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 June 30, 2003

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

       For the transition period from _______________ to ________________

                         Commission File Number 0-30430

                              INTERMOST CORPORATION
                              ---------------------
                 (Name of Small Business Issuer in its charter)

            Wyoming                                    87-0418721
------------------------------------      ------------------------------------
  (State or other jurisdiction            (I.R.S. Employer Identification No.)
   of incorporation or organization)

                 10th Floor, B10-07 Guomao Building, Renmin Rd.
                        (South), Shenzhen, China 518014
       --------------------------------------------------------------
      (Address of principal executive offices)             (Zip code)

Issuer's telephone number, including area code: 86 755 822 10238

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

 Title of each class      Name of each exchange on which each is registered
 -------------------      -------------------------------------------------
     None                                 None

Securities to be registered pursuant to Section 12(g) of the Act:

                         Common Stock, $0.001 par value
                         ------------------------------
                                (Title of class)

         Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or 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
                                                                      ---    --

         Check if disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, 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. [ ]

         The Issuer's revenues for the fiscal year ended June 30, 2003 were
$446,265.

         The number of shares of the registrant's common stock, $.001 par value
per share, outstanding as of September 12, 2003 was 49,246,066. The aggregate
market value of the voting and non-voting common equity held by non-affiliates
of the registrant on September 12, 2003, based on the last sales price on the
OTC Bulletin Board as of such date, was approximately $13,788,898.

                       DOCUMENTS INCORPORATED BY REFERENCE

         None

         Transition Small Business Disclosure Format:   Yes      No  X
                                                           ----    ----

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<TABLE>
<CAPTION>
                                TABLE OF CONTENTS
                                                                                Page
                                                                                ----
PART I
<S>                                                                             <C>
         ITEM 1.      BUSINESS................................................     4
         ITEM 2.      DESCRIPTION OF PROPERTY.................................     7
         ITEM 3.      LEGAL PROCEEDINGS.......................................     7
         ITEM 4.      SUBMISSION OF MATTERS TO A VOTE OF
                      SECURITY HOLDERS........................................     8

PART II

         ITEM 5.      MARKET FOR COMMON EQUITY AND
                      RELATED STOCKHOLDER MATTERS.............................     8
         ITEM 6.      MANAGEMENT'S DISCUSSION AND ANALYSIS....................    10
         ITEM 7.      FINANCIAL STATEMENTS....................................    17
         ITEM 8.      CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
                      ON ACCOUNTING AND FINANCIAL DISCLOSURE..................    17
         ITEM 8A.     DISCLOSURE CONTROLS AND PROCEDURES......................    17

PART III

         ITEM 9.      DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND
                      CONTROL PERSONS; COMPLIANCE WITH
                      SECTION 16(a) OF THE EXCHANGE ACT.......................    18
         ITEM 10.     EXECUTIVE COMPENSATION..................................    20
         ITEM 11.     SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
                      OWNERS AND MANAGEMENT...................................    21
         ITEM 12.     CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS..........    22
         ITEM 13.     EXHIBITS AND REPORTS OF FORM 8-K........................    22
         ITEM 14      PRINCIPAL ACCOUNTANT FEES AND SERVICES..................    23

SIGNATURES
</TABLE>


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                    NOTE REGARDING FORWARD LOOKING STATEMENTS

This annual report on Form 10-KSB contains "forward-looking statements" within
the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. These forward-looking statements are based on
our current expectations, assumptions, estimates and projections about our
business and our industry. Words such as "believe," "anticipate," "expect,"
"intend," "plan," "will," "may," and other similar expressions identify
forward-looking statements. In addition, any statements that refer to
expectations, projections or other characterizations of future events or
circumstances are forward-looking statements. These forward-looking statements
are subject to certain risks and uncertainties that could cause actual results
to differ materially from those reflected in the forward-looking statements.
Factors that might cause such a difference include, but are not limited to, the
following:

         o        a continuation of the general decline in the market for
                  business-to-business Internet products,

         o        our lack of capital and whether or not we will be able to
                  raise capital when we need it,

         o        government regulation of the Internet and Internet services in
                  China,

         o        our ability to successfully compete in our market and
                  industry,

         o        our ability to find suitable acquisition targets and, once
                  acquired, to integrate these acquisitions into our business;

         o        the loss of the services of our President, Chief Executive
                  Officer and Chief Financial Officer, Mr. Andy Lin

and other factors, some of which will be outside our control. You are cautioned
not to place undue reliance on these forward-looking statements, which relate
only to events as of the date on which the statements are made. We undertake no
obligation to publicly revise these forward-looking statements to reflect events
or circumstances that arise after the date hereof. You should refer to and
carefully review the information in future documents we file with the Securities
and Exchange Commission.

                       INFORMATION ON CURRENCY TRANSLATION

All amounts are in Renminbi ("Rmb") unless indicated to be in United States
Dollars ("$" or "US$"). Our sales are principally in Renminbi. The translation
of Renminbi amounts into US dollars are for reference purposes only and have
been made at the exchange rate of Rmb8.28 for US$1. The People's Bank of China
sets and publishes daily a base exchange rate with reference primarily to the
supply and demand of Renminbi against the United States dollar in the market
during the prior day. The People's Bank of China also takes into account other
factors such as the general conditions existing in the international foreign
exchange markets. Although Chinese governmental policies were introduced in 1996
to reduce restrictions on the convertibility of Renminbi into foreign currency
for current amount items, conversion of Renminbi into any other currency for
capital items, such as foreign direct investment, loans or security, requires
the approval of the State Administration for Foreign Exchange. The translation
of Renminbi amounts in this annual report on Form 10-KSB is not a representation
that the Renminbi amounts could actually be converted into United States dollars
at that rate or at any other rate on that date or on any other date.


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<PAGE>

                                     PART I

ITEM 1.  BUSINESS

HISTORY AND DEVELOPMENT OF THE COMPANY

Intermost Corporation (as used in this annual report on Form 10-KSB, unless the
context otherwise requires, the terms "we," "us," "the Company," and "Intermost"
refer to Intermost Corporation and its subsidiaries) was incorporated as La Med
Tech, Inc. under the laws of the State of Utah on March 6, 1985. The Company
changed its name to Entertainment Concepts International in 1987, to Lord &
Lazarus, Inc. in 1988, and to Utility Communication International, Inc. in 1996.

From the date of incorporation through October 1998, the Company's operations
were limited to efforts to identify and acquire, or merge with, one or more
operating businesses. In October 1998, the Company acquired all of the issued
share capital of Intermost Limited, a British Virgin Islands Company ("IML"), by
issuing to the then shareholders of IML a total of 4,970,000 shares of the
Company's common stock, par value $0.001 per share (the "Merger"). Following the
Merger, (i) IML became a wholly-owned subsidiary of the Company, (ii) the
shareholders of IML held 58.7% of all issued and outstanding shares of the
Company, (iii) the Company changed its name to Intermost Corporation, (iv) the
Company terminated all its prior business activities and adopted IML's business
plan, and (v) all officers and directors of the Company resigned and were
replaced by officers and directors of IML.

In February, 2003, the Company redomiciled from the State of Utah to the State
of Wyoming.

Our operations are conducted mainly through our largest subsidiary, China e.com
Information Technology Ltd., which is the owner of 90% of Intermost Focus
Advertising Company Ltd. and 55.3% of Shenzhen Bank Union & Jiayin e-Commerce
Company Ltd.

IML was incorporated in January 1998 to develop a Chinese-language Internet
business portal and to render services in connection therewith in the People's
Republic of China ("China"). During the period following the Merger, the Company
entered into agreements with, and completed acquisitions of, various businesses
that provided or supported Internet services in an effort to implement this
business plan. The Company also endeavored to develop its own Internet services
businesses, including e-commerce business solutions. However, the global decline
in the demand for Internet services since mid-2000, resulting in a significant
economic slowdown experienced by many of the companies with whom we do business,
has materially undermined the effectiveness of our efforts. Currently, through
China e.com Information Technology Ltd., we offer web design and hosting
services and system integration services to customers in China.

In November 2002 the Company's subsidiary, China e.com Information Technology
Ltd., purchased eight licenses for HanWEB Publishing Server 3.0, an online real
time translation engine that translates traditional Chinese characters, used in
most of the world, to simplified Chinese characters, which are used only in
China, and vice versa, and six licenses for HanVoice Web to Phone Server 1.0, a
real time Internet to telephone conversion server for Cantonese, Putonghua and
English. These were purchased from KanHan Technologies Ltd. ("KanHan") at a cost
of $150K. The Company will be one of the distributors of these licenses in
China. Currently, KanHan has one other distributor in China.

In February 2003 KanHan provided a demonstration of the HanVoice Web to Phone
Server1.0 in the Company's office in Shenzhen. The purpose of the demonstration
was to increase awareness of the product. With the assistance of KanHan, the
Company opened an office in Guangzhou in April 2003. The office is staffed with
two persons who are responsible for introducing these products to businesses and

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government agencies in Guangdong Province. For a period of at least one year,
KanHan is subsidizing the costs related to maintaining this office and
developing a market for these products. The amount of the subsidy is
approximately $12,800 per month.

In May, 2003, the Company's wholly owned subsidiary, IMOT Information Technology
(Shenzhen) Ltd. ("IMOT Technology"), received approval from the governments of
Shenzhen and Shanghai, China to its proposed acquisition of 51% of the issued
and outstanding shares of Shanghai Newray Photographic Equipment Co., Ltd.
("Shanghai Newray") from Shanghai Newray Business Development Co., Ltd.
("Shanghai Newray Business"), the owner of 75.5% of the issued and outstanding
capital stock of Shanghai Newray. Shanghai Newray is engaged in the sale of
digital photographic equipment. Approval of the governments of Shenzhen and
Shanghai, China was required to complete the acquisition, which was memorialized
by a Shareholding Transfer Agreement entered into on May 23, 2003 between IMOT
Technology and Shanghai Newray Business.

Pursuant to the Shareholding Transfer Agreement, IMOT Technology paid Shanghai
Newray Business Rmb200,000 (approximately $24,000) in cash to reimburse Shanghai
Newray Business for certain expenses related to the acquisition and agreed to
transfer to Shanghai Newray Business 4,000,000 shares of the Company's
restricted common stock. The cash used to reimburse Shanghai Newray Business for
its expenses was paid with the Company's funds.

Management is continuing efforts to identify and explore acquisition, merger and
development opportunities.

PRODUCTS AND SERVICES

Currently, we offer web design and hosting services exclusively in China. We
operate within what is commonly referred to as the "business-to-business"
segment of the Internet market, where products and services are offered
principally to businesses, as compared to the "business-to-consumer" segment of
the Internet services market, where products and services are offered
principally to consumers. During the year 2001, we developed imSCM, an
e-commerce supply chain management software, and imPARTNER, an e-commerce
customer relations management software. As of June 30, 2003, we installed this
software in connection with the web design, web hosting or system integration
services we rendered. However, as of June 30, 2003, we had not yet sold these
programs as stand-alone products, although we are making efforts to do so.

During the past fiscal year we opened an office in Guanzhou to market the KanHan
translation Internet and telephone software. The office is staffed with two
persons. Because the cost of a license for this software is quite expensive,
$20,000 for the character conversion and $15,000 for the telephone software, we
are focusing our marketing efforts toward large enterprises and the local
government of Guang Dong Province. An organization such as an airline, for
example, can access the HanWEB Publishing Server to duplicate into simplified
Chinese characters information that is posted on its website in traditional
Chinese characters. As information in the traditional Chinese characters is
updated, the software automatically updates the simplified characters. Likewise,
by using the HanVoice Web to Phone Server, the information on the website is
available via telephone. There is no need to record a separate message, which
must be updated as information changes. The software provides the message and
automatically updates the message as the website is updated.

Shanghai Newray is engaged in the sale of digital photographic equipment in
Shanghai. It is our intention to expand Shanghai Newray's market into Hong Kong
and, eventually, to the United States, although we have not yet determined how
we will accomplish this.


                                       5
<PAGE>

We locate our customers and secure web design and hosting projects or sales of
KanHan licenses primarily through the efforts of members of our sales team. We
currently employ 28 sales persons who are based in Shenzhen and Guangzhou, but
who travel throughout China, as necessary. Our sales persons are paid a base
salary, and earn commissions on revenues we receive from the customers they
procure.

During the fiscal year ended June 30, 2003, neither the Company nor any of its
subsidiaries was dependent on one or a few major customers, however, during the
2003 fiscal year two customers in the photographic business segment each
accounted for 10% or more of the sales made by Shanghai Newray.

COMPETITION

Internet Services

The software market is intensely competitive and we expect it to become
increasingly competitive in the future. Increased competition could result in
pricing pressures, low operating margins and the realization of little or no
market share. Currently, our competitors are primarily other Chinese owned and
operated software development companies.

Many of our current and potential competitors may have longer operating
histories, larger customer bases, greater brand recognition and greater
financial, marketing and other resources than we do and may enter into strategic
or commercial relationships on more favorable terms than we can. In addition,
new technologies and the expansion of existing technologies may increase
competitive pressures on us.

We compete through quality service, competitive pricing and excellent working
relationships with our customers. However, we have no patented technology to
preclude our competitors from entering our markets. At this time, we do not
represent a significant competitive presence in the marketplace.

Photographic Equipment
----------------------

We also face substantial competition in the digital equipment market. In China,
Shanghai Newray's digital equipment, which is sold under the name "Seagull"
(English translation) represents one of the more prominent competitors in the
marketplace. However, the brand does not have significant recognition outside of
China. In the world market, manufacturers such as Minolta, Canon, Casio and
Pentax dominate, and most likely will dominate the world market for several
years due to their greater brand recognition and greater financial, marketing
and other resources. We anticipate that it will take several years to increase
awareness of the Seagull brand. However, we believe that these products will
eventually become accepted in the marketplace outside of China. We believe that
we will be able to compete with the well-established brands because we will be
able to offer comparable equipment at a lower price. Currently, however, we do
not have a significant presence in the market for digital photographic equipment
outside of China and we cannot guarantee you that we will ever establish a
significant presence or be able to compete successfully in the world market.

REGULATION

Since we operate through our subsidiaries in China, we are subject to and
affected by Chinese laws, regulations, administrative determinations, court
decisions and similar constraints regarding operation in China, Internet usage
and e-commerce.

China has enacted regulations governing Internet connection and the distribution
of information via the Internet. Pursuant to Article 6 of the Revised
Provisional Regulations Governing the Management of Chinese Computer Information
Networks Connected to International Networks, individuals or entities operating

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<PAGE>

computer networks within China which are connected to the Internet and conduct
international information exchange must use the international access channels
provided by the Ministry of Information Industry ("MII") and obtain various
licenses and approvals. Our relevant subsidiaries have secured the necessary
licenses and approvals, and access the Internet through ChinaNet, an approved
channel of MII.

We intend to work diligently to assure compliance with all applicable
regulations which impact our business, including cooperating with the MII and
the Ministry of Public Security. There can be no assurance, however, that we
will be successful in our efforts to assure full compliance with Chinese
regulations affecting our operations or that additional regulations will not be
enacted which might adversely impact our operations.

EMPLOYEES

As of June 30, 2003, we employed 49 full-time employees, 1 management executive,
14 engineering and technical staff, 6 administrative and clerical staff, and 28
sales persons. None of our employees are members of any labor union, and we have
never experienced any business interruption as a result of any labor disputes.
We do not provide any special benefit or incentive programs for our employees.
We believe that we enjoy good relations with all of our employees.

ITEM 2.  DESCRIPTION OF PROPERTY

Our principal office consists of approximately 4,000 square feet of office space
that is located at 10th Floor, B10-07 Guomao Building, Renmin Rd.(South),
Shenzhen, China 518014. The premises are leased from an unrelated third party
with rental payments and management fees of approximately $29,000 per year. The
lease will expire in September 2004. As part of our efforts to reduce our
operating costs, we moved to the above address in August 2002.

Our representative office in Hong Kong consists of approximately 500 square feet
of office space located at Suite 4703, Central Plaza, Hong Kong. The premises
are leased from an unrelated third party with rental payments, office facilities
and management fees of approximately $20,000 per year. There is no lease
agreement signed for the premises.

We have decided to expand our web design and production team, therefore we have
leased additional office space. In July 2003 we leased a 600 square feet office
located at 10/F, Guomao Building. The lease payments, which include a management
fee, total approximately $4,000 per year. The lease expires on January 31, 2004.
In September 2003 we leased premises located at 13/F Guomao Building. The
premises are approximately 1,100 square feet. The lease payments, which also
include a management fee, total approximately $8,700 per year. This lease will
expire on February 28, 2004.

All of our office facilities are in good condition and we believe they are
adequate to support our operations for the foreseeable future.

We also own office space consisting of approximately 5,000 square feet in Guomao
Building, which we lease to an unrelated third party for approximately $24,000
per year. The lease term is 3 years. The lease will expire in September 2003. On
June 18, 2003 we entered into an agreement to sell the property to an unrelated
third party for Rmb 940,000 (approximately $114,000).

ITEM 3.  LEGAL PROCEEDINGS

In June 2001 we filed a lawsuit in the Court of First Instance of High Court of
Hong Kong (the "Court") against J.R. Hi-Tech Investment Corporation ("J.R.
Hi-Tech") and its controlling shareholders, Mr. Xin Lei Wang and Mr. Yong Jiang,

                                       7
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(collectively, the "Defendants"). On October 24, 2000, we entered into a
Subscription Agreement with the Defendants, which provided among other things
for our subscription of 70,000 ordinary shares, par value $1 per share,
representing 58.3% of the post-closing issued and outstanding shares of J.R.
Hi-Tech in consideration of our payment of $176,470 in cash and our issuance of
510,300 shares of our common stock. J.R. Hi-Tech's principal asset is an
indirect 90% interest in Shenzhen China Websecurity.com, a Chinese-foreign
equity joint venture, which engages in the provision of Internet security
services, systems integration and software development services. Despite the
Defendants' failure to deliver J.R. Hi-Tech ordinary shares to us as provided in
the Subscription Agreement, we delivered in January 2001 Rmb 1,500,000 in cash
to J.R. Hi-Tech (but not our shares). In this lawsuit, we seek rescission of the
Subscription Agreement, recovery of the Rmb 1,500,000, and additional damages
and injunctive relief. On June 22, 2001, the Court issued an order to freeze
certain bank accounts in the names of the Defendants. On July 3, 2001, following
a hearing, the Court extended this order until further order from the Court. We
intend to vigorously pursue our rights against the Defendants. However, due to
uncertainty of any recovery from J.R. Hi-Tech or the other two Defendants, in
fiscal 2001, we have written off the entire Rmb 1,500,000 we delivered to J.R.
Hi-Tech.

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

No matters were put before our shareholders for a vote during the last quarter
of our fiscal year.

                                     PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Our common stock is quoted on the National Association of Securities Dealers,
Inc. Electronic Bulletin Board (the "OTC Bulletin Board"), and is traded under
the symbol "IMOT".

The following table represents the high and low bid prices for our common stock
on the OTC Bulletin Board for each quarter during the last two fiscal years.

                                                               High       Low
                                                               ----       ---

FISCAL 2002

              Quarter ended September 30, 2001                 0.09       0.04
              Quarter ended December 31, 2001                  0.08       0.03
              Quarter ended March 31, 2002                     0.07       0.03
              Quarter ended June 30, 2002                      0.05       0.03

FISCAL 2003

              Quarter ended September 30, 2002                 0.04       0.02
              Quarter ended December 31, 2002                  0.08       0.01
              Quarter ended March 31, 2003                     0.08       0.03
              Quarter ended June 30, 2003                      0.69       0.03

The above bid information is obtained from the "Finance" section of yahoo.com,
and reflects inter-dealer prices, without retail mark-up, mark-down or
commission and may not represent actual transactions.


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As of September 12, 2003, there were approximately 588 holders of record of the
Company's common stock. This number does not include an indeterminate number of
shareholders whose shares are held by brokers in street name.

We have never declared or paid any cash dividend on our common stock and do not
expect to declare or pay any cash dividend in the foreseeable future.

We do not currently have an equity compensation plan.

In the fiscal year ended June 30, 2003, the Company issued common stock to
various parties. The value of the common stock issued was based on the market
price of the shares at the date of the transactions or on the fair value of
services received. The issuances were as follows:

On May 14, 2003 the Company issued 2,000,000 shares of common stock to Shanghai
Newray Business Development Ltd. and 2,000,000 shares of common stock to Tien
Chou Wei for the purchase of 51% of the issued and outstanding shares of
Shanghai Newray Photographic Equipment Co., Ltd. The value of the common stock
was determined to be $0.13 per share, for a total value of $520,000. The stock
was issued in reliance on the exemption from registration provided by Section
4(2) of the Securities Act of 1933.

On May 14, 2003 the Company issued 2,000,000 shares of common stock to Yorkshire
Capital Ltd. in exchange for services rendered to the Company in a capital
raising transaction. The total value of the stock was determined to be $0.02 per
share, for a total value of $40,000. The stock was issued in reliance on the
exemption from registration provided by Section 4(2) of the Securities Act of
1933.

On May 14, 2003, the Company issued 1,027,318 shares to five consultants who
rendered services to the Company having a value of $6,000, $6,000, $4,000,
$5,000 and $10,000. 733,333 shares were issued with a value of $0.03 per share,
200,000 shares were issued with a value of $0.02 per share and 93,985 shares
were issued with a value of $0.0532 per share. The stock was issued in reliance
on the exemption from registration provided by Section 4(2) of the Securities
Act of 1933.

On May 14, 2003 the Company issued a total of 3,922,801 shares of common stock
to Andy Lin, its Chief Executive Officer. Of this amount, 1,709,400 shares,
having a value of $0.03 per share or $51,282, was issued to Mr. Lin in lieu of
cash as part of his compensation. The balance of the common stock, 2,213,401
shares, was issued to Mr. Lin in partial payment of loans he made to the
Company. The common stock had a value of $130,720. The stock was issued in
reliance on the exemption from registration provided by Section 4(2) of the
Securities Act of 1933.

On May 14, 2003 the Company issued a total of 52,000 shares of common stock,
having a value of $0.07 per share or $3,848, to Mr. Jian Xing Li, in settlement
for obligations owed to him by the Company in connection with the termination of
his employment. The stock was issued in reliance on the exemption from
registration provided by Section 4(2) of the Securities Act of 1933.

On May 14, 2003 the Company issued 200,000 shares of common stock to each of
Francis Tsui and Kwok Wing Hung, its former directors, for services rendered
prior to their resignation in February 2003. The common stock had a value of
$0.035 per share, for a total of $14,000. The stock was issued in reliance on
the exemption from registration provided by Section 4(2) of the Securities Act
of 1933.

On May 14, 2003 the Company issued 1, 709,400 shares of common stock to Kam Fai
Sun, the Company's former Financial Manager. The shares had a value of $0.03 per
share or $51,282. The shares were issued to Mr. Sun in lieu of cash as part of
his compensation. The stock was issued in reliance on the exemption from
registration provided by Section 4(2) of the Securities Act of 1933.

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

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Management's discussion and analysis of results of operations and financial
condition are based upon the Company's consolidated financial statements. These
statements have been prepared in accordance with accounting principles generally
accepted in the United States of America. These principles require management to
make certain estimates, judgments and assumptions that affect the reported
amounts of assets, liabilities, revenues and expenses, and related disclosure of
contingent assets and liabilities. On an on-going basis, we evaluate our
estimates based on historical experience and various other assumptions that are
believed to be reasonable under the circumstances, the results of which form the
basis for making judgments about the carrying values of assets and liabilities
that are not readily apparent from other sources. Actual results may differ from
these estimates under different assumptions or conditions.

The following critical accounting policies rely upon assumptions, judgments and
estimates and were used in the preparation of the Company's consolidated
financial statements:

Revenue Recognition

Revenues are recognized (i) with respect to services, at the time a project (or
a milestone thereof) is completed and accepted by the customer, and (ii) with
respect to products, at the time products are delivered to customers and
collectibility for such sales is reasonably assured. We have adopted Staff
Accounting Bulletin No.101, Revenue Recognition ("SAB101") in our financial
statements. SAB 101 provides in part further interpretive guidance for public
companies on the recognition, presentation, and disclosure of revenues in
financial statements. The adoption of SAB 101 did not have a material impact on
our revenue recognition practices.

Accounts Receivable

We typically extend credit to our customers. From time to time, e-commerce
solution services are provided under fixed-price contracts where the revenues
and the payment of related receivable balances are due upon the achievement of
certain milestones. Management estimates the probability of collection of the
receivable balances and provides an allowance for doubtful accounts based upon
its judgment in assessing the realization of these receivable balances based on
aging, historical experience, the customer's financial condition and general
economic conditions.

Long-lived assets and goodwill

The Company periodically evaluates the carrying value of long-lived assets held
or used whenever events and circumstances indicate that the carrying value of
the asset may no longer be recoverable. An impairment loss, measured on the fair
value of the asset, is recognized if expected future undiscounted cash flows are
less than the carrying value of the assets.

We evaluate goodwill, at a minimum, on an annual basis and whenever events and
changes in circumstances suggest that the carrying amount may not be recoverable
in accordance with SFAS No. 142 "Goodwill and Other Intangible Assets".
Impairment of goodwill is tested at the reporting unit level by comparing the
reporting unit's carrying amount, including goodwill, to the fair value of the
reporting unit. The fair values of the reporting units are estimated using
discounted cash flows approach. If the carrying amount of the reporting unit
exceeds its fair value, goodwill is considered impaired and a second step is
performed to measure the amount of impairment loss, if any.


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OVERVIEW

From the fourth quarter of fiscal 2000 through the present day, the global
market for Internet services and products experienced a sharp decline in growth
that was accompanied by a general reduction in technology spending. This
reduction in spending has adversely impacted both our liquidity and our
revenues. In addition, the outbreak of SARS had a severe negative impact on the
economy of China, from which it now seems to be recovering.

In response to the decline in our revenues, management has taken measures to
both raise and conserve cash. We have also used flexible marketing and pricing
strategies to attract customers and we began to diversify the Company's
business, so that it is no longer dependent on one market for revenue. The
investment in Shanghai Newray in May, 2003 has initially provided encouraging
results. Although this business may have a profit margin that is lower than our
existing web design and hosting business, we expect it to contribute positively
to our overall profits. Our plan for the future is to strengthen our core
Internet business, control our overall expenditures, enhance the effectiveness
of our operations and continue to acquire profitable businesses.

Currently, we are experiencing an increase in web design projects. We are
recruiting additional staff to meet project deadlines. We are also coordinating
with our salespersons, who will act as liaisons with our customers, to prepare a
schedule for completion of a project, to keep the customer apprised of the
status of a project and to work with the customer in providing our designers
with input during the creation of the website. We are also implementing
procedures for inventory control, including stock in/stock out records and
proper documentation for invoicing and receivable collection for Shanghai
Newray.

We plan to acquire companies by using shares of our common stock. We believe
that active trading of our common stock will be important to the principals of
target companies and future acquisitions may be dependent on the active trading
of our common stock. However, our common stock has not been actively traded and,
if our common stock continues to trade flatly, we may not be able to make
acquisitions.

RESULTS OF OPERATIONS

Following is summary financial information reflecting our operations for the
periods indicated.

                                                       Year Ended June 30,
                                                       -------------------
                                                       2002           2003
                                                       ----           ----

         Net revenues                              $   592,059    $   446,265
         Cost of revenues                             (401,089)      (366,905)
         Gross profit                                  190,970         79,360
         Selling, general and administrative        (1,026,258)    (1,088,782)
         Loss on abandonment of fixed assets           (98,731)             -
         Impairment of fixed assets                          -       (164,251)
         Loss on disposal of fixed assets              (37,952)        (6,254)
         Write back of welfare provisions                    -         89,200
         Loss from operations                         (971,971)    (1,090,727)
         Gain on liquidation of an associated
           company                                      67,735              -
         Other income, net                              64,766         21,205
         Loss before minority interest                (839,470)    (1,069,522)
         Minority interests                               (357)        (9,296)
         Net loss                                  $  (839,827)   $(1,078,818)


                                       11
<PAGE>

Year Ended June 30, 2003 Compared to Year Ended June 30, 2002

Net revenues.

Net revenues for the year ended June 30, 2003 decreased by $146K*, or 25%, to
$446K from $592K for the year ended June 30, 2002.

Net revenues during fiscal 2003 were derived principally from e-commerce
solutions, sales of computer software, sales of photographic equipment and
management fee income while net revenues during fiscal 2002 were derived
principally from e-commerce solutions, system sales and integration and web
advertisement. The term "e-commerce solutions" includes web site design and
development and web hosting.

The following table reflects the total net revenues and percentage of net
revenues by major category for the periods indicated:

<TABLE>
<CAPTION>
                                              Total Net Revenues         Percent of Total Net Revenues
                                              ------------------         -----------------------------
                                              Year Ended June 30,              Year Ended June 30,
                                              -------------------              -------------------
                                              2002          2003              2002           2003
                                              ----          ----              ----           ----
<S>                                           <C>           <C>               <C>            <C>
                                               US$           US$
E-commerce solutions
     - Web site design and development       246,450       155,995            41.63%       34.96%
     - Conference services                   132,633             0            22.40%           0%
                                            --------     ---------         ---------     --------
                                             379,083       155,995            64.03%       34.96%
System sales and integration                 112,003        36,832            18.92%        8.25%
Sales of computer software                         0         3,135                0%        0.70%
Sales of photographic equipment                    0       211,318                0%       47.35%
Management fee income                              0        38,768                0%        8.69%
Advertisement                                100,973           217            17.05%        0.05%
                                            --------     ---------         ---------     --------
     Total                                   592,059       446,265            100.0%       100.0%
                                            ========     =========         =========     ========
</TABLE>

Total revenues derived from e-commerce solutions decreased by $223K, or 59 %, to
$156K in fiscal 2003 as compared to $379K in fiscal 2002. System sales and
integration revenues decreased by $75K, or 67%, to $37K in fiscal 2003 as
compared to $112K in fiscal 2002. Web advertisement revenues decreased by $101K,
or 99%, to $0.2K in fiscal 2003 as compared to $101K in fiscal 2002.

The decline in total net revenues and the character of those sales was primarily
attributable to management's decision to revise the Company's plan of operation
to develop our business beyond the market for Internet products and services.
The Internet market was adversely impacted during the 2000 fiscal year by a
sharp decline in worldwide investment in Internet initiatives and by weak
economic conditions and slowing economic growth globally. These conditions are
still present and were exacerbated by the outbreak of SARS.

We continue to believe that the Chinese Internet market will continue to
develop, outpacing the growth of other more mature Internet markets, and that
our presence in the market, including development of our software products, will
allow us to capitalize on opportunities to sell computer software products and
web design and hosting services in China. In the meantime, we believe that our
plan to acquire other types of small, profitable businesses will help carry us
through until the Internet market in China begins to accelerate.

--------
* As used in this 10-KSB, the letter "K" appearing immediately after a dollar
amount denotes rounding to the nearest $1,000; as an example, $380,499 may be
rounded to "$380K"

                                       12
<PAGE>

Costs of Revenues.

Costs of revenues consist principally of salaries for computer network
technicians, sub-contract fees, costs of systems sales and integration, costs of
photographic equipment, costs of computer software, depreciation, and other
costs including travel, employee benefits, office expenses and related expenses
allocated to the engineering and technician staff.

The following table reflects the principal components of costs of revenues and
the percentage of net revenues represented by each component for the periods
indicated:

<TABLE>
<CAPTION>
                                            Total Cost of Revenues       Percent of Total Net Revenues
                                            ----------------------       -----------------------------
                                              Year Ended June 30,               Year Ended June 30,
                                              -------------------               -------------------
                                             2002           2003              2002         2003
                                           ---------      --------          --------     --------
<S>                                          <C>            <C>               <C>          <C>
                                              US$           US$
Engineers/technician salaries                 49,518        52,425             8.36%       11.75%
Subcontract fees                             177,015           195            29.90%        0.04%
Cost of system sales and integration          97,485        41,784            16.47%        9.36%
Cost of photographic equipment                     -       190,130                -%       42.60%
Cost of computer software                          -        45,969                -%       10.30%
Depreciation                                  15,394         4,433             2.60%        1.00%
Other                                         61,677        31,969            10.41%        7.16%
                                           ---------      --------          --------     --------
     Total                                   401,089       366,905            67.74%       82.21%
                                           =========      ========          ========     ========
</TABLE>

Compared to the 2002 fiscal year, the total costs of revenues for the 2003
fiscal year decreased by $34K, or 9%, to $367K. The decline in costs of revenues
was due to cost containment efforts implemented by management and a decline in
sales. The principal components of costs of revenues during the 2003 fiscal year
were costs of hardware, photographic equipment and computer software, other
costs associated with support of the engineering and technician staff, engineer
and technician salaries, and depreciation of equipment utilized in connection
with services.

Selling, General and Administrative Expense.

Selling, general and administrative expense ("SG&A") consists principally of (1)
sales commissions, advertising, trade show and seminar expenses, and
direct-field sales expense, (2) salaries for administrative and sales staff, (3)
corporate overhead, and (4) allowances for bad and doubtful accounts. The
following table reflects the principal components of SG&A and the percentage of
net revenues represented by each component for the periods indicated:

<TABLE>
<CAPTION>
                                            Total SG&A                Percent of Total Net Revenues
                                            ----------                -----------------------------
                                         Year Ended June 30,                Year Ended June 30,
                                         ----------------------             ---------------------
                                           2002           2003                2002         2003
                                         --------       --------            --------     --------
<S>                                        <C>            <C>                 <C>          <C>
                                            US$            US$

Sales and marketing salaries and
     commissions                          114,172         98,663              19.28%       22.11%
Other sales and marketing                 105,000         55,131              17.73%       12.35%
Rentals                                    55,130         61,036               9.31%       13.68%
Administrative salaries                   168,858        268,328              28.52%       60.13%
Corporate overhead                        529,806        566,120              89.49%      126.86%
Bad and doubtful debt for
     accounts receivables                   5,006              -               0.84%           -%
Bad and doubtful debt for
 other receivables                         48,286         30,767               8.16%        6.89%
Bad and doubtful debt for
 related company                                -          8,737                  -%        1.96%
                                        ---------      ---------             -------     --------
     Total                              1,026,258      1,088,782             173.33%      243.98%
                                        =========      =========             =======     ========
</TABLE>

                                       13
<PAGE>

The principal components of SG&A during the 2003 year were sales and marketing
salaries and commissions, other marketing expenditures, administrative salaries
and benefits and other corporate expenses, which includes legal and professional
fees, general office expenses, traveling expenses, general employee benefit
expense, depreciation and consultancy fees.

For the 2003 fiscal year, SG&A increased by $63K, or 6%, to $1,089K as compared
to $1,026K for the 2002 fiscal year. Sales and marketing salaries and
commissions decreased 14% during the 2003 fiscal year, to $99K, as compared to
$114K for the 2002 fiscal year. During the 2003 fiscal year, rentals increased
by 6K or 11% to $61K, as compared to $55K in the 2002 fiscal year.
Administrative salaries increased substantially by $99K or 59% to $268K during
the 2003 fiscal year, as compared to $169K in the 2002 fiscal year. Other
corporate expense increased slightly during the 2003 fiscal year, by $36K or 7%
to $566K, as compared to $530K in the 2002 fiscal year. The increase in SG&A has
been principally attributable to a combination of (1) the addition of office
space in Hong Kong (2) the addition of one senior management position, (3)
corporate overhead including consultancy fee, management fee and investor
relation expenses, and (4) provision of doubtful accounts for a related company.

Impairment of Fixed Assets

On June 18, 2003 we entered into an agreement to sell our real property. Cost
and accumulated depreciation amounted to $336,981 and $58,972 respectively. As a
result, we have provided for an impairment charge of $164,251.

Write-back of Welfare Provisions

During previous years we have made provisions for benefits (welfare) for certain
of our employees. The amount of the benefit was based on the employee's salary.
Due to poor performance, the benefits were not paid. Furthermore, the employment
of many of these employees has been terminated. We do not have any plans to
provide our current employees with benefits, other than those benefits mandated
by the government of China. Therefore, we have "written back" the amount of the
benefits for the fiscal year ended June 30, 2003.

Minority Interest.

We reported a minority interest with a value of $9K for the 2003 fiscal year,
reflecting our proportionate interest in the profits of Intermost Focus
Advertising and Shanghai Newray Photographic Equipment, as compared to a
minority interest with a value $0.4K for the 2002 fiscal year, reflecting our
proportionate interest in the profits of Intermost Focus Advertising.

LIQUIDITY AND CAPITAL RESOURCES

To date, we have funded our operations with cash from our operating activities,
sales of our securities and by using our common stock to make acquisitions and
purchases.

At June 30, 2003 we had cash and cash equivalents of $79K and negative working
capital of $324K as compared to $54K of cash and cash equivalents and $98K of
working capital at June 30, 2002.

                                       14
<PAGE>

Operations used $351K of cash during the 2003 fiscal year as compared to $579K
of cash used during the 2002 fiscal year. Cash was used in operations to fund
our loss of $1,079K, to increase inventory by $88K, to purchase computer
software costing $106K and for the payment of increases in various liabilities.
We also included in cash approximately $89K representing the value of employee
welfare (benefits) that was unused. These costs were partially offset by
non-cash charges, including depreciation expense of $61K and loss on the
disposal of fixed assets of $6K and impairment of fixed assets of $164K.

Net cash provided by investing activities was $33K for the 2003 fiscal year
while net cash provided by investing activities was $51K for the 2002 fiscal
year. Funds provided by investing activities consisted of net sales of equipment
and the acquisition of a subsidiary.

Net cash provided by financing activities was $343K for the 2003 fiscal year
while net cash provided by financing activities was $83K for the 2002 fiscal
year. Funds provided by financing activities consisted of proceeds received
during fiscal 2002 from the subscription for 4,760,000 shares of common stock
from a private placement of 20,000,000 shares at $0.02 per share.

We had no long term debt at June 30, 2003 or June 30, 2002.

We have implemented various cost management measures to reduce our overhead in
response to our declining revenues. We are also evaluating various opportunities
to accelerate the path to, and attain, profitability. The investment in Shanghai
Newray is the beginning of our plan to invest in or acquire businesses that are
not dependent on the Internet market. However, there can be no assurance that
the cash provided by our current operations will be sufficient to meet our cash
needs in the 2004 fiscal year, and in such instance the Company will likely need
to borrow money or obtain additional equity financing in order to sustain
operations. We have no commitments for funding and we cannot assure you that
funding will be available to us on acceptable terms, or at all. If we need
financing and cannot obtain it, we may be required to severely curtail, or even
cease, our operations.

In July 3, 2003 the Company's wholly-owned subsidiary, IMOT Technology, entered
into an agreement, subject to the final approval from the government of Shenzhen
and Hainan, China, to its proposed acquisition of (i) 21% of the issued and
outstanding shares, of Hainan Special Economic Zone Property Rights Exchange
Center ("Exchange Center") from Hainan Concord Investment Holding Co., Ltd. and
Guangzhou Keensheng Science and Technology Development Co., Ltd., the owners of
100% of the issued and outstanding capital stock of Exchange Center
(collectively, the "Exchange Stockholders") and (ii) 80% of the issued and
outstanding shares of Hainan Concord Financial Products Development Co., Ltd.
("Development") from Hainan Concord Investment Holding Co., Ltd. and Guangzhou
Ditai Communication Co., Ltd.(collectively, the "Development Stockholders").
Development is an owner of 51% of the shares of Hainan Yangpu Multifunctional
Smart Card Sales and Management Co. Ltd.

Exchange Center is the only institution in Hainan approved by the Hainan
Provincial Securities Commission to facilitate the trading of property rights,
including intellectual property rights. Exchange Center charges a transaction
fee of 0.3% on each trade. The Company, through IMOT Technology, intends to
continue and expand these operations in China.


                                       15
<PAGE>

Development provides financial institutions with research and development
services related to financial products and instruments. Its subsidiary, Hainan
Yangpu Multifunctional Smart Card Sales and Management Co. Ltd., issues and
manages multifunctional smart cards and provides related services. The Company,
through IMOT Technology, also intends to continue and expand these operations in
China.

Pursuant to the Stock Exchange Agreements relating to Development and Exchange
Center, IMOT Technology paid the Development and Exchange Stockholders each
5,000,000 shares of the Company's restricted common stock, having a value of
Rmb8,980,000 (approximately US$1,085,000).

CERTAIN FACTORS AFFECTING FUTURE OPERATING RESULTS

 Our operating results have been, and will continue to be, affected by a wide
variety of factors that could have a material adverse effect on revenues and
profitability during any particular period. Some of these factors include:

         o        Our ability to successfully implement our revised business
                  plan;

         o        Whether or not we will be able to obtain the additional
                  capital necessary to support our operations;

         o        Whether or not we will find joint venture prospects or
                  acquisition prospects with which to enhance our business;

         o        Whether or not we can successfully integrate acquisitions that
                  we make into our business;

         o        The level and rate of acceptance of our products and services
                  by the Chinese people;

         o        Continued growth in the use of the Internet in China;

         o        Entry of new competition (including established companies from
                  outside China and companies with substantially greater
                  resources) into our markets;

         o        Fluctuations in the level of orders for services delivered in
                  a quarter;

         o        Rescheduling or cancellation of orders by customers;

         o        Competitive pressures on selling prices;

         o        Changes in product, service or customer mix;

         o        Rapid changes in technology, which result in our technology
                  becoming obsolete;

         o        Dependence upon certain key employees;

         o        Availability and cost of computer technicians;

         o        Loss of any strategic relationships;

         o        Our ability to introduce new products and services on a timely
                  basis;

         o        New product and service introductions by our competitors;

         o        Fluctuations in exchange rates, and

         o        General economic conditions.

                                       16
<PAGE>

Except as noted above, we are not aware of any trends, events or uncertainties
that have had, or are reasonably likely to have, a material impact on our
operations or our short-term or long-term liquidity.

ITEM 7.  FINANCIAL STATEMENTS

The financial statements, together with the independent auditors' report thereon
of Moores Rowland, appear beginning on page F-1 of this report.

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

In September 2001 the Company's Board of Directors dismissed
PricewaterhouseCoopers as the independent auditors for the Company and selected
Blackman Kallick Bartelstein LLP to serve as its new independent auditors.

In January 2002 the Company's Board of Directors dismissed Blackman Kallick
Bartelstein LLP as the independent auditors for the Company and selected Moores
Rowland to serve as its new independent auditors.

PricewaterhouseCoopers did not render any audit reports on the financial
statements of the Company. During the Company's two quarterly interim periods
preceding the dismissal of PricewaterhouseCoopers, there were no disagreements
with PricewaterhouseCoopers on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure which
disagreements if not resolved to the satisfaction of PricewaterhouseCoopers,
would have caused PricewaterhouseCoopers to make reference to the subject matter
of the disagreements in connection with its report. During the Company's two
quarterly interim periods preceding the dismissal of PricewaterhouseCoopers,
there have been no reportable events of the type required to be disclosed by
Item 304(a)(1)(v) of Regulation S-K.

Blackman Kallick Bartelstein LLP's audit report on the financial statements of
the Company as of June 30, 2001 contained no adverse opinion or disclaimer of
opinion and was not qualified or modified as to uncertainty, audit scope, or
accounting principles. During the subsequent interim period preceding the
resignation of Blackman Kallick Bartelstein LLP, there were no disagreements
with Blackman Kallick Bartelstein LLP on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure, which
disagreements, if not resolved to the satisfaction of Blackman Kallick
Bartelstein LLP, would have caused Blackman Kallick Bartelstein LLP to make
reference to the subject matter of the disagreements in connection with its
report.

ITEM 8A

(a) EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES. Regulations under the
Securities Exchange Act of 1934 require public companies to maintain "disclosure
controls and procedures," which are defined to mean a company's controls and
other procedures that are designed to ensure that information required to be
disclosed in the reports that it files or submits under the Securities Exchange
Act of 1934 is recorded, processed, summarized and reported, within the time
periods specified in the Commission's rules and forms. Our Chief Executive
Officer ("CEO") who is also our Chief Financial Officer ("CFO") carried out an
evaluation of the effectiveness of our disclosure controls and procedures as of
the end of the period covered by this report. Based on those evaluations, as of
the Evaluation Date, our CEO/CFO believes:


                                       17
<PAGE>

         (i) that our disclosure controls and procedures are designed to ensure
that information required to be disclosed by us in the reports we file under the
Securities Exchange Act of 1934 is recorded, processed, summarized and reported
within the time periods specified in the SEC's rules and forms and that such
information is accumulated and communicated to our management, including the
CEO/CFO, as appropriate to allow timely decisions regarding required disclosure;
and

         (ii) that our disclosure controls and procedures are effective.

(b) CHANGES IN INTERNAL CONTROLS. There were no significant changes in our
internal controls or, to our knowledge, in other factors that could
significantly affect our internal controls subsequent to the evaluation date.

                                    PART III

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
         COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT

IDENTIFICATION OF DIRECTORS, EXECUTIVE OFFICERS AND CERTAIN SIGNIFICANT
EMPLOYEES

The following table sets forth certain information regarding the directors and
executive officers of the Company.

         Name               Age               Position
         ----               ---               --------

         Andy Lin            57      President, Chief Executive Officer,
                                     Chief Financial Officer and Director

         Sai Keung Chan      47      Secretary and Director

         Shim Yang           45      Director

         Catalina Chan       52      Director

In February 2003, upon the Company's change of domicile from the State of Utah
to the State of Wyoming, Messrs. Francis Tsui, Jun Liang and Sonny Hung
voluntarily relinquished their positions as directors of the Company.

There are no family relationships among any of the directors or officers of the
Company.

None of our directors or executive officers has, during the past five years,

         o        had any bankruptcy petition filed by or against any business
                  of which such person was a general partner or executive
                  officer, either at the time of the bankruptcy or within two
                  years prior to that time,

         o        been convicted in a criminal proceeding and none of our
                  directors or executive officers is subject to a pending
                  criminal proceeding,

         o        been subject to any order, judgment, or decree not
                  subsequently reversed, suspended or vacated of any court of
                  competent jurisdiction, permanently or temporarily enjoining,
                  barring, suspending or otherwise limiting his involvement in
                  any type of business, securities, futures, commodities or
                  banking activities, or


                                       18
<PAGE>

         o        been found by a court of competent jurisdiction (in a civil
                  action), the Securities and Exchange Commission or the
                  Commodity Futures Trading Commission to have violated a
                  federal or state securities or commodities law, and the
                  judgment has not been reversed, suspended, or vacated.

BUSINESS EXPERIENCE

ANDY LIN has served as President, Chief Executive Officer and Chief Financial
Controller of the Company since June 2001 and as a director of the Company since
October 1998. Mr. Lin co-founded the Company's predecessor, IML, in January 1998
and previously served as Vice President of the Company from the Merger, in
October 1998. Prior to forming IML, he was the Vice President of China Business
Resources from 1994 to 1998. Mr. Lin graduated from Tsinghua University in 1970
with a Bachelor degree and from the Chinese Academy of Sciences in 1981 with a
Master of Science degree in computer science.

SAI KEUNG CHAN joined the Company's predecessor, IML, as Secretary and a
director in January 1998 and assumed the same positions with the Company
following the Merger in October 1998. Mr. Chan received a law degree from the
University of Southampton, U.K. and since 1986 has been a partner in the law
firm of Liau, Ho & Chan in Hong Kong.

SHIM YANG joined the Company's predecessor, IML, as a director in January 1998
and was appointed a director of the Company following the Merger in October
1998. Since December 1997, Mr. Yang has been a Managing Director of Corporate
Finance International Ltd., a privately-held investment consulting and business
brokerage company in Hong Kong specializing in corporate finance and business
restructuring consulting, where he is responsible for corporate development and
strategic management. From January 1997 to December 1997, Mr. Yang served as
Managing Director of CEC (HK) Ltd., a privately-held company in Hong Kong
specializing in securing financing for start-up Internet companies in Hong Kong
and China. From 1993 to 1996, Mr. Yang served as Managing Director of Eagle Gain
Ltd., a privately-held company in Hong Kong specializing in securing financing
for real estate development in China. Mr. Yang received a Bachelors degree in
Economics from the University of Foreign Trade in China in 1982.

CATALINA CHAN has served as a director of the Company since April 2002. Ms.
Chan first established Multi M Company Limited in 1984 and it was one of the
first companies to introduce Casio Products into China and is responsible for
the trading and logistic management of these products in China. She has over 18
years of experience in China trade for digital products including cameras,
watches, personal computers and printers, software and accessories.

TERM OF OFFICE

All directors named above will serve until the next annual meeting of the
Company's shareholders. Officers will hold their positions at the pleasure of
the Board of Directors, absent any employment agreement.

COMPLIANCE WITH SECTION 16(A) OF EXCHANGE ACT

Section 16(a) of the Securities Exchange Act requires our directors, executive
officers and persons who own more than 10% of our Common Stock to file reports
of ownership and changes in ownership of our common stock with the Securities
and Exchange Commission. Directors, executive officers and persons who own more
than 10% of our common stock are required by Securities and Exchange Commission
regulations to furnish to us copies of all Section 16(a) forms they file.


                                       19
<PAGE>

The Company believes that, with respect to its fiscal year ended June 30, 2003,
all of the Company's directors and officers and all of the persons known to the
Company to own more than ten percent (10%) of the Company's common stock, either
failed to file on a timely basis, or have yet to file the required beneficial
ownership reports with the Securities and Exchange Commission.

ITEM 10. EXECUTIVE COMPENSATION

For the 2003 fiscal year, all executive officers received their salaries from
the Company and no bonus was paid to any executive officer. Executive officers
include our current Chief Executive Officer and President, Andy Lin, our former
Chief Executive Officer and President, Jun Liang, and Kam Fai Sun, our former
Finance Manager.

The following table sets forth information concerning cash and non-cash
compensation paid or accrued to our executive officers during the past three
fiscal years:

<TABLE>
<CAPTION>
                                                                       LONG TERM COMPENSATION
                                                                       -----------------------------------------
                                 ANNUAL COMPENSATION                    AWARDS                              PAYOUTS
                             --------------------------------------------------------------------------------------
                                                     Other          Restricted                            All Other
                                                      Annual        Stock        Securities     LTIP      Compen-sation
Name and Principal            Salary       Bonus     Compensation   Awards       Underlying     Payout       ($)
Position               Year       ($)        ($)          ($)           ($)      Options/SARs     ($)
<S>                    <C>     <C>            <C>          <C>           <C>           <C>         <C>        <C>
Andy Lin,              2003    128,205(4)     0            0             0             0           0          0
CEO and                2002     76,923        0            0             0             0           0          0
President(1)           2001     76,923        0          5,640           0             0           0          0

Jun Liang              2003        0          0            0             0             0           0          0
CEO, Chairman          2002      5,769        0            0             0             0           0          0
and President(2)       2001     92,307        0          5,640           0             0           0          0

Kam Fai Sun            2003    102,564(5)     0            0             0             0           0          0
Finance Manager(3)     2002     19,231        0            0             0             0           0          0
                       2001        0          0            0             0             0           0          0
</TABLE>

(1) Mr. Lin was appointed as Chief Executive Officer and President of the
Company in June 2001. Previously, Mr. Lin served as Vice President of the
Company.
(2) Mr. Liang served as Chief Executive Officer of the Company from October 1998
until June 2001.
(3) Mr. Sun's employment with the Company began on March 25, 2002 and terminated
on February 28, 2003. Mr. Sun continues to perform consulting services for the
Company.
(4) Of this amount, $76,923 was paid in cash and the balance, totaling $51,282,
was paid by issuing to Mr. Lin 1,709,400 shares of the Company's common stock
having a value of $0.03 a share.
(5) Of this amount, $51,282 was paid in cash and the balance, totaling $51,282,
was paid by issuing to Mr. Sun 1,709,400 shares of the Company's common stock
having a value of $0.03 a share.

During the 2003 fiscal year, the Company did not grant options to any of its
directors or executive officers.


DIRECTOR'S COMPENSATION

Neither employee nor non-employee directors received any compensation for his or
her service as a director in the 2003 fiscal year, with the exception of the
shares of common stock issued to Francis Tsui and Kwok Wing Hung as more fully
described in Item 5 of this annual report.

                                       20
<PAGE>

The Company reimburses its directors for out-of-pocket expenses incurred on
behalf of the Company.

OTHER COMPENSATION AND EMPLOYMENT ARRANGEMENTS

No executive officer, at June 30, 2003, had an employment agreement.

The Company does not have any pension, profit-sharing, stock bonus, or other
benefit plans. The Company expects to enter into employment agreements with key
employees, to implement comprehensive compensation arrangements with its
officers and to adopt benefit plans in the future to attract and retain officers
and key employees.

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

COMMON STOCK

         The following table is furnished as of September 12, 2003, to indicate
beneficial ownership of shares of the Company's common stock by (1) each
shareholder of the Company who is known by the Company to be a beneficial owner
of more than 5% of the Company's common stock, (2) each director and named
officer of the Company, individually, and (3) all officers and directors of the
Company as a group.

<TABLE>
<CAPTION>
         Name and Address of                                  Number of Shares
         Beneficial Owner (1)                                 Beneficially Owned                Percent
         --------------------                                 ------------------                -------
<S>  <C>                                                      <C>                               <C>
     Allied Point Limited (3)...........................         3,218,653   (2)                6.53%
     Jun Liang (3)......................................         3,218,653   (2)                6.53%
     Andy Lin (3).......................................         3,218,653   (2)                6.53%
     Andy Lin...........................................         3,922,801                      7.96%
     eBiz Incubation Co. Ltd. (4).......................         1,166,066   (5)                2.36%
     Francis Tsui (4)...................................         1,166,066   (5)                2.36%
     Francis Tsui.......................................           200,000                      0.40%
     Shim Yang..........................................           350,000                      0.71%
     Catalina Chan (6)..................................         1,000,000                      2.03%
     Grand Grade International Ltd (6)..................         1,000,000                      2.03%
     Sai Keung Chan.....................................           700,000                      1.42%
     Sonny Hung.........................................           200,000                      0.40%
     E-World Investment Holding Ltd.....................         5,340,000                     10.84%
     Mass United Investment Ltd.........................         2,500,000                      5.07%
     All officers and directors as a group (7 persons)..        10,757,520                     21.84%
</TABLE>

(1)      Unless otherwise noted, each person or group identified possesses sole
         voting and investment power with respect to the shares shown opposite
         the name of each person or group.
(2)      Allied Point Limited is a corporation organized under the laws of the
         British Virgin Islands and is owned 50% by Jun Liang and 50% by Andy
         Lin. Therefore, Mr. Liang and Mr. Lin are deemed to be the beneficial
         owners of those shares.
(3)      Address is 10th Floor, B10-07 Guomao Building, Renmin Rd.(South),
         Shenzhen, China 518014.
(4)      Address is Rm 3106, China Merchants Tower, Shun Tak Centre, 200
         Connaught Road, Central, Hong Kong.
(5)      Francis Tsui is Managing Director of eBiz Incubation Co. Ltd. and may
         be deemed to be the beneficial owner of the shares held by eBiz
         Incubation Co. Ltd.
(6)      Catalina Chan is director and shareholder of Grand Grade International
         Ltd. and may be deemed to be the beneficial owner of the share held by
         Grand Grade International Ltd.


                                       21
<PAGE>

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

During the years ended June 30, 2001 and 2002, Jun Liang and Andy Lin, officers,
directors and principal shareholders of the Company, advanced funds to, and were
advanced funds by, the Company on an unsecured, non-interest bearing basis
without pre-determined repayment terms. At June 30, 2002, the net balances owed
to Mr. Liang and Mr. Lin were $80,891 and $143,496, respectively. At June 30,
2003, the net balances owed to Mr. Liang and Mr. Lin were $80,487 and $51,071,
respectively.

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits

Exhibit
Number                     Description of Exhibit
------                     ----------------------

2.1      Exchange Agreement with Shareholders of Intermost Limited (1)

3.1      Articles of Incorporation (1)

3.2      Bylaws (1)

10.1     Joint Venture Agreement, dated June 1, 2000, re: Shenzhen Sino
         E-commerce Co. Ltd.(2)

10.2     Subscription Agreement dated October 24, 2000, by and among Intermost
         Corporation, J.R. Hi-Tech Investment Corporation, Xinlei Wang and Yong
         Jiang (3)

10.3     Shareholding Transfer Agreement dated May 23, 2003 between IMOT
         Information Technology (Shenzhen) Ltd. and Shanghai Newray Business
         Development Co., Ltd.(4)

21.      Significant Subsidiaries(5)

31.      Certification of Chief Executive Officer/Chief Financial Officer
         Pursuant to Rule 13a-14(a) and 15d-14(a)(5)

32.      Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant
         to Section 906 of the Sarbanes-Oxley Act of 2002(5)

--------------------
(1)      Incorporated by reference to the respective exhibits filed with
         Registrant's Registration Statement on Form 10-SB (Commission File No.
         0-30430).
(2)      Incorporated by reference to the respective exhibits filed with
         Registrant's Annual Report on Form 10-KSB for the year ended June 30,
         2000.
(3)      Incorporated by reference to the respective exhibits filed with
         Registrant's Current Report on Form 8-K dated January 20, 2001.
(4)      Incorporated by reference to the exhibits filed with Registrant's
         Current Report on Form 8-K dated June 9, 2003 and filed on June 9,
         2003.
(5)      Filed herewith.


(b)      Reports on Form 8-K

         On June 9, 2003 the Registrant filed a Current Report relating to the
acquisition by its subsidiary of 51% of the outstanding shares of Shanghai
Newray Photographic Equipment Co., Ltd.



                                       22
<PAGE>

ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES

The following table sets forth fees billed to us by our auditors during the
fiscal years ended June 30, 2002 and June 30, 2003 for: (i) services rendered
for the audit of our annual financial statements and the review of our quarterly
financial statements, (ii) services by our auditor that are reasonably related
to the performance of the audit or review of our financial statements and that
are not reported as Audit Fees, (iii) services rendered in connection with tax
compliance, tax advice and tax planning, and (iv) all other fees for services
rendered.


                                    June 30, 2003             June 30, 2002
                                    -------------             -------------

(i)      Audit Fees                 $ 74,750                  $ 82,500
(ii)     Audit Related Fees         $       -                 $        -
(iii)    Tax Fees                   $       -                 $        -
(iv)     All Other Fees             $       -                 $        -






                                       23
<PAGE>



                                   SIGNATURES

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


                                       INTERMOST CORPORATION



                                       BY:/s/ Andy Lin
                                          ------------------------------------
                                          ANDY LIN
                                          PRESIDENT, CHIEF EXECUTIVE OFFICER
                                          AND CHIEF FINANCIAL OFFICER
Dated: September 25, 2003

         In accordance with the Exchange Act, this report has been signed below
by the following persons on behalf of the Registrant and in the capacities and
on the dates indicated.


<TABLE>
<CAPTION>
<S>                                     <C>                                <C>
    Signature                          Title                              Date
    ---------                          -----                              ----



/s/Andy Lin             President, Chief Executive Officer,         September 25, 2003
------------------
Andy Lin                Chief Financial Officer and Director



/s/Sai Keung Chan       Director                                    September 25, 2003
------------------
Sai Keung Chan



/s/Shim Yang            Director                                    September 25, 2003
------------------
Shim Yang



/s/Catalina Chan        Director                                    September 25, 2003
------------------
Catalina Chan
</TABLE>


                                       24
<PAGE>

<TABLE>
<CAPTION>

INTERMOST CORPORATION

INDEX TO FINANCIAL STATEMENTS
----------------------------------------------------------------------------------------------------------------------



                                                                                                               Page


<S>                                                                                                             <C>
Report of Independent Auditors                                                                                  F-2

Consolidated Balance Sheet as of June 30, 2003                                                                  F-3

Consolidated Statements of Operations for the years ended June 30, 2002 and 2003                                F-4

Consolidated Statements of Stockholders' Equity for the years ended June 30, 2002 and 2003                      F-5

Consolidated Statements of Cash Flows for the years ended June 30, 2002 and 2003                                F-6

Notes to and forming part of the Financial Statements                                                       F-7 - F-27

</TABLE>

                                      F-1
<PAGE>



REPORT OF INDEPENDENT AUDITORS



To the Stockholders and the Board of Directors of

INTERMOST CORPORATION

We have  audited  the  accompanying  consolidated  balance  sheet  of  Intermost
Corporation  (the "Company") and its  subsidiaries  (the "Group") as of June 30,
2003,  and the related  consolidated  statements  of  operations,  stockholders'
equity  and cash  flows  for the  years  ended  June 30,  2002 and  2003.  These
consolidated   financial  statements  are  the  responsibility  of  the  Group's
management.  Our  responsibility is to express an opinion on these  consolidated
financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
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 misstatement.  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 financial statement  presentation.  We believe that our audits provide a
reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the financial position of the Group as of June 30, 2003
and the  results of its  operations  and its cash flows for the years ended June
30, 2002 and 2003, in conformity with accounting  principles  generally accepted
in the United States of America.

The accompanying financial statements have been prepared assuming that the Group
will  continue as a going  concern.  As discussed in Note 2(b) to the  financial
statements,  the Group has suffered  recurring  losses from  operations  and has
significant  accumulated  deficit.  In addition,  the Group has negative working
capital and continues to  experience  negative  cash flow from  operations.  All
these factors raise  substantial  doubt about its ability to continue as a going
concern.  Management's  plans in regard to these  matters are also  described in
Note 2(b). The financial  statements do not include any  adjustments  that might
result from the outcome of this uncertainty.







MOORES ROWLAND
Chartered Accountants
Certified Public Accountants,
Hong Kong, September 25, 2003


                                      F-2
<PAGE>


<TABLE>
<CAPTION>

INTERMOST CORPORATION

CONSOLIDATED BALANCE SHEET
------------------------------------------------------------------------------------------------------------------------



                                                                                          AS OF JUNE 30, 2003
                                                                                 ---------------------------------------
ASSETS                                                                                       Rmb                    US$

<S>                                                                                      <C>                     <C>
CURRENT ASSETS
Cash and cash equivalents                                                                652,453                 78,799
Accounts receivable                                                                    1,392,119                168,130
Inventories                                                                              367,522                 44,387
Deposits, prepayments and other receivables, net of allowance for doubtful
    accounts of Rmb197,950 (Note 4)                                                    1,314,834                158,796
                                                                                 ----------------       ----------------

TOTAL CURRENT ASSETS                                                                   3,726,928                450,112

Plant and equipment, net (Note 5)                                                      1,356,056                163,775
Goodwill, at cost                                                                      4,568,552                551,757
Computer software held for sale                                                          879,750                106,250
                                                                                 ----------------       ----------------

TOTAL ASSETS                                                                          10,531,286              1,271,894
                                                                                 ================       ================

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
Accounts payable                                                                       2,958,920                357,357
Accruals and other payables (Note 6)                                                   2,246,653                271,336
Deposits from customers                                                                  472,664                 57,085
Deferred revenue                                                                         286,000                 34,541
Business tax and government surcharges payable                                            23,493                  2,837
Due to a director (Note 11)                                                              422,871                 51,071
                                                                                 ----------------       ----------------

TOTAL CURRENT LIABILITIES                                                              6,410,601                774,227
                                                                                 ----------------       ----------------

COMMITMENTS AND CONTINGENCIES (Note 9)

MINORITY INTERESTS                                                                       412,556                 49,826
                                                                                 ----------------       ----------------

STOCKHOLDERS'  EQUITY
Preferred  stock,  par value of US$0.001:
- Authorized - 5,000,000  shares
- None  outstanding
Common  stock,  par  value  US$0.001:
- Authorized - 100,000,000 shares
- Outstanding and fully paid - 46,246,066 shares                                         382,954                 46,246
- Reserved and to be issued - 3,820,000 shares                                            31,630                  3,820
Additional paid-in capital                                                            70,635,073              8,530,809
                                                                                 ----------------       ----------------

                                                                                      71,049,657              8,580,875

Accumulated deficit                                                                  (67,310,632)            (8,129,303)
Accumulated other comprehensive loss                                                     (30,896)                (3,731)
                                                                                 ----------------       ----------------

TOTAL STOCKHOLDERS' EQUITY                                                             3,708,129                447,841
                                                                                 ----------------       ----------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                            10,531,286              1,271,894
                                                                                 ================       ================

The accompanying notes are an integral part of these financial statements.
------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                      F-3
<PAGE>


<TABLE>
<CAPTION>


INTERMOST CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS
-------------------------------------------------------------------------------------------------------------------------


                                                                               YEARS ENDED JUNE 30,
                                                           --------------------------------------------------------------
                                                                      2002                  2003                  2003
                                                                       Rmb                   Rmb                   US$
<S>                <C>                                           <C>                   <C>                     <C>
Net revenues (Note 2(k))                                         4,902,248             3,695,075               446,265
Cost of revenues (Note 2(l))                                    (3,321,014)           (3,037,972)             (366,905)
                                                           ------------------    ------------------    ------------------

Gross profit                                                     1,581,234               657,103                79,360

Selling, general and administrative expenses                    (8,497,414)           (9,015,113)           (1,088,782)
Loss on disposal of fixed assets                                  (314,242)              (51,784)               (6,254)
Loss on abandonment of fixed assets                               (817,496)                    -                     -
Impairment of fixed assets (Note 5)                                      -            (1,360,000)             (164,251)
Write-back of welfare provisions (Note 2(m))                             -               738,578                89,200
                                                           ------------------    ------------------    ------------------

LOSS FROM OPERATIONS                                            (8,047,918)           (9,031,216)           (1,090,727)

Other income:
Gain on liquidation of an associated company                       560,847                     -                     -
Interest income                                                     14,169                 2,105                   254
Other net income (Note 2(n))                                       522,092               173,474                20,951
                                                           ------------------    ------------------    ------------------

TOTAL OTHER INCOME                                               1,097,108               175,579                21,205
                                                           ------------------    ------------------    ------------------

LOSS BEFORE MINORITY INTERESTS                                  (6,950,810)           (8,855,637)           (1,069,522)

Minority interests                                                  (2,954)              (76,972)               (9,296)
                                                           ------------------    ------------------    ------------------

NET LOSS                                                        (6,953,764)           (8,932,609)           (1,078,818)
                                                           ==================    ==================    ==================

Net loss per share (Note 2(s))
Weighted average number of shares outstanding
    - basic                                                     14,189,163            35,161,599            35,161,599
                                                           ==================    ==================    ==================

Loss per common share
    - basic                                                          (0.49)                (0.25)                (0.03)
                                                           ==================    ==================    ==================

The accompanying notes are an integral part of these financial statements.
-------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                      F-4
<PAGE>


<TABLE>
<CAPTION>

INTERMOST CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
--------------------------------------------------------------------------------------------------------------------


                                                                   COMMON STOCK
                                              ------------------------------------------------------
                                                       ISSUED              RESERVED AND TO BE ISSUED
                                              --------------------------  --------------------------
                                                                                                          ADDITIONAL
                                                  Number                        Number                       PAID-IN
                                               of shares         AMOUNT      of shares         AMOUNT        CAPITAL
                                                                    Rmb                           Rmb            Rmb

<S>                                           <C>               <C>          <C>               <C>         <C>
Balance as of June 30, 2001                   13,120,481        108,679              -              -     58,955,419
Proceeds on issuance of common stock, net
   of issuance cost of Rmb331,200, of
   which the shares for issuance cost have
   not been issued                            20,000,000        165,600      2,000,000         16,560      3,129,840
Net loss                                               -              -              -              -              -
                                              ----------     ----------    -----------     ----------    -----------
Balance as of June 30, 2002                   33,120,481        274,279      2,000,000         16,560     62,085,259


Issuance of common stock for services
   rendered                                    1,027,318          8,505              -              -        248,176
Issuance of common stock to a director for
   partial settlement of balance due           2,213,401         18,326              -              -      1,064,033
Issuance of common stock to employee as
   compensation                                3,870,800         32,048              -              -        964,959
Issuance of common stock for settlement of
   creditors, net of issuance cost             2,014,066         16,676     (2,000,000)       (16,560)          (116)
Issuance of common stock for acquisition       4,000,000         33,120              -              -      4,272,480
Common stock reserved and to be issued for
   services rendered                                   -              -      3,820,000         31,630      2,000,282
Net loss                                               -              -              -              -              -
                                              ----------     ----------    -----------     ----------    -----------

Balance as of June 30, 2003                   46,246,066        382,954      3,820,000         31,630     70,635,073
                                              ==========     ==========    ===========     ==========    ===========

</TABLE>



<TABLE>
<CAPTION>

                                                                    Accumulated
                                                                          other
                                                  Accumulated   comprehensive
                                                      deficit              loss           Total            Total
                                                          Rmb               Rmb             Rmb              US$

<S>                <C> <C>                        <C>                   <C>           <C>                <C>
Balance as of June 30, 2001                       (51,424,259)          (30,896)      7,608,943          918,955
Proceeds on issuance of common stock, net
   of issuance cost of Rmb331,200, of
   which the shares for issuance cost have
   not been issued                                          -                 -       3,312,000          400,000
Net loss                                           (6,953,764)                -      (6,953,764)        (839,827)
                                                  -----------        ----------    ------------     ------------

Balance as of June 30, 2002                       (58,378,023)          (30,896)      3,967,179          479,128


Issuance of common stock for services
   rendered                                                 -                 -         256,681           31,000
Issuance of common stock to a director for
   partial settlement of balance due                        -                 -       1,082,359          130,720
Issuance of common stock to employee as
   compensation                                             -                 -         997,007          120,411
Issuance of common stock for settlement of
   creditors, net of issuance cost                          -                 -               -                -
Issuance of common stock for acquisition                    -                 -       4,305,600          520,000
Common stock reserved and to be issued for
   services rendered                                        -                 -       2,031,912          245,400
Net loss                                           (8,932,609)                -      (8,932,609)      (1,078,818)
                                                  -----------        ----------    ------------     ------------

Balance as of June 30, 2003                       (67,310,632)          (30,896)      3,708,129          447,841
                                                  ===========        ==========    ============     ============

The accompanying notes are an integral part of these financial statements.
----------------------------------------------------------------------------------------------------------------

</TABLE>

                                      F-5
<PAGE>


<TABLE>
<CAPTION>

INTERMOST CORPORATION
==========================================================================================================================

CONSOLIDATED STATEMENTS OF CASH FLOWS
--------------------------------------------------------------------------------------------------------------------------

                                                                                        YEARS ENDED JUNE 30,
                                                                            ---------------------------------------------
                                                                                     2002            2003          2003
                                                                                      Rmb             Rmb           US$
<S>                                                                            <C>             <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss                                                                       (6,953,764)     (8,932,609)   (1,078,818)
Adjustments to reconcile net loss to net cash used in operating activities
    Issuance of common stock in exchange for services                                   -       1,253,688       151,411
    Common stock reserved and to be issued in exchange for services                     -       1,713,960       207,000
    Bad debt written off and provision for doubtful debt:
       - Accounts receivable                                                       41,450               -             -
       - Other receivables                                                        399,810         254,753        30,767
       - Due from a related company                                                     -          72,345         8,738
    Amortization of computer software held for sale                                     -         362,250        43,750
    Deposits for acquisition of projects owned by Internet.com written off        496,800               -             -
    Write-back of welfare provisions                                                    -        (738,578)      (89,200)
    Loss on disposal of fixed assets                                              314,242          51,784         6,254
    Loss on abandonment of fixed assets                                           817,496               -             -
    Impairment of fixed assets                                                          -       1,360,000       164,251
    Depreciation of plant and equipment                                           865,337         506,076        61,120
    Minority interests                                                              2,954          76,972         9,296
    Gain on liquidation of an associated company                                 (560,847)              -             -
Changes in operating assets and liabilities:
    Accounts receivable                                                          (240,812)       (733,478)      (88,584)
    Costs and estimated earnings in excess of billings                            203,040         150,170        18,137
    Deposits, prepayments and other receivables                                  (117,094)         (5,970)         (721)
    Inventories                                                                    15,818        (729,772)      (88,136)
    Computer software held for sale                                                     -        (879,750)     (106,250)
    Accruals and other payables                                                   388,643          61,201         7,391
    Accounts payable                                                                    -       2,958,920       357,358
    Deferred revenue                                                               20,431        (146,534)      (17,697)
    Deferred rent                                                                (362,638)              -             -
    Deposits from customers                                                       (61,400)        472,664        57,085
    Business tax and government surcharge payable                                 (66,781)        (31,125)       (3,759)
                                                                             ------------     -----------   -----------

NET CASH USED IN OPERATING ACTIVITIES                                          (4,797,315)     (2,903,033)     (350,607)

CASH FLOWS FROM INVESTING ACTIVITIES
Additions to plant and equipment                                                  (17,612)        (25,690)       (3,103)
Proceeds on disposal of plant and equipment                                       441,889             100            12
Acquisition, net of cash acquired                                                       -         300,000        36,232
                                                                             ------------     -----------   -----------

NET CASH PROVIDED BY INVESTING ACTIVITIES                                         424,277         274,410        33,141
                                                                             ------------     -----------   -----------

CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from  issuance of common stock                                       788,257               -             -
(Repayments to) advances from directors/former directors                          (97,750)        313,726        37,889
Cash received from issuance of common stock in prior year                               -       2,523,743       304,800
                                                                             ------------     -----------   -----------

NET CASH PROVIDED BY FINANCING ACTIVITIES                                         690,507       2,837,469       342,689
                                                                             ------------     -----------   -----------

Net (decrease) increase in cash and bank deposits                              (3,682,531)        208,846        25,223
Cash and bank deposits, beginning of year                                       4,126,138         443,607        53,576
                                                                             ------------     -----------   -----------

CASH AND BANK DEPOSITS, END OF YEAR                                               443,607         652,453        78,799
                                                                             ============     ===========   ===========

NON-CASH INVESTING AND FINANCING ACTIVITIES:
Receivable from issuance of common stock                                        2,523,743               -             -
Issuance of common stock in exchange for services                                       -       1,253,688       151,411
Issuance of common stock in settlement of balance due to a director and
    creditors                                                                           -       1,082,359       130,720
Issuance of common stock for acquisition                                                -       4,305,600       520,000
Common stock reserved and to be issued in exchange for services                         -       2,031,912       245,400
                                                                             ============     ===========   ===========

The accompanying notes are an integral part of these financial statements.
-----------------------------------------------------------------------------------------------------------------------
</TABLE>

                                      F-6
<PAGE>



INTERMOST CORPORATION

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
-------------------------------------------------------------------------------



1.       ORGANIZATION AND PRINCIPAL ACTIVITIES

         Intermost  Corporation  (the "Company") was originally  incorporated in
         the State of Utah,  United  States of  America  on March 6,  1985.  The
         Company  changed its name from  Utility  Communications  International,
         Inc. to Intermost Corporation on October 23, 1998.

         During the period from January 2, 1998 to October 22, 1998, the Company
         was inactive.  On October 23, 1998, the Company  acquired 100% interest
         in  Intermost  Limited  ("IL";  a company  incorporated  in the British
         Virgin  Islands)  by issuing  4,970,000  shares of common  stock of par
         value of  US$0.001  each (after the  redenomination  of par value and a
         stock split) to the shareholders of IL.

         The  acquisition  of IL by the  Company  on October  23,  1998 has been
         treated as a reverse acquisition since IL is the continuing entity as a
         result of the exchange reorganization.

         IL and its subsidiaries (the "IL Group") are principally engaged in the
         provision of business portal and e-commerce solutions,  the development
         of  software,  the  provision  of  consultation  services  and sales of
         photographic  equipment in the  People's  Republic of China ("the PRC")
         and Hong Kong.

         In February 2003, Intermost  Corporation  redomiciled from the State of
         Utah to the State of Wyoming.  The  procedure  undertaken  retained the
         existing corporate status and structure.

         A new Utah corporation, IMOT Corporation, was formed to replace the old
         Utah  corporation.  Once  the new  corporation  was  incorporated,  the
         existing shareholders of the original Intermost Corporation (Utah) were
         deemed to have contributed  their respective  interest in the dissolved
         Utah  corporation  to  the  new  corporation.   The  shareholders  were
         technically deemed to own prorata the assets of the corporation.  These
         were then  contributed to IMOT  Corporation  in a transaction  that was
         determined  to be tax free under  Section 351 of the  Internal  Revenue
         Code of 1986,  as  amended.  This new Utah  company  was deemed to be a
         successor in interest  under Section 12 of the  Securities and Exchange
         Act of 1934.

         Simultaneous with this, a new Wyoming corporation was incorporated as a
         wholly-owned   subsidiary  of  IMOT  Corporation.   After  the  Wyoming
         corporation was formed, a statutory merger was executed whereby the new
         Utah  corporation  was merged  into the  Wyoming  corporation  with the
         Wyoming corporation deemed to be the survivor. This statutory merger is
         tax free under Section 361 of the Internal  Revenue Code. Under Section
         12 of the Securities and Exchange Act of 1934, the Wyoming  corporation
         is also deemed to be the successor in interest of the Utah  corporation
         and therefore the  registration  remains in tact.  This means that both
         the Commission file number and federal tax  identification  number will
         remain the same.  The Utah  entity is now being  liquidated.  This will
         only leave the Wyoming entity.

-------------------------------------------------------------------------------

                                      F-7
<PAGE>

INTERMOST CORPORATION

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
-------------------------------------------------------------------------------


1.       ORGANIZATION AND PRINCIPAL ACTIVITIES (CONTINUED)

         Details of the Company's  subsidiaries (which together with the Company
         are  collectively  referred  to as the  "Group")  and  their  principal
         activities as of June 30, 2003 were as follows:

<TABLE>
<CAPTION>

                                                                          PERCENTAGE OF
                                                             PLACE OF   EQUITY INTEREST
                                                       INCORPORATION/   ATTRIBUTABLE TO
                           NAME                          REGISTRATION         THE GROUP           PRINCIPAL ACTIVITIES
        -------------------------------------------  ----------------  ----------------   ----------------------------
<S>                       <C>                            <C>                       <C>            <C>
        Intermost Limited ("IL")                          The British              100%             Investment holding
                                                       Virgin Islands

        China E.com Information Technology Ltd.               The PRC              100%   Provision of business portal
          ("CECITL")*                                                                         and e-commerce solutions

        IMOT Information Technology (Shenzhen)                The PRC              100%     Sales of computer software
          Ltd. ("IITSL")*

        Intermost (H.K.) Limited ("IHKL")                   Hong Kong              100%                       Inactive

        Shenzhen Bank Union & Jiayin E-commerce               The PRC             55.3%                       Inactive
          Company Ltd. ("SBUJE")**

        Intermost Focus Advertising Company Ltd.              The PRC               90%       Provision of advertising
          ("IFACL")**                                                                          consultancy, and agency
                                                                                            services and production of
                                                                                                 advertising materials

        Shanghai Newray Photographic Equipment                The PRC               51%          Sales of photographic
          Co., Ltd. ("SNPE")**                                                                 equipment, provision of
                                                                                               management services and
                                                                                                    operation of photo
                                                                                                      processing chain

</TABLE>

         *        CECITL  and  IITSL  are  wholly  owned   foreign   enterprises
                  established in the PRC to be operated for a period of 10 years
                  until 2008.

         **       SBUJE, IFACL and SNPE are equity joint ventures established in
                  the PRC to be  operated  for a period of 10 years  until 2009,
                  2010 and  2013,  respectively.  They are  subsidiaries  of the
                  Company  and are  consolidated  into the  Company's  financial
                  statements.

-------------------------------------------------------------------------------

                                      F-8

<PAGE>

INTERMOST CORPORATION

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
-------------------------------------------------------------------------------


2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         (a)    Basis of accounting

                The  consolidated  financial  statements  have been  prepared in
                accordance with generally accepted accounting  principles in the
                United States of America. The consolidated  financial statements
                are  presented  in  Renminbi  which  is the  Group's  functional
                currency as the Group's  operations are primarily located in the
                PRC.

         (b)    Going concern considerations

                As shown in the accompanying  consolidated financial statements,
                the Group incurred a net loss of Rmb8,932,609 for the year ended
                June 30, 2003 and has accumulated deficit of Rmb67,310,632 as of
                June 30, 2003. The Group also has negative  working  capital and
                continues to  experience  negative  cash flows from  operations.
                Management will be required to raise additional  capital through
                an offering of  securities to fund the Group's  operations,  and
                will attempt to continue  raising  capital  resources until such
                time as the Group  generates  revenues  sufficient  to  maintain
                itself  as a viable  entity.  Additionally,  the  Group  and its
                principal   shareholders   are  exploring  the   possibility  of
                obtaining  loans  from other  third  party  sources.  Management
                believes  that these actions will assist the Company in reaching
                the point of profitability  from operations and enable the Group
                to raise  further  capital  from  private  placements  or public
                offerings.  If successful,  these actions will serve to mitigate
                the  factors  which  have  raised  substantial  doubt  about the
                Group's  ability to continue as a going concern and increase the
                availability  of  resources  for funding of the Group's  current
                operations  and  future  market  development.  There  can  be no
                assurance  that  the  Group  will be able  to  raise  additional
                capital or achieve profitability.  These financial statements do
                no include any  adjustments  that may result from the outcome of
                this uncertainty.

         (c)    Principles of consolidation

                The consolidated  financial  statements  include the accounts of
                the  Company  and  all  of  its   subsidiaries.   All   material
                intra-group  balances and  transactions  have been eliminated on
                consolidation.

         (d)    Cash and cash equivalents

                The Company  considers  all cash and highly  liquid  investments
                purchased  with an original  maturity of three months or less to
                be cash equivalents.

         (e)    Associated company

                An  associated  company is an  enterprise in which the Group has
                significant  influence,  but not control or joint  control,  and
                thereby have the ability to participate  in their  financial and
                operating policy decisions.

                In  the  consolidated  financial  statements,  investment  in an
                associated  company is accounted  for under the equity method of
                accounting, whereby the investment is initially recorded at cost
                and the  carrying  amount is  adjusted  thereafter  for the post
                acquisition  change in the Group's share of the  associate's net
                assets.

-------------------------------------------------------------------------------

                                      F-9
<PAGE>

INTERMOST CORPORATION

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
-------------------------------------------------------------------------------

2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

         (e)    Associated company (Continued)

                The associated  company of the Group has been liquidated  during
                the year ended June 30, 2002. The gain on  liquidation  has been
                included in the statement of operations  for the year ended June
                30, 2002

         (f)    Plant and equipment and depreciation

                Plant  and  equipment  are  recorded  at cost  less  accumulated
                depreciation    and   impairment.    Repairs   and   maintenance
                expenditures,  which are not considered  improvements and do not
                extend the useful life of property and  equipment,  are expensed
                as  incurred.  The cost  and  related  accumulated  depreciation
                applicable to plant and  equipment  sold or no longer in service
                are  eliminated  from  the  accounts  and  any  gain  or loss is
                included in statement of operations.

                Depreciation  is  calculated  to write off the cost of plant and
                equipment  over their  estimated  useful  lives from the date on
                which  they  become  fully  operational  and after  taking  into
                account of their estimated  residual values,  using the straight
                line method, at the following annual rates:

                 Buildings                         20 years
                 Computer equipment                3 years
                 Motor vehicles                    5 years
                 Furniture and office equipment    5 years
                 Leasehold improvement             shorter of 1 to 3 years or
                                                   the unexpired term of leases

         (g)    Inventories

                Inventories  consist  of  finished  goods and are  valued at the
                lower of cost or market  using  weighted  average cost method of
                accounting.   As  of  June  30,  2003,   inventories   comprised
                photographic equipment.

         (h)    Goodwill

                Goodwill  represents  the excess of the purchase  price over the
                fair  value  of the net  tangible  and  identifiable  intangible
                assets  acquired in a business  combination.  In accordance with
                Statement of Financial  Accounting Standards No. 142 or SFAS No.
                142,  "Goodwill  and Other  Intangible  Assets",  goodwill is no
                longer subject to amortization.  Rather,  goodwill is subject to
                at  least  an  annual  assessment  for  impairment,  applying  a
                fair-value based test. Fair value is generally  determined using
                a discounted cash flow analysis.


-------------------------------------------------------------------------------

                                      F-10

<PAGE>

INTERMOST CORPORATION

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
-------------------------------------------------------------------------------


2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

         (i)    Computer software held for sale

                The Group  accounts for software  costs in accordance  with SFAS
                No. 86,  "Accounting  for the Costs of  Computer  Software to Be
                Sold, Leased, or Otherwise Marketed".

                Computer software held for sale represents the purchase price of
                software  license  acquired  during the year ended June 30, 2003
                and is amortized  over the  estimated  economic life of 2 years.
                The  amount of  amortization  and  charged to the  statement  of
                operations  amounted to  Rmb362,250  for the year ended June 30,
                2003.

         (j)    Impairment of long-lived assets

                Long-lived  assets are evaluated for impairment  whenever events
                or changes in circumstances indicate that the carrying amount of
                an asset may not be recoverable in accordance with SFAS No. 144,
                "Accounting   for  the  Impairment  or  Disposal  of  Long-Lived
                Assets".  An asset is considered impaired if its carrying amount
                exceeds  the  future  net cash  flow the  asset is  expected  to
                generate.  If such  assets is  considered  to be  impaired,  the
                impairment  to be  recognized is measured by the amount by which
                the carrying  amount of the asset exceeds its fair market value.
                The   recoverability   of  long-lived   assets  is  assessed  by
                determining  whether the  unamortized  balances can be recovered
                through  undiscounted  future  net  cash  flows  of the  related
                assets.  The amount of impairment,  if any, is measured based on
                projected discounted future net cash flows using a discount rate
                reflecting the Group's average cost of capital.

                Goodwill  is  evaluated,  at a minimum,  on an annual  basis and
                whenever  events and changes in  circumstances  suggest that the
                carrying amount may not be  recoverable.  Impairment of goodwill
                is tested at the reporting unit level by comparing the reporting
                unit's carrying amount, including goodwill, to the fair value of
                the reporting  unit. The fair values of the reporting  units are
                estimated using discounted cash flows approach.  If the carrying
                amount of the reporting unit exceeds its fair value, goodwill is
                considered  impaired  and a second step is  performed to measure
                the amount of impairment loss, if any.

         (k)    Net revenues

                The Company  recognizes  revenue on the  elements  when there is
                persuasive evidence of an agreement with customers, with a fixed
                fee  that is  collectible  and when  delivery  has  occurred  or
                service has been rendered.

                Revenue from website  development  contract is recognized  under
                the  percentage  of  completion  method  using  milestones  as a
                measure of progress towards  completion.  Revenues are allocated
                to the elements of the contract  based on the fair values of the
                elements.   Provisions   for  estimated   contract   losses  are
                recognized  in the  year the loss  becomes  probable  and can be
                reasonably estimated. The asset, costs and estimated earnings in
                excess of billings  represents  revenue  recognized in excess of
                amounts billed.

                Revenue  from   maintenance   contracts  is   recognized   on  a
                straight-line  basis over the term of the maintenance  contract,
                generally  twelve  months.  The unearned  portion of maintenance
                revenue is classified as deferred revenue and amortized over the
                life of the contract.

-------------------------------------------------------------------------------

                                      F-11

<PAGE>

INTERMOST CORPORATION

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
-------------------------------------------------------------------------------

2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

         (l)    Cost of revenues

                Cost of revenues  includes the cost of the direct  labour force,
                sub  contract  fee,  costs of  systems  sales  and  integration,
                depreciation and  amortization,  and other costs associated with
                the same, including travel, welfare, office and related expenses
                allocable to the engineering and technician staff.

         (m)    Write-back of welfare provisions

                Write-back   of   welfare   provisions   represented  amount  of
                provision  for welfare  made in previous  years  written back in
                current  year.  The  Group has made  provision  for  welfare  in
                previous years based on staff salaries.  However,  the Group has
                not paid out such welfare due to poor  performance  of the Group
                in recent  years.  As the Group has reduced its  manpower and is
                not  expecting to provide any other  welfare to existing and new
                staff (except for mandatory  welfare as required by local law or
                employment contracts), so the amount has been written back.

         (n)    Other net income

                Other net income  consists  mainly of rental income for the year
                ended  June 30,  2003.  For the year ended  June 30,  2002,  the
                amount  represented  rental  income  and  written  back of lease
                incentive.

         (o)    Income taxes

                Income taxes are provided under the  provisions of SFAS No. 109,
                which  requires   recognition   of  the  estimated   future  tax
                consequences  attributable to differences  between the financial
                statement  carrying  amounts of existing  assets and liabilities
                and their  respective  tax bases and net  operating  loss  carry
                forwards  under the  liability  method.  Deferred tax assets and
                liabilities  are measured using expected tax rates in effect for
                the year in which those temporary differences are expected to be
                recovered or settled.  The Group has  recorded a full  valuation
                allowance for its deferred tax assets as of June 30, 2003 due to
                the uncertainty of the realizability of those assets.

         (p)    Operating leases

                Leases  where   substantially  all  the  rewards  and  risks  of
                ownership  of  assets  remain  with  the  leasing   company  are
                accounted  for  as  operating   leases.   Rentals   payable  and
                receivable  under operating leases are recorded in the statement
                of  operations  on a  straight-line  basis over the lease terms.
                Lease  incentives  received are  recognized  in the statement of
                operations as an integral part of the net  consideration  agreed
                for the use of the leased asset.



-------------------------------------------------------------------------------

                                      F-12

<PAGE>

INTERMOST CORPORATION

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
-------------------------------------------------------------------------------



2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

         (q)    Comprehensive income (loss)

                The Group has  adopted  SFAS No.  130  "Reporting  Comprehensive
                Income",  which requires the disclosure of comprehensive income,
                which includes net income (loss), unrealized gains and losses on
                marketable  securities  classified  as  available-for-sale   and
                foreign currency  translation  adjustments.  Total comprehensive
                loss for the years ended June 30,  2002 and 2003 only  consisted
                of  net  loss  of  respective   years.  As  of  June  30,  2003,
                accumulated  other  comprehensive  loss was  comprised of mainly
                foreign currency translation adjustments.

         (r)    Foreign currency translation

                The Group  considers  Renminbi as its  functional  currency as a
                substantial portion of the Group's business activities are based
                in Renminbi.

                The  translation  of the financial  statements  of  subsidiaries
                whose  functional  currencies  are  other  than  Renminbi,  into
                Renminbi is performed for balance sheet  accounts  using closing
                exchange  rates in  effect  at the  balance  sheet  date and for
                revenue  and expense  accounts  using an average  exchange  rate
                during each reporting period. The gains or losses resulting from
                translation are included in stockholders'  equity  separately as
                accumulated other comprehensive loss.

                Transactions  in  currencies  other than  functional  currencies
                during the year are translated  into the  respective  functional
                currencies at the applicable rates of exchange prevailing at the
                time  of  the  transactions.  Monetary  assets  and  liabilities
                denominated in currencies  other than functional  currencies are
                translated   into  respective   functional   currencies  at  the
                applicable  rates of  exchange  in effect at the  balance  sheet
                date.  Exchange gains and losses are dealt with in the statement
                of operations.

                Translation of amounts from Renminbi  ("Rmb") into United States
                dollars  ("US$") is for the  convenience of readers and has been
                made  at the  noon  buying  rate  in New  York  City  for  cable
                transfers  in  foreign   currencies  as  certified  for  customs
                purposes  by the  Federal  Reserve  Bank of New York on June 30,
                2003 of US$1.00 = Rmb8.28.  No  representation  is made that the
                Renminbi  amounts could have been, or could be,  converted  into
                United States dollars at that rate or at any other rate.


-------------------------------------------------------------------------------

                                      F-13

<PAGE>

INTERMOST CORPORATION

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
-------------------------------------------------------------------------------



2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

         (s)    Loss per common share

                Loss per common  share is computed in  accordance  with SFAS No.
                128,  by  dividing  net  loss for each  period  by the  weighted
                average number of shares of common stock outstanding  during the
                period.

                The  computation  of diluted loss per common share is similar to
                basic loss per common  share,  except  that the  denominator  is
                increased to include the number of additional common shares that
                would  have  been   outstanding   if  all  dilutive   securities
                outstanding during the period were exercised.

                No  diluted  loss  per  common   share  was   presented  in  the
                consolidated  statements of operations as there were no dilutive
                securities  available  for exercise for the years ended June 30,
                2002 and 2003.

         (t)    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
                the 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. Such estimates include
                provisions for doubtful accounts,  sales returns and allowances,
                long-lived  assets and deferred  income  taxes.  Actual  results
                could differ from those estimates.

         (u)    Fair value of financial instruments

                The estimated fair values for financial  instruments  under SFAS
                No.   107,   "Disclosures   about   Fair   Value  of   Financial
                Instruments", are determined at discrete points in time based on
                relevant   market    information.    These   estimates   involve
                uncertainties  and  cannot be  determined  with  precision.  The
                estimated  fair  values of the  Group's  financial  instruments,
                which includes cash,  accounts  receivable and accounts payable,
                approximates their carrying value in the financial statements.

         (v)    Reclassifications

                Certain prior year balances have been reclassified to conform to
                the current year's presentation.



-------------------------------------------------------------------------------

                                      F-14

<PAGE>

INTERMOST CORPORATION

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
-------------------------------------------------------------------------------



2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

         (w)    Recent accounting pronouncements

                In June 2002, the Financial  Accounting Standards Board ("FASB")
                issued  Statement  of  Financial  Accounting  Standards  No. 146
                ("SFAS  146"),  "Accounting  for Costs  Associated  with Exit or
                Disposal  Activities".  SFAS 146 addresses financial  accounting
                and  reporting  for  costs  associated  with  exit  or  disposal
                activities  and nullifies  Emerging  Issues Task Force Issue No.
                94-3,  "Liability  Recognition for Certain Employee  Termination
                Benefits and Other Costs to Exit an Activity  (including Certain
                Costs  Incurred in a  Restructuring)".  SFAS 146 requires that a
                liability for costs associated with an exit or disposal activity
                be recognized and measured initially at fair value only when the
                liability is incurred,  rather than at the date of commitment to
                an exit or  disposal  plan.  SFAS 146 is  effective  for exit or
                disposal  activities that are initiated after December 31, 2002.
                The adoption of SFAS 146 have no material  impact on the Group's
                financial  position or results of operations,  although SFAS 146
                may impact the timing of  recognition of costs  associated  with
                future restructuring, exit or disposal activities.

                In December  2002,  the FASB issued  SFAS 148,  "Accounting  for
                Stock-Based  Compensation  -  Transition  and  Disclosure  -  An
                Amendment of FASB Statement No. 123". SFAS 148 amends  Statement
                of  Financial   Accounting   Standards  No.  123  ("SFAS  123"),
                "Accounting   for   Stock-Based   Compensation",    to   provide
                alternative  methods of transition for a voluntary change to the
                fair value based method of accounting for  stock-based  employee
                compensation.  SFAS 148 amends the  disclosure  requirements  of
                SFAS 123 to  require  prominent  disclosures  both in annual and
                interim financial  statements about the method of accounting for
                stock-based  employee  compensation and the effect of the method
                used on  reported  results.  The Company  has not  provided  any
                stock-based  compensation  plan to employee  for the years ended
                June 30,  2002 and 2003,  except for direct  issuance  of common
                stock for the year ended June 30, 2003. Such  compensation  cost
                amounted to Rmb997,011 for the year ended June 30, 2003.

                In November  2002, the FASB issued  Interpretation  No. 45 ("FIN
                45")  "Guarantor's  Accounting and Disclosure  Requirements  for
                Guarantees,  Including  Indirect  Guarantees of  Indebtedness of
                Others".   FIN  45   elaborates   on  the  existing   disclosure
                requirements for most guarantees,  including loan guarantees. It
                also  clarifies  that at the time a company  issues a guarantee,
                the Group  must  recognize  an  initial  liability  for the fair
                value, or market value, of the obligations it assumes under that
                guarantee.  However,  the  provisions  related to  recognizing a
                liability at inception  of the  guarantee  for the fair value of
                the guarantor's obligations does not apply to product warranties
                or to  guarantees  accounted  for as  derivatives.  The  initial
                recognition  and  initial  measurement  provisions  apply  on  a
                prospective   basis  to  guarantees  issued  or  modified  after
                December 31, 2002.  The  disclosure  requirements  of FIN 45 are
                effective for financial  statements of interim or annual periods
                ending after  December  15, 2002.  The Group does not expect the
                adoption  of FIN 45 will have a material  impact on the  Group's
                results of operations or financial position.


-------------------------------------------------------------------------------

                                      F-15
<PAGE>

INTERMOST CORPORATION

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
-------------------------------------------------------------------------------




 2.      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

         (w)    Recent accounting pronouncements (Continued)

                In January  2003,  the FASB issued  Interpretation  No. 46 ("FIN
                46") "Consolidation of Variable Interest  Entities".  Until this
                interpretation,  a company generally  included another entity in
                its consolidated  financial statements only if it controlled the
                entity  through  voting  interests.  FIN 46  requires a variable
                interest entity, as defined,  to be consolidated by a company if
                that  company is subject to a majority  of the risk of loss from
                the variable interest entity's activities or entitled to receive
                a majority of the entity's residual returns.  The Group does not
                expect the adoption of FIN 45 will have a material impact on the
                Group's results of operations or financial position.

                In November  2002,  the  Emerging  Issues  Task Force  reached a
                consensus   on  Issue  No.  00-21   ("EITF   00-21"),   "Revenue
                Arrangements  with Multiple  Deliverables".  EITF 00-21 provides
                guidance on how to account  for  arrangements  that  involve the
                delivery or performance of multiple  products,  services  and/or
                rights to use assets. The provisions of EITF 00-21 will apply to
                revenue  arrangements  entered into in fiscal periods  beginning
                after June 15,  2003.  The Group does not expect the adoption of
                EITF 00-21 will have a material impact on its financial position
                or results of operations.

                In April 2003, the FASB issued SFAS 149, "Amendment of Statement
                133 on  Derivative  Instruments  and Hedging  Activities".  This
                statement   amends  and  clarifies   financial   accounting  and
                reporting  for  derivative  instruments,   including  derivative
                instruments   embedded  in  other   contracts  and  for  hedging
                activities  under  SFAS No.  133.  The Group does not expect the
                adoption of SFAS 149 will have a material  impact on the Group's
                results of operations or financial position.

                In May 2003, the FASB issued SFAS 150,  "Accounting  for Certain
                Financial  Instruments with  Characteristics of both Liabilities
                and Equity".  SFAS No. 150 establishes standards for how certain
                financial  instruments with  characteristics of both liabilities
                and equity shall be classified  and measured.  This statement is
                effective  for  financial  instruments  entered into or modified
                after May 31, 2003,  and otherwise is effective at the beginning
                of the first interim period  beginning  after June 15, 2003. The
                Group  does not  expect  the  adoption  of SFAS 150 will  have a
                material impact on the Group's result of operations or financial
                position.

-------------------------------------------------------------------------------

                                      F-16

<PAGE>

INTERMOST CORPORATION

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
-------------------------------------------------------------------------------

3.       ACQUISITION

         In May 2003,  the Group  completed the  acquisition  of 51% interest in
         SNPE, a company  incorporated in Shanghai,  PRC. SNPE had no operations
         prior to acquisition and had no assets and liabilities  other than cash
         balances.  Only a  corporate  structure  had  been  setup.  Staff  with
         expertise in  photographic  business in Shanghai has been  recruited by
         the  vendor  (also a  minority  shareholder)  on behalf  of SNPE.  SNPE
         intends to commence  certain  photographic  business after  acquisition
         including  (1)  provision  of  management   services  for  photographic
         distribution outlets on behalf of the vendor, (2) sales of photographic
         equipment  and (3) joint  operation  of new  photographic  distribution
         outlets with the vendor. After acquisition,  SNPE is currently carrying
         on the  business  of sales of  photographic  equipment.  The  terms for
         provision  of  management  services  has not  been  finalized  with the
         vendor. The acquisition  grants the Company meaningful  presence in the
         digital  imaging  business.  The Company can assist SNPE to develop its
         digital  imaging  platform  for  photo  processing  and  other  related
         business,  which may provide further expansion into other parts of PRC.
         These factors  contributed to a purchase price in excess of fair market
         value of SNPE's net  tangible  assets  acquired,  and as a result,  the
         Company has recorded goodwill in connection with this transaction.

         The total purchase price of  Rmb4,823,552  consisted of Rmb4,305,600 in
         the Company's common stock representing 4,000,000 shares and Rmb200,000
         in cash consideration  paid to the vendor,  and commission  expenses of
         Rmb317,952 paid to an unrelated advisor.  The value of the common stock
         issued  was  based  on the  market  value  of the  common  stock at the
         completion date. The acquisition  agreement contains clause that should
         SNPE be unable to attain an annual turnover of Rmb20 million and annual
         net profit of Rmb2 million within 3 years from the completion date, the
         vendor shall pay a penalty of Rmb1,000,000 to the Group or shall return
         all the 4,000,000 shares of the Company's common stock to the Group.

         The  allocation  of the  purchase  price  to the  assets  acquired  and
         liabilities assumed based on the fair value of SNPE was as follows:

                                                                        Rmb

        Cash acquired                                               500,000
        Goodwill                                                  4,568,552
        Minority interest                                          (245,000)
                                                              ----------------

        Total                                                     4,823,552
                                                              ================

         Prior to the  acquisition  by the Group,  SNPE had no operations  since
         incorporated on April 3, 2003 and therefore no proforma  information is
         presented.  The results of operations of SNPE have been included  since
         the completion of the acquisition on May 29, 2003.

         Goodwill of  Rmb4,568,552  represents  the excess of the purchase price
         over the fair value of the net  tangible  assets  acquired,  and is not
         deductible  for tax  purposes.  The goodwill  has been  included in the
         photographic   business   segment.   The  Group  performed  its  annual
         assessment of goodwill and concluded that there was no impairment.

-------------------------------------------------------------------------------

                                      F-17

<PAGE>

INTERMOST CORPORATION
===============================================================================

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
-------------------------------------------------------------------------------




4.       DEPOSITS, PREPAYMENTS AND OTHER RECEIVABLES

         Deposits, prepayments and other receivables consisted of:
<TABLE>
<CAPTION>
                                                                                          AS OF JUNE 30, 2003
                                                                                  ------------------------------------
                                                                                            Rmb                   US$

<S>                                                                                     <C>                    <C>
        Rental and utilities deposits                                                   113,234                13,676
        Advance to employees                                                             27,845                 3,363
        Prepaid expenses                                                                 27,163                 3,281
        Advances to China Chance Technology & Electronics Co. Ltd.
          (Note 4(a))                                                                         -                     -
        Fortification for legal proceeding (Note 4(b))                                  535,000                64,614
        Business tax and government surcharges recoverable                               32,655                 3,944
        Due from minority shareholders                                                  245,000                29,589
        Other loan                                                                      255,000                30,796
        Others                                                                           78,937                 9,533
                                                                                  --------------        --------------

                                                                                      1,314,834               158,796
                                                                                  ==============        ==============
</TABLE>

         Notes:-

         (a)    This advance was for future fund raising  activities  or support
                to be provided by that  company  and is  collateralized  with an
                asset held in the PRC.  Full  allowance  for  doubtful  debts of
                Rmb197,950 has been made.

         (b)    During September of 2000, the Group entered into an agreement to
                acquire  58.3%  of  the  outstanding   shares  of  J.R.  Hi-Tech
                Investment  Corporation  ("JRHIC")  from  its two  stockholders.
                JRHIC's main investment via a holding  company,  is an ownership
                of 90% of  Shenzhen  China  Websecurity.com,  a  Chinese-foreign
                equity joint venture  established  in the PRC,  which engages in
                the provision of internet security services, systems integration
                and  software  development  services.  Based on the terms of the
                agreement,  the consideration was to be Rmb1,500,000 in cash and
                510,300  shares  of  common  stock  of  the  Company  valued  at
                Rmb10,974,001  or US$2.60 per share.  As of June 30,  2001,  the
                Group had paid  Rmb1,500,000  in cash,  but had not  issued  the
                510,300  shares  of  common  stock,  nor had they  received  the
                transfer of shares from the  stockholders of JRHIC. The Group is
                in the  process of  commencing  legal  action to  terminate  the
                agreement and attempt the recovery of  Rmb1,500,000.  Due to the
                uncertainty of any recovery from the  stockholders of JRHIC, the
                Group has  provided a valuation  allowance on the full amount of
                this receivable,  and has accounted for it as a bad debt expense
                in the fiscal year ended June 30,  2001.  During the fiscal year
                2002,  the Group paid  Rmb535,000 to the Court and an Injunction
                Order was granted against the Defendants to freeze bank accounts
                held in the name of the Defendants  until  conclusion or further
                order from the Court. The Group intends to proceed the matter to
                trial as soon as possible.

-------------------------------------------------------------------------------

                                      F-18

<PAGE>

INTERMOST CORPORATION

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
-------------------------------------------------------------------------------




5.       PLANT AND EQUIPMENT, NET

         Plant and equipment consisted of:
<TABLE>
<CAPTION>
                                                                                        AS OF JUNE 30, 2003
                                                                              ----------------------------------------
                                                                                           Rmb                    US$
<S>                                                                                 <C>                      <C>
         Building                                                                   2,790,204                336,980
         Computer equipment                                                           743,095                 89,746
         Furniture and office equipment                                               397,051                 47,953
         Leasehold improvements                                                       148,416                 17,925
         Motor vehicles                                                               532,470                 64,308
                                                                              -----------------      -----------------

         Cost                                                                       4,611,236                556,912
         Less: Accumulated depreciation and impairment                             (3,255,180)              (393,137)
                                                                              -----------------      -----------------

         Plant and equipment, net                                                   1,356,056                163,775
                                                                              =================      =================

</TABLE>
         On June 18,  2003,  the Group has entered  into an agreement to dispose
         its  building  of  cost  and  accumulated   depreciation   amounted  to
         Rmb2,790,204 and Rmb488,289  respectively.  As a result,  the Group has
         provided an impairment charge of Rmb1,360,000.

         Depreciation  expense  amounted to Rmb865,337  and  Rmb506,076 for the
         years ended June 30, 2002 and 2003 respectively.


6.       ACCRUALS AND OTHER PAYABLES

         Accruals and other payables consisted of:
<TABLE>
<CAPTION>
                                                                                        AS OF JUNE 30, 2003
                                                                               ---------------------------------------
                                                                                           Rmb                    US$
<S>                                                                                    <C>                     <C>
        Accrued operating expenses
            Wages and bonus                                                            129,999                 15,700
            Rental deposit received                                                     34,325                  4,146
            Legal and professional fees                                              1,169,618                141,258
        Others                                                                         246,285                 29,745
        Due to a former director (Note 11)                                             666,426                 80,487
                                                                               ----------------       ----------------

                                                                                     2,246,653                271,336
                                                                               ================       ================
</TABLE>

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                                      F-19

<PAGE>


INTERMOST CORPORATION

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
-------------------------------------------------------------------------------



7.       INCOME TAXES

         The Company  and its  subsidiaries  are  subject to income  taxes on an
         entity basis on income arising in or derived from the tax  jurisdiction
         in which they  operate.

         The  Company is subject to the United  States  federal tax at a rate of
         35%. IL was incorporated under the International Business Companies Act
         of the British  Virgin  Islands  and,  accordingly,  is  exempted  from
         payment of the British Virgin Islands  income taxes.  The  subsidiaries
         (IITSL,  CECITL, SBUJE and IFACL) established in the PRC are subject to
         PRC  enterprise  income taxes at a rate of 15%.  SNPE is subject to PRC
         enterprise  income  tax at a rate of 33%.  IHKL is subject to Hong Kong
         profits  tax at a rate of 16% and 17.5% for the  years  ended  June 30,
         2002 and 2003  respectively.  As of June 30,  2002 and 2003,  all group
         companies were in tax loss position.

         The  reconciliation of the United States federal income tax rate to the
         effective  income tax rate based on loss before  income taxes stated in
         the consolidated statements of operations is as follows:

<TABLE>
<CAPTION>
                                                                                        YEARS ENDED JUNE 30,
                                                                              -----------------------------------------
                                                                                         2002                   2003
                                                                                            %                      %

<S>                                                                                        <C>                    <C>
         United States federal income tax rate                                             35                     35
         Effect of different tax rates in foreign jurisdictions                           (10)                    (7)
         Valuation allowance for deferred tax assets                                      (25)                   (28)
                                                                              ------------------     ------------------

                                                                                            -                      -
                                                                              ==================     ==================

         Deferred taxation consisted of:
                                                                                        AS OF JUNE 30, 2003
                                                                              -----------------------------------------
                                                                                            Rmb                  US$
         Deferred tax assets, gross
             Net operating loss carry forwards                                      1,122,225                135,534
         Valuation allowance                                                       (1,122,225)              (135,534)
                                                                              ------------------     ------------------

         Deferred taxes, net                                                                -                      -
                                                                              ==================     ==================
</TABLE>

         The change in valuation  allowance  from June 30, 2002 to June 30, 2003
         is  primarily  related to the tax  effects of the  increase  in the net
         operating  loss in the current year. The Company has net operating loss
         carry forwards totaling approximately  Rmb7,481,497 as of June 30, 2003
         primarily relating to their operations in the PRC.

         A valuation  allowance has been  established for the full amount of the
         deferred  tax benefit  related to those loss carry  forwards  and other
         deferred tax assets as management  believes that it is more likely than
         not that the benefit will not be realized.

-------------------------------------------------------------------------------

                                      F-20

<PAGE>

INTERMOST CORPORATION

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
-------------------------------------------------------------------------------




8.       STOCKHOLDERS' EQUITY

         In May 2002, the Company issued  20,000,000  shares of common stock for
         cash at US$0.02 per share. The gross proceeds  amounted to Rmb3,312,000
         (equivalent  to  US$400,000).  In connection  with this  issuance,  the
         Company was required to pay an issuing cost by issuing 2,000,000 shares
         of common stock of Rmb331,200  (equivalent to US$40,000) to a placement
         agent.  The  subscription  proceeds  amounting to  Rmb788,257  had been
         received  and the  balance of  Rmb2,523,743  was held by the  placement
         agent. The money was released to the Company during the year ended June
         30, 2003.

         In May 2003,  the Company issued common stock to various  parties.  The
         value of common stock issued not for employee  compensation  were based
         on the  market  price of shares at the date of  transactions  or on the
         fair value of services received, whichever is more reliably measurable.
         The value of common stock issued as employee  compensation was based on
         the market  price of shares at the date of grant.  The  issues  were as
         follows:

         The  Company  issued  1,027,318  shares  of common  stock for  services
         rendered  at a range from  US$0.02 to  US$0.0532  per share.  2,213,401
         shares of common stock have been issued to the chief executive  officer
         of the Company,  Mr. Andy Lin, for partial  settlement of amount due to
         Mr. Lin at US$0.15 and US$0.02 per share.  The Company issued 1,709,400
         shares of common  stock  each,  to the chief  executive  officer of the
         Company,  Mr. Lin, and an employee of the Company, at US$0.03 per share
         as part of their remuneration in fiscal 2003. In addition,  the Company
         issued  200,000  shares of common stock each,  to two  directors of the
         Company at US$0.04  and  US$0.03  per share.  The  Company  also issued
         52,000  shares to an  ex-employee  of the Company as  dismissal  notice
         compensation  at US$0.074 per share.  2,014,066  shares of common stock
         were  issued to various  creditors  for  settlement  of balance  due at
         US$0.001 to US$0.02 per share.  4,000,000  shares of common  stock were
         issued to acquire 51% of interest in SNPE at US$0.13 per share.

         During the year ended June 30, 2003,  the Company had 3,820,000  common
         stock  reserved  and to be  issued  to  various  parties  for  services
         rendered, at a range from US$0.03 to US$0.24 per share.


9.       OPERATING LEASE COMMITMENTS

         The Group has operating  lease  agreements  for office  premises  which
         extend through 2005.  Rental expenses for the years ended June 30, 2002
         and 2003 were approximately,  Rmb385,888 and Rmb144,963,  respectively.
         Future minimum rental  payments as of June 30, 2003,  under  agreements
         classified  as  operating  leases  with  non-cancelable  terms,  are as
         follows:
<TABLE>
<CAPTION>

                                                                                        AS OF JUNE 30, 2003
                                                                               ---------------------------------------
                                                                                           Rmb                    US$
        Fiscal year:
<S>         <C>                                                                        <C>                      <C>
            2004                                                                       123,000                  14,855
            2005                                                                        10,250                   1,238
                                                                               ================       ================

</TABLE>

-------------------------------------------------------------------------------

                                      F-21

<PAGE>

INTERMOST CORPORATION

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
-------------------------------------------------------------------------------




10.      RETIREMENT PLAN AND POST-EMPLOYMENT BENEFITS

         The Group has no retirement  plan or  post-employment  benefits for its
         employees.

11.      RELATED PARTY TRANSACTIONS

         In addition to the  transactions / information  disclosed  elsewhere in
         the  financial  statements,  during  the  years,  the  Company  had the
         following transactions with related parties.

         (1) Related party transaction during the years are as follows:-

<TABLE>
<CAPTION>
                 NAME OF RELATED PARTY                         EXISTING RELATIONSHIP WITH THE GROUP

                 Corporate Conventions International Limited   A director of the Company, Mr. Shim Yang, is a
                                                                 shareholder of, and controls the management of this
                                                                 company


                                                                                      YEARS ENDED JUNE 30,
                                                                            ------------------------------------------
                                                                                    2002           2003          2003
                                                                                     Rmb            Rmb           US$
<S>                                                                                 <C>            <C>           <C>
                 Written off of amount due from a related company
                     Corporate Conventions International Limited                       -         72,345          8,738

                                                                            ============  ============= ==============
         (2) Balances with related parties are as follows:

                                                                                           AS OF JUNE 30, 2003
                                                                                    ----------------------------------
                                                                                              Rmb                 US$
                 Due to a director:
                     Mr. Andy Lin                                                         422,871              51,071
                                                                                    ==============       =============

                 Due to a former director:
                     Mr. Jun Liang                                                        666,426              80,487
                                                                                    ==============       =============
</TABLE>

                  Mr. Jun Liang  ceased to be a director of the Company upon the
                  Company  redomiciled  from the  State of Utah to the  State of
                  Wyoming.

                  The  outstanding  balances with  director and former  director
                  were    unsecured,    non-interest    bearing    and   without
                  pre-determined repayment terms.

-------------------------------------------------------------------------------

                                      F-22

<PAGE>

INTERMOST CORPORATION

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
-------------------------------------------------------------------------------



12.      SEGMENT INFORMATION

         The Group  adopted  SFAS No.  131  "Disclosures  About  Segments  of an
         Enterprise  and  Related  Information",  in  respect  of its  operating
         segments.  The Group's  reportable  segments are  E-Commerce  Solutions
         section,   System  Sales  Integration  section,  Phone  Payment  System
         section, Web Advertisement  section, Sales of Computer Software section
         and  Photographic   Business  section.   E-Commerce  solutions  section
         comprises  revenue from website  development  contracts and maintenance
         contracts.   Photographic   Business   section  consists  of  sales  of
         photographic equipment.

         They are managed  separately  because each business requires  different
         technology and marketing  strategies.  The Group evaluates  performance
         based on  operating  earnings of the  respective  business  units.  The
         accounting  policies of the segments are the same as those described in
         the summary of significant  accounting  policies.  The corporate assets
         primarily  include  cash and cash  equivalents  and  deposit  and other
         receivables.  There  were  no  significant  inter-segment  transactions
         during  any  of  the  reported   periods.   In  determining   operating
         income/loss by reportable segment,  general corporate  expenses,  other
         income and expense items of non-operating nature are not considered, as
         such  items  are  not  allocated  to  the  Group's  segments.   Segment
         information for the years ended June 30, 2002 and 2003 are as follows:

         (a)    Net revenues
<TABLE>
<CAPTION>
                                                                              YEARS ENDED JUNE 30,
                                                           -----------------------------------------------------------
                                                                      2002                  2003                 2003
                                                                       Rmb                   Rmb                  US$
<S>                                                                   <C>                   <C>                  <C>
               E-commerce solutions                              3,138,809             1,291,637              155,995
               System sales and integration                        927,384               304,967               36,832
               Phone payment system                                      -                     -                    -
               Web advertisement                                   836,055                 1,800                  217
               Sales of computer software                                -               346,962               41,904
               Photographic business                                     -             1,749,709              211,317
                                                           ----------------     -----------------    -----------------

                                                                 4,902,248             3,695,075              446,265
                                                           ================     =================    =================

               The PRC                                           4,773,249             3,695,075              446,265
               Hong Kong                                           128,999                     -                    -
                                                           ----------------     -----------------    -----------------

                                                                 4,902,248             3,695,075              446,265
                                                           ================     =================    =================
</TABLE>

-------------------------------------------------------------------------------

                                      F-23


<PAGE>

INTERMOST CORPORATION

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
-------------------------------------------------------------------------------




12.      SEGMENT INFORMATION (CONTINUED)

         (b)   Net loss:
<TABLE>
<CAPTION>
                                                                               YEARS ENDED JUNE 30,
                                                            -----------------------------------------------------------
                                                                         2002                 2003                2003
                                                                          Rmb                  Rmb                 US$
<S>                                                               <C>                  <C>                   <C>
               E-commerce solutions                               (2,558,483)          (2,928,202)           (353,648)
               System sales and integration                         (273,252)            (168,179)            (20,311)
               Phone payment system                                 (557,870)                   -                   -
               Web advertisement                                      36,897               (7,974)               (963)
               Sales of computer software                                  -              168,487              20,349
               Photographic business                                       -               81,035               9,787
                                                            ------------------   ------------------   -----------------

                                                                  (3,352,708)          (2,854,833)           (344,786)

               Reconciliation:
               Net loss for reportable segments                   (3,352,708)          (2,854,833)           (344,786)
               Unallocated corporate expenses                     (3,601,056)          (6,077,776)           (734,032)
                                                            ------------------   ------------------   -----------------

                                                                  (6,953,764)          (8,932,609)         (1,078,818)
                                                            ==================   ==================   =================


         (c)   Assets:
                                                                                          AS OF JUNE 30, 2003
                                                                                 --------------------------------------
                                                                                             Rmb                  US$

               E-commerce solutions                                                    2,588,933              312,673
               System sales and integration                                                6,108                  738
               Web advertisement                                                          12,527                1,513
               Sales of computer software                                                 61,153                7,386
               Photographic business                                                   6,950,844              839,474
                                                                                 ------------------   -----------------

                                                                                       9,619,565            1,161,784
                                                                                 ==================   =================

               Reconciliation:
               Total assets for reportable segments                                    9,619,565            1,161,784
               Other corporate assets                                                    911,721              110,110
                                                                                 ------------------   -----------------

                                                                                      10,531,286            1,271,894
                                                                                 ==================   =================
</TABLE>

               Substantially all of the Group's  identifiable assets are located
               in the PRC.


-------------------------------------------------------------------------------

                                      F-24

<PAGE>

INTERMOST CORPORATION

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
-------------------------------------------------------------------------------




12.      SEGMENT INFORMATION (CONTINUED)

       (d)     Other items:
<TABLE>
<CAPTION>
                                                                               YEARS ENDED JUNE 30,
                                                             ----------------------------------------------------------
                                                                        2002                 2003                 2003
                                                                         RMB                  RMB                  US$
<S>                                                                  <C>                  <C>                  <C>
               Depreciation:
                   E-commerce solutions                              723,318              477,398              57,656
                   System sales and integration                       15,812                3,027                 366
                   Phone payment system                               37,326                    -                   -
                   Web advertisement                                  12,930                    -                   -
                   Sales of computer software                              -                4,542                 549
                   Unallocated corporate assets                       75,951               21,109               2,549
                                                             ----------------     ----------------    -----------------

                                                                     865,337              506,076              61,120
                                                             ================     ================    =================

               Expenditures for fixed assets:
                   E-commerce solutions                               16,500               25,690               3,103
                   Unallocated corporate assets                      195,402                    -                   -
                                                             ----------------     ----------------    -----------------

                                                                     211,902               25,690               3,103
                                                             ================     ================    =================

               Impairment of fixed assets:
                   E-commerce solutions                                    -            1,360,000             164,251
                                                             ================     ================    =================
</TABLE>

         (e)    Major customers

                For the year ended June 30, 2002, no single  customer  accounted
                for more than 10% of total revenue.  For the year ended June 30,
                2003,  the  two  largest  customers  were  in  the  photographic
                business segment and accounted for 23% and 10% of total revenue.


13.      OPERATING RISK

         (a)    Country risk

                The Group's  operations  are conducted in the PRC and Hong Kong.
                Accordingly,  the  Group's  business,  financial  condition  and
                results  of  operations  may be  influenced  by  the  political,
                economic and legal environments in the PRC and Hong Kong, and by
                the general state of the PRC and Hong Kong economies.

                The  Group's  operations  in the  PRC  are  subject  to  special
                considerations  and significant  risks not typically  associated
                with  companies  in North  America  and  Western  Europe.  These
                include risks  associated  with,  among others,  the  political,
                economic and legal  environments and foreign currency  exchange.
                The Group's results may be adversely  affected by changes in the
                political  and  social  conditions  in the PRC,  and  changes in
                governmental  policies  with  respect  to laws and  regulations,
                anti-inflationary  measures,  currency conversion and remittance
                abroad, and rates and methods of taxation, among other things.

-------------------------------------------------------------------------------

                                      F-25

<PAGE>


INTERMOST CORPORATION

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
-------------------------------------------------------------------------------



13.      OPERATING RISK (CONTINUED)

         (b)    Industry risk

                The Group operates in business  segments which are characterized
                by   rapid   technological   advances,   changes   in   customer
                requirements and evolving  regulatory  requirements and industry
                standards.  Any failure by the Group to anticipate or to respond
                adequately to  technological  changes in its industry  segments,
                changes  in  customer  requirements  or  changes  in  regulatory
                requirements  or  industry  standards,  could  have  a  material
                adverse effect on the Group's business and operating results.

         (c)    Concentration of credit risk

                As of June 30,  2003,  two  customers  had  accounts  receivable
                balances  representing 72% and 11% of total accounts  receivable
                balance.  No other customer had an accounts  receivable  balance
                that exceeded 10% of total accounts receivable balance.  For the
                year ended June 30, 2003,  the two largest  customers  accounted
                for 23% and 10% of total revenue.

                The Group performs ongoing credit  evaluation of each customer's
                financial condition.  It maintains reserves for potential credit
                losses  and such  losses  in the  aggregate  have  not  exceeded
                management's projections.


14.      SUBSEQUENT EVENTS

         In July 3, 2003 the Company's wholly-owned  subsidiary,  IITSL, entered
         into an agreement, subject to the final approval from the government of
         Shenzhen and Hainan, PRC to its proposed  acquisition of (i) 21% of the
         issued and outstanding  shares of Hainan Special Economic Zone Property
         Rights  Exchange  Center   ("Exchange   Center")  from  Hainan  Concord
         Investment  Holding  Co.,  Ltd.  and  Guangzhou  Keensheng  Science and
         Technology  Development Co., Ltd., the owners of 100% of the issued and
         outstanding  capital  stock  of  Exchange  Center  (collectively,   the
         "Exchange  Stockholders")  and (ii) 80% of the issued  and  outstanding
         shares of Hainan  Concord  Financial  Products  Development  Co.,  Ltd.
         ("Development")  from Hainan Concord  Investment  Holding Co., Ltd. and
         Guangzhou Ditai Communication Co., Ltd. (collectively, the "Development
         Stockholders").  Development is an owner of 51% of the shares of Hainan
         Yangpu Multifunctional Smart Card Sales and Management Co. Ltd.

         Pursuant to the Stock Exchange  Agreement  relating to Exchange Center,
         IITSL paid the Exchange Stockholders  5,000,000 shares of the Company's
         restricted common stock, having a value of Rmb8,980,000  (approximately
         US$1,085,000).  The  consideration  for the  transaction  was agreed to
         after negotiation by the parties, none of whom is related.

         Exchange  Center  is the only  institution  in Hainan  approved  by the
         Hainan  Provincial  Securities  Commission to facilitate the trading of
         property  rights,  including  intellectual  property  rights.  Exchange
         Center  charges a  transaction  fee of 0.3% on each  trade.  The Group,
         through IITSL, intends to continue and expand these operations in PRC.

-------------------------------------------------------------------------------

                                      F-26

<PAGE>


INTERMOST CORPORATION

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
-------------------------------------------------------------------------------



14.      SUBSEQUENT EVENTS (CONTINUED)

         Pursuant to the Stock Exchange Agreement relating to Development, IITSL
         paid the  Development  Stockholders  5,000,000  shares of the Company's
         restricted common stock, having a value of Rmb8,980,000  (approximately
         US$1,085,000).  The  consideration  for the  transaction  was agreed to
         after negotiation by the parties, none of whom is related.

         Development   provides   financial   institutions   with  research  and
         development services related to financial products and instruments. Its
         subsidiary,   Hainan  Yangpu   Multifunctional  Smart  Card  Sales  and
         Management Co. Ltd., issues and manages multifunctional smart cards and
         provides related  services.  The Group,  through IITSL, also intends to
         continue and expand these operations in PRC.

         In July 2003, the Company issued total 6,053,700 shares of common stock
         in two placements and raised around US$1,200,000 as working capital.


-------------------------------------------------------------------------------

                                      F-27