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, 2004

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

       For the transition period from _______________ to ________________

                         Commission File Number 0-30430

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

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

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

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

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

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

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

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

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

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

      The  registrant's  revenues  for the fiscal  year ended June 30, 2004 were
$1,827,382

      The number of shares of the registrant's common stock, $.001 par value per
share, outstanding as of September 30, 2004 was 79,017,406. The aggregate market
value of the voting and non-voting  common equity held by  non-affiliates of the
registrant  on  September  30,  2004,  based on the last sales  price on the OTC
Bulletin Board as of such date, was approximately $18,964,177.

                       DOCUMENTS INCORPORATED BY REFERENCE

      None

      Transition Small Business Disclosure Format: Yes [_]  No [X]


                                       1
<PAGE>


                               TABLE OF CONTENTS

                                                                            PAGE
                                                                            ----
PART I
  ITEM 1.   BUSINESS........................................................   4
  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 AND
            RELATED STOCKHOLDER MATTERS.....................................   9
  ITEM 6.   MANAGEMENT'S DISCUSSION AND ANALYSIS............................  12
  ITEM 7.   FINANCIAL STATEMENTS............................................  20
  ITEM 8.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
            ON ACCOUNTING AND FINANCIAL DISCLOSURE..........................  20
  ITEM 8A.  DISCLOSURE 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...........................................  25
  ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS..................  25
  ITEM 13.  EXHIBITS AND REPORTS OF FORM 8-K................................  26
  ITEM 14   PRINCIPAL ACCOUNTANT FEES AND SERVICES..........................  27

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


                                       2
<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 Rmb8.28 for US$1.  The People's Bank of China
sets and publishes  daily a base exchange rate with  reference  primarily to the
supply and demand of  Renminbi  against the United  States  dollar in the market
during the prior day. The People's  Bank of China also takes into account  other
factors such as the general  conditions  existing in the  international  foreign
exchange markets. Although Chinese governmental policies were introduced in 1996
to reduce  restrictions on the  convertibility of Renminbi into foreign currency
for current  amount items,  conversion  of Renminbi into any other  currency for
capital items, such as foreign direct  investment,  loans or security,  requires
the approval of the State  Administration for Foreign Exchange.  The translation
of Renminbi amounts in this Annual Report on Form 10-KSB is not a representation
that the Renminbi amounts could actually be converted into United States dollars
at that rate or at any other rate on that date or on any other date.


                                       3
<PAGE>


                                     PART I

ITEM 1.   BUSINESS

HISTORY AND DEVELOPMENT OF THE COMPANY

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

From the date of incorporation through October 1998, the Company's operations
were limited to efforts to identify and acquire, or merge with, one or more
operating businesses. In October 1998, the Company acquired all of the issued
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
continued (and still continue) to offer web design and hosting services to
customers in China through our subsidiary, ChinaE.com Information Technology
Ltd. ("ChinaE"), we also began to look for ways to diversify or expand our
business.

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

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


                                       4
<PAGE>


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

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

On October 3, 2003 IMOT Technology entered into an agreement for the acquisition
of 25% of the issued and outstanding shares of Shanghai Fortune Venture Limited
("Shanghai Fortune") from certain shareholders of Shanghai Fortune. Shanghai
Fortune owns two property rights exchanges, one of which it operates. In China,
property rights, 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 August 10, 2004, all necessary government approvals were obtained to complete
the transfer of 51% of the issued and outstanding shares of Golden Anke
Technology Ltd. ("Golden Anke") from two of its shareholders, Tu Guoshen and Li
Zhiquan, to IMOT Technology. Pursuant to the Share Transfer Agreement signed on
March 31, 2004 among IMOT Technology, Intermost, Golden Anke, Tu Guoshen and Li
Zhiquan, the purchase price paid for the stock was $3.24 million. On August 10,
2004 we issued to the selling shareholders 12 million shares of our common
stock, in full payment of the purchase price. The value of our common stock was
determined by applying a 20% discount to the average closing price during the
period from January 20 to March 19, 2004. Golden Anke is a leading digital
security imaging system provider operating in China. Golden Anke offers a
variety of solutions on video surveillance, digital image processing and
compressing, Internet image transfer and imaging security systems.

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

PRODUCTS AND SERVICES

INTERNET SERVICES

Through ChinaE, our wholly-owned subsidiary, we offer web design, web hosting,
business directory, software development and office automation software to our
clients. We operate within what is commonly referred to as the
"business-to-business" segment of the Internet market, where products and
services are offered principally to businesses, as compared to the
"business-to-consumer" segment of the Internet services market, where products
and services are offered to consumers directly.


                                       5
<PAGE>


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 25
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 we provide value-added services (such
as software design and system integration) for such equipment through our
subsidiary, Shanghai Newray. Shanghai Newray specializes in manufacturing
digital imaging systems for the printing of identity cards, such as staff passes
and student identity cards. Shanghai Newray is also a wholesaler of various
brands of consumer digital photographic equipment, including traditional 35mm
cameras, digital cameras and camera accessories. During the 2004 fiscal year,
two customers of Shanghai Newray accounted for approximately 47% of our
revenues.

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.

PROPERTY RIGHTS EXCHANGE

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

Our subsidiary, Shanghai Fortune, has been granted the right to operate the
North Shanghai Branch ("NSB") of the Shanghai Technology Property Rights
Exchange Center. NSB is a duly authorized exchange platform for the transfer of
property rights, intellectual property rights and private equity rights.
Shanghai Fortune was a registered member of Shanghai Technology Exchange ("STE")
and had the exclusive right to operate and manage the NSB of the STE in exchange
for 80% of the exchange fees. In December 2003 STE was merged into Shanghai
United Assets & Equity Exchange (SUAEE). SUAEE has continued STE's exchange
business and Shanghai Fortune is a registered member of SUAEE and will continue
to operate NSB. Shanghai Fortune is also actively participating in the Yangtze
River Delta Technology and Equity Exchange Market Place, an exchange launched in
November 2003, and it owns a 33.75% interest in the Xi'an Assets and Equity
Exchange, which is similar in scope to the NSB. Furthermore, Shanghai Fortune
also offers consultancy services related to property right transfers, including
financial arrangements and advice and assistance with business combinations.

Shanghai Fortune finds prospective clients principally through its team of
project managers and through referrals by its business network. During the 2004
fiscal year, we did not earn any revenues from Shanghai Fortune.

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


                                       6
<PAGE>


TRADING

Shanghai Fortune is also engaged in the business of trading parts and components
for machines and equipment. Most of its products, including die castings,
bearings, drive motors, flywheels, and lift motors, are exported to the U.S.

COMPETITION

INTERNET SERVICES

The market for Internet services and software is intensely competitive and we
expect it to become increasingly competitive in the future. Increased
competition could result in pricing pressures, low operating margins and the
realization of little or no market 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 do not represent 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 for several years due to their greater brand recognition
and greater financial, marketing and other resources. We anticipate that it will
take several years to increase awareness of the Seagull brand. However, we
believe that these products will eventually become accepted in the marketplace
outside China. We believe that we will be able to compete with the
well-established brands because we will be able to offer comparable equipment at
a lower price. Currently, however, we do not have a significant presence in the
market for digital photographic equipment outside China and we cannot guarantee
you that we will ever establish a significant presence or be able to compete
successfully in the world market.

PROPERTY RIGHTS EXCHANGE

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


                                       7
<PAGE>


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

REGULATION

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

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 property rights exchange will be largely dependant upon the
development of China's policies and laws relating to the transfer of private and
state-owned property rights. The transfer and management of state-owned property
rights are subject to the supervision of the Administrative Bureau of
State-owned Assets, whereas the property rights 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 Property Rights in Enterprises, all the transfers of state-owned
property rights must be carried out through duly authorized property rights
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 property rights.

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, 2004 we employed 53 full-time employees, namely, 1 management
executive, 16 engineering and technical staff, 7 administrative and clerical
staff, and 29 sales persons. None of our employees are members of any labor
union, and we have never experienced any business interruption as a result of
any labor disputes. We do not provide any special benefit or incentive programs
for our employees. We believe that we enjoy good relations with all of our
employees.

ITEM 2.   DESCRIPTION OF PROPERTY

Our principal office consists of approximately 4,000 square feet of office space
that is located at 10th  Floor,  B10-07  Guomao  Building,  Renmin Rd.  (South),
Shenzhen,  China 518014.  The premises are leased from an unrelated  third party
with rental payments and management fees of approximately $34,000 per year. This
lease will expire in August  2007.  In September  2004,  we entered into another
lease agreement for additional  office space consisting of  approximately  2,200
square feet which is located on the 31st Floor of Guomao Building.  The premises
are leased from an unrelated  third party with rental  payments  and  management
fees of approximately $39,000 per year. This lease will expire in August 2007.


                                       8
<PAGE>


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.

We owned office space consisting of approximately 5,000 square feet on the 38th
Floor of Guomao Building, which we leased to an unrelated third party for
approximately $24,000 per year. On June 18, 2003 we entered into an agreement to
sell the property to an unrelated third party for Rmb940,000 (approximately
$114,000) and we completed the transfer of the property during this fiscal year.

ITEM 3.   LEGAL PROCEEDINGS

In June 2001, we filed a lawsuit in the Court of First Instance of High Court of
Hong Kong (the "Court") against J.R. Hi-Tech Investment Corporation ("J.R.
Hi-Tech") and its controlling shareholders, Mr. Xin Lei Wang and Mr. Yong Jiang,
(collectively, the "Defendants"). On October 24, 2000, we entered into a
Subscription Agreement with the Defendants, which provided among other things
for our subscription of 70,000 ordinary shares, par value $1 per share,
representing 58.3% of the post-closing issued and outstanding shares of J.R.
Hi-Tech in consideration of our payment of $176,470 in cash and our issuance of
510,300 shares of our common stock. J.R. Hi-Tech's principal asset is an
indirect 90% interest in Shenzhen China Websecurity.com, a Chinese-foreign
equity joint venture, which engages in the provision of Internet security
services, systems integration and software development services. Despite the
Defendants' failure to deliver J.R. Hi-Tech ordinary shares to us as provided in
the Subscription Agreement, we delivered in January 2001 Rmb1,500,000 in cash to
J.R. Hi-Tech (but not our shares). In this lawsuit, we seek rescission of the
Subscription Agreement, recovery of the Rmb1,500,000, and additional damages and
injunctive relief. On June 22, 2001, the Court issued an order to freeze certain
bank accounts in the names of the Defendants. On July 3, 2001, following a
hearing, the Court extended this order until further order from the Court. We
intend to vigorously pursue our rights against the Defendants. However, due to
uncertainty of any recovery from J.R. Hi-Tech or the other two Defendants, in
fiscal 2001, we have written off the entire Rmb1,500,000 we delivered to J.R.
Hi-Tech.

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

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

                                     PART II

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

Our common stock is quoted on the National Association of Securities Dealers,
Inc. 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.


                                       9
<PAGE>


                                                 HIGH        LOW
                                                ------      -----

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


Fiscal 2004
      Quarter ended September 30, 2003            0.42       0.21
      Quarter ended December 31, 2003             0.50       0.20
      Quarter ended March 31, 2004                0.40       0.28
      Quarter ended June 30, 2004                 0.34       0.28

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 30, 2004, there were approximately 608 holders of record of the
Company's common stock. This number does not include an indeterminate number of
shareholders whose shares are held by brokers in street name.

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

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.

In the fiscal year ended June 30, 2004, 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 issued was
based on the market price of the shares at the date of the transactions, on
negotiations between the parties or on the fair value of services received. The
issuances were as follows:

On September 11, 2003 the Company issued, 3,000,000 shares of common stock with
a value of $0.05 per share to certain designated shareholders of Firstmax
Investment Limited who rendered services to us having a value of $150,000. 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
was an accredited investor.


                                       10
<PAGE>


On April 14, 2004, the Company issued 3,500,000 shares of common stock to Li Lao
Hu, 3,000,000 shares of common stock to Li Xiao Qin and 3,500,000 shares of
common stock to Huang Xiu Juan for the purchase of 25% of the issued and
outstanding shares of Shanghai Fortune Venture Ltd. The value of the common
stock was determined to be $0.24 per share, for a total of $2,400,000. 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
were accredited investors.

On June 24, 2004, the Company issued 400,000 shares of common stock to Stanford
Capital International Limited for investment relations services rendered to us
having a value of $64,000 and $60,000. 200,000 shares were issued with a value
of $0.32 per share and 200,000 shares were issued with a value of $0.30 per
share. 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 was an accredited investor.

On June 24, 2004, the Company issued 225,000 shares of common stock having a
value of $0.32 per share to Hank Vanderkam (Vanderkam & Associates) for legal
services rendered to us. 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 occupied an insider status relative to the Company that
afforded him effective access to the information registration would otherwise
provide.

During  fiscal  2004 we issued  72,640  shares of our  common  stock,  valued at
approximately  $14,528,  to Shanghai Newray  Business  Development Co. Ltd., the
owner of 24.5% of Shanghai  Newray.  These shares of common stock were issued to
Shanghai  Newray Business  Development  Co. Ltd. as a one-time  finder's fee for
introductions to certain accredited investors.  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  occupied  an insider  status
relative to the Company that  afforded him effective  access to the  information
registration would otherwise provide.

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, 2004, no awards had been granted from the Plan.

<TABLE>
<CAPTION>

                                              EQUITY COMPENSATION PLAN INFORMATION (1)

---------------------------- --------------------------------- --------------------------------- ---------------------------------
                                                                                                 NUMBER OF SECURITIES REMAINING
                                                                                                 AVAILABLE FOR FUTURE ISSUANCE
                             NUMBER OF SECURITIES TO BE ISSUED WEIGHTED AVERAGE EXERCISE PRICE   UNDER THE EQUITY COMPENSATION
                             UPON EXERCISE OF OUTSTANDING      OUTSTANDING OPTIONS WARRANTS AND  PLAN (EXCLUDING SECURITIES
                             OPTIONS, WARRANTS AND RIGHTS      RIGHTS                            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.


                                       11
<PAGE>


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.

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.


                                       12
<PAGE>


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, Shanghai
Newray, which sells, and provides value-added services for, digital photographic
equipment. The balance of our revenues are generated primarily by our
subsidiary, China E.com Information Technology Ltd., which distributes licenses
for Chinese language translation software and offers web design and hosting
services.

While the outbreak of SARS in the first quarter of 2003 had a severe negative
impact on the economy of China, the economy, including the retail and Internet
services sector, has recovered since then.

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 property rights 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
property rights 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 transfer of our common stock
represents some or all of the purchase price we pay for an acquired business. We
believe that active trading of our common stock will be important to the
principals of target companies and future acquisitions may be dependent on the
active trading of our common stock. However, our common stock has not been
actively traded and, if our common stock continues to trade flatly, we may not
be able to make acquisitions as planned.

Currently, we are experiencing an increase in web design projects and we are
recruiting additional staff to meet project deadlines.

During the fiscal year ended June 30, 2004 we had a net loss of Rmb 6,712,852
and an accumulated deficit of Rmb 74,023,484. Our auditor, Grobstein, Horwath &
Company LLP, has issued a "going concern" opinion for our financial statements
at June 30 2004. In that opinion, the auditor noted that attainment of
profitable operations is dependent upon our ability to generate positive cash
flows and to raise additional capital. These factors raise substantial doubt
about our ability to continue as a going concern.


                                       13
<PAGE>


RESULTS OF OPERATIONS

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

                                                 YEAR ENDED JUNE 30,
                                            --------------------------
                                                2003           2004
                                            -----------    -----------

Net revenues                                $   446,265    $ 1,827,382
Cost of revenues                               (366,905)    (1,466,213)
Gross profit                                     79,360        361,169
Selling, general and administrative          (1,088,782)    (1,216,760)
Impairment of fixed assets                     (164,251)          --
Gain/(loss) on disposal of fixed assets          (6,254)         5,356
Write back of welfare provisions                 89,200           --
Impairment of software license                     --          (31,250)
Loss from operations                         (1,090,727)      (881,485)
Share of profit of an associated
  company                                          --          141,824
Other income/(loss), net                         21,205           (493)
Loss before taxation                         (1,069,522)      (740,154)
Taxation                                           --           (6,867)
Loss before minority interest                (1,069,522)      (747,021)
Minority interests                               (9,296)       (63,710)
Net loss                                    $(1,078,818)   $  (810,731)

Year Ended June 30, 2004 Compared to Year Ended June 30, 2003

Net revenues.

Net revenues for the year ended June 30, 2004 increased by $1,381K, or 309%, to
$1,827K from $446K for the year ended June 30, 2003.

Net revenues during fiscal 2004 were derived principally from e-commerce
solutions, sales of computer software, sales of photographic equipment,
management fees that we collected from KanHan for promoting its software and
helping it establish a presence in China and consultancy fee income. Net
revenues during fiscal 2003 were derived principally from e-commerce solutions,
system sales and integration, web advertisement, sales of photographic
equipment, sales of computer software and management fee income, again related
to the work we did for KanHan. 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:


----------
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"
                                       14
<PAGE>


<TABLE>
<CAPTION>

                                                                     PERCENT OF TOTAL
                                            TOTAL NET REVENUES         NET REVENUES
                                           ---------------------   --------------------
                                             YEAR ENDED JUNE 30,    YEAR ENDED JUNE 30,
                                           ---------------------   --------------------
                                              2003        2004        2003       2004
                                           ---------   ---------   ---------    -------
<S>                                        <C>         <C>         <C>          <C>
                                              US$         US$
E-commerce solutions
      - Web site design and development      155,995     342,869       34.96%     18.76%

System sales and integration                  36,832          --        8.25%        --%
Sales of computer software                     3,135       5,755        0.70%      0.31%
Sales of photographic equipment              211,318   1,373,438       47.35%     75.16%
Management fee income                         38,768     103,382        8.69%      5.66%
Consultancy fee income                            --       1,938          --%      0.11%
Advertisement                                    217          --        0.05%        --%
                                           ---------   ---------   ---------    -------
      Total                                  446,265   1,827,382      100.00%    100.00%
                                           =========   =========   =========    =======
</TABLE>

Total revenues derived from e-commerce solutions increased by $187K, or 120%, to
$343K in fiscal 2004 as compared to $156K in fiscal 2003. Sales of photographic
equipment increased by $1,162K, or 550%, to $1,373K in fiscal 2004 as compared
to $211K in fiscal 2003. Sales of computer software increased by $3K, or 84% to
$6K in fiscal 2004 as compared to $3K in fiscal 2003. Management fee income
increased by $65K, or 167%, to $103K in fiscal 2004 as compared to $39K in
fiscal 2003.

The increase 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 remain convinced that the Chinese Internet market will continue to develop,
outpacing the growth of other more mature Internet markets, and that our
presence in the market will allow us to capitalize on opportunities to sell
computer software products and web design and hosting services in 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 kinds of markets. 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 offer now or
that we will offer in the future.

Costs of Revenues.

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


                                       15
<PAGE>


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

<TABLE>
<CAPTION>

                                                                     PERCENT OF TOTAL
                                          TOTAL COST OF REVENUES       NET REVENUES
                                           ---------------------   --------------------
                                            YEAR ENDED JUNE 30,      YEAR ENDED JUNE 30,
                                           ---------------------   --------------------
                                              2003        2004         2003       2004
                                           ---------   ---------   ---------    -------
<S>                                        <C>         <C>           <C>        <C>
                                              US$          US$
Engineers/technician salaries                 52,425     102,638       11.75%      5.62%
Subcontract fees                                 195          --        0.04%        --%
Cost of system sales and integration          41,784          --        9.36%        --%
Cost of photographic equipment               190,130   1,222,219       42.60%     66.88%
Cost of computer software                     45,969       5,352       10.30%      0.29%
Depreciation                                   4,433       3,797        1.00%      0.21%
Other                                         31,969     132,207        7.16%      7.23%
                                           ---------   ---------   ---------    -------
      Total                                  366,905   1,466,213       82.21%     80.23%
                                           =========   =========   =========    =======

Compared to the 2003 fiscal year, the total costs of revenues for the 2004
fiscal year increased by $1,099K, or 300%, to $1,466K. The increase in costs of
revenues, in total and as a percentage of revenues, as compared to the
corresponding period in the last fiscal year, was principally attributable to
the increase in our sales as well as to an increase in engineering and technical
staffing. The increase in other costs was mainly attributable to $106K in
amortization costs related to the amortization of the computer software we
purchased from KanHan Technologies Ltd. The principal components of costs of
revenues during the 2003 fiscal year were costs of hardware, photographic
equipment and computer software, other costs associated with support of the
engineering and technician staff, engineer and technician salaries, and
depreciation of equipment utilized in connection with services.

Selling, General and Administrative Expense.

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

                                                                     PERCENT OF TOTAL
                                                 TOTAL SG&A            NET REVENUES
                                           ---------------------   --------------------
                                            YEAR ENDED JUNE 30,     YEAR ENDED JUNE 30,
                                           ---------------------   --------------------
                                              2003       2004        2003         2004
                                           ---------   ---------   ---------    -------
                                              US$        US$

Sales and marketing salaries and
      commissions                             98,663      81,624       22.11%      4.47%
Other sales and marketing                     55,131     138,010       12.35%      7.55%
Rent obligation                               61,036      74,654       13.68%      4.09%
Administrative salaries                      268,328     101,638       60.13%      5.56%
Corporate overhead                           566,120     820,834      126.86%     44.92%
Bad and doubtful debt for
    other receivables                         30,767          --        6.89%        --%
Bad and doubtful debt for
    related company                           8 ,737          --        1.96%        --%
                                           ---------   ---------   ---------    -------
      Total                                1,088,782   1,216,760      243.98%     66.59%
                                           =========   =========   =========    =======
</TABLE>

The principal components of SG&A during the 2004 year were sales and marketing
salaries and commissions, other marketing expenditures, administrative salaries
and benefits and other corporate expenses, which includes legal and professional
fees, general office expenses, traveling expenses, general employee benefit
expense, depreciation and consultancy fees.


                                       16
<PAGE>


For the 2004 fiscal year, SG&A increased by $128K, or 12%, to $1,217K as
compared to $1,089K for the 2003 fiscal year. Sales and marketing salaries and
commissions decreased 17% during the 2004 fiscal year, to $82K, as compared to
$99K for the 2003 fiscal year. During the 2004 fiscal year, rent obligations
increased by 14K or 22% to $75K, as compared to $61K in the 2003 fiscal year.
Rent obligations increased due to the expansion of our operations into
additional office space. Administrative salaries decreased substantially by
$167K or 62% to $101K during the 2004 fiscal year, as compared to $268K in the
2003 fiscal year. Other corporate expense increased during the 2004 fiscal year,
by $255K or 45% to $821K, as compared to $566K in the 2003 fiscal year. The
increase in SG&A was principally attributable to a combination of (1) the
addition of office space in Guangzhou, which we used for promoting KanHan's
software and (2) corporate overhead including consultancy fees, overseas
traveling and investor relations expenses.

Minority Interest.

We reported a minority interest with a value of $64K for the 2004 fiscal year,
reflecting our proportionate interest in the profits of Intermost Focus
Advertising and Shanghai Newray, as compared to a minority interest with a value
$9K for the 2003 fiscal year, reflecting our proportionate interest in the
profits of Intermost Focus Advertising.

LIQUIDITY AND CAPITAL RESOURCES

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

At June 30, 2004 we had cash and cash equivalents of $187K and working capital
of $409K as compared to $79K of cash and cash equivalents and $324K of negative
working capital at June 30, 2003.

Operations used $818K of cash during the 2004 fiscal year as compared to $351K
of cash used during the 2003 fiscal year. Cash was used in operations to fund
our loss of $811K. Cash was also used to pay liabilities, which increased due to
our expanded operations. Our use of cash was partially offset by non-cash
charges, including the use of our common stock (or the reservation of common
stock to be used) in exchange for services in the amount of $298K, depreciation
expense in the amount of $46K and amortization and impairment of computer
software in the amount of $75K and $31K respectively.

Net cash provided by investing activities was $7K for the 2004 fiscal year while
net cash provided by investing activities was $33K for the 2003 fiscal year.
Funds provided by investing activities consisted of the net proceeds of sale
from the property at 38/F Guomao Building.

Net cash provided by financing activities was $919K for the 2004 fiscal year
while net cash provided by financing activities was $343K for the 2003 fiscal
year. Funds provided by financing activities consisted of proceeds received
during fiscal 2004 from the subscription for 6,053,700 shares of common stock
from a private placement of 6,053,700 shares at $0.20 per share.

We had no long term debt at June 30, 2004 or at June 30, 2003. 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.


                                       17
<PAGE>


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, Shanghai Fortune and Golden
Anke are the beginning of our plan to invest in or acquire businesses that are
not dependent on the Internet market. However, there can be no assurance that
the cash provided by our current operations will be sufficient to meet our cash
needs in the 2005 fiscal year. The Company will likely need to borrow money or
obtain additional equity financing in order to sustain operations. We have no
commitments for funding and we cannot assure you that funding will be available
to us on acceptable terms, or at all. If we need financing and cannot obtain it,
we may be required to severely curtail, or even cease, our operations.

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

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

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

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

Because final government approval of this transaction was not received by the
date required by the Stock Exchange Agreements, the Stock Exchange Agreements
were re-signed on December 16, 2003 to extend the date for receipt of government
approval. As at the date of this report, this transaction is still awaiting
government approval.

On January 2, 2004 IMOT Technology entered into an agreement for the acquisition
of 25% of the issued and outstanding shares of Zenith Technology Ltd. ("Zenith")
from Mr. Wei Xie, the major shareholder of Zenith. The agreement is subject to
final approval from the government of Shenzhen, China, the completion of a due
diligence investigation by the parties and approval by the board of directors of
both corporations. The consideration for the acquisition consists of Rmb1
million (approximately $120,000) in cash and 300,000 shares of our common stock.
Prior to this acquisition, Mr. Xie owned a 70% interest in Zenith. As at the
date of this report, this transaction is still awaiting government approval.


                                       18
<PAGE>


Zenith, which was established in 2001 and is located in Shenzhen, China, is
principally engaged in providing value-added banking services to its
subscribers. Its subscribers can pay bills (e.g. for water, electricity,
telephone, mobile phone, fixed penalty, etc.), make lottery purchases, receive
payment confirmations and engage in other financial, brokerage and banking
related services via their mobile phones.

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.


                                       19
<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 Grobstein, Horwath & Company LLP and Moores Rowland Mazars,
Chartered Accountants, appear beginning on page F-1 of this report.



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

In March 2004, the Company's Board of Directors dismissed Moores Rowland Mazars,
Chartered Accountants as the independent auditors for the Company and selected
Grobstein, Horwath & Company LLP to serve as its new registered independent
auditors.

The report of Moores Rowland Mazars, Chartered Accountants, on the financial
statements of the Company as of and for the years ended June 30, 2003 and June
30, 2002 did not contain an adverse opinion, or a disclaimer of opinion, however
the reports were modified as to the Company's ability to continue as a going
concern. During the two year periods ended June 30, 2003 and June 30, 2002, and
the interim period from July 1, 2003 through the date of dismissal of Moores
Rowland Mazars, Chartered Accountants, the Company did not have any
disagreements with Moores Rowland Mazars, Chartered Accountants, 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 Moores Rowland Mazars, Chartered Accountants, would have caused
it to make a reference to the subject matter of the disagreements in connection
with its reports.

Prior to engaging Grobstein, Horwath & Company, LLP, the Company had not
consulted Grobstein, Horwath & Company, LLP 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

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

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


                                       20
<PAGE>


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

(b)   Changes in Internal Controls. There were no significant changes in our
internal controls or, to our knowledge, in other factors that could
significantly affect our internal controls subsequent to the evaluation date.

ITEM 8B   OTHER INFORMATION

On October 5, 2004 our President, Mr. Andy Lin, and the Company executed a First
Amendment to Employment Agreement, referred to herein as the "Amendment". The
Amendment acknowledged that the Employment Agreement executed by Mr. Lin and the
Company on March 12, 2004 included an error at paragraph 6.1. The Employment
Agreement as drafted included the grant of certain options to Mr. Lin, beginning
with the grant of an option to purchase 1,000,000 shares of the Company's common
stock on the date the Employment Agreement was executed. It was the intention of
the Board of Directors, however, not to grant the option but to set forth in the
Employment Agreement the parameters of options that could be granted in the
future to Mr. Lin, in the Board's discretion. The Amendment modifies paragraph
6.1 of the Employment Agreement to reflect the agreement of the Board of
Directors and Mr. Lin as to the proposed option grants.

                                    PART III

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

IDENTIFICATION OF DIRECTORS, EXECUTIVE OFFICERS AND CERTAIN SIGNIFICANT
EMPLOYEES

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

NAME            AGE       POSITION
---------       ---       ---------------------------------------------------
Andy Lin         58       President, Chief Executive Officer, Chief Financial
                          Controller and Director

Shim Yang        46       Director

Catalina Chan    53       Director


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

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

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,


                                       21
<PAGE>


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.

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. 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 China trade for digital products including cameras,
watches, personal computers and printers, software and accessories.

TERM OF OFFICE

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

COMPLIANCE WITH SECTION 16(a) OF EXCHANGE ACT

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


                                       22
<PAGE>


The Company believes that, with respect to its fiscal year ended June 30, 2004,
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 2004 fiscal year, all executive officers received their salaries from
the Company and no bonus was paid to any executive officer. Executive officers
include our current Chief Executive Officer and President, Andy Lin, our former
Chief Executive Officer and President, Jun Liang, and Kam Fai Sun, our former
Finance Manager.

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

<TABLE>
<CAPTION>

                                                                                          LONG TERM COMPENSATION
                                                                     ------------------------------------------------------
                                          ANNUAL COMPENSATION               AWARDS                             PAYOUTS
                                   ----------------------------------------------------------------------------------------
                                                           OTHER      RESTRICTED                               ALL OTHER
                                                          ANNUAL     STOCK AWARDS   SECURITIES     LTIP       COMPENSATION
NAME AND PRINCIPAL                 SALARY      BONUS   COMPENSATION       ($)       UNDERLYING     PAYOUT        ($)
POSITION                  YEAR       ($)        ($)        ($)                      OPTIONS/SARS     ($)
------------------        ----     ------      -----    -----------  -------------  ------------   ------    -------------
<S>                       <C>      <C>         <C>      <C>          <C>            <C>            <C>       <C>
Andy Lin,                 2004     81,196          0          0            0                0         0           0
CEO and                   2003    128,205(4)       0          0            0                0         0           0
President(1)              2002     76,923          0          0            0                0         0           0

Jun Liang                 2004          0          0          0            0                0         0           0
CEO, Chairman             2003          0          0          0            0                0         0           0
and President(2)          2002      5,769          0          0            0                0         0           0

Kam Fai Sun               2004          0          0          0            0                0         0           0
Finance Manager(3)
                          2003    102,564(5)       0          0            0                0         0           0
                          2002     19,231          0          0            0                0         0           0
</TABLE>


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

(2)   Mr. Liang served as Chief Executive Officer of the Company from October
      1998 until June 2001.

(3)   Mr. Sun's employment with the Company began on March 25, 2002 and
      terminated on February 28, 2003. Mr. Sun continues to perform consulting
      services for the Company.

(4)   Of this amount, $76,923 was paid in cash and the balance, totaling
      $51,282, was paid by issuing to Mr. Lin 1,709,400 shares of the Company's
      common stock having a value of $0.03 a share.

(5)   Of this amount, $51,282 was paid in cash and the balance, totaling
      $51,282, was paid by issuing to Mr. Sun 1,709,400 shares of the Company's
      common stock having a value of $0.03 a share.

DIRECTOR'S COMPENSATION

None of our directors received any compensation for his or her service as a
director in the 2004 fiscal year.

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


                                       23
<PAGE>


OTHER COMPENSATION AND EMPLOYMENT ARRANGEMENTS

On March 12, 2004 we entered into an Employment Agreement with Andy Lin, our
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 our 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.

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, 2004, all of
the Company's employees, officers and directors were eligible to receive awards
under the Plan. The number of persons covered by the Plan may increase if we add
additional employees (including officers) and directors. As of the date of this
Annual Report, no awards have been granted from the Plan.

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

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

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.


                                       24
<PAGE>


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

COMMON STOCK

      The following table is furnished as of September 7, 2004, to indicate
beneficial ownership of shares of the Company's common stock by (1) each
shareholder of the Company who is known by the Company to be a beneficial owner
of more than 5% of the Company's common stock, (2) each director and named
officer of the Company, individually, and (3) all officers and directors of the
Company as a group.

<TABLE>
<CAPTION>

      NAME AND ADDRESS OF                                          NUMBER OF SHARES
      BENEFICIAL OWNER (1)                                         BENEFICIALLY OWNED    PERCENT
      ------------------------------------------------------------ ------------------    -------
      <S>                                                          <C>                   <C>
      Allied Point Limited (3).................................... 3,418,653   (2)          4.32%
      Jun Liang (3)............................................... 3,418,653   (2)          4.32%
      Andy Lin (3)................................................ 3,418,653   (2)          4.32%
      Andy Lin ................................................... 4,922,801   (5)          6.15%
      Shim Yang...................................................   350,000                   *%
      Catalina Chan (4)........................................... 1,000,000                1.26%
      Grand Grade International Ltd (4)........................... 1,000,000                1.26%

      All officers and directors as a group (3 persons)........... 9,691,454               11.73%
</TABLE>


----------
*     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 10th Floor, B10-07 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)   Includes an option for the purchase of 1,000,000 shares of common stock
      granted to Mr. Lin in conjunction with the execution of his employment
      agreement. The option was fully vested on the date of grant and is
      immediately exercisable.

Information relating to the Intermost Corporation 2003 Equity Incentive Plan can
be found at Item 5 and Item 10 of this Annual Report.

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

During the years ended June 30, 2003 and 2004, Jun Liang, a director until
February 2003, and Andy Lin, an officer, director and principal shareholder of
the Company, advanced funds to the Company on an unsecured, non-interest bearing
basis without pre-determined repayment terms. At June 30, 2003, the net balances
owed to Mr. Liang and Mr. Lin were $80,487 and $51,071, respectively. At June
30, 2004, the net balances owed to Mr. Liang and Mr. Lin were $90,759 and
$17,909, respectively.


                                       25
<PAGE>


During 2004 we issued 72,640 shares of our common stock, valued at approximately
$14,528, to Shanghai Newray Business Development Co. Ltd., the owner of 24.5% of
Shanghai Newray. These shares of common stock were issued to Shanghai Newray
Business Development Co. Ltd. as a one-time finder's fee for introductions to
certain accredited investors.

During 2003 we wrote off a debt of $8,742 that was owed to us by Corporate
Conventions International Limited, a company controlled by our director, Mr.
Shim Yang.

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
            (Schenzhen) Ltd., Shanhai 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*
-------     --------------------------------------------------------------------
23          Consent of Independent Accountants*
-------     --------------------------------------------------------------------
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.

(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.


                                       26
<PAGE>


(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.

(b)   Reports on Form 8-K

On March 8, 2004 the Registrant filed a Current Report relating to its change in
certifying accountant.

On March 25, 2004 the Registrant filed a Current Report disclosing the
Employment Agreement executed by Andy Lin on March 12, 2004.

On April 26, 2004 the Registrant filed a Current Report disclosing the Sale and
Purchase Agreement entered into by IMOT Information Technology (Shenzhen) Ltd.,
Shanghai Fortune Venture Limited, North Shanghai Branch of Shanghai Technology
Property Right Exchange Center and the Registrant.

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, 2003 and June 30, 2004 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, 2004         JUNE 30, 2003
                              -------------         -------------

(i)       Audit Fees          $     196,000         $      74,750
(ii)      Audit Related Fees  $          --         $          --
(iii)     Tax Fees            $       6,500         $       8,000
(iv)      All Other Fees      $          --         $          --


                                       27
<PAGE>


                                   SIGNATURES

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


                                           INTERMOST CORPORATION



                                           By:  /s/ Andy Lin
                                             -----------------------------------
                                             Andy Lin
                                             President, Chief Executive Officer
                                             and Chief Financial Officer
Dated: October 13, 2004

      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, Chief Executive Officer,     October 13, 2004
---------------------   Chief Financial Officer and Director
Andy Lin


/s/ Shim Yang           Director                                October 13, 2004
---------------------
Shim Yang


/s/ Catalina Chan       Director                                October 13, 2004
---------------------
Catalina Chan



                                       28


<PAGE>


                              INTERMOST CORPORATION

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


                                                                      Page

Reports of Independent Registered Public Accounting Firms             F-1

Consolidated Balance Sheet as of June 30, 2004                        F-3

Consolidated Statements of Operations for the
Years Ended June 30, 2003 and 2004                                    F-4

Consolidated Statements of Stockholders' Equity for
the Years Ended June 30, 2003 and 2004                                F-5

Consolidated Statements of Cash Flows for
the Years Ended June 30, 2003 and 2004                                F-6

Notes to Consolidated Financial Statements                            F-7

<PAGE>

             Report of Independent Registered Public Accounting Firm


To the Board of Directors and Stockholders
of Intermost Corporation

We have  audited  the  accompanying  consolidated  balance  sheet  of  Intermost
Corporation  and  subsidiaries  (the  "Company")  as of June 30,  2004,  and the
related  consolidated  statements of operations,  stockholders'  equity and cash
flows for the year then ended. These consolidated  financial  statements are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these consolidated financial statements based on our audit.

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

In our opinion, the consolidated  financial statements referred to above present
fairly,  in all  material  respects,  the  consolidated  financial  position  of
Intermost Corporation and subsidiaries as of June 30, 2004, and the consolidated
results of their  operations  and their cash flows for the year then  ended,  in
conformity with accounting principles generally accepted in the United States of
America.

The accompanying  consolidated  financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 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.

/s/ GROBSTEIN, HORWATH & COMPANY, LLP

Certified Public Accountants
Sherman Oaks, California
September 29, 2004

                                      F-1
<PAGE>

                         Report of Independent Auditors


To the Stockholders and the Board of Directors
of Intermost Corporation

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

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

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

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

/s/ MOORES ROWLAND

Chartered Accountants
Certified Public Accountants
Hong Kong
September 25, 2003


                                      F-2
<PAGE>

<TABLE>
<CAPTION>

                     Intermost Corporation and Subsidiaries
                           Consolidated Balance Sheet

                                                                        June 30, 2004
                                                                 ----------------------------
                                                                     Rmb              US$

<S>                                                                 <C>               <C>
Assets

Current assets:
Cash and cash equivalents                                           1,544,822         186,573
Accounts receivable                                                 3,052,336         368,640
Inventory                                                               6,000             724
Deposits, prepayments and other receivables                         4,503,799         543,937
                                                                 ------------    ------------

Total current assets                                                9,106,957       1,099,874

Investment in an associated company                                21,646,308       2,614,288
Plant and equipment, net                                              365,400          44,131
Goodwill                                                            4,568,552         551,758
                                                                 ------------    ------------

Total assets                                                       35,687,217       4,310,051
                                                                 ============    ============

Liabilities, Minority Interests and Stockholders' Equity

Current liabilities:
Accounts payable                                                    3,117,252         376,480
Accrued liabilities and other payables                              1,714,076         207,014
Customer deposits                                                     421,051          50,851
Deferred revenue                                                      286,357          34,584
Business taxes and government surcharges payable                       36,131           4,364
Due to a director                                                     148,283          17,909
                                                                 ------------    ------------

Total current liabilities                                           5,723,150         691,202
                                                                 ------------    ------------

Commitments

Minority interests                                                    940,072         113,535
                                                                 ------------    ------------

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 - 67,017,406 shares                          554,938          67,021
  Reserved and to be issued - 200,000 shares                            1,656             200
Additional paid-in capital                                        102,521,781      12,381,858
Accumulated deficit                                               (74,023,484)     (8,940,034)
Accumulated other comprehensive loss                                  (30,896)         (3,731)
                                                                 ------------    ------------

Stockholders' equity                                               29,023,995       3,505,314
                                                                 ------------    ------------

Total liabilities, minority interests and stockholders' equity     35,687,217       4,310,051
                                                                 ============    ============

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


                                      F-3
<PAGE>

<TABLE>
<CAPTION>

                     Intermost Corporation and Subsidiaries
                      Consolidated Statements of Operations

                                                                     Years Ended June 30,
                                                           -----------------------------------------
                                                              2003                  2004
                                                           -----------    --------------------------
                                                               Rmb           Rmb              US$

<S>                                                          <C>           <C>             <C>
Net revenues                                                 3,695,075     15,130,727      1,827,382
Cost of revenues                                            (3,037,972)   (12,140,249)    (1,466,213)
                                                           -----------    -----------    -----------

Gross profit                                                   657,103      2,990,478        361,169
                                                           -----------    -----------    -----------

Costs and expenses:
Selling, general and administrative expenses                 9,015,113     10,074,773      1,216,760
(Gain) loss on disposal of fixed assets                         51,784        (44,345)        (5,356)
Impairment of fixed assets                                   1,360,000             --             --
Impairment of software license                                      --        258,750         31,250
Write-back of welfare provisions                              (738,578)            --             --
                                                           -----------    -----------    -----------

Total costs and expenses                                     9,688,319     10,289,178      1,242,654
                                                           -----------    -----------    -----------

Loss from operations                                        (9,031,216)    (7,298,700)      (881,485)
                                                           -----------    -----------    -----------

Other income (expense):
Interest income                                                  2,105         14,937          1,804
Other income (expense), net                                    173,474        (19,021)        (2,297)
                                                           -----------    -----------    -----------

Total other income (expense)                                   175,579         (4,084)          (493)
                                                           -----------    -----------    -----------

Loss before income taxes, minority interests and equity
    in earnings of an associated company                    (8,855,637)    (7,302,784)      (881,978)

Income taxes                                                        --        (56,860)        (6,867)
                                                           -----------    -----------    -----------

Loss before minority interests and equity in earnings of
    an associated company                                   (8,855,637)    (7,359,644)      (888,845)

Minority interests                                             (76,972)      (527,516)       (63,710)
                                                           -----------    -----------    -----------

Loss before equity in earnings of an associated company     (8,932,609)    (7,887,160)      (952,555)

Equity in earnings of an associated company                         --      1,174,308        141,824
                                                           -----------    -----------    -----------

Net loss                                                    (8,932,609)    (6,712,852)      (810,731)
                                                           ===========    ===========    ===========


Net loss per common share - basic and diluted                    (0.25)         (0.12)         (0.01)
                                                           ===========    ===========    ===========

Weighted average number of common shares outstanding -
    basic and diluted                                       35,161,599     57,105,734     57,105,734
                                                           ===========    ===========    ===========

</TABLE>

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


                                      F-4
<PAGE>

<TABLE>
<CAPTION>

                     Intermost Corporation and Subsidiaries
                 Consolidated Statements of Stockholders' Equity
                       Years Ended June 30, 2003 and 2004

                                        Common Stock
                            -----------------------------------------
                                                    Reserved and
                                  Issued            to be Issued
                            ------------------   --------------------
                                                                                                  Accumulated
                               Number                                   Additional                   Other
                                 of                 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, 2002            33,120,481  274,279  2,000,000   16,560   62,085,259   (58,378,023)    (30,896)   3,967,179    479,128
Issuance of common stock
 for services rendered        1,027,318    8,505         --       --      248,176            --          --      256,681     31,000
Issuance of common stock
 to a director for partial
 settlement of balance due    2,213,401   18,326         --       --    1,064,033            --          --    1,082,359    130,720
Issuance of common stock
 to employee as compensation  3,870,800   32,048         --       --      964,959            --          --      997,007    120,411
Issuance of common stock
 for settlement of creditors,
 net of issuance cost         2,014,066   16,676 (2,000,000) (16,560)        (116)           --          --           --         --
Issuance of common
 stock for acquisition        4,000,000   33,120         --       --    4,272,480            --          --    4,305,600    520,000
Common stock reserved and
 to be issued for
 services rendered                   --       --  3,820,000   31,630    2,000,282            --          --    2,031,912    245,400
Net loss                             --       --         --       --           --    (8,932,609)         --   (8,932,609)(1,078,818)
                             ---------- -------- ---------- --------   ----------    ----------  ----------   ---------- ----------
Balance as of June 30, 2003  46,246,066  382,954  3,820,000   31,630   70,635,073   (67,310,632)    (30,896)   3,708,129    447,841

Issuance of common stock
 for services rendered        4,717,640   39,060 (3,820,000) (31,630)   1,979,770            --          --    1,987,200    240,000
Issuance of common stock
 for private placement        6,053,700   50,124         --       --    9,639,154            --          --    9,689,278  1,170,204
Issuance of common
 stock for acquisition       10,000,000   82,800         --       --   19,789,200            --          --   19,872,000  2,400,000
Common stock reserved and
 to be issued for
 services rendered                   --       --    200,000    1,656      478,584            --          --      480,240     58,000
Net loss                             --       --         --       --           --    (6,712,852)         --   (6,712,852)  (810,731)
                             ---------- -------- ---------- --------   ----------    ----------  ----------   ---------- ----------
Balance as of
 June 30, 2004 (Rmb)         67,017,406  554,938    200,000    1,656  102,521,781   (74,023,484)    (30,896)  29,023,995         --
                             ========== ======== ========== ========   ==========    ==========  ==========   ========== ==========
Balance as of
 June 30, 2004 (US$)         67,017,406   67,021    200,000      200   12,381,858    (8,940,034)     (3,731)   3,505,314  3,505,314
                             ========== ======== ========== ========   ==========    ==========  ==========   ========== ==========

</TABLE>

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


                                      F-5
<PAGE>

<TABLE>
<CAPTION>

                     Intermost Corporation and Subsidiaries
                      Consolidated Statements of Cash Flows

                                                                                        Years Ended June 30,
                                                                              ------------------------------------------
                                                                                 2003                   2004
                                                                              -----------    ---------------------------
                                                                                  Rmb            Rmb             US$

Cash flows from operating activities:
<S>                                                                            <C>            <C>              <C>
Net loss                                                                       (8,932,609)    (6,712,852)      (810,731)
Adjustments to reconcile net loss to net cash used in operating activities:
    Issuance of common stock in exchange for services                           1,253,688      1,987,200        240,000
    Common stock reserved and to be issued in exchange for services             1,713,960        480,240         58,000
    Bad debt written off and provision for doubtful debt:
       Other receivables                                                          254,753             --             --
       Due from a related company                                                  72,345             --             --
    Amortization of computer software held for sale                               362,250        621,000         75,000
    Write-back of welfare provisions                                             (738,578)            --             --
    (Gain) loss on disposal of fixed assets                                        51,784        (44,345)        (5,356)
    Impairment of fixed assets                                                  1,360,000             --             --
    Impairment of software license                                                     --        258,750         31,250
    Depreciation of plant and equipment                                           506,076        378,337         45,693
    Minority interests                                                             76,972        527,516         63,710
    Equity in earnings of an associated company                                        --     (1,174,308)      (141,824)
Changes in operating assets and liabilities:
      (Increase) decrease in -
    Accounts receivable                                                          (733,478)    (1,660,217)      (200,509)
    Costs and estimated earnings in excess billings                               150,170             --             --
    Deposits, prepayments and other receivables                                    (5,970)    (1,380,613)      (166,741)
    Inventory                                                                    (729,772)       361,522         43,662
    Computer software held for sale                                              (879,750)            --             --
      Increase (decrease) in -
    Accrued liabilities and other payables                                         61,201       (532,577)       (64,321)
    Accounts payable                                                            2,958,920        158,332         19,122
    Deferred revenue                                                             (146,534)           357             43
    Customer deposits                                                             472,664        (51,613)        (6,233)
    Business taxes and government surcharges payable                              (31,125)        12,638          1,526
                                                                              -----------    -----------    -----------
Net cash used in operating activities                                          (2,903,033)    (6,770,633)      (817,709)
                                                                              -----------    -----------    -----------

Cash flows from investing activities:
Additions to plant and equipment                                                  (25,690)      (213,336)       (25,765)
Acquisition of investment in an associated company                                     --       (600,000)       (72,464)
Proceeds on disposal of plant and equipment                                           100        870,000        105,072
Acquisition, net of cash acquired                                                 300,000             --             --
                                                                              -----------    -----------    -----------

Net cash provided by investing activities                                         274,410         56,664          6,843
                                                                              -----------    -----------    -----------

Cash flows from financing activities:
Cash received from issuance of common stock in prior year                       2,523,743             --             --
Advances from (repayments to) directors/former directors                          313,726       (274,588)       (33,163)
Net proceeds from issuance of common stock                                             --      7,880,926        951,803
                                                                              -----------    -----------    -----------

Net cash provided by financing activities                                       2,837,469      7,606,338        918,640
                                                                              -----------    -----------    -----------
Cash and cash equivalents:
Net increase                                                                      208,846        892,369        107,774
Balance at beginning of year                                                      443,607        652,453         78,799
                                                                              -----------    -----------    -----------

Balance at end of year                                                            652,453      1,544,822        186,573
                                                                              ===========    ===========    ===========

Supplemental disclosures of cash flow information:
  Cash paid for -
    Interest                                                                           --             --             --
    Income taxes                                                                       --         73,019          8,819
                                                                              ===========    ===========    ===========

Non-cash investing and financing activities:
Issuance of common stock in exchange for services                               1,253,688      1,987,200        240,000
Issuance of common stock in settlement of
 balance due to a director and creditors                                        1,082,359             --             --
Issuance of common stock for acquisitions                                       4,305,600     19,872,000      2,400,000
Common stock reserved and to be issued in exchange for services                 2,031,912        480,240         58,000
                                                                              ===========    ===========    ===========

</TABLE>

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


                                      F-6
<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,
      consulting  services,  the  development  of  software,  and  the  sale  of
      photographic  equipment  in the  People's  Republic of China (the "PRC" or
      "China"), including Hong Kong. Segment information is provided at Note 16.
      The Company's fiscal year-end is June 30.

      The Company's  subsidiaries  and affiliated  companies and their principal
      activities as of June 30, 2004 are summarized as follows:

<TABLE>
<CAPTION>

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

        <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%     Sales of computer software
          Ltd. ("IITSL")*                                                                       and investment holding

        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, management
                                                                                            services, and operation of
                                                                                                photo processing chain

        Shanghai Fortune Venture Ltd. ("SFVL")***                 PRC               25%    Private equity exchange and
                                                                                                    investment holding

</TABLE>


                                      F-7
<PAGE>


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

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

      ***   SFVL is an equity joint  venture  established  in the PRC to operate
            for a period of 10 years until 2012. 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.

      Going  Concern  - As  shown  in the  accompanying  consolidated  financial
      statements,  the Company  incurred a net loss of Rmb6,712,852 for the year
      ended June 30, 2004 and has an accumulated  deficit of Rmb74,023,484 as of
      June 30, 2004.  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.

      Subsequent  to June 30, 2004,  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.  The Company may also attempt to raise additional  capital.
      However, there can be no assurances that the Company will be successful in
      this regard.

      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.

      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 5).


                                      F-8
<PAGE>

      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

      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,  2004,   inventories   were  comprised  of
      photographic equipment and office automation software.

      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.

      Computer  Software Held for Sale - The Company accounts for software costs
      in  accordance  with SFAS No. 86,  "Accounting  for the Costs of  Computer
      Software to Be Sold,  Leased,  or Otherwise  Marketed".  Computer software
      held for sale represents the purchase price of software  licenses acquired
      during  the year  ended  June 30,  2003  and is being  amortized  over the
      estimated  economic life of 2 years. For the year ended June 30, 2004, the
      Company  recorded  amortization of Rmb621,000.  During the year ended June
      30, 2004, the Company also determined that the asset had been impaired, as
      a result of which  the  Company  recorded  an asset  impairment  charge of
      Rmb258,750 during such period to reduce the carrying value of the asset to
      zero at June 30, 2004.

      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.


                                      F-9
<PAGE>

      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.

      Revenue from the sale of  photographic  equipment is  recognized  from the
      sale of photographic  equipment 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  that are  short-term  in nature and require  acceptance  by the
      customer pursuant to the respective  contracts are accounted for under the
      completed contract method. If the contract does not contain provisions for
      contractual acceptance by the customer, the Company uses the percentage of
      completion  method  to  recognize   revenues.   Under  the  percentage  of
      completion  method,   revenues  from  web-site  development  contract  are
      recognized using  milestones as a measure of progress towards  completion.
      Revenues are  allocated to the elements of the contract  based on the fair
      values of the  elements.  Provisions  for  estimated  contract  losses are
      recognized  in the year the loss becomes  probable  and can be  reasonably
      estimated.  The asset,  costs and estimated earnings in excess of billings
      represent revenues recognized in excess of amounts billed.

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

      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, 2004 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,  2003 and  2004  consisted  of the net loss for the
      respective  years. As of June 30, 2004,  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.


                                      F-10
<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 years
      ended  June  30,  2003  and  2004.  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.

      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 years
      ended June 30, 2003 and 2004.

      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, 2004 of US$1.00 = Rmb8.28. No
      representation  is made that the Rmb amounts could have been, or could be,
      converted into US$ at that rate or at any other rate.

      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 years ended June
      30, 2003 and 2004. Accordingly, basic and diluted loss per common share is
      the same for the years ended June 30, 2003 and 2004.

      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.


                                      F-11
<PAGE>

      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..

      Recent Accounting Pronouncements - In April 2003, the Financial Accounting
      Standards  Board  ("FASB")  issued   Statement  on  Financial   Accounting
      Standards  ("SFAS") No. 149,  "Amendment  of Statement  133 on  Derivative
      Instruments  and Hedging  Activities."  SFAS No. 149 amends and  clarifies
      under what  circumstances  a contract with initial  investments  meets the
      characteristics of a derivative and when a derivative contains a financing
      component.  SFAS  No.  149 is  effective  for  contracts  entered  into or
      modified  after June 30, 2003. The adoption of SFAS No. 149 did not have a
      significant effect on the Company's  financial  statement  presentation or
      disclosures.

      In May  2003,  the FASB  issued  SFAS No.  150,  "Accounting  for  Certain
      Financial   Instruments  with  Characteristics  of  both  Liabilities  and
      Equity." SFAS No. 150 establishes  standards for how an issuer  classifies
      and  measures in its  statement of financial  position  certain  financial
      instruments with  characteristics of both liabilities and equity. SFAS No.
      150 requires that an issuer classify a financial instrument that is within
      its scope as a liability (or an asset in some circumstances)  because that
      financial instrument embodies an obligation of the issuer. SFAS No. 150 is
      effective for financial instruments entered into or modified after May 31,
      2003 and  otherwise  is effective  at the  beginning of the first  interim
      period beginning after June 15, 2003. SFAS No. 150 is to be implemented by
      reporting the  cumulative  effect of a change in accounting  principle for
      financial instruments created before the issuance date of SFAS No. 150 and
      still  existing  at the  beginning  of the  interim  period  of  adoption.
      Restatement is not permitted.  The adoption of SFAS No. 150 did not have a
      significant effect on the Company's  financial  statement  presentation or
      disclosures.

      In November  2002,  the FASB issued  Interpretation  No. 45,  "Guarantor's
      Accounting and Disclosure Requirements for Guarantees,  Including Indirect
      Guarantees of Indebtedness of Others" ("FIN 45"). FIN 45 elaborates on the
      existing  disclosure  requirements  for most  guarantees,  including  loan
      guarantees  such as standby  letters of credit.  It also clarifies that at
      the time a company  issues a  guarantee,  the company  must  recognize  an
      initial  liability for the fair market value of the obligations it assumes
      under that guarantee and must disclose that information in its interim and
      annual  financial  statements.  The initial  recognition  and  measurement
      provisions of FIN 45 apply on a prospective  basis to guarantees issued or
      modified after December 31, 2002. The Company  implemented  the disclosure
      provisions  and  the  measurement  and  recording  provisions  of  FIN  45
      effective on December 31, 2002.  The  implementation  of the provisions of
      FIN 45 did  not  have a  significant  effect  on the  Company's  financial
      statement presentation or disclosures.

      In January 2003, the FASB issued  Interpretation No. 46, "Consolidation of
      Variable Interest Entities" ("FIN 46"), which clarifies the application of
      Accounting Research Bulletin No. 51, "Consolidated  Financial Statements,"
      relating to consolidation of certain entities.  In December 2003, the FASB
      issued a revised  version of FIN 46 ("FIN 46R") that replaced the original
      FIN 46. FIN 46R requires  identification  of a company's  participation in
      variable interest entities ("VIEs"),  which are defined as entities with a
      level of invested equity that is not sufficient to fund future  activities
      to permit it to operate on a standalone basis. For entities  identified as
      a VIE,  FIN 46R sets  forth a model to  evaluate  potential  consolidation
      based on an assessment of which party to the VIE (if any) bears a majority
      of the exposure to its expected losses,  or stands to gain from a majority
      of its  expected  returns.  FIN 46R also sets  forth  certain  disclosures
      regarding  interests  in  VIEs  that  are  deemed  significant,   even  if
      consolidation is not required. The Company is not currently  participating
      in, or invested in any VIEs, as defined in FIN 46R. The  implementation of
      the provisions of FIN 46R in 2003 did not have a significant effect on the
      Company's financial statement presentation or disclosures.


                                      F-12
<PAGE>

      In May 2003, the Emerging Issues Task Force ("EITF")  finalized EITF 00-21
      "Revenue  Arrangements with Multiple  Deliverables".  EITF 00-21 addresses
      the accounting for multiple  element revenue  arrangements,  which involve
      more than one deliverable or unit of accounting in circumstances where the
      delivery of those units takes place in different accounting periods.  EITF
      00-21  requires   disclosures   of  the  accounting   policy  for  revenue
      recognition of multiple  element revenue  arrangements  and the nature and
      description   of  such   arrangements.   The   accounting   and  reporting
      requirements are effective for revenue arrangements entered into in fiscal
      periods  beginning after June 15, 2003. The adoption of EITF 00-21 did not
      have  a   significant   effect  on  the  Company's   financial   statement
      presentation or disclosures.

      In December  2003,  the FASB issued  SFAS No. 132  (Revised),  "Employer's
      Disclosure About Pensions and Other Postretirement Benefits". SFAS No. 132
      (Revised)  retains the original  disclosure  requirements  in SFAS 132 and
      requires  additional  disclosures  relating to assets,  obligations,  cash
      flows and net periodic  benefit cost.  SFAS No. 132 (Revised) is effective
      for fiscal  years ending  after  December  15,  2003,  except that certain
      disclosures are effective for fiscal years ending after June 15, 2004. The
      Company currently does not have any broad-based  pension or postretirement
      benefit plans which require disclosure.  Accordingly, the adoption of SFAS
      No.  132  (Revised)  did not have a  significant  effect on the  Company's
      financial statement presentation or disclosures.

      In  July  and  December   2003,   the  EITF  published  EITF  Issue  03-9,
      "Interaction  of Paragraphs 11 and 12 of FASB  Statement No. 142 Regarding
      Determination of the Useful Life and Amortization of an Intangible  Asset"
      ("EITF 03-9").  EITF 03-9 provides guidance in determining  whether or not
      an  intangible  asset  has an  indefinite  useful  life and,  if not,  the
      appropriate useful life for the intangible asset.

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  with the  political  and economic
      environment, foreign currency exchange and the legal system in the PRC.

      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.


                                      F-13
<PAGE>

      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.

      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, and the
      customer base is not concentrated.

      Any  devaluation of the Renminbi  ("Rmb") against the United States dollar
      would  consequently  have  adverse  effects  on  the  Company's  financial
      performance  and asset values when  measured in terms of the United States
      dollar.  Should the Rmb  significantly  devalue  against the United States
      dollar,  such  devaluation  could  have a material  adverse  effect on the
      Company's earnings and the foreign currency equivalent of such earnings.

      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 April 12, 2004, the Company completed the acquisition of a 25% interest
      in Shanghai  Fortune  Venture Ltd.  ("SFVL"),  a company  incorporated  in
      Shanghai, PRC.

      The total purchase price of  Rmb20,472,000  consisted of  Rmb19,872,000 in
      the form of 10,000,000 shares of the Company's common stock and Rmb600,000
      of cash  consideration.  The value of the common stock issued was based on
      the  market  value  of the  common  stock  at  the  completion  date.  The
      acquisition  agreement  contains  a  provision  that  for the  five  years
      subsequent  to the  completion  of  this  transaction,  the  profit  to be
      distributed to the Company shall not be less than US$420,000 per annum. If
      SFVL cannot  achieve  this target in the first year,  the Company  will be
      entitled to demand that SFVL to return a portion of  10,000,000  shares to
      the Company.

      The Company's investment in SFVL at June 30, 2004 was as follows:

                                                           Rmb             US$

        Cash consideration paid                        600,000          72,464
        10,000,000 shares of the Company's common
         stock valued at $0.24 per share            19,872,000       2,400,000
                                                  ------------    ------------

        Total consideration paid                    20,472,000       2,472,464

        25% of net income of SFVL for the period
         from April 13, 2004 to June 30, 2004        1,174,308         141,824
                                                  ------------    ------------

        Total                                       21,646,308       2,614,288
                                                  ============    ============


                                      F-14
<PAGE>

      Since December 6, 2002, SFVL 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.  SFVL 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.

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

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

      As a result of the merger of the STE,  although SFVL continues to maintain
      its  membership,  it is  currently  unclear  how the NSB and the YRDE will
      conduct  business  going  forward,  and how SFVL will  participate  in the
      equity  exchange  markets,  as a result of the  pending  issuance of final
      regulations  by the local PRC  government  which is  expected  to occur by
      December 31, 2004.

      Summarized financial information for SFVL is presented below.

                  Shanghai Fortune Venture Ltd. and Subsidiary
                          (A Development Stage Company)
                           Consolidated Balance Sheet

                                                  June 30, 2004
                                             -----------------------
                                                 Rmb          US$

       Assets

Current assets                               50,610,183    6,112,341
Equipment, net                                   63,028        7,612
Intangible assets, net                          170,000       20,531
Investments                                   1,350,000      163,044
                                             ----------   ----------

Total assets                                 52,193,211    6,303,528
                                             ==========   ==========

Liabilities and Stockholders' Equity

Current liabilities                          37,806,286    4,565,977
Minority interest                               626,753       75,695
Stockholders' equity                         13,760,172    1,661,856
                                             ----------   ----------

Total liabilities and stockholders' equity   52,193,211    6,303,528
                                             ==========   ==========


                                      F-15
<PAGE>

                  Shanghai Fortune Venture Ltd. and Subsidiary
                          (A Development Stage Company)
                      Consolidated Statement of Operations


                               Period From April 12, 2004
                                    to June 30, 2004
                               --------------------------
                                   Rmb           US$

Net revenues                    46,358,830      5,598,893

Cost of sales                   40,379,921      4,876,802
Operating costs and expenses       760,794         91,883
Other income                       (12,526)        (1,513)
Minority interest                  533,410         64,422
                               -----------    -----------

Net income                       4,697,231        567,299
                               ===========    ===========

      Shanghai  Fortune Venture Ltd.'s  operating  subsidiary is exempt from PRC
      enterprise  income taxes  through  December 31, 2004 due to a one year tax
      holiday.  Beginning  January 1, 2005,  Shanghai Fortune Venture Ltd.'s PRC
      enterprise income tax rate will be 33%.


5.    ACCOUNTS RECEIVABLE

      Accounts receivable are summarized as follows:

                                             June 30, 2004
                                         ---------------------
                                            Rmb         US$

Accounts receivable                      3,052,336     368,640

Less:  Allowance for doubtful accounts          --          --
                                         ---------   ---------

                                         3,052,336     368,640
                                         =========   =========


      There was no activity in the  Company's  allowance  for doubtful  accounts
      during the year ended June 30, 2004.

6.    DEPOSITS, PREPAYMENTS AND OTHER RECEIVABLES

      Deposits, prepayments and other receivables are summarized as follows:

                                                         June 30, 2004
                                                     ---------------------
                                                        Rmb          US$

Rental and utilities deposits                           67,538       8,157
Advance to employees                                    34,061       4,114
Prepaid expenses                                        78,385       9,467
Subscription money held in escrow account (a)        1,808,352     218,400
Court deposit for legal proceeding (b)                 535,000      64,613
Deposit on investment in an associated company (c)   1,000,000     120,773
Due from minority stockholders (d)                     245,000      29,589
Other loans (e)                                        730,200      88,188
Other                                                    5,263         636
                                                     ---------   ---------

                                                     4,503,799     543,937
                                                     =========   =========

      (a)  Subscription  money held in escrow  account  was fully  repaid to the
      Company in September 2004.


                                      F-16
<PAGE>

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

      (c) Deposit on investment in an  associated  company of Zenith  Technology
      Ltd.  ("Zenith")  from Mr. Xie Wei, the major  stockholder of Zenith.  The
      acquisition is currently pending, subject to government approval (see Note
      17).

      (d) 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  during the year  ending June 30,
      2005.

      (e) At June 30,  2004,  the Company had advanced  Rmb475,200  to Metrolink
      Holdings Limited,  which is controlled by a shareholder of the Company, as
      a deposit for a potential project (which was repaid in September 2004) and
      Rmb255,000 to Mr. Zhu Wei, the former holder of a 51% interest in Shanghai
      Newray  Photograpic  Equipment Co., Ltd. which is unsecured,  non-interest
      bearing, and due and payable during the year ending June 30, 2005.

7.    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 (1) providing management services for photographic  distribution
      outlets on behalf of the vendor, (2) sales of photographic equipment,  and
      (3) joint  operation  of new  photographic  distribution  outlets with the
      minority  interest  holder.  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  acquisition  agreement
      specifies  that  should  SNPE be unable to  attain an annual  turnover  of
      Rmb20,000,000 and an annual net profit of Rmb2,000,000 within 3 years from
      the  completion  date,  the  minority  interest  partner has the option of
      paying a penalty of  Rmb1,000,000  to the Company or returning  all of the
      4,000,000 shares of the Company's common stock.


                                      F-17
<PAGE>

      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       60,386
        Goodwill                                      4,568,552      551,758
        Minority interest                              (245,000)     (29,589)
                                                    -----------   ----------

        Total                                         4,823,552      582,555
                                                    ===========   ==========

      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.

      Goodwill is summarized as follows:


                                                          Rmb          US$


Goodwill acquired in SNPE transaction on May 29, 2003   4,568,552     551,758
                                                        ---------   ---------

Balance, June 30, 2003                                  4,568,552     551,758
                                                        ---------   ---------

Balance, June 30, 2004                                  4,568,552     551,758
                                                        =========   =========


8.    Plant and Equipment

      Plant and equipment is summarized as follows:

                                        June 30, 2004
                                  ------------------------
                                     Rmb            US$

Plant and equipment, at cost:
Computer equipment                   931,061       112,447
Furniture and office equipment       402,259        48,582
Motor vehicles                       532,470        64,308
                                  ----------    ----------

Total                              1,865,790       225,337
Less:  Accumulated depreciation   (1,500,390)     (181,206)
                                  ----------    ----------

                                     365,400        44,131
                                  ==========    ==========

      On June 18, 2003, the Company  entered into an agreement to dispose of its
      building, with a cost of Rmb2,790,204 (US$336,981) and related accumulated
      depreciation of Rmb488,289 (US$58,972), for Rmb940,000 (US$113,527),  as a
      result of which the Company recorded an impairment  charge of Rmb1,360,000
      (US$164,251)  for the year ended June 30, 2003. The Company  completed the
      disposal of the building in April 2004.


                                      F-18
<PAGE>

      Depreciation expense was Rmb506,076 (US$61,120) and Rmb378,337 (US$45,693)
      for the years ended June 30, 2003 and 2004, respectively.

9.    Accrued liabilities and Other Payables

      Accrued liabilities and other payables are summarized as follows:

                                             June 30, 2004
                                         ---------------------
                                            Rmb          US$
Accrued operating expenses
    Wages and bonus                        151,441      18,290
    Consultancy fees                       240,464      29,041
    Legal and professional fees            350,062      42,278
Other                                      220,626      26,646
Due to a former director (see Note 15)     751,483      90,759
                                         ---------   ---------

                                         1,714,076     207,014
                                         =========   =========

10.   WRITE-BACK OF WELFARE PROVISIONS

      During the year ended June 30, 2003, the Company  recorded a write-back of
      welfare  provisions  representing  the amount of the provision for welfare
      made in previous years.  The Company made a provision for employee welfare
      in years prior to 2003 based on staff salaries.  However,  the Company did
      not pay out such amounts due to the Company's poor  operating  performance
      in recent  years.  As the Company has  reduced its  manpower  and does not
      expect to provide any other  welfare  payments  to existing  and new staff
      (except  for  mandatory  welfare as  required  by local law or  employment
      contracts),  the previously  recorded estimate was reduced during the year
      ended June 30, 2003.

11.   INCOME TAXES

      The Company and its  subsidiaries are subject to income taxes on an entity
      basis on income arising in, or derived, from the tax jurisdiction in which
      they operate. The Company is subject to the United States federal tax at a
      rate  of  35%.  IL  was  incorporated  under  the  International  Business
      Companies Act of the British Virgin Islands and, accordingly,  is exempted
      from payment of the British Virgin Islands income taxes.  The subsidiaries
      (IITSL, CECITL, SBUJE and IFACL) established in the PRC are subject to PRC
      enterprise income taxes at a rate of 15%. SNPE is subject to 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,  2003 and 2004,  all
      subsidiary companies except SNPE were in a tax loss position.

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

<TABLE>
<CAPTION>
                                                                                        Years Ended June 30,
                                                                              -----------------------------------------
                                                                                         2004                   2003
                                                                                            %                      %

<S>                                                                                        <C>                    <C>
         United States federal income tax rate                                             35                     35
         Effect of different tax rates in foreign jurisdictions                            (3)                    (7)
         Valuation allowance for deferred tax assets                                      (33)                   (28)
                                                                              ------------------     ------------------

                                                                                           (1)                     -
                                                                              ==================     ==================

</TABLE>


                                      F-19
<PAGE>

<TABLE>
<CAPTION>


         Deferred taxation consisted of:

                                                                                           June 30, 2004
                                                                              -----------------------------------------
                                                                                        Rmb                  US$
<S>                                                                                 <C>                    <C>
         Deferred tax assets, gross:
         Net operating loss carry forwards                                          5,683,827                686,453
         Valuation allowance                                                       (5,683,827)              (686,453)
                                                                              ------------------     ------------------

         Deferred tax assets, net                                                           -                      -
                                                                              ==================     ==================
</TABLE>

      The change in valuation  allowance  from June 30, 2003 to June 30, 2004 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
      carryforwards  totaling  approximately  Rmb37,892,178 as of June 30, 2004,
      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  carryforwards  and  other
      deferred  tax assets as  management  believes  that their  realization  is
      uncertain.


12. STOCKHOLDERS' EQUITY

      Year Ended June 30, 2003:

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

      In May 2003, the Company issued common stock to various parties. The value
      of the common  stock issued was based on the market price of shares at the
      dates of the  transactions or on the fair value of the services  received,
      whichever was more reliably  measurable.  The value of common stock issued
      as employee  compensation  was based on the market  price of the shares at
      the date of issuance. The issuances were as follows:

      The Company issued 1,027,318 shares of common stock for services  rendered
      at a range of US$0.02 to US$0.0532 per share, of which 2,213,401 shares of
      common  stock were issued to the chief  executive  officer of the Company,
      Mr. Andy Lin, as partial  settlement  of amounts due to Mr. Lin at US$0.15
      and US$0.02 per share. The Company issued 1,709,400 shares of common stock
      each to the chief  executive  officer  of the  Company,  Mr.  Lin,  and an
      employee  of  the  Company,  at  US$0.03  per  share,  as  part  of  their
      remuneration  for the year ended June 30, 2003.  In addition,  the Company
      issued 200,000 shares of common stock each to two directors of the Company
      at US$0.04 and US$0.03 per share. The Company also issued 52,000 shares to
      an ex-employee of the Company as dismissal notice compensation at US$0.074
      per share.  The Company issued 2,014,066 shares of common stock to various
      creditors for settlement of balances due at US$0.001 to US$0.02 per share.
      The  Company  issued  4,000,000  shares of common  stock to  acquire a 51%
      interest in Shanghai  Newray  Photographic  Equipment Co., Ltd. at US$0.13
      per share.

      At June 30,  2003,  the Company had  recorded  3,820,000  shares of common
      stock as  reserved  and to be  issued  to  various  parties  for  services
      rendered  through June 30, 2003 at prices  ranging from US$0.03 to US$0.24
      per share, which were issued subsequent to June 30, 2003.


                                      F-20
<PAGE>

      Year Ended June 30, 2004:

      During the year ended June 30, 2004,  the Company  issued shares of common
      stock to  various  parties.  The  value of the  common  stock  issued  for
      accounting  purposes  was based on the  market  price of the shares at the
      date of the transaction or on the fair value of the services received. The
      issuances of common stock are summarized as follows:

      On September 11, 2003, the Company issued 3,000,000 shares of common stock
      with a value of US$0.05 per share to certain  designated  shareholders  of
      Firstmax  Investment  Limited  for  consulting  services  rendered  to the
      Company in the prior fiscal year having a value of US$150,000. At June 30,
      2003,  the value of these shares had been  recorded and the share  amounts
      were included in common stock reserved and to be issued.

      In  connection  with a private  offering of the Company's  securities,  on
      October 30, 2003, the Company issued 6,053,700 shares of common stock with
      a value of US$0.20 per share to investors in the PRC.

      On October 30, 2003,  the Company issued 700,000 shares of common stock to
      Stanford Capital  International Ltd. for investor relations services.  The
      Company's  contract with Stanford Capital  International Ltd. provided for
      the issuance of 300,000 shares upon its effective date (April 1, 2003) and
      200,000  shares per quarter on the last day of each quarter.  Accordingly,
      the 700,000  shares  included  the payment for  services  rendered for the
      three months ended June 30, 2003 and September 30, 2003. At June 30, 2003,
      the Company had  recorded  500,000 of such shares,  consisting  of 300,000
      shares  valued at the closing  price on April 1, 2003 of US$0.03 per share
      and 200,000 shares valued at the closing price on June 30, 2003 of US$0.24
      per share,  which share amounts were included in common stock reserved and
      to be issued at such date. In addition,  200,000  shares wee valued at the
      closing  price on September  30, 2003 of US$0.22 per share.  The aggregate
      value of such shares was US$101,000.

      On October 30, 2003, the Company issued 72,640 shares of common stock with
      a value of US$0.20 per share to Shanghai Newray Business  Development Co,.
      Ltd.,  the  owner of a 24.5%  interest  in  Shanghai  Newray  Photographic
      Equipment  Co.,  Ltd.  ("SNPE"),  in exchange  for  services to  introduce
      investors to subscribe  for 908,000  shares of common stock of the Company
      in the  private  offering  issued  on  October  2003,  having  a value  of
      US$14,528.

      On October 30, 2003,  the Company  issued  320,000  shares of common stock
      with a value of US$0.12 per share to  Yorkshire  Capital  Ltd. in exchange
      for services  rendered in connection  with the  acquisition  of 51% of the
      shares of SNPE on May 29, 2003, having a value of US$38,400.

      On April 14, 2004, the Company issued  3,500,000 shares of common stock to
      Li Lao Hu,  3,000,000 shares of common stock to Li Xiao Qin, and 3,500,000
      shares of common  stock to Huang Xiu Juan  valued at US$0.24 per share for
      the purchase of a 25% interest in Shanghai Fortune Venture Ltd., having an
      aggregate value of US$2,400,000.

      On June 24, 2004,  the Company  issued  400,000  shares of common stock to
      Stanford Capital  International  Limited for investor  relations  services
      rendered to the Company for the three months  ended  December 31, 2003 and
      March  31,  2004,  with  200,000  shares  valued at the  closing  price on
      December  31, 2003 of US$0.32 per share and 200,000  shares  valued at the
      closing price on March 31, 2004 of US$0.30 per share,  having an aggregate
      value of US$124,000.

      On June 24, 2004, the Company issued 225,000 shares of common stock with a
      value of US$0.32 per share to Hank Vanderkam for legal  services  rendered
      to the Company, having a value of US$72,000. At June 30, 2004, the Company
      had recorded  200,000  shares of common stock as reserved and to be issued
      to Stanford Capital  International Limited for investor relations services
      for the three  months  ended June 30, 2004 valued at the closing  price on
      June 30, 2004 of US$0.29.  At June 30, 2004, the value of these shares had
      been recorded and the share amounts were included in common stock reserved
      and to be issued. The shares were issued subsequent to June 30, 2004.

      Stock Option Plan - On December 1, 2003,  the Board of  Directors  adopted
      the Intermost  Corporation  2003 Equity  Incentive Plan (the "Plan").  The
      Plan was approved at a stockholders' meeting on January 28, 2004. The Plan
      authorizes   awards  of  options   (both   incentive   stock  options  and
      non-qualified  stock  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, 2004, no awards have been granted under the Plan.

      The Company's Board of Directors,  or a committee  comprised of members of
      the  Company's  Board  of  Directors   (hereinafter  referred  to  as  the
      "Administrator"),  will  administer  the Plan. 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.  The Company has reserved  20,000,000 shares of
      common stock for awards to be made under the Plan.


                                      F-21
<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 granting or the vesting of stock options.

13.   COMMITMENTS

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

                                      Rmb                US$
Years Ending June 30,
---------------------
                     2005            70,730             8,543
                     2006            72,576             8,765
                     2007            72,576             8,765
                     2008            12,096             1,461
                                    -------           -------
      Total                         227,978            27,534
                                    =======           =======

      Rent  expense for the years  ended June 30,  2003 and 2004 was  Rmb144,963
      (US$17,508) and Rmb219,057 (US$26,456), respectively.

      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.


                                      F-22
<PAGE>

14.   Retirement Plan and Post-Employment Benefits

      The Company has no retirement  plans or  post-employment  benefits for its
      employees.

15.   Related Party Transactions

      In addition  to the  transactions  and  information  disclosed  elsewhere,
      during  the years  ended  June 30,  2003 and  2004,  the  Company  had the
      following transactions with related parties.

      Related parties are considered to be related if one party has the ability,
      directly  or  indirectly,   to  control  the  other  party,   or  exercise
      significant  influence  over the  other  party  in  making  financial  and
      operating decisions. Parties are also considered to be related if they are
      subject to common control or common significant influence.

      (1)   Related  party  transactions  during the fiscal years ended June 30,
            2003 and 2004 are as follows:

<TABLE>
<CAPTION>

                 Name of related party                         Existing relationship with the Company
                 --------------------------------------------- --------------------------------------------------------

                <S>                                                               <C>        <C>            <C>
                 (a)  Corporate Conventions International Limited ("CCIL")      A director of the Company, Mr. Shim Yang, is a
                                                                                shareholder of, and controls the management of CCIL


                 (b) Shanghai Newray Business Development Co. Ltd.              24.5% interest in SNPE

                                                                                      Years Ended June 30,
                                                                            ------------------------------------------
                                                                                    2003             2004
                                                                            ------------- ----------------------------
                                                                                   Rmb            Rmb           US$

                 (a) Write-off of amount due from a related company
                      CCIL                                                        72,345           -               -
                                                                                ========    ========        ========
                 (b)  72,640 shares of common stock for services rendered                                        528
                     to introduce accredited investors in the private
                     placement offering issued in October 2003 at US$0.20
                     per share - Shanghai Newray Business Development Co.
                     Ltd                                                               -     120,292          14,528
                                                                                ========    ========        ========

         (2) Balances with related parties are as follows:

                                                                                              June 30, 2004
                                                                                    ----------------------------------
                                                                                              Rmb                 US$
                 Due to a director:
                     Mr. Andy Lin                                                          148,283              17,909
                                                                                    ==============       =============

                 Due to a former director:
                     Mr. Jun Liang                                                         751,483              90,759
                                                                                    ==============       =============
</TABLE>

      Mr. Jun Liang  ceased to be a director  of the  Company  upon the  Company
      being  redomiciled  from the  State of Utah to the  State  of  Wyoming  in
      February 2003.

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

                                      F-23
<PAGE>

16.   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,  and  Photographic  Business.   E-Commerce  Solutions  comprises
      revenue from web-site development contracts and maintenance contracts. The
      Photographic Business consists of sales of photographic equipment.

      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
      years ended June 30, 2003 and 2004 is as follows:

(a)   Net revenues:

                                      Years Ended June 30,
                               ------------------------------------
                                  2003               2004
                               ----------   -----------------------
                                   Rmb          Rmb          US$

E-commerce solutions            1,291,637    2,838,959      342,869
System sales and integration      304,967           --           --
Consultancy fee                        --       16,050        1,938
Web advertisement                   1,800           --           --
Sales of computer software        346,962      903,654      109,137
Photographic business           1,749,709   11,372,064    1,373,438
                               ----------   ----------   ----------

                                3,695,075   15,130,727    1,827,382
                               ==========   ==========   ==========

PRC                             3,695,075   15,114,677    1,825,444
Hong Kong                              --       16,050        1,938
                               ----------   ----------   ----------

                                3,695,075   15,130,727    1,827,382
                               ==========   ==========   ==========


(b)   Net loss:

                                            Years Ended June 30,
                                   --------------------------------------
                                      2003                 2004
                                   ----------    ------------------------
                                      Rmb           Rmb            US$

E-commerce solutions               (2,928,202)   (2,441,407)     (294,856)
System sales and integration         (168,179)        6,015           726
Web advertisement                      (7,974)         (505)          (61)
Sales of computer software            168,487       617,823        74,616
Photographic business                  81,035       549,106        66,318
                                   ----------    ----------    ----------

                                   (2,854,833)   (1,268,968)     (153,257)

Reconciliation:
Net loss for reportable segments   (2,854,833)   (1,268,968)     (153,257)
Unallocated corporate expenses     (6,077,776)   (5,443,884)     (657,474)
                                   ----------    ----------    ----------

                                   (8,932,609)   (6,712,852)     (810,731)
                                   ==========    ==========    ==========


                                      F-24
<PAGE>


(c)   Assets:

                                            June 30, 2004
                                       -----------------------
                                           Rmb          US$

E-commerce solutions                      664,809       80,291
Sales of computer software                632,147       76,346
Photographic business                   8,332,099    1,006,292
                                       ----------   ----------

                                        9,629,055    1,162,929
                                       ==========   ==========

Reconciliation:
Total assets for reportable segments    9,629,055    1,162,929
Other corporate assets                 26,058,162    3,147,122
                                       ----------   ----------

                                       35,687,217    4,310,051
                                       ==========   ==========

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


(d)   Other items:

                                         Years Ended June 30,
                                   ---------------------------------
                                      2003             2004
                                   ---------   ---------------------
                                      Rmb         Rmb         US$
Depreciation:
    E-commerce solutions             477,398     358,605      43,310
    System sales and integration       3,027          --          --
    Phone payment system                  --          --          --
    Web advertisement                     --          --          --
    Photographic business                 --       3,089         373
    Sales of computer software         4,542          --          --
    Unallocated corporate assets      21,109      16,643       2,010
                                   ---------   ---------   ---------

                                     506,076     378,337      45,693
                                   =========   =========   =========

Expenditures for fixed assets:
    E-commerce solutions              25,690     180,835      21,840
    Photographic business                 --      10,111       1,221
    Unallocated corporate assets          --      22,390       2,704
                                   ---------   ---------   ---------

                                      25,690     213,336      25,765
                                   =========   =========   =========

Impairment of fixed assets:
    E-commerce solutions           1,360,000          --          --
                                   =========   =========   =========


                                      F-25
<PAGE>

(e)   Major customers and concentrations:

      For the year ended June 30, 2004,  the two largest  customers  were in the
      photographic  business  segment  and  accounted  for 40%  and 7% of  total
      revenues,  respectively. For the year ended June 30, 2003, the two largest
      customers were in the photographic  business segment and accounted for 23%
      and 10% of total revenues, respectively

      As of June 30, 2004, one customer  accounted for 88% of the total accounts
      receivable balance.

17.   PENDING TRANSACTIONS

      On July 3, 2003, the Company's wholly-owned  subsidiary,  IMOT Information
      Technology (Shenzhen) Ltd. ("IITSL"),  entered into an agreement,  subject
      to the final approval from the government of Shenzhen and Hainan,  PRC, to
      acquire:  (i) 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")  and (ii) 80% of the issued and  outstanding
      shares  of  Hainan  Concord  Financial  Products   Development  Co.,  Ltd.
      ("Development")  from Hainan  Concord  Investment  Holding  Co.,  Ltd. and
      Guangzhou Ditai  Communication Co., Ltd.  (collectively,  the "Development
      Stockholders").  Development  is the owner of 51% of the  shares of Hainan
      Yangpu Multifunctional Smart Card Sales and Management Co. Ltd.

      This  agreement  was  awaiting  government  approval  and was  pending  at
      September 30, 2004.

      Pursuant to the Stock Exchange  Agreement relating to the Exchange Center,
      IITSL  will issue to the  Exchange  Stockholders  5,000,000  shares of the
      Company's   restricted   common  stock  having  a  value  of  Rmb8,980,000
      (approximately  US$1,085,000).  The  consideration for the transaction was
      determined by arm's-length  negotiations between the parties, none of whom
      is related.

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

      Pursuant to the Stock Exchange  Agreement  relating to Development,  IITSL
      will  issue  to  the  Development  Stockholders  5,000,000  shares  of the
      Company's   restricted   common  stock  having  a  value  of  Rmb8,980,000
      (approximately  US$1,085,000).  The  consideration for the transaction was
      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.

      On January  2, 2004 IMOT  Technology  entered  into an  agreement  for the
      acquisition  of  25%  of the  issued  and  outstanding  shares  of  Zenith
      Technology  Ltd.  ("Zenith")  from Mr. Wei Xie, the major  shareholder  of
      Zenith.  The agreement is subject to final approval from the government of
      Shenzhen,  China,  the completion of a due diligence  investigation by the
      parties and approval by the board of directors of both  corporations.  The
      consideration for the acquisition consists of Rmb1,000,000  (approximately
      $120,000) in cash and 300,000 shares of the Company's common stock.  Prior
      to this acquisition, Mr. Xie owned a 70% interest in Zenith.

      This  agreement  was  awaiting  government  approval  and was  pending  at
      September 30, 2004.


                                      F-26
<PAGE>

      Zenith,  which was established in 2001 and is located in Shenzhen,  China,
      is principally  engaged in providing  value-added  banking services to its
      subscribers.  Its subscribers can pay bills (e.g., for water, electricity,
      telephone,  mobile phone,  fixed penalty,  etc.), make lottery  purchases,
      receive payment confirmations and engage in other financial, brokerage and
      banking related services via their mobile phones.

18.   SUBSEQUENT EVENTS

      On  August  10,  2004,  the  Company's   wholly-owned   subsidiary,   IMOT
      Information  Technology (Shenzhen) Ltd. ("IMOT Technology"),  received all
      necessary government approvals 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 an
      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.

      On September 2, 2004, the Company's wholly-owned subsidiary,  IL, formed a
      new  wholly-owned  foreign  investment  company,   ChinaE.com   Technology
      (Shenzhen) Ltd. ("CECTSL"), with registered capital of Rmb1,000,000, to be
      operated for a period of 10 years until 2014.  Its  business  scope is the
      provision of business portal and e-commerce solutions.


                                      F-27