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, 2006

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

       For the transition period from _______________ to ________________

                         Commission File Number 0-30430

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

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

             31st Floor, B31-23 Guomao Building, Renmin Rd.(South),
                             Shenzhen, China 518014
               (Address of principal executive offices)(Zip code)

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

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

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

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

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

     Check  whether  the issuer:  (1) filed all reports  required to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 12 months (or for such
shorter period that the  registrant was required to file such reports);  and (2)
has been  subject to such  filing  requirements  for the past 90 days.
Yes X No
   ---  ---

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

     The  registrant's  revenues  for the fiscal  year ended June 30,  2006 were
$12,319,459

         The number of shares of the registrant's common stock, $.001 par value
per share, outstanding as of September 19, 2006 was 153,290,278. The aggregate
market value of the voting and non-voting common equity held by non-affiliates
of the registrant on September 19, 2006, based on the last sales price on the
OTC Bulletin Board as of such date, was approximately $20,694,187.

                       DOCUMENTS INCORPORATED BY REFERENCE

         None

              Transition Small Business Disclosure Format: Yes   No X
                                                             ---   ----
<PAGE>

                                TABLE OF CONTENTS

                                                                          Page

PART I

         ITEM 1.       DESCRIPTION OF BUSINESS.........................    5
         ITEM 2.      DESCRIPTION OF PROPERTY..........................    8
         ITEM 3.      LEGAL PROCEEDINGS................................    9
         ITEM 4.      SUBMISSION OF MATTERS TO A VOTE OF
                      SECURITY HOLDERS.................................    9

PART II

         ITEM 5.      MARKET FOR COMMON EQUITY.........................
                      RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS
                      ISSUER PURCHASES OF EQUITY SECURITIES............    9
         ITEM 6.      MANAGEMENT'S DISCUSSION AND ANALYSIS
                      OR PLAN OF OPERATIONS............................   14
         ITEM 7.      FINANCIAL STATEMENTS.............................   20
         ITEM 8.      CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
                      ON ACCOUNTING AND FINANCIAL DISCLOSURE...........   20
         ITEM 8A.     CONTROLS AND PROCEDURES..........................   20
         ITEM 8B      OTHER INFORMATION................................   21

PART III

         ITEM 9.      DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND
                      CONTROL PERSONS; COMPLIANCE WITH
                      SECTION 16(a) OF THE EXCHANGE ACT................   21
         ITEM 10.     EXECUTIVE COMPENSATION...........................   23
         ITEM 11.     SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
                      OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
                      MATTERS..........................................   25
         ITEM 12.     CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS...   25
         ITEM 13.     EXHIBITS.........................................   26
         ITEM 14      PRINCIPAL ACCOUNTANT FEES AND SERVICES...........   27

SIGNATURES.............................................................   28

CERTIFICATIONS.........................................................
<PAGE>


                    Note Regarding Forward Looking Statements

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

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

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

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

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

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

o   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.

                       Information on Currency Translation

All amounts are in Renminbi ("Rmb") unless indicated to be in United States
Dollars ("$" or "US$"). Our sales are principally in Renminbi. The translation
of Renminbi amounts into US dollars are for reference purposes only and have
been made at the exchange rate of Rmb8.11 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.

                                       3
<PAGE>


                                     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," 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 redomiciled from the State of 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, various businesses
that provided or supported Internet services in an effort to implement this
business plan. The Company also endeavored to develop its own Internet services
businesses, including e-commerce business solutions. However, the global decline
in the demand for Internet services 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
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. The licenses 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.

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 for 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.

                                       4
<PAGE>

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 Company 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 in Shanghai, and through its
investment in Xi'an Assets and Equity Exchange, operate a 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 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 dispose 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, making 25% of Rmb 5,489,448.

The consideration for the sale of the 25% shareholding was the return of
6,500,000 shares of common stock of IMOT held by Mr Li Laohu, Mr Li Xiaoqin and
Ms Huang Xiujuan with a value of US$0.18 per share based on the closing price of
IMOT shares on May 23, 2006.

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.

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 unclear how the NSB and the YRDE will
conduct business and how Shanghai Fortune will participate in the equity
exchange markets because there have been no final regulations issued by the
local PRC government. For the past two years Shanghai Fortune has not been able
to operate because of the lack of regulations. The Board of Directors is
uncertain as to the date that NSB and the YRDE will conduct business and were
then the continuation of the investment in Shanghai Fortune may not be able to
generate a suffient return to the Company. Therefore, the Company determined
that it may be able to use the 6,500,000 share of common stock of IMOT for a
better purposes.

                                       5
<PAGE>

On August 10, 2004, the 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 between 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
compressing, Internet image transfer and imaging security systems.

In September 2, 2004, IML incorporated a 100% owned subsidiary, ChinaE.com
Technology (Shenzhen) Ltd. ("ChinaE Tech"), to take over the business of ChinaE
and 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 conduct 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.

On January 6, 2005, the 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
million shares of our 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 trading days from November 16, 2004 to November
30, 2004. Hainan Concord's principle business is to issue and manage
multi-functional membership cards for the people who participate in the 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, the 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 will issue 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 million
shares of our common stock in full payment of the purchase price.

                                       6
<PAGE>

Management is continuing its 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 directly consumers.

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

We sell digital photographic equipment and provide value-added services (such as
software design and system integration) for such equipment, through our
subsidiary, Shanghai Newray which is also a wholesaler of various brands of
consumer digital photographic equipment, including traditional 35mm cameras,
digital cameras and camera accessories.

Through Golden Anke, we have expanded our digital imaging services business to
include digital imaging security systems for offices, department stores and
shopping malls.

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.

Our subsidiary, Hainan Concord's principle 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 expended 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 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.

                                       7
<PAGE>

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.

Photographic Equipment

We also face substantial competition in the photographic equipment market. In
China, Shanghai Newray's photographic equipment, which is sold under the brand
name "Seagull" (English translation) represents one of the more prominent
competitors in the marketplace. However, the brand does not have significant
recognition outside of China. In the world market for both digital imaging
systems and consumer digital photographic equipment, manufacturers such as
Kodak, Minolta, Canon, Nikon and Pentax dominate, and most likely will continue
to dominate the market in the future due to their greater brand recognition and
greater financial, marketing and other resources. We anticipate that it will
take several years to increase awareness of the Seagull brand. Currently, we do
not have a significant presence in the market for digital photographic equipment
outside China and we cannot guarantee you that we will ever establish a
significant presence or be able to compete successfully in the world market.

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.

                                       8
<PAGE>

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.

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 dependant 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, 2006 we employed 89 full-time employees consisting of 4
management persons, 25 engineering and technical personnel, 30 administrative
and clerical personnel, and 30 sales persons. None of our employees are members
of any labor union, and we have never experienced any business interruption as a
result of any labor disputes. We do not provide any special benefit or incentive
programs for our employees. We believe that we enjoy good relations with all of
our employees.

ITEM 2.  DESCRIPTION OF PROPERTY

Our principal office consists of approximately 6,000 square feet of office space
located at 27th Floor, B2718-2721 and 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 $70,000 per year. These leases will expire in August, 2008.

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

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

                                       9
<PAGE>

ITEM 3.  LEGAL PROCEEDINGS

         None


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 RELATED  STOCKHOLDER MATTERS AND SMALL BUSINESS
        ISSUER PURCHASES OF STOCK 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 2005

              Quarter ended September 30, 2004       0.34             0.20
              Quarter ended December 31, 2004        0.28             0.18
              Quarter ended March 31, 2005           0.34             0.19
              Quarter ended June 30, 2005            0.24             0.07

Fiscal 2006

              Quarter ended September 30, 2005       0.24             0.07
              Quarter ended December 31, 2005        0.13             0.07
              Quarter ended March 31, 2006           0.30             0.08
              Quarter ended June 30, 2006            0.18             0.11


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 19, 2006, there were approximately 639 holders of record of the
Company's common stock. This number does not include an indeterminate number of
shareholders whose shares are held 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.

On March 12, 2004 we entered into an employment agreement with our President,
Mr. Andy Lin. The employment agreement was amended on October 5, 2004. Pursuant
to the amended employment agreement, the Board of Directors, in its discretion,
may grant to Mr. Lin an option to purchase 1,000,000 shares of our common stock
and an option to purchase an additional 1,000,000 shares of our common stock for
each year that he provides services to us pursuant to the employment agreement.
The exercise price of the option is to be computed by averaging the price of the
common stock for a period of five trading days prior to the last day of Mr.
Lin's service year or the date of the option grant. The option is to terminate
on the earlier of the following: (i) one year after the termination of Mr. Lin's
employment; or (ii) the seventh anniversary from the date of vesting of the
options, whichever is earlier. The Board of Directors has not granted any
options to Mr. Lin as of the date of this report.

During the fiscal year ended June 30, 2006, 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 July 26, 2005, we issued 1,028,278 shares of common stock at $0.05 per share
to A3W Infrastructure Corporation 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 offeree and the parties they
designated to receive the stock were all accredited investor.

                                       10
<PAGE>

 On August 22, 2005, we issued (i) 474,900 shares of common stock at $0.09 per
share to Stanford Capital International Limited in payment of investment
relation services already rendered having a value of $45,000; (ii) 200,000
shares of common stock at $0.076 per share to Vanderkam & Associates in payment
of legal services already rendered having a value of $15,188. (iii) 1,700,000
shares of common stock at $0.09 per share to directors and the CEO for
compensation. (iv) 700,000 shares of common stock at $0.09 per share to
consultants for services already rendered. (v) 2,600,000 shares of common stock
at $0.09 per share to Yorkshire Capital Ltd, Wei, Xiping and Fang Hailing as
commissions for sale of shares in a private placement and (vi) 3,000,000 shares
of common stock at $0.05 per share to Worldwide Gateway in a private placement.
All of 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 designated to receive the stock were all
accredited investors.

On September 26, 2005, we issued 40,000,000 shares of common stock at $0.05 per
share to Alferdo Properties; Piaster Assets; Original Group Holdings and Magnate
Trading Services 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 designated to receive
the stock were all accredited investor.

On September 27, 2005, we issued 5,000,000 shares of common stock at $0.217 per
share to acquire 21% of the issued and outstanding shares of Hainan Special
Economic Zone Equity 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 designated to receive the stock were all
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 issued 1,000,000 shares of common stock at $0.05 per
share to Xu ZIJIAN 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 designated to
receive the stock were all accredited investor.

On March 9, 2006, we issued 5,880,000 shares of common stock at $0.068 per share
to Tian Suishang, Chow Siu Chun, Zhou Xiao Si, Ka Shishi, Huang Yi and Zhang
Zheng 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 designated to receive the stock
were all accredited investor.

On May 30, 2006, we issued 1,000,000 shares of common stock at $0.05 per share
to Pan Zheng and Liu Wei Liang 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
designated to receive the stock were all accredited investor.

On September 25, 2006 we issued 20,000,000 shares of common stock at $0.05 per
share to First Federal Holdings 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 designated to receive the stock are accredited investor.

                                       11
<PAGE>


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, 2006, no awards had been granted from the Plan.

                    Equity Compensation Plan Information (1)
<TABLE>

------------------------ ---------------------------- ---------------------------- ------------------------
------------------------ ---------------------------- ---------------------------- ------------------------
                         Number of securities to be Weighted average
                         exercise Number of securities issued upon
                         exercise of price of outstanding remaining
                         available for outstanding options, options
                         warrants and rights future issuance under the
                         warrants and rights equity compensation plan
                                                                                   (excluding securities
                                                                                   reflected in column (a)
<S>                      <C>                          <C>                           <C>

Plan Category                        (a)                          (b)                          (c)
------------------------ ---------------------------- ---------------------------- ------------------------
------------------------ ---------------------------- ---------------------------- ------------------------

------------------------ ---------------------------- ---------------------------- ------------------------
------------------------ ---------------------------- ---------------------------- ------------------------
Shareholder Approved                  0                           N/A                      20,000,000
------------------------ ---------------------------- ---------------------------- ------------------------
------------------------ ---------------------------- ---------------------------- ------------------------

------------------------ ---------------------------- ---------------------------- ------------------------
------------------------ ---------------------------- ---------------------------- ------------------------
Not Approved by
Shareholders                         N/A                          N/A                          N/A
------------------------ ---------------------------- ---------------------------- ------------------------
</TABLE>

(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

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.

                                       12
<PAGE>

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.

Currently over half of our revenues are generated by our subsidiary, Golden
Anke, which sells, and provides value-added services for, digital security
imaging system. 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 offers web design and hosting
services.

In response to the economic recovery, we began to aggressively expand our core
business by using our technical expertise to develop an electronic information
and trading platform for use by equity exchanges in China. We also began to
diversify our business, so that we will no longer be dependent on one market for
revenue. Our plan for the future is to strengthen our core Internet business,
control our overall expenditures, enhance the effectiveness of our operations
and continue to expand by acquiring other profitable businesses. During the past
two years we have acquired a digital imaging system business, a equity exchange
business and a security systems business. We are planning to use our
technological expertise to enhance the products and services provided by these
businesses. 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.

                                       13
<PAGE>

We generated a net operating profit in fiscal 2005 and again in 2006 before
deducting an extra ordinary loss and minority interest. We will continue to
develop our business in equity exchange industry by using our technical
expertise to develop an electronic platform for the trading of private equity
exchange in China. Through our acquisition of businesses in Hainan and Shenzhen,
we have enhanced our market presence in major equity exchange centers in the
PRC. The test run of our new electronic trading platform is complete. We
anticipate that when more private property right exchange centre in various
provinces in China will use our trading platform, and we will have another
source of revenue from the equity exchange industry.

During the fiscal year ended June 30, 2006 we incurred a net operating loss
before extra-ordinary item of ($302,495), including a goodwill impairment of
$563,323. After the extra ordinary loss from the disposal of the associated
Company, we have a net loss of ($2,117,200) and an accumulated deficit of
$10,691,452. Our auditor, E. Randall Gruber, CPA, PC, has issued a "going
concern" opinion for our financial statements at June 30, 2006.

                                       14
<PAGE>

Results of Operations

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

                                                       Year Ended June 30,

                                                   2005            2006
                                                   ----            ----

    Net revenues                                $16,834,252     $12,319,459
    Cost of revenues                           (11,437,855)     (9,445,712)
    Gross profit                                  5,396,397       2,873,747
    Selling, general and administrative         (1,690,609)     (1,137,716)
    Amortization on intangible assets             (504,293)        (99,005)
    Loss on disposal of fixed assets                (6,795)               -
    Impairment of goodwill                                -       (563,323)
    Loan Interest income                                 13          44,772
    Investment income                                27,130         168,395
    Profit from operations                        3,221,843       1,286,870
    Share of profit of associated Companies         195,175          27,684
    Other income, net                                15,153           3,551
    Profit before taxation                        3,432,171       1,318,105
    Taxation                                      (759,096)       (427,809)
    Profit before minority interest               2,673,075         890,296
    Minority interests                          (2,131,252)     (1,192,791)
    Profit (loss) before extra ordinary item        541,823       (302,495)
    Loss on disposal of an associated company             -     (1,814,705)
    Net profit/(loss)                              $541,823    $(2,117,200)

Year Ended June 30, 2006 Compared to Year Ended June 30, 2005

Net revenues.

Net revenues for the year ended June 30, 2006 decreased by $4,515K(1), or 27%,
to $12,319K from $16,834K for the year ended June 30, 2005.

Net revenues during fiscal 2006 were derived principally from e-commerce
solutions, sales of photographic equipment and sales of digital security
systems. Net revenues during fiscal 2005 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:


                                       15
<PAGE>
<TABLE>


                                              Total Net Revenues     Percent of Total Net Revenues
                                              Year Ended June 30,          Year Ended June 30,
                                              2005          2006          2005           2006
                                              ----          ----          ----           ----
                                               US$           US$
<S>                                        <C>           <C>               <C>         <C>

E-commerce solutions
   - Web site design and development         225,897       172,051         1.34%        1.40%
Sales of photographic equipment              924,618        96,215         5.49%        0.78%
Sales of digital security system          15,682,832    12,052,118        93.16%       97.83%
Consultancy fee income                           905         (925)         0.01%       -0.01%
                                               _____         ____
                                          ----------    ----------       -------     --------
     Total                                16,834,252    12,319,459       100.00%      100.00%
                                          ==========    ==========       =======     ========
</TABLE>

Total revenues derived from e-commerce solutions decreased by $54K, or 24%, to
$172K in fiscal 2006 as compared to $226K in fiscal 2005. Sales of photographic
equipment decreased by $828K, or 89%, to $96K in fiscal 2006 as compared to
$925K in fiscal 2005. Sales of digital security system decreased by $3,631K, or
23% to $12,052K in fiscal 2006 as compared to $15,683K in fiscal 2005.

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.

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:
<TABLE>


                                   Total Cost of Revenues   Percent of Total Net Revenues
                                     Year Ended June 30,           Year Ended June 30,
                                     2005          2006           2005         2006
                                   --------      --------       -------      -------
                                     US$           US$
<S>                               <C>           <C>             <C>          <C>

Engineers/technician salaries        84,308       111,884         0.50%        0.91%
Write-off of Kanhan product       (150,000)             -        -0.89%           -%
Cost of digital security system  10,623,112     9,181,851        63.10%       74.53%
Cost of photographic equipment      822,905        90,203         4.89%        0.73%
Depreciation                          4,881         3,981         0.03%        0.03%
Other                                52,649        57,793         0.31%        0.47%
                                -----------    -----------      -------      -------
     Total                       11,437,855     9,445,712        67.94%       76.67%
                                 ==========     =========       =======      =======
</TABLE>

Compared to the 2005 fiscal year, the total costs of revenues for the 2006
fiscal year decreased by $1,992K, or 17%, to $9,446K. The decrease in costs of
revenues was due to cost containment effort implemented by management and a
declinein sales. The increase in salaries was due to the increase of the cost of
an engineer and technician to develop the equity platform in PRC and increased
the related expense accordingly. The principal components of costs of revenues
during the 2006 fiscal year were the costs of digital security system, other
costs associated with the support of the engineering and technician staff,
engineer and technician salaries, and depreciation of equipment utilized in
connection with these services.

Selling, General and Administrative Expense.

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

                                          Total SG&A           Percent of Total Net Revenues
                                       Year Ended June 30,           Year Ended June 30,
                                      2005           2006           2005         2006
                                    --------       --------       --------     --------
                                       US$            US$
<S>                                 <C>            <C>             <C>         <C>


Sales and marketing salaries and
     commissions                     105,471         81,521          0.63%        0.66%
Other sales and marketing             55,810        115,129          0.33%        0.93%
Rent obligation                       63,532         74,652          0.38%        0.61%
Administrative salaries              200,881        170,054          1.19%        1.38%
Corporate overhead                 1,144,142        695,178          6.80%        5.64%
Bad and doubtful debt
   -account receivables                    -          1,182             -%        0.01%
   -other receivables                120,773              -          0.72%           -%
                                   ---------      ---------         ------      -------
     Total                         1,690,609      1,137,716         10.05%        9.23%
                                   =========      =========         ======      =======

</TABLE>

                                       16
<PAGE>

The principal components of SG&A during the 2006 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 2006 fiscal year, SG&A decreased by $553K, or 33%, to $1,138K as
compared to $1,691K for the 2005 fiscal year. Sales and marketing salaries and
commissions decreased 23% during the 2006 fiscal year, to $81K, as compared to
$105K for the 2005 fiscal year. During the 2006 fiscal year, rent obligations
increased by 11K or 18% to $75K, as compared to $64K in the 2005 fiscal year.
Rent obligations increased due to more office space leased in the PRC office.
Administrative salaries decreased by $31K or 15% to $170K during the 2006 fiscal
year, as compared to $201K in the 2005 fiscal year. Other corporate expense
decreased during the 2006 fiscal year, by $449K or 39% to $695K, as compared to
$1,144K in the 2005 fiscal year. The decrease in SG&A was principally
attributable to a combination of (1) decrease in corporate overhead including
professional fees, consultancy fees, investor relation fees and audit fees. (2)
gain on exchange from the change of exchange rates of Rmb to HK$ and US$ from
1.07 and 8.28 to 1.04 and 8.11 respectively from July 22, 2006.

Minority Interest.

We reported a minority interest in our earnings of $1,193K for the 2006 fiscal
year, reflecting the proportionate interest in the profits of Shanghai Newray,
Golelen Anke and Hainan Concord owned by other parties as compared to a minority
interest in an earnings of $2,131K for the 2005 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, 2006 we had cash and cash equivalents of $693K and working capital
of $10,632K as compared to $135K of cash and cash equivalents and $4,883K of
working capital at June 30, 2005.

 Net cash used in operating activities totaled $970K during the 2006 fiscal year
as compared to $1,627K of cash used in operating activities during the 2005
fiscal year. Our use of cash was partially offset by non-cash charges, including
the use of our common stock in exchange for services in the amount of $663K,
loss on disposal of an associated company of $1,815K, depreciation expense in
the amount of $20K and amortization of intangible assets in the amount of $99K,
and impairment of goodwill of $563,323.

Net cash used in investing activities was $823K for the 2006 fiscal year while
net cash provided by investing activities was $1,593K for the 2005 fiscal year.
Funds used in investing activities consisted of addition of office equipment,
addition of intangible assets, increase in short-term investment and a
short-term loan.

Net cash provided by financing activities was $2,548K for the 2006 fiscal year
while net cash used in financing activities was $18K for the 2005 fiscal year.
Funds provided by financing activity was the net proceeds from the issuance of
common stock during fiscal 2006.

We had no long term debt at June 30, 2006. 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 Golden Anke are the
beginning 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 Exchanges 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 2006 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 we cannot assure you that funding will be available to us on
acceptable terms, or at all. If we need financing and cannot obtain it, we may
be required to severely curtail, or even cease, our operations.

                                       17
<PAGE>


CERTAIN FACTORS AFFECTING FUTURE OPERATING RESULTS

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

o   Our ability to successfully implement our business plan;

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

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

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

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

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

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

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

o   Rescheduling or cancellation of orders by customers;

o   Competitive pressures on selling prices;

o   Changes in product, service or customer mix;

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

o   Dependence upon certain key employees, in particular our President, Mr. Andy
    Lin;

o   Availability and cost of computer technicians;

o   Loss of any strategic relationships;

o   Loss of our largest customers;

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

o   New product and service introductions by our competitors;

o   Fluctuations in exchange rates, and

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

                                       18
<PAGE>

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

ITEM 7.  FINANCIAL STATEMENTS

The financial statements, together with the registered independent auditors'
report thereon of E. Randall Gruber, CPA, PC appear beginning on page F-1 of
this report.

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

In May 2005, the Company's Board of Directors dismissed Grobstein Horwath &
Company LLP as the independent auditors for the Company and selected E. Randall
Gruber, CPA, PC to serve as its new registered independent auditor.

The report of Grobstein Horwath & Company LLP, on the financial statements of
the Company as of and for the years ended June 30, 2004 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, 2004, and the interim period from July 1, 2004 through the date of
dismissal of Grobstein Horwath & Company LLP, the Company did not have any
disagreements with Grobstein Horwath & Company LLP, on any matter of accounting
principles or practices, financial statement disclosure, or auditing scope or
procedure, which disagreements, if not resolved to the satisfaction of Grobstein
Horwath & Company LLP, would have caused it to make a reference to the subject
matter of the disagreements in connection with its reports.

Prior to engaging E. Randall Gruber, CPA, PC, the Company had not consulted E.
Randall Gruber, 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  CONTROL AND PROCEDURES

(a) 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, with the
participation of the Chief Executive Officer and our Chief Financial Officer
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's Annual Report on Internal Control over Financing Reporting

         Management is responsible for establishment 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 officers and Chief Financial Officers, we assessed the
effectiveness of our internal control over financial reporting as of June 30,
2006. We concluded that our internal control over financial reporting was
effective as of June 30.

(b) Change in Internal Controls Over Financing Reporting. During the year ended
June 30, 2006 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.

                                       19
<PAGE>

ITEM 8B. OTHER INFORMATION

         None


                                    PART III

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

Identification  of  Directors,   Executive  Officers  and  Certain   Significant
Employees

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

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

         Andy Lin            60     President, Chief Financial Officer and
                                    Director

         Shim Yang           48     Director

         Catalina Chan       55     Director

         Fred Peck           47     Director

         Rocky Wu            47     Director

         Deng Xiang Xiong    40     Director and Acting Chief Executive Officer

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

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

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

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

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

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


                                       20
<PAGE>

Business Experience

Andy Lin has served as President, Chief Executive Officer and Chief Financial
Officer of the Company since June 2001 and as a director of the Company since
October 1998. Mr. Lin co-founded the Company's predecessor, IML, in January 1998
and served as Vice President of the Company from the Merger, in October 1998
until June 2001. Mr. Lin resigned as the Chief Executive Officer on Aug 8, 2006.
Prior to forming IML, he was the Vice President of China Business Resources from
1994 to 1998. Mr. Lin graduated from Tsinghua University in 1970 with a Bachelor
degree and from the Chinese Academy of Sciences in 1981 with a Master of Science
degree in computer science.

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

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

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. Mr. Peck has more than 15 years experience in portfolio
investment, risk investment, capital management, fund raising, acquisition and
merger, project fund raising privatization.

Rocky Wu has served as a director of the Company since December 6, 2005. Mr. Wu
graduated from the University of Michigan with Master Degree in electronic
engineering. He is an experienced manager in capital management and a noted
financial writer and journalist and serves as editor-in-chief and a general
editor for Taiwan Television. He is also the General Manager of Asia Capital
Management Inc. (1998) and director of FFBC Holdings Group (2001).

Deng Xiang Xiong has 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 and Shanghai Jiao Tong
University MBA. He is a member of the Shenzhen Board of Arbitration and frmerly
the General Manager of a number of state-owned and private enterprises. He has
successfully originated and executed many influential capital management
projects. He is experienced in both capital management and investment banking.


                                       21
<PAGE>

Term of Office

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

Compliance With Section 16(a) of Exchange Act

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

The Company believes that, with respect to its fiscal year ended June 30, 2005,
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 2006 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 Financial Officer and President, Andy Lin, and the
current acting Chief Executive Officer, Deng Xiang Xiong.

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

                                                                LONG TERM COMPENSATION
                          ANNUAL COMPENSATION                    AWARDS                              PAYOUTS

                                                   Other          Restricted                           All Other
                                                    Annual        Stock       Securities      LTIP     Compens-ation
Name and Principal            Salary     Bonus     Compensation   Awards      Underlying      Payout      ($)
Position             Year        ($)       ($)          ($)          ($)      Options/SARs      ($)
<S>                 <C>        <C>       <C>       <C>           <C>          <C>             <c>      <c>
                                                          -

Andy Lin,            2006      89,746       0            0            0             0            0         0
CFO and              2005      89,743       0            0            0             0            0         0
President (1)        2004      81,196       0            0            0             0            0         0


Deng Xiang Xiong (2)
  Acting CEO         2006      18,093       0        5,128            0             0            0         0

</TABLE>


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

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


                                       22
<PAGE>


Director's Compensation

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

On September 10, 2005, the Board of directors approved a plan to compensate the
directors with common stock for their services provided to the Company. Pursuant
to this plan, the following shares were issued.

        Andy Lin      1,000,000 shares of common stock
        Shim Yang       400,000 shares of common stock
        Catalina Chan   300,000 shares of common stock

Other Compensation and Employment Arrangements

On March 12, 2004 we entered into an Employment Agreement with Andy Lin, our
then Chief Executive Officer and President. The effective date of the Employment
Agreement is March 1, 2004. The term of the Employment Agreement is three years,
which may be automatically renewed. As compensation for his services, Mr. Lin
will receive an annual salary of HK$700,000 (US$89,744). The Board of Directors
may, in its discretion, grant an annual bonus to Mr. Lin. Pursuant to an
amendment to the Employment Agreement on October 5, 2004, the Board of Directors
may also, in its discretion, grant options to Mr. Lin to purchase shares of our
common stock. If any option is granted, the exercise price of the option is to
be computed using the average of the closing price of the common stock for the
five trading days prior to the date of grant or the average of the closing price
of the common stock for the five trading days immediately preceding the last day
of the Executive's service year.

Since Mr. Lin resigned from the position of Chief Executive Officer of the
Company, it was agreed by both parties that his employment compensation should
reduced to HK$40,000 (US$5,128) per month after August, 2006.

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.


                                       23
<PAGE>


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.

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 SHAREHOLDER MATTERS

Common Stock

         The following table is furnished as of June 30, 2006, 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 Shares
         Beneficial Owner (1)              Beneficially Owned       Percent

     Allied Point Limited (3)...........        600,000   (2)          *%
     Jun Liang (3)......................        600,000   (2)          *%
     Andy Lin (3).......................        600,000   (2)          *%
     Andy Lin ..........................      4,922,801             3.21%
     Shim Yang..........................        350,000                *%
     Catalina Chan (4) .................      1,300,000                *%
     Grand Grade International Ltd (4)..      1,000,000                *%
     Alfredo Properties Limited (5).....     20,000,000            13.04%
     Fred Peck (5)......................     20,000,000            13.04%
     Tu Guoshen ........................      8,830,000             5.76%
     Deng Xiang Xiong ..................        500,000                *%
                                              ----------           -------

                                       24
<PAGE>


     Beneficial owner of more than
     5% of common stock and all officers
     and directors as a group (3 persons)    36,502,801             23.81%

*        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.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

At June 30, 2006, the net balances owed to Mr. Liang, the former director, of
$25,845 was fully repaid.

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits

Exhibit
Number   Description of Exhibit

2.1      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 Corporation and 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)
16       Letter on Change in Certifying Accountant (9)
21       Significant Subsidiaries *
31       Certification of Chief Executive Officer Pursuant to Rule 13a-14(a)
         and 15d-14(a) *
32       Certification  Pursuant  to 18  U.S.C.  Section  1350,  as  adopted
         pursuant to Section  906 of the Sarbanes-Oxley Act of 2002 *

*Filed herewith.

                                       25
<PAGE>


(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 Current Report on Form
     8-K filed with the SEC on March 8,
     2004.

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, 2005 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, 2006        June 30, 2005
                              -------------        -------------

(i)      Audit Fees           $     75,261         $    233,800
(ii)     Audit Related Fees   $         --         $     10,256
(iii)    Tax Fees             $         --         $         --
(iv)     All Other Fees       $         --         $         --


                                       26
<PAGE>

                                   SIGNATURES

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

                            INTERMOST CORPORATION



                            By:/s/ Andy Lin
                               -------------------------
                                 Andy Lin
                                 President,
                                 Chief Financial Officer


                            By:/s/ Deng Xiang Xiong
                               ------------------------
                               Deng Xiang Xiong
                               Acting Chief Executive Officer


Dated:   September 28, 2006

         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

/s/ Andy Lin         President,                             September 28, 2006
------------------
Andy Lin             Chief Financial Officer and
                     Director


/s/ Shim Yang        Director                               September 28, 2006
------------------
Shim Yang


/s/ Catalina Chan    Director                               September 28, 2006
------------------
Catalina Chan


/s/ Fred Peck        Director                               September 28, 2006
------------------
Fred Peck


/s/ Rocky Wu         Director                               September 28, 2006
------------------
Rock Wu


/s/ Deng Xiang Xiong Director and Acting Chief Executive    September 28, 2006
-------------------- Officer
Deng Xiang Xiong


                                       27
<PAGE>

                                                                Exhibit 21.1
                        LIST OF SIGNIFICANT SUBSIDIARIES
<TABLE>

Name of Subsidiary                                               Jurisdiction of Organization
<S>                                                              <C>


ChinaE.com Information Technology Ltd.                                 China
IMOT Information Technology (Shenzhen) Ltd                             China
Shanghai Newray Photographic Equipment Co. Ltd.                        China
Golden Anke Technology Ltd                                             China
Hainan Concord Financial Products Development Co., Ltd.                China
ChinaE.com Technology (Shenzhen) Ltd.                                  China

</TABLE>


<PAGE>



                                                            Exhibit 31.1

        CERTIFICATION OF CHIEF EXECUTIVE OFFICER/CHIEF FINANCIAL OFFICER
                       PURSUANT TO RULES 13a-14 AND 15d-14
                     OF THE SECURITIES EXCHANGE ACT OF 1934

I, Andy Lin, Chief Financial Officer and I, Deng Xiang Xiong, acting Chief
Executive Officer of Intermost Corporation (the "Company"), certify that:

         I have reviewed this Annual Report on Form 10-KSB of Intermost
Corporation.

         Based on my knowledge, this Annual Report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this Annual
Report.

         Based on my knowledge, the financial statements, and other financial
information included in the report, fairly present in all material respects the
financial condition, results of operations and cash flows of the Company as of,
and for, the periods, presented in the report.

         I am responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the
Company and have:

(a)              designed such disclosure controls and procedures, or caused
                 such disclosure controls and procedures to be designed under
                 our supervision, to ensure that material information relating
                 to the Company, including its consolidated subsidiaries, is
                 made known to me by others within those entities, particularly
                 during the period in which the periodic report is being
                 prepared;

(b)              evaluated the effectiveness of the Company's disclosure
                 controls and procedures and presented in this report our
                 conclusions about the effectiveness of the disclosure controls
                 and procedures, as of the end of the period covered by this
                 Annual Report based on such evaluation; and

(c)              disclosed in this Annual Report any change in the Company's
                 internal control over financial reporting that occurred during
                 the Company's most recent fiscal quarter that has materially
                 affected, or is reasonably likely to materially affect, the
                 Company's internal control over financial reporting; and

     I have disclosed,  based on our most recent  evaluation of internal control
over financial  reporting,  to the Company's auditors and to the audit committee
of the board of directors (or persons fulfilling the equivalent  function):  (i)
all significant deficiencies in the design or operation of internal control over
financial  reporting  which  are  reasonably  likely  to  adversely  affect  the
Company's   ability  to  record,   process,   summarize  and  report   financial
information; and

(ii) any fraud,  whether or not  material,  that  involves  management  or other
     employees who have a significant  role in the  Company's  internal  control
     over financial reporting.

Dated:  September 28, 2006


/s/ Andy Lin
Andy Lin
Chief Financial Officer

/s/ Deng Xiang Xiong
Deng Xiang Xiong
Acting Chief Executive Officer


                                       28
<PAGE>

                                                         Exhibit 32.1

                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Intermost Corporation (the "Company") on
Form 10-KSB for the period ending June 30, 2006, as filed with the Securities
and Exchange Commission on the date hereof (the "Report"), I, Deng Xiang Xiong,
Acting Chief Executive Officer and Andy Lin, Chief Financial Officer of the
Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)  The Report fully complies with the requirements of section 3(a) or 15(d) of
     the Securities and Exchange Act of 1934; and

(2)  The information  contained in the Report fairly  presents,  in all material
     respects, the financial condition and results of operations of the Company.




                                            /s/ Andy Lin
                                            Andy Lin
                                            Chief Financial Officer
                                            September 28, 2006

                                            /s/ Deng Xiang Xiong
                                            Deng Xiang Xiong
                                            Acting Chief Executive Officer
                                            September 28, 2006


                                       29
<PAGE>


                                                                Exhibit 14.1

                       CODE OF BUSINESS CONDUCT AND ETHICS
           (as approved by the Board of Directors on October 1, 2004)


THIS CODE APPLIES TO EVERY DIRECTOR, OFFICER (INCLUDING THE CHIEF EXECUTIVE
OFFICER, PRESIDENT AND CHIEF FINANCIAL OFFICER), AND EMPLOYEE OF INTERMOST
CORPORATION (THE "COMPANY").

To further the Company's fundamental principles of honesty, loyalty, fairness
and forthrightness, the Board of Directors of the Company (the "Board:") has
established and adopted this Code of Business Conduct and Ethics (this "Code").

This Code strives to deter wrongdoing and promote the following six objectives:

o        honest and ethical conduct;

o        avoidance of conflicts of interest;

o        full, fair, accurate, timely and transparent disclosure;

o        compliance with applicable government and self-regulatory organization
         laws, rules and regulations;

o        prompt internal reporting of Code violations; and

o        accountability for compliance with the Code.

Below, we discuss situations that require application of our fundamental
principles and promotion of our objectives. If you believe there is a conflict
between this Code and a specific procedure, please consult the Company's Board
of Directors for guidance. Each of our directors, officers and employees is
expected to:

o      understand the requirements of your position, including Company
       expectations and governmental rules and regulations that apply to your
       position;

o        comply with this Code and all applicable laws, rules and regulations;

o        report any violation of this Code of which you become aware; and

o        be accountable for complying with this Code.

<PAGE>


TABLE OF CONTENTS
========================================================================

ETHICS ADMINISTRATOR...................................................37
--------------------
ACCOUNTING POLICIES....................................................37
-------------------
AMENDMENTS AND MODIFICATIONS OF THIS CODE..............................37
-----------------------------------------
ANTI-BOYCOTT AND U.S. SANCTIONS LAWS...................................37
------------------------------------                                   --
BRIBERY................................................................37
-------
COMPLIANCE WITH LAWS, RULES AND REGULATIONS............................37
-------------------------------------------
COMPUTER AND INFORMATION SYSTEMS.......................................38
--------------------------------
CONFIDENTIAL INFORMATION BELONGING TO OTHERS...........................38
--------------------------------------------
CORPORATE OPPORTUNITIES AND USE AND PROTECTION OF COMPANY ASSETS.......38
----------------------------------------------------------------
DISCIPLINE FOR NONCOMPLIANCE WITH THIS CODE............................39
-------------------------------------------
DISCLOSURE POLICIES AND CONTROLS.......................................39
--------------------------------
ENVIRONMENT, HEALTH AND SAFETY.........................................39
------------------------------
FILING OF GOVERNMENT REPORTS...........................................39
----------------------------
FOREIGN CORRUPT PRACTICES ACT..........................................39
-----------------------------
INSIDER TRADING OR TIPPING.............................................40
--------------------------
INVESTOR RELATIONS AND PUBLIC AFFAIRS..................................40
-------------------------------------
RECORD RETENTION.......................................................41
----------------
REPORTING VIOLATIONS OF THIS CODE......................................41
---------------------------------
WAIVERS................................................................41
-------
CONCLUSION.............................................................41
----------



<PAGE>





                              ETHICS ADMINISTRATOR

All matters concerning this Code shall be heard by the Board of Directors.

                               ACCOUNTING POLICIES

The Company will make and keep books, records and accounts, which in reasonable
detail accurately and fairly present the Company's transactions.

All directors, officers, employees and other persons are prohibited from
directly or indirectly falsifying or causing to be false or misleading any
financial or accounting book, record or account. You and others are expressly
prohibited from directly or indirectly manipulating an audit, and from
destroying or tampering with any record, document or tangible object with the
intent to obstruct a pending or contemplated audit, review or federal
investigation. The commission of, or participation in, one of these prohibited
activities or other illegal conduct will subject you to federal penalties, as
well as to punishment, up to and including termination of employment.

No director, officer or employee of the Company may directly or indirectly make
or cause to be made a materially false or misleading statement, or omit to
state, or cause another person to omit to state, any material fact necessary to
make statements made not misleading, in connection with the audit of financial
statements by independent accountants, the preparation of any required reports
whether by independent or internal accountants, or any other work which involves
or relates to the filing of a document with the Securities and Exchange
Commission ("SEC").


                    AMENDMENTS AND MODIFICATIONS OF THIS CODE

There shall be no amendment or modification to this Code except upon approval by
the Board of Directors.

In case of any amendment or modification of this Code that applies to an officer
or director of the Company, the amendment or modification shall be posted on the
Company's website within two days of the board vote or shall be otherwise
disclosed as required by applicable law or the rules of any stock exchange or
market on which the Company's securities are listed for trading. Notice posted
on the website shall remain there for a period of twelve months and shall be
retained in the Company's files as required by law.

                                     BRIBERY

You are strictly forbidden from offering, promising or giving money, gifts,
loans, rewards, favors or anything of value to any governmental official,
employee, agent or other intermediary (either inside or outside the United
States) which is prohibited by law. Those paying a bribe may subject the Company
and themselves to civil and criminal penalties. When dealing with government
customers or officials, no improper payments will be tolerated. If you receive
any offer of money or gifts that is intended to influence a business decision,
it should be reported to your supervisor our CEO or the chairman of the Board of
Directors immediately.

The Company prohibits improper payments in all of its activities, whether these
activities are with governments or in the private sector.

                   COMPLIANCE WITH LAWS, RULES AND REGULATIONS

The Company's goal and intention is to comply with the laws, rules and
regulations by which we are governed. In fact, we strive to comply not only with
requirements of the law but also with recognized compliance practices. All
illegal activities or illegal conduct are prohibited whether or not they are
specifically set forth in this Code.
Where law does not govern a situation or where the law is unclear or
conflicting, you should discuss the situation with your supervisor, our CEO or
the chairman of the Board of Directors, who may then direct you to our legal
counsel. Business should always be conducted in a fair and forthright manner.
Directors, officers and employees are expected to act according to high ethical
standards.
<PAGE>


                        COMPUTER AND INFORMATION SYSTEMS

For business purposes, officers and employees are provided telephones and
computer workstations and software, including network access to computing
systems such as the Internet and e-mail, to improve personal productivity and to
efficiently manage proprietary information in a secure and reliable manner. You
must obtain the permission from your supervisor or our CEO to install any
software on any Company computer or connect any personal laptop to the Company
network. As with other equipment and assets of the Company, we are each
responsible for the appropriate use of these assets. Except for limited personal
use of the Company's telephones and computer/e-mail, such equipment may be used
only for business purposes. Officers and employees should not expect a right to
privacy of their e-mail or Internet use. All e-mails or Internet use on Company
equipment is subject to monitoring by the Company.

                  CONFIDENTIAL INFORMATION BELONGING TO OTHERS

You must respect the confidentiality of information, including, but not limited
to, trade secrets and other information given in confidence by others, just as
we protect our own confidential information. This includes, but is not limited
to partners, suppliers, contractors, competitors or customers. However, certain
restrictions about the information of others may place an unfair burden on the
Company's future business. For that reason, directors, officers and employees
should coordinate with your supervisor or the CEO to ensure appropriate
agreements are in place prior to receiving any confidential third-party
information. In addition, any confidential information that you may possess from
an outside source, such as a previous employer, must not, so long as such
information remains confidential, be disclosed to or used by the Company.
Unsolicited confidential information submitted to the Company should be refused,
returned to the sender where possible and deleted, if received via the Internet.

        CORPORATE OPPORTUNITIES AND USE AND PROTECTION OF COMPANY ASSETS

You are prohibited from:

o  taking for yourself, personally, opportunities that are discovered through
   the use of Company property, information or position;

o  using Company property, information or position for personal gain; or

o  competing with the Company.

You have a duty to the Company to advance its legitimate interests when the
opportunity to do so arises.

You are personally responsible and accountable for the proper expenditure of
Company funds, including money spent for travel expenses or for customer
entertainment. You are also responsible for the proper use of property over
which you have control, including both Company property and funds and property
that customers or others have entrusted to your custody. Company assets must be
used only for proper purposes.

Company property should not be misused. Company property may not be sold, loaned
or given away regardless of condition or value, without proper authorization.
Each director, officer and employee should protect our assets and ensure their
efficient use. Theft, carelessness and waste have a direct impact on the
Company's profitability. Company assets should be used only for legitimate
business purposes.
<PAGE>


                   DISCIPLINE FOR NONCOMPLIANCE WITH THIS CODE

Disciplinary actions for violations of this Code can include oral or written
reprimands, suspension or termination of employment or a potential civil lawsuit
against you. The violation of laws, rules or regulations, which can subject the
Company to fines and other penalties, may result in your criminal prosecution.

                        DISCLOSURE POLICIES AND CONTROLS

The continuing excellence of the Company's reputation depends upon our full and
complete disclosure of important information about the Company that is used in
the securities marketplace. Our financial and non-financial disclosures and
filings with the SEC must be transparent, accurate and timely. We must all work
together to insure that reliable, truthful and accurate information is disclosed
to the public.

The Company must disclose to the SEC, current security holders and the investing
public information that is required, and any additional information that may be
necessary to ensure the required disclosures are not misleading or inaccurate.
The Company requires you to participate in the disclosure process, which is
overseen by our CEO and CFO. The disclosure process is designed to record,
process, summarize and report material information as required by all applicable
laws, rules and regulations. Participation in the disclosure process is a
requirement of a public company, and full cooperation and participation by our
CEO, CFO and, upon request, other employees in the disclosure process is a
requirement of this Code.

Officers and employees must fully comply with their disclosure responsibilities
in an accurate and timely manner or be subject to discipline of up to and
including termination of employment.

                         ENVIRONMENT, HEALTH AND SAFETY

The Company is committed to managing and operating our assets in a manner that
is protective of human health and safety and the environment. It is our policy
to comply, in all material respects, with applicable health, safety and
environmental laws and regulations. Each employee is also expected to comply
with our policies, programs, standards and procedures.

                          FILING OF GOVERNMENT REPORTS

Any reports or information provided, on our behalf, to federal, state, local or
foreign governments should be true, complete and accurate. Any omission,
misstatement or lack of attention to detail could result in a violation of the
reporting laws, rules and regulations.

                          FOREIGN CORRUPT PRACTICES ACT

The United States Foreign Corrupt Practices Act prohibits giving anything of
value, directly or indirectly, to foreign government officials or foreign
political candidates in order to obtain, retain or direct business. Accordingly,
corporate funds, property or anything of value may not be, directly or
indirectly, offered or given by you or an agent acting on our behalf, to a
foreign official, foreign political party or official thereof or any candidate
for a foreign political office for the purpose of influencing any act or
decision of such foreign person or inducing such person to use his influence or
in order to assist in obtaining or retaining business for, or directing business
to, any person.

You are also prohibited from offering or paying anything of value to any foreign
person if it is known or there is a reason to know that all or part of such
payment will be used for the above-described prohibited actions. This provision
includes situations when intermediaries, such as affiliates, or agents, are used
to channel payoffs to foreign officials.
<PAGE>


                           INSIDER TRADING OR TIPPING

Directors, officers and employees who are aware of material, non-public
information from or about the Company (an "insider"), are not permitted,
directly or through family members or other persons or entities, to:

o  buy or sell securities (or derivatives relating to such securities) of
   the Company, or

o  pass on, tip or disclose material, nonpublic information to others
   outside the Company including family and friends.

Such buying, selling or trading of securities may be punished by discipline, up
to and including termination of employment; civil actions, resulting in
penalties of up to three times the amount of profit gained or loss avoided by
the inside trade or stock tip, or criminal actions, resulting in fines and jail
time.

Examples of information that may be considered material, non-public information
in some circumstances are:

o undisclosed annual, quarterly or monthly financial results, a change in
  earnings or earnings projections, or unexpected or unusual gains or
  losses in major operations;

o undisclosed negotiations and agreements regarding mergers, concessions, joint
  ventures, acquisitions, divestitures, business
  combinations or tender offers;

o undisclosed major management changes;

o a substantial contract award or termination that has not been publicly
  disclosed;

o a major lawsuit or claim that has not been publicly disclosed;

o the gain or loss of a significant customer or supplier that has not been
  publicly disclosed;

o an undisclosed filing of a bankruptcy petition by the Company;

o information that is considered confidential; and

o any other undisclosed information that could affect our stock price.

The same policy also applies to securities issued by another company if you have
acquired material, nonpublic information relating to such company in the course
of your employment or affiliation with the Company.

When material information has been publicly disclosed, each insider must
continue to refrain from buying or selling the securities in question until the
third business day after the information has been publicly released to allow the
markets time to absorb the information.

                      INVESTOR RELATIONS AND PUBLIC AFFAIRS

It is very important that the information disseminated about the Company be both
accurate and consistent. For this reason, all matters relating to the Company's
internal and external communications are handled by our CEO (or, if retained for
such purpose, a public relations consultant). Our CEO (or a public relations
consultant retained by the Company) is solely responsible for public
communications with stockholders, analysts and other interested members of the
financial community. Our CEO (or a public relations consultant retained by the
Company) is also solely responsible for our marketing and advertising activities
and communication with employees, the media, local communities and government
officials. Our CEO serves as the Company's spokesperson in both routine and
crisis situations.
<PAGE>


                                RECORD RETENTION

The alteration, destruction or falsification of corporate documents or records
may constitute a criminal act. Destroying or altering documents with the intent
to obstruct a pending or anticipated official government proceeding is a
criminal act and could result in large fines and a prison sentence of up to 20
years. Document destruction or falsification in other contexts can result in a
violation of the federal securities laws or the obstruction of justice laws.

                        REPORTING VIOLATIONS OF THIS CODE

You should be alert and sensitive to situations that could result in actions
that might violate federal, state, or local laws or the standards of conduct set
forth in this Code. If you believe your own conduct or that of a fellow employee
may have violated any such laws or this Code, you have an obligation to report
the matter.

Generally, you should raise such matters first with an immediate supervisor.
However, if you are not comfortable bringing the matter up with your immediate
supervisor, or do not believe the supervisor has dealt with the matter properly,
then you should raise the matter with our CEO who may, if a law, rule or
regulation is in question, then refer you to our legal counsel. The most
important point is that possible violations should be reported and we support
all means of reporting them.

Directors and officers should report any potential violations of this Code to
the chairman of the Board of Directors or to our legal counsel.

We will not allow retaliation against an employee for reporting a possible
violation of this Code in good faith. Retaliation for reporting a federal
offense is illegal under federal law and prohibited under this Code. Retaliation
for reporting any violation of a law, rule or regulation or a provision of this
Code is prohibited. Retaliation will result in discipline, up to and including
termination of employment, and may also result in criminal prosecution. However,
if a reporting individual was involved in improper activity the individual may
be appropriately disciplined even if he or she was the one who disclosed the
matter to the Company. In these circumstances, we may consider the conduct of
the reporting individual in reporting the information as a mitigating factor in
any disciplinary decision.

                                     WAIVERS

There shall be no waiver of any part of this Code for any director or officer
except by a vote of the Board of Directors. In case a waiver of this Code is
granted to a director or officer, the notice of such waiver shall be posted on
our website within five days of the Board's vote or shall be otherwise disclosed
as required by applicable law or the rules of any stock exchange or market on
which the Company's securities are listed for trading. Notices posted on our
website shall remain there for a period of 12 months and shall be retained in
our files as required by law.

                                   CONCLUSION

This Code is an attempt to point all of us at the Company in the right
direction, but no document can achieve the level of principled compliance that
we are seeking. In reality, each of us must strive every day to maintain our
awareness of these issues and to comply with the Code's principles to the best
of our abilities. Before we take an action, we must always ask ourselves:
<PAGE>


o    Does it feel right?

o    Is this action ethical in every way?

o    Is this action in compliance with the law?

o    Could my action create an appearance of impropriety?

o    Am I trying to fool anyone, including myself, about the propriety of this
     action?

If an action would elicit the wrong answer to any of these questions, do not
take it. We cannot expect perfection, but we do expect good faith. If you act in
bad faith or fail to report illegal or unethical behavior, then you will be
subject to disciplinary procedures. We hope that you agree that the best course
of action is to be honest, forthright and loyal at all times.




<PAGE>


                              INTERMOST CORPORATION

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<S>                                                                                     <C>




Report of Independent Auditor                                                             F-2

Consolidated Balance Sheets as of June 30, 2006                                           F-3

Consolidated Statements of Operations for the years ended June 30, 2006 and 2005          F-4

Consolidated Statements of Changes in Stockholders' Equity for the years ended
   June 30, 2006 and 2005                                                                 F-5

Consolidated Statements of Cash Flows for the year ended June 30, 2006 and 2005           F-6

Notes to and forming part of the Consolidated Financial Statements                  F-7 - F27
</TABLE>



<PAGE>


                           E. Randall Gruber, CPA, PC



             Report of Independent Registered Public Accounting Firm


To the Board of Directors and Stockholders
of Intermost Corporation

I have audited the accompanying consolidated balance sheets of Intermost
Corporation and subsidiaries (the "Company") as of June 30, 2006, and the
related consolidated statements of operations, stockholders' equity and cash
flows for the years ended June 30, 2006 and 2005. These consolidated financial
statements are the responsibility of the Company's management. My responsibility
is to express an opinion on these consolidated financial statements based on my
audits.

I conducted my audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that I plan
and perform the audits 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.
I believe that my audits provide a reasonable basis for my opinion.

In my opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Intermost Corporation and subsidiaries as of June 30, 2006 and 2005, and the
consolidated results of their operations and their cash flows for the years 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 2 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.






E. Randall Gruber, CPA, PC
Lake Saint Louis, Missouri

September 18, 2006




           Member - American Institute of Certified Public Accountants
         Registered - Public Company Accounting Oversight Board (PCAOB)


<PAGE>




                     Intermost Corporation and Subsidiaries
                           Consolidated Balance Sheets
<TABLE>


                                                                                June 30, 2006
                                                                    ----------------------------------------
                                                                    ---------------- ------ ----------------
                                                                               Rmb                      US$
<S>                                                                    <C>                      <C>

Assets

Current assets:
Cash and cash equivalents                                                5,617,182                  692,624
Accounts receivable, net                                                68,381,831                8,431,792
Inventory                                                                1,026,078                  126,520
Stock in custodian                                                       9,488,700                1,170,000
Short-term loan                                                          4,867,200                  600,148
Deposits, prepayments and other receivables                              6,765,699                  834,242
Short term investment                                                    2,806,560                  346,062
                                                                    ----------------        ----------------
                                                                    ----------------        ----------------
 Total current assets                                                   98,953,250               12,201,388


Unlisted investment                                                      4,817,271                  593,991
Property and equipment, net                                                412,639                   50,880
Goodwill                                                                24,424,893                3,011,701
Intangible assets                                                          878,851                  108,366
Investment in associated company                                         8,676,426                1,069,843
                                                                    ----------------
                                                                    ----------------        ----------------

Total assets                                                           138,163,330               17,036,169
                                                                    ================        ================
                                                                    ================        ================

 Liabilities, Minority Interests and Stockholders' Equity

Current liabilities:
Accounts payable                                                           279,458                   34,458
Accrued liabilities and other payables                                   1,438,509                  177,375
Customer deposits                                                        1,201,828                  148,190
Deferred revenue                                                           195,287                   24,080
Business taxes and government surcharges payable                         9,610,836                1,185,060
Due to directors                                                                 -                        -
Due to related companies                                                         -                        -
                                                                    ----------------        ----------------
                                                                    ----------------

Total current liabilities                                               12,725,918                1,569,163
                                                                    ----------------        ----------------
                                                                    ----------------

Commitments

Minority interests                                                      33,551,110                4,137,005
                                                                    ----------------        ----------------
                                                                    ----------------

Stockholders' equity:
Preferred stock, par value of US$0.001 -
  Authorized - 5,000,000 shares
  Issued  and outstanding - None
Common stock, par value US$0.001 -
  Authorized - 500,000,000 shares
  Issued and outstanding - 153,290,278 shares                            1,243,188                  153,291
Additional paid-in capital                                             176,115,082               21,715,793
Shares to be issued                                                              -                        -
Accumulated deficit                                                    (86,707,681)             (10,691,452)
Accumulated other comprehensive loss                                     1,235,713                  152,369
                                                                    ----------------        ----------------
                                                                    ----------------

Stockholders' equity                                                    91,886,302               11,330,001
                                                                    ----------------        ----------------
                                                                    ----------------

Total liabilities, minority interests and stockholders'                138,163,330
equity                                                                                           17,036,169
                                                                    ================        ================
                                                                    ================


</TABLE>

See accompanying report of independent registered public accounting firm and
notes to consolidated financial statements.


<PAGE>

                     Intermost Corporation and Subsidiaries
                      Consolidated Statements of Operations

<TABLE>

                                                              Years Ended June 30

                                                         2005                              2006
                                                 ----------------------     ----------------------------------
                                                 ----------------------     ----------------------------------
                                                         Rmb                     Rmb                 US$
<S>                                               <C>                        <C>                 <C>

Net revenues                                          139,387,605             99,910,810          12,319,459
Cost of revenues                                      (94,705,435)           (76,604,725)         (9,445,712)
                                                 -------------------      ---------------  -------------------
                                                 -------------------      ---------------  -------------------

Gross profit                                            44,682,170             23,306,085           2,873,747
                                                 -------------------      ---------------  -------------------
                                                 -------------------      ---------------  -------------------


Costs and expenses:
Selling, general and administrative expenses            13,998,244              9,226,881           1,137,716
Amortization on intangible assets                        4,175,546                802,928              99,005
Impairment of goodwill                                           -              4,568,552             563,323
Gain/(loss) on disposal of fixed assets                     56,259                      -                   -
                                                 -------------------      ---------------  -------------------
                                                 -------------------      ---------------  -------------------

Total costs and expenses                                18,230,049             14,598,361           1,800,044
                                                 -------------------      ---------------  -------------------
                                                 -------------------      ---------------  -------------------

Profit from operations                                  26,452,121              8,707,724           1,073,703

Other income:
Interest income                                              4,949               363,110               44,772
Investment income                                          224,640             1,365,680              168,395
Other income net of other expense                          120,620                28,800                3,551
                                                 -------------------      ---------------  -------------------
                                                 -------------------      ---------------  -------------------

 Total other income                                        350,209             1,757,590              216,718
                                                 -------------------      ---------------  -------------------
                                                 -------------------


Profit before income taxes, minority interests
and equity in earnings of an associated company         26,802,330            10,465,314            1,290,421

Income taxes                                           (6,285,315)           (3,469,529)            (427,809)
                                                 -------------------      ---------------  -------------------
                                                 -------------------

Profit before minority interests and equity in
earnings of an associated company                       20,517,015            6,995,785               862,612

Minority interests                                    (17,646,768)           (9,673,537)          (1,192,791)
                                                 -------------------      ---------------  -------------------
                                                 -------------------

Profit/(loss) before equity in earnings of an
associated company                                       2,870,247           (2,677,752)            (330,179)

Equity in earnings of an associated company              1,616,049               224,514               27,684
                                                 -------------------      ---------------  -------------------
                                                 -------------------

Profit/(loss) before extra-ordinary item                 4,486,296           (2,453,238)            (302,495)

Loss on disposal of an associated company                        -          (14,717,255)          (1,814,705)
                                                 -------------------      ---------------  -------------------
                                                 -------------------      ---------------  -------------------

Net profit/(loss)                                        4,486,296          (17,170,493)          (2,117,200)
                                                 ===================      ===============  ===================
                                                 ===================

Net profit/(loss) per common share - basic and
diluted                                                       0.06               (0.127)             (0.0157)
                                                 ===================      ===============  ===================
                                                 ===================      ===============  ===================

Weighted average number of common shares
outstanding - basic and diluted                         81,129,812           134,978,079          134,978,079
                                                 ===================      ===============  ===================
                                                 ===================

</TABLE>

See accompanying report of independent registered public accounting firm and
notes to consolidated financial statements.



<PAGE>



                     Intermost Corporation and Subsidiaries
                 Consolidated Statements of Stockholders' Equity
                       Years Ended June 30, 2005 and 2006
<TABLE>

                               Common Stock
                                 Issued           Reserved and to be Issued
                          Number                                                                  Accumulated
                            of                                         Additional                  Other
                      --------------              Number                Paid-In    Accumulated   Comprehensive
                          Shares      Amount     of Shares    Amount    Capital      Deficit         Loss       Stockholders' Equity
                      --------------------------------------------------------------------------------------------------------------
                                      Rmb                    Rmb          Rmb         Rmb           Rmb         Rmb         US$
<S>                     <C>           <C>         <C>       <C>       <C>         <C>             <C>        <C>          <C>

Balance
as of
June 30, 2004           67,017,406   554,938     200,000    1,656    102,521,781 (74,023,484)      (30,896)  29,023,995   3,505,314

Issuance of
common stock
for services
rendered                 1,119,787     9,273    (200,000)  (1,656)       865,917           -             -      873,534     105,499

Issuance of
common  stock
for acquisition         19,470,355   161,215           -        -     38,783,583           -             -   38,944,798   4,703,478

Issuance of
common stock
to a former
director for
settlement
of balance due            341,924     2,833           -         -       530,413           -             -      533,246      64,402

Common stock reserved
and to be issued for
services rendered               -         -   2,757,628    22,832     2,032,152           -             -    2,054,984     248,186

Net profit                      -         -           -         -             -   4,486,296             -    4,486,296     541,823
                      --------------------------------------------------------------------------------------------------------------

Balance as of
June 30,
2005 (Rmb)            87,949,472    728,259   2,757,628    22,832   144,733,846 (69,537,188)      (30,896)  75,916,853   9,168,702

Change of
exchange rate
to Rmb and US$                 -    (14,985)          -      (468)   (2,937,135)          -     1,266,609   (1,685,979)    (15,696)

Issuance of
common stock
for services
 rendered              5,832,528     47,302  (2,757,628)  (22,364)    2,196,724           -             -    2,221,662     273,941

Issuance of
common stock
for private
placement             54,508,278    442,062           -         -    23,362,847           -             -   23,804,909   2,935,254

Issuance of
common stock
for acquisition        5,000,000     40,550           -         -     8,758,800           -             -    8,799,350   1,085,000

</TABLE>

<PAGE>
<TABLE>
<S>                <C>           <C>      <C>   <C>   <C>            <C>           <C>         <C>          <C>


Net loss                -            -      -    -             -     (17,170,493)            - (17,170,493) (2,117,200)
              --------------------------------------------------------------------------------------------------------------
              153,290,278    1,243,188      -    -    176,115,082     (86,707,681)    1,235,713 91,886,302  11,330,001
Balance as
of June 30,
2006 (Rmb)   ===============================================================================================================
              153,290,278       153,291     -    -     21,715,793     (10,691,452)      152,369   11,330,001
Balance as
of June
30, 2006 (US) ==============================================================================================================

</TABLE>



See accompanying report of independent registered public accounting firm and
notes to consolidated financial statements.


<PAGE>

                     Intermost Corporation and Subsidiaries
                      Consolidated Statements of Cash Flows
<TABLE>

                                                                                Years Ended June 30,
                                                                     ------------------------------------------------
                                                                     ------------------------------------------------
                                                                        2005                        2006
                                                                     ------------------------------------------------

                                                                               Rmb            Rmb             US$
<S>                                                                       <C>             <C>             <C>


Cash flows from operating activities:
Net profit / (loss)                                                      4,486,296      (17,170,493)   (2,117,200)
Adjustments to reconcile net loss to net cash used in operating
    activities:
    Issuance of common stock in exchange for services                      873,584        5,377,209       663,034
    Common stock reserved and to be issued in exchange for services      2,054,984                -             -
    Bad debt written off - Accounts receivables                                  -            9,585         1,182
    Bad debt written off - Other receivables                             1,000,000                -             -
    Amortization of intangible asset                                     4,175,546          802,928        99,005
    Impairment of goodwill                                                       -        4,568,552       563,323
    Loss on disposal of fixed assets                                        56,259                -             -
    Depreciation of plant and equipment                                    215,036          162,218        20,002
    Minority interests                                                  17,646,768        9,673,537     1,192,791
    Loss on disposal of an associated company                                    -       14,717,255     1,814,705
    Equity in earnings of an associated company                         (1,616,049)        (224,514)      (27,684)

Changes in operating assets and liabilities:

     (Increase) decrease in -

    Accounts receivable                                                (62,395,383)      (6,861,381)     (846,040)
    Deposits, prepayments and other receivables                          1,705,776       (4,960,448)     (611,646)
    Inventory                                                               31,392         (930,427)     (114,726)
      Increase (decrease) in -
    Accrued liabilities and other payables                               4,111,574       (6,272,603)     (773,440)
    Accounts payable                                                     7,542,742      (10,380,536)   (1,279,967)
    Deferred revenue                                                        30,241         (121,311)      (14,958)
    Customer deposits                                                      421,887          358,890        44,253
    Business taxes and government surcharges payable                     6,191,077        3,383,630       417,217

Net cash used in operating activities                                  (13,468,320)      (7,867,909)     (970,149)

Cash flows from investing activities:
Additions to plant and equipment                                           (96,834)        (348,797)      (43,008)
Acquisition of investment in an associated company                      (4,669,998)               -             -
Acquisition of investment in subsidiaries                                5,037,294              __-             -
Acquisition of short-term investment                                             -       (1,246,560)     (153,707)
Increase in short-term loan                                                      -       (4,867,200)     (600,148)
Additional to intangible assets                                                  -         (213,700)      (26,350)
Increase in amount due from related company                             12,917,684                -             -

Net cash provided by/(used in) investing activities                     13,188,146       (6,676,257)     (823,213)

Cash flows from financing activities:
Advances from (repayments to) directors/former directors                  (148,283)               -             -
Net proceeds from issuance of common stock                                       -       20,667,837     2,548,438

Net cash provided by/(used in) financing activities                       (148,283)      20,667,837     2,548,438

Accumulated other comprehensive loss                                             -       (1,622,854)     (200,105)

Cash and cash equivalents:
Net increase / (decrease)                                                 (428,457)       4,500,817       554,971
Balance at beginning of year                                             1,544,822        1,116,365       137,653

Balance at end of year                                                   1,116,365        5,617,182       692,624
                                                                     ================================================

Supplemental disclosures of cash flow information:
  Cash paid for -
    Interest                                                                     -                -             -
    Income taxes                                                            38,279            3,902           481
                                                                     ================================================
                                                                     ================================================



Non-cash investing and financing activities:
Issuance of common stock in exchange for services                          873,534        2,244,026       276,699
Issuance of common stock in settlement of balance due to a director        533,246                -             -
Issuance of common stock for acquisitions                               38,944,798        8,799,350     1,085,000
Common stock reserved and to be issued in exchange for services          2,054,984                -             -
                                                                     ================================================

</TABLE>

See accompanying report of independent registered public accounting firm and
notes to consolidated financial statements.

<PAGE>

                     Intermost Corporation and Subsidiaries
                   Notes to Consolidated Financial Statements


1. ORGANIZATION AND PRINCIPAL ACTIVITIES

Intermost Corporation (hereinafter referred to as 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 redomiciled 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.

The Company's subsidiaries and affiliated companies and their principal
activities as of June 30, 2006 are summarized as follows:
<TABLE>


                           Name                         Place of        Percentage of        Principal Activities
                                                      Incorporation     Equity Interest
                        -----------------             or Organization   Attributable to
                                                                        the Company
                                                    ------------------ ----------------- ------------------------------
<S>                                                  <C>                  <C>                <C>

        Intermost Limited ("IL")                       British Virgin          100%             Investment holding
                                     Islands

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

        IMOT Information Technology (Shenzhen)                    PRC          100%             Investment holding
          Ltd. ("IITSL")*

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

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

        Intermost Focus Advertising Company Ltd.                  PRC           90%                       Inactive
          ("IFACL")**

        Shanghai Newray Photographic Equipment                    PRC           51%          Sales of photographic
          Co., Ltd. ("SNPE")**                                                         equipment, and LCD monitors

        Golden Anke Technology Ltd. ("GATL")**                    PRC           51%      Sales of digital security
                                                                                                            system

        China E.com Technology (Shenzhen) Ltd.                    PRC          100%            Business postal and
          ("CECTSL")*                                                                         e-commence solutions

        Hainan Concord Financial Products                         PRC           80%      Private equity exchange &
          Development Co., Ltd. ("HCFPDCL")**                                                   investment holding

        Shenzhen International Hi-Tech Property                   PRC           15%        Private equity exchange
          Right Exchange Centre
            ("SIHTPREC")

        Hainan Special Economic Zone Property                     PRC                       Private Property Right
        Right Exchange Center (PREC)***                                         21%                       exchange
</TABLE>

<PAGE>



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

         **     SBUJE, IFACL, SNPE, GATL and HCFPDCL are equity joint ventures
                established in the PRC to be operated for a period of 10 years
                until 2009, 2010, 2013, 2014 and 2015 respectively. They are
                subsidiaries of the Company and their operations are
                consolidated into the Company's financial statements.

         ***    PREC is an equity joint venture established in the PRC to
                operate for a period of 4 years until 2007. It is an associated
                company of the Company and is 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.


2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 Basis of Presentation - The consolidated financial statements have been
 prepared in accordance with generally accepted accounting principles in the
 United States of America.

 Principles of Consolidation - The consolidated financial statements include the
 accounts of the Company and its majority-owned subsidiaries, of which the
 Company has the ability to exercise control and direct operations and the
 minority interests do not possess participatory rights. All material
 intercompany balances and transactions have been eliminated on consolidation.
<PAGE>

Going Concern - As shown in the accompanying consolidated financial statements,
the Company incurred a net loss of Rmb 17,170,493 for the year ended June 30,
2006 and has an accumulated deficit of Rmb86,707,681 as of June 30, 2006. 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, 2006, the company acquired an associated company (see Note 1). The Company
also raised additional capital by several private placements of HK$400,000 in
July 26, 2005, US$2,000,000 in September 26, 2005 US$50,000 in January 19, 2006,
US$399,840 in March 9, 2006 and US$50,000 in May 30, 2006.

Cash and Cash Equivalents - The Company considers all cash and highly liquid
investments purchased with an original maturity of three months or less to be
cash equivalents. As at June 30, 2006 the company did not have any cash
equivalents.

Accounts Receivable - In order to determine the value of the Company's accounts
receivable, the Company records a provision 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 (see Note 6).

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 are 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.

Plant and Equipment - Plant and equipment are recorded at cost. Major renewals
and improvements are capitalized; minor repairs and maintenance expenditures are
charged to expense as incurred. The cost and related accumulated depreciation
applicable to equipment sold or no longer in service is eliminated from the
accounts and any gain or loss is included in the statement of operations.

Depreciation is provided on the straight-line method over the estimated useful
lives of the respective assets at the following annual rates:

                    Buildings                                20 years
                    Computer equipment                       3 years
                    Motor vehicles                           5 years
                    Furniture and office equipment           5 years


<PAGE>

Inventory - Inventory consists of finished goods and is valued at the lower of
cost or market using the weighted average cost method of accounting. As of June
30, 2006, inventories were comprised of digital security imaging system and
digital camera.

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.

Impairment of Long-Lived Assets - Long-lived assets are evaluated for impairment
whenever events or changes in circumstances indicate that the carrying amount of
an asset may not be recoverable in accordance with SFAS No. 144, "Accounting for
the Impairment or Disposal of Long-Lived Assets". An asset is considered
impaired if its carrying amount exceeds the future net cash flow the asset is
expected to generate. If 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.

Goodwill is evaluated, at a minimum, on an annual basis and whenever events and
changes in circumstances suggest that the carrying amount may not be
recoverable. Impairment of goodwill is tested at the reporting unit level by
comparing the reporting unit's carrying amount, including goodwill, to the fair
value of the reporting unit. The fair values of the reporting units are
estimated using the 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.

Revenue 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 sale of photographic equipment and digital
security imaging system represents 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 or the
completed contract methods 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.


<PAGE>

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.

Cost of Revenues - Cost of revenues includes the cost of the direct labor force,
sub-contract fees, costs of systems sales and integration, depreciation and
amortization, and other similar costs, including travel, employee welfare,
office and related expenses allocable to the engineering and technical staff.

Income Taxes - Income taxes are provided under the provisions of SFAS No. 109,
which requires recognition of the estimated future tax consequences attributable
to differences between the financial statement carrying amounts of existing
assets and liabilities and their respective tax bases and net operating loss
carry forwards under the liability method. Deferred tax assets and liabilities
are measured using expected tax rates in effect for the year in which those
temporary differences are expected to be recovered or settled. The Company has
recorded a full valuation allowance for its deferred tax assets as of June 30,
2006 due to the uncertainty of the realizability of those assets.

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

Comprehensive Income (Loss) - The Company has adopted SFAS No. 130, "Reporting
Comprehensive Income", which requires the disclosure of comprehensive income,
which includes net income (loss), unrealized gains and losses on marketable
securities classified as available-for-sale, and foreign currency translation
adjustments. Total comprehensive loss for the years ended June 30, 2004 and 2005
consisted of the net loss for the respective years. As of June 30, 2006,
accumulated other comprehensive loss was comprised of foreign currency
translation adjustments.

Stock-Based 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.


<PAGE>

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.

Pro Forma Financial Disclosure - In accordance with SFAS No. 123, the Company
will provide footnote disclosure with respect to stock-based employee
compensation. The value of a stock-based award will be determined using the
Black-Scholes option-pricing model, whereby compensation cost is the fair value
of the award as determined by the pricing model at the grant date or other
measurement date. The resulting amount will be 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, 2006. Accordingly no pro forma financial disclosure is provided herein.

Foreign Currency Translation - The Company maintains its books and records in
Renminbi ("Rmb"), the currency of the PRC. The Rmb is the Company's functional
currency, as the Company's business activities are located in the PRC and
denominated in Rmb. Translation of amounts into United States dollars ("US$")
has been made at the rate of Rmb8.28 to US$1.00. On July 22, 2005. due to the
change of rate of currency translation of Rmb to US$ by the PRC government, the
rate of exchange is changed to approximately Rmb8.11 to US$1.00

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

Transactions in currencies other than functional currencies during the year are
translated into the respective functional currencies at the applicable rates of
exchange prevailing at the time of the transactions. Monetary assets and
liabilities denominated in currencies other than functional currencies are
translated into the respective functional currencies at the applicable rates of
exchange in effect at the balance sheet date. Exchange gains and losses are
included in the statement of operations. Exchange gains and losses were not
significant for the year ended June 30, 2006.

The Rmb is not readily convertible into US$ or other foreign currencies.
Translation of amounts from Rmb into US$ is for the convenience of readers and
has been made at the noon buying rate in New York City for cable transfers in
foreign currencies as certified for customs purposes by the Federal Reserve Bank
of New York on June 30, 2006 of US$1.00 = Rmb8.11. No representation is made
that the Rmb amounts could have been, or could be, converted into US$ at that
rate or at any other rate.

Earnings (loss) per Common Share - Statement of Financial Accounting Standards
No. 128, "Earnings Per Share", requires presentation of basic earnings per share
("Basic EPS") and diluted earnings per share ("Diluted EPS"). Basic earnings
(loss) per share is computed by dividing earnings (loss) available to common
stockholders by the weighted average number of common shares outstanding
(including shares reserved for issuance) during the period. Diluted earnings per
share gives effect to all dilutive potential common shares outstanding during
the period. The Company did not have any potentially dilutive securities
outstanding during the year ended June 30, 2006. Accordingly, basic and diluted
loss per common share is the same for the year ended June 30, 2006.
<PAGE>

Use of Estimates - The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and the disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Such estimates include
provisions for doubtful accounts, sales returns and allowances, long-lived
assets and deferred income taxes. Actual results could differ from those
estimates.

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

In November 2004, the FASB issued SFAS No. 151, entitled Inventory Costs -- An
Amendment of ARB No. 43, Chapter 4. SFAS No. 151 amends the guidance in ARB No.
43, Chapter 4, entitled Inventory Pricing [June 1953], to clarify the accounting
for "abnormal amounts" of idle facility expense, freight, handling costs, and
wasted material [spoilage]. Before revision by SFAS No. 151, the guidance that
existed in ARB No. 43 stipulated that these type items may be "so abnormal" that
the appropriate accounting treatment would be to expense these costs as incurred
[i.e., these costs would be current-period charges]. SFAS No. 151 requires that
these type items be recognized as current-period charges without regard to
whether the "so abnormal" criterion has been met. Additionally, SFAS No. 151
requires that allocation of fixed production overheads to the costs of
conversion be based on the normal capacity of the production facilities. The
adoption of SFAS 151 did not impact the financial statements.

In December 2004, the FASB issued SFAS No. 152, entitled Accounting for Real
Estate Time-Sharing Transactions -- An Amendment of FASB Statements No. 66 and
67. SFAS No. 152 amends SFAS No. 66 to reference the financial accounting and
reporting guidance for real estate time-sharing transactions that is provided in
AICPA Statement of Position 04-2. SFAS No. 152 also amends SFAS No. 67 to state
that the guidance for (a) incidental operations and (b) costs incurred to sell
real estate projects does not apply to real estate time-sharing transactions.
The accounting for those operations and costs is subject to the guidance of SOP
04-2. This statement is effective for financial statements for fiscal years
beginning after June 15, 2005. The adoption of SFAS 152 did not impact the
financial statements.

In December 2004, the FASB issued SFAS No. 153, entitled Exchanges of
Nonmonetary Assets -- An Amendment of APB Opinion No.29. SFAS No. 153 amends
Opinion 29 to eliminate the exception for nonmonetary exchanges of nonmonetary
assets that do not have commercial substance. A nonmonetary exchange has
commercial substance if the future cash flows of the entity are expected to
change significantly as a result of the exchange. The adoption of SFAS 153 did
not impact the financial statements.

In December 2004, the FASB issued SFAS No. 123 (Revised), entitled Share-Based
Payment. This revised Statement eliminates the alternative to use APB Opinion
No. 25's intrinsic value method of accounting that was provided in SFAS No. 123
as originally issued. Under Opinion 25, issuing stock options to employees
generally resulted in recognition of no compensation cost. This Statement
requires entities to recognize the cost of employee services received in
exchange for awards of equity instruments based on the grant-date fair value of
those awards. For public companies that file as a small business issuer, this
Statement is effective as of the beginning of the first interim or annual
reporting period that begins after December 15, 2005. The adoption of SFAS 123
(Revised) will not impact the financial statements as the Company has not
granted any equity instruments to employees.
<PAGE>

In May 2005, the FASB issued SFAS No. 154, entitled Accounting Changes and Error
Corrections--a replacement of APB Opinion No. 20 and FASB Statement No. 3. This
Statement replaces APB Opinion No. 20, Accounting Changes, and FASB Statement
No. 3, Reporting Accounting Changes in Interim Financial Statements, and changes
the requirements for the accounting for and reporting of a change in accounting
principle. This Statement applies to all voluntary changes in accounting
principle. It also applies to changes required by an accounting pronouncement in
the unusual instance that the pronouncement does not include specific transition
provisions. Opinion 20 previously required that most voluntary changes in
accounting principle be recognized by including in net income of the period of
the change the cumulative effect of changing to the new accounting principle.
This Statement requires retrospective application to prior periods' financial
statements of changes in accounting principle, unless it is impracticable to
determine either the period-specific effects or the cumulative effect of the
change. This Statement defines retrospective application as the application of a
different accounting principle to prior accounting periods as if that principle
had always been used or as the adjustment of previously issued financial
statements to reflect a change in the reporting entity. This Statement also
redefines restatement as the revising of previously issued financial statements
to reflect the correction of an error. The adoption of SFAS 154 did not impact
the financial statements.

In February 2006, FASB issued SFAS No. 155, "Accounting for Certain Hybrid
Financial Statements". SFAS No. 155 amends SFAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities" and SFAS No. 140, "Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of Liabilities".
SFAS No. 155, permits fair value measurement for any hybrid financial instrument
that contains an embedded derivative that otherwise would require bifurcation,
clarifies which interest-only strips and principal-only strips are not subject
to the requirements of SFAS No. 133, establishes a requirement to evaluate
interest in securitized financial assets to identify interests that are
freestanding derivatives or that are hybrid financial instruments that contain
an embedded derivative requiring bifurcation, clarifies that concentrations of
credit risk in the form of subordination are not embedded derivatives, and
amends SFAS No. 140 to eliminate the prohibition on the 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 the Company's first fiscal year that begins
after September 15, 2006. Management believes that this statement will not have
a significant impact on the consolidated financial statements.

In March, 2006 FASB issued SFAS 156 "Accounting for Servicing of Financial
Assets" this Statement amends FASB Statement No. 140. Accounting for Transfers
and Servicing of Financial Assets and Extinguishments of Liabilities, with
respect to the accounting for separately recognized servicing assets and
servicing liabilities. This Statement:

1.     Requires an entity to recognize a servicing asset or servicing
       liability each time it undertakes an obligation to service a
       financial asset by entering into a servicing contract.
2.     Requires all separately recognized servicing assets and
       servicing liabilities to be initially measured at fair value,
       if practicable.
3.     Permits an entity to choose "Amortization method" or "Fair
       value measurement method" for each class of separately
       recognized servicing assets and servicing liabilities:
<PAGE>

4.     At its initial adoption, permits a one-time reclassification
       of available-for-sale securities to trading securities by
       entities with recognized servicing rights, without calling
       into question the treatment of other available-for-sale
       securities under Statement 115, provided that the
       available-for-sale securities are identified in some manner as
       offsetting the entity's exposure to changes in fair value of
       servicing assets or servicing liabilities that a servicer
       elects to subsequently measure at fair value.
5.     Requires separate presentation of servicing assets and
       liabilities subsequently measured at fair value in the
       statement of financial position and additional disclosures for
       all separately recognized servicing assets and servicing
       liabilities.

3.                CERTAIN SIGNIFICANT RISKS AND UNCERTAINTIES

         Country Risk:

         The Company is subject to the consideration and risks of operating in
         the PRC.  These include risks associated

         The economy of PRC 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
         PRC 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 PRC government to
         control inflation have significantly restrained economic expansion in
         the recent past. Similar actions by the PRC government in the future
         could have a significant adverse effect on economic conditions in PRC.

         Many laws and regulations dealing with economic matters in general and
         foreign investment in particular have been enacted in the PRC. However,
         the PRC still does not have a comprehensive system of laws, and
         enforcement of existing laws may be uncertain and sporadic.

         The Company's primary sources of revenues and cash flows are derived
         from its business operations in the PRC. The PRC economy has, for many
         years, been a centrally-planned economy, operating on the basis of
         annual, five-year and ten-year state plans adopted by central PRC
         governmental authorities, which set out national production and
         development targets. The PRC government has been pursuing economic
         reforms since it first adopted its "open-door" policy in 1978. There is
         no assurance that the PRC government will continue to pursue economic
         reforms or that there will not be any significant change in its
         economic or other policies, particularly in the event of any change in
         the political leadership of, or the political, economic or social
         conditions in, the PRC. There is also no assurance that the Company
         will not be adversely affected by any such change in governmental
         policies or any unfavorable change in the political, economic or social
         conditions, the laws or regulations, or the rate or method of taxation
         in the PRC.

         As many of the economic reforms which have been or are being
         implemented by the PRC government are unprecedented or experimental,
         they may be subject to adjustment or refinement, which may have adverse
         effects on the Company. Further, through state plans and other economic
         and fiscal measures such as the leverage of exchange rate, it remains
         possible for the PRC government to exert significant influence on the
         PRC economy.
<PAGE>

         The Company's financial instruments that are exposed to concentration
         of credit risk consist primarily of cash and cash equivalents. Cash and
         cash equivalents are maintained with government-owned banks in the PRC
         with high credit ratings. Accordingly, the Company believes that no
         significant credit risk exists.

         The Company's business activity is with customers in the PRC.

         On January 1, 1994, the PRC government introduced a single rate of
         exchange as quoted daily by the People's Bank of China (the "Unified
         Exchange Rate"). No representation is made that the Rmb amounts have
         been, or could be, converted into US$ at that rate. This quotation of
         exchange rates does not imply free convertibility of Rmb to other
         foreign currencies. All foreign exchange transactions continue to take
         place either through the Bank of China or other banks authorized to buy
         and sell foreign currencies at the exchange rate quoted by the People's
         Bank of China. Approval of foreign currency payments by the People's
         Bank of China or other institutions requires submitting a payment
         application form together with suppliers' invoices, shipping documents
         and signed contracts.

         Industry Risk:

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


4. SHANGHAI FORTUNE VENTURE LTD.

         On May 23 2006, the Company disposed the 25% shareholding of Shanghai
         Fortune Venture Ltd. ("SFVL") with a consideration of 6,500,000 shares
         of IMOT at US$0.18 per share. (Detail refer to Note 16)


5. HAINAN SPECIAL ECONOMIC ZONE PROPERTY RIGHTS EXCHANGE CENTRE

        On December 16, 2003, the Company's wholly-owned subsidiary, IMOT
        Information Technology (Shenzhen) Ltd. ("IMOT Technology"), entered into
        an agreement (the "Stock Exchange Agreement"), subject to approval from
        the governments of Shenzhen and Hainan, China, to acquire 21% of the
        issued and outstanding shares of Hainan Special Economic Zone Property
        Rights Exchange Center (the "Exchange Center") from Hainan Concord
        Investment Holding Co., Ltd. and Guangzhou Keensheng Science and
        Technology Development Co., Ltd., the owners of 100% of the issued and
        outstanding capital stock of the Exchange Center (collectively, the
        "Exchange Stockholders"). Pursuant to the Stock Exchange Agreement, IMOT
        Technology will issue 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. The Stock Exchange Agreement was approved by the Hainan
        government on October 19, 2005, the transfer of the issued and
        outstanding shares of the Exchange Centre to IMOT Technology was
        completed on the same date and the company delivered the 5,000,000
        shares of the Company's common stock to designed parties of Hainan
        Concord Investment Holding Co., Ltd. and Guangzhou Keensheng Science and
        Technology Development Co., Ltd.
<PAGE>


6. ACCOUNTS RECEIVABLE

         Accounts receivable are summarized as follows:

                                         June 30, 2006
                                         -------------------------------------
                                                    Rmb                   US$

        Accounts receivable                  68,391,416             8,432,974

        Less:  Bad debt written off               9,585                 1,182
                                         ---------------      ----------------
                                         ---------------      ----------------

                                             68,381,831             8,431,792
                                         ===============      ================

7. DEPOSITS, PREPAYMENTS AND OTHER RECEIVABLES

         Deposits, prepayments and other receivables are summarized as follows:

                                           June 30, 2006
                                           ----------------------------------
                                                      Rmb                US$

        Rental and utilities deposits              77,994              9,617
        Advance to employees                       16,746              2,065
        Prepaid expenses                           23,049              2,842
        Loan Interest receivable (a)              330,969             40,810
        Interest Income (b)                        42,760              5,272
        Due from minority stockholders (c)        245,000             30,210
        Other loans (d)                           390,000             48,088
        Trade deposit paid (e)                  5,629,627            694,160
        Others                                      9,554              1,178
                                           ---------------    ---------------

                                                6,765,699            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) Rmb255,000 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.
<PAGE>

        (e) Trade deposit of security systems and spare parts prepaid to the
           suppliers for the sales orders placed by the customers.


8.         GOODWILL

         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. The acquisition provided the
         Company with a presence in the digital imaging business. The Company
         also expects to assist SNPE in developing its digital imaging platform
         for photo processing and other related business, which may provide
         further expansion into other parts of the PRC. These factors
         contributed to a purchase price in excess of the fair market value of
         SNPE's net tangible assets acquired, and as a result, the Company has
         recorded goodwill in connection with this transaction.

         The total purchase price of Rmb4,823,552 consisted of 4,000,000 shares
         of the Company's common stock valued at Rmb4,305,600 (US$0.13 per
         share) and Rmb200,000 (US$24,155) in cash consideration, and commission
         expenses of Rmb317,952 (US$38,400) 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.

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

                                                  Rmb                 US$

        Cash acquired                         500,000              61,652
        Goodwill                            4,568,552             563,323
        Minority interest                   (245,000)             (30,210)
                                      ----------------      ----------------
                                      ----------------      ----------------

        Total                               4,823,552             594,765
                                      ================      ================
                                      ================      ================


        Prior to the acquisition by the Company, SNPE had no operations since it
        was incorporated on April 3, 2003. Accordingly, no pro forma financial
        information is presented. The results of operations of SNPE have been
        included in the Company's consolidated financial statements since the
        completion of the acquisition on May 29, 2003.

        Goodwill of Rmb4,568,552 represented the excess of the purchase price
        over the fair value of the net tangible assets acquired. The goodwill
        has been included in the photographic business segment.

         In September, 2006, the Company's management determined that based on a
         discounted cash flow analysis, and the discontinuance of the
         wholesaling of photographic equipment, the principal business activity
         of Shanghai Newray Photographic Company, Ltd. that this business unit
         has no goodwill. See note 19.
<PAGE>

         Goodwill is summarized as follows:
<TABLE>


                                                                       Rmb             US$
         <S>                                                    <C>               <C>

         Goodwill acquired in SNPE transaction on May 29, 2003  4,568,552         563,323
                                                               (4,568,552)       (563,323)
                                                               ------------     -----------
                                                               ------------     -----------

         Balance, June 30, 2006                                        --              --
                                                               ============     ===========
</TABLE>


         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.

         Previously, on March 31, 2004, IMOT Technology had entered into
         agreement to acquire a 51% interest in Golden Anke from two of Golden
         Anke's stockholders. The agreement was subject to final approval from
         the government of Shenzhen, PRC the completion of a due diligence
         investigation by the parties, and approval by the respective boards of
         directors of each party. The purchase price was determined to be
         $3,240,000, consisting of 12,000,000 shares of the Company's common
         stock at a value of $0.27 per share. The value of the common stock was
         determined by computing the average closing price of the Company's
         common stock from January 20, 2004 to March 19, 2004, and then applying
         a 20% discount.

         Golden Anke is a digital security imaging system provider in China,
         offering a variety of solutions on video surveillance, digital image
         processing and compressing, Internet image transfer and imaging
         security systems.

         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.


         Goodwill is summarized as follows:
<TABLE>

                                                                          Rmb             US$
         <S>                                                        <C>             <C>

         Goodwill acquired in GATL transaction on August 10, 2004  17,152,456       2,114,976

                                                                  ------------   -------------
                                                                  ------------   -------------
         Balance, June 30, 2006                                    17,152,456       2,114,976
                                                                  ============   =============
                                                                  ============   =============
</TABLE>
<PAGE>


         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.

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

         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.

         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.

         Goodwill is summarized as follows:
<TABLE>


                                                                         Rmb            US$
         <S>                                                      <C>              <C>

         Goodwill acquired in HCFPDCL transaction on Jan 6, 2005   7,272,437        896,725

                                                                  -----------    -----------
                                                                  -----------    -----------
         Balance, June 30, 2006                                    7,272,437        896,725
                                                                  ===========    ===========
</TABLE>


9. STOCK IN CUSTODIAN

        The Company received 6,500,000 shares of common stock of IMOT as
        consideration on disposal of investment in Shanghai Fortune Venture Ltd.
        The share certificates were kept in the custodian account of the
        Company. The shares are valued at the market closing price on May 23,
        2006, of US$0.18 per share when the disposal of the associated company
        was concluded.


10. 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. The loan was fully repaid on August 30,
        2006.

<PAGE>

11. PLANT AND EQUIPMENT
         Plant and equipment is summarized as follows:

                                          June 30, 2006
                                          --------------------------------
                                                    Rmb               US$

         Plant and equipment, at cost:
         Computer equipment                 1,291,373             159,232
         Furniture and office equipment       418,166              51,562
         Motor vehicles                        83,228              10,262
                                          --------------     -------------

         Total                              1,792,767             221,056
         Less:  Accumulated depreciation   (1,380,128)          (170,176)
                                          --------------     -------------

                                              412,639              50,880
                                          ==============     =============

         Depreciation expense was Rmb162,218 (US$20,002) and or the year ended
         June 30, 2006.


12. ACCRUED LIABILITIES AND OTHER PAYABLES

         Accrued liabilities and other payables are summarized as follows:

                                           June 30, 2006
                                           ------------------------------
                                                    Rmb               US$

        Accrued operating expenses
            Wages and bonus                     254,734            31,410
            Consultancy fees                    717,783            88,506
            Legal and professional fees         288,415            35,563
            Audit fees                           20,275             2,500
        Other                                   157,302            19,396
                                           -------------      ------------

                                              1,438,509           177,375
                                           =============      ============



13. INCOME TAXES

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

     The Company is subject to the United  States  federal tax at a rate of 35%.
     IL was incorporated  under the International  Business Companies Act of the
     British  Virgin Islands and,  accordingly,  is exempted from payment of the
     British Virgin  Islands  income taxes.  The  subsidiaries  (IITSL,  CECITL,
     SBUJE, 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%.  As of June 30, 2006,
     all subsidiary  companies  except SNPE, GATL and HCFPDCL were in a tax loss
     position.
<PAGE>





         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:


                                                                    June 30,
                                                                      2006
                                                                   -----------

                                                                            %

           United States federal income tax rate                           35
           Effect of different tax rates in foreign jurisdictions        (30)
           Valuation allowance for deferred tax assets                    (9)
                                                                   -----------
                                                                   -----------
                                                                          (4)
                                                                   ===========


         Deferred taxation consisted of:

                                            June 30, 2006
                                            --------------------------------
                                                     Rmb             US$
         Deferred tax assets, gross:
         Net operating loss carry forwards     8,033,164            990,526
         Valuation allowance                 (8,033,164)          (990,526)
                                            -------------       ------------
         Deferred tax assets, net                      -                  -
                                            =============       ============


         The change in valuation allowance from June 30, 2005 to June 30, 2006
         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 Rmb53,554,427 as
         of June 30 2006, 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.


14. STOCKHOLDERS' EQUITY

         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.
<PAGE>

                 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.

               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.
<PAGE>


15.      COMMITMENTS

         Operating Leases - The Company has operating lease agreements for
         office premises which extend through August 2007 and February 2008,
         respectively. Future minimum rental payments under agreements
         classified as operating leases with non-cancelable terms are as
         follows:

                                             Rmb              US$

            Year Ending June 30, 2007    290,776            35,854
                         June 30,2008     64,496             7,953
                                      -----------       ----------
                     Total               355,272            43,807
                                      ===========       ==========


         Rental expense for the years ended June 30, 2006 was and Rmb605,426
         ($74,652).

         Employment Agreement - On March 12, 2004 the Company entered into an
         Employment Agreement with Andy Lin, its Chief Executive Officer and
         President. The effective date of the Employment Agreement is March 1,
         2004. The term of the Employment Agreement is three years, and it may
         be automatically renewed. As compensation for his services, Mr. Lin
         will receive an annual salary of HK$700,000 (US$89,744). The Board of
         Directors may, in its discretion, grant an annual bonus to Mr. Lin.
         Pursuant to an amendment to the Employment Agreement that was entered
         into on October 5, 2004, the Board of Directors may also, in its
         discretion, grant options to Mr. Lin to purchase shares of the
         Company's common stock. If any option is granted, the exercise price of
         the option is to be computed as the average of the closing price of the
         common stock for the five trading days prior to the date of grant or
         the average of the closing price of the common stock for the five
         trading days immediately preceding the last day of the Executive's
         service year.


16. 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 an disposal of 25% investment in SFVI is summarized as follows:
<TABLE>

                                                                             Rmb               US$
                                                                         ----------------------------------
                                                                         ----------------------------------
        <S>                                                               <C>                 <C>
           Cash consideration                                                   600,000             73,982

           10,000,000 shares of IMOT at @US$0.24 per share                   19,872,000          2,450,308
                                                                         ---------------     --------------
           Total consideration paid                                          20,472,000          2,524,290

           Commission paid                                                      596,160             73,509
                                                                         ---------------     --------------
                                                                             21,068,160          2,597,800

           25% shared of net income  for period  from April 13,  2004 to
           May 23, 2006                                                       3,137,795            386,905
                                                                         ---------------     --------------
                                                                             24,205,955          2,984,704
                                                                         ---------------     --------------

           6,500,000 shares of IMOT  consideration to the Company on May
           23, 2006 at @0.18 per share                                        9,488,700          1,170,000
                                                                         ---------------     --------------

           Loss on disposal of 25% investment in SFVL                        14,717,255          1,814,705
                                                                         ===============     ==============
</TABLE>
<PAGE>


17. RETIREMENT PLAN AND POST-EMPLOYMENT BENEFITS
         The Company has no retirement plans or post-employment benefits for its
employees.


18. 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 intercompany
         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, 2006 is as
         follows:


(a) Net revenues:
                                      Year Ended June 30, 2006

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


                                           Rmb                     US$

E-commerce solutions                 1,395,330                 172,051
Consultancy fee                        (7,500)                   (925)
Photographic business                  780,305                  96,615
Sales of digital security system    97,742,675              12,052,118
                                   ------------      ------------------
                                   ------------      ------------------
                                    99,910,810              12,319,459
                                   ============      ==================
                                   ============      ==================

PRC                                 99,910,810              12,319,459
Hong Kong                                    -                       -
                                   ------------      ------------------
                                   ------------      ------------------
                                    99,910,810              12,319,459
                                   ============      ==================
                                   ============      ==================
<PAGE>



         (b) Net Profit / (loss):
<TABLE>

                                                            Year Ended June 30, 2006
                                                            -----------------------------------
                                                                     Rmb                US$
             <S>                                              <C>                 <C>


               E-commerce solutions                              (2,663,211)          (328,386)
               Consultancy fee                                       902,327            111,261
               Photographic business                             (4,773,055)          (588,538)
               Sales of digital security system                    9,145,818          1,127,721
                                                            -----------------  -----------------
                                                            -----------------  -----------------
                                                                   2,611,879            322,058
                                                            =================  =================
                                                            =================  =================



               Reconciliation:                                     2,611,879           322,058
                                                                               ----------------
                                                                               ----------------
               Net Profit / (loss) for reportable segments      (19,782,372)       (2,439,258)
                                                            -----------------  ----------------
                                                            -----------------  ----------------
               Unallocated corporate expenses                   (17,170,493)       (2,117,200)
                                                            =================  ================
                                                            =================  ================
</TABLE>

<TABLE>

         (c)    Assets:
                                                            June 30, 2006
                                                            ------------------------------------
                                                                         Rmb                US$
              <S>                                            <C>                 <C>


               E-commerce solutions                                  801,097             98,779
               Consultancy fee                                    10,657,531          1,314,122
               Photographic business                               1,995,093            246,004
               Sales of digital  Security System                  92,135,872         11,360,773
                                                            -----------------  -----------------
                                                            -----------------  -----------------
                                                                 105,589,593         13,019,678
                                                            =================  =================
                                                            =================  =================

               Reconciliation:
               Total assets for reportable segments              105,589,593         13,019,678
               Other corporate assets                             32,573,737          4,016,491
                                                            -----------------  -----------------
                                                            -----------------  -----------------

                                                                 138,163,330         17,036,169
                                                            =================  =================
                                                            =================  =================

</TABLE>


         (d) Other items:

                                                 Year Ended June 30, 2006
                                                 -------------------------------
                                                          Rmb              US$
               Depreciation:
                   E-commerce solutions              130,190           16,053
                   Photographic business               3,370              416
                   Consultancy fee                    14,682            1,810
                   Unallocated corporate assets       13,976            1,723
                                                 ------------     ------------
                                                 ------------

                                                     162,218           20,002
                                                 ============     ============
                                                 ============     ============

               Expenditures for fixed assets:
                   E-commerce solutions              336,717           41,519
                   Consultancy fee                    12,080            1,489
                   Unallocated corporate assets            -                -
                                                 ------------     ------------
                                                 ------------

                                                     348,797           43,008
                                                 ============     ============
                                                 ============     ============


         (e) Major customers and concentrations:

                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.

19. SUBSEQUENT EVENTS

         On July 3, 2006, the Company's wholly-owned subsidiary, IL,
         incorporated a new wholly-owned foreign investment company, ChinaE.com
         Investment Consultant (Shenzhen) Ltd. ("CECICSL"), with registered
         capital of RMB10,000,000, to be operated for a period of 20 years until
         2026. Its business scope is the provision of consultancy services of
         listing in PRC, USA, United Kingdom and Singapore security markets.

         On July 13, 2006, the Company's wholly-owned subsidiary, IL,
         incorporated a new wholly-owned British Virgin Island company, Leader
         Palace International Limited ("LPIL"), with registered capital of US$1.
         Its business scope is the provision of VOIP services.

         During September, 2006, the Company's management determined that
         Shanghai Newray Photographic Equipment Co., Ltd. would discontinue its
         primary business activity, the wholesale sales of various brands of
         consumer digital photographic equipment, including traditional 35mm
         cameras, digital cameras and camera accessories. In part, the decision
         was made due to the substantial competition in the PRC, and the lack of
         significant recognition of its brand outside of China, and the Company
         anticipated that it would take several years to increase awareness of
         its brand outside China. Because of this decision, the Company
         performed an evaluation of the fair value of the goodwill resulting
         from the purchase of Shanghai Newray Photographic Equipment Co., Ltd.
         on May 29, 2003. The Company prepared a cash flow analysis for the
         Shanghai Newray Photographic Equipment Co., Ltd. segment comparing the
         discounted cash flows to the net book values of the direct assets, and
         goodwill. The discounted cash flows supported the direct assets only.
         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 RMB4,568,552 (US $563,323) in the fiscal year ended June 30,
         2006.
<PAGE>


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