**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, 2007





**o**
            **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
      BusinessIssuer in its charter)







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





31st
      Floor, B31-23
      Guomao Building, Renmin Rd. (South),


Shenzhen,
      China
      518001


(Address
      of principal executive offices)(Zip code)





Issuer’s
      telephone number:  86 755 822 10238





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







Title
                of each class
            Name
                of each exchange on which each is registeredNone
            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 is not
      required to file reports pursuant to Section 13 or 15(d) of the Exchange
      Act.  o





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 ý  No o





Check
      if there is no disclosure of
      delinquent filers in response to Item 405 of Regulation S-B contained in this
      form, and no disclosures will 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.
      o





Indicate
      by check mark whether the
      registrant is a shell company (as defined in Rule 12b-2 of the Exchange
      Act).  Yes o  No ý





State
      issuer’s revenues for its most
      recent fiscal year.  $4,549,840





State
      the aggregate market value of the
      voting and non-voting common equity held by non-affiliates computed by reference
      to the price at which the common equity was sold, or the average bid price
      and
      asked price of such common equity, as of a specified date within the past 60
      days.  (See definition of affiliate in Rule 12b-2 of the Exchange
      Act).  As of September 9, 2007 the aggregate market value of the
      registrant’s common stock held by non-affiliates of the registrant was
      approximately $24,182,461, based on the average bid and asked price of such
      common stock as reported on the NASD Bulletin Board system.  Shares of
      common stock held by each officer and director and each person who owns more
      than 10% or more of the outstanding common stock have been excluded because
      these persons may be deemed to be affiliates.  The determination of
      affiliate status for purpose of this calculation is not necessarily a conclusive
      determination for other purposes.





The
      number of shares of the
      registrant’s common stock, $.001 par value per share, outstanding as of
      September 9, 2007 was 215,370,278.





Transition
      Small Business Disclosure
      Format:  Yes o  No ý









**TABLE
      OF CONTENTS**




PART
                  I
              
              
              PageITEM
                  1.
              DESCRIPTION
                  OF BUSINESS
              3ITEM
                  2.
              DESCRIPTION
                  OF PROPERTY
              12ITEM
                  3.
              LEGAL
                  PROCEEDINGS
              12ITEM
                  4.
              SUBMISSION
                  OF MATTERS TO A VOTE OF SECURITY
                  HOLDERS
              14PART
                  IIITEM
                  5.
              MARKET
                  FOR COMMON EQUITY AND RELATED STOCKHOLDER
                  MATTERS AND SMALL BUSINESS ISSUER PURCHASES OF
                  EQUITY SECURITIES
              14ITEM
                  6.
              MANAGEMENT’S
                  DISCUSSION AND ANALYSIS OR PLAN OF
                  OPERATION
              15ITEM
                  7.
              FINANCIAL
                  STATEMENTS
              21ITEM
                  8.
              CHANGES
                  IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
                  AND FINANCIAL DISCLOSURE
              27ITEM
                  8A.
              CONTROLS
                  AND PROCEDURES
              27ITEM
                  8B.
              OTHER
                  INFORMATION
              28PART
                  IIIITEM
                  9.
              DIRECTORS,
                  EXECUTIVE OFFICERS, PROMOTERS, CONTROL PERSONS
                  AND CORPORATE GOVERNANCE; COMPLIANCE WITH SECTION 16(a) OF THE
                  EXCHANGE
                  ACT
              28ITEM
                  10.
              EXECUTIVE
                  COMPENSATION
              30ITEM
                  11.
              SECURITY
                  OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
                  MANAGEMENT AND RELATED STOCKHOLDER MATTERS
              33ITEM
                  12.
              CERTAIN
                  RELATIONSHIPS AND RELATED TRANSACTIONS, AND
                  DIRECTOR INDEPENDENCE
              34ITEM
                  13.
              EXHIBITS
              34ITEM
                  14.
              PRINCIPAL
                  ACCOUNTANT FEES AND SERVICES
              37SIGNATURES
              
              
              64








**Note
      Regarding Forward Looking Statements**





This
        Annual Report on Form
        10-KSB and any information incorporated herein by reference contain
“forward-looking statements.”  These forward-looking statements are
        based on our current expectations, assumptions, estimates and projections
        about
        our business and our industry and involve a number of risks and uncertainties,
        as well as assumptions that, if they never materialize or if they prove
        incorrect, would likely cause our results to differ materially from those
        expressed or implied by such forward-looking statements.  Although our
        forward-looking statements reflect the good faith judgment of our management,
        these statements can only be based on facts and factors currently known by
        us.  Consequently, forward-looking statements are inherently subject
        to risks and uncertainties, and actual results and outcomes may differ
        materially from results and outcomes discussed in the forward-looking
        statements.





Words
      such
      as “believe,” “anticipate,” “expect,” “intend,” “plan,” “could,” “should,”
hope,” “seek,” “may,” and other similar expressions (including their use in the
      negative) 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:





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





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





·
            our
                ability to successfully compete in our markets and
                industries,





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





·
            adverse
                changes to the political, economic or social conditions in
                China





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.





These
        statements include, but are not limited to, statements under the captions
        “Business,” “Risk Factors,” and “Management’s Discussion and Analysis of
        Financial Condition and Results of Operations,” as well as other sections in
        this Annual Report.  You should be aware that the occurrence of any of
        the events discussed under the heading “Risk Factors” and elsewhere in this
        Annual Report could substantially harm our business, results of operations
        and
        financial condition.  If any of these events occurs, the trading price
        of our common stock could decline and you could lose all or a part of the
        value
        of your shares of our common stock.





The
        cautionary statements made in this Annual Report are intended to be applicable
        to all related forward-looking statements wherever they may appear in this
        Annual Report.  We urge you not to place undue reliance on these
        forward-looking statements, which speak only as of the date of this Annual
        Report.





**Information
      on Currency Translation**







1


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 Rmb7.6248 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.  Renminbi which had been tightly pegged at Rmb8.28 for US$1
      for the previous decade, was revalued on July 21, 2005 to Rmb8.11 for US$1
      following the removal of the peg to the US dollar and pressure for the United
      States.  The Peoples Bank of China also announced that the Renminbi
      would be pegged to a basket of foreign currencies, rather then being strictly
      tied to the US dollar and would trade within a narrow 0.3% band against this
      basket of currencies, which is dominated by the US dollar, Euro, Japanese Yen
      and South Korean Won, with a smaller proportion made up of the British pound,
      Thai Baht and Russian Ruble.  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.




2





**PART
      I**





**ITEM
      1.    DESCRIPTION OF
      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,” “IMOT,” 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
      shares 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 reincorporated from Utah to the State of
      Wyoming.





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, some
      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 after mid-2000, which resulted in a significant economic slowdown
      that
      affected many of the companies with whom we do business, materially undermined
      the effectiveness of our efforts.  While we continued (and still
      continue) to offer web design and hosting services to customers in China through
      our subsidiary, ChinaE.com Information Technology Ltd. (“ChinaE”), we also began
      to look for ways to diversify or expand our business.





In
      November 2002 ChinaE 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 was one
      of two distributors of these licenses in China.





With
      the
      assistance of KanHan, the Company opened an office in Guangzhou in April
      2003.  The office was staffed with two persons who were responsible
      for introducing these products to businesses and government agencies in
      Guangdong Province.  For a period of approximately one year, KanHan
      subsidized the costs related to maintaining this office and developing a market
      for these products.  The amount of the subsidy was approximately
      $12,800 per month.  The office was closed in March 2004 and the
      Company is not longer receiving the subsidy, although it continues to market
      the
      licenses.




3


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 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 located in
      Shanghai and is engaged in the sale of digital photographic
      equipment.  Approval of the governments of Shenzhen and Shanghai 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.





On
      October
      3, 2003 IMOT Technology entered into an agreement for the acquisition of 25%
      of
      the issued and outstanding shares of Shanghai Fortune Venture Limited (“Shanghai
      Fortune”) from certain shareholders of Shanghai Fortune.  Shanghai
      Fortune has the right to operate equity exchange transactions in Shanghai,
      and
      through its investment in Xi’an Assets and Equity Exchange, operate an equity
      exchange in Xi’an. In China, equity, including intellectual property rights, may
      be listed on and transferred through such exchanges.  The share
      transfer was approved by the government of Shanghai on April 12,
      2004.  The consideration for this acquisition was Rmb600,000,
      approximately $72,464, in cash plus 10 million shares of our restricted common
      stock.  The value of the common stock was determined to be $0.24 per
      share, based upon the average of the closing prices for the 10-day period from
      September 22, 2003 to October 1, 2003.  The shares were issued on
      April 14, 2004.





On
      May 23,
      2006, IMOT signed an agreement to sell the 25% shareholding investment in
      Shanghai Fortune to Mr. Li Laohu.  The net asset value of Shanghai
      Fortune as at December 31, 2005, the latest audited financial statements date,
      was Rmb 21,957,791.  The consideration received by IMOT for the sale
      of the 25% shareholding was agreed at redemption of 6,500,000 shares of
      restricted common stock of IMOT with a value of US$0.18 per share, which was
      the
      closing price of IMOT share of common stock as at May 23, 2006, held and
      transferred by Mr. Li Laohu, Mr. Li Xiaoqin and Ms. Huang Xiujuan.





Since
      December 6, 2002, Shanghai Fortune has been an official registered member of
      the
      Shanghai Technology Exchange (the “STE”) and was entitled to conduct exchange
      business with the STE. The STE was the major entity in the Shanghai Equity
      Exchange Market.  Shanghai Fortune had the exclusive right to manage
      and operate the North Shanghai Branch (the “NSB”) of the STE. The NSB had the
      right to conduct the same exchange business as STE and share 80% of the profits
      with the STE.





Shanghai
      Fortune was also a founder and major participant in the Yangtze River Delta
      Equity Exchange Market Place (the “YRDE”).  The YRDE included more
      than 14 major exchanges in Shanghai and the surrounding cities and was the
      largest equity exchange market place in China.





However,
      in December 2003, the STE and another exchange were merged into the Shanghai
      United Assets and Equity Exchange (the “SUAEE”).  The SUAEE is a
      non-profit government-sponsored organization.





As
      a
      result of the merger of the STE, although Shanghai Fortune continues to maintain
      its membership, it is currently still unclear how the NSB and the YRDE will
      conduct business going forward, and how Shanghai Fortune will participate in
      the
      equity exchange markets following the issuance of final regulations by the
      local
      PRC government.  Due to the uncertainty of the content and timing of
      governmental regulations, IMOT entered into the May 23, 2006 agreement for
      the
      sale of its interest in Shanghai Fortune





4


On
      August
      10, 2004, all necessary government approvals were obtained to complete the
      transfer of 51% of the issued and outstanding shares of Golden Anke Technology
      Ltd. (“Golden Anke”) from two of its shareholders, Tu Guoshen and Li Zhiquan, to
      IMOT Technology.  Pursuant to the Share Transfer Agreement signed on
      March 31, 2004 among IMOT Technology, Intermost, Golden Anke, Tu Guoshen and
      Li
      Zhiquan, the purchase price paid for the stock was $3.24 million.  On
      August 10, 2004 we issued to the selling shareholders 12 million shares of
      our
      common stock, in full payment of the purchase price.  The value of our
      common stock was determined by applying a 20% discount to the average closing
      price during the period from January 20 to March 19, 2004.  Golden
      Anke is a leading digital security imaging system provider operating in
      China.  Golden Anke offers a variety of solutions in video
      surveillance, digital image processing and compression, Internet image transfer
      and imaging security systems.  We recently sold approximately two
      percent (2%) of the outstanding shares in Golden Anke to an unaffiliated
      minority stockholder so that this minority stockholder could seek an independent
      listing of Golden Anke on a UK exchange thus reducing our ownership from
      approximately 51% to approximately 49%.





In
      September 2, 2004, IML incorporated a 100% owned subsidiary, ChinaE.com
      Technology (Shenzhen) Ltd. (“ChinaE Tech”), to take over the business of ChinaE
      to provide and support Internet services including, but not limited to,
      web-hosting, web design, domain name registration and software
      development.





On
      December 8, 2004, IMOT Technology entered into an agreement for the acquisition
      of 15% of the issued and outstanding shares of Shenzhen International Hi-Tech
      Exchange (“Hi-Tech Exchange”) from Shenzhen Merchant Technology Investment Co.,
      Ltd.  Hi-Tech Exchange is an enterprise authorized by the PRC
      government to carry out business in the transfer of hi-tech property rights
      and
      corporate equity interests.  The share transfer was approved by the
      government of Shenzhen on February 25, 2005.  The consideration for
      this acquisition was 2,470,355 shares of our common stock.  The value
      of the common stock was determined to be $0.22 per share based upon the average
      of the closing prices for the period from October 18, 2004 to November 18,
      2004.  The shares were issued on February 28,
      2005.  Subsequently, on December 8, 2006, we redeemed all of these
      2,470,355 shares for an aggregate redemption price of
      US$805,214.75.





On
      January
      6, 2005, all necessary government approvals were obtained to complete the
      transfer of 80% of the issued and outstanding shares of Hainan Concord Financial
      Products Development Co., Ltd. (“Hainan Concord”) from Guangzhou Ditai
      Communication Co., Ltd. and Zhai Xiya to IMOT Technology.  Pursuant to
      the Share Transfer Agreement signed on December 11, 2004 the purchase price
      paid
      for the stock was $917,874.  On January 12, 2005 we issued to the
      selling shareholders 5,000,000 shares of our restricted common stock, in full
      payment of the purchase price.  The value of our common stock was
      determined by applying a 15% discount to the average closing price for the
      10
      day trading period from November 16, 2004 to November 30,
      2004.  Hainan Concord’s principal business is to issue and manage
      multi-functional membership cards for the people who participate in private
      equity exchange in Hainan.  Hainan Concord also provides financial
      institutions with research and development services for their financial products
      and instruments.





On
      October
      19, 2005, all necessary government approvals were obtained to complete the
      transfer of 21% of the issued and outstanding shares of Hainan Special Economic
      Zone Equity Exchange Center (the “Exchange Center”) from Hainan Concord
      Investment Holding Co., Ltd. and Guangzhou Keensheng Science and Technology
      Development Co., Ltd. Pursuant to the Stock Exchange Agreement, the Company
      issued to the Exchange Stockholders 5,000,000 shares of the Company’s common
      stock having a value of RMB8,799,350 (approximately
      US$1,085,000).  The consideration for the transaction was agreed to
      after arm’s-length negotiations between the parties, which are unrelated to each
      other.  On October 19, 2005, we issued to the selling shareholders
      5,000,000 shares of our common stock, in full payment of the purchase
      price.




5


On
      July
      13, 2006, IML incorporated a 100% owned subsidiary, Leader Palace International
      Ltd. (“LPI”), to explore businesses in Taiwan region.  LPI started to
      negotiate an investment in touch panel manufacturing and such acquisition was
      still ongoing.





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





**Products
      and Services**





**Internet
      Services**





Through
      ChinaE Tech, our wholly-owned subsidiary, we offer web design, web hosting,
      domain name registration, software development and office automation software
      to
      our clients.  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 to consumers directly.





We
      locate
      web design and hosting customers and secure web design and hosting projects
      primarily through the efforts of our sales team.  We currently employ
      10****sales persons for our Internet solution
      services.  All of our sales team members are based in Shenzhen, but
      occasionally travel throughout China, as necessary.  Our sales persons
      are paid a base salary, and earn commissions on revenues we receive from the
      customers they secure.





**Digital
      Imaging System**





Shanghai
      Newray is a wholesaler of various brands of consumer digital photographic
      equipment, including traditional 35mm cameras, digital cameras and camera
      accessories.





For
      fiscal
      year ended 2006 through Golden Anke, we have our digital imaging services
      business in digital imaging security systems for offices, department stores
      and
      shopping malls.  Since IML has sold approximately 2% of the
      outstanding shares of Golden Anke to a minor shareholder and our ownership
      in
      Golden Anke has decreased to approximately 49% of the issued and outstanding
      stock, in accordance with GAAP the sales revenue of Golden Anke has not
      incorporated into our consolidated revenues.  The result of activities
      of Golden Anke during 2007 is shown under “Equity in earnings of an associated
      company”.





Both
      Shanghai Newray and Golden Anke sell their products through sales
      representatives.





**Equity
      Exchange**





Equity
      exchanges are platforms that permit privately-owned and state-owned equity
      transactions.  Subject to the parameters established by the government
      of China, equity exchanges provide services for the purchase and sale of equity
      rights, debts, intellectual property rights and technology property
      rights.  Equity listed on the exchanges may be traded through
      negotiation, auction and bids.





6


Our
      subsidiary, Hainan Concord’s principal business is to issue and manage
      multi-functional membership cards for the people who participate in private
      equity exchange in Hainan, and has an exclusive agreement with Hainan Exchange
      Centre Non-Public Company Registration Co., Ltd. to issue multi-functional
      membership and credit cards to their members.





Through
      our 15% investment in Hi-Tech Exchange and 21% investment in Exchange Center,
      we
      have further expanded our investment in Shenzhen and Hainan,
      China.  Hi-Tech Exchange and Exchange Center are authorized by the
      government of China to engage in the business of transferring equity and
      corporate equity interests in Shenzhen and Hainan.





At
      this
      time the various equity exchanges in China work, for the most part,
      independently of one another.  We believe that this is
      inefficient.  We are in the process of using our software technology
      to develop, and we hope to eventually implement, an electronic information
      and
      trading platform for equity exchanges that will enable the flow of information
      regarding rights transfers, as well as payments, among the different equity
      exchanges in China, including those owned and operated by Hi-Tech Exchange
      and
      Exchange Center.





**Competition**





**Internet
      Services**





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





Most
      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 pressure on us.  We  are a significant
      presence, in the Chinese market for Internet services.





**Equity
      Exchange**





There
      is
      no national equity exchange in China.  It has been estimated that
      there are approximately 100 equity exchanges in China, most of them small in
      scale and serving only the local area.  There are also a few large
      equity exchanges serving the largest cities in China, including the Beijing
      Equity Exchange Center, the Tianjin Equity Exchange Center and the Shanghai
      Equity Exchange Center.  Even the operations of the large equity
      exchanges are localized.





Currently,
      because of the localized nature of equity exchanges, there is not significant
      competition among them.  However, further development and expansion of
      other large equity exchanges, or the nationalization of equity exchanges, would
      be likely to result in an increase in competition.  If that were to
      happen, it could have a material adverse effect on our ability to attract
      property owners to list their properties for sale on our exchange and to
      identify and secure investors or buyers for the properties we list.





**Regulation**





Since
      we
      operate principally through our subsidiaries in China, we are subject to and
      affected by laws, regulations, administrative determinations, court decisions
      and similar constraints that apply to business operations located in
      China.





7


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
      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.





The
      operation of our equity exchange will be largely dependent upon the development
      of China’s policies and laws relating to the transfer of private and state-owned
      equity.  The transfer and management of state-owned equity are subject
      to the supervision of the Administrative Bureau of State-owned Assets, whereas
      the equity of privately-owned enterprises must be transferred in compliance
      with
      the Company Law and related regulations.





According
      to the Provisional Procedures on the Administration of the Transfer of
      State-owned Equity in Enterprises, all the transfers of state-owned equity
      must
      be carried out through duly authorized equity exchange centers.  NSB
      and Xi’an Assets and Equity Exchange have secured the necessary licenses and
      approvals for their operations and qualify to transfer state-owned
      equity.





We
      work
      diligently to assure compliance with all applicable regulations which impact
      our
      business, including cooperating with the MII, the Ministry of Public Security
      and the Administrative Bureau of State-owned Assets.  There can be no
      assurance, however, that additional regulations will not be enacted that might
      adversely affect our operations.





**Employees**





As
      of June
      30, 2007, we employed 37 full-time employees consisting of 2 management
      executives, 16 engineering and technical staff, 13 administrative and clerical
      staff, and 6 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.





**RISK
      FACTORS**





In
      addition to other information in this Form 10-KSB, including many risks
      presented in our Management’s Discussion and Analysis, the following risk
      factors should be carefully considered in evaluating our business since it
      operates in a highly changing and complex business environment that involves
      numerous risks, some of which are beyond our control.  The following
      discussion highlights a few of these risk factors, any one of which may have
      a
      significant adverse impact on our business, operating results and financial
      condition.  As a result of the risk factors set forth below and
      elsewhere in this 10-KSB, and the risks discussed in our other Securities and
      Exchange Commission filings, actual results could differ materially from those
      projected in any forward-looking statements.





We
      face
      significant risks, and the risks described below may not be the only risks
      we
      face.  Additional risks that we do not know of or that we currently
      consider immaterial may also impair our business operations.  If any
      of the events or circumstances described in the following risks actually occurs,
      our business, financial condition or results of operations could be harmed
      and
      the trading price of our common stock could decline.





8


***Our
      success depends on identifying and closing acquisitions of emerging and growing
      businesses in China.***





Our
      success is largely dependent on our identifying good acquisition targets,
      negotiating and structuring transactions that are beneficial to us, closing
      those transactions, finding suitable management to operate those businesses
      and
      successfully operate and grow the businesses we acquire.





***We
      must work cooperatively with governmental
      authorities***.





We
      are
      engaged in business in a country with a planned economy heavily influenced
      by
      government activities and we must work cooperatively with a variety of national,
      federal, regional, state, provincial, and local government authorities and
      entities.  The economy of China differs significantly from the
      economies of the “western” industrialized nations in such respects as structure,
      level of development, gross national product, growth rate, capital reinvestment,
      resource allocation, self-sufficiency, rate of inflation and balance of payments
      position, among others.  Only recently has the Chinese government
      encouraged substantial private economic activities.  The Chinese
      economy has experienced significant growth in the past several years, but such
      growth has been uneven among various sectors of the economy and geographic
      regions.  Actions by the Chinese government to control inflation have
      significantly restrained economic expansion in the recent
      past.  Similar actions by the Chinese government in the future could
      have a significant adverse effect on economic conditions in China and the
      results of operations of the Company.





***If
      we deliver products with defects, our credibility will be harmed and the sales
      and market acceptance of our products will decrease***.





Our
      products and services are complex and may at times contained errors, defects
      and
      bugs.  If we deliver products with errors, defects or bugs, our
      credibility and the market acceptance and sales of our products would be
      harmed.  Further, if our products contain errors, defects or bugs, we
      may be required to expend significant capital and resources to alleviate such
      problems.  We may agree to indemnify our customers in some
      circumstances against liability arising from defects in our products. Defects
      could also lead to product liability as a result of product liability lawsuits
      against us or against our customers. We carry product and information liability
      and errors and omissions insurance, but in the event that we are required to
      defend more than a few such actions, or in the event that we are found liable
      in
      connection with such an action, our business and operations may be severely
      and
      materially adversely affected.





***We
      compete with large companies***.





We
      operate
      in a highly competitive industry.  Although we believe that some of
      our technology is unique, can be protected, and, if adopted, will confer
      benefits that will be otherwise unavailable for some time, we face very large
      competitors with greater resources who may adopt various strategies to block
      or
      slow our market penetration, thereby straining our more limited
      resources.  We are aware of efforts by competitors to introduce doubt
      about our financial stability as we compete to make sales and win customers
      and
      business.  Large competitors may also seek to hinder our operations
      through attempts to recruit key staff with exceptionally attractive terms of
      employment, including signing bonuses, or by offer of highly competitive terms
      to potential or newly acquired customers.





***We
      will need to continue our product development
      efforts***.





We
      believe
      that our market will be characterized by increasing technical
      sophistication.  We also believe that our eventual success will depend
      on our ability to continue to provide increased and specialized technical
      expertise.  There is no assurance that we will not fall
      technologically behind competitors with greater resources.  Although
      we believe that we enjoy a lead in our product development, and are hopeful
      that
      our patents provide some protection, we will likely need significant additional
      capital in order to continue to enjoy such a technological lead over competitors
      with more resources.





9


***If
      we are unable to protect our intellectual property, our competitive position
      would be adversely affected***.





We
      may
      rely on patent protection, as well as trademark and copyright law, trade secret
      protection and confidentiality agreements with our employees and others to
      protect our intellectual property.  Despite our precaution,
      unauthorized third parties may copy our products and services or reverse
      engineer or obtain and use information that we regard as
      proprietary.  We have filed eleven patent applications with the United
      States Patent and Trademark Office and intend to file more.  Six
      patents have been granted; however, we do not know if the remaining applications
      will be granted or whether we will be successful in prosecuting any future
      patents.  In addition, the laws of some foreign countries do not
      protect proprietary rights to the same extent, as do the laws of the United
      States.  Our means of protecting our proprietary rights may not be
      adequate and third parties may infringe or misappropriate our patents,
      copyrights, trademarks and similar proprietary rights.  If we fail to
      protect our intellectual property and proprietary rights, our business,
      financial condition and results of operations would suffer.  We
      believe that we do not infringe upon the proprietary rights of any third party,
      and no third party has asserted an infringement claim against us.  It
      is possible, however, that such a claim might be asserted successfully against
      us in the future.  We may be forced to suspend our operations to pay
      significant amounts to defend our rights, and a substantial amount of the
      attention of our management may be diverted from our ongoing business, all
      of
      which would materially adversely affect our business.





***We
      focus on the research and development of our proprietary technologies and the
      marketing of our first product***.





We
      believe
      that these technologies are the basis for marketable commercial
      products.  However, there can be no assurance of this, and it is
      possible that our proprietary technologies and products will have no commercial
      benefit or potential.  In addition, from our inception to the present,
      we have not recognized any substantial operating revenues.





***We
      depend on our key personnel and may have difficulty attracting and retaining
      the
      skilled staff we need to execute our growth plans***.





Our
      success will be dependent largely upon the efforts of our management
      team.  The loss of key staff could have a material adverse effect on
      our business and prospects.  To execute our plans, we will have to
      retain current employees. Competition for highly skilled employees with
      technical, management, marketing, sales, product development and other
      specialized training is intense.  We may not be successful in
      retaining such qualified personnel. Specifically, we may experience increased
      costs in order to retain skilled employees. If we are unable to retain
      experienced employees as needed, we would be unable to execute our business
      plan.





***We
      may face rapid technological change***.





The
      market
      for our products and services may be characterized by rapidly changing
      technologies, extensive research and the introduction of new products and
      services. We believe that our future success will depend in part upon our
      ability to continue to enhance our existing products and to develop, manufacture
      and market new products and services. As a result, we expect to continue to
      make
      a significant investment in engineering, research and
      development.  There can be no assurance that we will be able to
      develop and introduce new products and services or enhance our initial products
      in a timely manner to satisfy customer needs, achieve market acceptance or
      address technological changes in our target markets. Failure to develop products
      and services and introduce them successfully and in a timely manner could
      adversely affect our competitive position, financial condition and results
      of
      operations.





***If
      we experience rapid growth, we will need to manage such growth
      well***.





10


We
      may
      experience substantial growth in the size of our staff and the scope of our
      operations, resulting in increased responsibilities for
      management.  To manage this possible growth effectively, we will need
      to continue to improve our operational, financial and management information
      systems, will possibly need to create entire departments that do not now exist,
      and hire, train, motivate and manage a growing number of staff.  Due
      to a competitive employment environment for qualified technical, marketing
      and
      sales personnel, we expect to experience difficulty in filling our needs for
      qualified personnel.  There can be no assurance that we will be able
      to effectively achieve or manage any future growth, and our failure to do so
      could delay product development cycles and market penetration or otherwise
      have
      a material adverse effect on our financial condition and results of
      operations.





***We
      could face information and product liability risks and may not have adequate
      insurance***.





Our
      products may be used in connection with critical business applications. We
      may
      become the subject of litigation alleging that one or more of our products
      are
      ineffective or disruptive in our treatment of data, or with regard to critical
      business information.  Thus, we may become the target of lawsuits from
      injured or disgruntled businesses or other users.  In the event that
      we are required to defend more than a few such actions, or in the event that
      it
      is found liable in connection with such an action, our business and operations
      may be severely and materially adversely affected.





***Future
      profitability is not guaranteed***.





We
      have
      not recognized any substantial operating revenues to date.  Assuming
      we can attract sufficient financing, and revenues increase, there is no
      assurance that our plans will be realized or that we will achieve break-even
      status or profitability in the future.





***Changes
      to financial accounting standards may affect our results of operations and
      cause
      us to change business practices***.





We
      prepare
      financial statements in conformity with U.S. generally accepted accounting
      principles.  These accounting principles are subject to interpretation
      by the American Institute of Certified Public Accountants, the Public Company
      Accounting Oversight Board, the SEC and various other bodies formed to interpret
      and create appropriate accounting principles.  A change in those
      principles can have a significant effect on our reported results and may affect
      our reporting of transactions completed before a change is
      announced.  Changes to those rules or the questioning of current
      practices may adversely affect our reported financial results or the way we
      conducts business.  For example, accounting principles affecting many
      aspects of our business, including rules relating to equity-related
      compensation, have recently been revised.  The Financial Accounting
      Standards Board and other agencies finalized changes to U.S. generally accepted
      accounting principles that required us, starting January 1, 2006, to record
      a
      charge to earnings for employee stock option grants and other equity incentives.
      We will have significant ongoing accounting charges resulting from option grant
      and other equity incentive expensing that could reduce net income or increase
      losses.  In addition, since we historically used equity-related
      compensation as a component of our total employee compensation program, the
      accounting change could make the use of equity-related compensation less
      attractive and therefore make it more difficult to attract and retain
      employees.





***There
      is a limited market for our common stock***.





Our
      common
      stock is not listed on any exchange and trades in the over-the-counter (the
      “OTC”) market.  Additionally, one stockholder holds a majority of our
      stock.  As such, the market for our common stock is limited and is not
      regulated by the rules and regulations of any exchange. Further, the price
      of
      our common stock and its volume in the OTC market may be subject to wide
      fluctuations. Our stock price could decline regardless of our actual operating
      performance, and stockholders could lose a substantial part of their investment
      as a result of industry or market-based fluctuations. Our stock trades
      relatively thinly.  If a more active public market for our stock is
      not sustained, it may be difficult for stockholders to sell shares of our common
      stock.  Because we do not anticipate paying cash dividends on our
      common stock for the foreseeable future, stockholders will not be able to
      receive a return on their shares unless they are able to sell
      them.  The market price of our common stock will likely fluctuate in
      response to a number of factors, including but not limited to, the
      following:





11


·
            sales,
                sales cycle and market acceptance or rejection of our
                product;


·
            economic
                conditions within our industry;


·
            our
                failure to meet performance estimates or the performance estimates
                of
                securities analysts;


·
            the
                timing of announcements by us or our competitors of significant products,
                contracts or acquisitions or publicity regarding actual or potential
                results or performance thereof; and


·
            domestic
                and international economic, business and political
                conditions.





***Failure
      to maintain effective internal controls in accordance with Section 404 of
      the Sarbanes-Oxley Act of 2002 could have a material adverse effect on our
      stock
      price***.





Section 404
      of the Sarbanes-Oxley Act of 2002 and the related rules and regulations of
      the
      SEC require annual management assessments of the effectiveness of our internal
      control over financial reporting and a report by our independent registered
      public accounting firm attesting to and reporting on these
      assessments.  If we fail to adequately maintain compliance with, or
      maintain the adequacy of, our internal control over financial reporting, as
      such
      standards are modified, supplemented or amended from time to time, we may not
      be
      able to ensure that we can conclude on an ongoing basis that we have effective
      internal control over financial reporting in accordance with Section 404 of
      the Sarbanes-Oxley Act of 2002 and the related rules and regulations of the
      SEC.  If we cannot favorably assess, or our independent registered
      public accounting firm is unable to provide an unqualified attestation report
      on
      our assessment of the effectiveness of our internal control over financial
      reporting, investor confidence in the reliability of our financial reports
      may
      be adversely affected, which could have a material adverse effect on our stock
      price.





**ITEM
      2.                      DESCRIPTION
      OF PROPERTY**





Our
      principal office consists of approximately 6,000 square feet of office space
      that is located at 31st Floor, B3101-3105
      and B3123-3127 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 $56,000 per
      year.  This lease will expire in August
      2008.****





Our
      representative office in Hong Kong consists of approximately 200 square feet
      of
      office space located at Suite 5204, Central Plaza, Hong
      Kong.  Thepremises
      are leased from a related third party with free rental.





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





**ITEM
      3.                  LEGAL
      PROCEEDINGS**





We
      are a
      party to the following legal proceedings:





(1)
      Hainan
      Concord Financial Products Co., Ltd.





On
      December 11, 2004, the Company’s wholly subsidiary, IMOT Information Technology
      (Shenzhen) Ltd. (“IMOT Technology”) entered into a stock exchange agreement and
      a profit guarantee agreement (respectively, the “Stock Swap Agreement” &
“Profit Guarantee Agreement”) with Guangzhou Di Tai Communication Co. Ltd &
Mr. Zai (collectively “Sellers”).  The Stock Swap Agreement called for
      the Company to ultimately issue 5,000,000 shares of common stock in January
      2005
      in exchange for 80% of the issued and outstanding capital of Hainan Financial
      Products Development Co., Ltd (“Hainan Financial Products”).  Under
      the Profit Guarantee Agreement, the Sellers guaranteed that the net profit
      after
      taxation of Hainan Financial Products for the year ended December 31, 2005
      would
      not be less than Rmb 5,000,000.  On February 7, 2005, the Sellers
      received the share certificates of the 3,000,000 common stocks of the Company
      from IMOT Technology.  In late 2006, IMOT Technology discovered that
      the profit requirement of Rmb 5,000,000 of Hainan Financial Products had not
      met
      and Hainan Financial Products was a shelf company without any registered
      capital.





12


In
      accordance with the terms of Stock Swap Agreement, any dispute in a deadlock
      situation should be referred to an Arbitration tribunal in Shenzhen to be
      resolved.  As such, IMOT Technology and the Company decided to refer
      the dispute (“the Dispute”) and apply to China International Economic and Trade
      Arbitration Commission, South China Sub-Commission in Shenzhen (“Arbitration
      Commission”).  On December 20, 2006, Arbitration Commission approved
      the application.  Under the application, IMOT Technology and the
      Company were named as joint applicants (“the Applicants”); and the Sellers
      together with Hainan Special Economic Zone Property Rights Exchange Centre
      and a
      securities-broker in Hainan province as respondents (“the
      Respondents”).  The three orders sought under this arbitration include
      rescission of Share Swap Agreement and Profit Guarantee Agreement; return of
      3,000,000 shares of common stock of the Company by the Sellers to the
      Applicants; and to have all the legal costs and other costs incurred in this
      arbitration to be reimbursed or born by the Sellers.  The share
      certificate of the remaining 2,000,000 shares common stock is currently under
      the custody of IMOT Technology.





The
      Respondents at the same time also applied to a court in Haikou of the Hainan
      province to request that the Dispute be handled by the court.  On
      April 29, 2007, this court ruled that the Dispute could be subject to its
      jurisdiction.  IMOT Technology appealed to the Haikou Intermediate
      Court arguing that the dispute should be under the jurisdiction of the
      Arbitration Commission.  On August 16, the Haikou Intermediate Court
      made a final decision that the Dispute should be under the jurisdiction of
      the
      Arbitration Commission,  The Arbitration Commission is arranging for a
      trial date for the Dispute





(2)
      Hainan
      Special Economic Zone Property Rights Exchange Centre





Pursuant
      to an agreement (“ the Agreement”) signed with a third party on December 16,
      2003, IMOT Information Technology (Shenzhen) Ltd. (“IMOT Technology”) acquired
      21% of the issued and outstanding capital of Hainan Special Economic Zone
      Property Rights Exchange Centre (“Hainan Exchange”).





In
      2006,
      Hainan Exchange rejected the request of IMOT Technology to hold a general
      meeting for its shareholders, and Hainan Exchange also declined to provide
      any
      current financial information or reports.  In addition, Hainan refused
      to fulfill certain obligations under the Co-operative Agreement.  The
      Company is currently seeking legal advice as to those matters.  The
      Company believes that Hainan Exchange has contravened its Articles of
      Association, and IMOT Technology has the right to sue under the current
      legislation.





(3)
      Shanghai Newray Photographic Equipment Co. Ltd





In
      prior
      years, IMOT Information Technology (Shenzhen) Ltd. (“IMOT Technology”) acquired
      51% of the issued and outstanding capital of Shanghai Newray Photographic
      Equipment Co. Ltd (“Shanghai Newray”) from Mr. Tang who in turn acts as the
      trustee of IMOT Technology, holding shares in Shanghai Newray on behalf of
      IMOT
      Technology.  On September 30, 2006, the shareholders in a special
      meeting passed a resolution (“the Resolution”) to take action to terminate the
      operation of Shanghai Newray.  On November 2, 2006, Shanghai Newray
      set up a liquidation working team to take over the operations with one of its
      duties being to commence all the necessary procedures for the members’ voluntary
      liquidation.





13


Mr.
      Zhu,
      as the legal representative, manager and the executive director of Shanghai
      Newray, refused to comply with all the requests of the liquidation working
      team,
      resulting in delay of the liquidation procedures.  On January 18,
      2007, Mr. Tang took civil action under the Companies Law against Mr.
      Zhu.  Under this action, Mr. Zhu Wei was requested to comply with the
      Resolution passed on September 30, 2006 to reimburse legal and other related
      costs of Rmb 30,000 incurred by Mr. Tang for this case, and also to bear all
      the
      court costs to be incurred.





On
      January
      24, 2007, Shanghai Hongkou District Court accepted the
      case.   Recently discovery was completed.





**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 COMMON EQUITY AND RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS ISSUER
        PURCHASES OF EQUITY SECURITIES****


Our
      common
      stock is quoted on the National Association of Securities Dealers, Inc.
      Over-The-Counter 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
                  2006**Quarter
                ended September 30, 2005
              0.24
              0.07Quarter
                ended December 31, 2005
              0.13
              0.07Quarter
                ended March 31, 2006
              0.3
              0.08Quarter
                ended June 30, 2006
              0.18
              0.11**Fiscal
                  2007**Quarter
                ended September 30, 2006
              0.16
              0.09Quarter
                ended December 31, 2006
              0.11
              0.08Quarter
                ended March 31, 2007
              0.5
              0.097Quarter
                ended June 30, 2007
              0.28
              0.145




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.





As
      of
      September 25, 2007, there were approximately 629 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.





14


In
      the
      fiscal year ended June 30, 2007,****the Company issued common
      stock to various parties.  The following transactions have not been
      reported by the Company in previous quarterly reports.  The value of
      the common stock for each issuance was based on one of the following: the market
      price of the shares on the date of the transactions, the market price of the
      shares on the date the negotiations between the parties began or on the fair
      value of services received.  The issuances were as
      follows:





On
      September 25, 2006****we authorized the issuance of
      20,000,000 shares of common stock with a value of $0.05 per share to First
      Federal Holdings Limited for private placement. The stock will be issued in
      reliance on the exemption from registration provided by Section 4(2) of the
      Securities Act of 1933. There was no general solicitation or advertising engaged
      in by the Company in making this offering, and the offerees and the parties
      they
      designated to receive the stock were accredited investors.





On
      November 17, 2006****we authorized the issuance of 20,000,000
      shares and 80,000 shares of common stock with a value of $0.05 per share to
      First Federal Holdings Limited and Ren Shun Biao, respectively, for private
      placement. The stock will be issued in reliance on the exemption from
      registration provided by Section 4(2) of the Securities Act of 1933. There
      was
      no general solicitation or advertising engaged in by the Company in making
      this
      offering, and the offerees and the parties they designated to receive the stock
      were accredited investors.





On
      May 21,
      2007****we sold 22,000,000 restricted shares of common stock
      with a value of $0.05 per share, for cash to First Core Capital Finance Limited
      in a private placement. The stock was issued in reliance on the exemption from
      registration provided by Section 4(2) of the Securities Act of 1933. There
      was
      no general solicitation or advertising engaged in by the Company in making
      this
      offering, and the offerees and the parties they designated to receive the stock
      were accredited investors.





**Equity
      Compensation Plan**





On
      December 1, 2003 our Board of Directors adopted, and on January 28, 2004 our
      stockholders approved, the Intermost Corporation 2003 Equity Incentive
      Plan.  As of June 30, 2007, no awards had been granted from the
      Plan.





**Equity
      Compensation Plan Information (1)**




Plan
                Category
            Number
                of securities to be issued upon exercise of outstanding options,
                warrants
                and rights
              
              (a)
            Weighted
                average exercise price of outstanding options warrants and
                rights
              
              (b)
            Number
                of securities remaining available for future issuance under the equity
                compensation plan (excluding securities reflected in column
                (a)
              (c)Shareholder
                Approved
            0
            N/A
            20,000,000Not
                Approved by Shareholders
            N/A
            N/A
            N/A




(1)
      Pursuant to the terms of the Intermost Corporation 2003 Equity Incentive Plan,
      awards may be granted for options to purchase common stock or for common
      stock.





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





**Critical
      Accounting Policies and Estimates**





15


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 (“SAB 101”) 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 taking into account 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.





**Overview**





We
      believe
      that the People’s Republic of China represents an exciting emerging world market
      whose role in the global economy is increasing steadily.  China’s
      economic growth rate, measured by its gross domestic product, has consistently
      been higher than 7% over the past 10 years.  This economic growth is
      attributable to many factors, including investment in the country’s
      infrastructure, increased privatization of businesses and an abundant source
      of
      labor.  Currently, we offer products and services to businesses and
      consumers located primarily in China.  Our plan is to take advantage
      of China’s economic growth to expand our existing businesses and, possibly, in
      the future, to sell our products and services outside of China.  We
      also have begun to acquire diverse businesses that are not dependent on, or
      directly related to, each other.  We believe that diversification is a
      good hedge against the collapse of a single industry, such as the global
      collapse of the technology industry that occurred in 2000.  We expect
      that any acquisitions we make will improve our financial condition, although
      we
      cannot guarantee any such result.





16


Currently
      over half of our revenues are generated by our subsidiary, Leader Palace
      International Ltd., which provide VOIP services.  The balance of our
      revenues are generated primarily by our subsidiaries, ChinaE and ChinaE Tech
      both of which distributes licenses for Chinese language translation software
      and
      offer web design and hosting services.





In
      response to the economic recovery, we began to diversify our business, so that
      we will no longer be dependent on one market for
      revenue.   Generally, the issuance of our common stock represents
      some or all of the purchase price we pay for an acquired business.  We
      believe that the continued 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 with
      limited volume and at current levels we may not be able to make acquisitions
      as
      planned.





We
      intend
      to finalize an acquisition of a Taiwan touch panel manufacturing company which
      we believe will be a good addition to our business.





During
      the
      fiscal year ended June 30, 2007 we incurred a net operating loss of $1,608,622,
      including a goodwill impairment of $928,969.  Our auditor, Samuel H.
      Wong & Co., LLP, CPA, PC, has issued a “going concern” opinion for our
      financial statements at June 30, 2007.





**Results
      of Operations**





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





Year
                Ended June 30,2006
            
            
            2007Net
                revenues
            
            $
            12,319,459
            
            
            $
            4,680,532Cost
                of revenues
            
            
            (9,445,712
            )
            
            
            (4,608,566
            )Gross
                profit
            
            
            2,873,747
            
            
            
            71,966Selling,
                general and administrative
            
            
            (1,137,716
            )
            
            
            (1,716,653
            )Exchange
                difference
            
            
            -
            
            
            
            (6,413
            )Amortization
                on intangible assets
            
            
            (99,005
            )
            
            
            (5,459
            )Impairment
                of goodwill
            
            
            (563,323
            )
            
            
            (928,969
            )Interest
                income
            
            
            44,772
            
            
            
            83,861Investment
                income
            
            
            168,395
            
            
            
            102,230Profit/(Loss)
                from operations
            
            
            1,286,870
            
            
            
            (2,399,437
            )Share
                of profit/(loss) of associated Companies
            
            
            27,684
            
            
            
            37,472Other
                income, net
            
            
            3,551
            
            
            
            458Profit/(Loss)
                before taxation
            
            
            1,318,105
            
            
            
            (2,361,507
            )Taxation
            
            
            (427,809
            )
            
            
            -Profit/(Loss)
                before minority interest
            
            
            890,296
            
            
            
            (2,361,507
            )Minority
                interests
            
            
            (1,192,791
            )
            
            
            17,209Profit
                (loss) before extra ordinary item
            
            
            (302,495
            )
            
            
            (2,344,298
            )Loss
                on disposal of an associated company
            
            
            (1,814,705
            )
            
            
            -Provision
                for contingent loss of investment in associated company
            
            
            
            
            
            
            (746,249
            )Net
                profit/(loss)
            
            $
            (2,117,200
            )
            
            $
            (3,090,547
            )




*Year
      Ended June 30, 2007 Compared to Year Ended June 30, 2006*





*Net
      revenues*.





Net
      revenues for the year ended June 30, 2007 decreased by $7,639K1, or
      62%, to $4,681K from $12,319K for the year ended June 30, 2006.





Net
      revenues during fiscal 2007 were derived principally from e-commerce solutions,
      sales of photographic equipment and VOIP services.  Net revenues
      during fiscal 2006 were derived principally from e-commerce solutions, sales
      of
      photographic equipment, sales of digital security system and consultancy fee
      income.  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:




Total
                  Net Revenues
              
              
              Percent
                  of Total Net RevenuesYear
                  Ended June 30,
              
              
              Year
                  Ended June 30,2006
              
              
              2007
              
              
              2006
              
              
              2007US$
              
              
              US$E-commerce
                  solutions-
                  Web site design and development
              
              
              172,051
              
              
              
              80,285
              
              
              
              1.40
              %
              
              
              1.72
              %Sales
                  of photographic equipment
              
              
              96,215
              
              
              
              1,628
              
              
              
              0.78
              %
              
              
              0.03
              %Sales
                  of digital security system
              
              
              12,052,118
              
              
              
              -
              
              
              
              97.83
              %
              
              
              -
              %VOIP
                  services
              
              
              -
              
              
              
              4,598,619
              
              
              
              -
              %
              
              
              98.25
              %Consultancy
                  fee income
              
              
              -925
              
              
              
              -
              
              
              
              -0.01
              %
              
              
              -
              %Total
              
              
              12,319,459
              
              
              
              4,680,532
              
              
              
              100.00
              %
              
              
              100.00
              %




Total
      revenues derived from e-commerce solutions decreased by $92K, or 53%, to $80K
      in
      fiscal 2007 as compared to $172K in fiscal 2006.  Sales of
      photographic equipment decreased by $94K, or 98%, to $2K in fiscal 2007 as
      compared to $96K in fiscal 2006.  Sales of digital security systems
      decreased by $12,052K, or 100%, to $0K in fiscal 2007 as compared to $12,052K
      in
      fiscal 2006 because the share holdings in this business has been decreased
      to
      49%.  Sales of VOIP services was newly developed in fiscal 2007 and
      got revenues of $4,599K.





The
      decrease 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
      as
      well as to the recovery of the economy of China, as well as the sale during
      2007
      of a portion of our majority ownership interest in Golden Anke resulting in
      cessation of consolidation of Golden Anke’s revenue.





1
        As used in this
        Annual Report on Form 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”


17


We
      believe
      that the expansion of the Chinese economy will continue, and that by
      diversifying our business we will be able to better capitalize on this
      expansion by being in different markets.  Although we have no
      revenue generated during the year using the trading platform for the trading
      of
      private equity exchange centre in China, we believe that our technology for
      the
      design and operation of the trading platform will have additional source of
      revenue for the Company in the fiscal 2007.  Even though the
      businesses we have acquired are diverse from our core business, we believe
      that
      our technological expertise can be used to enhance the products and services
      that we now offer or that we will offer in the future.





*Costs
      of Revenues*.





Costs
      of
      revenues consist principally of salaries for computer network technicians,
      costs
      of photographic equipment, costs of digital security systems, 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:




Total
                  Cost of Revenues
              
              
              Percent
                  of Total Net RevenuesYear
                  Ended June 30,
              
              
              Year
                  Ended June 30,2006
              
              
              2007
              
              
              2006
              
              
              2007US$
              
              
              US$Engineers/technician
                  salaries
              
              
              111,884
              
              
              
              116,879
              
              
              
              0.91
              %
              
              
              2.50
              %Cost
                  of digital security system
              
              
              9,181,851
              
              
              
              -
              
              
              
              74.53
              %
              
              
              -
              %Cost
                  of photographic equipment
              
              
              90,203
              
              
              
              1,798
              
              
              
              0.73
              %
              
              
              0.04
              %VOIP
                  services
              
              
              -
              
              
              
              4,427,016
              
              
              
              -
              %
              
              
              94.58
              %Depreciation
              
              
              3,981
              
              
              
              17,835
              
              
              
              0.03
              %
              
              
              0.38
              %Other
              
              57,793
              
              
              
              45,038
              
              
              
              0.47
              %
              
              
              0.96
              %Total
              
              
              9,445,712
              
              
              
              4,608,566
              
              
              
              76.67
              %
              
              
              98.55
              %




Compared
      to the 2006 fiscal year, the total costs of revenues for the 2007 fiscal year
      decreased by $4,837K, or 51%, to $4,609K. The decrease in costs of revenues
      was
      due to the exclusion of cost from digital security system, cost containment
      effort implemented by management and a deadline in sales. The increase in
      salaries was due to the increase of engineer and technician to develop the
      equity platform in the PRC.  The principal components of costs of
      revenues during the 2007 fiscal year were 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:




18




Total
                  SG&A
              
              
              Percent
                  of Total Net RevenuesYear
                  Ended June 30,
              
              
              Year
                  Ended June 30,2006
              
              
              2007
              
              
              2006
              
              
              2007US$
              
              
              US$Sales
                  and marketing salaries andcommissions
              
              
              81,521
              
              
              
              55,887
              
              
              
              0.66
              %
              
              
              1.19
              %Other
                  sales and marketing
              
              
              115,129
              
              
              
              52,510
              
              
              
              0.93
              %
              
              
              1.12
              %Rent
                  obligation
              
              
              74,652
              
              
              
              75,856
              
              
              
              0.61
              %
              
              
              1.62
              %Administrative
                  salaries
              
              
              170,054
              
              
              
              166,209
              
              
              
              1.38
              %
              
              
              3.55
              %Corporate
                  overhead
              
              
              695,178
              
              
              
              666,191
              
              
              
              5.64
              %
              
              
              14.23
              %Bad
                  and doubtful debt-account
                  receivables
              
              
              1,182
              
              
              
              700,000
              
              
              
              0.01
              %
              
              
              14.96
              %Total
              
              
              1,137,716
              
              
              
              1,716,653
              
              
              
              9.23
              %
              
              
              36.67
              %




The
      principal components of SG&A during the 2007 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 consultancy fees.





For
      the
      2007 fiscal year, SG&A increased by $579K, or 51%, to $1,717K as compared to
      $1,138K for the 2006 fiscal year.  Sales and marketing salaries and
      commissions decreased 31% during the 2007 fiscal year, to $56K, as compared
      to
      $81K for the 2006 fiscal year.  During the 2007 fiscal year,
      administrative salaries decreased by $4K or 2% to $166K during the 2007 fiscal
      year, as compared to $170K in the 2006 fiscal year.  Other corporate
      expense decreased during the 2007 fiscal year, by $29K or 4% to $666K, as
      compared to $695K in the 2006 fiscal year.  The increase in SG&A
      was principally attributable to the net of provision for doubtful debts and
      exclusion of the expenses in our former subsidiary company, Golden Anke, in
      which we now own a minority interest, and the decrease in corporate overhead
      including professional fees, consultancy fees, investor relation fees and audit
      fees.





*Minority
      Interest.*





We
      reported a minority interest in our losses of $17K for the 2007 fiscal year,
      reflecting the   proportionate interest in the losses of Shanghai
      Newray, and Hainan Concord owned by other parties as compared to a minority
      interest in an earnings of $1,193K for the 2006 fiscal year, reflecting the
      ownership of third parties in Shanghai Newray, Golden Anke and Hainan
      Concord.





**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, 2007 we had cash and cash equivalents of $834K and working capital of
      $2,737K as compared to $693K of cash and cash equivalents and $10,632K of
      working capital at June 30, 2006.





Net
      cash
      used in operating activities totaled $2,678K during the 2007 fiscal year as
      compared to $970K of cash in operating activities used during the 2006 fiscal
      year. Cash generated from operating activities was partially offset by non-cash
      charges, including depreciation expense in the amount of $28K and amortization
      of intangible assets in the amount of $5K, and impairment of goodwill of
      $929.





Net
      cash
      used in investing activities was $4,464K for the 2007 fiscal year while net
      cash
      provided by investing activities was $823K for the 2006 fiscal
      year.  Funds used in investing activities consisted of addition of
      office equipment, addition of intangible assets, increased in short-term
      investment and short-term loan.




19


Net
      cash
      provided by financing activities was $2,458K for the 2007 fiscal year while
      net
      cash used in financing activities was $2,548K for the 2006 fiscal
      year.  Funds provided by financing activity were the net proceeds from
      the issuance of common stock during fiscals 2007 and 2006.





We
      had no
      long term debt as of June 30, 2007.  Except as otherwise described
      herein, we have no plans to make any major capital expenditures during the
      next
      12 months and we are not aware of any trends or uncertainties that could affect
      sales of our products.  We do not have any off balance sheet
      arrangements.





We
      have
      implemented various cost management measures to reduce our
      overhead.  We are also evaluating various opportunities to accelerate
      the path to, and attain, profitability.  The investment in Shanghai
      Newray, and Leader Palace are the part of our plan to invest in or acquire
      businesses that are not dependent on the Internet market.  The
      investment in Hainan Concord and Hi-Tech Exchange are part of a plan to
      develop and expand our investment in Equity Exchange in the
      PRC.  However, there can be no assurance that the cash provided by our
      current operations will be sufficient to meet our cash needs in the 2007 fiscal
      year.  The Company will likely need to borrow money or obtain
      additional equity financing in order to sustain operations.  At
      present, we have no commitments for funding and there is no
      assurance  that funding will be available to us, or that any such
      funding would be on acceptable terms.  If we need financing and cannot
      obtain it, we may be required to severely curtail, or even cease, our
      operations.





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:





·
            Our
                ability to successfully implement our business
                plan;





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





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





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





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





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





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





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





·
            Rescheduling
                or cancellation of orders by
                customers;





·
            Competitive
                pressures on selling prices;





·
            Changes
                in product, service or customer
                mix;





20


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





·
            Availability
                and cost of computer technicians;





·
            Loss
                of any strategic relationships;





·
            Loss
                of our largest customers;





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





·
            New
                product and service introductions by our
                competitors;





·
            Fluctuations
                in exchange rates, and





·
            Adverse
                changes in the general economic, social or political conditions in
                the
                People’s Republic of China.





**ITEM
      7.                   FINANCIAL
      STATEMENTS**





**REPORT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**





To:           The
      Board of Directors and Stockholders of


Intermost
      Corporation





We
      have
      audited the accompanying consolidated balance sheets of Intermost Corporation
      as
      of June 30, 2007 and the related consolidated statements of income,
      stockholders' equity and cash flows for the year then ended.  These
      consolidated financial statements are the responsibility of the Company's
      management.  Our responsibility is to express an opinion on these
      consolidated financial statements based on our audit.





We
      conducted our audits in accordance with the standards of the Public Company
      Accounting Oversight Board in the United States of America.  Those
      standards require that we plan and perform the audit to obtain reasonable
      assurance about whether the consolidated 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 audit provides a reasonable basis
      for our opinion.





In
      our
      opinion, the consolidated financial statements referred to above present fairly,
      in all material respects, the financial position of Intermost Corporation.
      as of
      June 30, 2007 and the results of its operations and its cash flows for the
      year
      then ended in conformity with accounting principles generally accepted in the
      United States of America.





The
      accompanying consolidated financial statements have been prepared assuming
      that
      the Company will continue as a going concern. As discussed in Note 13 to the
      consolidated financial statements, the Company has suffered recurring losses
      from operations and has a significant accumulated deficit. In addition, the
      Company continues to experience negative cash flows from operations. These
      factors raise substantial doubt about the Company's ability to continue as
      a
      going concern. Management's plans in regard to these matters are also described
      in Note 2. The consolidated financial statements do not include any adjustments
      that might result from the outcome of this uncertainty.




South
              San Francisco, California
            Samuel
              H. Wong & Co., LLPSeptember
              24, 2007
            Certified
              Public Accountants






21





1
        As used in this
        Annual Report on Form 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”


**INTERMOST
                CORPORATION****CONDENSED
                CONSOLIDATED BALANCE SHEETS****AS
                AT JUNE 30, 2007 AND 2006****(Stated
                in US Dollars)**Note
            
            2007
            
            
            2006**ASSETS**Current
                AssetsCash
                and cash equivalents
            
            
            2
            (e)
            
            $
            833,993
            
            
            $
            692,624Accounts
                receivable, net
            
            
            2
            (g)
            
            
            4,085,123
            
            
            
            8,431,792Inventories
            
            
            
            
            
            
            195,946
            
            
            
            126,520Deposits,
                prepayment and other receivable
            
            
            3
            
            
            
            2,269,083
            
            
            
            834,242Short-term
                loan
            
            
            5
            
            
            
            670,763
            
            
            
            600,148Short-term
                investment
            
            
            2
            (i)
            
            
            368,083
            
            
            
            346,062Stock
                in custodian
            
            
            
            
            
            
            0
            
            
            
            1,170,000Total
                current assets
            
            
            
            
            
            $
            8,422,991
            
            
            $
            12,201,388Long
                term assetsUnlisted
                investment
            
            
            2
            (i)
            
            
            893,526
            
            
            
            593,991Plant
                and equipment, net
            
            
            6
            
            
            
            51,414
            
            
            
            50,880Intangible
                assets, net
            
            
            
            
            
            
            20,354
            
            
            
            108,366Investment
                in associated companies
            
            
            2
            (m)
            
            
            6,497,267
            
            
            
            1,069,843Goodwill
            
            
            2
            (k),4
            
            
            0
            
            
            
            3,011,701**TOTAL
                ASSETS**
            
            
            
            
            
            $
            15,885,552
            
            
            $
            17,036,169**LIABILITIES
                AND STOCKHOLDERS’ EQUITY**Current
                LiabilitiesAccounts
                payable
            
            
            
            
            
            $
            3,927,964
            
            
            $
            34,458Accrued
                liabilities and other payable
            
            
            7
            
            
            
            792,560
            
            
            
            177,375Customer
                deposits
            
            
            
            
            
            
            105,708
            
            
            
            172,270Due
                from shareholder
            
            
            
            
            
            
            160,000
            
            
            
            0Business
                and other taxes payable
            
            
            
            
            
            
            0
            
            
            
            1,185,060Total
                Current Liabilities
            
            
            
            
            
            $
            4,986,232
            
            
            $
            1,569,163Minority
                Interests
            
            
            
            
            
            $
            732,762
            
            
            $
            4,137,005




22


The
                accompanying notes are an integral part of the financial
                statements**STOCKHOLDERS’
                EQUITY**Preferred
                Stock, $0.001 par value,5,000,000
                shares authorized,0
                share issued and outstandingat
                June 30, 2007 and 2006Common
                Stock, $0.001 par value,500,000,000
                shares authorized,215,370,278
                shares issued and outstandingat
                June 30, 2007;153,290,278
                shares issued andoutstanding
                at June 30, 2006
            
            
            9
            
            
            $
            215,371
            
            
            $
            153,291Treasury
                stock
            
            
            9
            
            
            
            (8,970
            )
            
            
            0Additional
                paid in capital
            
            
            9
            
            
            
            23,235,236
            
            
            
            22,187,824Accumulated
                deficit
            
            
            
            
            
            
            (13,391,999
            )
            
            
            (10,691,452
            )Accumulated
                other comprehensive income
            
            
            2
            (t)
            
            
            116,920
            
            
            
            (319,662
            )$
            10,166,558
            
            
            $
            11,330,001**TOTAL
                LIABILITIES, MINORITY INTERESTS AND****STOCKHOLDERS’
                EQUITY**
            
            
            
            
            
            $
            15,885,552
            
            
            $
            17,036,169





The
      accompanying notes are an integral part of the financial statements




23


**INTERMOST
                CORPORATION****CONDENSED
                CONSOLIDATED STATEMENTS OF INCOME****FOR
                THE YEARS ENDED JUNE 30, 2007 AND 2006****(Stated
                in US Dollars)**2007
            
            
            2006NoteSales,
                net
            
            
            2
            (n)
            
            $
            4,680,532
            
            
            
            12,319,459Cost,
                net
            
            
            
            
            
            
            (4,608,566
            )
            
            
            (9,445,712
            )Gross
                profit
            
            
            
            
            
            $
            71,966
            
            
            
            2,873,747Selling,
                general and administrative expenses
            
            
            
            
            
            
            (1,957,494
            )
            
            
            (1,800,044
            )Profit
                / (loss) from operations
            
            
            
            
            
            $
            (1,885,528
            )
            
            
            1,073,703Other
                income / (expenses), net
            
            
            
            
            
            
            458
            
            
            
            3,551Investment
                income
            
            
            
            
            
            
            102,230
            
            
            
            168,395Interest
                income
            
            
            
            
            
            
            83,861
            
            
            
            44,772Income
                before income taxes, minority interests and equity in earnings of
                associated companies
            
            
            
            
            
            $
            (1,698,979
            )
            
            
            1,290,421Income
                tax
            
            
            
            
            
            
            0
            
            
            
            427,809Net
                loss before minority interests and equity in earnings of associated
                companies
            
            
            
            
            
            $
            (1,698,979
            )
            
            
            862,612Minority
                interests
            
            
            
            
            
            
            17,209
            
            
            
            (1,192,791
            )Net
                income(loss) before equity in earnings of associated
                companies
            
            
            
            
            
            $
            (1,681,770
            )
            
            
            (330,179
            )Equity
                in earning of associated companies
            
            
            
            
            
            
            (1,408,777
            )
            
            
            27,684Net
                income(loss) before extra-ordinary item
            
            
            
            
            
            $
            (3,090,547
            )
            
            
            (302,495
            )Loss
                on disposal of an associated company
            
            
            11
            
            
            
            0
            
            
            
            (1,814,705
            )Net
                loss
            
            
            
            
            
            $
            (3,090,547
            )
            
            
            (2,117,200
            )Basic
                net income per common share
            
            
            2
            (m)
            
            $
            (0.0242
            )
            
            $
            (0.0157
            )Diluted
                net income per common share
            
            
            
            
            
            $
            (0.0242
            )
            
            $
            (0.0157
            )Basic
                weighted average common shares outstanding
            
            
            
            
            
            
            127,894,970
            
            
            
            134,978,079Diluted
                weighted average common shares outstanding
            
            
            
            
            
            
            127,894,970
            
            
            
            134,978,079


The
      accompanying notes are an integral part of the financial statements




24





**INTERMOST
                CORPORATION****CONSOLIDATED
                STATEMENTS OF STOCKHOLDERS' EQUITY****FOR
                THE YEARS ENDED JUNE 30, 2007 AND 2006****(Stated
                in US Dollars)**AccumulatedTotal
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            othernumber
                of
            
            
            Common
            
            
            Treasury
            
            
            Additional
            
            
            comprehensive
            
            
            comprehensive
            
            
            Retainedshares
            
            
            stock
            
            
            stock
            
            
            paid
                in capital
            
            
            income
                / (loss)
            
            
            income
            
            
            deficit
            
            
            TotalBalance,
                July 1, 2005
            
            
            87,949,472
            
            
            $
            87,949
            
            
            
            
            
            
            17,479,933
            
            
            
            
            
            
            (3,731
            )
            
            
            (8,574,252
            )
            
            
            8,989,899Net
                loss
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (2,117,200
            )
            
            
            
            
            
            
            (2,117,200
            )
            
            
            (2,117,200
            )Issuance
                of common stocks
            
            
            65,340,806
            
            
            
            65,342
            
            
            
            
            
            
            4,707,891
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            4,773,233Foreign
                currency translation adjustment
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (315,931
            )
            
            
            (315,931
            )
            
            
            
            
            
            
            (315,931
            )Balance,
                June 30, 2006
            
            
            153,290,278
            
            
            $
            153,291
            
            
            
            -
            
            
            
            22,187,824
            
            
            
            (2,433,131
            )
            
            
            (319,662
            )
            
            
            (10,691,452
            )
            
            
            11,330,001Balance,
                July 1, 2006
            
            
            153,290,278
            
            
            $
            153,291
            
            
            
            
            
            
            
            22,187,824
            
            
            
            
            
            
            
            (319,662
            )
            
            
            (10,691,452
            )
            
            
            11,330,001Net
                loss
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (3,090,547
            )
            
            
            
            
            
            
            (3,090,547
            )
            
            
            (3,090,547
            )Prior
                year adjustment
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            390,000
            
            
            
            390,000Issuance
                of common stocks
            
            
            62,080,000
            
            
            
            62,080
            
            
            
            
            
            
            
            1,047,412
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            1,109,492Redemption
                of common stocks
            
            
            (8,970,000
            )
            
            
            
            
            
            
            (8,970
            )
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (8,970
            )Prior
                year foreign currency translation adjustment
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            472,031
            
            
            
            472,031
            
            
            
            
            
            
            
            472,031Foreign
                currency translation adjustment
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (35,449
            )
            
            
            (35,449
            )
            
            
            
            
            
            
            (35,449
            )Balance,
                June 30, 2007
            
            
            206,400,278
            
            
            $
            215,371
            
            
            
            (8,970
            )
            
            
            23,235,236
            
            
            
            (2,653,965
            )
            
            
            116,920
            
            
            
            (13,391,999
            )
            
            
            10,166,558





The
      accompanying notes are an integral part of the financial statements





25





**INTERMOST
                  CORPORATION****CONSOLIDATED
                  STATEMENTS OF CASH FLOWS****FOR
                  THE YEARS ENDED JUNE 30, 2007 AND 2006****(Stated
                  in US Dollars)**2007
              
              
              2006Cash
                  flows from operating activitiesNet
                  income
              
              $
              (3,090,547
              )
              
              
              (2,117,200
              )Impairment
                  of goodwill and amortization
              
              
              934,428
              
              
              
              662,328Loss
                  on disposal of an associated company
              
              
              -
              
              
              
              1,814,705Equity
                  in loss (earnings) of associated companies
              
              
              1,408,777
              
              
              
              (27,684
              )Depreciation
              
              
              28,146
              
              
              
              20,002Loss
                  on disposal of fixed assets
              
              
              1,869
              
              
              
              -Minority
                  interests
              
              
              (3,404,243
              )
              
              
              1,192,791Issuance
                  of common stock in exchange for services
              
              
              -
              
              
              
              663,034Bad
                  debts written off
              
              
              -
              
              
              
              1,182(Increase)/decrease
                  in accounts receivable
              
              
              4,346,669
              
              
              
              (846,040
              )(Increase)/decrease
                  in inventories
              
              
              (69,426
              )
              
              
              (114,726
              )(Increase)/decrease
                  in deposits, prepayment and other receivable
              
              
              (1,434,841
              )
              
              
              (611,646
              )Increase/(decrease)
                  in payables
              
              
              3,893,506
              
              
              
              (1,279,967
              )Increase/(decrease)
                  in accrued liabilities and other payable
              
              
              615,185
              
              
              
              (773,440
              )Increase/(decrease)
                  in customer deposits
              
              
              (66,562
              )
              
              
              44,253Increase/(decrease)
                  in deferred revenue
              
              
              -
              
              
              
              (14,958
              )Increase/(decrease)
                  in business and other taxes payable
              
              
              (1,185,060
              )
              
              
              417,217Net
                  cash used in operating activities
              
              $
              1,977,901
              
              
              
              (970,149
              )Cash
                  flows from investing activitiesPurchases
                  of plant and equipment
              
              $
              (27,312
              )
              
              
              (43,008
              )Acquisition
                  of intangible asset
              
              
              -
              
              
              
              (26,350
              )Increase
                  in investment
              
              
              (3,666,248
              )
              
              
              (153,707
              )Increase
                  in note receivable
              
              
              (70,615
              )
              
              
              (600,148
              )Net
                  cash provided by (used in) investing activities
              
              $
              (3,764,175
              )
              
              
              (823,213
              )Cash
                  flows from financing activitiesAdvance
                  from related parties
              
              $
              160,000
              
              
              
              -Redemption
                  of common stocks
              
              
              (805,215
              )
              
              
              -Proceeds
                  from issuance / redemption of common stocks, net
              
              
              3,104,000
              
              
              
              2,548,438Net
                  cash provided by (used in) financing activities
              
              $
              2,458,785
              
              
              
              2,548,438Net
                  (decrease)/increase in cash and cash equivalents
              
              $
              672,511
              
              
              
              755,076Effect
                  of foreign currency translation on cash and cash
                  equivalents
              
              
              (531,142
              )
              
              
              (200,105
              )Cash
                  and cash equivalents - beginning of year
              
              
              692,624
              
              
              
              137,653
  26
  The
                  accompanying notes are an integral part of the financial
                  statementsCash
                  and cash equivalents - end of year
              
              $
              833,993
              
              
              
              692,624Other
                  supplementary informationInterest
                  paid
              
              $
              -
              
              
              
              -Income
                  tax paid
              
              $
              -
              
              
              
              481




The
      accompanying notes are an integral part of the financial statements





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





On
      May 15,
      2007, the Company dismissed E. Randall Gruber, CPA, PC as the independent
      auditors for the Company and engaged Samuel H. Wong & Co., LLC, CPA,
      PC to serve as its new registered independent auditor.





The
      report
      of E. Randall Gruber, CPA, PC, on the financial statements of the Company as
      of
      and for the years ended June 30, 2006 did not contain an adverse opinion, or
      a
      disclaimer of opinion.  However the report was qualified as to the
      Company’s ability to continue as a going concern.  During the year
      ended June 30, 2006, and the period from July 1, 2006 through the date of the
      dismissal of E. Randall Gruber, CPA, PC, the Company did not have any
      disagreements with E. Randall Gruber, CPA, PC, 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 E.
      Randall Gruber, CPA, PC, would have caused it to make a reference to the subject
      matter of the disagreements in connection with its reports.





Prior
      to
      engaging Samuel H. Wong & Co., LLP, CPA, PC, the Company had not consulted
      Samuel H. Wong & Co., LLP, CPA, PC regarding the application of accounting
      principles to a specified transaction, completed or proposed, or the type of
      audit opinion that might be rendered on the Registrant’s financial
      statements.





**ITEM
      8A.                      CONTROLS
      AND PROCEDURES**





**Disclosure
      Controls and Procedures**





We
      maintain controls and procedures designed to ensure that we are able to collect
      the information we are required to disclose in the reports we file with the
      SEC,
      and to record, process, summarize and disclose this information within the
      time
      periods specified by the SEC.  Based on an evaluation of our
      disclosure controls and procedures as of the end of the period covered by this
      report conducted by management, the Chief Executive Officer and Chief Financial
      Officer have concluded that these controls and procedures are effective to
      ensure that we are able to record, process, summarize and report the information
      we are required to disclosure in the reports we file with the SEC within the
      required time periods.





Management
      is responsible for establishing and maintaining adequate internal control over
      financing reporting as such term is defined in Rules 13a-15(f) or 15d-15(f)
      under the Securities Exchange Act of 1934, as amended.  Under the
      supervision and with the participation of management, including the Chief
      Executive Officer and Chief Financial Officer, we assessed the effectiveness
      of
      our internal control over financial reporting as of June 30, 2007.  We
      concluded that our internal control over financial reporting was effective
      as of
      June 30, 2007.





**Change
      in Internal Controls Over Financing Reporting**





27


During
      the
      year ended June 30, 2007 there has been no change in our internal control over
      financial reporting that has materially affected, or is reasonably likely to
      materially affect, our internal control over financial reporting.





**ITEM
      8B                      OTHER
      INFORMATION**





None.





**PART
      III**





**ITEM
                9.**
            **DIRECTORS,
                EXECUTIVE OFFICERS, PROMOTERS, CONTROL PERSONS, AND CORPORATE GOVERNANCE;
                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
              PositionFred
                  Peck
              48
              DirectorChia
                  Hsun Wu
              46
              DirectorRocky
                  Wulianghai
              48
              President,
                  Chief Executive Officer and DirectorThomas
                  Lee
              57
              Chief
                  Financial OfficerWilbert
                  Kam
              51
              DirectorCatalina
                  Chan
              56
              DirectorShim
                  Yang
              49
              DirectorDeng
                  Xiang Xiong
              41
              Director




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,





·
            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,





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





·
            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





28


·
            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**





**Fred
      Peck** has served as a director of the Company since December 6, 2005.
      Mr. Peck is a funds manager, transaction superintendent and vice president
      of
      Boston Bank Taiwan Branch. Over 15 years experience in portfolio investment,
      risk investment, capital management, fundraising, acquisition and merger,
      project fund raising privatization.





**Chia
      Hsun Wu** has served as a director of the Company since November 3,
      2006.  Mr. Wu has extensive management
      and  industrial  experience  and is a graduate
      from Oriental Institute of Technology. Mr. Wu has conducted scientific research
      at the National Taiwan University of Science and Technology. Mr. Wu is currently
      the Managing Director of FFBC Holdings Group.





**Rocky
      Wulianghai** has served as a director of the Company since December 6,
      2005. Mr. Wulianghai was appointed as President and Chief Executive Officer
      since June 13, 2007.  Mr. Wulianghai graduated from Michigan
      University with a Masters Degree in electronic engineering.  Mr.
      Wulianghai is an experienced manager in capital management, a well-known writer
      in finance and was once a journalist, specifically editor-in-chief and a general
      editor in Taiwan Television.  Mr. Wulianghai served as General Manager
      of Asia Capital Management Inc. (1998) and as director of FFBC Holdings Group
      (2001).





**Thomas
      Lee** was appointed as Chief Financial Officer of the Company since June
      13, 2007.  Mr. Lee was Chief Financial Officer of Management
      Recruiters International from June to September 2002.  Mr. Lee
      simultaneously worked on a project for Superstore International Ltd. which
      began
      in September 2002 and ended in August 2003.  From September 2003 to
      August 2004, Mr. Lee established a public relations company and reviewed a
      China
      architecture and re-design project.  In 2004, Mr. Lee rejoined
      Management Recruiters International as Chief Financial Officer.  In
      the same year, he joined the Ladies Recreations Club (Hong Kong) as Financial
      Consultant and Bund 18 Real Estate Management, Ltd (Shanghai) where he continues
      to serve as the Group Financial Officer.





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





**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.





29


**Deng
      Xiang Xiong** served as a director of the Company since December 6, 2005
      and was appointed as Acting Chief Executive Officer on Aug 8,
      2006.  Mr. Deng graduated from Shenzhen University Bachelor of Law,
      Shanghai Jiao Tong University MBA Member of Shenzhen Board of Arbitration.
      Mr.
      Deng formerly was General Manager of a number of state-owned and private
      enterprises. Successfully contrived and carried out many influential capital
      management projects. Mr. Deng also has experience in capital management and
      investment banking.





**Wilbert
      Kam** served as a director of the Company since November 3,
      2006.  Mr. Kam is a U.S. Certified Public Accountant (CPA) with
      diverse international experience in both accounting and management
      consulting.  Mr. Kam has worked in the United States, Taiwan, Hong
      Kong and mainland China, and has more than 20 years of financial and accounting
      experience in Asia.





**Term
      of Office**





All
      directors named above will serve until the next annual meeting of the Company’s
      shareholders and until their successors are elected and
      qualified.  Officers will hold their positions at the pleasure of the
      Board of Directors.





**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.





The
      Company believes that, with respect to its fiscal year ended June 30, 2007,
      none
      of the Company’s directors and officers and none of the persons known to the
      Company to own more than 10% of the Company’s common stock, were required to
      file beneficial ownership reports with the Securities and Exchange Commission
      and no such reports were filed.





**ITEM
      10.                      EXECUTIVE
      COMPENSATION**





For
      the
      2007 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, Rocky Wu,
      and Chief Financial Officer, Thomas Lee.





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





30




**Summary
      Compensation Table**


The
      amounts in the table below are calculated as of June 30, 2007


Name
                and Principal Position
              
              
              
              
              (a)
            Year
              
              
              
              (b)
            Salary
              ($)
              
              
              
              (c)
            Bonus
              ($)
              
              
              
              (d)
            Stock
                awards
              ($)
              
              
              
              (e)
            Option
                Awards
              ($)
              (4)
              
              
              (f)
            Non-Equity
                Incentive Plan Compen-sation
              ($)
              
              
              (g)
            Non-Qualified
                Deferred Compensation Earnings
              ($)
              
              
              (h)
            All
                Other Compen-sation
              ($)
              
              
              
              (i)
            Total
              ($)
              
              
              
              (j)Rocky
                Wulianghai,
              CEO
                and
              President
                (1)
            2007
            1,964
            0
            0
            0
            0
            0
            0
            1,964Thomas
                Lee ,
              CFO
                (2)
            2007
            3,274
            0
            0
            0
            0
            0
            0
            3,274Andy
                Lin,
              CFO
                and President (3)
            2007
            5,137
            0
            0
            0
            0
            0
            0
            5,137Deng
                Xiang Xiong,
              Acting
                CEO (4)
            2007
            15,175
            0
            0
            0
            0
            0
            0
            15,175





(1)
      Mr.
      Rocky Wulianghai was appointed as Director of the Company since December 6,
      2005
      and Chief Executive Officer and President of the Company on June 13,
      2007.





(2)
      Mr.
      Thomas Lee was appointed as Chief Financial Officer of the Company on June
      13,
      2007.





(3)
      Mr.
      Lin was appointed as Chief Executive Officer, Chief Financial Officer and
      President of the Company in June 2001.  Mr. Lin resigned as Chief
      Financial Officer on October 1, 2006, as President on November 3, 2006, and
      as
      Chief Executive Officer on August 8, 2006.  Previously, Mr. Lin served
      as Vice President of the Company.





(4)
      Mr.
      Deng Xiang Xiong was appointed as Director of the Company on December 6, 2005
      and acting Chief Executive Officer on August 8, 2006.  Mr. Deng was
      terminated as acting Chief Executive Officer on June 13, 2007.




31





**Director
      Compensation Table**


The
      amounts in the table below are calculated as of June 30, 2007.




Name
                
                
                
                
                (a)
              Fees
                  Earned or Paid in Cash ($)
                
                
                
                (b)
              Stock
                  Awards ($)
                
                
                
                
                (c)
              Option
                  Awards ($)
                
                
                
                
                (d)
              Non-Equity
                  Incentive Plan Compensation ($)
                
                
                
                (e)
              Nonqualified
                  Deferred Compensation Earnings
                
                
                
                (f)
              All
                  Other Compensation ($)
                
                
                
                (g)
              Total
                  ($)
                
                
                
                
                (h)Rocky
                  Wulianghai
              29,466
              0
              0
              0
              0
              0
              29,466Deng
                  Xiang Xiong
              21,608
              0
              0
              0
              0
              0
              21,608Wilbert
                  Kam
              10,477
              0
              0
              0
              0
              0
              10,477Fred
                  Peck
              0
              0
              0
              0
              0
              0
              0Chia
                  Hsun Wu
              0
              0
              0
              0
              0
              0
              0Catalina
                  Chan
              0
              0
              0
              0
              0
              0
              0Shim
                  Yang
              0
              0
              0
              0
              0
              0
              0


**Director’s
      Compensation**





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





**Other
      Compensation and Employment Arrangements**





The
      Company has adopted and the stockholders have approved the Intermost Corporation
      2003 Equity Incentive Plan.  The following discussion is qualified in
      its entirety by the terms and provisions of the Plan.





The
      Plan
      authorizes awards of options, awards of stock (“Stock Award”) and the granting
      of bonus stock (“Stock Bonus”).  Persons eligible to receive awards
      under the Plan include the Company's employees, officers and directors and
      its
      consultants, independent contractors and advisors.  As of June 30,
      2005, all of the Company’s employees, officers and directors were eligible to
      receive awards under the Plan.  The number of persons covered by the
      Plan may increase if we add additional employees (including officers) and
      directors.  As of the date of this Annual Report, no awards have been
      granted from the Plan.





The
      Company’s Board of Directors administers the Plan.  For purposes of
      this discussion, the body administering the Plan will be referred to as the
      Administrator.  The Administrator has the authority to determine, at
      its discretion, the number and type of awards that will be granted, the
      recipients of the awards, any exercise or purchase price required to be paid,
      when options may be exercised and the term of option grants.  Awards
      under the Plan are not defined as to any group.  The term of the Plan
      is 10 years from the date the Plan was adopted by the Board of
      Directors.  We have reserved 20,000,000 shares of our common stock for
      awards to be made under the Plan.





The
      exercise price for stock options granted to officers and directors must be
      the
      fair market value of the common stock on the date of grant.  The
      exercise price for stock options granted to eligible persons other than officers
      and directors may not be less than 85% of the fair market value of the common
      stock on the date of grant.  The term of an option may not exceed 10
      years.





32


A
      Stock
      Award is an offer by the Company to sell to an eligible person shares of common
      stock that may or may not be subject to restrictions.  Stock Awards
      granted to officers and directors must be granted at the fair market value
      of
      the common stock on the date of the award.  Stock Awards granted to
      eligible persons who are not officers or directors may not be granted at less
      than 85% of the fair market value of the common stock on the date of the
      award.  Stock Awards may be subject to vesting conditions, as
      determined by the Administrator.





A
      Stock
      Bonus is a grant of shares that may be awarded to an eligible
      person.  A Stock Bonus may be subject to vesting conditions, as
      determined by the Administrator.  A Stock Bonus may be awarded for any
      reason determined by the Administrator, including, but not limited to,
      extraordinary services rendered to the Company by an eligible person, as an
      award for performance achieved by the Company or upon satisfaction of
      performance goals by the eligible person.





In
      the
      United States, a recipient will not recognize any taxable income at the time
      an
      option is granted.  However, upon exercise of an option, the recipient
      will include in income as compensation an amount equal to the difference between
      the fair market value of the shares on the date of exercise and the recipient's
      exercise price.  The included amount will be treated as ordinary
      income by the recipient and may be subject to withholding.  Upon
      resale of the shares by the recipient, any subsequent appreciation or
      depreciation in the value of the shares will be treated as capital gain or
      loss.  There is no tax consequence to the Company as a result of
      either the grant or the vesting of stock options.





**ITEM
                11.**
            **SECURITY
                OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
                STOCKHOLDER MATTERS**





**Common
      Stock**





The
      following table is furnished as of June 30, 2007, 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.




Name
                  and Address of
              Number
                  of SharesBeneficial
                  Owner (1)
              Beneficially
                  Owned
              PercentAllied
                  Point Limited (3)
              300,000 
                  (2)
              *%Andy
                  Lin (3)
              1,000,000 
                  (2)
              *%Shim
                  Yang
              350,000
              *%Catalina
                  Chan (4)
              300,000
              *%Grand
                  Grade International Ltd (4)
              1,000,000
              *%Alfredo
                  Properties Limited (5)
              20,000,000
              9.29%Deng
                  Xiang Xiong
              500,000
              *%First
                  Core Capital Finance Ltd. (5)
              22,000,000
              10.21%First
                  Federal Holding (5)
              40,000,000
              18.57%Magnate
                  Trading Services Ltd. (5)
              6,666,000
              3.10%Piaster
                  Assets Inc (5).
              6,666,000
              3.10%Original
                  Group Holdings Ltd. (5)
              6,668,000
              3.10%





33





*           Less
      than 1%.


(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 31st Floor, B31-23 Guomao Building, Renmin Rd. (South), Shenzhen, China
      518014.


(4)
            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.


(5)
            Fred
                Peck is director and shareholder of Alfredo Properties Limited and
                may be
                deemed to be the beneficial owner of the share held by Alfredo Properties
                Limited.  During 2007, Mr. Peck purchased 40,000,000 restricted
                shares in IMOT, which shares are held in name of the companies affiliated
                with Mr. Peck.





Equity
      Compensation Plan Information




Number
                  of securities to be issued upon exercise of outstanding options,
                  warrants
                  and rights.
              Weighted-average
                  exercise price of outstanding options, warrants and rights
              Number
                  of securities remaining available for future issuance under equity
                  compensation plans (excluding securities reflected in column
                  (a))Plan
                category
              **(a)**
              **(b)**
              **(c)**Equity
                  compensation plans approved by security holders
              0
              Not
                  applicable
              0Equity
                  compensation plans not approved by security holders
              0
              Not
                  applicable
              0Total
              0
              Not
                  applicable
              0




**ITEM
                12.**
            **CERTAIN
                RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
                INDEPENDENCE**





No
      directors, executive officers or immediate family members of such individuals
      were engaged in transactions with us or any of our subsidiaries during the
      fiscal years ended June 30, 2005, June 30, 2006 and June 30,
      2007.  Furthermore, we have no “interlocking” relationships in which
      any of our executive officers is a member of the board of directors of another
      entity, one of whose executive officers are a member of our Board of
      directors.





Of
      the
      members of the Company’s Board of directors, Mr. Wilbert Kam is independent
      directors as defined by Rule 4200(a)(15) of the NASDAQ Market Place
      Rules.





**ITEM
      13.                    EXHIBITS
      AND REPORTS ON FORM 8-K**




34





(a)
            ExhibitsExhibitNumber
            Description
                of Exhibit2.1
            Articles
                of Merger *3.1
            Articles
                of Incorporation *3.2
            Bylaws
                *10.1
            Employment
                Agreement, dated March 12, 2004, between Intermost Corporation and
                Andy
                Lin (2)10.2
            Amendment
                to Employment Agreement dated March 12, 2004 between Intermost
                Corporationand
                Andy Lin*10.3
            Cooperative
                Agreement re: formation of Jiayin E-Commerce joint venture
                (1)10.4
            Agreement
                Regarding Transfer of Properties on 38th Floor, Guomao Building
                (3)10.5
            Shareholding
                Transfer Agreement dated May 23, 2003 between IMOT Information Technology
                (Shenzhen) Ltd. and Shanghai Newray Business Development Co., Ltd.
                (4)10.6
            Share
                Transfer Agreement among IMOT Information Technology (Shenzhen) Ltd.,
                Shenzhen Golden Anke Technology Co. Ltd., Intermost Corporation,
                Tu
                Guoshen and Li Zhiquan (5)10.7
            Sale
                and Purchase Agreement among IMOT Information Technology (Shenzhen)
                Ltd.,
                Shanghai Fortune Venture Limited, North Shanghai Branch of Shanghai
                Technology Property Right Exchange Center and Intermost Corporation
                (6)10.8
            Distributorship
                Agreement dated November 28, 2002 between KanHan Technologies Limited
                and
                ChinaE.com Information Technology Ltd. (7)10.9
            Intermost
                Corporation 2003 Equity Incentive Plan (8)14
            Code
                of Ethics (9)16
            Letter
                on Change in Certifying Accountant (10)21
            Significant
                Subsidiaries *31.1
            Certification
                of Chief Executive Officer Pursuant to Rule 13a-14(a) and 15d-14(a)
                *31.2
            Certification
                of Chief Financial Officer Pursuant to Rule 13a-14(a) and 15d-14(a)
                *32.1
            Certification
                Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
                906 of
                the Sarbanes-Oxley Act of 2002 *32.2
            Certification
                Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
                906 of
                the Sarbanes-Oxley Act of 2002 **Filed
                herewith.-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 exhibit filed with the Registrant’s Current Report on
                Form 8-K filed with the SEC on March 25, 2004.-3
            Incorporated
                by reference to the respective exhibits filed with the Registrant’s
                Quarterly Report on Form 10-QSB for the quarter ended March 31,
                2000.-4
            Incorporated
                by reference to the exhibit filed with the Registrant’s Current Report on
                Form 8-K filed with the SEC on June 9, 2003.-5
            Incorporated
                by reference to the exhibit filed with the Registrant’s Current Report on
                Form 8-K filed with the SEC on August 17, 2004.-6
            Incorporated
                by reference to the exhibit filed with the Registrant’s Current Report on
                Form 8-K filed with the SEC on April 26, 2004.-7
            Incorporated
                by reference to the exhibit filed with the Registrant’s Current Report on
                Form 8-K filed with the SEC on February 14, 2003.-8
            Incorporated
                by reference to the exhibit filed with the Registrant’s Proxy Statement
                filed with the SEC on January 6, 2004.-9
            Incorporated
                by reference to the exhibit filed with the Registrant’s 10-KSB Amendment
                filed with the SEC on October 25, 2004.-10
            Incorporated
                by reference to the exhibit filed with the Registrant’s Current Report on
                Form 8-K filed with the SEC on  March 8,
                2004.





35


(b)           Reports
      on Form 8-K





On
      July
      27, 2006 the Registrant filed a Current Report disclosing the disposition of
      25%
      share investment in Shanghai Fortune Venture Limited to Mr. Li
      Laohu.





On
      August
      14, 2006 the Registrant filed a Current Report disclosing the resignation of
      Mr.
      Andy Lin as the Chief Executive Officer and appointment of Mr. Andy Lin and
      Mr.
      Deng Xiang Xiong as the Chief Financial Officer & Company Secretary and
      Acting Chief Executive Officer respectively with effect from August 8,
      2006.





On
      October
      16, 2006 the Registrant filed a Current Report disclosing the resignation of
      Mr.
      Andy Lin as the Chief Financial Officer and appointment of Ms. Yang Liu as
      the
      Acting Chief Financial Officer with effect from October 11, 1006.





On
      November 6, 2006 the Registrant filed a Current Report disclosing the
      resignation of Mr. Andy Lin as Executive Director and appointment of Mr. James
      Woo and Mr. Wilbert Kim as the Directors until the next annual meeting of the
      shareholders.  The board also appointed Mr. Syh-kwan Chan as the new
      Chief Financial Officer.





On
      January
      3, 2007 the Registrant filed a Current Report disclosing election of Mr. Deng
      Xiang Xiong, Chen Syh Kwan and Mr. Chris Liu as President & Acting Chief
      Executive Officer, Chief Financial Officer and Secretary
      respectively.  The board also took the action to protect and optimize
      the interests of the Company and its shareholders in: 1. terminating the “Hainan
      Concord Financial Products Development Co., Ltd. Stock Swap Agreement” and the
“Profit Guarantee Agreement” and requiring the counterparts to return the
      5,000,000 shares of IMOT stock; 2. suing the management of Shanghai Newray
      Photographic Equipment Co., Ltd.; 3. issuing a legal notice to the Hainan
      Special Economic Zone Property Rights Exchange Centre.





On
      February 15, 2007 the Registrant filed a Current Report disclosing the
      wholly-owned subsidiary of the Intermost Corporation, IMOT Information
      Technology (Shenzhen) Co., Ltd., entered into an agreement on the restructuring
      and listing of the Shenzhen Golden Anke Technology Lted.





On
      June
      20, 2007 the Registrant filed a Current Report disclosing the termination of
      Mr.
      Deng Xiang Xiong and Mr. Chen Syh Kwan as Chief Executive Officer &
President and Chief Financial Officer and accepting the resignation of Mr.
      Chris
      Liu as Secretary with effective as of June 13, 2007 and on the same date,
      appointment of Mr. Rocky Wulianghai and Mr. Thomas Lee as Chief Executive
      Officer & President and Chief Financial Officer respectively.





36


**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, 2007 and June 30, 2006 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, 2007
              
              
              June
                  30, 2006(i)
              Audit
                  Fees
              
              $
              159,500
              *
              
              $
              75,261(ii)
              Audit
                  Related Fees
              
              $
              --
              
              
              $
              --(iii)
              Tax
                  Fees
              
              $
              --
              
              
              $
              --(iv)
              All
                  Other Fees
              
              $
              --
              
              
              $
              --




*  Audit
                fee for fiscal year ended June 30, 2007 was paid to the former auditors,
                E. Randall Gruber, CPA, and K.M. Lee & Co., CPA, in amount of
                US$100,000 and US$16,500
                respectively.




37





**Documents
      filed as part of this report:**








PAGEREPORT
                OF INDEPENDENT REGISTERED
                PUBLIC
            39ACCOUNTING
                FIRM  1 -
                2CONSOLIDATED
                BALANCE
                SHEET     3
            40-41CONSOLIDATED
                STATEMENT OF
                INCOME
            42CONSOLIDATED
                STATEMENT OF STOCKHOLDERS’
                EQUITY     5
            43CONSOLIDATED
                STATEMENT OF CASH
                FLOWS
            44NOTES
                TO CONSOLIDATED FINANCIAL
                STATEMENTS 7 - 10
            45-63SIGNATURES
                AND EXHIBITS
            64




38





**REPORT
      OF INDEPENDENT REGISTERED PUBLIC
      ACCOUNTING FIRM**





To:    The
      Board of Directors and Stockholders of


Intermost
      Corporation





We
      have
      audited the accompanying consolidated balance sheets of Intermost Corporation
      as
      of June 30, 2007 and the related consolidated statements of income,
      stockholders' equity and cash flows for the year then ended.  These
      consolidated financial statements are the responsibility of the Company's
      management.  Our responsibility is to express an opinion on these
      consolidated financial statements based on our audit.





We
      conducted our audits in accordance with the standards of the Public Company
      Accounting Oversight Board in the United States of America.  Those
      standards require that we plan and perform the audit to obtain reasonable
      assurance about whether the consolidated 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 audit provides a reasonable basis
      for our opinion.





In
      our
      opinion, the consolidated financial statements referred to above present fairly,
      in all material respects, the financial position of Intermost Corporation.
      as of
      June 30, 2007 and the results of its operations and its cash flows for the
      year
      then ended in conformity with accounting principles generally accepted in the
      United States of America.





The
      accompanying consolidated financial statements have been prepared assuming
      that
      the Company will continue as a going concern. As discussed in Note 13 to the
      consolidated financial statements, the Company has suffered recurring losses
      from operations and has a significant accumulated deficit. In addition, the
      Company continues to experience negative cash flows from operations. These
      factors raise substantial doubt about the Company's ability to continue as
      a
      going concern. Management's plans in regard to these matters are also described
      in Note 2. The consolidated financial statements do not include any adjustments
      that might result from the outcome of this uncertainty.








South
              San Francisco, California
            Samuel
              H. Wong & Co., LLPSeptember
              24, 2007
            Certified
              Public Accountants





39


**INTERMOST
                CORPORATION****CONDENSED
                CONSOLIDATED BALANCE SHEETS****AS
                AT JUNE 30, 2007 AND 2006****(Stated
                in US Dollars)**Note
            
            2007
            
            
            2006**ASSETS**Current
                AssetsCash
                and cash equivalents
            
            
            2
            (e)
            
            $
            833,993
            
            
            $
            692,624Accounts
                receivable, net
            
            
            2
            (g)
            
            
            4,085,123
            
            
            
            8,431,792Inventories
            
            
            
            
            
            
            195,946
            
            
            
            126,520Deposits,
                prepayment and other receivable
            
            
            3
            
            
            
            2,269,083
            
            
            
            834,242Short-term
                loan
            
            
            5
            
            
            
            670,763
            
            
            
            600,148Short-term
                investment
            
            
            2
            (i)
            
            
            368,083
            
            
            
            346,062Stock
                in custodian
            
            
            
            
            
            
            0
            
            
            
            1,170,000Total
                current assets
            
            
            
            
            
            $
            8,422,991
            
            
            $
            12,201,388Long
                term assetsUnlisted
                investment
            
            
            2
            (i)
            
            
            893,526
            
            
            
            593,991Plant
                and equipment, net
            
            
            6
            
            
            
            51,414
            
            
            
            50,880Intangible
                assets, net
            
            
            
            
            
            
            20,354
            
            
            
            108,366Investment
                in associated companies
            
            
            2
            (m)
            
            
            6,497,267
            
            
            
            1,069,843Goodwill
            
            
            2
            (k),4
            
            
            0
            
            
            
            3,011,701**TOTAL
                ASSETS**
            
            
            
            
            
            $
            15,885,552
            
            
            $
            17,036,169**LIABILITIES
                AND STOCKHOLDERS’ EQUITY**Current
                LiabilitiesAccounts
                payable
            
            
            
            
            
            $
            3,927,964
            
            
            $
            34,458Accrued
                liabilities and other payable
            
            
            7
            
            
            
            792,560
            
            
            
            177,375Customer
                deposits
            
            
            
            
            
            
            105,708
            
            
            
            172,270Due
                from shareholder
            
            
            
            
            
            
            160,000
            
            
            
            0Business
                and other taxes payable
            
            
            
            
            
            
            0
            
            
            
            1,185,060Total
                Current Liabilities
            
            
            
            
            
            $
            4,986,232
            
            
            $
            1,569,163Minority
                Interests
            
            
            
            
            
            $
            732,762
            
            
            $
            4,137,005




40




The
                accompanying notes are an integral part of the financial
                statements**STOCKHOLDERS’
                EQUITY**Preferred
                Stock, $0.001 par value,5,000,000
                shares authorized,0
                share issued and outstandingat
                June 30, 2007 and 2006Common
                Stock, $0.001 par value,500,000,000
                shares authorized,215,370,278
                shares issued and outstandingat
                June 30, 2007;153,290,278
                shares issued andoutstanding
                at June 30, 2006
            
            
            9
            
            
            $
            215,371
            
            
            $
            153,291Treasury
                stock
            
            
            9
            
            
            
            (8,970
            )
            
            
            0Additional
                paid in capital
            
            
            9
            
            
            
            23,235,236
            
            
            
            22,187,824Accumulated
                deficit
            
            
            
            
            
            
            (13,391,999
            )
            
            
            (10,691,452
            )Accumulated
                other comprehensive income
            
            
            2
            (t)
            
            
            116,920
            
            
            
            (319,662
            )$
            10,166,558
            
            
            $
            11,330,001**TOTAL
                LIABILITIES, MINORITY INTERESTS AND****STOCKHOLDERS’
                EQUITY**
            
            
            
            
            
            $
            15,885,552
            
            
            $
            17,036,169





The
      accompanying notes are an integral part of the financial statements




41





**INTERMOST
                CORPORATION****CONDENSED
                CONSOLIDATED STATEMENTS OF
                INCOME****FOR
                THE YEARS ENDED JUNE 30, 2007 AND 2006****(Stated
                in US Dollars)**2007
            
            
            2006NoteSales,
                net
            
            
            2
            (n)
            
            $
            4,680,532
            
            
            
            12,319,459Cost,
                net
            
            
            
            
            
            
            (4,608,566
            )
            
            
            (9,445,712
            )Gross
                profit
            
            
            
            
            
            $
            71,966
            
            
            
            2,873,747Selling,
                general and administrative expenses
            
            
            
            
            
            
            (1,957,494
            )
            
            
            (1,800,044
            )Profit
                / (loss) from operations
            
            
            
            
            
            $
            (1,885,528
            )
            
            
            1,073,703Other
                income / (expenses), net
            
            
            
            
            
            
            458
            
            
            
            3,551Investment
                income
            
            
            
            
            
            
            102,230
            
            
            
            168,395Interest
                income
            
            
            
            
            
            
            83,861
            
            
            
            44,772Income
                before income taxes, minority interests and equity in earnings of
                associated companies
            
            
            
            
            
            $
            (1,698,979
            )
            
            
            1,290,421Income
                tax
            
            
            
            
            
            
            0
            
            
            
            427,809Net
                loss before minority interests and equity in earnings of associated
                companies
            
            
            
            
            
            $
            (1,698,979
            )
            
            
            862,612Minority
                interests
            
            
            
            
            
            
            17,209
            
            
            
            (1,192,791
            )Net
                income(loss) before equity in earnings of associated
                companies
            
            
            
            
            
            $
            (1,681,770
            )
            
            
            (330,179
            )Equity
                in earning of associated companies
            
            
            
            
            
            
            (1,408,777
            )
            
            
            27,684Net
                income(loss) before extra-ordinary item
            
            
            
            
            
            $
            (3,090,547
            )
            
            
            (302,495
            )Loss
                on disposal of an associated company
            
            
            11
            
            
            
            0
            
            
            
            (1,814,705
            )Net
                loss
            
            
            
            
            
            $
            (3,090,547
            )
            
            
            (2,117,200
            )Basic
                net income per common share
            
            
            2
            (m)
            
            $
            (0.0242
            )
            
            $
            (0.0157
            )Diluted
                net income per common share
            
            
            
            
            
            $
            (0.0242
            )
            
            $
            (0.0157
            )Basic
                weighted average common shares outstanding
            
            
            
            
            
            
            127,894,970
            
            
            
            134,978,079Diluted
                weighted average common shares outstanding
            
            
            
            
            
            
            127,894,970
            
            
            
            134,978,079





The
      accompanying notes are an integral part of the financial statements




42





**INTERMOST
                CORPORATION****CONSOLIDATED
                STATEMENTS OF STOCKHOLDERS' EQUITY****FOR
                THE YEARS ENDED JUNE 30, 2007 AND 2006****(Stated
                in US Dollars)**AccumulatedTotal
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            othernumber
                of
            
            
            Common
            
            
            Treasury
            
            
            Additional
            
            
            comprehensive
            
            
            comprehensive
            
            
            Retainedshares
            
            
            stock
            
            
            stock
            
            
            paid
                in capital
            
            
            income
                / (loss)
            
            
            income
            
            
            deficit
            
            
            TotalBalance,
                July 1, 2005
            
            
            87,949,472
            
            
            $
            87,949
            
            
            
            
            
            
            17,479,933
            
            
            
            
            
            
            (3,731
            )
            
            
            (8,574,252
            )
            
            
            8,989,899Net
                loss
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (2,117,200
            )
            
            
            
            
            
            
            (2,117,200
            )
            
            
            (2,117,200
            )Issuance
                of common stocks
            
            
            65,340,806
            
            
            
            65,342
            
            
            
            
            
            
            4,707,891
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            4,773,233Foreign
                currency translation adjustment
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (315,931
            )
            
            
            (315,931
            )
            
            
            
            
            
            
            (315,931
            )Balance,
                June 30, 2006
            
            
            153,290,278
            
            
            $
            153,291
            
            
            
            -
            
            
            
            22,187,824
            
            
            
            (2,433,131
            )
            
            
            (319,662
            )
            
            
            (10,691,452
            )
            
            
            11,330,001Balance,
                July 1, 2006
            
            
            153,290,278
            
            
            $
            153,291
            
            
            
            
            
            
            
            22,187,824
            
            
            
            
            
            
            
            (319,662
            )
            
            
            (10,691,452
            )
            
            
            11,330,001Net
                loss
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (3,090,547
            )
            
            
            
            
            
            
            (3,090,547
            )
            
            
            (3,090,547
            )Prior
                year adjustment
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            390,000
            
            
            
            390,000Issuance
                of common stocks
            
            
            62,080,000
            
            
            
            62,080
            
            
            
            
            
            
            
            1,047,412
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            1,109,492Redemption
                of common stocks
            
            
            (8,970,000
            )
            
            
            
            
            
            
            (8,970
            )
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (8,970
            )Prior
                year foreign currency translation adjustment
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            472,031
            
            
            
            472,031
            
            
            
            
            
            
            
            472,031Foreign
                currency translation adjustment
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (35,449
            )
            
            
            (35,449
            )
            
            
            
            
            
            
            (35,449
            )Balance,
                June 30, 2007
            
            
            206,400,278
            
            
            $
            215,371
            
            
            
            (8,970
            )
            
            
            23,235,236
            
            
            
            (2,653,965
            )
            
            
            116,920
            
            
            
            (13,391,999
            )
            
            
            10,166,558





The
      accompanying notes are an integral part of the financial statements








43





**INTERMOST
                  CORPORATION****CONSOLIDATED
                  STATEMENTS OF CASH
                  FLOWS****FOR
                  THE YEARS ENDED JUNE 30, 2007 AND 2006****(Stated
                  in US Dollars)**2007
              
              
              2006Cash
                  flows from operating activitiesNet
                  income
              
              $
              (3,090,547
              )
              
              
              (2,117,200
              )Impairment
                  of goodwill and amortization
              
              
              934,428
              
              
              
              662,328Loss
                  on disposal of an associated company
              
              
              -
              
              
              
              1,814,705Equity
                  in loss (earnings) of associated companies
              
              
              1,408,777
              
              
              
              (27,684
              )Depreciation
              
              
              28,146
              
              
              
              20,002Loss
                  on disposal of fixed assets
              
              
              1,869
              
              
              
              -Minority
                  interests
              
              
              (3,404,243
              )
              
              
              1,192,791Issuance
                  of common stock in exchange for services
              
              
              -
              
              
              
              663,034Bad
                  debts written off
              
              
              -
              
              
              
              1,182(Increase)/decrease
                  in accounts receivable
              
              
              4,346,669
              
              
              
              (846,040
              )(Increase)/decrease
                  in inventories
              
              
              (69,426
              )
              
              
              (114,726
              )(Increase)/decrease
                  in deposits, prepayment and other receivable
              
              
              (1,434,841
              )
              
              
              (611,646
              )Increase/(decrease)
                  in payables
              
              
              3,893,506
              
              
              
              (1,279,967
              )Increase/(decrease)
                  in accrued liabilities and other payable
              
              
              615,185
              
              
              
              (773,440
              )Increase/(decrease)
                  in customer deposits
              
              
              (66,562
              )
              
              
              44,253Increase/(decrease)
                  in deferred revenue
              
              
              -
              
              
              
              (14,958
              )Increase/(decrease)
                  in business and other taxes payable
              
              
              (1,185,060
              )
              
              
              417,217Net
                  cash used in operating activities
              
              $
              1,977,901
              
              
              
              (970,149
              )Cash
                  flows from investing activitiesPurchases
                  of plant and equipment
              
              $
              (27,312
              )
              
              
              (43,008
              )Acquisition
                  of intangible asset
              
              
              -
              
              
              
              (26,350
              )Increase
                  in investment
              
              
              (3,666,248
              )
              
              
              (153,707
              )Increase
                  in note receivable
              
              
              (70,615
              )
              
              
              (600,148
              )Net
                  cash provided by (used in) investing activities
              
              $
              (3,764,175
              )
              
              
              (823,213
              )Cash
                  flows from financing activitiesAdvance
                  from related parties
              
              $
              160,000
              
              
              
              -Redemption
                  of common stocks
              
              
              (805,215
              )
              
              
              -Proceeds
                  from issuance / redemption of common stocks, net
              
              
              3,104,000
              
              
              
              2,548,438Net
                  cash provided by (used in) financing activities
              
              $
              2,458,785
              
              
              
              2,548,438Net
                  (decrease)/increase in cash and cash equivalents
              
              $
              672,511
              
              
              
              755,076Effect
                  of foreign currency translation on cash and cash
                  equivalents
              
              
              (531,142
              )
              
              
              (200,105
              )Cash
                  and cash equivalents - beginning of year
              
              
              692,624
              
              
              
              137,653
 
 44
 The
                  accompanying notes are an integral part of the financial
                  statementsCash
                  and cash equivalents - end of year
              
              $
              833,993
              
              
              
              692,624Other
                  supplementary informationInterest
                  paid
              
              $
              -
              
              
              
              -Income
                  tax paid
              
              $
              -
              
              
              
              481






The
      accompanying notes are an integral part of the financial
      statements





**1.
      ORGANIZATION AND PRINCIPAL ACTIVITIES**





Intermost
      Corporation (the Company), including its subsidiaries and associated companies,
      when the context so requires) was originally incorporated in the State of Utah
      on March 6, 1985 under the name Utility Communications International, Inc.
      The
      Company changed its name from Utility Communications International, Inc. to
      Intermost Corporation on October 23, 1998. In February 2003, the Company
      re-domiciled from the State of Utah to the State of Wyoming.





On
      October
      23, 1998, the Company acquired a 100% interest in Intermost Limited ("IL"),
      a
      company incorporated in the British Virgin Islands, by issuing 4,970,000 shares
      of its common stock with a par value of US$0.001 per share (after the
      redenomination of par value and a stock split) to the shareholders of
      IL.





The
      acquisition of IL by the Company was treated as a reverse acquisition since
      IL
      was the continuing entity as a result of the exchange
      reorganization.





The
      Company is engaged in providing, directly and through its subsidiaries and
      associated companies, business portal and e-commerce solutions, the sale of
      photographic equipment and the sale of digital security imaging system in the
      People's Republic of China (the "PRC" or "China"), including Hong Kong. Segment
      information is provided at Note 18. The Company's fiscal year-end is June
      30.





**2.
      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**





*(a)*
            *Method
                of accounting*





The
      Group
      maintains its general ledger and journals with the accrual method accounting
      for
      financial reporting purposes. The consolidated financial statements and notes
      are representations of management.  Accounting policies adopted by the
      Group conform to generally accepted accounting principles in the United States
      of America and have been consistently applied in the presentation of
      consolidated financial statements, which are compiled on the accrual basis
      of
      accounting.





*(b)*
            *Consolidation*





The
      consolidated financial statements include the accounts of China Architectural
      Engineering, Inc. (the Company) and its six subsidiaries constituting the group.
      Significant inter-company transactions have been eliminated in consolidation.
      The consolidated financial statements include 100% of the assets and liabilities
      of these majority-owned subsidiaries, and the ownership interests of minority
      investors are recorded as minority interests.





45


The
      Company’s subsidiaries and affiliated companies and their principal activities
      as of June 30, 2007 are summarized as follows:





**Name**
            
            **Place
                of incorporation of organization**
            
            **Percentage
                of Equity Interest Attributable to the Company**
            
            **Principal
                Activities**Intermost
                Limited ("IL")
            
            British
                Virgin Islands
            
            100%
            
            Investment
                holdingChina
                E.com Information Technology Ltd.("CECITL")*
            
            PRC
            
            100%
            
            Business
                portal and
              e-commerce
                solutionsIMOT
                Information Technology (Shenzhen) Ltd. ("IITSL")*
            
            PRC
            
            100%
            
            Investment
                holdingIntermost
                (H.K.) Limited ("IHKL")
            
            Hong
                Kong
            
            100%
            
            InactiveShenzhen
                Bank Union & Jiayin E-commerce Company Ltd.
                ("SBUJE")**
            
            PRC
            
            55.30%
            
            InactiveIntermost
                Focus Advertising Company Ltd.("IFACL")**
            
            PRC
            
            90%
            
            InactiveShanghai
                Newray Photographic Equipment Co., Ltd. ("SNPE")**
            
            PRC
            
            51%
            
            Sales
                of photographic equipment, and LCD monitorsChina
                E.com Technology (Shenzhen) Ltd.("CECTSL")*
            
            PRC
            
            100%
            
            Business
                postal and
              e-commerce
                solutionsHainan
                Concord Financial Products Development Co., Ltd.
                ("HCFPDCL")**
            
            PRC
            
            80%
            
            Private
                equity exchange & investment holdingShenzhen
                International Hi-Tech Property Right Exchange Centre
                ("SIHTPREC")***
            
            PRC
            
            15%
            
            Private
                equity exchangeGolden
                Anke (GATL) ***
            
            PRC
            
            49%
            
            Sales
                of photographic equipment, and LCD monitorsHainan
                Special Economic Zone Property Right Exchange Center
                (PREC)***
            
            PRC
            
            21%
            
            Private
                Property Right ExchangeLeader
                Palace (LP)
            
            Taiwan
            
            100%
            
            VOIP
                services





46


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





**     SBUJE,
                IFACL, SNPE, and HCFPDCL are equity joint ventures established in
                the
                PRC    to be operated for a period of 10 years until
                2009, 2010, 2013, and 2015 respectively. They are subsidiaries of
                the
                Company and their operations are consolidated into the Company's
                financial
                statements.





***  SIHTPREC,
                GATL and PREC are equity joint venture established in the PRC to
                operate
                for a period of years until   2007. These are associated
                companies of the Company and are accounted for under the equity method
                of
                accounting.





The
      Company owns certain of its subsidiaries through trusts that were created by
      a
      Declaration of Trust executed by Huang Liqiong and Jun Liang in February 2000.
      The trusts were created by, and therefore are revocable by, IL. Accordingly,
      IL
      consolidates the operations of CECITL since it is the beneficial owner of a
      majority of the outstanding interests and, through its ability to revoke the
      trusts, retains control of these interests.





*(c)*
            *Use
                of estimates*





The
      preparation of the consolidated financial statements in conformity with
      generally accepted accounting principles in the United States of America
      requires management to make estimates and assumptions that affect the reported
      amounts of assets and liabilities and disclosure of contingent assets and
      liabilities at the date of the consolidated financial statements and the
      reported amounts of revenues and expenses during the reporting
      periods.  Management makes these estimates using the best information
      available at the time the estimates are made; however actual results could
      differ materially from those estimates.





*(d)*
            *Economic
                and political risks*





The
      Company’s operations are mainly conducted in the PRC. Accordingly, the Company’s
      business, financial condition and results of operations in the PRC may be
      influenced by the political, economic and legal environment in the PRC, and
      by
      the general state of the PRC economy.





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





*(e)*
            *Cash
                and cash equivalents*





The
      Company considers all highly liquid investments purchased with original
      maturities of three months or less to be cash equivalents.  The
      Company maintains bank accounts only in the PRC and Hong Kong. The Company
      does
      not maintain any bank accounts in the United States of America.





47


*(f)*
            *Restricted
                cash*





Restricted
      cash represents time deposit accounts to secure notes payable and bank
      loans








*(g)*
            *Accounts
                receivable*





Accounts
      receivable is carried at the net invoice value charged to
      customer.  The Company records an allowance for doubtful accounts to
      cover estimated credit losses. Management reviews and adjusts this allowance
      periodically based on historical experience and its evaluation of the
      collectibility of outstanding accounts receivable. The Company evaluates the
      credit risk of its customers utilizing historical data and estimates of future
      performance





*(h)*
            *Inventories*





Inventories
      are raw materials which are stated at the lower of weighted average cost or
      market value. As of June 30, 2007, inventories were comprised of digital
      security imaging system and digital camera.





*(i)*
            *Investments*




The
      non-marketable equity security investments are presented at historical cost
      because the Company does not have significant influence over the underlying
      investments. These investments are subject to a periodic impairment review.
      To
      the extent any impairment is considered other-than-temporary, the investment
      is
      written down to its fair value and the loss is recorded as interest income
      and
      other, net.





*(j)*
            *Plant
                and equipment*





Plant
      and
      equipment are carried at cost less accumulated
      depreciation.  Depreciation is provided over their estimated useful
      lives, using the straight-line method. Estimated useful lives of the plant
      and
      equipment are as follows:




Computer
                  equipment
              3
                  yearsMotor
                  vehicles
              5
                  yearsFurniture
                  and office equipment
              5
                  years




The
                cost and related accumulated depreciation of assets sold or otherwise
                retired are eliminated from the accounts and any gain or loss is
                included
                in the statement of income. The cost of maintenance and repairs is
                charged
                to income as incurred, whereas significant renewals and betterments
                are
                capitalized.





*(k)*
            *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 ("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.





48


*(l)*
            *Accounting
                for the impairment of long-lived
                assets*





Impairment
      of Long-Lived Assets is evaluated for impairment at a minimum on an annual
      basis
      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 an asset 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 Company's average cost of
      capital.





During
      the
      reporting period, there was no impairment loss.





*(m)*
            *Associated
                Company*





An
      associated company is a business enterprise in which the Company owns between
      20% and 50% of the equity capital, and does not have direct or indirect or
      joint
      control, and therefore, has only limited ability to participate in financial
      and
      operating policy decisions.





The
      Company's investment in associated companies 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 Company's share of the associated company's results
      of
      operations.





*(n)*
            *Revenue
                and cost recognition.*





The
      Company recognizes revenue in accordance with SEC Staff Accounting Bulletin
      No.
      101, "Revenue Recognition in Financial Statements". The Company recognizes
      revenue when the significant risks and rewards of ownership have been
      transferred to the customer pursuant to PRC law, including factors such as
      when
      persuasive evidence of an arrangement exists, delivery has occurred, the sales
      price is fixed or determinable, sales and value-added tax laws have been
      complied with, and collectibility is probable.





Revenues
      from the sale of photographic equipment and digital security imaging system
      are
      recognized from the invoiced value of the goods supplied to customers. Revenues
      are recognized upon delivery of goods and passage of title to
      customers.





Revenue
      from web-site development contracts is recognized based on the terms of the
      contract. The Company uses either the percentage of completion when the contract
      is long-term or the completed contract method when the contract is short-term
      to
      recognize such revenue. Contracts are short-term in nature and require
      acceptance by the customer pursuant to the respective contracts are accounted
      for under the completed contract method. 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.





49


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.





*(o)*
            *Stock
                compensation*





The
      Company may periodically issue shares of common stock for services rendered
      or
      for financing costs. Such shares are valued based on the market price of the
      shares on the transaction date.





The
      Company may periodically issue stock options to employees and stock options
      or
      warrants to non-employees in non-capital raising transactions for services
      and
      for financing costs.





The
      Company has adopted Statement of Financial Accounting Standards No. 123,
      "Accounting for Stock-Based Compensation" ("SFAS No. 123"), which establishes
      a
      fair value method of accounting for stock-based compensation plans.





The
      provisions of SFAS No. 123 allow companies to either record an expense in the
      financial statements to reflect the estimated fair value of stock options to
      employees, or to continue to follow the intrinsic value method set forth in
      Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to
      Employees", but to disclose on an annual basis the pro forma effect on net
      income (loss) and net income (loss) per share had the fair value of the stock
      options been recorded in the financial statements. SFAS No. 123 was amended
      by
      SFAS No. 148, which now requires companies to disclose in interim financial
      statements the pro forma effect on net income (loss) and net income (loss)
      per
      common share of the estimated fair market value of stock options issued to
      employees. The Company has elected to continue to account for stock-based
      compensation plans utilizing the intrinsic value method. Accordingly,
      compensation cost for stock options will be measured as the excess, if any,
      of
      the fair market price of the Company's common stock at the date of grant above
      the amount an employee must pay to acquire the common stock.





In
      accordance with SFAS No. 123, the cost of stock options and warrants issued
      to
      non-employees is measured at the grant date based on the fair value of the
      award. The fair value of the stock-based award is determined using the
      Black-Scholes option-pricing model. The resulting amount is charged to expense
      on the straight-line basis over the period in which the Company expects to
      receive benefit, which is generally the vesting period.





Stock
      options issued to non-employee directors at fair market value will be accounted
      for under the


intrinsic
      value method.





The
      Company did not have any stock options outstanding during the year ended June
      30, 2007. Accordingly, no pro forma financial disclosure is provided
      herein.





*(p)*
            *Advertising*





50


The
      Company expensed all advertising costs as incurred.  Advertising
      expenses included in selling expenses were $3,125 and $2,991 for the years
      ended
      June 30, 2007 and 2006 respectively.





*(q)*
            *Income
                taxes*





The
      Company uses the accrual method of accounting to determine and report its
      taxable income and tax credit in the year in which they are
      available.  The Company has implemented *Statement of Financial
      Accounting Standards (SFAS) No. 109, Accounting for Income
      Taxes.*





Income
      tax
      liabilities computed according to the United States, People’s Republic of China
      (PRC) and Hong Kong SAR tax laws are provided for the tax effects of
      transactions reported in the financial statements and consists of taxes
      currently due plus deferred taxes related primarily to differences between
      the
      basis of fixed assets and intangible assets for financial and tax
      reporting.  The deferred tax assets and liabilities represent the
      future tax return consequences of those differences, which will either be
      taxable or deductible when the assets and liabilities are recovered or
      settled.  Deferred taxes also are recognized for operating losses that
      are available to offset future income taxes.  A valuation allowance is
      created to evaluate deferred tax assets if it is more likely than not that
      these
      items will either expire before the Company is able to realize that tax benefit,
      or that future realization is uncertain.





In
      respect
      of the Company’s subsidiaries domiciled and operated in China and Hong Kong, the
      taxation of these entities can be summarized as follows:





·
            The
                subsidiaries incorporated in PRC are subject to the corporation income
                tax
                rate of 33%. However, in accordance with the relevant tax laws and
                regulations of PRC, the local corporation income tax rate is
                15%.





·
            The
                subsidiaries are subject to Hong Kong profits tax rate of
                17.5%.





The
      Company is subject to United States Tax according to Internal Revenue Code
      Sections 951 and 957.  Corporate income tax is imposed on graduated
      rates in the range of:





Taxable
      Income


Rate
            Over
            But
                not over
            Of
                Amount Over15%
            0
            50,000
            025%
            50,000
            75,000
            50,00034%
            75,000
            100,000
            75,00039%
            100,000
            335,000
            100,00034%
            335,000
            10,000,000
            335,00035%
            10,000,000
            15,000,000
            10,000,00038%
            15,000,000
            18,333,333
            15,000,00035%
            18,333,333
            -
            0





*(r)*
              *Earning
                  per share*





In
        September 2004, the Emerging Issues Task Force (“EITF”) reached consensus on
        EITF 04-8 “The effect of Contingently Convertible Debt on Diluted Earnings per
        Share.” The new rule requires companies to include shares to be issued upon
        conversion of contingently convertible debt in their diluted earnings per
        share
        (“EPS”) calculations regardless of whether or not the debt is currently
        convertible. Potential shares should be calculated using the if-converted
        method
        or the net share settlement method. The change has no effect on net income,
        but
        it does affect the related dilution per share amount. The new rule is effective
        for reporting periods ending on or after December 31, 2004.





51


*(s)*
            *Foreign
                currency translation*





The
      accompanying consolidated financial statements are presented in United States
      dollars. The functional currencies of the Company are Hong Kong Dollar (HKD)
      and
      Renminbi (RMB).  The consolidated financial statements are translated
      into United States dollars from HKD and RMB at year-end exchange rates as to
      assets and liabilities and average exchange rates as to revenues and expenses.
      Capital accounts are translated at their historical exchange rates when the
      capital transactions occurred.





**June
                30, 2007**
            
            **June
                30, 2006**Year
                end HKD : US$ exchange rate
            7.8172
            
            7.7680Average
                yearly HKD : US$ exchange rate
            7.8172
            
            7.7585





**June
                30, 2007**
            
            **June
                30, 2006**Year
                end RMB : US$ exchange rate
            7.6248
            
            8.0065Average
                yearly RMB : US$ exchange rate
            7.6891
            
            8.0229




The
                RMB is not freely convertible into foreign currency and all foreign
                exchange transactions must take place through authorized
                institutions.  No representation is made that the RMB amounts
                could have been, or could be, converted into US$ at the rates used
                in
                translation.




*(t)*
            *Statutory
                reserves*





Statutory
      reserves for foreign investment enterprises are referring to the amount
      appropriated from the net income in accordance with laws or regulations, which
      can be used to recover losses and increase capital, as approved, and are to
      be
      used to expand production or operations.





*(u)*
            *Comprehensive
                income*





Comprehensive
      income is defined to include all changes in equity except those resulting from
      investments by owners and distributions to owners.  Among other
      disclosures, all items that are required to be recognized under current
      accounting standards as components of comprehensive income are required to
      be
      reported in a financial statement that is presented with the same prominence
      as
      other consolidated financial statements.  The Company’s current
      components of other comprehensive income are the foreign currency translation
      adjustment.





*(v)*
            *Recent
                accounting pronouncements*







In
      February 2006, the FASB issued a SFAS 155, “Accounting for Certain Hybrid
      Financial Instruments” to amend FASB Statements No. 133, Accounting for
      Derivative Instruments and Hedging Activities, and No. 140, Accounting for
      Transfers and Servicing of Financial Assets and Extinguishments of Liabilities.
      This statement permits fair value re-measurement for any hybrid financial
      instrument that contains an embedded derivative that otherwise would require
      bifurcation and eliminate the prohibition on a qualifying special-purpose entity
      from holding a derivative financial instrument that pertains to a beneficial
      interest other than another derivative financial instrument.  This
      statement is effective for all financial instruments acquired or issued after
      the beginning of an entity’s first fiscal year that begins after September 15,
      2006.




52




In
      July
      2006, the FASB issued FIN 48, Accounting for Uncertainty in Income Taxes—an
      Interpretation of FASB Statement No. 109, which clarifies the accounting for
      uncertainty in tax positions. This Interpretation requires that the Company
      recognizes in its consolidated financial statements the impact of a tax position
      if that position is more likely than not of being sustained on audit, based
      on
      the technical merits of the position. The provisions of FIN 48 are effective
      for
      the Company on January 1, 2007, with the cumulative effect of the change in
      accounting principle, if any, recorded as an adjustment to opening retained
      earnings.






In
      September 2006, the FASB issued SFAS 157, Fair Value Measurements, which defines
      fair value, establishes a framework for measuring fair value in generally
      accepted accounting principles, and expands disclosures about fair value
      measurements. SFAS 157 applies under other accounting pronouncements that
      require or permit fair value measurements, where fair value is the relevant
      measurement attribute. The standard does not require any new fair value
      measurements. SFAS 157 is effective for financial statements issued for fiscal
      year beginning after November 15, 2007, and interim periods within those fiscal
      years.






In
      September 2006, the SEC issued SAB No. 108, which provides guidance on the
      process of quantifying financial statement misstatements. In SAB No. 108, the
      SEC staff establishes an approach that requires quantification of financial
      statement errors, under both the iron-curtain and the roll-over methods, based
      on the effects of the error on each of the Company’s financial statements and
      the related financial statement disclosures. SAB No.108 is generally effective
      for annual financial statements in the first fiscal year ending after November
      15, 2006. The transition provisions of SAB No. 108 permits existing public
      companies to record the cumulative effect in the first year ending after
      November 15, 2006 by recording correcting adjustments to the carrying values
      of
      assets and liabilities as of the beginning of that year with the offsetting
      adjustment recorded to the opening balance of retained earnings.




The
      Company does not anticipate that the adoption of the above standards will have
      a
      material impact on these consolidated financial statements.





**3.**  **DEPOSITS,
      PREPAYMENTS AND OTHER RECEIVABLES**





Deposits,
      prepayments and other receivables are summarized as follows:





53


June
                30, 2007
            
            
            June
                30, 2006Rental
                and utilities deposits
            
            $
            7,508
            
            
            $
            9,617Advance
                to employees
            
            
            2,142
            
            
            
            2,065Prepaid
                expenses
            
            
            315,388
            
            
            
            2,842Loan
                Interest receivable (a)
            
            
            116,547
            
            
            
            40,810Interest
                Income (b)
            
            
            -
            
            
            
            5,272Due
                from stockholders (c)
            
            
            65,575
            
            
            
            30,210Other
                loans / advance to supplier (d)
            
            
            350,080
            
            
            
            48,088Trade
                deposit paid (e)
            
            
            1,293
            
            
            
            694,160Deposit
                for investment (f)
            
            
            1,400,000
            
            
            
            -Others
            
            
            10,550
            
            
            
            1,178$
            2,269,083
            
            
            $
            834,242




(a)
              Cash
                  loan interest receivable from an un-related third party of US$250,000
                  and
                  US$350,000 at   @12% p.a. for period from November 28, 2005
                  to June 30, 2006 and December 12, 2005 to June 30, 2006,
                  respectively.


(b)
            Investment
              income for period from April 1, 2005 to June 30,
              2005.  (c
                )
            The
                amount receivable from the minority stockholders of Shanghai Newray
                Photographic  Equipment Co., Ltd. of Rmb245,000 is unsecured,
                non-interest bearing, and due and payable on
                demand.  (d)
            RMB
              255,000 to Mr. Zhu Wei, the former holder of a 51% interest in Shanghai
              Newray Photographic Equipment Co., Ltd. which is unsecured, non-interest
              bearing, and due and payable on demand.
              
              Cash
                  loan to Hainan Man Lai Yuan, unrelated third party of Rmb85,000
                  with
                  interest rate at 0.45% per month, and due and payable by end of
                  2006 and
                  cash loan for an unrelated third party of Rmb50,000 with interest
                  at 5.22%
                  p.a. This loan was renewed and due by the end of 2007 with same
                  interest
                  rate.
                
                There
                  was an advance to supplier of RMB 2,574,289 for the VOIP services.
                  This
                  advance is unsecured, non-interest bearing, and due on
                  demand. (e)
            Trade
                deposit of security systems and spare parts prepaid to the suppliers
                for
                the sales orders placed by the customers.  (f)
            The
              deposit for investment was paid to an unrelated company in Taiwan for
              a
              pending acquisition.  As of the report date, the acquisition has
              not been completed.




**4.**
            **GOODWILL**





54


On
      May 29,
      2003, the Company completed the acquisition of a 51% interest in Shanghai Newray
      Photographic Equipment Co., Ltd. ("SNPE"), a company incorporated in Shanghai,
      PRC. SNPE had no operations prior to the acquisition and had no assets and
      liabilities other than cash balances. Subsequent to the acquisition, staff
      with
      expertise in the photographic business in Shanghai was recruited and SNPE
      commenced business operations, including sales of photographic equipment, and
      sales of LCD monitors to PRC Railway Dept.





Consequently,
      based on the results of the Company's discounted cash flows calculation, and
      the
      discontinuance of the primary business activity of Shanghai Newray Photographic
      Equipment Co., Ltd. it is management's conclusion that the Shanghai Newray
      Photographic Equipment Co., Ltd. has no goodwill. The Company has recorded
      an
      impairment charge of RMB 4,568,552 (US $563,323) in the fiscal year ended June
      30, 2006.





On
      August
      10, 2004, the Company's wholly-owned subsidiary, IMOT Information Technology
      (Shenzhen) Ltd. ("IMOT Technology"), received all necessary government approval
      required to complete the transfer of 51% of the issued and outstanding shares
      of
      Golden Anke Technology, Ltd. ("Golden Anke") from two of its shareholders to
      IMOT Technology.





The
      total
      purchase price of Rmb 27,542,592 consisted of 12,000,000 shares of the Company's
      common stock valued at Rmb26,827,200 (US$0.27 per share) and commission expenses
      of Rmb715,392 ($86,400) 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 of the acquisition.





Goodwill
      of Rmb17,152,456 represented the excess of the purchase price over the fair
      value of the net tangible asset acquired. The goodwill has been included in
      the
      digital security system segment.








RMB
            
            
            US$Goodwill
                acquired in GATL transaction on August 10, 2004
            
            $
            17,152,456
            
            
            $
            2,114,976Impairment
                for the year ended June 30, 2006
            
            
            -
            
            
            
            -Balance
                at June 30, 2006
            
            
            17,152,456
            
            
            
            2,114,976





Pursuant
      to the Stock Exchange Agreement relating to Hainan Concord Financial Products
      Development Co., Ltd. ("Development"), IITSL issued to the Development
      Stockholders 5,000,000 shares of the Company's restricted common stock having
      a
      value of Rmb7,617,600 (US$920,000). The consideration for the transaction was
      determined by arm's-length negotiations between the parties, none of whom is
      related.





The
      total
      purchase price of Rmb8,213,760 consisted of 5,000,000 shares of the Company’s
      common stock valued at Rmb7,617,600 (US$0.184 per share) and commission expenses
      of Rmb596,160 US$72,000) paid to unrelated advisor. The value of the common
      stock issued was based on the market value of the common issued was based on
      the
      market value of the common stock at the completion dated of the
      acquisition.





55


Goodwill
      of Rmb7,272,437 represented the excess of the purchase price over the fair
      value
      of the net tangible asset acquired. The goodwill has been included in the
      unallocated segment.





RMB
            
            
            US$Goodwill
                acquired in HCFPDCL transaction on Jan 6, 2005
            
            $
            7,272,437
            
            
            $
            896,725Impairment
                for the year ended June 30, 2006
            
            
            -
            
            
            
            -Balance
                at June 30, 2006
            
            
            7,272,437
            
            
            
            896,725Impairment
                for the year ended June 30, 2007
            
            
            (7272,437
            )
            
            
            (896,725
            )Balance
                at June 30, 2007
            
            $
            -
            
            
            $
            -





**5.**
            **SHORT-TERM
                LOAN**





The
      Company loan to an un-related third party of US$250,000 and US$350,000 on
      November 28, 2005 and December 12, 2005, respectively with interest rate at
      12%
      p.a. and due and payable on September 28, 2006 and September 12, 2006
      respectively. These loans are still outstanding and the Company is expecting
      to
      be paid in full by June 30, 2008.





**6.**
            **PLANT
                AND EQUIPMENT**





Plant
      and
      equipment is summarized as follows:





June
                30, 2007
            
            
            June
                30, 2006Computer
                equipment
            
            $
            166,813
            
            
            $
            159,232Furniture
                and office equipment
            
            
            51,562
            
            
            
            51,562Motor
                vehicles
            
            
            7,049
            
            
            
            10,262225,424
            
            
            
            221,056Less:
                Accumulated depreciation
            
            
            (173,972
            )
            
            
            (170,176
            )$
            51,414
            
            
            $
            50,880





Depreciation
      expenses were $28,146 and $ 20,002 for the years ended June 30, 2007 and June
      30, 2006 respectively.




56





**7.**
            **ACCRUED
                LIABILITIES AND OTHER
                PAYABLES**





Accrued
      liabilities and other payables are summarized as follows:





June
                30, 2007
            
            
            June
                30, 2006Wages
                and bonus
            
            
            23,031
            
            
            $
            31,410Consultancy
                fees
            
            
            100,071
            
            
            
            88,506Legal
                and professional fees
            
            
            37,737
            
            
            
            35,563Audit
                and review fees
            
            
            43,000
            
            
            
            2,500Loan
                interest payable
            
            
            7,275
            
            
            
            0Loan
                from shareholder
            
            
            500,000
            
            
            
            0Other
            
            
            81,446
            
            
            
            19,396$
            792,560
            
            
            $
            177,375





**8.**
            **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 33%. 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, IFACL,
      GATL, CECTSC and HCFPDCL) established in the PRC are subject to PRC enterprise
      income taxes at a rate of 15%.  SNPE is subject to a special PRC
      enterprise income tax at a rate 0.5% of turnover.  IHKL is subject to
      Hong Kong profits tax at a rate of 17.5%.





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:





Deferred
      taxation consisted of:





June
                30, 2007
            
            
            June
                30, 2006Net
                operating loss carry forwards
            
            $
            4,081,073
            
            
            $
            990,526Valuation
                allowance
            
            
            (4,081,073
            )
            
            
            (990,526
            )Deferred
                tax assets, net
            
            $
            -
            
            
            $
            -





57





The
      change
      in valuation allowance from June 30, 2006 to June 30, 2007 is primarily related
      to the tax effects of the increase in the net operating loss in the current
      fiscal year. The Company has net operating loss carry forwards totaling
      approximately $4,000,000 as of June 30 2007, primarily relating to 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 their realization is uncertain.





**9.**
            **STOCKHOLDERS'
                EQUITY**





**Year
      ended June 30, 2007**





On
      September 25, 2006, November 17, 2006 and May 21, 2007, we authorize the
      issuance of 20,000,000, 20,000,000 and 22,000,000 shares respectively of common
      stock with a value of $0.05 per share to First Federal Holding Ltd. for private
      placement. The stock was issued in reliance on the exemption from registration
      provided by Section 4(2) of the Securities Act of 1933. There was no general
      solicitation or advertising engaged in by the Company in making this offering
      and the offeree and the parties they designated to receive the stock were
      accredited investor.





On
      November 17, 2006, we authorized the issuance of 80,000 shares of common stock
      with a value of $0.05 per share to an individual. The stock was issued in
      reliance on the exemption from registration provided by Section 4(2) of the
      Securities Act of 1933. There was no general solicitation or advertising engaged
      in by the Company in making this offering and the offeree and the parties they
      designated to receive the stock were accredited investor.





The
      Company redeemed 2,470,000 shares at $0.326 from Shenzhen International Hi-Tech
      Property Right Exchange Centre in December 2006. This redemption represented
      the
      reduction of the investment of $261,737.





The
      Company invested 25% of SFVI in October 2003. The Company decided to withdraw
      the investment in May 2006. The extraordinary loss was calculated in Note
      11.





The
      Company redeemed 6,500,000 shares at $0.18 and the loss was erroneously
      overstated by $390,000. This accounting error had been corrected to the
      accumulated deficit at June 30, 2007 as prior year adjustment.





**Year
      Ended June 30, 2006**





On
      July
      26, 2005, we authorize the issuance of 1,028,278 shares of common stock with
      a
      value of $0.05 per share to A3W Infrastructure Corporation for private
      placement. The stock was issued in reliance on the exemption from registration
      provided by Section 4(2) of the Securities Act of 1933. There was no general
      solicitation or advertising engaged in by the Company in making this offering
      and the offeree and the parties they designated to receive the stock were
      accredited investor.




58


On
      August
      22, 2005, we authorized the issuance of (i) 474,900 shares of common stock
      with
      a value of $0.09 per share to Stanford Capital International Limited for
      settlement of investment relation services already rendered to us having a
      value
      of $45,000; (ii) 200,000 shares of common stock with a value of $0.076 per
      share
      to Vanderkam &Associates for settlement of legal professional services
      already rendered to us having a value of $15,188; (iii) 1,700,000 shares of
      common stock with a value of $0.09 per share to directors and CEO for
      compensation; (iv) 700,000 shares of common stock with a value of $0.09 per
      share to consultants for services already rendered; (v)
      2,600,000  shares of common stock with a value of $0.09 per share to
      Yorkshire  Capital Ltd, Wei, Xiping and Fang Hailing as commission for
      the  completion of a private placement of 40million shares of common
      stock of the Company; (vi) 3,000,000 shares of common stock with a value of
      $0.05 per share to Worldwide Gateway for private placement. The stock was issued
      in reliance on the exemption from registration provided by Section 4(2) of
      the
      Securities Act of 1933. There was no general solicitation or advertising engaged
      in by the Company in making this offering and the offerees and the parties
      they
      designated to receive the stock were accredited investors.




On
      September 26, 2005, we authorized the issuance of 40,000,000 shares of common
      stock with a value of $0.05 per share to Alferdo Properties; Piaster Assets;
      Original Group Holdings and Magnate Trading Services for private placement.
      The
      stock was issued in reliance on the exemption from registration provided by
      Section 4(2) of the Securities Act of 1933. There was no general solicitation
      or
      advertising engaged in by the Company in making this offering and the offerees
      and the parties they designated to receive the stock were accredited
      investor.





On
      September 27, 2005, we authorized the issuance of 5,000,000 shares of common
      stock with a value of $0.217 per share to acquire 21% of the issued and
      outstanding shares of Hainan Special Economic Zone Property Rights Exchange
      Centre from the shareholders of the Exchange Centre. The stock was issued in
      reliance on the exemption from registration provided by Section 4(2) of the
      Securities Act of 1933.There was no general solicitation or advertising engaged
      in by the Company in making this offering and the offerees and the parties
      they
      designated to receive the stock were accredited investor. The stock was
      delivered to the designated parties on October 17, 2005 after the approval
      and
      completion of the transfer of the 21% shareholding of the Exchange Centre to
      IMOT Technology.





On
      January
      19, 2006, we authorized the issuance of 1,000,000 shares of common stock with
      a
      value of $0.05 per share to Xu ZIJIAN for private placement. The stock was
      issued in reliance on the exemption from registration provided by Section 4(2)
      of the Securities Act of 1933. There was no general solicitation or advertising
      engaged in by the Company in making this offering and the offerees and the
      parties they designated to receive the stock were accredited
      investor.





On
      March
      9, 2006, we authorized the issuance of 5,880,000 shares of common stock with
      a
      value of $0.068 per share to Tian Suishang, Chow Siu Chun, Zhou Xiao Si, Ka
      Shishi, Huang Yi and Zhang Zheng for private placement. The stock was issued
      in
      reliance on the exemption from registration provided by Section 4(2) of the
      Securities Act of 1933. There was no general solicitation or advertising engaged
      in by the Company in making this offering and the offerees and the parties
      they
      designated to receive the stock were accredited investor.





59


On
      May 30,
      2006, we authorized the issuance of 1,000,000 shares of common stock with a
      value of $0.05 per share to Pan Zheng and Liu Wei Liang for private placement.
      The stock was issued in reliance on the exemption from registration provided
      by
      Section 4(2) of the Securities Act of 1933. There was no general solicitation
      or
      advertising engaged in by the Company in making this offering and the offerees
      and the parties they designated to receive the stock were accredited
      investor.





**10.**
            **COMMITMENTS**





Operating
      Leases - The Company has operating lease agreements for office premises, which
      extend through May 2008. Future minimum rental payments under agreements
      classified as operating leases with non-cancelable terms for the year ended
      June
      30, 2008 are $61,347.





Rental
      expense paid for the years ended June 30, 2007 and 2006 were $60,238 and $74,652
      respectively.





**11.**
            **EXTRAORDINARY
                ITEM**





The
      Company disposed the 25% shareholding of SFVI on May 23, 2006 and sustained
      a
      loss on disposal of an associated company.





Loss
      on disposal of 25% investment in SFVI is summarized as follows:





Cash
                consideration
            
            $
            73,98210,000,000
                shares of IMOT at @US$0.24 per share
            
            
            2,450,308Total
                consideration paid
            
            
            2,524,290Commission
                paid
            
            
            73,5092,597,80025%
                shared of net income  for period  from April
                13,  2004 to May 23, 2006
            
            
            386,9052,984,7046,500,000
                shares of IMOT  consideration to the Company on May 23, 2006 at
                @0.18 per share
            
            
            1,170,000Loss
                on disposal of 25% investment in SFVL
            
            $
            1,814,705





60





**12.**
            **SEGMENT
                INFORMATION**





The
      Company adopted SFAS No. 131, "Disclosures About Segments of an Enterprise
      and
      Related Information", in respect of its operating segments. The Company's
      reportable segments are E-Commerce Solutions, System Sales Integration, Phone
      Payment System, Web Advertisement, Sales of Computer Software, Photographic
      Business and Digital Security System Business. E-Commerce Solutions comprises
      revenue from web-site development contracts and maintenance contracts. The
      Photographic Business consists of sales of photographic equipment and the
      Digital Security System Business consists of sales of digital image security
      surveillance system.





Each
      segment is managed separately because each business requires different
      technology and marketing strategies. The Company 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 include primarily cash and cash
      equivalents and deposits and other receivables. There were no significant
      inter-company transactions during any of the reported periods. In determining
      operating income (loss) by reportable segment, general corporate expenses and
      other income and expense items of a non-operating nature are not considered,
      as
      such items are not allocated to the Company's segments. Segment information
      for
      the year ended June 30, 2007 and 2006 are as follows:





a.
            Net
                revenues





June
                30, 2007
            
            
            June
                30, 2006E-commerce
                solutions
            
            $
            80,285
            
            
            $
            172,051Consultancy
                fee
            
            
            -
            
            
            
            (925
            )Photographic
                business
            
            
            1,628
            
            
            
            96,615VOIP
                services
            
            
            4,598,619
            
            
            
            -Sales
                of digital security system
            
            
            -
            
            
            
            12,052,118$
            4,680,532
            
            
            
            12,319,459PRC
            
            
            81,913
            
            
            
            12,319,459Taiwan
            
            
            4,598,619
            
            
            
            -$
            4,680,532
            
            
            $
            12,319,459





b.
            Net
                Profit / (loss):





June
                30, 2007
            
            
            June
                30, 2006E-commerce
                solutions
            
            $
            (417,439
            )
            
            $
            (328,386
            )Consultancy
                fee
            
            
            -
            
            
            
            111,261Photographic
                business
            
            
            (27,110
            )
            
            
            (588,538
            )




61


VOIP
                services
            
            
            (1,164,073
            )
            
            
            -Sales
                of digital security system
            
            
            
            
            
            
            1,127,721$
            (1,608,622
            )
            
            $
            322,058





Reconciliation:
            
            
            (1,608,622
            )
            
            
            322,058Unallocated
                corporate expenses
            
            
            (1,481,925
            )
            
            
            (2,439,258
            )Net
                Profit / (loss) for reportable segments
            
            $
            (3,090,547
            )
            
            $
            (2,117,200
            )





c.
            Assets:





June
                30, 2007
            
            
            June
                30, 2006E-commerce
                solutions
            
            $
            477,168
            
            
            $
            98,779Consultancy
                fee
            
            
            -
            
            
            
            1,314,122Photographic
                business
            
            
            -
            
            
            
            246,004VOIP
                services
            
            
            4,700,131Sales
                of digital  Security System
            
            
            6,497,267
            
            
            
            11,360,773$
            11,674,566
            
            
            
            13,019,678Reconciliation:Total
                assets for reportable segments
            
            
            11,674,566
            
            
            
            13,019,678Other
                corporate assets
            
            
            4,210,986
            
            
            
            4,016,491$
            15,885,552
            
            
            $
            17,036,169





d.
            Other
                items:





June
                30, 2007
            
            
            June
                30, 2006Depreciation:E-commerce
                solutions
            
            $
            25,541
            
            
            $
            16,053Photographic
                business
            
            
            37
            
            
            
            416Consultancy
                fee
            
            
            1,051
            
            
            
            1,810Unallocated
                corporate assets
            
            
            1,517
            
            
            
            1,72328,146
            
            
            $
            20,002Expenditures
                for fixed assets:E-commerce
                solutions
            
            
            24,119
            
            
            $
            41,519Consultancy
                fee
            
            
            -
            
            
            
            1,489Unallocated
                corporate assets
            
            
            3193$
            27,312
            
            
            $
            43,008





62


e.
            Major
                customers and concentrations:





For
      the
      year ended June 30, 2007, the three largest customers in the VOIP segment,
      accounted for 86% and in VOIP segment, accounted for 85% of total revenues,
      respectively. As of June 30, 2007, two customers accounted for 94% of the total
      accounts receivable balance.





For
      the
      year ended June 30, 2006, the two largest customers in the digital security
      system segment, accounted for 35%, and in the photographic business segment,
      accounted for 58%, of total revenues, respectively. As of June 30, 2006, one
      customer accounted for 32% of the total accounts receivable
      balance.





**13.**
            **GOING
                CONCERN**





As
      shown
      in the accompanying consolidated financial statements, the Company incurred
      a
      net loss of $3,090,547 for the year ended June 30, 2007 and has an accumulated
      deficit of $13,391,999 as of June 30, 2007. The Company also continues to
      experience negative cash flows from operations. The Company will be required
      to
      raise additional capital to fund its operations, and will continue to attempt
      to
      raise capital resources from both related and unrelated parties until such
      time
      as the Company is able to generate revenues sufficient to maintain itself as
      a
      viable entity. These factors have raised substantial doubt about the Company's
      ability to continue as a going concern. There can be no assurances that the
      Company will be able to raise additional capital or achieve profitability.
      These
      consolidated financial statements do not include any adjustments that might
      result from the outcome of this uncertainty.





The
      Company plans to strengthen its core business, control its overall expenditures,
      improve the efficiency of its operations and continue its efforts to expand
      by
      acquiring other business opportunities. During the year ended June 30, 2007,
      the
      Company raised additional capital by several private placements of
      $3,104,000.





**14.**
            **SUBSEQUENT
                EVENTS**





In
      July
      2007, the Company has signed a letter of intent to invest in a Taiwan company,
      which is a manufacturer of touch screen with clientele mainly in Taiwan. This
      transaction is still pending as of the date of this report.




63


**SIGNATURES**





In
      accordancewith 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/ Rocky
              WuRocky
              WulianghaiPresident
              and Chief Executive Officer


By:
            /s/ Thomas
              LeeThomas
              LeeChief
              Financial Officer




Dated:                      October
      25, 2007





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.






Signature
            Title
            Date:
              October 25, 2007/s/
                Fred Peck
            DirectorFred
              Peck/s/
                James Wu
            DirectorJames
              Wu/s/
              Rocky Wu
            Director,
              President and Chief Executive OfficerRocky
              Wulianghai/s/
              Wilbert Kam
            DirectorWilbert
              Kam/s/
              Catalina Chan
            DirectorCatalina
              Chan/s/
              Shim Yang
            DirectorShim
              Yang/s/
              Deng Xiang Xiong
            DirectorDeng
              Xiang Xiong




64