value-added
information services provider,  we do not engage in the Internet portal business
which typically  involves the provision of extensive  Internet content services,
including  Chinese language Web navigational  and search  capabilities,  content
channels,  web-based  communications  and community  services and a platform for
e-commerce,  such as auction  houses.  Sifang  Information  registered  with the
Shanghai  Telecommunication  Administration  Bureau in  January  2001 to provide
commercial services at the www.sifang.net web site.

         As a commercial ICP provider,  Sifang  Information  is prohibited  from
posting or displaying any content that:

         o        opposes  the  fundamental  principles  determined  in  China's
                  Constitution;
         o        compromises state security,  divulges state secrets,  subverts
                  state power or damages national unity;
         o        harms the dignity or interests of the state;
         o        incites  ethnic  hatred or racial  discrimination  or  damages
                  inter-ethnic unity;
         o        sabotages  China's  religious  policy or propagates  heretical
                  teachings or feudal superstitions;
         o        disseminates rumors,  disturbs social order or disrupts social
                  stability;
         o        propagates obscenity, pornography,  gambling, violence, murder
                  or fear or incites the commission of crimes;
         o        insults or slanders a third party or infringes upon the lawful
                  rights and interests of a third party; or



                                       12
<PAGE>

         o        includes  other content  prohibited by laws or  administrative
                  regulations.

Failure to comply  with these  prohibitions  may result in the closing of Sifang
Information's Web site.

         Regulation of News  Dissemination  through SMS Services.  Pursuant to a
circular issued by the Shanghai Communications  Administration,  distribution of
news content through wireless applications like SMS must be approved by relevant
government  agencies.  Both Sifang  Information  and Tianci  have all  necessary
approvals.

         Regulation of Advertisements.  The State Administration of Industry and
Commerce,  or the SAIC, is the  government  agency  responsible  for  regulating
advertising  activities  in  China.  The  SAIC has not  promulgated  regulations
specifically  aimed at  wireless  advertising  through  a media  other  than the
Internet,  such as through SMS services.  One provisional  regulation  issued by
Shanghai  municipal  government  prohibits  service  providers  from sending SMS
advertisements without the client's consent.

         As  part  of our  non-mobile  operator  marketing  activities,  we have
developed  integrated marketing campaigns with traditional media outlets such as
magazines  and  newspapers  and  multinational   corporations   through  certain
cross-selling  efforts with companies,  including  Motorola and Samsung.  If the
SAIC were to treat our  integrated  marketing  campaigns or other  activities as
being  advertising  activities,  we would need to apply to the local SAIC for an
advertising license to conduct wireless  advertising business (through SMSs, for
example).  We can give no assurance that such  application  would be approved by
the SAIC.  Failure to obtain such approval  could result in penalties  including
being banned from engaging in online  advertising  activities,  confiscation  of
illegal earnings and fines.

         Foreign Exchange Controls.  The principal regulations governing foreign
exchange in China are the Foreign  Exchange Control  Regulations  (1996) and the
Administration of Settlement,  Sale and Payment of Foreign Exchange  Regulations
(1996),  or  the  Foreign  Exchange  Regulations.  Under  the  Foreign  Exchange
Regulations,  Renminbi is freely  convertible  into foreign currency for current
account items,  including the distribution of dividends.  Conversion of Renminbi
for  capital  account  items,  such as direct  investment,  loans  and  security
investment,   however,   is  still   subject  to  the   approval  of  the  State
Administration of Foreign Exchange, or SAFE.

         Under the Foreign Exchange  Regulations,  foreign-invested  enterprises
are required to open and maintain separate foreign exchange accounts for capital
account  items  (but  not  for  other  items).  In  addition,   foreign-invested
enterprises  may only buy, sell and/or remit  foreign  currencies at those banks
authorized to conduct foreign exchange business after providing valid commercial
documents  and,  in the case of capital  account  item  transactions,  obtaining
approval from SAFE.

Intellectual Property and Proprietary Rights

         We rely primarily on a combination  of copyright  laws and  contractual
restrictions  to establish  and protect our  intellectual  property  rights.  We
require  our  employees  to  enter  into  agreements   requiring  them  to  keep
confidential all information  relating to our customers,  methods,  business and
trade  secrets  during and after their  employment  with us. Our  employees  are
required to acknowledge and recognize that all inventions,  trade secrets, works
of authorship,  developments and other  processes,  whether or not patentable or
copyrightable,  made by them during their employment are our property. They also
sign agreements to substantiate  our sole and exclusive right to those works and
to transfer any ownership that they may claim in those works to us.

         While we actively take steps to protect our  proprietary  rights,  such
steps may not be adequate to prevent the infringement or misappropriation of our
intellectual property. This is particularly the case in China where the laws may
not  protect  our  proprietary   rights  as  fully  as  in  the  United  States.



                                       13
<PAGE>

Infringement or misappropriation  of our intellectual  property could materially
harm our business.  Sifang Information has registered the following Internet and
WAP domain name www.sifang.net.

         Shanghai Sifang  Communication  Company  ("Sifang  Communication")  has
registered one trademark with China's  Trademark  Office.  That trademark is our
logo,  a square (the  English  translation  of "Sifang"  is  "square").  China's
trademark law utilizes a "first-to-file"  system for obtaining trademark rights.
As a result,  the first applicant to file an application  for  registration of a
mark will preempt all other applicants.  Prior use of unregistered marks, except
"well known" marks,  is generally not a basis for legal action in China.  We may
not be able to  successfully  defend or claim any legal rights in any trademarks
for which we apply in the future.

         Pursuant  to  a  license  agreement   between  our  affiliate,   Sifang
Communication,  and us, we have the right to use our registered  trademark,  our
square logo,  whenever necessary.  We also acquired all of Sifang  Information's
interest in the Sifang Gutong software  pursuant to the terms of the spin-off of
Sifang  Information's  business  divisions  focusing on value-added  information
services and  distribution  of mobile phones.  We have the right to use the word
"Sifang" and to market ourselves through  www.sifang.net  with regard to both of
the spun-off divisions.

         Many parties are actively  developing and seeking patent protection for
wireless services-related  technologies.  We expect these parties to continue to
take steps to protect these  technologies,  including seeking patent protection.
There may be patents  issued or  pending  that are held by others and that cover
significant parts of our technology, business methods or services. Disputes over
rights to these  technologies  are likely to arise in the  future.  We cannot be
certain that our products do not or will not infringe valid patents,  copyrights
or other intellectual  property rights held by third parties.  We may be subject
to legal  proceedings and claims from time to time relating to the  intellectual
property of others.


                                  RISK FACTORS

         In addition to the other  information  contained in this annual report,
including  the reports we  incorporate  by  reference,  you should  consider the
following  factors that may affect our future  results and  financial  condition
before  investing in our securities.  Although we believe that the  expectations
reflected in the forward-looking  statements are reasonable, we cannot guarantee
future results, levels of activity, performance or achievements. We are under no
duty to  update  any of the  forward-looking  statements  after the date of this
prospectus  to conform such  statements  to actual  results or to changes in our
expectations.

RISKS RELATED TO OUR WIRELESS VALUE-ADDED INFORMATION SERVICES BUSINESS

WE DEPEND UPON CONTRACTUAL  ARRANGEMENTS WITH OUR AFFILIATED  VALUE-ADDED MOBILE
PHONE SERVICE  PROVIDERS,  SIFANG INFORMATION AND TIANCI, FOR THE SUCCESS OF OUR
BUSINESS.  THESE  ARRANGEMENTS MAY NOT BE AS EFFECTIVE IN PROVIDING  OPERATIONAL
CONTROL AS DIRECT OWNERSHIP OF THESE BUSINESSES AND MAY BE DIFFICULT TO ENFORCE.

         Because we  conduct  our  business  only in China,  and  because we are
restricted by the Chinese government from owning  telecommunications or Internet
operations  in China,  we  depend on our  affiliated  value-added  mobile  phone
service  providers,  Sifang  Information and Tianci,  in which we have no direct
ownership interest,  but with which we have entered into information service and
cooperation agreements, to provide those services to mobile phone users in China
through contractual agreements with the mobile operators, China Mobile and China
Unicom. These arrangements may not be as effective in providing control over our
value-added  information  services  to mobile  phone  users in China as would be
direct ownership of these businesses.  For example, Sifang Information or Tianci
could fail to take actions  required to operate our  business,  such as entering
into service contracts with China Mobile or China Unicom. Moreover, a portion of



                                       14
<PAGE>

the fees for our  services are paid by the mobile  operators  directly to Sifang
Information  and Tianci,  which are then obligated to transfer all of those fees
to us, in return  for a small  fee.  If Sifang  Information  or Tianci  fails to
perform their obligations  under these agreements,  we may have to rely on legal
remedies  under  Chinese law,  which we cannot  assure you would be effective or
sufficient.

         In the opinion of our Chinese counsel, Grandall Legal Group (Shanghai),
Sifang Information and Tianci each possess such licenses, permits, certificates,
authorities and approvals, issued by appropriate governmental agencies or bodies
in the People's  Republic of China,  as are necessary to conduct its business as
presently  conducted as well as to perform its  obligations  under any contracts
between it and China Mobile and China Unicom, respectively.  In addition, to the
best knowledge of Grandall Legal Group (Shanghai), TCH is not in breach of or in
default  under  any laws of the  People's  Republic  of  China or any  approval,
consent, waiver, authorization,  exemption,  permission,  endorsement or license
granted by any  People's  Republic of China  governmental  agencies.  There are,
however,  substantial uncertainties regarding the interpretation and application
of current and future Chinese laws and regulations, as discussed below.

WE DEPEND ON ONE SOFTWARE  DEVELOPER FOR A  SIGNIFICANT  PORTION OF OUR SOFTWARE
DEVELOPMENT, AS WELL AS FOR IMPORTANT MARKETING RELATIONSHIPS.

         We rely on Shanghai  Chengao  Industrial  Co.,  Ltd.,  or  Chengao,  to
develop a  significant  portion of our  software,  including  our Sifang  Gutong
software.  We also rely on Chengao to  provide  us with an  important  marketing
relationship  regarding the mobile phone version of our Sifang Gutong  software.
If we lose our relationship with Chengao, we could have a difficult time finding
a suitable  replacement  in the short term.

OUR CORPORATE  STRUCTURE COULD BE DEEMED TO BE IN VIOLATION OF CURRENT OR FUTURE
CHINESE LAWS AND REGULATIONS WHICH COULD ADVERSELY AFFECT OUR ABILITY TO OPERATE
OUR BUSINESS EFFECTIVELY OR AT ALL.

         In connection with China's entry into the World Trade Organization,  or
WTO, foreign investment in telecommunications and Internet services in China was
liberalized   to   allow   for   30.0%   foreign    ownership   in   value-added
telecommunication  and  Internet  services  in 2002,  49.0% in 2003,  and  50.0%
thereafter. In order to meet these ownership requirements,  we have entered into
information  service and  cooperation  agreements  with Sifang  Information  and
Tianci.  We do not have any direct ownership  interest in Sifang  Information or
Tianci. The original  stockholder  structure of Sifang Holdings was identical to
the current  stockholder  structure  of Sifang  Information,  and each of Sifang
Information and Tianci are beneficially  owned 69% by Tai Caihua,  our president
and the  chairman of our board of  directors.  It is possible  that the relevant
Chinese authorities could, at any time, assert that any portion or all of TCH's,
Sifang  Information's,  or Tianci's  existing or future ownership  structure and
businesses violate existing or future Chinese laws,  regulations or policies. It
is  also   possible   that   the  new   laws  or   regulations   governing   the
telecommunication  or Internet sectors in China that have been adopted or may be
adopted in the future will prohibit or restrict foreign  investment in, or other
aspects  of,  TCH's,  Sifang  Information's  or  Tianci's  current  or  proposed
businesses and  operations.  In addition,  these new laws and regulations may be
retroactively applied. In any such case, we could be required to restructure our
operations,  which could  adversely  affect our ability to operate our  business
effectively or at all.

WE DEPEND ON CHINA  MOBILE AND CHINA  UNICOM  FOR  DELIVERY  OF OUR  VALUE-ADDED
INFORMATION  SERVICES TO MOBILE  PHONE USERS IN CHINA,  AND THE  TERMINATION  OR
ALTERATION OF SIFANG INFORMATION'S AND TIANCI'S VARIOUS CONTRACTS WITH EITHER OF
THEM OR THEIR  PROVINCIAL OR LOCAL  AFFILIATES  COULD  MATERIALLY  AND ADVERSELY
IMPACT OUR BUSINESS.

         Our  affiliated  value-added  mobile phone  service  providers,  Sifang
Information and Tianci,  contract with the two principal  mobile phone operators
in China,  China  Mobile and China  Unicom,  to offer our  wireless  value-added
information services to mobile phone users through these mobile phone operators,



                                       15
<PAGE>

which service  nearly all of China's  approximately  282.2 million  mobile phone
subscribers.  Given their dominant market position,  our affiliated  value-added
mobile phone service  providers'  negotiating  leverage with these  operators is
limited.  If our affiliated  value-added mobile phone service providers' various
contracts with either  operator are terminated or adversely  altered,  it may be
impossible for our affiliated value-added mobile phone service providers to find
appropriate  replacement  operators  with the  requisite  licenses  and permits,
infrastructure  and customer base to offer our services,  and our business would
be significantly impaired.

         Our value-added information services are provided to mobile phone users
in China  pursuant to  contracts  with Sifang  Information  and Tianci have with
China Mobile and China Unicom and their provincial or local affiliates.  Each of
these contracts is  non-exclusive,  and has a limited term (generally one year).
Our  affiliates  usually  renew these  contracts or enter into new ones when the
prior  contracts  expire,  but on occasion  the renewal or new  contract  can be
delayed by periods of one month or more. The terms of these  contracts vary, but
the operators are generally  entitled to terminate them in advance for a variety
of reasons or, in some cases,  for no reason in their  discretion.  For example,
several of our affiliates'  contracts with the mobile operators can generally be
terminated if:

         o        our affiliate fails to achieve performance standards which are
                  established by the applicable operator from time to time,

         o        our affiliate  breaches its  obligations  under the contracts,
                  which  include,  in many cases,  the obligation not to deliver
                  content that violates the  operator's  policies and applicable
                  law,

         o        the operator receives high levels of customer complaints about
                  our affiliate's services, or

         o        the operator  sends written  notice to our  affiliate  that it
                  wishes to terminate the contract at the end of the  applicable
                  notice period.

         Our affiliates may also be compelled to alter their  arrangements  with
these mobile operators in ways which adversely affect our business. China Mobile
and China  Unicom  have  unilaterally  changed  their  policies  as  applied  to
third-party service providers in the past, and may do so again in the future. We
may  not  be  able  to  adequately  respond  to  negative  developments  in  the
contractual  relationships  between  our  affiliates  and China  Mobile or China
Unicom in the future  because  we do not have a  contractual  relationship  with
China Mobile or China Unicom.

OUR BUSINESS COULD BE ADVERSELY AFFECTED IF CHINA MOBILE OR CHINA UNICOM OR BOTH
BEGIN PROVIDING THEIR OWN WIRELESS VALUE-ADDED SERVICES.

         Our wireless value-added information services business may be adversely
affected if China Mobile or China Unicom or both decide to begin providing their
own wireless  value-added services to mobile phone users. In that case, we would
face enhanced  competition,  and our services could be fully or partially denied
access to their networks.

WE DEPEND IN PART ON CHINA MOBILE AND CHINA UNICOM TO MAINTAIN  ACCURATE RECORDS
AND  THEIR  WILLINGNESS  TO PAY  OUR  AFFILIATED  VALUE-ADDED  WIRELESS  SERVICE
PROVIDERS.

         We depend in part on China Mobile and China Unicom to maintain accurate
records of the fees paid by mobile phone users and their  willingness to pay our
affiliated  value-added  wireless service  providers.  Specifically,  the mobile
operators  provide our affiliates  with monthly  statements  that do not provide
itemized  information  regarding  which of our  services are being paid for. Our
business  and results of operation  could be adversely  affected if these mobile
phone  companies  miscalculate  the revenue  generated from our services and our
affiliates' portion of that revenue, or refuse to pay our affiliates altogether.



                                       16
<PAGE>

OUR  REVENUES  AND COST OF SERVICES  ARE  AFFECTED  BY BILLING AND  TRANSMISSION
FAILURES WHICH ARE OFTEN BEYOND OUR CONTROL.

         Our  affiliates  do not collect fees for our  services  owed to them by
China Mobile and China Unicom in a number of circumstances, including if:

         o        the delivery of our service to a customer is prevented because
                  his or her phone is turned off for an extended period of time,
                  the customer's  prepaid phone card has run out of value or the
                  customer  has  ceased  to  be a  customer  of  the  applicable
                  operator,

         o        China Mobile or China Unicom  experiences  technical  problems
                  with their networks which prevent the delivery of our services
                  to the customer,

         o        we experience  technical problems with our technology platform
                  that prevent delivery of our services,

         o        our  affiliates   experience  technical  problems  with  their
                  technology platforms that prevent delivery of our services, or

         o        the customer  refuses to pay for our service due to quality or
                  other problems.

         These  situations are known in the industry as billing and transmission
failures,   and  we  do  not  recognize  any  revenue  for  services  which  are
characterized  as billing and transmission  failures.  The failure rate can vary
among the operators,  and by province, and also has fluctuated  significantly in
the past. If actual billing and transmission failures exceed our estimates,  our
revenues could be materially adversely affected.


CHINA MOBILE AND CHINA UNICOM MAY IMPOSE  HIGHER  SERVICE OR NETWORK FEES ON OUR
AFFILIATED  VALUE-ADDED  SERVICE  PROVIDERS IF WE ARE UNABLE TO SATISFY CUSTOMER
USAGE AND OTHER PERFORMANCE CRITERIA.

         Fees for our wireless value-added information services are charged on a
monthly subscription or per use basis. Based on our contractual  arrangement and
those of our wireless value-added service providers, we rely on China Mobile and
China Unicom to bill and collect fees for our services from mobile phone users.

         China  Mobile  and  China  Unicom   generally   charge  our  affiliated
value-added  service  providers  service  fees of 15%  and  30% of the  revenues
generated  by their  services,  respectively.  To the extent  that the number of
messages sent by Sifang  Information  over China  Mobile's  network  exceeds the
number of messages their customers send to it, Sifang  Information  must pay per
message  network  fees,  which  decrease in several  provinces  as the volume of
customer usage of our services increases.  The number of messages sent by Sifang
Information  will exceed those sent by end-users,  for example,  if a user sends
Sifang  Information a single  message to order a game but Sifang  Information in
turn must  send  that user  several  messages  to  confirm  his or her order and
deliver the game itself.  Tianci's  service fees owed to China Unicom could also
rise  if  Tianci  fails  to meet  certain  customer  usage,  revenue  and  other
performance  criteria.  We cannot be certain that our affiliates will be able to
continue to satisfy  these  criteria in the future or that the mobile  operators
will keep the criteria at their current  levels.  Any increase in China Mobile's
or China  Unicom's  network  fees and  service  charges  could  reduce our gross
margins.



                                       17
<PAGE>

CHINA  MOBILE  AND CHINA  UNICOM  MAY  TERMINATE  THEIR  RELATIONSHIPS  WITH OUR
AFFILIATES IF OUR AFFILIATES FAIL TO ACHIEVE MINIMUM CUSTOMER USAGE, REVENUE AND
OTHER CRITERIA.

         Our business could be adversely affected if our affiliated  value-added
mobile phone service  providers fail to achieve minimum customer usage,  revenue
and other criteria  imposed or revised by China Mobile and China Unicom at their
discretion  from time to time.  China  Mobile and China  Unicom,  through  their
national  and local  offices,  have  historically  preferred to work only with a
small group of the best performing wireless value-added service providers, based
upon the  uniqueness of the service  offered by each  provider,  total number of
users,  usage and revenue generated in the applicable  province or municipality,
the rate of customer  complaints,  and marketing  expenditures in the applicable
province or municipality.

THE SERVICES OUR AFFILIATED VALUE-ADDED MOBILE PHONE SERVICE PROVIDERS OFFER AND
THE PRICES THEY CHARGE ARE SUBJECT TO APPROVAL BY CHINA MOBILE AND CHINA UNICOM,
AND IF  REQUESTED  APPROVALS  ARE NOT GRANTED IN A TIMELY  MANNER,  OUR BUSINESS
COULD BE ADVERSELY AFFECTED.

         Our affiliated  value-added  mobile phone service providers must obtain
approval  from China  Mobile and China  Unicom with respect to each service that
they propose to offer to their  customers and the pricing for each such service.
In addition,  any changes in the pricing of our  affiliates'  existing  services
must be approved in advance by these  operators.  There can be no assurance that
such  approvals  will be granted in a timely manner or at all.  Moreover,  under
some of our affiliates'  contracts with the operators,  prices cannot be changed
more than once  every six months and  prices  must be within  fixed  parameters,
depending on the service.  Any failure of our affiliates to obtain, or any delay
in obtaining, such approvals could place us at a competitive disadvantage in the
market and adversely affect our business.

WE  OPERATE  IN A  RAPIDLY  EVOLVING  INDUSTRY,  WHICH  MAKES IT  DIFFICULT  FOR
INVESTORS TO EVALUATE OUR BUSINESS.

         We  began  commercially   offering  wireless  value-added   information
services  to mobile  phone and pager users in China in January  2002,  and since
that time,  the  technologies  and  services  used in the  wireless  value-added
information  services industry in China have developed  rapidly.  As a result of
this  rapid  and  continual  change  in  the  industry,  the  prospects  of  our
value-added  information  service  business should be considered in light of the
risks and difficulties frequently encountered by businesses in an early stage of
development. These risks include our ability to:

         o        attract  and  retain  users  for  our   wireless   value-added
                  information services,

         o        expand  the  content  and  services  that  we  offer  and,  in
                  particular,  develop and aggregate  innovative new content and
                  service offerings,

         o        respond effectively to rapidly evolving competitive and market
                  dynamics  and address the effects of mergers and  acquisitions
                  among our competitors,

         o        build relationships with strategic partners, and

         o        increase awareness of our brand and user loyalty.

         Due to these  factors,  there can be no certainty that we will maintain
or increase our current  share of the highly  competitive  wireless  value-added
information services market in which we operate.



                                       18
<PAGE>

THE  SUCCESS  OF  MUCH  OF OUR  WIRELESS  VALUE-ADDED  INFORMATION  SERVICES  IS
SIGNIFICANTLY  DEPENDENT ON OUR ABILITY TO OBTAIN AND REFORMAT DESIRABLE CONTENT
AND TECHNOLOGY FROM THIRD PARTIES.

         We obtain much of our content, including financial information,  games,
logos, music, news and other information,  from third parties.  Furthermore,  we
expect that we will  develop and  purchase  technology  in  connection  with our
development  of next  generation  services  such as MMS,  JAVA and BREW.  As the
market for  wireless  value-added  information  services  develops,  content and
technology  providers may attempt to increase  their  profits from  distribution
arrangements  by  demanding  greater  fees or a share of  revenues,  which would
adversely  affect  our  financial  performance.  Many of our  arrangements  with
content and technology providers are non-exclusive, have a term of one year, and
are subject to renewal.  If our competitors are able to obtain such content in a
similar  or  superior  manner  or to  develop,  purchase  or  license  the  same
technologies,  it could adversely  affect the popularity of our services and our
negotiating leverage with third-party providers.

         If  we  fail  to  establish   and  maintain   economically   attractive
relationships   with  content  and   technology   providers  and  to  thereafter
successfully  reformat their products,  we may not be able to attract and retain
customers or maintain or improve our financial performance.

WE DEPEND ON OUR SIFANG GUTONG  SOFTWARE  CONTINUING  TO BE COMPATIBLE  WITH NEW
MOBILE PHONE MODELS.

         There can be no  assurance  that our  Sifang  Gutong  software  will be
compatible with new mobile phones developed by manufacturers such as Samsung. If
the software is no longer compatible,  we will be forced to engage Chengao or an
alternative  software  developer to develop software that is compatible with the
new mobile phones or we will have to develop the software  ourselves.  If we are
unable to either engage a software  developer or develop  software in house that
is compatible with new mobile phones, we will lose a significant  portion of our
value-added  information  services  revenue,  including  all of the  pre-charged
subscription  fee revenues we receive  pursuant to our information  services and
cooperation agreement among us, Chengao, and Sifang Information.

WE FACE INTENSE COMPETITION.

         The Chinese  market for  wireless  value-added  services  is  intensely
competitive. We believe there are more than 800 service providers (including the
three  groups  discussed  below) as of June 30,  2004.  We compete  directly  or
indirectly with three groups of wireless value-added service providers in China:

         o        portal service providers,  which have established expertise in
                  Internet  content and have  subsequently  branched into mobile
                  space.  The portals  serve as content  aggregators  offering a
                  variety of wireless value-added services,

         o        dedicated  service   providers,   whose  businesses  focus  on
                  offering  a variety of  wireless  content  directly  to mobile
                  phone users, and

         o        niche service providers, which focus primarily on a particular
                  market  segment  or   application   that  often  builds  on  a
                  pre-existing sector competency.

         We have faced  direct or  indirect  competition  from all three  groups
since our entry into this market.  Moreover, there are low barriers to entry for
new competitors in the wireless  value-added  services market. As a result,  our
existing or  potential  competitors  may in the future  achieve  greater  market
acceptance  and gain  additional  market  share,  which in turn could reduce our
revenues.



                                       19
<PAGE>

MOST OF OUR  VALUE-ADDED  INFORMATION  SERVICES  REVENUES  ARE DERIVED  FROM THE
SHANGHAI  MUNICIPAL  AREA AND  SURROUNDING  PROVINCES,  AND THE  TERMINATION  OR
ALTERATION OF OUR AFFILIATES' CONTRACTS WITH THE MOBILE OPERATORS,  OR A GENERAL
ECONOMIC  DOWNTURN IN THOSE AREAS,  COULD HAVE A PARTICULARLY  ADVERSE EFFECT ON
OUR BUSINESS.

         Per capita income levels and mobile phone  penetration rates (i.e., the
number of mobile  subscribers  divided by the  population of China) in China are
generally higher in the coastal and southern provinces, and most of our revenues
are derived from those areas,  including  the  municipality  of Shanghai and the
provinces of Beijing and Jiangsu.

WE DEPEND ON KEY PERSONNEL FOR THE SUCCESS OF OUR BUSINESS.  OUR BUSINESS MAY BE
SEVERELY  DISRUPTED IF WE LOSE THE SERVICES OF OUR KEY  EXECUTIVES AND EMPLOYEES
OR FAIL TO ADD NEW SENIOR AND MIDDLE MANAGERS TO OUR MANAGEMENT.

         Our future success is heavily  dependent upon the continued  service of
our key executives,  particularly Tai Caihua,  our president and chairman of our
board of directors,  Fu Sixing, our chief executive  officer,  Lu Qin, our chief
financial  officer,  and Qian Fang,  our chief  technology  officer.  Our future
success is also  dependent  upon our  ability to  attract  and retain  qualified
senior and middle managers to our management team. If one or more of our current
or future key  executives  and  employees are unable or unwilling to continue in
their present  positions,  we may not be able to easily  replace  them,  and our
business may be severely disrupted.  In addition, if any of these key executives
or employees  joins a  competitor  or forms a competing  company,  we could lose
customers  and  suppliers  and incur  additional  expenses  to recruit and train
personnel.  Each of our  executive  officers  has entered  into  non-competition
agreements  with TCH. We do not maintain  key-man life  insurance for any of our
key  executives.  Management will spend  approximately  30% of its time managing
Sifang Information.

         We also rely on a number of key  technology  staff for the operation of
our  company.  Given the  competitive  nature of our  industry,  the risk of key
technology staff leaving our company is high and could disrupt our operations.

RAPID GROWTH AND A RAPIDLY  CHANGING  OPERATING  ENVIRONMENT  STRAIN OUR LIMITED
RESOURCES.

         As our value-added  information  services  customer base increases,  we
will  need  to  increase  our  investment  in  our  technology   infrastructure,
facilities and other areas of operations, in particular our product development,
customer service and sales and marketing departments, which are important to our
future success. If we are unable to manage our growth and expansion effectively,
the quality of our services and our customer  support could  deteriorate and our
business may suffer.  Our future success will depend on, among other things, our
ability to:

         o        develop and quickly introduce new services, adapt our existing
                  services  and  maintain  and improve the quality of all of our
                  services,  particularly as new mobile  technologies such as 3G
                  are introduced,

         o        expand the percentage of our value-added  information services
                  revenues  which are  recurring  and are derived  from  monthly
                  subscription based services,

         o        continue  to  enter  into  and  maintain   relationships  with
                  desirable content providers,

         o        continue  training,  motivating  and  retaining  our  existing
                  employees and attract and integrate new  employees,  including
                  our senior management, most of whom have been with our company
                  for less than one year,

         o        develop and improve our operational, financial, accounting and
                  other internal systems and controls, and



                                       20
<PAGE>

         o        maintain  adequate  controls and procedures to ensure that our
                  periodic public  disclosure under  applicable laws,  including
                  U.S. securities laws, is complete and accurate.

ANY  FAILURES  OF THE MOBILE  TELECOMMUNICATIONS  NETWORK,  THE  INTERNET OR OUR
TECHNOLOGY PLATFORM MAY REDUCE USE OF OUR SERVICES.

         Both the continual  accessibility  of China Mobile's and China Unicom's
mobile  networks  and  the  performance  and  reliability  of  China's  Internet
infrastructure are critical to our ability to attract and retain our value-added
information  services customers . Moreover,  our business depends on our ability
to maintain the  satisfactory  performance,  reliability and availability of our
technology platform.  The servers which constitute the principal system hardware
for  our  operations  are  located  in one  location  in  Shanghai.  Any  server
interruptions,  break-downs or system  failures,  including  failures  caused by
sustained power shutdowns,  floods or fire causing loss or corruption of data or
malfunctions  of software or hardware  equipment,  or other  events  outside our
control that could result in a sustained  shutdown of all or a material  portion
of the mobile networks, the Internet or our technology platform, could adversely
impact our  ability to  provide  our  services  to our  value-added  information
services customers and decrease our revenues.

COMPUTER  VIRUSES AND HACKING MAY CAUSE DELAYS OR  INTERRUPTIONS  ON OUR SYSTEMS
AND MAY REDUCE USE OF OUR SERVICES AND HARM OUR REPUTATION.

         Computer  viruses  and  hacking  may  cause  delays  or  other  service
interruptions on our systems.  "Hacking"  involves efforts to gain  unauthorized
access to information or systems or to cause intentional malfunctions or loss or
corruption of data, software, hardware or other computer equipment. In addition,
the inadvertent  transmission of computer  viruses could expose us to a material
risk of loss or litigation and possible liability.  We may be required to expend
significant  capital and other  resources  to protect  our  systems  against the
threat of such  computer  viruses  and  hacking and to rectify any damage to our
systems.  Moreover,  if a computer virus or hacking which affects our systems is
highly  publicized,  our reputation could be materially damaged and usage of our
services may decrease.

WE MAY BE HELD LIABLE FOR INFORMATION WE PURCHASE AND REFORMAT.

         We may face liability for defamation,  negligence, copyright, patent or
trademark  infringement  and other  claims based on the  reformatted  content to
which we provide access through our wireless value-added  information  services.
For example, SMS news updates provided by us could possibly be deemed to contain
state secrets in violation of applicable Chinese law. In addition, third parties
could assert claims  against us for losses  incurred in reliance on  information
distributed by us. We may incur significant costs in investigating and defending
these claims, even if they do not result in liability.

WE MAY NOT BE ABLE TO ADEQUATELY PROTECT OUR INTELLECTUAL  PROPERTY,  AND WE MAY
BE EXPOSED TO INFRINGEMENT CLAIMS BY THIRD PARTIES.

         We rely on  contractual  restrictions  on  disclosure  to  protect  our
intellectual  property  rights.  Monitoring  unauthorized use of our information
services is  difficult  and costly,  and we cannot be certain  that the steps we
take will effectively  prevent  misappropriation  of our technology and content.
Our  management may determine in the future to make  application  for copyright,
trademark  or  trade  secret  protection  if  management  determines  that  such
protection would be beneficial and cost-effective.

         From time to time,  we may have to resort to  litigation to enforce our
intellectual  property  rights,  which  could  result in  substantial  costs and
diversion of our resources.  In addition,  third parties may initiate litigation
against us for alleged infringement of their proprietary rights. In the event of
a  successful  claim of  infringement  and our failure or  inability  to develop
non-infringing  technology  or  content  or  license  the  infringed  or similar
technology or content on a timely basis,  our business  could suffer.  Moreover,
even if we are able to license the  infringed or similar  technology or content,
license fees that we pay to licensors could be substantial or uneconomical.


                                       21
<PAGE>

WE HAVE LIMITED BUSINESS INSURANCE COVERAGE.

         The  insurance  industry  in  China  is  still  at an  early  stage  of
development.  Insurance  companies  in China offer  limited  business  insurance
products, and do not, to our knowledge, offer business liability insurance. As a
result,  we do not  have  any  business  liability  insurance  coverage  for our
operations.  Moreover, while business disruption insurance is available, we have
determined  that the risks of disruption and cost of the insurance are such that
we do not  require it at this  time.  Any  business  disruption,  litigation  or
natural disaster might result in substantial costs and diversion of resources.

RISKS RELATED TO THE WIRELESS VALUE-ADDED SERVICES INDUSTRY

OUR ABILITY TO GENERATE REVENUES COULD SUFFER IF THE CHINESE MARKET FOR WIRELESS
VALUE-ADDED SERVICES DOES NOT DEVELOP AS ANTICIPATED.

         The wireless  value-added  services market in China has evolved rapidly
over the last four years, with the introduction of new services,  development of
consumer  preferences,  market  entry  by  new  competitors  and  adaptation  of
strategies by existing competitors.  We expect each of these trends to continue,
and we must  continue  to adapt our  strategy  to  successfully  compete  in our
market.

         In particular,  we currently offer a wide range of wireless value-added
information services for mobile phones using 2.5G technologies.  There can be no
assurance,  however,  that these 2.5G  technologies and any services  compatible
with them will be accepted  by  consumers  or promoted by the mobile  operators.
Moreover,   there  are  numerous  other   technologies   in  varying  stages  of
development, such as third generation mobile technologies, which could radically
alter or eliminate the market for SMS or 2.5G services.

         Accordingly,  it is extremely  difficult to accurately predict consumer
acceptance  and demand for various  existing and  potential  new  offerings  and
services,   and  the  future  size,  composition  and  growth  of  this  market.
Furthermore,  given the  limited  history  and  rapidly  evolving  nature of our
market, we cannot predict the price that wireless subscribers will be willing to
pay for our  services or the  services  of our  affiliated  value-added  service
providers or whether subscribers will have concerns about security, reliability,
cost and quality of service associated with wireless services.  If acceptance of
our wireless value-added information services is different than anticipated, our
ability to maintain or increase our revenue and profits could be materially  and
adversely affected.

THE  POPULARITY OF OUR SERVICES  WHICH OPERATE WITH NEXT  GENERATION  TECHNOLOGY
STANDARDS ARE NECESSARILY  DEPENDENT ON THE MARKET  PENETRATION OF MOBILE PHONES
THAT ARE COMPATIBLE WITH THOSE STANDARDS, WHICH IS BEYOND OUR CONTROL.

         Mobile  phone  users can  access  our MMS,  WAP,  JAVA,  BREW and other
services which operate with next  generation  technology  standards only if they
purchase mobile phones that are compatible with those standards.  In particular,
mobile phones that are 2.5G-compatible have historically been significantly more
expensive  in China than  mobile  phones  using  older  technology  such as GSM.
Although the prices of 2.5G-compatible  mobile phones have been dropping rapidly
in recent quarters, we cannot be certain whether this trend will continue or the
extent to which existing users will be willing to upgrade their mobile phones to
obtain the latest  technology.  The pricing,  marketing  and other factors which
affect the sales of more  sophisticated  mobile  phones  are all  outside of our
control,  and weak sales of mobile phones for which we have  developed  services
could adversely affect our business.


                                       22
<PAGE>

THE TELECOMMUNICATION  LAWS AND REGULATIONS IN CHINA ARE EVOLVING AND SUBJECT TO
INTERPRETATION  AND WILL LIKELY CHANGE IN THE NEAR FUTURE. IF WE ARE FOUND TO BE
IN  VIOLATION  OF CURRENT OR FUTURE  CHINESE  LAWS OR  REGULATIONS,  WE COULD BE
SUBJECT TO SEVERE PENALTIES.

         Although   wireless   value-added   services  are  subject  to  general
regulations  regarding  telecommunication  services,  we believe that  currently
there are no Chinese laws at the national level  explicitly  governing  wireless
value-added services,  such as our services related to MMS, WAP, JAVA, and BREW,
and no Chinese government authority has been specifically designated to regulate
these services.  Many providers of wireless  value-added  services have obtained
various value-added  telecommunication  services licenses,  such as the licenses
possessed  by our Chinese  affiliates,  Sifang  Information  and  Tianci.  These
value-added  telecommunication  licenses  were  issued  by  the  local  Shanghai
Municipal Telecommunications Administration Bureau, and may not be sufficient to
offer wireless  value-added services on a national basis. Sifang Information and
Tianci  are  in the  process  of  applying  with  the  Ministry  of  Information
Industries  for an  inter-provincial  value-added  telecommunication  license in
accordance with the Ministry's general regulations  regarding  telecommunication
services.  However,  we cannot  predict  whether  either  will be  granted  that
license.  Moreover,  we cannot be certain that any local or national value-added
telecommunication  license  requirements  will not conflict  with one another or
that any given license will be deemed  sufficient  by the relevant  governmental
authorities  for the provision of this category of service.  It is also possible
that new national legislation might be adopted to regulate such services.

         If we or our affiliates are found to be in violation of any existing or
future Chinese laws or regulations  regarding wireless  value-added  services or
Internet access, the relevant Chinese authorities have the power to, among other
things:

         o        levy fines;

         o        confiscate   our  income  or  the  income  of  our  affiliated
                  value-added service providers;

         o        revoke our business  license or the  business  licenses of our
                  affiliated value-added service providers;

         o        shut  down  our  servers  or the  servers  of  our  affiliated
                  value-added  service  providers or block any Web sites that we
                  or our affiliated value-added service providers may operate;

         o        require us to  discontinue  any portion or all of our wireless
                  value-added information services business; or

         o        require  our  affiliated   value-added  service  providers  to
                  discontinue  any portion or all of their wireless  value-added
                  services business.

THE  CHINESE  GOVERNMENT,  CHINA  MOBILE OR CHINA  UNICOM  MAY  PREVENT  US FROM
DISTRIBUTING,  AND WE MAY BE SUBJECT TO LIABILITY FOR,  CONTENT THAT ANY OF THEM
BELIEVE IS INAPPROPRIATE.

         China  has  enacted  regulations  governing  telecommunication  service
providers,  Internet access and the distribution of news and other  information.
In the past, the Chinese  government has stopped the distribution of information
over the Internet that it believes violates Chinese law,  including content that
is obscene,  incites violence,  endangers national security,  is contrary to the
national interest,  or is defamatory.  In addition,  our affiliated  value-added
service  providers may not publish certain news items,  such as news relating to
national security, without permission from the Chinese government.  Furthermore,
the Ministry of Public  Security has the  authority to cause any local  Internet
service  provider  to block any Web site  maintained  outside  China at its sole
discretion.



                                       23
<PAGE>

         China Mobile and China  Unicom also have their own  policies  regarding
the  distribution  of  inappropriate  content by  wireless  value-added  service
providers and have recently punished certain providers for distributing  content
deemed by them to be  obscene.  Such  punishments  have  included  censoring  of
content,  delaying  payments of fees by the mobile  operators  to the  offending
service  provider,  forfeiture  of fees  owed  by the  mobile  operators  to the
offending  service  provider  and  suspension  of  the  service  on  the  mobile
operators'  networks.  Accordingly,  even if our affiliated wireless value-added
service  providers  comply with  Chinese  governmental  regulations  relating to
licensing and foreign investment prohibitions,  if the Chinese government, China
Mobile  or China  Unicom  were to take any  action  to  limit  or  prohibit  the
distribution  of  information  or to limit or  regulate  any  current  or future
content or services  available to users,  our revenues  could be reduced and our
reputation harmed.

         The Chinese  government is expected to grant licenses to offer wireless
services in China to China Telecom, China Netcom and possibly other parties with
which  our  affiliated  wireless  value-added  service  providers  have  not yet
developed  close  relationships.  If  those  parties  receive  licenses  and are
successful in the market but our  affiliates  are unable to develop  cooperative
relationships with them, our business could be adversely affected.

         It is also  possible  that China  Telecom,  China  Netcom and any other
parties  receiving  wireless  licenses may decide to offer wireless  value-added
services created by them,  rather than by third-party  service providers such as
our  affiliated  wireless  value-added  service  providers.  In that  case,  our
business could be adversely affected.

RISKS RELATED TO DOING BUSINESS IN CHINA

A DOWNTURN IN THE CHINESE ECONOMY MAY SLOW DOWN OUR GROWTH AND PROFITABILITY.

         The growth of the Chinese  economy has been  uneven  across  geographic
regions  and  economic  sectors.  There can be no  assurance  that growth of the
Chinese  economy  will be steady or that any  downturn  will not have a negative
effect on our business.  Our  profitability,  will decrease if expenditures  for
wireless value-added services decrease due to a downturn in the Chinese economy.
More specifically, increased penetration of wireless value-added services in the
less  economically  developed central and western provinces of China will depend
on those  provinces  achieving  certain  income levels so that mobile phones and
related services become affordable to a significant portion of the population.

GOVERNMENT  REGULATION OF THE  TELECOMMUNICATIONS  AND INTERNET  INDUSTRIES  MAY
BECOME MORE COMPLEX.

         Government regulation of the telecommunications and Internet industries
is highly complex.  New  regulations  could increase our costs of doing business
and prevent us from efficiently  delivering our services.  These regulations may
stop or slow down the expansion of our wireless value-added information services
customer base and limit access to our services.

THE  UNCERTAIN  LEGAL  ENVIRONMENT  IN CHINA COULD  LIMIT THE LEGAL  PROTECTIONS
AVAILABLE TO YOU.

         The  Chinese  legal  system  is a civil  law  system  based on  written
statutes. Unlike common law systems, it is a system in which decided legal cases
have little  precedential value. In the late 1970s, the Chinese government began
to promulgate a comprehensive system of laws and regulations  governing economic
matters.  The overall effect of  legislation  enacted over the past 20 years has
significantly  enhanced the protections afforded to foreign invested enterprises
in China. However, these laws, regulations and legal requirements are relatively
recent  and are  evolving  rapidly,  and their  interpretation  and  enforcement
involve  uncertainties.  These  uncertainties  could limit the legal protections
available  to  foreign  investors,   such  as  the  right  of  foreign  invested
enterprises to hold licenses and permits such as requisite business licenses.



                                       24
<PAGE>

ANY  RECURRENCE  OF SEVERE  ACUTE  RESPIRATORY  SYNDROME,  OR SARS,  OR  ANOTHER
WIDESPREAD  PUBLIC  HEALTH  PROBLEM,  COULD  ADVERSELY  AFFECT OUR  BUSINESS AND
RESULTS OF OPERATIONS.

         A renewed outbreak of SARS or another  widespread public health problem
in China,  where all of our  revenue  is  derived,  and in  Shanghai,  where our
operations are  headquartered,  could have a negative  effect on our operations.
Our operations may be impacted by a number of health-related factors,  including
the following:

         o        quarantines  or closures  of some of our  offices  which would
                  severely disrupt our operations,

         o        the sickness or death of our key officers and employees, and

         o        a general slowdown in the Chinese economy.

         Any of the foregoing events or other unforeseen  consequences of public
health problems could adversely affect our business and results of operations.

CHANGES IN CHINA'S POLITICAL AND ECONOMIC POLICIES COULD HARM OUR BUSINESS.

         The economy of China has historically been a planned economy subject to
governmental plans and quotas and has, in certain aspects, been transitioning to
a more market-oriented economy. Although we believe that the economic reform and
the macroeconomic measures adopted by the Chinese government have had a positive
effect on the  economic  development  of China,  we cannot  predict  the  future
direction of these  economic  reforms or the effects these  measures may have on
our business,  financial  position or results of  operations.  In addition,  the
Chinese  economy  differs from the economies of most countries  belonging to the
Organization  for  Economic   Cooperation  and   Development,   or  OECD.  These
differences include:

         o        economic structure;

         o        level of government involvement in the economy;

         o        level of development,

         o        level of capital reinvestment;

         o        control of foreign exchange;

         o        methods of allocating resources; and

         o        balance of payments position.

         As a result of these  differences,  our business may not develop in the
same way or at the same rate as might be expected if the  Chinese  economy  were
similar to those of the OECD member countries.

RESTRICTIONS  ON CURRENCY  EXCHANGE MAY LIMIT OUR ABILITY TO RECEIVE AND USE OUR
REVENUES EFFECTIVELY.

         Because  almost  all of our  future  revenues  may  be in the  form  of
Renminbi, any future restrictions on currency exchanges may limit our ability to
use revenue generated in Renminbi to fund any future business activities outside
China or to make  dividend  or other  payments  in U.S.  dollars.  Although  the
Chinese   government   introduced   regulations   in  1996  to   allow   greater
convertibility  of the Renminbi for current  account  transactions,  significant
restrictions   still   remain,   including   primarily  the   restriction   that



                                       25
<PAGE>

foreign-invested  enterprises  may only buy, sell or remit  foreign  currencies,
after providing valid commercial documents, at those banks authorized to conduct
foreign  exchange  business.  In  addition,  conversion  of Renminbi for capital
account items, including direct investment and loans, is subject to governmental
approval in China,  and  companies  are required to open and  maintain  separate
foreign  exchange  accounts for capital account items. We cannot be certain that
the Chinese regulatory  authorities will not impose more stringent  restrictions
on the  convertibility  of the  Renminbi,  especially  with  respect  to foreign
exchange transactions.

THE VALUE OF OUR  SECURITIES  WILL BE  AFFECTED  BY THE  FOREIGN  EXCHANGE  RATE
BETWEEN U.S. DOLLARS AND RENMINBI.

         The value of our common stock will be affected by the foreign  exchange
rate between U.S. dollars and Renminbi.  For example, to the extent that we need
to convert U.S.  dollars into Renminbi for our operational  needs and should the
Renminbi appreciate against the U.S. dollar at that time, our financial position
and the price of our common stock may be adversely affected.  Conversely,  if we
decide to convert our  Renminbi  into U.S.  dollars for the purpose of declaring
dividends on our common stock or for other business purposes and the U.S. dollar
appreciates  against the Renminbi,  the U.S.  dollar  equivalent of our earnings
from our subsidiaries in China would be reduced.

RISKS RELATED TO THE MOBILE PHONE DISTRIBUTION INDUSTRY

WE ARE  DEPENDENT  ON THREE  MAIN  FIRST-TIER  WHOLESALERS  TO SUPPLY ALL OF OUR
MOBILE PHONES.

         Our performance  depends on whether we can continue to secure contracts
with the three first-tier  wholesalers of Samsung mobile phones on whom we rely.
We  have no  long-term  purchase  contracts  or  other  contracts  that  provide
continued  supply,  pricing or access to new mobile  phone models and any of the
first-tier  wholesalers on whom we rely could  discontinue  selling to us at any
time. We may not be able to acquire new Samsung  models in the future and we may
not be able to acquire the models that we need in  sufficient  quantities  or on
terms that are  acceptable  to us in the future.  As a result,  our revenues may
decrease.

OUR PERFORMANCE IS DEPENDENT ON THE POPULARITY OF SAMSUNG'S MOBILE PHONE MODELS.

         We primarily  distribute mobile phones manufactured by Samsung and thus
are  dependant  on Samsung's  ability to create and deliver high quality  mobile
phone  models  in a cost  effective  and  timely  manner.  Samsung  is a leading
manufacturer of mobile phones based on both the CDMA network and the GSM network
in China.  There can be no assurance  that Samsung will  continue to create high
quality mobile phone models that are popular with  consumers.  As a result,  our
revenues  may  decrease.  In  addition,  our  success  depends on our ability to
anticipate  and  respond to changing  mobile  phone  model  trends and  consumer
demands in a timely  manner.  The models we  distribute  must  appeal to a broad
range of consumers whose  preferences  cannot always be predicted with certainty
and may change between sales  seasons.  If we misjudge which mobile phone models
will be  popular  or the  market  for the  models we  distribute,  our sales may
decline or we may be required to sell our models at lower prices.

CASH FLOW.

         It is important that we have  sufficient  cash flow to purchase  enough
mobile phones from the first-tier  wholesalers on whom we rely. If our cash flow
decreases  significantly,  we will not be able to purchase a sufficient quantity
of inventory to meet our customers' demands,  which would have a negative impact
on our sales,  and may cause the first-tier  wholesalers on whom we rely to look
to other  sub-wholesalers  to distribute  their mobile phones.  This development
would have a negative impact on our revenues.



                                       26
<PAGE>

CUSTOMERS.

         One of the factors the first-tier  wholesalers on whom we rely consider
when determining who they will use as a sub-wholesaler  is the  sub-wholesaler's
relationship  with retailers.  Currently  approximately  67% of our mobile phone
sales are made to five retailers.  We have no long-term sales contracts or other
contracts that provide  continued selling or pricing and any of the retailers we
supply  could  discontinue   buying  from  us  at  any  time.  If  we  lose  our
relationships  with our five largest  retailers,  we will have a difficult  time
finding new large  retailers to purchase our Samsung  mobile phones and may lose
our  relationships  with the first-tier  wholesalers on whom we rely. This would
have a negative impact on our business.

WE FACE CERTAIN RISKS RELATING TO CUSTOMER SERVICE.

         Any material  disruption  or slowdown in our order  processing  systems
resulting from labor disputes,  mechanical  problems,  human error or accidents,
fire, natural disasters,  or comparable events could cause delays in our ability
to  receive  and  distribute  orders  and may  cause  orders to be lost or to be
shipped or delivered late. As a result, customers may cancel orders or refuse to
receive goods on account of late shipments, which would result in a reduction in
our net sales and could result in increased administrative and shipping costs.

WE FACE RISKS ASSOCIATED WITH DISTRIBUTION.

         We conduct  all of our  distribution  operations  from one  facility in
Shanghai,  China.  Any disruption in the operations at our  distribution  center
could have a negative impact on our business.

COMPETITION.

         Despite the fact that we distribute nine Samsung mobile phone models in
the Shanghai,  China region,  we face competition from distributors of different
models of mobile phones  manufactured by Samsung in the Shanghai region and from
distributors  of phones  manufactured  by  companies  other  than  Samsung  that
distribute in the Shanghai region.

         Competition is based on a variety of factors  including  maintenance of
product quality, competitive pricing, delivery efficiency,  customer service and
satisfaction  levels and the  ability to  anticipate  technological  changes and
changes in customer preferences.  The first-tier  wholesalers on whom we rely or
Samsung may acquire,  startup, or expand their own distribution  systems to sell
directly to our customers.

RISKS RELATED TO OUR COMMON STOCK

THE MARKET PRICE FOR OUR COMMON STOCK MAY BE VOLATILE.

         The market price for our common  stock is likely to be highly  volatile
and subject to wide fluctuations in response to factors including the following:

         o        actual or anticipated  fluctuations in our quarterly operating
                  results,

         o        announcements of new services by us or our competitors,

         o        changes in financial estimates by securities analysts,

         o        conditions in the wireless value-added services market,



                                       27
<PAGE>

         o        changes in the economic  performance  or market  valuations of
                  other companies involved in wireless  value-added  services or
                  distribution of mobile phones,

         o        announcements by our competitors of significant  acquisitions,
                  strategic partnerships, joint ventures or capital commitments,

         o        additions or departures of key personnel,

         o        potential litigation, or

         o        conditions in the mobile phone market.

         In addition,  the securities markets have from time to time experienced
significant price and volume  fluctuations that are not related to the operating
performance  of  particular  companies.   These  market  fluctuations  may  also
materially and adversely affect the market price of our common stock.

STOCKHOLDERS COULD EXPERIENCE SUBSTANTIAL DILUTION.

         We may issue additional shares of our capital stock to raise additional
cash for working capital.  If we issue  additional  shares of our capital stock,
our  stockholders  will  experience  dilution  in  their  respective  percentage
ownership in the company.

WE HAVE NO PRESENT INTENTION TO PAY DIVIDENDS.

         Neither during the preceding two fiscal years nor during the year ended
December 31, 2004 did we pay dividends or make other cash  distributions  on our
common  stock,  and we do not  expect to  declare  or pay any  dividends  in the
foreseeable  future. We intend to retain any future earnings for working capital
and to finance current operations and expansion of our business.

A  LARGE  PORTION  OF OUR  COMMON  STOCK  IS  CONTROLLED  BY A SMALL  NUMBER  OF
STOCKHOLDERS.

         A large  portion  of our  common  stock  is held by a small  number  of
stockholders.  As a result, these stockholders are able to influence the outcome
of stockholder votes on various matters, including the election of directors and
extraordinary   corporate  transactions  including  business  combinations.   In
addition,  the  occurrence  of sales of a large  number of shares of our  common
stock,  or the  perception  that these sales could  occur,  may affect our stock
price and could  impair our  ability to obtain  capital  through an  offering of
equity  securities.  Furthermore,  the current ratios of ownership of our common
stock  reduce the public  float and  liquidity  of our common stock which can in
turn affect the market price of our common stock.

WE MAY BE SUBJECT TO "PENNY STOCK" REGULATIONS.

         The Securities and Exchange Commission,  or SEC, has adopted rules that
regulate  broker-dealer  practices in  connection  with  transactions  in "penny
stocks." Penny stocks generally are equity  securities with a price of less than
$5.00 (other than securities registered on certain national securities exchanges
or  quoted  on the  NASDAQ  system,  provided  that  current  price  and  volume
information  with respect to  transactions in such securities is provided by the
exchange or  system).  Penny stock  rules  require a  broker-dealer,  prior to a
transaction in a penny stock not otherwise exempt from those rules, to deliver a
standardized  risk  disclosure  document  prepared by the SEC,  which  specifies
information  about penny stocks and the nature and  significance of risks of the
penny stock market. A broker-dealer  must also provide the customer with bid and
offer quotations for the penny stock, the compensation of the broker-dealer, and
our sales person in the transaction,  and monthly account statements  indicating


                                       28
<PAGE>

the  market  value  of each  penny  stock  held in the  customer's  account.  In
addition,  the penny stock rules require that, prior to a transaction in a penny
stock not  otherwise  exempt from those  rules,  the  broker-dealer  must make a
special written  determination that the penny stock is a suitable investment for
the purchaser and receive the purchaser's  written agreement to the transaction.
These  disclosure  requirements  may have the  effect of  reducing  the  trading
activity in the secondary  market for stock that becomes  subject to those penny
stock rules.  Whenever any of our  securities  become subject to the penny stock
rules,  holders  of  those  securities  may have  difficulty  in  selling  those
securities.

Where You Can Find More Information

         We file annual,  quarterly and special  reports,  proxy  statements and
other information with the SEC. Our SEC filings are available to the public over
the Internet at the SEC's web site at http://www.sec.gov.  You may also read and
copy any document we file at the SEC's public reference room in Washington, D.C.
Please  call the SEC at  1-800-SEC-0330  for further  information  on the public
reference rooms.


ITEM 2.  DESCRIPTION OF PROPERTY

         We currently occupy two office spaces in the Shanghai region.  We lease
the first  office  space,  located at 429  Guangdong  Road,  Shanghai,  People's
Republic of China 200001,  for  approximately  $41,000 a year. This office space
contains our  corporate  headquarters,  and is  approximately  250 square meters
under an operating  lease which was terminated on September 30, 2004. We own our
office space,  located at 689 Laoshandong Road,  Shanghai,  People's Republic of
China 200120,  which houses our administration,  technical team and servers, and
is  approximately  800 square  meters.  We believe that these two properties are
adequately covered by insurance. In addition, we believe that we will be able to
obtain  adequate  facilities,  principally  through the  leasing of  appropriate
properties, to accommodate our future expansion plans.


ITEM 3.  LEGAL PROCEEDINGS

         The Company is not  currently  involved in any material  pending  legal
proceedings

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         There were no matters  submitted to a vote of security  holders  during
the fiscal year ended December 31, 2004.

                                     PART II


ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

         Our  common  stock is traded on the  NASD's  Over-the-Counter  Bulletin
Board  under the  symbol  "CHDW."  On August  6, 2004 we  changed  our name from
Boulder  Acquisitions,  Inc. to China  Digital  Wireless,  Inc.  and changed our
symbol from "BAQI" to "CHDW." On April 19, 2005,  the last reported  sales price
for our common stock was $2.80 per share.

         The following table sets forth, for the quarters  indicated,  the range
of closing  high and low bid prices of our common  stock as reported by the NASD
Over-the-Counter  Bulletin Board, as adjusted for all previously  effected stock
splits.



                                       29
<PAGE>

                                                                 Common Stock
                                                             -------------------
By Quarter Ended                                              High          Low
----------------                                             ------       ------
Fiscal 2003
---------------------------------------------------------
March 31, 2003...........................................     $0.00        $0.00
June 30, 2003............................................     $0.42        $0.23
September 30, 2003.......................................     $0.42        $0.42
December 31, 2003........................................     $0.42        $0.42

Fiscal 2004
---------------------------------------------------------
March 31, 2004...........................................     $5.00        $0.42
June 30, 2004............................................     $4.05        $2.30
September 30, 2004.......................................     $3.90        $1.98
December 31, 2004........................................     $4.85        $2.80

Fiscal 2005
---------------------------------------------------------
March 31, 2005...........................................     $5.45        $3.42


         As of April 19, 2005, there were 17,018,692  shares of our common stock
outstanding held by approximately 2,561 stockholders of record.

         We did not pay any cash dividends on our common stock in our 2002, 2003
or 2004 fiscal  years.  We do not  anticipate  paying any cash  dividends on our
common stock in the  foreseeable  future.  We currently  intend to retain future
earnings, if any, to finance operations and the expansion of our business.


ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION


         This report contains certain forward-looking statements and information
relating  to us that  are  based  on the  beliefs  and  assumptions  made by our
management as well as information  currently  available to the management.  When
used in this  document,  the  words  "anticipate",  "believe",  "estimate",  and
"expect"  and similar  expressions,  are  intended  to identify  forward-looking
statements.  Such  statements  reflect our current  views with respect to future
events and are subject to certain risks,  uncertainties and assumptions.  Should
one or more of these risks or uncertainties  materialize,  or should  underlying
assumptions  prove  incorrect,  actual  results may vary  materially  from those
described herein as anticipated, believed, estimated or expected.

         The  following  discussion  should  be read  in  conjunction  with  our
financial  statements and the notes thereto and the other financial  information
appearing elsewhere in this document. In addition to historical information, the
following   discussion  and  other  parts  of  this  document   contain  certain
forward-looking information. When used in this discussion, the words "believes,"
"anticipates,"  "expects,"  and  similar  expressions  are  intended to identify
forward-looking  statements.  Such  statements  are subject to certain risks and
uncertainties,  which could cause actual results to differ materially from those
projected due to a number of factors beyond our control.  We do not undertake to
publicly  update  or  revise  any  of its  forward-looking  statements  even  if
experience or future changes show that the indicated  results or events will not
be  realized.   You  are  cautioned  not  to  place  undue   reliance  on  these
forward-looking statements, which speak only as of the date hereof.

Overview of Business Background

         Sifang  Holdings  was formed  under the laws of the  Cayman  Islands on
February 9, 2004 for the purpose of holding a 100% equity  interests in TCH. TCH
was established as a foreign investment enterprise in Shanghai under the laws of
the PRC on May 25, 2004, with a registered capital of $7.2 million.



                                       30
<PAGE>

         Sifang  Information  is a  Shanghai-based  privately  owned  enterprise
established under the laws of the PRC on August 14, 1998. Sifang  Information is
engaged in the  business of pager and mobile  phone  distribution  and  provides
value added information  services to the customers in the Shanghai  metropolitan
area. In March 2004, Sifang  Information spun off its mobile phone  distribution
business and the majority of its value added  information  services  business by
presenting a set of carve-out financial  statements for the years ended December
31,  2002 and 2003 and three  months  ended  March 31,  2004 as if the  spun-off
business had been a stand-alone  company for two years and one quarter. On March
31, 2004, Sifang Information transferred the spun-off business into TCH. Being a
receiving entity under common control,  TCH initially  recognized all the assets
and liabilities  transferred at their carrying amounts in the accounts of Sifang
Information at the date of transfer under the guidance of SFAS No. 141, Appendix
D. On May 26, 2004 Sifang  Information  exchanged 100% of equity interest in TCH
for a 100% equity interest in Sifang Holdings.  Since the ultimate owners of the
three entities were the same owners and the three entities remained under common
control,  the  ownership  exchange  transaction  was accounted for at historical
costs under the  guidance of SFAS No.  141,  Appendix D. Prior to May 26,  2004,
there were no  activities  in Sifang  Holdings.  As a result of  exchanging  the
ownership between TCH and Sifang Holdings, TCH's historical financial statements
become the historical financial statements of Sifang Holdings.

         Sifang  Information  operates in a business  segment that is subject to
certain restrictions  imposed by the government of the PRC. For example,  paging
facilities,  radio  transmitting  stations and  transmitting  equipment owned by
Sifang Information are not allowed to be owned by foreign investment enterprises
in accordance with PRC government  regulations.  Therefore,  Sifang  Information
still  maintains a small part of its business and paging  facilities in order to
stay in compliance with relevant regulations and laws in PRC.

         As a result of the  spin-off,  TCH  engages in the  business  of mobile
phone  distribution  and the  provision of pager and mobile phone  (collectively
"wireless  receiver")  users with access to certain  information  reformatted by
TCH. TCH purchases mobile phones from first tier  distributors and sells them to
retailers with a mark-up.  In the process of providing  value-added  information
services  through  entering into monthly  subscription  agreements  with various
users, TCH purchases trading activity information from stock exchanges, comments
and analysis on PRC stock  markets  provided by certain  reputable  security and
investment  companies,   lottery  information,   weather  forecast,   and  other
value-added  products  and  reformats  the  aforementioned  information  through
decoding and recoding and then has the  reformatted  information  transmitted by
Sifang  Information,  via service contracts,  to pager users. The information is
constantly  saved in TCH's server in order for mobile phone users to dial in via
China  Mobile or China  Unicom.  By  signing a monthly  subscription  agreement,
wireless  users agree to make  advance  payments  for either  three or six-month
subscription periods.

         The  company  was engaged in a smart card  project in June,  2004.  The
project was delayed due to issues  regarding  accounting  policy in the PRC, and
the company decided to discontinue this project in the 2004 fiscal year.

Discussion and Analysis of Operating Results

Fiscal Year Ended  December 31, 2004 Compared to the Fiscal Year Ended  December
31, 2003

Revenue

Total Revenues

         Total  revenues  for our 2004 fiscal year  increased  by  approximately
$7,488,572,  representing an  approximately  44.0%  increase,  to $24,520,950 as
compared to $17,032,378  for the same period of the prior year. The increase was
due  mainly  to our  marketing  effort  and  further  facilitated  by  Samsung's
marketing  promotion.  Total revenues consist of product sales, product sales to
related  parties and  service  revenue,  net.  In the Chinese  telecommunication


                                       31
<PAGE>

market,  mobile  phones have rapidly  replaced  beepers and pagers as the mobile
communication device preferred by consumers,  resulting in an increase in mobile
phone distribution.  For our 2004 fiscal year, Samsung's mobile phones accounted
for about 97% of our total  product  sales and other name brands  mobile  phones
accounted  for the  remaining  3%,  compared to our 2003 fiscal  year,  in which
Samsung's mobile phones accounted for 99.6% of our total product sales and other
brands  accounted  for the balance.  During 2004 market  competition  for mobile
phone sales  intensified,  causing us to decrease our overall  mark-up  ratio to
6.4% in order to maintain our market position,  in comparison to a mark-up ratio
of 8.2% for the same period the prior year.

Product Sales

         Revenue  from  product  sales for our 2004  fiscal  year  decreased  by
approximately  $2,471,881,  representing an  approximately  18.3%  decrease,  to
$11,057,398  as compared to  $13,529,279  for the same period of the prior year.
The decrease was due mainly to the spun-off business of THC.

Product sales to related parties

         Before  January 1, 2004 we only  distributed  CDMA mobile phones in the
Shanghai  area.  Beginning  in January 2004 we entered into the GSM mobile phone
distribution business. Since the retail market channel related to our GSM mobile
phone distribution was developed and maintained by Shanghai  Shantian,  in which
Sifang  Information  holds a 51% equity interest,  all of our Samsung GSM mobile
phones were sold to Shanghai  Shantian,  which made Shanghai Shantian our second
tier distributor in the first half of 2004. During our 2004 fiscal year, we sold
a total of  $9,891,691  worth of mobile  phones to  related  parties,  including
$9,178,674 worth of mobile phones to Shanghai Shantian, and $713,017 to Shanghai
Tianci  Industry Group Co. Ltd and Shanghai  Tianci Industry Co.Ltd with a total
competitive  mark-up on average of approximately 4.8 % as compared to an average
mark-up ratio of 7.8% for the products sold to all of our other customers.

Service revenue, net

         Total service  revenue net of related  business tax for our 2004 fiscal
year  increased  by $68,762,  representing  approximately  a 2.0%  increase,  to
$3,571,861  compared to $3,503,099 for the same period of the prior year. It was
due mainly to the increase of mobile phone value-added  services and the revenue
derived from agent service income.

         Value-added service revenue from mobile phone users for our 2004 fiscal
year  increased by $1,090,855 to $2,388,178  compared to $1,297,323 for the same
period of the prior year,  representing a material  increase,  which resulted in
the overall  increase in our service  revenue.  Approximately  $1,973,842 of the
service revenue from mobile phone users was attributable to prepaid service fees
generated by an installing  agent,  Chengao  Industry Co. Ltd, who installed the
software on a retailer's  (Beijing Jianghe  Communication  Co., Ltd) inventories
and  collected  proceeds from the retailer and  transferred  the proceeds to the
Company,  representing  a $745,057  increase  compared to the same period of the
prior year. The remaining  $404,336 portion of the service revenue was generated
by our SMS  service ,  representing  a material  increase  compared  to the same
period  of the  prior  year.  The  increase  was  mainly  due to the  aggressive
expansion  of our  subscriber  base as the  result  of the  Company's  marketing
campaigns.  In  addition,  service  revenue from pager users for our 2004 fiscal
year  decreased by $1,226,307 to $ 979,469  compared to $2,205,776  for the same
period  of the prior  year,  representing  approximately  a 55.6%  decrease.  We
believe that service  revenue from pager users will  continue to decrease  given
the increased  popularity  of mobile phones over beepers and pagers.  We project
that the decrease in service  revenue from pager users will likely  plateau at a
certain  level as most  lower  income  pager  users  still like to use pagers to
access our information services.

         Moreover,  On July 16,  2004,  Tianci  Group,  a related  party to TCH,
entered  into an agreement  with China Unicom to promote CDMA mobile  phones and
agent service for China Unicom. Under the agreement, Tianci Group is entitled to
receive a sales  commission from China Unicom of $15.70 per unit,  $3.62 per SIM


                                       32
<PAGE>
<TABLE>
<CAPTION>

card based on sales to customers who agree to subscribe for monthly  service for
a minimum period of two years at a minimum monthly service fee of $3.38.  Tianci
Group then entered into an agent agreement with TCH pursuant to which TCH agreed
to sell the CDMA mobile phones,  SIM cards and monthly service  subscriptions on
behalf  of  Tianci  Group  and,  consequently,  is  entitled  to  receive  sales
commissions  from Tianci  Group based on the terms  agreed upon  between  Tainci
Group and China Unicom.  The agent relationship began in August 2004 at the same
time as a sales promotion initiated by China Unicom. We recognized agent service
income of $204,214  during the send half year of our 2004 fiscal year at the TCH
level.

Total cost of goods sold

         The total  cost of goods sold for our 2004  fiscal  year  increased  by
$8,230,371 to  $19,608,832  compared to  $12,424,454  for the same period of the
prior year,  representing  an  approximately  57,8%  increase.  The increase was
consistent with the increases in revenue from product sales.

Cost of service

         The cost of service for our 2004 fiscal  year  increased  by $29,675 to
$1,045,993  compared  to  $1,016,318  for the same  period  of the  prior  year,
representing an approximately 2.9% increase. In addition,  software amortization
for  mobile  phone  value-added  service  generated  in  the  2004  fiscal  year
represented  a $42,338  increase  compared to the prior year.  During  2004,  we
continued to strive to expand the content  offered by our  value-added  services
while  maintaining  current  fee  structures  and  to  establish   collaborative
relationships  or  partnerships   with  Chinese  mobile  operators  and  certain
information content providers.

Gross profit

         After  taking into  account the cost of goods sold and cost of service,
our gross profit for our 2004 fiscal year increased by approximately $274,519 to
approximately $3,866,125,  representing approximately a 7.6% increase,  compared
to gross  profit  of  $3,591,606  for the same  period of the  prior  year.  The
increase in gross profit was primarily attributable to the following factors (i)
the gross  profit  derived  from  mobile  phone  distribution  and mobile  phone
information services increased significantly, which offset the decrease in pager
information  service  income;  (ii) the agent  service  income  generated in the
second half of 2004 .

         The following table presents in summary certain information related to
the various components of revenue.

                                                             Information
                                                             Service -     Information
                                 Agency        Mobile Phone  Mobile        Service -
                                 Income        Distribution  Phone         Pager         Total
                                 -----------   ------------  -----------   -----------   -----------
<S>                              <C>           <C>           <C>           <C>           <C>
For the year ended December 31,
2004

Revenue                          $   204,214   $ 20,949,089  $ 2,388,178   $   979,469   $24,520,950
                                 -----------   ------------  -----------   -----------   -----------
Cost                                    --       19,608,832      498,194       547,799    20,654,825
                                 -----------   ------------  -----------   -----------   -----------
Gross profit                         204,214      1,340,257    1,889,984       431,670     3,866,125
                                 -----------   ------------  -----------   -----------   -----------
Gross profit ratio                    100.0%           6.4%        79.1%         44.1%         15.8%
                                 -----------   ------------  -----------   -----------   -----------



                                       33
<PAGE>

For the year ended December 31,
2003

                                 -----------   -------------  -----------   -----------   -----------
Revenue                          $      --        13,529,279  $ 1,297,323   $ 2,205,776   $17,032,378
                                 -----------   -------------  -----------   -----------   -----------
Cost                                    --        12,424,454      287,464       728,854    13,440,772
                                 -----------   -------------  -----------   -----------   -----------
Gross profit                            --         1,104,825    1,009,859     1,476,922     3,591,606
                                 -----------   -------------  -----------   -----------   -----------
Gross profit ratio                      --              8.2%        77.8%         67.0%         21.1%
                                 -----------   -------------  -----------   -----------   -----------
</TABLE>

Other income, net

         On July 16, 2004, Tianci Group, a related party to TCH, entered into an
agreement  with China Unicom to promote CDMA mobile phones and agent service for
China Unicom.  Under the agreement,  Tianci Group is entitled to receive a sales
commission  from China  Unicom of $15.70  per unit,  $3.62 per SIM card based on
sales to  customers  who agree to  subscribe  for monthly  service for a minimum
period of two years at a minimum monthly service fee of $3.38. Tianci Group then
entered  into an agent  agreement  with TCH pursuant to which TCH agreed to sell
the CDMA mobile phones, SIM cards and monthly service subscriptions on behalf of
Tianci Group and,  consequently,  is entitled to receive sales  commissions from
Tianci  Group based on the terms  agreed  upon  between  Tainci  Group and China
Unicom.  The agent relationship began in August 2004 at the same time as a sales
promotion  initiated by China Unicom. As the sales commission  revenue from this
business is more  uncertain in nature,  we reported this revenue as other income
instead of regular revenue.  We recognized agency income of $204,214 in the 2004
fiscal year at the TCH level.

Selling expenses

         Selling  expenses  for our 2004  fiscal  year  increased  by $93,202 to
$246,639   compared  to  $153,437  for  the  same  period  of  the  prior  year,
representing  approximately  a 61% increase.  This increase was due to promotion
expenses for  value-added  information  services  related to mobile phone users.
Advertising fees and expenses for a series of marketing  campaigns  increased by
$41,183 in our 2004  fiscal  year,  from  $18,909  to  $60,092,  representing  a
material  increase in  comparison to the prior year. We have moved our marketing
focus from  beeper and pager users to mobile  phone users in line with  changing
consumer  demands.  Salaries  paid to the Company's  marketing  team in the 2004
fiscal  year rose from  $33,836 to  $84,946,  representing  a 151%  increase  in
comparison to the prior year.

General and administrative expenses

         General and administrative  expenses for our 2004 fiscal year increased
by  $1,365,428  to  $1,656,841  compared to $291,413  for the same period of the
prior year, representing a material increase. The increase was due mainly to the
reorganization  and  recapitalization  transaction  and related  audit and legal
fees.

         General and  administrative  expenses  incurred at the TCH level in the
2004 fiscal year  increased  from  $286,058 to  $456,445,  representing  a 52.5%
increase.  These general and administrative  expenses were comprised of salaries
paid to the management, which increased from $94,437 to $117,800, representing a
$23,363  increase,  and office  expenses,  which rose from  $11,888 to  $20,015,
representing a $8,127 increase.

         During our 2004  fiscal  year  there was  stock-based  compensation  of
$1,014,000  related to the reverse merger generated at parent level,  consisting
of  167,895  shares  issued to a  consultant  in lieu of cash  payment at a fair
market value of $604,000 and the issuance of 166,667  redeemable shares pursuant



                                       34
<PAGE>

to a stock purchase agreement resulting in a charge of $410,000 representing the
premium between the trading price ($3.60 per share) and the pre-negotiated stock
purchase price ($1.14 per share) of the purchased  shares.  The other cash-based
expenses incurred in the 2004 fiscal year of $205,376,  represented payments for
the audit fees, a retainer fee and other consultant fees.

Interest income (expense)

         During our 2003 fiscal year, we borrowed funds from Sifang  Information
for temporary  working capital and mobile phone  distribution.  As a result,  we
paid  interest  totaling  $12,082 to Sifang  Information  during the 2003 fiscal
year.

         During our 2004 fiscal year, the interest  income derived from deposits
in banks was $1,955.

Income tax

         TCH is subject to taxation under the laws of the PRC, and the statutory
income  tax rate  for  2003 and 2004  fiscal  years  was  33%.  The  income  tax
provisions  presented on our financial  statements  are based on the  historical
actual income tax rates of Sifang  Information  at 7.5% for the 2003 fiscal year
and the six months ended June 30, 2004.  The income tax provision  presented for
the six months ended December 31, 2004 are based on a 15% effective rate. In our
2003 and 2004  fiscal  years,  income tax  expense was  $246,694  and  $369,971,
respectively,  based on  pretax  income  of  $3,134,674  and  $1,964,600  (which
included the stock  compensation of $1,014,000  incurred in the U.S.). Since the
loss of approximately $1,014,000 incurred in the U.S. did not offset the taxable
income in China, a portion of income tax expense  totaling  $169,643,  which was
incurred in China, was based on taxable income of approximately $2,979,023.

Net income

         We  recorded  net income of  $1,594,629  for our 2004  fiscal  year,  a
$1,293,351  decrease in net income  compared to net income of $2,887,980 for the
same period of the prior year,  representing  approximately a 45% decrease.  The
decrease  in net income was  attributable  to (i) the  increase  in general  and
administrative  expenses for the period  compared to general and  administrative
expenses for the same period of the prior year (we incurred a $1,014,423  charge
for services performed by consultants  related to the reverse merger and related
activites,  and the issuance of common stock in 2004),  and (ii) the decrease of
the gross profit generated from mobile phone  distribution and our pager service
business.

Earnings per share

         Earnings per share for our 2004 fiscal year decreased by $0.11 to $0.10
compared to $0.21for  the same period of the prior year.  The  decrease  was due
mainly  to the  decrease  in our  net  income  and  the  increase  in the  total
outstanding shares of our common stock, as the weighted average number of shares
of common stock  outstanding for the 2004 fiscal year increased by approximately
12.1%,  compared the weighted average number of common stock outstanding for the
same period of the prior year.

Liquidity and Capital Resources

         Our cash balance decreased from approximately $1,713,748 as of December
31, 2003 to approximately $75,511 as of December 31, 2004. This decrease in cash
and cash  equivalents  was due  primarily  to the decrease in net income and the
increase in the amount due from parent.

         Net cash used in  operating  activities  was  $1,788,915  during  2004,
compared to net cash provided by operating  activities of $1,383,597  during the
prior  year.  We believe  that the  decrease of net cash  provided by  operating
activities  was due mainly to the decrease of  $1,293,351  in net income and the
increase  of  $4,497,420  in cash due  from and  advanced  to a  related  party,
partially  offset by cash generated from a non-cash  expense of $1,014,423 and a
change of  $1,911,527  in  inventories.  Net income of  $1,594,629  for the 2004
fiscal  year  compared  to net income of  $2,887,980  for the 2003  fiscal  year
represented  a decrease  of  $1,293,351.  The  amount  due from a related  party
increased  from $0 to  $4,742,688  in the 2004 fiscal year compared to the prior
year,  representing  a large portion of cash used in operating  activities.  The
cash used in accounts receivable increased by $2,276,245 in the 2004 fiscal year
compared to net cash used of $1,790,616 in the 2003 fiscal year,  representing a
change of $485,629.  However,  the change in accounts  payable was in a net cash
used  position  ended the year  December 31, 2004,  representing  an increase of
approximately  $55,730 compared to positive cash inflow of $111,569 for the same
period of the prior year.  The change in deferred  revenue at December  31, 2004
was less than the change in  deferred  revenue  for the same period of the prior
year. The cash generated in the change of other current liabilities increased to
$404,769  compared  to  $25,737  in the  prior  year,  representing  a  $379,032
increase.

         Net  cash  used in  investing  activities  for  the  2004  fiscal  year
increased  to $132,155  compared  to  $259,858  for the same period of the prior
year,  representing a $ 127,703 decrease. The decrease in cash used in investing
activities  was due mainly to the decrease of $127,703 cash used in the purchase
of property and equipment



                                       35
<PAGE>

         Net cash provided by financing  activities for the 2004 fiscal year was
$282,570  compared to cash used in $604,062 for the 2003 fiscal year. We believe
that the increase was due mainly to the proceeds from issuing  redeemable common
stocks and restricted common stocks in the 2004 fiscal year.

         We believe that current cash balance and cash flows from operations, if
any, will be sufficient to meet present growth  strategies  and related  working
capital.  In regards to the capital  expenditures,  we have sufficient  funds to
expand our operations.  We plan to utilize a combination of internally generated
funds from operations  with potential debt and/or equity  financings to fund its
longer-term  growth  over a period of two to five  years.  The  availability  of
future financings will depend on market  conditions.  There is no assurance that
the future funding will be available.

         The  forecast  of the  period  of  time  through  which  our  financial
resources will be adequate to support operations is a forward-looking  statement
that involves risks and uncertainties.

Recent Accounting Pronouncements

         In December 2003, the FASB issued Interpretation No. 46R ("FIN 46R"), a
revision to FIN 46,  "Consolidation  of  Variable  Interest  Entities".  FIN 46R
clarifies some of the provisions of FIN46 and exempts certain  entities from its
requirements. FIN 46R is effective at the end of the first interim period ending
after March 15, 2004.  Entities that have adopted FIN 46 prior to this effective
date can continue to apply the  provisions of FIN 46 until the effective date of
Fin 46R.  The  adoption  of FIN 46R did not have any effect on our  consolidated
financial statements.

         In March 2004,  the FASB issued EITF Issue No.  03-1,  "The  Meaning of
Other-Than-Temporary  Impairment  and Its  Application  to Certain  Investments"
("EITF  03-1") which  provides new guidance for assessing  impairment  losses on
debt and equity  investments.  Additionally,  EITF 03-1 includes new  disclosure
requirements  for  investments  that are deemed to be temporarily  impaired.  In
September  2004,  the FASB  delayed  the  accounting  provisions  of EITF  03-1;
however,  the disclosure  requirements remain effective and have been adopted by
the Company (see Note 6. Short-term investments).  The Company will evaluate the
effect, if any, of EITF 03-1 when final guidance is released.

         In November  2004,  the FASB issued  Statement of Financial  Accounting
Standards (SFAS) No. 151,  Inventory  Costs,  which clarifies the accounting for
abnormal amounts of idle facility expense,  freight,  handling costs, and wasted
material.  SFAS No. 151 will be effective for inventory  costs  incurred  during
fiscal years  beginning  after June 15, 2005.  We do not believe the adoption of
SFAS No. 151 will have a material impact on our financial statements.

         In December 2004, the FASB issued SFAS No. 123-R,  Share Based Payment,
which  requires  that the  compensation  cost  relating to  share-based  payment
transactions (including the cost of all employee stock options) be recognized in
the financial  statements.  The cost will be measured based on the estimate fair



                                       36
<PAGE>

value of the equity or liability  instruments  issued.  SFAS 123-R covers a wide
range  of  share-based   compensation   arrangement   including  share  options,
restricted share plans, performance-based awards, share appreciation rights, and
employee share purchase plans.

         Also,  in  December  2004,  the FASB  issued  SFAS 153,  "Exchanges  of
Nonmonetary  Assets,  an  amendment  of  APB  Opinion  No.  29,  Accounting  for
Nonmonetary  Transactions." The amendments made by SFAS No. 153 are based on the
principle that the exchange of  nonmonetary  assets should be measured using the
estimated fair market value of the assets exchanged. SFAS No. 153 eliminates the
narrow exception for nonmonetary  exchanges of similar  productive  assets,  and
replaces it with a broader exception for exchanges of nonmonetary  assets do not
have commercial substance.  A nonmonetary exchange has "commercial substance" if
the future cash flows of the entity are  expected to change  significantly  as a
result  of  the  transaction.  This  pronouncement  is  effective  for  monetary
exchanges in fiscal periods beginning after June 15, 2005.  Management  believes
the  adoption  of this  pronouncement  will not have a  material  effect  on our
consolidated financial statements.

         Other recent  accounting  pronouncements  issued by the FASB (including
its  Emerging  Issues  Task  Force),  the AICPA,  and the SEC did not or are not
believed by  management to have a material  impact on the  Company's  present or
future consolidated financial statements.


ITEM 7.  FINANCIAL STATEMENTS

         The consolidated  financial statements of China Digital Wireless,  Inc.
and its  subsidiaries  including  the notes  thereto,  together with the reports
thereon of  Grobstein,  Horwath & Company,  LLP and BDO  Shanghai  Zhonghua  are
presented beginning at page F-1.


ITEM  8.  CHANGES  IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
          FINANCIAL DISCLOSURE

         On January 4, 2005, we approved  resolutions to replace our independent
registered  public  accounting  firm,  BDO Shanghai  Zhonghua  Certified  Public
Accountant, with Grobstein, Horwath & Company, LLP, which we appointed effective
as of January 6, 2005.

         During June 2004, we completed a stock  exchange  transaction  with the
shareholders of Sifang Holdings Co. Ltd. ("Sifang") resulting in Sifang becoming
a wholly owned subsidiary of the Company.  This stock exchange  transaction also
resulted in a recapitalization  of the Company with Sifang becoming the survivor
of the  transaction  for  accounting  purposes.  BDO Shanghai  Zhonghua  audited
Sifang's  financial  statements for the fiscal years ended December 31, 2002 and
2003.  BDO  Shanghai  Zhonghua's  reports  for those  periods did not contain an
adverse  opinion or a disclaimer of opinion,  and were not qualified or modified
as to uncertainty, audit scope or accounting principles.

         During the  Company's  fiscal year ended  December 31, 2003,  for which
audit services were provided by BDO Shanghai  Zhonghua,  and through  January 6,
2005,  there were no disagreements  with BDO Shanghai  Zhonghua on any matter of
accounting principles or practices,  financial statement disclosure, or auditing
scope and procedures, which, if not resolved to the satisfaction of BDO Shanghai
Zhonghua,  would have caused  them to make  reference  to the subject  matter in
their report.

         Prior  to  Grobstein,   Horwath  &  Company  becoming  our  independent
registered  public  accounting  firm,  neither  we,  nor  anyone on our  behalf,
consulted with Grobstein,  Horwath & Company regarding either the application of
accounting  principles to a specific or contemplated  transaction or the type of
audit opinion that might be rendered on our financial statements.



                                       37
<PAGE>

ITEM 8A. CONTROLS AND PROCEDURES

         Prior to the  conclusion  of the  period  covered  by this  report,  we
carried out an evaluation,  under the supervision and with the  participation of
our  management,  including  our Chief  Executive  Officer  and Chief  Financial
Officer,  of the  effectiveness  of the design and  operation of our  disclosure
controls and procedures  pursuant to Exchange Act Rule  13(a)-14(c).  Based upon
that  evaluation,  our  Chief  Executive  Officer  and Chief  Financial  Officer
concluded  that our  disclosure  controls and procedures are effective in timely
alerting them to material information relating to us (including our consolidated
subsidiary) required to be included in our periodic SEC filings.

         Additionally,  there  were  no  significant  changes  in  our  internal
controls or in other  factors that could  significantly  affect  these  controls
subsequent  to the  Evaluation  Date.  We have not  identified  any  significant
deficiencies  or material  weaknesses  in our internal  controls,  and therefore
there were no corrective actions taken.


ITEM 8B. OTHER INFORMATION

          None.

                                    PART III


Item 9.  Directors and Executive Officers

         The following table provides  information about our executive  officers
and directors and their  respective ages and positions as of March 31, 2005. The
directors  listed  below will serve until the next  annual  meeting of the China
Digital stockholders:

    Name                 Age                           Title
--------------         -------        ------------------------------------------

Tai Caihua               48           Director, President, Chairman of the Board
Shi Ying                 45           Director
Huang Tianqi             33           Director, Chief Technology Officer
Jing Weiping             41           Director
Mao Ming                 43           Director
Song Jing                29           Director
Fu Sixing                44           Director, Chief Executive Officer
Yu Ruijie                42           Director
Zhang Xiaodong           37           Director
Huang Wei                42           Director
Qian Fang                46           Chief Financial Officer
Jiang Hong Ming                       Director
Jachen Li                             Director
Yuan Feng                             Director

         Tai  Caihua  has  served  as our  president,  chairman  of our board of
directors  and a member of our board of directors  since June 23, 2004.  Mr. Tai
has been (i) the  president  and sole  director of our wholly owned  subsidiary,
Sifang Holdings, since February 2004; (ii) chairman of the board of directors of
Sifang Holdings' wholly owned subsidiary,  TCH, since our inception in May 2004;
(iii)  director and general  manager of Shanghai  Tianci  Industry  (Group) Co.,
Ltd.,  one of our  affiliates,  since January 1994 and (iv) a director of Sifang
Information, one of our affiliates, since December 2001. Mr. Tai holds a Masters
of Business Administration from the Macau University of Science and Technology.

         Shi Ying has  served as a member of our board of  directors  since June
24, 2004.  Ms. Shi has been the head of operations  and a member of the board of
directors of TCH since our  inception in May 2004.  For the past eight years she
has headed the operations  department of Sifang  Information.  Ms. Shi graduated
from the Shanghai Sports College with a Bachelors degree.

         Huang Tianqi has served as our chief technology  officer since June 23,
2004 and a member of our board of directors  since June 24, 2004.  Mr. Huang has
served as chief technology officer of Sifang Holdings and vice-general  manager,
chief technology officer and a director of TCH since their inception in February
2004 and May 2004,  respectively.  Mr.  Huang  also  serves as the  vice-general
manager and a member of the board of  directors  of Sifang  Information.  Before
becoming  vice-general  manager,  Mr. Huang was the chief technology  officer at
Sifang  Information for seven years. Mr. Huang graduated from Nanjing University
of Posts and  Telecommunications  with a Bachelors Degree and from Shanghai Jiao
Tong University with a Masters of Science Degree.

         Jing  Weiping  has served as a member of our board of  directors  since
June 24, 2004.  Mr. Jing has served as a member of the board of directors of TCH
since our  inception in May 2004 and as a Director of Sifang  Information  since
2001. Mr. Jing has served as the manager of the technology  assurance department
of Sifang  Information for the past nine years.  Mr. Jing received his Bachelors
Degree from Dong Hua University.

         Mao Ming serves as a member of our board of  directors.  He was elected
to our board of directors June 24, 2004. He has been (i) the general manager and
a member of the board of directors of TCH since our  inception in May 2004;  and
(ii) the  general  manager and a director of Sifang  Information  since  January
1998.  Mr. Mao  graduated  from China PLA  Measurement  College with a Bachelors
Degree and from the Macau University of Science and Technology with a Masters of
Business Administration.

         Song Jing has served as a member of our board of  directors  since June
24, 2004. Mr. Song has served as vice-general  manager and a member of the board
of  directors of TCH since our  inception in May 2004 and as general  manager of
Shanghai Shan Tian  Telecommunication  Co.,  Ltd.,  an affiliate of ours,  since
November 2003.  Previously,  Mr. Song served as director and general  manager of
Shanghai Zhong Si Hua Hao Co., Ltd. for one year and assistant  general  manager
of both  Shanghai Hua Si Trading Co.,  Ltd. and Shanghai Qi Shi Trading Co., Ltd
for five years.

         Fu Sixing has served as our chief executive officer since June 23, 2004
and a member of our board of directors since June 24, 2004. Mr. Fu has served as
executive  manager  of  Sifang  Holdings  and as the  head of the  research  and
development  department and a director of TCH since their  inception in February
2004 and May 2004, respectively.  During the past seven years, Mr. Fu has served
as (i) the assistant to general manager of Shanghai Tianci Industry (Group) Co.,
Ltd.;  (ii) a  director  and the  general  manager  of  Shanghai  Sifang  Health
Technology Co., Ltd. and (iii) directorate secretary of Sifang Information.  Mr.
Fu received a Bachelors of Science in Physics from Nanjing University, a Masters
of Social Science in Economics from Huadong Normal University and a Doctorate of
Business Administration from the University of Southern California.

         Yu Ruijie has served as a member of our board of  directors  since June
24, 2004. Mr. Yu has served (i) as head of the Systems Department and a director
of TCH  since  our  inception  in May 2004  and (ii) as the head of the  Systems
Department of Sifang Information since January 1994. Mr. Yu received a Bachelors
Degree in Computer Science from Shanghai University of Engineering Science.

         Zhang  Xiaodong has served as a member of our board of directors  since
June 24,2004.  Mr. Zhang has served as the head of the projection  department of
TCH since our inception in May 2004. Mr. Zhang also serves as a director and the
head of the  projection  department  of  Sifang  Information.  For the past nine
years,  Mr. Zhang has served as head of the wireless  engineering  department at
Sifang Information.  Mr. Zhang graduated from Shanghai Jiao Tong University with
a Bachelors  Degree and received a Masters  Degree from the Macao  University of
Science and Technology.

         Huang Wei has served as a member of our board of  directors  since June
24, 2004. Mr. Huang has served as (i) the vice-general  manager of TCH since our
inception  in May 2004 and (ii)  vice-general  manager  and a director of Sifang
Information since 1993. Mr. Huang graduated from Nanjing University of Air Force
and Politics with a Bachelors Degree in Logistics.

         Qian Fang has served as our Chief  Financial  Officer  since January 1,
2005.  Ms. Fang has served as Manager of Accounting of TCH since 1999.  Ms. Fang
graduated from China Cable-TV  University with a Bachelors  Degree in Accounting
and is a Certified Public Accountant.

         Jiang Hong Ming has served as a member of our board of directors  and a
member of the audit  committee of the board of directors  since April 2005.  Mr.
Ming is a director of Shanghai Hua Cheng Certified Public Accountants.

         Yuan Feng has served as a member of our board of directors and a member
of the audit  committee of the board of directors  since April 2005. Mr. Feng is
the General Manager of Shanghai Guan Tong Telecommunication Technology Ltd.

         Jachen Li has served as a member of our board of directors and a member
of the audit  committee of the board of directors since April 2005. Mr. Li is an
executive with Beijing Mon Long Software Developing Ltd.

Family Relationships

         Except as set forth herein, there are no family relationships among our
directors or officers.  Mr. Tai Caihua,  President  and a member of our Board of
Directors is married to Ms. Shi Ying, a member of our Board of Directors and Ms.
Ying is also a sibling of Huang Wei, a member of our Board of Directors.

Section 16(a) Beneficial Ownership Compliance

         Section  16(a) of the  Securities  Exchange  Act of 1934  requires  our
officers,  directors and certain other stockholders to file reports of ownership
and changes in ownership with the Securities and Exchange Commission.  Officers,
directors and certain other  stockholders  are required by regulation to furnish
us with  copies  of all  Section  16(a)  forms  they  file.  To the  best of our
knowledge  (based  solely  upon a review of the Forms 3, 4 and 5 filed),  during
2004, no individual or entity was late with any Form 3, 4 or 5 filings.

Code of Ethics

         We have  adopted a  corporate  code of ethics.  We believe  our code of
ethics is reasonably designed to deter wrongdoing and promote honest and ethical
conduct; provide full, fair, accurate,  timely and understandable  disclosure in
public reports; comply with applicable laws; ensure prompt internal reporting of
code violations; and provide accountability for adherence to the code. A copy of
our corporate code of ethics is attached to this annual report.

Board Composition and Committees

         The board of  directors  is  currently  composed of  thirteen  members,
including Tai Caihua,  Song Jin, Shi Ying,  Mao Ming,  Fu Sixing,  Huang Tianqi,
Huang Wei, Jing Weiping, Yu Ruijie,  Zhang Xiaodong,  Jiang Hong Ming, Jachen Li
and Yuan Fong.  All Board  action  requires  the  approval  of a majority of the
directors in attendance at a meeting at which a quorum is present.

         We  currently  do  not  have  standing   nominating   or   compensation
committees.  We intend,  however, to establish d a compensation committee of the
board of directors as soon as  practicable.  We envision  that the  compensation
committee will be primarily  responsible  for reviewing and approving our salary
and benefits  policies  (including  stock  options),  including  compensation of
executive officers.  We established an audit committee of the board of directors
in April 2005.  The audit  committee is primarily  responsible  fo reviewing the
services  performed  by our  independent  auditors,  evaluating  our  accounting
policies and our system of internal controls. The charter of the audit committee
is an exhibit to this annual report.

ITEM 10.  EXECUTIVE COMPENSATION

         The  following   Summary   Compensation   Table  sets  forth  all  cash
compensation  paid to our chief executive  officer for services  rendered in all
capacities to the company during the noted periods.  No other executive officers
received  salary and bonus  compensation  in excess of $100,000  during the 2004
fiscal year.
<TABLE>
<CAPTION>
                           Summary Compensation Table

                                  Annual Compensation
                                  -------------------                      Securities
Name and Principal                                         All Other       Underlying
   Position              Year   Salary ($)   Bonus ($)  Compensation ($)    Options
---------------------    ----   ----------   ---------  ----------------   ----------
<S>                      <C>    <C>          <C>        <C>                <C>
Tai Caihua(1)            2004    $28,992                                       --
Timothy P. Halter (2)    2004      $-0-                                     131,722(4)
Chief Executive
Officer/Director
Glenn Little (3)         2004      $-0-                                        --
Chief Executive
Officer/Director
</TABLE>

(1)      Began service as Chief Executive  Officer and a director of the Company
         in June 2004. Reported salary information is as of August 31, 2004.
(2)      Appointed Chief  Executive  Officer in February 2004 and resigned as an
         officer and director of the Company in June 2004.
(3)      Resigned  as Chief  Executive  Officer and a director of the Company in
         March 2004.
(4)      Represents  131,722  shares of common stock  underlying  the  identical
         number of warrants  granted to Mr.  Halter on February 23, 2004,  which
         warrants were exercised in full on June 14, 2004.
                                       38
<PAGE>

ITEM 11.  SECURITY  OWNERSHIP OF CERTAIN  BENEFICIAL  OWNERS AND  MANAGEMENT AND
          RELATED STOCK HOLDER MATTERS

         The following  table sets forth,  as of March 31, 2005,  the number and
percentage  of our  17,018,692  outstanding  shares  of common  stock  that were
beneficially  owned by (i) each director and executive officer of China Digital,
(ii) each  person  known to China  Digital  to be the  beneficial  owner of five
percent or more of the outstanding shares of common stock of China Digital,  and
(iii) all directors and officers of China Digital as a group.  Unless  otherwise
indicated,  the person or entity listed in the table is the beneficial owner of,
and has sole voting and investment power with respect to, the shares indicated.

                                   Amount and Nature of Beneficial Ownership (1)
                                   ---------------------------------------------
                                     Number                      Percent of
Name and Address                   of Shares (2)                Voting Stock (3)
----------------                   -------------                ----------------
Tai Caihua (4)                       11,301,764                       66.4%
Shi Ying (5)                         11,301,764                       66.4%
Halter Financial Group, Inc. (6)      1,271,287                        7.5%
Chinamerica Fund, LP                    877,193                        5.2%
Mao Ming                                413,480                        2.4%
Song Jing                               413,480                        2.4%
Huang Tianqi                            275,652                        1.6%
Jing Weiping                            275,652                        1.6%
Fu Sixing                               275,652                        1.6%
Yu Ruijie                               275,652                        1.6%
Zhang Xiaodong                          275,652                        1.6%
Huang Wei                               275,652                        1.6%

Directors and executive officers     13,782,636                       81.0%
as a group (10 persons)

(1)      On March 31, 2005, there were 17,018,692 shares of China Digital common
         stock  outstanding.  Each person  named below has sole  investment  and
         voting  power with  respect to all shares of our common  stock shown as
         beneficially owned by the person, except as otherwise indicated below.
(2)      Under  applicable  rules   promulgated  by  the  SEC  pursuant  to  the
         Securities  Exchange Act of 1934,  as amended,  or the Exchange  Act, a
         person is deemed the  "beneficial  owner" of a security  with regard to
         which the person, directly or indirectly,  has or shares (a) the voting
         power,  which  includes  the power to vote or direct  the voting of the
         security,  or (b) the  investment  power,  which  includes the power to
         dispose  or  direct  the  disposition  of the  security,  in each  case
         irrespective of the person's economic  interest in the security.  Under
         these SEC  rules,  a person is deemed to  beneficially  own  securities
         which the person has the right to acquire  within 60 days  through  (x)
         the exercise of any option or warrant or (y) the  conversion of another
         security.
(3)      In  determining  the percent of our common  stock owned by a person (a)
         the numerator is the number of shares of our common stock  beneficially
         owned by the person, including shares the beneficial ownership of which
         may be acquired within 60 days upon the exercise of options or warrants
         or conversion of convertible securities, and (b) the denominator is the
         total of (i) the 17,018,692  shares of our common stock  outstanding on
         March 31, 2005 and (ii) any shares of our common stock which the person
         has the right to acquire within 60 days upon the exercise of options or
         warrants or conversion of convertible securities. Neither the numerator
         nor the  denominator  include  shares  which  may be  issued  upon  the
         exercise  of any other  options or warrants  or the  conversion  of any
         other convertible securities.
(4)      Includes  1,791,743  shares held by Mr. Tai's wife,  Shi Ying.  Mr. Tai
         disclaims beneficial ownership of those shares.
(5)      Includes  9,510,021 shares held by Ms. Shi's husband,  Tai Caihua.  Ms.
         Shi disclaims beneficial ownership of those shares.
(6)      Includes  116,720  shares held by Timothy P. Halter,  the president and
         sole stockholder of Halter Financial Group, Inc.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         During the 2004 fiscal year,  TCH  purchased  local brand mobile phones
from Shanghai Sifang  Telecommunication  Co. Ltd.  ("Sifang  Telecom") valued at
$390,340, and all these mobile phones were sold to retailers in 2004.

         During the 2004 fiscal year,  TCH sold Samsung GSM mobile phones valued
at  $9,178,674  at a 4% gross  profit  margin to Shantian.  Accounts  receivable
include $1,583,512 due from Shantian. During the 2004 fiscal year, TCH also sold
mobile phones to other related parties, which included Tianci Industy and Tianci
Group  for  $136,310  and  $576,707  at  gross  profit  margins  of 17%  and 16%
respectively.

         On July 16,  2004,  the Tianci Group  entered into an agency  agreement
with TCH to sell CDMA mobile phones owned by China Unicom.  TCH obtains the same
commission  structure that Tianci Group earns from China Unicom.  For each phone
sold, TCH receives $15.70 per unit,  sales commission of $3.62 per SIM card. TCH
recognized  commission  income of $204,214 in the year ended  December  31, 2004
from the Tianci Group, which is recorded in service revenues,  net on the income
statement.

         In accordance with terms contained in signed service agreements between
TCH and Sifang  Information  giving  TCH the right to use  Sifang  Information's
facility (which may not be owned by foreign  investors at the present time under
Chinese law) to transmit  the  reformatted  information  we paid service fees of
approximately  $567,000 in each of the 2003 and 2004 fiscal  years.  The service
agreements are in effect for ten years and became effective on June 1, 2004. The
annual  payments for the services  should  continue to approximate  $567,000 per
year.  During the 2004 fiscal  year,  Sifang  Information  also  provided  other
management  support and  marketing  services to TCH for $36,462 and none for the
year ended December 31, 2003.  TCH earned  information  service  revenues net of
costs from China  Mobile / China  Unicom  that were passed  through  from Sifang
Information and are recorded in Service  revenue,  net on the income  statement.
For the 2004 fiscal year, the total  revenues  generated were $846,416 and total
cost of services  were  $421,476 and none for the 2003 fiscal  year.  TCH earned
paging  service  revenues  net of costs that were  passed  through  from  Sifang
Information and are recorded in Service  revenue,  net on the income  statement.
For the 2004 fiscal year, the total  revenues  generated were $964,869 and total
cost of services  were  $533,199 and none for the year ended  December 31, 2003.
TCH  launched a smart card  project as a joint  cooperation  project with Sifang
Information  in June 2004.  However,  the  project was  abandoned  in the fourth
quarter of 2004 due to government regulations. No revenue was generated from the
project in 2004.

         Sifang  signed a lease  agreement  with Tianci Real Estate to lease its
apartment  for office  use,  which was assumed by TCH as a part of the carve out
transaction. The original lease term was from May 1, 2003 to April 30, 2008. The
lease agreement was terminated on September 30, 2004. The related rental expense
for the  years  ended  December  31,  2003  and 2004 was  $20,540  and  $30,810,
respectively.

         As a result of the spin-off transaction,  cash collections received and
payments made Sifang  Information on behalf of TCH, resulted in a net receivable
of $2,910,956  due from Sifang  Information at December 31, 2004. The amount due
from  related  party also  consists  of  $501,000  relating  to the value  added
information services provided to Sifang Information and sold to China Unicom and
another  $371,000  relating to the paging  revenues that are collected by Sifang
Information  on behalf of TCH. In the first  quarter of 2005,  TCH has collected
$3.2 million from Sifang  Information  subsequent  to March 31, 2005. We believe
that the collection of the remaining balance of $582,956 from Sifang Information
is  reasonably  assured and  accordingly,  no allowance  has been recorded as of
December 31, 2004. We also advanced US$1,205,000 to provide Sifang Information's
needs for working capital in order to complete  spin-off  procedures in the PRC.
The outstanding balance was fully collected in March 2005.

         On February 23, 2004, we sold 987,915 shares of restricted common stock
for gross proceeds of $300,000,  pursuant to a subscription agreement, to Halter
Financial Group,  Inc., an entity owned by Timothy P. Halter, a former member of
the  Board of  Directors  and the  Company's  former  Chief  Executive  Officer.
Additionally,  in consideration for agreeing to serve as an officer and director
of the  Company,  Timothy P.  Halter was  granted a warrant  to  purchase  up to
131,722 shares of common stock of the Company. The warrant was exercised on June
14, 2004, and we received gross proceeds of $40,000 upon exercise.

         On February  23, 2004,  we agreed to pay Little and Company  Investment
Securities,  an  entity  owned  by  Glenn  A.  Little,  our  former  controlling
stockholder,  officer and director,  $30,000 in  consulting  fees related to the
transaction  discussed  in  the  previous  paragraph  and in  consideration  for
maintaining  the corporate  entity.  To formalize this  obligation,  we issued a
$30,000  non-interest  bearing  promissory  note  maturing on February 23, 2005.
Concurrent  with the  transaction  discussed in the previous  paragraph,  we and
Little and Company Investment  Securities executed an Exchange Agreement whereby
we issued  98,792  shares of common  stock in  satisfaction  of the  outstanding
promissory note.

         On June 23,  2004,  we entered  into a Stock  Purchase  Agreement  with
Halter Financial Group,  Inc. pursuant to which we sold 166,667 shares of common
stock of the Company in  exchange  for  $190,000.  Timothy P. Halter is the sole
stockholder and President of Halter Financial Group,  Inc. Pursuant to the Stock
Purchase  Agreement,  we granted to Halter  Financial  Group,  Inc. an option to
require  the Company to  purchase  up to 166,667  shares of common  stock of the
Company at a price of $1.14 per share, such option being exercisable at any time
after  the date  that is six  months  after  the  Company  filed a  registration
statement on Form SB-2 with the SEC, (which registration  statement was declared
effective  on  February  8, 2005)  registering  the shares  purchased  by Halter
Financial Group, Inc., up to and including the earlier of (i) the date that such
registration statement is declared effective by the SEC or (ii) Halter Financial
Group, Inc.'s shares are eligible for resale under Rule 144 under the Securities
Act of 1933.

ITEM 13. EXHIBITS


         Exhibit
         Number            Description

           3.1*            Articles of Incorporation of the Registrant.

           3.2**           Second Amended and Restated Bylaws of the Registrant.

           4.1****         Common Stock Specimen.

          10.1**           Securities  Exchange  Agreement by and among  Boulder
                           Acquisitions, Inc., Sifang Holdings Co., Ltd. and the
                           stockholders  of  Sifang  Holdings  Co.,  Ltd.  dated
                           effective as of June 23, 2004.

          10.2***          Information Service and Cooperation  Agreement by and
                           among Shanghai Sifang Information Technology Co. Ltd.
                           and Shanghai TCH Data Technology Co. Ltd. dated as of
                           June 1, 2004.

          10.3***          Information Service and Cooperation  Agreement by and
                           among Shanghai Sifang Information Technology Co. Ltd.
                           and Shanghai TCH Data Technology Co. Ltd. dated as of
                           June 1, 2004.

          10.4***          Information Service and Cooperation  Agreement by and
                           among  Shanghai  Sifang  Information  Technology  Co.
                           Ltd.,   Shanghai  Chengao  Industrial  Co.  Ltd.  and
                           Shanghai  TCH Data  Technology  Co. Ltd.  dated as of
                           June 1, 2004.

          10.5***          Information Service and Cooperation  Agreement by and
                           among Shanghai Tianci  Industrial  (Group),  Co. Ltd.
                           and Shanghai TCH Data Technology Co. Ltd. dated as of
                           June 1, 2004.

          10.6***          Business  and  Related  Assets   Transfer   Agreement
                           between  Shanghai Sifang  Information  Technology Co.
                           Ltd. and Shanghai TCH Data  Technology Co. Ltd. dated
                           as of May 26, 2004.

          10.7**           Stock  Purchase   Agreement  by  and  between  Halter
                           Financial Group, Inc. and Boulder Acquisitions,  Inc.
                           dated as of June 23, 2004.

          10.8**           Stock Purchase  Agreement by and between  Chinamerica
                           Fund, LP and Boulder  Acquisitions,  Inc. dated as of
                           June 28, 2004.

          10.9**           Stock Purchase  Agreement by and between  Chinamerica
                           Acquisition, LLC and Boulder Acquisitions, Inc. dated
                           as of June 28, 2004.

          10.10**          Stock  Purchase  Agreement  by and between Gary Evans
                           and Boulder  Acquisitions,  Inc. dated as of June 28,
                           2004.

          14.0             Code of Ethics

          21.1****         Subsidiaries of the Registrant.



                                       39
<PAGE>

         Exhibit
         Number            Description

          24.1****         Power of Attorney  Reference  is made to page II-5 of
                           the Registration Statement.

          31.1             Chief  Executive  Officer   Certification   furnished
                           pursuant to Section 302 of the  Sarbanes-Oxley Act of
                           2002

          31.2             Chief  Financial  Officer   Certification   furnished
                           pursuant to Section 302 of the  Sarbanes-Oxley Act of
                           2002

          32.1             Chief  Executive  Officer   Certification   furnished
                           pursuant to Section 906 of the  Sarbanes-Oxley Act of
                           2002

          32.2             Chief  Financial  Officer   Certification   furnished
                           pursuant to Section 906 of the  Sarbanes-Oxley Act of
                           2002

          99.1             Audit Committee Charter
-----------------------------------------
*        Previously  filed as an exhibit to the  Registrant's  Annual  Report on
         Form  10-KSB for the fiscal year ended  December  31,  2001,  which was
         filed  with  the   Commission  on  January  28,  2002,   and  which  is
         incorporated herein by reference.
**       Previously  filed as an exhibit to the  Registrant's  Current Report on
         Form 8-K  dated  July 8,  2004,  and  which is  incorporated  herein by
         reference.
***      Previously filed as an exhibit to the Registrant's  Quarterly Report on
         Form  10-QSB  for the  period  ended  June 30,  2004 as filed  with the
         Commission  on August 23,  2004,  and which is  incorporated  herein by
         reference.
****     Previously  filed  as  an  exhibit  to  the  Registrant's  Registration
         Statement  on Form SB-2 as filed with the  Commission  on November  12,
         2004, and which is incorporated herein by reference.


ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES


Board Meetings

         Our board of  directors  held six meetings in 2004.  During  2004,  all
directors  attended  at  least  75  percent  of the  meetings  of our  board  of
directors.  We did not have any committees of the board of directors established
in 2004.

Committees

         The board of directors has a standing audit committee. We do not have a
standing  nominating  or  compensation  committee.  Instead,  the whole board of
directors  performs the functions of a nominating  committee and participates in
the  consideration  of  director  nominees,  as  well  as  the  functions  of  a
compensation  committee  and  participates  in the  determination  of  executive
compensation.  We do not have a  nominating  committee  because we feel that the
entire board of Directors can best perform this function. We plan to establish a
compensation  committee  as  soon  as  practicable.  The  members  of the  audit
committee and the functions performed thereby are described below:

         Audit  Committee.  The audit committee is currently  comprised of three
independent  members.  At least one member of the audit committee is a financial
expert,  as that term is defined for  purposes of the American  Stock  Exchange,
Inc. Listed Company Manual.  The members of the audit committee are as follows :
Jiang Hong Ming (Financial Expert), Jachen Li and Yuan Feng. The audit committee
reviews and recommends to the directors the independent  auditors to be selected
to audit the  financial  statements of the Company;  meets with the  independent
auditors  and  financial  management  of the  Company to review the scope of the
proposed audit procedures to be utilized; reviews with the independent auditors,
the Company's  internal  auditor,  and financial and accounting  personnel,  the
internal  accounting  and  financial  controls of the  company,  and elicits any
recommendations for the improvement thereof; reviews the financial statements of
the  Company  and  reports  the  results  of the  annual  audit to the  board of
directors.  The audit committee was established in the first quarter of 2005 and
held one meeting in April 2005.

         The board of directors  has adopted a charter for the audit  committee,
which is  included  as an exhibit to this  annual  report.  The audit  committee
charter provides that the audit committee will conduct  quarterly  meetings with
management  and the  auditors  of the  Company to review  operating  results and
financial reporting issues.

         Our Bylaws provide that the board of directors should meet annually for
the election of the Company's officers and hold regular meetings.

             REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS

         The  audit  committee  serves  as the  representative  of the  board of
directors  for general  oversight of our  financial  accounting  and  reporting,
systems of internal  control,  audit process,  and compliance  with standards of
business  conduct.  The board of  directors  has adopted a charter for the audit
committee, which can be found in Appendix A to this Proxy Statement.  Management
of the Company has primary  responsibility for preparing financial statements of
the Company as well as the Company's  financial  reporting  process.  Grobstein,
Horwath & Company,  LLP,  acting as independent  auditors,  is  responsible  for
expressing  an opinion on the  conformity  of the  Company's  audited  financial
statements with generally accepted accounting principles.

         In this context, the audit committee hereby reports as follows:

         (1)  The  audit  committee  has  reviewed  and  discussed  the  audited
financial statements for the 2004 fiscal year with the Company's management.

         (2) The audit committee has discussed with the independent auditors the
matters  required to be discussed by  Statement  on Auditing  Standards  No. 61,
Communications with audit committees.

         (3) The audit  committee has received the written  disclosures  and the
letter from the independent  auditors  required by Independence  Standards Board
No. 1, Independence  Discussions with audit  committees,  and has discussed with
Grobstein, Horwath & Company, LLP the matter of that firm's independence.

         (4) Based on the review and  discussion  referred to in paragraphs  (1)
through (3) above, the audit committee  recommended to the board of directors of
the Company, and the board of directors has approved, that the audited financial
statements  be included in the  Company's  Annual  Report on Form 10-KSB for the
2004  fiscal  year,  for filing with the  Securities  and  Exchange  Commission.
Biographical  information  on each  member of the audit  committee  is set forth
above.

                                 Audit Committee
                                 ---------------

                                 Jiang Hong Ming
                                 Jachen Li
                                 Yuan Feng


Fees Paid to Independent Public Accountants for 2004 and 2003

Audit Fees

         The  aggregate  audit fees for 2004 were  approximately  $160,695.  The
amounts include fees of approximately $56,483 for professional services rendered
by  Grobstein,  Horwath  &  Company,  LLP in  connection  with the  audit of our
consolidated financial statements as of and for the 2004 fiscal year and fees of
approximately  $110,212  for  professional  services  rendered  by BDO  Shanghai
Zhonghua  in  connection  with  reviews of our  unaudited  consolidated  interim
financial statements for the third quarter of 2004.

         The  aggregate  audit fees for 2003 were  approximately  $149,509.  The
amounts include fees for professional services rendered by BDO Shanghai Zhonghua
in connection with the audit of our  consolidated  financial  statements for the
2003 fiscal year and reviews of our  unaudited  consolidated  interim  financial
statements for the first, second and third quarters of 2003.

Audit-Related Fees

         There  were no  audit-related  fees  billed  by  Grobstein,  Horwath  &
Company, LLP or BDO Shanghai Zhonghua for other services rendered to the Company
for the 2003 or 2004 fiscal years.

Tax Fees

         There  were no fees for tax  services  billed by  Grobstein,  Horwath &
Company, LLP or BDO Shanghai Zhonghua for other services rendered to the Company
for the 2003 or 2004 fiscal years.

All Other Fees

         There were no additional aggregate fees billed by Grobstein,  Horwath &
Company,  LLP and BDO  Shanghai  Zhonghua  for other  services  rendered  to the
Company for the 2003 or 2004 fiscal years.

Policy  on audit  committee  Pre-Approval  of Audit  and  Permissible  Non-Audit
Services of Independent Auditors

         The audit  committee  pre-approves  all audit  and  non-audit  services
provided by the independent  auditors prior to the engagement of the independent
auditors with respect to such services.  The Company's  independent auditors may
be engaged to provide  non-audit  services  only after the audit  committee  has
first  considered  the proposed  engagement  and has determined in each instance
that the proposed services are not prohibited by applicable  regulations and the
auditors'  independence  will not be  materially  impaired as a result of having
provided these services. In making this determination, the audit committee takes
into consideration whether a reasonable investor, knowing all relevant facts and
circumstances,  would  conclude  that the  auditors'  exercise of objective  and
impartial  judgment on all issues  encompassed  within the auditors'  engagement
would be  materially  impaired.  The audit  committee  may delegate its approval
authority to pre-approve services provided by the independent auditors to one or
more of the members of the audit committee, provided that any such approvals are
presented to the audit committee at its next scheduled meeting.


                                       40
<PAGE>

                                   SIGNATURES

         In  accordance  with  Section  13 or 15(d)  of the  Exchange  Act,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned, thereunto duly authorized.

By:  /s/ Tai Caihua                                         Date: April 29, 2005
   ------------------------------------------------
   Tai Caihua, President and Chairman of the Board

By:  /s/ Qian Fang                                          Date: April 29, 2005
   ------------------------------------------------
   Qian Fang, Chief Financial Officer

         In accordance with the requirements of the Securities Act of 1933, this
registration  statement  has  been  signed  by  the  following  persons  in  the
capacities and on the date stated.


By:                      *                                  Date: April 29, 2005
   ------------------------------------------------
    Tai Caihua, Director


By:                      *                                  Date: April 29, 2005
   ------------------------------------------------
   Shi Ying, Director

By:                      *                                  Date: April 29, 2005
   ------------------------------------------------
  Huang Tianqi, Director

By:                      *                                  Date: April 29, 2005
   ------------------------------------------------
   Jing Weiping, Director

By:                      *                                  Date: April 29, 2005
   ------------------------------------------------
   Mao Ming, Director

By:                      *                                  Date: April 29, 2005
   ------------------------------------------------
   Song Jing, Director

By:                      *                                  Date: April 29, 2005
   ------------------------------------------------
   Fu Sixing, Director

By:                      *                                  Date: April 29, 2005
   ------------------------------------------------
   Yu Ruijie, Director

By:                      *                                  Date: April 29, 2005
   ------------------------------------------------
   Zhang Xiaodong, Director

By:                      *                                  Date: April 29, 2005
   ------------------------------------------------
   Huang Wei, Director

By:                                                         Date:
   ------------------------------------------------
   Jiang Hong Ming, Director

By:                                                         Date:
   ------------------------------------------------
   Jachen Li, Director

By:                                                         Date:
   ------------------------------------------------
   Yuan Feng, Director


*By:  /s/ Tai Caihua                                        Date: April 29, 2005
   ------------------------------------------------
   Tai Caihua, As Attorney-in-fact








                                       41
<PAGE>

                REPORT OF INDEPENDENT REGISTERED ACCOUNTING FIRM


To the Shareholders and Board of Directors
China Digital Wireless, Inc. and Subsidiary

We have audited the  accompanying  consolidated  balance  sheet of China Digital
Wireless,  Inc. and Subsidiary  (the  "Company") as of December 31, 2004 and the
related   consolidated   statements   of  income   and   comprehensive   income,
shareholders'  equity and cash flows for the year then ended. These consolidated
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is  to  express  an  opinion  on  these  consolidated  financial
statements based on our audit.

We conducted  our audit in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and  perform  the  audit  to  obtain  reasonable  assurance  about  whether  the
consolidated financial statements are free of material misstatement. The Company
is not  required  to  have,  nor were we  engaged  to  perform,  an audit of its
internal controls over financial reporting.  Our audit included consideration of
internal  controls  over  financial  reporting  as a basis for  designing  audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the  effectiveness  of the Company's  internal  control
over  financial  reporting.  Accordingly  we express no such  opinion.  An audit
includes  examining,  on a test  basis,  evidence  supporting  the  amounts  and
disclosures in the  consolidated  financial  statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall consolidated  financial statement
presentation.  We believe  that our audit  provides a  reasonable  basis for our
opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material respects,  the consolidated  financial position of China
Digital  Wireless,  Inc.  and  Subsidiary  as of  December  31,  2004,  and  the
consolidated  results of their operations and cash flows for the year then ended
in conformity with accounting principles generally accepted in the United States
of America.

GROBSTEIN, HORWATH & COMPANY LLP

Sherman Oaks, California
March 14, 2005



<PAGE>


                     [LETTERHEAD OF BDO SHANGHAI ZHONGHUA]

             Report of Independent Registered Public Accounting Firm




The Board of Directors
China Digital Wireless, Inc. (formerly, Sifang Holdings Co. Ltd.)

We have audited the  accompanying  consolidated  balance sheets of China Digital
Wireless, Inc. (formerly,  Sifang Holdings Co. Ltd.) as of December 31, 2003 and
the  related  consolidated   statements  of  income  and  comprehensive  income,
stockholders'  equity and cash flows for the year then  ended.  These  financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audit.

We conducted  our audit in accordance  with the standards of the Public  Company
Accounting  Oversight  Board in the United  States of America.  Those  standards
require that we plan and perform the audit to obtain reasonable  assurance about
whether the financial  statements are free of material  misstatements.  An audit
includes  examining,  on a test  basis.  evidence  supporting  the  amounts  and
disclosures in the financial  statements.  An audit also includes  assessing the
accounting principles used and significant estimates made by management. as well
as evaluating the overall financial statement presentation.  We believe that our
audit provide a reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly,  in all  material  respects,  the  financial  position of China  Digital
Wireless, Inc (formerly,  Sifang Holdings Co. Ltd.), as of December 31, 2003 and
the results of its  operations  and its cash flows for the year then  ended,  in
conformity with accounting principles generally accepted in the United States of
America.







                                                     /s/ BDO Shanghai Zhonghua
                                                    BDO Shanghai Zhonghua
                                                    Certified Public Accountants





Shanghai, PRC
June 1, 2004


                                      F-1
<PAGE>
<TABLE>
<CAPTION>

                   CHINA DIGITAL WIRELESS, INC. AND SUBSIDIARY

                          CONSOLIDATED BALANCE SHEETS

                                                          December 31,   December 31,
                                                              2003           2004
                                                          ------------   ------------
<S>                                                       <C>            <C>
ASSETS

Current assets:
   Cash and cash equivalents                              $  1,713,748   $     75,511
   Accounts receivable, net of allowance for doubtful
     accounts  of $25,651 and $47,922                        2,363,327      4,619,809
   Inventories                                               1,591,223        101,696
   Deferred tax assets                                           4,955         28,772
   Common stock proceeds held in escrow                              0      1,500,000
   Amounts due from a related party                               --        4,987,956
   Deposits paid                                               245,268           --
   Other current assets                                        175,850        150,412
                                                          ------------   ------------
Total current assets                                         6,094,371     11,464,156
                                                          ------------   ------------

Property and equipment, net                                  1,354,238      1,198,509
                                                          ------------   ------------

Total assets                                              $  7,448,609   $ 12,662,665
                                                          ============   ============
LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
   Accounts payable                                       $    111,569   $     55,839
   Deferred revenue                                            537,046        617,694
   VAT payable                                                       0        213,535
   Income tax payable                                                0        312,763
   Due to related parties                                       20,540        100,260
   Other current liabilities                                    95,790        287,025
                                                          ------------   ------------

Total current liabilities                                      764,945      1,587,116
                                                          ------------   ------------


Shareholders' equity:
   Common stock - $0.001 par value, 100,000 000 shares
      authorized, 17,018,692 (2003 - 13,782,636) shares
      issued and outstanding                                    13,783         17,019
   Additional paid-in capital                                1,436,217      4,229,974
   Retained earnings                                         5,233,652      6,828,281
   Accumulated other comprehensive income                           12            275
                                                          ------------   ------------

Total shareholders' equity                                   6,683,664     11,075,549
                                                          ------------   ------------

Total liabilities and shareholders' equity                $  7,448,609   $ 12,662,665
                                                          ============   ============
</TABLE>


           See accompanying notes to consolidated financial statements

                                      F-2


<PAGE>
<TABLE>
<CAPTION>

                   CHINA DIGITAL WIRELESS, INC. AND SUBSIDIARY

                        CONSOLIDATED STATEMENTS OF INCOME
                            AND COMPREHENSIVE INCOME

                                                        Years Ended December 31,
                                                      ----------------------------
                                                          2003            2004
                                                      ------------    ------------
<S>                                                   <C>             <C>
Revenues:
   Product sales                                      $ 13,529,279    $ 11,057,398
   Product sales to related parties                              0       9,891,691
   Service revenue, net                                  3,503,099       3,571,861
                                                      ------------    ------------

Total revenues                                          17,032,378      24,520,950
                                                      ------------    ------------

Cost of goods sold                                      12,424,454      10,196,443
Cost of goods sold to related parties                            0       9,412,389
Cost of service                                          1,016,318       1,045,993
                                                      ------------    ------------
Total cost of goods sold                                13,440,772      20,654,825
                                                      ------------    ------------

Gross profit                                             3,591,606       3,866,125
                                                      ------------    ------------

Operating expenses:
   Sales and marketing                                     153,437         246,639
   General and administrative                              291,413       1,656,841
                                                      ------------    ------------

Total operating expenses                                   444,850       1,903,480
                                                      ------------    ------------

Income from operations                                   3,146,756       1,962,645

Interest income (expense)                                  (12,082)          1,955
                                                      ------------    ------------

Income before income taxes                               3,134,674       1,964,600

Income tax provision                                       246,694         369,971
                                                      ------------    ------------

Net income                                            $  2,887,980    $  1,594,629
                                                      ============    ============

Other comprehensive income
   Translation adjustments                            $        381    $        263

Comprehensive income                                  $  2,888,361    $  1,594,892
                                                      ============    ============

Basic earnings (loss) per share                       $       0.21    $       0.10

Weighted average shares of common stock outstanding     13,782,636      15,458,000
</TABLE>




          See accompanying notes to consolidated financial statements.

                                      F-3
<PAGE>
<TABLE>
<CAPTION>

                   CHINA DIGITAL WIRELESS, INC. AND SUBSIDIARY

                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                      (In U.S. dollars, except share data)

                                                                  Additional                         Other            Total
                                          Common Stock              Paid-in          Retained     Comprehensive    Shareholders'
                                     Shares          Amount         Capital          Earnings     Income (Loss)       Equity
                                 -------------   -------------   -------------    -------------   -------------    -------------
<S>                              <C>             <C>             <C>              <C>             <C>              <C>
Balance at December 31, 2002        13,782,636   $      13,783   $   1,436,217    $   2,345,672   $        (369)   $   3,795,303

Net income                                --              --              --          2,887,980            --          2,887,980

Translation adjustment                    --              --              --               --               381              381
                                 -------------   -------------   -------------    -------------   -------------    -------------

Balance at December 31, 2003        13,782,636          13,783       1,436,217        5,233,652              12        6,683,664

Recapitalization and
reorganization                       1,585,705           1,586         308,465             --              --            310,051

Shares issued for consulting
service                                167,895             168         604,254             --              --            604,422

Shares issued for proceeds of
$190,000                               166,667             167         599,834             --               --           600,001

Shares issued for net proceeds
of $1.5 million                      1,315,789           1,315       1,498,685             --              --          1,500,000

Offset by issuing cost                    --              --          (217,481)            --              --           (217,481)

Net income                                --              --              --          1,594,629            --          1,594,629

Translation adjustment                    --              --              --               --               263              263
                                 -------------   -------------   -------------    -------------   -------------    -------------

Balance at December 31, 2004        17,018,692   $      17,019   $   4,229,974    $   6,828,281   $         275    $  11,075,549
                                 =============   =============   =============    =============   =============    =============
</TABLE>






          See accompanying notes to consolidated financial statements.
                                      F-4


<PAGE>
<TABLE>
<CAPTION>

                   CHINA DIGITAL WIRELESS, INC. AND SUBSIDIARY

                      CONSOLIDATED STATEMENTS OF CASH FLOWS


                                                                    Years Ended December 31,
                                                                   --------------------------
                                                                       2003           2004
                                                                   -----------    -----------
<S>                                                                <C>            <C>
Cash flows from operating activities:
   Net income                                                      $ 2,887,980    $ 1,594,629
   Adjustments to reconcile net income to net cash
     provided by (used in) operating activities:
        Depreciation                                                   234,055        287,232
        Bad debt expenses                                                    0         19,764
        Issuance of common stock to consultants for services                 0      1,014,423
        Loss on disposal of fixed assets                                 5,361            652
        Deferred tax assets                                                601        (23,817)
        Changes in assets and liabilities:
           Accounts receivable                                      (1,790,616)    (2,276,245)
           Inventories                                                (422,000)     1,489,527
           Amounts due from a related party                                  0     (4,742,688)
           Deposits paid                                              (245,268)             0
           Other current assets                                         62,522         25,438
           Accounts payable                                            111,569        (55,730)
           Deferred revenue                                            493,116         80,648
           Income tax payable                                                0        312,763
           Due to related parties                                       20,540         79,720
           Other current liabilities                                    25,737        404,769
                                                                   -----------    -----------

Net cash provided by (used in) operating activities                  1,383,597     (1,788,915)
                                                                   -----------    -----------

Cash flows from investing activities:
   Purchase of property and equipment                                 (259,858)      (132,155)
                                                                   -----------    -----------
Net cash  used in investing activities                                (259,858)      (132,155)
                                                                   -----------    -----------

Cash flows from financing activities:

   Recapitalization and reorganization                                       0        310,051
   Proceeds from issuing common stock                                        0      1,690,000
   Common stock proceeds held in escrow                                      0     (1,500,000)
   Issuing cost                                                              0       (217,481)
   Due to a related party                                             (604,062)             0
                                                                   -----------    -----------

Net cash provided by financing activities                             (604,062)       282,570
                                                                   -----------    -----------

Foreign currency translation                                               381            263
                                                                   -----------    -----------

Net increase (decrease) in cash and cash equivalents                   520,058     (1,638,237)

Cash and cash equivalents, beginning of the period                   1,193,690      1,713,748
                                                                   -----------    -----------

Cash and cash equivalents, end of the period                       $ 1,713,748    $    75,511
                                                                   ===========    ===========
Supplemental disclosure of cash flow information:
   Cash paid during the year for:
        Interest                                                   $    12,082    $         0

        Income taxes                                               $   246,093    $    76,339

 Non-cash financing activity:

 Issuance of common stock to consultants for consulting services   $         0    $ 1,014,423
                                                                   ===========    ===========
</TABLE>


          See accompanying notes to consolidated financial statements.

                                      F-5
<PAGE>

                   CHINA DIGITAL WIRELESS, INC. AND SUBSIDIARY
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1 - ORGANIZATION AND BUSINESS BACKGROUND

China Digital  Wireless,  Inc. ("CDW,"  formerly known as Boulder  Acquisitions,
Inc.) through its subsidiary sells mobile phones to retailers, distributors, and
related parties and provides  information services to users of mobile phones and
pagers.  Substantially  all  operations  are  conducted  in  Shanghai,  People's
Republic of China (PRC).

In order to meet  ownership  requirements  under  Chinese  law that  restrict  a
foreign  company,  from  operating  in certain  industries  such as  value-added
telecommunication  and  Internet  services,  CDW's  subsidiary  has entered into
information service and cooperation agreements with two of CDW's affiliates that
are  incorporated in China:  Shanghai SFT Co. Ltd.  ("Sifang  Information")  and
Shanghai  Tianci  Industry Co. Ltd ("Tianci  Industry").  CDW holds no ownership
interest in Sifang Information or Tianci Industry. Sifang Information and Tianci
Industry contract with China Mobile Communications Corporation, or China Mobile,
and China United Telecommunications  Corporation, or China Unicom, respectively,
to provide  wireless  value-added  information  services  to  wireless  receiver
customers  in China  via  China  Mobile  and China  Unicom.  Sifang  Information
transmits those services to customers of China Mobile and China Unicom on behalf
of itself and Tianci  Industry  pursuant to a signed  agreement  between  Sifang
Information and Tianci Industry.

Recapitalization and Reorganization

On June 23, 2004, Boulder Acquisitions,  Inc. ("Boulder  Acquisitions")  entered
into  a  stock  exchange  agreement  with  Sifang  Holdings  Co.  Ltd.  ("Sifang
Holdings") and certain  shareholders.  Pursuant to the stock exchange agreement,
Boulder  Acquisitions  issued  13,782,636 shares of its common stock in exchange
for a 100% equity interest in Sifang  Holdings,  making Sifang Holdings a wholly
owned subsidiary of Boulder Acquisitions.

Boulder Acquisitions was incorporated under the laws of the State of Colorado on
May 8, 1980 as Boulder Brewing Company ("Boulder Brewing").  Boulder Brewing was
the  successor  to a  general  partnership  formed  in 1979.  From  the  initial
inception of the original  partnership  through 1990, Boulder Brewing was in the
business of operating a  microbrewery  in Boulder,  Colorado.  During 1990, as a
result of various debt defaults,  Boulder  Brewing's assets were foreclosed upon
and all business operations were ceased.  Boulder Brewing has effectively had no
operations, assets or liabilities since its fiscal year ended December 31, 1990.

In September  2001,  Boulder  Brewing  changed its state of  incorporation  from
Colorado to Nevada by means of a merger with and into  Boulder  Acquisitions,  a
Nevada  corporation  formed on  September  6, 2001  solely  for the  purpose  of
effecting the  reincorporation.  The Articles of Incorporation and Bylaws of the
Nevada corporation are the Articles of Incorporation and Bylaws of the surviving
corporation. Such Articles of Incorporation eliminated the provision for Boulder
Acquisitions to issue preferred stock.

The above stock exchange  transaction  resulted in those  shareholders of Sifang
Holdings obtaining a majority voting interest in Boulder Acquisitions. Generally
accepted accounting  principles in the United States of America require that the
company whose  shareholders  retain the majority interest in a combined business
be treated as the  acquirer for  accounting  purposes.  Consequently,  the stock
exchange  transaction  has been  accounted for as a  recapitalization  of Sifang
Holdings as Sifang  Holdings  acquired a controlling  equity interest in Boulder
Acquisitions,  as of June 23, 2004. The reverse acquisition process utilizes the
capital  structure of Boulder  Acquisitions  and the assets and  liabilities  of
Sifang Holdings recorded at historical cost.

Sifang  Holdings is the  continuing  operating  entity for  financial  reporting
purposes,  and the financial  statements prior to June 23, 2004 represent Sifang
Holdings'  financial  position and results of  operations.  As of June 23, 2004,
Boulder  Acquisitions  had only cash of $310,051,  and  shareholders'  equity of
$310,051 with 1,585,705  shares of common stock  outstanding,  all of which were
included in the consolidated  financial  statements of Sifang Holdings.  See the
shareholders'  equity  statement for the period from January 1, 2004 to December
31, 2004. Although Sifang Holdings is deemed to be the acquiring corporation for
financial  accounting  and  reporting  purposes,  the legal  status  of  Boulder
Acquisitions as the surviving corporation did not change. Subsequent to June 30,
2004, Boulder Acquisitions changed its name to China Digital Wireless, Inc.


                                       F-6
<PAGE>

                   CHINA DIGITAL WIRELESS, INC. AND SUBSIDIARY
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


Business History

CDW's business is primarily conducted through its wholly-owned subsidiary Sifang
Holdings Co., Ltd.,  (Sifang Holdings) and its wholly-owned  subsidiary TCH Data
Technology  Co., Ltd. (TCH).  Sifang Holdings was established  under the laws of
the Cayman  Islands on February 9, 2004 for the purpose of holding a 100% equity
interest in TCH.  TCH was  established  as a foreign  investment  enterprise  in
Shanghai under the laws of the PRC on May 25, 2004, with  registered  capital of
$7.2 million.

CDW's  current   operations  were  originally  a  business  division  of  Sifang
Information.  Sifang Information is a Shanghai-based  privately owned enterprise
established under the laws of the PRC on August 14, 1998. Sifang  Information is
engaged in the  business of pager and mobile  phone  distribution  and  provides
value added information  services to the customers in the Shanghai  metropolitan
area. In March 2004, Sifang  Information spun off its mobile phone  distribution
business and the majority of its value added  information  services  business to
TCH. As the acquiring entity under common control,  TCH initially recognized all
the assets and liabilities transferred at their carrying amounts in the accounts
of Sifang  Information  at the date of transfer  under the  guidance of SFAS No.
141, Appendix D.

On May 25, 2004, Sifang  Information  transfered its 100% equity interest in TCH
in exchange  for 100% equity  interest in Sifang  Holdings.  Since the  ultimate
owners  of the  three  entities  were the same  owners  and the  three  entities
remained under common control,  the ownership exchange transaction was accounted
for at historical costs under the guidance of SFAS No. 141, Appendix D. Prior to
May 25, 2004,  there were no activities in Sifang  Holdings.  As a result of the
exchange  of  ownership  between  TCH  and  Sifang  Holdings,  TCH's  historical
financial  statements  became  the  historical  financial  statements  of Sifang
Holdings.

As a result of the  spin-off,  TCH  engages  in the  business  of  mobile  phone
distribution  and  provides  pager and mobile phone users with access to certain
value-added  information  reformatted  by TCH. TCH purchases  mobile phones from
first tier  distributors  and sells them to retailers  and  distributors  with a
mark-up. In the process of providing  value-added  information  services through
monthly  subscription  agreements  with various  users,  TCH  purchases  trading
activity  information from stock  exchanges,  comments and analysis on PRC stock
markets provided by certain reputable security and investment companies, lottery
information,  weather forecast, and other value-added products and reformats the
aforementioned  information  through  decoding  and  recoding  and  then has the
reformatted   information   transmitted  by  Sifang  Information,   via  service
contracts,  to pager users.  The value-added  information is constantly saved on
TCH's  server in order for  mobile  phone  users to dial in via China  Mobile or
China Unicom.  By signing a monthly  subscription  agreement,  wireless receiver
users  agree to make  advance  payments  for our  services  for either  three or
six-month subscription periods.

In the spin-off process,  the cost of sales included in the Company's  financial
statements is directly  related to the product  revenue and the cost of services
is directly  related to different types of service.  The business taxes (similar
to sales taxes in the U.S.) are related only to service revenue at a tax rate of



                                      F-7
<PAGE>

                   CHINA DIGITAL WIRELESS, INC. AND SUBSIDIARY
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


approximately 3.3%. The selling expenses are allocated based on the relationship
between  expense and revenue  (such as  commission)  and  payroll  records.  The
general and  administrative  expenses are allocated  based on  management  hours
spent and payroll  records.  The income tax provision  has been  calculated on a
separate  company  basis and is in line with the  historical  actual  income tax
provision at the Sifang  Information  level  assuming  that all income taxes had
been paid by Sifang  Information and no income tax liability was in existence in
the  periods  reported  in the  accompanying  financial  statements.  Management
believes that the costs,  operating expenses,  interest expense,  and income tax
provision  included  in the  Company's  financial  statements  are a  reasonable
representation  of the costs and expenses  that would have been  incurred if the
Company had performed these functions as a stand-alone company.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The  consolidated  financial  statements  have been prepared in accordance  with
accounting  principles generally accepted in the United States of America (GAAP)
and  pursuant  to the rules  and  regulations  of the  Securities  and  Exchange
Commission (SEC) for annual  financial  statements.  The consolidated  financial
statements, in the opinion of management,  include all adjustments necessary for
a fair statement of the consolidated  results of operations,  financial position
and cash flows for each period presented.

The Company's  consolidated financial statements for the year ended December 31,
2003 have been derived from the historical  financial  statements and accounting
records of Sifang  Information  using the historical  operating  results and the
historical  basis of the assets and  liabilities  transferred  to the Company in
accordance with accounting principles generally accepted in the United States of
America.  Management  believes that the assumptions  underlying the accompanying
financial statements are reasonable.  However, the financial statements that are
derived from Sifang Information's  financial records may not necessarily reflect
the  Company's  results  of  operations  and cash flows had the  Company  been a
stand-alone company.

Principles of Consolidation

The  consolidated  financial  statements  for the year ended  December  31, 2004
include the accounts CDW, its wholly owned subsidiary  Sifang Holdings,  and its
wholly owned subsidiary TCH (collectively  the "Company").  Substantially all of
the Company's  revenues are derived from the operations of TCH, which represents
substantially  all of the Company's  consolidated  assets and  liabilities as of
December 31, 2004. All significant  intercompany  accounts and transactions have
been eliminated.

Foreign Currency Translations and Transactions

The Renminbi ("RMB"),  the national currency of the PRC, is the primary currency
of  the  economic  environment  in  which  the  operations  of the  Company  are
conducted.  The Company  uses the United  States  dollar  ("U.S.  dollars")  for
financial reporting purposes.

The Company  translates it's assets and liabilities  into U.S. dollars using the
rate of exchange  prevailing  at the balance  sheet date,  and the  statement of
income is translated at average rates during the reporting  period.  Adjustments
resulting from the  translation of its financial  statements  from RMB into U.S.
dollars  are   recorded  in   shareholders'   equity  as  part  of   accumulated
comprehensive  income. Gains or losses resulting from transactions in currencies
other  than RMB are  reflected  in the  statement  of income  for the  reporting
periods.


                                      F-8
<PAGE>

                   CHINA DIGITAL WIRELESS, INC. AND SUBSIDIARY
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


Revenue Recognition

The Company derives revenues from the sale of mobile phones and the provision of
wireless information services that are used on mobile phones, pagers and prepaid
phone cards. The Company  additionally earns commission income ("Agency Income")
from the sale of CDMA  mobile  phones  on the  behalf of a  related  party.  The
Company  recognizes  its revenues net of related  business taxes and value added
taxes.

Mobile Phone Sales:

Revenues  generated  from the sale of  mobile  phones  are  recognized  when the
products are shipped to the distributor or retailer and when persuasive evidence
of an  arrangement  exists,  delivery of the  products  has  occurred,  customer
acceptance has been obtained,  which means the significant  risks and rewards of
ownership  have  been  transferred  to the  customer,  the  price  is  fixed  or
determinable and collectibility is reasonably assured.

Services:

The Company recognizes service revenues over the term of the noted agreement and
or when the services have been provided to the end user.

i) Information Services - TCH:

By signing a  subscription  agreement,  wireless  receiver  users  agree to make
payments for three- to six-month  subscriptions in advance.  The Company records
the proceeds as deferred  revenue and  amortizes  the deferred  revenue over the
subscription  period. When customers buy a pre-charged service card, the Company
records the  proceeds as deferred  revenue.  When a customer  starts to use this
card to access to the  Company's  server and starts to use a pager to access the
aforementioned  information,  the Company identifies the subscription period and
amortizes the deferred revenue over the subscription period.

ii) Information Services - Installing Agent:

The Company has an installing  agent  install the  Company's  software on mobile
phones,  which are owned by the retailer.  The retailer sells these phones for a
premium  covering  a fee to be  paid to the  installing  agent  and  pre-charged
six-month  subscription  fees to be paid to the Company.  After a customer using
such a phone dials into the server to access the desired information, the server
records a unique  identification  number  installed on the mobile  phone,  which
indicates  that a specific  phone user  starts his or her  subscription  period.
After the Company  receives a detailed list from the installing  agent regarding
the number of phones that have been installed with the Company's  software,  the
Company matches this  information with a detailed list from the retailer setting
forth how many such  phones  have been sold.  Based on the number of such phones
sold, the Company records accounts  receivable and deferred revenue. At the date
on which a customer starts to dial into the server,  the six-month  subscription
period begins and the Company amortizes deferred revenue accordingly.

iii) Information Services - China Mobile and / or Unicom:

Since April 2004,  the revenue  generated  from  selling  pre-charged  cards has
gradually  decreased while the revenue generated  through monthly  subscriptions
with China Mobile and/or China Unicom  (collectively,  "Mobile  Operators")  has
gradually increased as the Mobile Operators' billing systems have been enhanced.
The Company's  affiliates,  Sifang  Information and Shanghai  Tianci  Industrial


                                      F-9
<PAGE>

                   CHINA DIGITAL WIRELESS, INC. AND SUBSIDIARY
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


Group Co., Ltd.  ("Tianci  Group"),  contract with the Mobile  Operators for the
transmission  of the  Company's  value-added  information  services.  The Mobile
Operators  bill and  collect  from  customers  and then pass  those fees (net of
billing and collection  service fees charged by the Mobile  Operators) to Sifang
Information  and Tianci  Group who in turn pass those fees to the  Company.  The
Company recognizes net revenues based on the total amount paid by its customers,
for which the Mobile Operators bill and collect on behalf of the Company.  There
is a time lag  ranging  from 10 days to 45 days  between  the end of the service
period and the date the Mobile  Operators send out their billing  statements due
to the segregated billing systems of each of the provincial  subsidiaries of the
Mobile Operators.  The Company received the December invoice before the issuance
of the  financial  statements  to reconcile  the monthly  revenues to the Mobile
Operators  billing  statement.  The Company has not recognized  service  revenue
based  on  the  records   provided  by  its  own  server  but  has  performed  a
reconciliation  on a monthly  basis of the revenues  recognized by the Company's
server to the Mobile  Operator's  billing  statement.  In  addition,  the Mobile
Operators charge a network usage fee based on a fixed per message fee multiplied
by the excess of messages sent over messages  received.  This type of service is
not  covered by a monthly  service  subscription  and the Company has no control
whether or not it will occur Network usage fees charged by the Mobile  Operators
are reduced for messages  received by the Company  because the Mobile  Operators
separately charge the sender a fee for these transmissions.

The Company  records the revenue from China Mobile / China Unicom on a net basis
in compliance with EITF 99-19,  "Reporting  Revenues Gross as a Principle versus
Net as an Agent" because the Company:

         o        Is not the primary obligor in the arrangement, as it relies on
                  Sifang Information to transmit the information services to the
                  end user
         o        Has  limited  ability  to  adjust  the  cost  of  services  by
                  adjusting the design or marketing of the service,
         o        Has limited  ability to  determine  prices,  the Company  must
                  follow the price policy  within  ranges  prescribed  by Mobile
                  Operators, and
         o        Has  limited   ability  to  assume  risk  of   non-payment  by
                  customers.

The Company's  dependence on the substance and timing of the billing  systems of
the mobile  telecommunications  operators may require us to estimate portions of
our reported  revenue for wireless  Internet  services  from time to time.  As a
result,  subsequent  adjustments  may have to be made to our  wireless  Internet
service  revenue in our  financial  statements.  As we do not bill our  wireless
Internet  services users directly,  we depend on the billing systems and records
of the mobile telecommunications  operators to record the volume of our wireless
Internet services provided,  charge our users through mobile telephone bills and
collect payments from our users and pay us.

Cash and Cash Equivalents

The Company  considers all highly liquid  investments  with  maturities of three
months or less to be cash  equivalents.  The Company maintains its cash accounts
at credit worthy financial institutions.

Accounts Receivable and Concentration of Credit Risk

During the normal course of business,  the Company extends  unsecured  credit to
retailers and distributors  who are mainly located in the Shanghai  metropolitan
area. Typically, for mobile phone distributors,  credit terms require payment to
be made within 30 days of the sale. The Company does not require collateral from
its  customers.  The  Company's  policy is to provide  for  delinquent  accounts



                                      F-10
<PAGE>

                   CHINA DIGITAL WIRELESS, INC. AND SUBSIDIARY
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


receivable balances as an allowance for doubtful accounts that is based on 5% of
total trade accounts  receivable  less amounts due from related parties and from
the installing agent.

The Company  regularly  evaluates  and  monitors  the  creditworthiness  of each
customer on a case-by-case basis. The Company includes any account balances that
are  determined  to be  uncollectible  in the  overall  allowance  for  doubtful
accounts. After all attempts to collect a receivable have failed, the receivable
is written off against the  allowance.  The Company  believes that its allowance
for doubtful  accounts  was adequate as of December 31, 2003 and 2004.  However,
actual write-offs might exceed the recorded allowance.

As of December 31, 2004,  accounts  receivable  resulting from  pre-charged fees
amounted to $2,125,777, which was collected in March 2005.

The following table presents activities in the allowance for doubtful accounts.

                                                               December 31
                                                        ------------------------
                                                           2003          2004
                                                        ------------------------

Beginning balance                                       $   30,143    $   28,158
Additions charged to expense                                  --          19,764
Recovered                                                   (4,492)         --
Actual write off                                              --            --
                                                        ----------    ----------
Ending balance                                          $   25,651    $   47,922
                                                        ==========    ==========

Inventories

Inventories  consist  principally  of mobile phones  manufactured  by name brand
manufacturers  with  various  features  and  are  stated  at the  lower  of cost
(weighted-average) or market.

Rebates and Credits Receivable

In 2004 the Company's  major vendor began  providing  rebates and credits if the
Company meets certain sales volume levels prescribed by the vendor. As a result,
the Company is entitled to receive certain rebates and credits for the inventory
held and sold by the Company  within the specified  period of time as defined by
its vendor through submitting the necessary  application forms. In general, once
the vendor approves these  applications the amounts of these rebates and credits
will be deducted from the Company's  accounts payable to its vendor and decrease
the cost of goods sold or inventory held correspondingly.

Capitalization of Software Costs

The  Company's  software is  developed by an  independent  third party to enable
pager users to accept certain recoded information which is transmitted,  through
affiliates,  by the  Company  and  enables  mobile  phone users to dial into the
Company's  server.  The  software is for  internal use and gives the Company the
ability to provide value added information services. In accordance with SOP 98-1
"Accounting  for the  Costs of  Computer  Software  Developed  or  Obtained  for
Internal  Use," the Company  capitalizes  the external  cost incurred to develop
this  internal-use  software  by  an  engineering  company  at  the  application
development  stage and amortizes  that cost over the estimated  economic life of
the software (two or three years) which is consistent  with the expected life of
a particular type of mobile phone.



                                      F-11
<PAGE>

                   CHINA DIGITAL WIRELESS, INC. AND SUBSIDIARY
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


Property and equipment

Property and  equipment  are recorded at cost and are stated net of  accumulated
depreciation.  Depreciation expense is determined using the straight-line method
over the estimated useful lives of the assets as follows:

         Buildings                                                     20 years
         Software                                                      2-3 years
         Vehicles and other equipment                                  2-5 years

Maintenance  and repairs are charged  directly to expense as  incurred,  whereas
betterment and renewals are generally  capitalized in their respective  property
accounts.  When an item is  retired  or  otherwise  disposed  of,  the  cost and
applicable  accumulated  depreciation are removed and the resulting gain or loss
is recognized and reflected as an item before operating income (loss).

Impairment of Long-Lived Assets

The Company applies the provisions of Statement of Financial Accounting Standard
No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" ("SFAS
No. 144"), issued by the Financial Accounting Standards Board ("FASB"). SFAS No.
144 requires that long-lived  assets be reviewed for impairment  whenever events
or changes in  circumstances  indicate that the carrying  amount of an asset may
not be  recoverable  through the estimated  undiscounted  cash flows expected to
result from the use and eventual  disposition  of the assets.  Whenever any such
impairment exists, an impairment loss will be recognized for the amount by which
the carrying value exceeds the fair value. There was no impairment of long-lived
assets in the years ended December 31, 2003 and 2004.

Fair Value of Financial Instruments

The  carrying  amount of cash,  notes  receivable,  accounts  receivable,  other
receivables,  advances to vendor,  accounts payable and accrued  liabilities are
reasonable  estimates of their fair value because of the short maturity of these
items.

Advertising Expenses:

Advertising  expenses are expensed in the period incurred.  Advertising expenses
for the years  ended  December  31,  2004 and 2003  were $ 60,092  and $ 18,909,
respectively.

Stock Based Compensation

The Company  utilizes FAS 123 "Accounting for  Stock-Based  Compensation,"  when
accounting for stock based  compensation and recognizes the fair value impact of
the compensation  granted to employees and consultants as a charge to net income
in the period that the services  associated with the  compensation are incurred.
The Company does not currently have a stock option plan.

Value Added Tax

TCH is subject to value added tax ("VAT")  imposed by the PRC on TCH's  domestic
product sales. The output VAT is charged to customers who purchase mobile phones
from TCH and the input VAT is paid when TCH  purchases  mobile  phones  from its
vendors. The VAT rate ranges from 13% to 17%, in general, depending on the types
of products  purchased and sold.  The input VAT can be offset against the output
VAT.



                                      F-12
<PAGE>

                   CHINA DIGITAL WIRELESS, INC. AND SUBSIDIARY
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


Income Taxes

The Company  accounts for income taxes in accordance with Statement of Financial
Accounting  Standards No 109,  "Accounting  for Income  Taxes" ("SFAS No. 109").
SFAS No. 109  requires  an entity to  recognize  deferred  tax  liabilities  and
assets.  Deferred tax assets and  liabilities  are recognized for the future tax
consequence  attributable to the difference  between the tax bases of assets and
liabilities and their reported amounts in the financial statements. Deferred tax
assets and liabilities are measured using the enacted tax rate expected to apply
to taxable income in the years in which those temporary differences are expected
to be recovered or settled. The effect on deferred tax assets and liabilities of
a change in tax rates is  recognized  in income in the period that  includes the
enactment date. The Company  establishes a valuation when it is more likely than
not that the assets will not be recovered.

The  Company's  Chinese  subsidiary  TCH is  registered  at Pudong  District  in
Shanghai and subject to a favorable  income tax rate of 15% compared to a normal
income  tax rate of 33% (30% for the  central  government  and 3% for the  local
government)  under  current  PRC  tax  laws.  However,   Sifang  Information  is
registered  in the Shanghai  downtown  area and has been treated by the Shanghai
Municipal  Administration of Labor as an enterprise that provides unemployed and
handicapped people with jobs.  Accordingly,  Sifang Information is entitled to a
favorable  income tax rate of 15% and  qualifies for an income tax exemption for
three years from  January 1, 2000 to  December  31,  2002,  and a 50% income tax
reduction for three years from January 1, 2003 to December 31, 2005.  The income
tax provisions  presented in the Company's financial statements are based on the
historical  actual  income tax rates of SFT at 7.5% for the year ended  December
31, 2003.  The income tax provision  presented  for the year ended  December 31,
2004 is based on 7.5% for the  months of  January to June and 15% for the months
of July to  December.  The  deferred  tax  assets  are  determined  based on the
historical income tax rates applicable at the TCH level.

There  is  no  income  tax  for  companies  domiciled  in  the  Cayman  Islands.
Accordingly,  the Company's  financial  statements do not present any income tax
provisions related to Cayman Islands tax jurisdiction.

Use of Estimates

The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States of America requires  management to make
estimates  and  assumptions  that  affect  the  reported  amounts  of assets and
liabilities  and disclosure of contingent  assets and liabilities at the date of
the  financial  statements  and the  reported  amounts of revenues  and expenses
during the reporting  period.  Actual results could differ materially from those
estimates.

Comprehensive Income (Loss)

The  Company  adopted  Statement  of  Financial  Accounting  Standard  No.  130,
"Reporting  Comprehensive Income" ("SFAS No. 130"), issued by the FASB. SFAS No.
130 establishes standards for reporting and presentation of comprehensive income
(loss) and its components in a full set of general-purpose financial statements.
The Company has chosen to report  comprehensive  income (loss) in the statements
of income and comprehensive income.  Comprehensive income (loss) is comprised of
net  income  and  all  changes  to  stockholders'  equity  except  those  due to
investments by owners and distributions to owners.



                                      F-13
<PAGE>

                   CHINA DIGITAL WIRELESS, INC. AND SUBSIDIARY
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


Earnings (Loss) Per Share

The Company  presents  earnings per share in  accordance  with the  Statement of
Financial  Accounting  Standards No. 128, "Earnings per Share" ("SFAS No. 128").
Basic earnings (loss) per share includes no dilution and is computed by dividing
income (loss) available to common shareholders by the weighted average number of
shares outstanding during the period. Diluted earnings (loss) per share reflects
the  potential  dilution of  securities  that could share in the  earnings of an
entity,  similar to fully diluted earnings (loss) per share. The Company did not
have any potentially  dilutive common share  equivalents as of December 31, 2003
or 2004.

Reclassifications

Certain amounts included in the prior year's consolidated  financial  statements
have been  reclassified  to  conform  to the  current  year  presentation.  Such
reclassifications  did not  have any  effect  on  reported  net  income  and are
immaterial to the financial statements as a whole.

Recent Accounting Pronouncements

In December 2003, the FASB issued Interpretation No. 46R ("FIN 46R"), a revision
to FIN 46, "Consolidation of Variable Interest Entities". FIN 46R clarifies some
of the provisions of FIN46 and exempts certain  entities from its  requirements.
FIN 46R is effective at the end of the first  interim  period ending after March
15, 2004.  Entities  that have adopted FIN 46 prior to this  effective  date can
continue to apply the  provisions of FIN 46 until the effective date of FIN 46R.
The  adoption of FIN 46R did not have any effect on the  Company's  consolidated
financial statements.

In  March  2004,  the  FASB  issued  EITF  Issue  No.  03-1,   "The  Meaning  of
Other-Than-Temporary  Impairment  and Its  Application  to Certain  Investments"
("EITF  03-1") which  provides new guidance for assessing  impairment  losses on
debt and equity  investments.  Additionally,  EITF 03-1 includes new  disclosure
requirements  for  investments  that are deemed to be temporarily  impaired.  In
September  2004,  the FASB delayed the  accounting  provisions of EITF 03-1. The
Company will  evaluate the effect,  if any, of EITF 03-1 when final  guidance is
released.

In November 2004, the FASB issued  Statement of Financial  Accounting  Standards
(SFAS) No. 151,  Inventory  Costs,  which  clarifies the accounting for abnormal
amounts of idle facility expense,  freight, handling costs, and wasted material.
SFAS No. 151 will be effective for inventory  costs incurred during fiscal years
beginning  after June 15,  2005.  We do not believe the adoption of SFAS No. 151
will have a material impact on our consolidated financial statements.

In December 2004, the FASB issued SFAS No. 123-R,  Share Based  Payments,  which
requires that the compensation cost relating to share-based payment transactions
(including  the  cost  of all  employee  stock  options)  be  recognized  in the
financial statements. The cost will be measured based on the estimate fair value
of the equity or liability instruments issued. SFAS 123-R covers a wide range of
share-based compensation arrangements including share options,  restricted share
plans,  performance-based  awards, share appreciation rights, and employee share
purchase plans.  Management believes the adoption of this pronouncement will not
have a material effect on our consolidated financial statements.

Also, in December  2004,  the FASB issued SFAS 153,  "Exchanges  of  Nonmonetary
Assets,  an  amendment  of  APB  Opinion  No.  29,  Accounting  for  Nonmonetary
Transactions."  The  amendments  made by SFAS No. 153 are based on the principle
that the exchange of  nonmonetary  assets should be measured using the estimated



                                      F-14
<PAGE>

                   CHINA DIGITAL WIRELESS, INC. AND SUBSIDIARY
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


fair market value of the assets  exchanged.  SFAS No. 153  eliminates the narrow
exception for nonmonetary  exchanges of similar  productive assets, and replaces
it with a broader  exception  for  exchanges of  nonmonetary  assets do not have
commercial substance.  A nonmonetary exchange has "commercial  substance" if the
future cash flows of the entity are expected to change significantly as a result
of the transaction.  This  pronouncement is effective for monetary  exchanges in
fiscal periods beginning after June 15, 2005.  Management  believes the adoption
of this  pronouncement  will  not have a  material  effect  on our  consolidated
financial statements.

Other  recent  accounting  pronouncements  issued  by the  FASB  (including  its
Emerging Issues Task Force),  the AICPA, and the SEC did not or are not believed
by  management  to have a  material  impact on the  Company's  present or future
consolidated financial statements.

NOTE 3 - Equity Transactions

On June 23, 2004,  the Company  issued  167,895  shares of its common stock to a
consultant  for services  relating to the reverse  merger that was  completed in
fiscal 2004.  The trading price of the  Company's  common stock on June 23, 2004
was $3.60 per share, accordingly, the fair value of 167,895 shares was $604,422.

On June 23,  2004,  the Company  issued  166,667  shares of its common  stock in
exchange for  services  performed by an existing  major  shareholder  of Boulder
Acquisitions for his consulting  services involved with the reverse merger . The
common  stock was  issued at a price of $1.14  per share in  exchange  for gross
proceeds of $190,000  based on a stock purchase  agreement.  The $1.14 per share
price was  pre-negotiated  between the Company  and the  shareholder  before the
reverse merger had been completed. Pursuant to the stock purchase agreement, the
Company granted the existing shareholder an option which required the Company to
purchase up to the  aforementioned  166,667 shares of common stock at a price of
$1.14 per share,  such option being  exercisable at any time after the date that
is six months after the Company files a registration statement on Form SB-2 with
the SEC, registering the shares purchased by the existing shareholder, up to and
including the earlier of the date that such  registration  statement is declared
effective  by the SEC or the  existing  shareholder's  shares are  eligible  for
resale under Rule 144 under the Securities Act of 1933.  According to Topic D-98
from the SEC,  "Classification and Measurement of Redeemable  Securities," these
shares should be presented  outside the permanent  equity section.  However,  on
November 12, 2004, the Company filed a Registration  Statement on Form SB-2 with
the SEC,  for  registration  of these  securities  to be sold to the public by a
small business  issuers.  On February 8, 2005, the SEC approved the registration
filing and  accordingly,  the Company has recorded these shares in shareholders'
equity as the  contingency  surrounding  these shares  expired as of February 8,
2005. On June 23, 2004,  the trading price of the Company's  stock at the end of
the day was $3.60 per share.  Due to the relationship  between the parties,  the
difference between the price of $1.14 per share and the price of $3.60 per share
was  recorded as  compensation  by  presenting  $410,001 in  additional  paid-in
capital and in general and administrative expenses.

On June 28, 2004,  the Company  issued,  in aggregate,  1,315,789  shares of its
common  stock to three  investors  at a price of $1.14 per share in exchange for
gross proceeds of $1,500,000 based on a stock purchase agreement.  The $1.14 per
share price was pre-negotiated  between the Company and the investors before the
reverse  merger  had been  completed.  Pursuant  to the  signed  stock  purchase
agreement,  the Company  granted to each of the three  investors an option which
requires the Company to purchase up to the  aforementioned  1,315,789 shares, in
aggregate,  of common  stock at a price of $1.14 per share,  such  option  being
exercisable  at any time  after the date that is six  months  after the  Company
files a Registration Statement on Form SB-2 with the SEC, registering the shares
purchased by the existing  stockholder,  up to and  including the earlier of the
date that such  registration  statement is declared  effective by the SEC or the
existing  shareholder's  shares are eligible for resale under Rule 144 under the
Securities  Act of 1933.  As of December 31, 2004,  the proceeds of $1.5 million



                                      F-15
<PAGE>

                   CHINA DIGITAL WIRELESS, INC. AND SUBSIDIARY
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS



were held in an escrow account with an agent who is related to a shareholder. As
of December 31, 2004,  the Company has treated the proceeds  held in escrow as a
current  asset as the entire  amount was released  from escrow in March 2005 and
paid to the  Company.  According  to Topic  D-98 from SEC,  "Classification  and
Measurement of Redeemable  Securities," these shares should be presented outside
the permanent equity section. However, on November 12, 2004, the Company filed a
Registration  Statement  on Form SB-2 with the SEC,  for  registration  of these
securities to be sold to the public by small  business  issuers.  On February 8,
2005, the SEC declared the registration  statement effective.  Accordingly,  the
Company has recorded  these shares in  shareholders'  equity as the  contingency
surrounding these shares expired as of February 8, 2005.

In  connection  with the June 28, 2004,  issuance of common  stock,  the Company
incurred  share issue costs of $217,481 and  accounted  for it as a reduction of
additional paid-in capital.

NOTE 4 - PROPERTY AND EQUIPMENT

A summary of property and equipment at cost is as follows:

                                                            December 31,
                                                     --------------------------
                                                         2003           2004
                                                     --------------------------


Buildings                                            $   943,368    $   943,391
Software                                                 391,660        489,103
Vehicles                                                  65,484         65,485
Other equipment                                          424,891        455,453
                                                     -----------    -----------
                                                       1,825,403      1,953,432
Accumulated depreciation                                (471,165)      (754,923)
                                                     -----------    -----------

                                                     $ 1,354,238    $ 1,198,509
                                                     ===========    ===========


Depreciation expense for the years ended December 31, 2003 and 2004 was $234,055
and $287,232, respectively.

As of December 31, 2004,  in accordance  with the  "Business and Related  Assets
Transfer Agreement" signed by TCH and Sifang  Information,  the ownership of the
building  suite and two motor  vehicles,  (collectively  known as "Assets")  are
recorded on TCH's books of record.  The net book value of the pledged assets was
$853,743.  The property is pledged as security for a $2.5 million line of credit
held under the credit  facility  agreement  between Sifang  Information  and the
bank.  The line of credit is  recorded on Sifang  Information's  books and has a
balance of  $2,416,334  as of December 31, 2004.  However,  the two parties have
declared  that the  ownership of the "Assets"  should be TCH's as of the balance
sheet date and have signed a legal agreement, as noted above. Sifang Information
is expected to pay off the line of credit  balance in May 2005 and at that point
they will transfer the legal title of the property and the motor vehicles within
one week after the pledge is to be released by the bank.



                                      F-16
<PAGE>

                   CHINA DIGITAL WIRELESS, INC. AND SUBSIDIARY
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


NOTE 5 - RELATED PARTY TRANSACTIONS

Related Party Relationships

The following  related  parties are related  through  common  ownership with the
major shareholder of the Company:
================================================================================


Shanghai SFT Co., Ltd. ("Sifang Information")
Shanghai Tianci Industry Co. Ltd. ("Tianci Industry")
Shanghai Tianci Industry Group Co. Ltd. ("Tianci Group")
Shanghai Shantian Telecommunication Co. Ltd. ("Shantian")
Shanghai Sifang Telecommunication Co. Ltd. ("Sifang Telecom")
Shanghai Tianci Real Estate Co. Ltd. ("Tianci Real Estate")

Merchandise Sold to Related Parties

                                                        Years Ended December 31,
                                                        ------------------------
                                                            2003          2004
                                                        ------------------------

Shanghai Shantian Telecommunication Co. Ltd.            $     --      $9,178,674
Shanghai Tianci Industry Group Co. Ltd.                       --         136,310
Shanghai Tianci Industry Co. Ltd.                             --         576,707
                                                        ----------    ----------
                                                        $     --      $9,891,691
                                                        ==========    ==========

During the year ended  December  31, 2004,  TCH sold  Samsung GSM mobile  phones
valued  at $  9,178,674  at a 4%  gross  profit  margin  to  Shantian.  Accounts
receivable include $1,583,512 due from Shantian.  During the year ended December
31, 2004 TCH also sold mobile phones to other related  parties,  which  included
Tianci  Industy and Tianci  Group for  $136,310  and  $576,707  at gross  profit
margins of 17% and 16% respectively.

Agency Income from a Related Party

The Tianci Group entered into an agency  agreement  with TCH to sell CDMA mobile
phones owned by China Unicom.  TCH obtains the same  commission  structure  that
Tianci Group earns from China Unicom.  For each phone sold, TCH receives  $15.70
per unit,  sales  commission of $3.62 per SIM card.  TCH  recognized  commission
income of $204,214 in the year ended  December  31, 2004 from the Tianci  Group,
which is recorded in service revenues, net on the income statement.

Purchase from Related Party

                                                        Years Ended December 31,
                                                        ------------------------
                                                            2003          2004
                                                        ------------------------


Shanghai Sifang Telecommunication Co. Ltd.              $     --      $  390,340
                                                        ==========    ==========

During the year ended December 31, 2004, TCH purchased local brand mobile phones
from Sifang Telecom valued at $390,340, and all these mobile phones were sold to
retailers in 2004.



                                      F-17
<PAGE>

                   CHINA DIGITAL WIRELESS, INC. AND SUBSIDIARY
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS



Service Provided by Related Party

                                                        Years Ended December 31,
                                                        ------------------------
                                                            2003          2004
                                                        ------------------------


Shanghai SFT Co., Ltd.                                  $  567,840    $  604,314
                                                        ==========    ==========

In accordance with terms contained in signed service  agreements between TCH and
Sifang  Information giving TCH the right to use Sifang  Information's  factility
(which may not be owned by foreign  investors  at the present  time) to transmit
the  reformatted  information  the Company paid service fees of  approximately $
567,000 in each of the years  ended  December  31,  2003 and 2004.  The  service
agreements are in effect for ten years and became effective on June 1, 2004. The
annual  payments for the services  should  continue to approximate  $567,000 per
year.

During the year ended December 31, 2004, Sifang  Information also provided other
management  support and  marketing  services to TCH for $36,462 and none for the
year ended December 31, 2003.

TCH earned  information  service revenues net of costs from China Mobile / China
Unicom that were passed  through  from Sifang  Information  and are  recorded in
Service revenue,  net on the income  statement.  For the year ended December 31,
2004, the total revenues generated were $846,416 and total cost of services were
$421,476 and none for the year ended December 31, 2003.

TCH earned paging  service  revenues net of costs that were passed  through from
Sifang  Information  and are  recorded  in  Service  revenue,  net on the income
statement.  For the year ended December 31, 2004,  the total revenues  generated
were  $964,869  and total cost of services  were  $533,199 and none for the year
ended December 31, 2003.

Leasing from Related Parties

Sifang  signed a leasing  agreement  with the Tianci Real Estate for leasing its
apartment  for office  use,  which was assumed by TCH as a part of the carve out
transaction.  The original  leasing term was from May 1, 2003 to April 30, 2008.
The lease  agreement was  terminated on September 30, 2004.  The related  rental
expense for the years ended  December 31, 2003 and 2004 was $20,540 and $30,810,
respectively.

Amounts Due from a Related Party

As a result of the spin-off transaction,  cash collections received and payments
made  Sifang  Information  on behalf of TCH,  resulted  in a net  receivable  of
$2,910,956 due from Sifang Information at December 31, 2004. The amount due from
related party also consists of $501,000  relating to the value added information
services  provided to Sifang  Information  and sold to China  Unicom and another
$371,000   relating  to  the  paging  revenues  that  are  collected  by  Sifang
Information  on behalf of TCH. In the first  quarter of 2005,  TCH has collected
$3.2 million from Sifang Information  subsequent to March 31, 2005 The Company's
management  believes that the  collection  of the remaining  balance of $582,956
from Sifang Information is reasonably assured and accordingly,  no allowance has
been recorded as of December 31, 2004.

The Company also advanced US$1,205,000 to provide Sifang Information's needs for
working  capital  in order  to  complete  spin-off  procedures  in the PRC.  The
outstanding balance was fully collected in March 2005.


                                      F-18
<PAGE>

                   CHINA DIGITAL WIRELESS, INC. AND SUBSIDIARY
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS



Due to Related Parties

                                                       Years Ended December 31,
                                                      -------------------------
                                                          2003          2004
                                                      -----------   -----------


Shanghai Tianci Real Estate Co. Ltd                   $    20,540   $    51,350
Shanghai Tianci Industry Group Co. Ltd.                      --          48,910
                                                      -----------   -----------
                                                      $    20,540   $   100,260
                                                      ===========   ===========


The balance  owed to Tianci Real Estate  represents  rental  payments for fiscal
2003 and 2004. The rental  agreement was cancelled as of September 30, 2004. The
balance  owed to Tianci Group  represents  cash paid in advance for mobile phone
purchases.  All of the above  amounts  due to  related  parties  are  unsecured,
non-interest bearing and due on demand.

NOTE 6 - INCOME TAXES

The income (loss)  generated in the Cayman Islands and China before income taxes
in 2003 and 2004, respectively, was as follows:


                                                       Years Ended December 31,
                                                      -------------------------
                                                          2003          2004
                                                      -----------   -----------


Loss in Cayman Islands before income taxes            $      --     $(1,199,738)
Income in China before income taxes                     3,134,674     3,164,338
                                                      -----------   -----------

                                                      $ 3,134,674   $ 1,964,600
                                                      ===========   ===========


The income tax provision was as follows:


                                                       Years Ended December 31,
                                                      -------------------------
                                                         2003        2004
                                                      -----------   -----------
Current:
   Cayman Islands                                     $      --     $      --
   China                                                  246,093       389,102
                                                      -----------   -----------
Deferred:
   Cayman Islands                                            --            --
    China                                                     601       (19,131)
                                                      -----------   -----------
                                                      $   246,694   $   369,971
                                                      ===========   ===========





                                      F-19
<PAGE>
<TABLE>
<CAPTION>

                   CHINA DIGITAL WIRELESS, INC. AND SUBSIDIARY
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS



         The difference  between the effective  income tax rate and the expected
federal statutory rate was as follows:


                                               Year ended       Year ended
                                              December 31,     December 31,
                                                  2003             2004
                                   ---------------------------------------------


Statutory rate                                    33.0%            33.0%
Income tax holiday                               (25.5)           (21.9)
Permanent differences                              0.4              7.7
Change in valuation allowance                       --               --
                                                --------         --------
Effective income tax rate                          7.9%            18.8%
--------------------------------------------------------------------------------

The primary components of temporary differences which give rise to the Company's
deferred tax assets are as follows:

                                                         Year Ended December 31,
                                                         -----------------------
                                                            2003         2004
                                                         ----------   ----------

Allowance for receivables                                $    1,973   $    7,188
Accrued liabilities                                           2,982       21,584
                                                         ----------   ----------
                                                              4,955       28,772
Valuation allowance                                            --           --
                                                         ----------   ----------

Net deferred tax assets                                  $    4,955   $   28,772
                                                         ==========   ==========


NOTE 8 - SEGMENT REPORTING

The Company currently operates in three principal business segments.  Management
believes that the following  table presents the useful  information to the chief
operation decision makers for measuring business performance and financing needs
and preparing the corporate budget,  etc. As most of the Company's customers are
located  in the  Shanghai  metropolitan  area  and the  Company's  revenues  are
generated in Shanghai, no geographical segment information is presented.

                                                Mobile          Mobile
                                Agency          Phone           Phone          Pagers
                                Income       Distribution      Service         Service       Corporate       Total
                              ------------   ------------    ------------   ------------   ------------   ------------
<S>                            <C>           <C>             <C>            <C>            <C>            <C>

2003
Revenue                               --     $ 13,529,279    $  1,297,323   $  2,205,776   $       --     $ 17,032,378
Gross profit                          --        1,104,825       1,009,859      1,476,922           --        3,591,606
Depreciation                          --             --           187,171           --           46,884        234,055
Interest expense                      --          (12,082)           --             --             --           12,082
Net income                            --          848,218         766,918      1,272,844           --        2,887,980
Expenditures for long-lived           --             --           194,374           --           65,484        259,858
assets
Total assets                          --        2,039,505       2,196,789        286,376      2,925,939      7,448,609



                                      F-20
<PAGE>


                   CHINA DIGITAL WIRELESS, INC. AND SUBSIDIARY
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS



2004
Revenue                       $    204,214     20,949,089       2,388,178        979,469           --       24,520,950
Gross profit                       204,214      1,340,257       1,889,984        431,670           --        3,866,125
Depreciation                          --             --           229,979           --           57,253        287,232
Interest income                       --             --              --             --            1,955          1,955
Net income                         165,757        802,854       1,271,078        176,742        821,801      1,594,629
Total assets                          --        2,721,741       2,443,657           --        7,497,267     12,662,665
Expenditures for long-lived           --             --           132,155           --             --          132,155
assets
</TABLE>


NOTE 9 - CONCENTRATION OF CUSTOMERS AND VENDORS

Customers  and  vendors  who  account  for  10% or more  of  revenues,  accounts
receivable, purchases and accounts payable are presented as follows:


Customer                         Revenues                  Accounts Receivable
                                 2003          2004        2003          2004

A                                -             37%          -            34%
B                                12%           11%          1%            7%
C                                16%            5%          2%            3%
D                                14%            6%          2%            4%
E                                 7%            8%         76%           46%
                                 ---           ---         ---           ---
                                 49%           67%         81%           94%

Vendor                           Purchases                  Accounts Payable
                                 2003          2004         2003         2004
A (Shantian, a related party)    36%           33%          0            96%
B                                31%            0           0             0
C                                23%           32%          0             4%
D                                 0            17%          0             0
                                 90%           82%          0           100%

On December 31,  2004,  the  agreement  between the  installation  agent and the
Company was  terminated  and not renewed.  For the year ended December 31, 2004,
the  Company  earned  $2,058,681  (2003 -  $1,271,113)  of  information  service
revenues from the installation agent.

NOTE 10 -EMPLOYEE WELFARE AND RETIREMENT BENEFITS

The PRC has been  undergoing  significant  reforms  with regard to its  employee
welfare and fringe benefits administration.  Any enterprise operating in the PRC
is  subject to  government-mandated  employee  welfare  and  retirement  benefit
contribution as a part of operating expense to the State Administration of Labor
Affairs.  In accordance  with PRC laws and  regulations,  TCH  participates in a



                                      F-21
<PAGE>

                   CHINA DIGITAL WIRELESS, INC. AND SUBSIDIARY
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS




multi-employer  defined  contribution  plan pursuant to which TCH is required to
provide  employees with certain  retirement,  medical and other fringe benefits.
PRC  regulations  require  TCH to pay the local  labor  administration  bureau a
monthly  contribution at a stated  contribution  rate based on the monthly basic
compensation  of qualified  employees.  The local labor  administration  bureau,
which manages various  investment funds, will take care of employee  retirement,
medical and other fringe  benefits.  TCH has no further  commitments  beyond its
monthly  contribution.  TCH  contributed a total of $58,501 and $39,391 to these
funds as part of selling,  general  and  administrative  expenses  for the years
ended December 31, 2003 and 2004, respectively.


























                                      F-22