UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549









FORM
10-Q





(Mark
One)





x
            QUARTERLY
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
              EXCHANGE
      ACT OF 1934





For
the quarterly period ended:  September 30, 2009





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





For
the transition period from _________________ to ________________





Commission
file number:  000-30430







INTERMOST
CORPORATION


(Exact
name of registrant as specified in its charter)





Wyoming
            87-0418721(State
      or other jurisdiction of
            (IRS
      Employer Identification Number)Incorporation
      or Organization)Suite
      5204, Central Plaza, 18 Harbour Road,
              Wanchai,
      Hong Kong
            000000(Address
      of principal executive offices)
            (Zip
      Code)





852-2827-6898


(Registrant’s
Telephone Number, including area code)





Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.  Yes ý  No o





Check
whether the issuer is a large accelerated filer, an accelerated filer, a
non-accelerated filer, or a smaller reporting company.  See the
definitions of “large accelerated filer” and “smaller reporting company” in Rule
12b-2 of the Exchange Act.


Large
      accelerated filer
              o
              Accelerated
      Filer
              oNon-accelerated
      filer
              o
              Smaller
      reporting company
              ý





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





Indicate
the number of shares outstanding of each of the issuer’s classes of common
stock, as of the latest practicable date:  212,031,873 shares of
common stock as of November 6, 2009.








TABLE
OF CONTENTS





PART
      I.  Financial InformationItem
      1.
                                                                Financial
      StatementsCondensed
      Consolidated Balance sheets as of June 30, 2009 and September 30, 2009
      (Unaudited)
                                                                2Condensed
      Consolidated Statements of Operations (Unaudited) for the three months
      ended September 30, 2009 and September 30, 2008
                                                                4Condensed
      Consolidated Statements of Cash Flows (Unaudited) for the three months
      ended September 30, 2009 and September 30, 2008
                                                                5Notes
      to Condensed Consolidated Financial Statements (Unaudited) for the
      three months ended September 30, 2009 and September 30,
    2008
                                                                6Item
      2.
                                                                Management’s
      Discussion and Analysis or Plan of Operation
                                                                11Item
      3.
                                                                Controls
      and Procedures
                                                                21PART
      II.  Other InformationItem
      1.
                                                                Legal
      Proceedings
                                                                22Item
      2.
                                                                Unregistered
      Sales of Equity Securities and Use of Proceeds
                                                                22Item
      3.
                                                                Defaults
      Upon Senior Securities
                                                                22Item
      4.
                                                                Submission
      of Matters to a Vote of Security Holders
                                                                22Item
      5.
                                                                Other
      Information
                                                                22Item
      6.
                                                                Exhibits
                                                                22Signatures
                                                                24


- 1
-


ITEM
1.  FINANCIAL STATEMENTS.





INTERMOST
CORPORATION AND SUBSIDIARIES


CONDENSED
CONSOLIDATED BALANCE SHEETS





Notes
                        
                        
                        Sept 30, 2009
                        
                        
                        June 30, 2009USD
                        
                        
                        USDASSETSCurrent assetsCash
      and cash equivalents
                        
                        
                        2(e)
                        
                        
                        $
                        361,987
                        
                        
                        $
                        575,523Accounts
      receivable, net
                        
                        
                        2(g)
                        
                        
                        
                        1,464
                        
                        
                        
                        1,464Deposits,
      prepayment and other receivables
                        
                        
                        3
                        
                        
                        
                        755,350
                        
                        
                        
                        741,680Other
      loan receivables
                        
                        
                        5
                        
                        
                        
                        474,845
                        
                        
                        
                        474,825Total
      current assets
                        
                        
                        
                        
                        
                        $
                        1,593,646
                        
                        
                        $
                        1,793,492Restricted
      cash
                        
                        
                        2(f)
                        
                        
                        
                        -
                        
                        
                        
                        -Unlisted
      investment
                        
                        
                        2(h)
                        
                        
                        
                        943,196
                        
                        
                        
                        943,072Plant
      and equipment, net
                        
                        
                        6
                        
                        
                        
                        108,055
                        
                        
                        
                        119,690Goodwill
                        
                        
                        4
                        
                        
                        
                        -
                        
                        
                        
                        -Intangible
      assets, net
                        
                        
                        
                        
                        
                        
                        10,718
                        
                        
                        
                        12,416Investment
      in associated companies
                        
                        
                        2(l)
                        
                        
                        
                        1
                        
                        
                        
                        1TOTAL
      ASSETS
                        
                        
                        
                        
                        
                        $
                        2,655,616
                        
                        
                        $
                        2,868,671LIABILITIES
      ANDSTOCKHOLDERS’
      EQUITYCurrent
      liabilitiesAccounts
      payable
                        
                        
                        
                        
                        
                        $
                        -
                        
                        
                        $
                        -Accrued
      liabilities and other payable
                        
                        
                        7
                        
                        
                        
                        552,142
                        
                        
                        
                        518,927Customers
      deposits
                        
                        
                        
                        
                        
                        
                        15,220
                        
                        
                        
                        5,468Advance
      from a shareholder
                        
                        
                        
                        
                        
                        
                        -
                        
                        
                        
                        -Advance
      from a related company
                        
                        
                        9
                        
                        
                        
                        -
                        
                        
                        
                        -Business
      and other taxes payable
                        
                        
                        
                        
                        
                        
                        1,204
                        
                        
                        
                        1,034Total
      current liabilities
                        
                        
                        
                        
                        
                        $
                        568,566
                        
                        
                        $
                        525,429TOTAL
      LIABILITIES
                        
                        
                        
                        
                        
                        $
                        568,566
                        
                        
                        $
                        525,429





See
accompanying notes to consolidated financial statements





- 2
-




ITEM
1.  FINANCIAL STATEMENTS.





INTERMOST
CORPORATION AND SUBSIDIARIES


CONDENSED
CONSOLIDATED BALANCE SHEETS





Notes
                                              
                                              
                                              Sept 30, 2009
                                              
                                              
                                              June 30, 2009USD
                                              
                                              
                                              USDMinority interests
                                              
                                              
                                              
                                              
                                              $
                                              372,610
                                              
                                              
                                              $
                                              446,361STOCKHOLDERS’
      EQUITYCommon
      stock at $0.001 par value, 500,000,000 shares authorized, 213,781,873
      shares issued and outstanding at June 30, 2009;
                                              
                                              10
                                              
                                              
                                              
                                              213,782
                                              
                                              
                                              
                                              213,282Additional
      paid-in capital
                                              
                                              10
                                              
                                              
                                              
                                              24,997,931
                                              
                                              
                                              
                                              24,997,931Accumulated
      deficit
                                              
                                              
                                              
                                              
                                              
                                              (23,464,933
                                              )
                                              
                                              
                                              (23,282,270
                                              )Accumulated
      other comprehensive income
                                              
                                              2(s),10
                                              
                                              
                                              
                                              (32,340
                                              )
                                              
                                              
                                              (32,062
                                              )$
                                              1,714,440
                                              
                                              
                                              $
                                              1,896,881TOTAL
      LIABILITIES ANDSTOCKHOLDERS’
      EQUITY
                                              
                                              
                                              
                                              
                                              $
                                              2,655,616
                                              
                                              
                                              $
                                              2,868,671





See
accompanying notes to consolidated financial statements


- 3
-





INTERMOST
CORPORATION AND SUBSIDIARIES


CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)





Three months ended Sept 30,2009
                                    
                                    
                                    2008USD
                                    
                                    
                                    USDNet
      revenue
                                    
                                    
                                    4,192
                                    
                                    
                                    
                                    520Cost
      of revenues
                                    
                                    
                                    -229
                                    
                                    
                                    
                                    -92Gross
      profit
                                    
                                    
                                    3,963
                                    
                                    
                                    
                                    428Costs
      and expenses:Selling,
      general and administrative expenses
                                    
                                    
                                    -225,591
                                    
                                    
                                    
                                    -246,605Impairment
      of goodwill
                                    
                                    
                                    
                                    
                                    
                                    
                                    0Exchange
      differences
                                    
                                    
                                    -399
                                    
                                    
                                    
                                    1,058Amortization
      of intangible assets
                                    
                                    
                                    -711
                                    
                                    
                                    
                                    -652Total
      costs and expenses
                                    
                                    
                                    -226,701
                                    
                                    
                                    
                                    -246,199Loss
      from operations
                                    
                                    
                                    -222,738
                                    
                                    
                                    
                                    -245,771Interest
      income
                                    
                                    
                                    82
                                    
                                    
                                    
                                    2,623Loan
      interest income
                                    
                                    
                                    0
                                    
                                    
                                    
                                    14,710Investment
      income (loss)
                                    
                                    
                                    0
                                    
                                    
                                    
                                    0Other
      income (loss), net
                                    
                                    
                                    -33,798
                                    
                                    
                                    
                                    -2,057Loss
      before income taxes, minority interests and equity in earnings of
      associated companies
                                    
                                    
                                    -256,454
                                    
                                    
                                    
                                    -230,495Income
      taxes
                                    
                                    
                                    0
                                    
                                    
                                    
                                    0Loss
      before minority interests and equity in earnings of associated
      companies
                                    
                                    
                                    -256,454
                                    
                                    
                                    
                                    -230,495Minority
      interests
                                    
                                    
                                    73,791
                                    
                                    
                                    
                                    1,028Net
      loss
                                    
                                    
                                    -182,663
                                    
                                    
                                    
                                    -229,467Net
      loss per common share-basic and diluted
                                    
                                    
                                    (0.0009
                                    )
                                    
                                    
                                    (0.001
                                    )Weighted
      average number of common shares outstanding-basic and
    diluted
                                    
                                    
                                    213,781,873
                                    
                                    
                                    
                                    213,281,873


- 4
-


INTERMOST
CORPORATION AND SUBSIDIARIES


CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)





Three months ended Sept 30,2009
                        
                        
                        2008USD
                        
                        
                        USDCash
      flows from operating activitesNet
      loss
                        
                        
                        -182,663
                        
                        
                        
                        -229,467Amortization
      of intangible assets
                        
                        
                        1,699
                        
                        
                        
                        652Depreciation
                        
                        
                        14,870
                        
                        
                        
                        20,442Minority
      interests
                        
                        
                        -73,791
                        
                        
                        
                        -1,028Adjustments
      to reconcile net loss to net cash provided by operating
      activities:-Accounts
      receivables
                        
                        
                        0
                        
                        
                        
                        120,928Deposits,
      prepayments and other receivables
                        
                        
                        -13,569
                        
                        
                        
                        194,699Accounts
      payable
                        
                        
                        0
                        
                        
                        
                        -3,843Accrued
      liabilities
                        
                        
                        33,180
                        
                        
                        
                        -20,830Cutomer
      deposits
                        
                        
                        10,057Deferred
      revenue
                        
                        
                        -309
                        
                        
                        
                        15Business
      taxes and government surcharges payable
                        
                        
                        170
                        
                        
                        
                        53Net
      cash generated from/(used in) operating activities
                        
                        
                        -210,356
                        
                        
                        
                        81,621Cash
      flows from investing activitiesAcquisition
      of plant and equipment
                        
                        
                        -3,223
                        
                        
                        
                        -122,017Increase
      n short term investment
                        
                        
                        0
                        
                        
                        
                        0Increase
      (decrease) in short term loan
                        
                        
                        0
                        
                        
                        
                        -1,127Net
      cash used in investing activities
                        
                        
                        -3,223
                        
                        
                        
                        -123,144Cash
      flows from financing activitiesAdvances
      from related parties
                        
                        
                        0
                        
                        
                        
                        -97,339Net
      proceeds from issuance of common stock
                        
                        
                        0
                        
                        
                        
                        0Net
      cash used in financing activities
                        
                        
                        0
                        
                        
                        
                        -97,339Cash
      and cash equivalentsNet
      increase (decrease)
                        
                        
                        -213,579
                        
                        
                        
                        -138,862Accumulated
      other comprehensive loss
                        
                        
                        43
                        
                        
                        
                        98,342Balance
      at beginning of period
                        
                        
                        575,523
                        
                        
                        
                        640,200Balance
      at end of period
                        
                        
                        361,987
                        
                        
                        
                        599,680Supplemental
      cash flow information:Interest
      received
                        
                        
                        0
                        
                        
                        
                        0





The
accompanying notes are an integral part of these condensed consolidated
financial statements


- 5
-





NOTES TO
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)


THREE
MONTHS ENDED SEPT 30, 2009 AND 2008





1.  ORGANIZATION
AND BASIS OF PRESENTATION





The
condensed consolidated financial statements include the accounts of the
Intermost Corporation (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.





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





The
condensed consolidated financial statements are unaudited, but in the opinion of
management of the Company, contain all adjustments, which include normal
recurring adjustments, necessary to present fairly the financial position at
September 30, 2009, the results of operations for the three months ended
September 30, 2009 and 2008, and the cash flows for the three months ended
September 30, 2009 and 2008. The balance sheet as of June 30, 2009 is derived
from the Company’s audited financial statements included in the Company’s Annual
Report on Form 10-K for the fiscal year ended June 30, 2009.





Certain
information and footnote disclosures normally included in financial statements
that have been prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to the rules and regulations
of the Securities and Exchange Commission, although management of the Company
believes that the disclosures contained in these financial statements are
adequate to make the information presented therein not misleading. For further
information, refer to the financial statements and the notes thereto included in
the Company’s Annual Report on Form 10-K for the fiscal year ended June 30,
2009, as filed with the Securities and Exchange Commission.





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





The
results of operations for the three months ended September 30, 2009 are not
necessarily indicative of the results of operations to be expected for the full
fiscal year ending June 30, 2010.





2.  NET
INCOME (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 three months ended September 30, 2009
and 2008. Accordingly, basic and diluted earnings per share are the same for all
periods presented.





3.  FOREIGN
CURRENCY TRANSLATION





The
Company maintains its books and records in Renminbi (“Rmb”), the currency of the
People’s Republic of China (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 Rmb6.8293 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.


- 6
-





Transactions
in currencies other than functional currencies during the period 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. On July 21, 2005, Rmb was revalued from Rmb8.28 to
Rmb8.11 for US$1 following the removal of the peg to the US dollar and pressure
for the United States. The Rmb continuously appreciated to Rmb6.8302 for US$1 at
June 30, 2009. And the Rmb further appreciated to Rmb6.8293 for US$1 at this
quarter ended September 30, 2009.





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. 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.





For the
purposes of financial statements presentation, the United States dollars
equivalents of the all numbers are translated at the rate of USD$1 to
Rmb6.8293.





4.  STOCK-BASED
COMPENSATION





The
Company may periodically issue shares of common stock for services rendered or
for financing costs. The Company may also periodically issue shares of common
stock in conjunction with the acquisition of an, all or a portion of the equity
interest in a business. The shares of common stock vest immediately on issuance
and are not subject to any redemption rights.





The value
of the shares of common stock issued for accounting purposes is based on the
market price of the shares at the date of the transaction or on the fair value
of the services rendered or net assets acquired, whichever is more determinable,
based on the specific facts and circumstances of each transaction. The Company
did not issue any stock during the three-month period ended September 30, 2009
for any services rendered or assets acquired.





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





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





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





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





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 period ended
September 30, 2009. Accordingly, no pro forma financial disclosure is provided
herein.


- 7
-





5.  RECENT
ACCOUNTING PRONOUNCEMENTS





In
June 2009, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards (SFAS) No. 168, “The FASB Accounting
Standards Codification TM and the Hierarchy of Generally Accepted
Accounting Principles, a replacement of FASB Statement No. 162” (the
Codification). The Codification, which was launched on July 1, 2009, became
the single source of authoritative nongovernmental U.S. GAAP, superseding
existing FASB, American Institute of Certified Public Accountants (AICPA),
Emerging Issues Task Force (EITF) and related literature. The Codification
eliminates the GAAP hierarchy contained in SFAS No. 162 and establishes one
level of authoritative GAAP. All other literature is considered
non-authoritative. This Statement is effective for financial statements issued
for interim and annual periods ending after September 15,
2009.  The implementation of this Statement is not expected to have
change to the company’s Consolidated Financial Statements





6.  CERTAIN
SIGNIFICANT RISKS AND UNCERTAINTIES





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





As many
of the economic reforms that 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.





On
January 1, 1994, the PRC government introduced a single rate of exchange of
Renminbi ("Rmb") against United States Dollar (“US$”) as quoted daily by the
People’s Bank of China (the "Unified Exchange Rate"). On July 21, 2006, the Rmb
was revalued from Rmb8.28 to Rmb8.11 for US$1 following the removal of the peg
to the US dollar and pressure from the United States. The Peoples Bank of China
also announced that the Renminbi would be pegged to a basket of foreign
currencies, rather than being strictly tied to the US dollar and would trade
within a narrow 0.3% band against this basket of currencies, which is dominated
by the US dollar, Euro, Japanese Yen and South Korean Won, with a smaller
proportion made up of the British pound, Thai Baht and Russian Ruble. No
representation is made that the Rmb amounts have been, or could be, converted
into US dollars 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.


- 8
-





Restrictions
on the Payment of Dividends - PRC law requires net profits after taxes to be
used to set-off any losses carried forward before any distribution of profits
may be made. Furthermore, PRC law imposes a Mandatory Provident Reserve on all
businesses. Under this law, a business must set aside 10% of its distributable
profits as a mandatory reserve before a distribution of profits may occur. Once
the business accumulates a mandatory reserve equal to 50% of its capitalization,
no further accumulation of the reserve is required.





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.





7.  INCOME
TAXES





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





The
Company is subject to the United States federal tax at a rate of
33%.





Intermost
Limited, China Equity Platform Holding Group Limited and Leader Palace
International Limited, the Company's subsidiaries incorporated under the
International Business Companies Act of the British Virgin Islands, is exempted
from payment of the British Virgin Islands income taxes.





Intermost
(H.K.) Limited, the Company's subsidiary incorporated in Hong Kong, is subject
to Hong Kong profits tax at a rate of 16.5%.





The  Company’s
key consolidated subsidiaries organized in the
PRC  (IMOT  Information  Technology  (Shenzhen)
Ltd., ChinaE.com E-Commerce Co. Ltd., ChinaE.com  Technology
(Shenzhen) Ltd., ChinaE.com Investment Consultant (Shenzhen) Ltd. and Intermost
Focus Advertising Company Ltd.) are subject to PRC enterprise income taxes at a
rate of 15%.





8.  CONCENTRATION





On August
10, 2004, we purchased 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 for $3.24 million, payable by issuance of 12 million
shares of our common stock.  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.  On or about February 15,
2008 we sold approximately two percent (2%) of the outstanding shares in Golden
Anke to an unaffiliated minority stockholder so that this minority stockholder
could seek an independent listing of Golden Anke on a UK exchange, thus reducing
our ownership from approximately 51% to approximately 49%.  We
recently discovered that GATL is no longer seeking a public listing and
negotiated an exit settlement under which they will buy back our 49% ownership
interest at US$1 million.  To date we have collected $400,000 of this
amount.





The
Company had entered into a joint venture agreement with other PRC investors on
February 19, 2009 to spin off the subsidiaries and investments in operating
equity exchange.  The PRC investors will form a new company to hold
these subsidiaries and investments and seek an independent listing of the new
company on a US exchange.  The name of the new company is China Equity
Platform Holding Group Limited. When the spin off process is completed, IMOT
will get 60% –common stock of the newly formed company. The spin off process is
still under processing and waiting for the approval from PRC Officials. The
subsidiary and associate companies will be spin off are listed as
following:





ChinaE.com
Technology (Shenzhen) Company Limited


ChinaE.com
Investment Consultant (Shenzhen) Company Limited


ChinaE.com
E-commerce Company Limited




- 9
-




Intermost
Focus Advertising Company Limited


Shenzhen
International Hi-Tech Property Right Exchange Centre


Hainan
Special Economic Zone Property Rights Exchange Centre


9.  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 currently operates in four principle business segments which are:
E-Commerce solutions and Consulting. E-Commerce Solutions comprises revenue from
web-site development contracts and maintenance contracts.  The
Consulting segment comprises services rendered for provision of information on
property exchange matters.





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. Management believes that
the following table presents the useful information to the chief operation
decision makers for measuring business performance and financing needs
etc.   Segment information for the three months period ended
September 30, 2009 is as follows:





(a)  Net
revenues:





Three Months Ended September 30, 2009Rmb’000
                  
                  
                  US$’000E-commerce solutions
                  
                  
                  4
                  
                  
                  
                  1Consultancy
                  
                  
                  25
                  
                  
                  
                  329
                  
                  
                  
                  4





(b)  Net
loss before equity in earnings of associated companies:





Three Months Ended September 30, 2009Rmb’000
                  
                  
                  US$’000E-commerce
      solutions
                  
                  
                  (648
                  )
                  
                  
                  (95
                  )Consultancy
                  
                  
                  (256
                  )
                  
                  
                  (38
                  )Corporate
                  
                  
                  (344
                  )
                  
                  
                  (50
                  )(1,248
                  )
                  
                  
                  (183
                  )





(c) Assets:





As of September 30, 2009Rmb’000
                    
                    
                    US$’000E-commerce
      solutions
                    
                    
                    5,807
                    
                    
                    
                    850Consultancy
                    
                    
                    111
                    
                    
                    
                    16VOIP
      call minutes
                    
                    
                    104
                    
                    
                    
                    15Corporate
                    
                    
                    12,114
                    
                    
                    
                    1,77418,136
                    
                    
                    
                    2,655


- 10
-





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





(d)  Other
items:





Three Months Ended September 30, 2009Rmb’000
                  
                  
                  US$’000Depreciation:E-commerce
      solutions
                  
                  
                  100
                  
                  
                  
                  15Corporate
      expenses
                  
                  
                  2
                  
                  
                  
                  0102
                  
                  
                  
                  15





There was
fixed expenditure for fixed assets $3K during the three months ended September
30, 2009.





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





Certain
statements contained in this Form 10-Q constitute forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as amended and
Section 21E of the Securities Exchange Act of 1934, as amended.  Such
forward-looking statements herein are based on current expectations that involve
a number of risks and uncertainties. Such forward-looking statements are based
on assumptions that there will be no material adverse change in our operations
or business, that we will meet success in marketing and selling our products,
and that we will be able to continue to attract and retain skilled employees
necessary for our business, among other things.  The foregoing
assumptions are based on judgments with respect to, among other things,
information available to our, future economic, competitive and market conditions
and future business decisions.  All of these assumptions are difficult
or impossible to predict accurately and many are beyond our control.
Accordingly, although we believe that the assumptions underlying the
forward-looking statements are reasonable, any such assumption could prove to be
inaccurate and therefore there can be no assurance that the results contemplated
in the forward-looking statements will be realized. There are a number of risks
presented by our business and operations, which could cause our financial
performance to vary markedly from prior results, or results contemplated by the
forward-looking statements. Such risks include failure of the our technology or
products to work as anticipated, failure to develop commercially viable products
or services from our technology, delays or failure in financing efforts, delays
in or lack of market acceptance, failure to recruit adequate personnel, and
problems with protection of intellectual property, among others. The words
“believe,” “estimate,” “expect,” “intend,” “anticipate” “should”, “could”,
“may”, “plan” and similar expressions and variations thereof identify some of
these forward-looking statements. Management decisions, including budgeting, are
subjective in many respects and periodic revisions must be made to reflect
actual conditions and business developments, the impact of which may cause us to
alter our capital investment and other expenditures, which may also adversely
affect our results of operations. In light of significant uncertainties inherent
in forward-looking information included in this Quarterly Report on Form 10-Q,
the inclusion of such information should not be regarded as a representation by
us that our objectives or plans will be achieved. We undertake no obligation to
revise or publicly release the results of any revision to these forward-looking
statements.





Overview





We
believe that the People’s Republic of China represents an exciting emerging
world market whose role in the global economy is, despite recent global economic
slowdown, 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.





- 11
-


Amidst
global economic slowdown we continue to diversify our business, not only so that
we will no longer be dependent on one market for revenue, but also so that we
will be poised to take advantage of future economic
recovery.  Generally, the issuance of our common stock represents some
or all of the purchase price we pay for an acquired business.  We
believe that the continued active trading of our common stock will be important
to the principals of target companies and future acquisitions may be dependent
on the active trading of our common stock.  However, our common stock
has not been actively traded and, if our common stock continues to trade with
limited volume and at current levels we may not be able to make acquisitions as
planned.





Risks
Associated with Doing Business in China





There are
significant risks in operating in the Peoples’ Republic of China (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 industrialized
nations of the west 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 there.





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





As many
of the economic reforms that 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.





On
January 1, 1994, the PRC government introduced a single rate of exchange of
Renminbi (“Rmb”) against United States Dollar ("US$") as quoted daily by the
People's Bank of China (the “Unified Exchange Rate”). On July 21, 2006, Rmb was
revalued from Rmb 8.28 to Rmb8.11 for US$1 following the removal of the peg to
the US dollar and pressure for the United States. The Peoples Bank of China also
announced that the Renminbi would be pegged to a basket of foreign currencies,
rather than being strictly tied to the US dollar and would trade within a narrow
0.3% band against this basket of currencies, which is dominated by the US
dollar, Euro, Japanese Yen and South Korean Won, with a smaller proportion made
up of the British pound, Thai Baht and Russian Ruble. No representation is made
that the Rmb amounts have been, or could be, converted into US$ 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.





Restriction
on the Payment of Dividends - PRC law requires net profits after taxes to be
used to set-off any losses carried forward before any distribution of profits
may be made. Furthermore, PRC law imposes a Mandatory Provident Reserve on all
businesses. Under this law, a business must set aside 10% of its distributable
profits as a mandatory reserve before a distribution of profits may occur. Once
the business accumulates a mandatory reserve equal to 50% of its capitalization,
no further accumulation of the reserve is required.


- 12
-





Certain
Factors Affecting Future Operating Results





The
Company’s 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:





·
            the
      Company's ability to successfully implement its current business
      plans;





·
            whether
      the Company will be able to obtain additional capital, if necessary, to
      support its operations;





·
            whether
      the Company will be able to find joint venture prospects or acquisition
      prospects with which to enhance its
business;





·
            whether
      the Company can successfully integrate acquisitions that it makes into its
      business;





·
            the
      level and rate of acceptance of the Company's products and services by
      consumers in China;





·
            continued
      economic growth in China;





·
            entry
      of new competition (including established companies from outside China and
      companies with substantially greater resources) into the Company's
      market;





·
            fluctuations
      in the level of demand for services or
products;





·
            rescheduling
      or cancellation of orders by
customers;





·
            competitive
      pressures on selling prices;





·
            rapid
      changes in technology, which could result in the Company's technology
      becoming obsolete;





·
            dependence
      upon key employees;





·
            availability
      and cost of computer technicians;





·
            loss
      of any of the Company's major
customers;





·
            the
      Company's ability to introduce new products and services on a timely
      basis;





·
            new
      product and service introductions by the Company's
      competitors;





·
            fluctuations
      in exchange rates; and





·
            adverse
      changes in the general economic, social or political conditions in the
      PRC.





Critical
Accounting Policies





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 the generally accepted
accounting principles as used 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.


- 13
-





The
following critical accounting policies affect the more significant judgments and
estimates 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
collectability 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.





Income
Taxes





The
Company records a valuation allowance to reduce its deferred tax assets derived
from operating loss of certain subsidiaries in the PRC to the amount that is
more likely than not to be realized. In the event the Company was to determine
that it would be able to realize its deferred tax assets in the future in excess
of its recorded amount, an adjustment to the deferred tax assets would be
credited to operations in the period such determination was made. Likewise,
should the Company determine that it would not be able to realize all or part of
its deferred tax assets in the future, an adjustment to the deferred tax assets
would be charged to operations in the period such determination was made. The
adoption of FIN 48 “Accounting for Uncertainty in Income Taxes – an
Interpretation of FASB Statement No. 109” is not expected to have a material
impact on the Company’s consolidated financial statements.





Results
of Operations - Three Months Ended September 30, 2009 and 2008





All
amounts shown below are presented in US$. As used below, the letter “K”
appearing immediately after a dollar amount denotes that it has been rounded to
the nearest $1,000.





Net
Revenues





Net
revenues for the three months ended September 30, 2009 consisted primarily from
ChinaE.com Tech and ChinaE.com Investment Consultants, which provide e-commerce
solutions and consultancy services. 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:


- 14
-





Net Revenue
                    
                    
                    Net Revenue2009
                    
                    
                    2009
                    
                    
                    2008
                    
                    
                    20083 months ended September 30
                    
                    USD'000
                    
                    
                    %
                    
                    
                    USD'000
                    
                    
                    %E-commerce
      solutions
                    
                    
                    1
                    
                    
                    
                    13
                    %
                    
                    
                    1
                    
                    
                    
                    100
                    %Consulting
                    
                    
                    3
                    
                    
                    
                    87
                    %
                    
                    
                    -
                    
                    
                    
                    0
                    %4
                    
                    
                    
                    100
                    %
                    
                    
                    1
                    
                    
                    
                    100
                    %





Total net
revenues increased by 706% to $4K during the three months ended September 30,
2009, as compared to $1K during the three months ended September 30, 2008. The
decrease in total net revenues was primarily due to the decrease in sales of
E-commerce solutions.





Cost of
Revenues





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





Cost of Revenue
                      
                      
                      Cost of Revenue2009
                      
                      
                      2009
                      
                      
                      2008
                      
                      
                      20083 months ended September 30
                      
                      USD'000
                      
                      
                      %
                      
                      
                      USD'000
                      
                      
                      %Salaries
      of technicians / engineers
                      
                      
                      0
                      
                      
                      
                      0
                      %
                      
                      
                      0
                      
                      
                      
                      0
                      %Depreciation
                      
                      
                      0
                      
                      
                      
                      0
                      %
                      
                      
                      0
                      
                      
                      
                      0
                      %Others
                      
                      
                      0
                      
                      
                      
                      0
                      %
                      
                      
                      0
                      
                      
                      
                      0
                      %0
                      
                      
                      
                      -
                      
                      
                      
                      0
                      
                      
                      
                      -





Cost of
revenues during the three months ended September 30, 2009 & 2008 were only
trace amounts paid for engineer and technician salaries, other costs associated
with engineering and technical staff support, and depreciation of equipment
utilized in connection with the Company's operations.





Selling,
General and Administrative Expense





Selling,
general and administrative (“SG&A”) expense consists principally of sales
commissions, advertising, other marketing expenses, rental expenses, salaries
for administrative and sales staff, and corporate overhead.





The
following table reflects the principal components of SG&A expense and the
percentage of net sales represented by each component for the periods
indicated:





SG&A Expenses
                    
                    
                    SG&A Expenses2009
                    
                    
                    2009
                    
                    
                    2008
                    
                    
                    20083 months ended September 30
                    
                    USD'000
                    
                    
                    %
                    
                    
                    USD'000
                    
                    
                    %Sales
      & Marketing salaries & commissions
                    
                    
                    46
                    
                    
                    
                    1150
                    %
                    
                    
                    38
                    
                    
                    
                    3800
                    %Advertising
      & other sales & marketing expenses
                    
                    
                    0
                    
                    
                    
                    0
                    %
                    
                    
                    15
                    
                    
                    
                    1500
                    %Rentals
                    
                    
                    35
                    
                    
                    
                    875
                    %
                    
                    
                    21
                    
                    
                    2100
                    %Administrative
      salaries
                    
                    
                    72
                    
                    
                    
                    1800
                    %
                    
                    
                    74
                    
                    
                    
                    7400
                    %Corporate
      overhead
                    
                    
                    73
                    
                    
                    
                    1825
                    %
                    
                    
                    99
                    
                    
                    
                    9900
                    %226
                    
                    
                    
                    5650
                    %
                    
                    
                    247
                    
                    
                    
                    2471
                    %


- 15
-





For the
three months ended September 30, 2009, SG&A expense decreased by 9% to $21K,
as compared to $247K for the three months ended September 30, 2008.





The
decrease in SG&A expense in 2009 as compared to 2008 was principally no
advertising expenses occurred for the three months ended September 30,
2009.





Income
Taxes





There was
no income tax for both the three months ended September 30, 2009 and the three
months ended September 30, 2008.





Other
Items





Minority
interests reflect the minority shareholders' proportionate interests in the net
income of the Company’s non-wholly-owned subsidiaries. The balance is derived
from Intermost Focus Advertising Co.





Net
Income (Loss)





The
Company had net loss of $183K during the three months ended September 30, 2009,
as compared to a net loss of $229K during the three months ended September 30,
2008.





Liquidity
and Capital Resources – September 30, 2009





At
September 30, 2009, the Company had cash and cash equivalents of $362K and
working capital of $1,025K, as compared to $600K of cash and cash equivalents
and $1,428K of working capital at September 30, 2008.





Net cash
used in operating activities was $210K for the three months ended September 30,
2009, as compared to net cash generated from operating activities of $82K for
the three months ended September 30, 2008.  The net cash generated
from operating activities in 2008 is mainly from the $200K deposit received from
the exit settlement agreement of Golden Anke signed on Aug 11, 2009 and there
was no such special receipt in 2009.





Net cash
used in investing activities was $3K and $123K for the three months ended
September 30, 2009 and September 30, 2009 respectively, mainly consisting of an
increase in additions of fixed assets.





Net cash
used in financing activities was $0 for three months ended September 30, 2009.
Net cash used in financing activities was $97K for the three months ended
September 30, 2008, was mainly attributable to the partial loan settlement due
to a related company.





The
Company continues to evaluate various opportunities to improve the operating
performance of the Company’s businesses and to invest in or acquire other types
of businesses.





Principal
Commitments





At
September 30, 2009, the Company has operating lease agreements for office
premises, which are expiring in February 2011. The Company does not have any
material commitments for capital expenditures, or have any transactions,
obligations or relationships that could be considered off-balance sheet
arrangements.





The
Company has no long-term debt at September 30, 2009.


- 16
-





Subsequent
Event





The
Company had entered into a joint venture agreement with other PRC investors on
February 19, 2009 to spin off the subsidiaries and investments in operating
equity exchange.  The PRC investors will form a new company to hold
these subsidiaries and investments and seek an independent listing of the new
company on a US exchange.  The name of the new company is China Equity
Platform Holding Group Limited. When the spin off process is completed, IMOT
will get 60% –common stock of the newly formed company. The spin off process is
still under processing and waiting for the approval from PRC Officials. The
subsidiary and associate companies will be spin off are listed as
following:





ChinaE.com
Technology (Shenzhen) Company Limited


ChinaE.com
Investment Consultant (Shenzhen) Company Limited


ChinaE.com
E-commerce Company Limited


Intermost
Focus Advertising Company Limited


Shenzhen
International Hi-Tech Property Right Exchange Centre


Hainan
Special Economic Zone Property Rights Exchange Centre





On
October 28, 2009, the Company has filed Schedule 14C and disclosed that the
Company intended to change its name to “Uni Core Holdings Corporation” and
increase the number of shares of common stock to 2 billion shares at par value
of $0.001 with no preemptive rights.





RISK
FACTORS





In
addition to other information in this Form 10-Q, including many risks presented
in our Management’s Discussion and Analysis, the following risk factors should
be carefully considered in evaluating our business since it operates in a highly
changing and complex business environment that involves numerous risks, some of
which are beyond our control.  The following discussion highlights a
few of these risk factors, any one of which may have a significant adverse
impact on our business, operating results and financial condition.  As
a result of the risk factors set forth below and elsewhere in this 10-Q, the
risks identified in our Annual Report on Form 10-K for the fiscal year ended
June 30, 2009, and the risks discussed in our other Securities and Exchange
Commission filings, actual results could differ materially from those projected
in any forward-looking statements.





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





We
are restating several of our financial statements and may have other or future
restatements.





On
August 12, 2009, the Company’s current management team, following
discussions with its Board of Directors and its auditors, concluded that the
previously filed audited financial statements and other financial information as
of and for the year ended June 30, 2008, issued with the Company’s Form 10-K
filed with the Commission on October 26, 2008 should no longer be relied
upon.  In response to an inquiry from the Securities and Exchange
Commission concerning the Company’s financial statements, the Company reexamined
certain accounts which it has now determined should have been
impaired.  Impairment of these accounts is not temporary and expected
to result in an increased loss for the fiscal year ended June 30, 2008 of
$5,507,510 from the loss of $3,090,547 reported in the Annual Report, to a loss
of $8,598,057.





Owing to
the above mentioned impairment, the Company will restate the audited financial
statements as of and for the year ended June 30, 2008 by filing amendments
to the Form 10-K for the year ended June 30, 2008 and to the Form 10-Q
for the period ended December 31, 2008 and March 31, 2009 as soon as
practicable.





Similarly,
on October 14, 2009, the Company announced that its board of directors and its
officers also concluded that, in the same context and for the same reasons, the
Company must also file amendments to its quarterly reports for the periods ended
September 30, 2008, December 31, 2008 and March 31, 2009.


- 17
-





In
connection with these restatements, the Company is re-evaluating its procedures
concerning long-life asset impairment, its disclosure and presentation criteria,
and its internal controls over financial reporting.  The Company
intends to examine enhancements to its internal controls over financial
reporting to provide reasonable assurance that errors of this type will not
recur.  In addition, the Company is examining the implementation of
well-defined standards for long-life asset impairment.  The Company
expects to complete this reporting examination by December 31,
2009.





The above
conclusions were reached in consultation with the Company’s Board of Directors
and the Company’s independent registered public accounting firm, Albert Wong
& Co.  A copy of these disclosures was provided to Albert Wong
& Co.





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





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





We must work
cooperatively with governmental authorities.





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





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





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





We compete with
large companies.





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





We will need to
continue our product development efforts.





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


- 18
-





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





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





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





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





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





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





We may face rapid
technological change.





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





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





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


- 19
-





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





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





Future
profitability is not guaranteed.





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





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





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





There is a
limited market for our common stock.





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





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


·
            economic
      conditions within our industry;


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


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


- 20
-


·
            domestic
      and international economic, business and political
    conditions.





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





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





ITEM
3.  CONTROLS AND PROCEDURES.





Evaluation
of Disclosure Controls and Procedures





The
Company maintains disclosure controls and procedures designed to ensure that
information required to be disclosed in the reports filed or submitted under the
Exchange Act of 1934 is recorded, processed, summarized and reported, within the
time periods specified in the rules and forms of the Securities and Exchange
Commission.  Disclosure controls and procedures include, without
limitation, controls and procedures designed to ensure that information required
to be disclosed in the reports filed under the Exchange Act of 1934 is
accumulated and communicated to management, including its principal executive
and financial officers, as appropriate, to allow timely decisions regarding
required disclosure.





The
Company carried out an evaluation, under the supervision and with the
participation of the Company’s management, including its principal executive and
financial officer, of the effectiveness of the design and operation of the
Company’s disclosure controls and procedures as of the end of the period covered
by this report.  Based upon and as of the date of that evaluation, the
Company’s principal executive and financial officer concluded that the Company’s
disclosure controls and procedures are effective to ensure that information
required to be disclosed in the reports the Company files and submits under the
Exchange Act of 1934 is recorded, processed, summarized and reported within the
time periods specified in the Securities and Exchange Commission's rules and
forms.





Notwithstanding
the foregoing, there are inherent limitations to the effectiveness of any system
of disclosure controls and procedures, including the possibility of human error
and the circumvention or overriding of the controls and
procedures.  Accordingly, even effective disclosure controls and
procedure can only provide reasonable assurance of achieving their control
objectives.





This
quarterly report does not include an attestation report of the company’s
registered public accounting firm regarding internal control over financial
reporting.  Management’s report was not subject to attestation by the
company’s public accounting firm pursuant to temporary rules of the Securities
and Exchange Commission that permit the company to provide only management’s
report in this quarterly report.





Changes
in Internal Controls





There
were no changes in the Company’s internal controls or in other factors that
could have significantly affected those controls subsequent to the date of the
Company’s most recent evaluation.


- 21
-


PART
II - OTHER INFORMATION





Item
1.  Legal Proceedings





We had no
legal proceedings outstanding as at September 30, 2009.





Item
2.  Unregistered Sales of Equity Securities and Use of
Proceeds.





Not
applicable.





Item
3.  Defaults Upon Senior Securities.





Not
applicable.





Item
4.  Submission of Matters to a Vote of Security Holders.





Not
applicable.





Item
5.  Other Information.





Not
applicable.





Item
6.  Exhibits





Exhibit Number
                                  
                                  Description of Exhibit2.1
                                  
                                  Articles
      of Merger (1)3.1
                                  
                                  Articles
      of Incorporation (1)3.2
                                  
                                  Bylaws
      (1)10.1
                                  
                                  Cooperative
      Agreement re: formation of Jiayin E-Commerce joint venture
    (2)10.2
                                  
                                  Agreement
      Regarding Transfer of Properties on 38th Floor, Guomao Building
      (3)10.3
                                  
                                  Shareholding
      Transfer Agreement dated May 23, 2003 between IMOT Information Technology
      (Shenzhen) Ltd. and Shanghai Newray Business Development Co., Ltd.
      (4)10.4
                                  
                                  Share
      Transfer Agreement among IMOT Information Technology (Shenzhen) Ltd.,
      Shenzhen Golden Anke Technology Co. Ltd., Intermost Corporation, Tu
      Guoshen and Li Zhiquan (5)10.5
                                  
                                  Sale
      and Purchase Agreement among IMOT Information Technology (Shenzhen) Ltd.,
      Shanghai Fortune Venture Limited, North Shanghai Branch of Shanghai
      Technology Property Right Exchange Center and Intermost Corporation
      (6)10.6
                                  
                                  Distributorship
      Agreement dated November 28, 2002 between KanHan Technologies Limited and
      ChinaE.com Information Technology Ltd. (7)10.7
                                  
                                  Intermost
      Corporation 2003 Equity Incentive Plan
(8)




- 22
-




10.8
                          
                          Joint
      Venture Agreement among Intermost Corporation and Entities and/or
      Individuals Collectively Referred to as “Investors.”*14
                          
                          Code
      of Ethics (9)16
                          
                          Letter
      on Change in Certifying Accountant (10)31.1
                          
                          Certification
      of Chief Executive Officer Pursuant to Rule 13a-14(a) and
      15d-14(a)*31.2
                          
                          Certification
      of Chief Financial Officer Pursuant to Rule 13a-14(a) and
      15d-14(a)*32.1
                          
                          Certification
      Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
      the Sarbanes-Oxley Act of 2002*32.2
                          
                          Certification
      Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
      the Sarbanes-Oxley Act of
2002*





(1)
            Incorporated
      by reference to the respective exhibits filed with the Registrant’s 10-KSB
      Amendment filed with the SEC on October 15, 2004(2)
            Incorporated
      by reference to the respective exhibits filed with Registrant’s
      Registration Statement on Form 10-SB (Commission File No.
      0-30430).(3)
            Incorporated
      by reference to the respective exhibits filed with the Registrant’s
      Quarterly Report on Form 10-QSB for the quarter ended March 31,
      2000.(4)
            Incorporated
      by reference to the exhibit filed with the Registrant’s Current Report on
      Form 8-K filed with the SEC on June 9, 2003.(5)
            Incorporated
      by reference to the exhibit filed with the Registrant’s Current Report on
      Form 8-K filed with the SEC on August 17, 2004.(6)
            Incorporated
      by reference to the exhibit filed with the Registrant’s Current Report on
      Form 8-K filed with the SEC on April 26, 2004.(7)
            Incorporated
      by reference to the exhibit filed with the Registrant’s Current Report on
      Form 8-K filed with the SEC on February 14, 2003.(8)
            Incorporated
      by reference to the exhibit filed with the Registrant’s Proxy Statement
      filed with the SEC on January 6, 2004.(9)
            Incorporated
      by reference to the exhibit filed with the Registrant’s 10-KSB Amendment
      filed with the SEC on October 25, 2004.(10)
            Incorporated
      by reference to the exhibit filed with the Registrant’s Current Report on
      Form 8-K filed with the SEC on March 8, 2004.*
            Filed
      herewith.




- 23
-




SIGNATURES





In
accordance with Section 13 or 15(d) the Securities Exchange Act of 1934, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.





Date:  November
      13, 2009
            
            INTERMOST
      CORPORATIONBy:
            /s/ Chia Hsun WuChia
      Hsun WuChief
      Executive OfficerBy:
            /s/ Thomas LeeThomas
      LeeChief
      Financial Officer


- 24
-