UNI CORE HOLDINGS CORP - FORM 10-Q

Attached files

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EX-32.1 - UNI CORE HOLDINGS CORP	v174213_ex32-1.htm
EX-31.1 - UNI CORE HOLDINGS CORP	v174213_ex31-1.htm
EX-31.2 - UNI CORE HOLDINGS CORP	v174213_ex31-2.htm
EX-32.2 - UNI CORE HOLDINGS CORP	v174213_ex32-2.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_____________________

FORM 10-Q

(Mark One)

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

For the quarterly period ended: December 31, 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

________________

UNI CORE HOLDINGS CORP

(Formerly known as 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 x 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	o
Non-accelerated filer	o	Smaller reporting company	x

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 334,031,873 shares of common stock as of January 29, 2010.

TABLE OF CONTENTS

PART I. Financial Information

Item 1.	Financial Statements

Condensed Consolidated Balance sheets (Unaudited) as of June 30, 2009 and December 31, 2009		2
Condensed Consolidated Statements of Operations (Unaudited) for the three months ended December 31, 2009 and December 31, 2008		4
Condensed Consolidated Statements of Operations (Unaudited) for the six months ended December 31, 2009 and December 31, 2008		5
Condensed Consolidated Statements of Cash Flows (Unaudited) for the three months ended December 31, 2009 and December 31, 2008		6
Notes to Condensed Consolidated Financial Statements for the three months ended December 31, 2009 and December 31, 2008		7

Item 2.	Management’s Discussion and Analysis or Plan of Operation	12
Item 3.	Controls and Procedures	24

PART II. Other Information

Item 1.	Legal Proceedings	25
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	25
Item 3.	Defaults Upon Senior Securities	25
Item 4.	Submission of Matters to a Vote of Security Holders	25
Item 5.	Other Information	25
Item 6.	Exhibits	25
	Signatures	27

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ITEM 1. FINANCIAL STATEMENTS.

INTERMOST CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

	Notes	Dec 31, 2009		June 30, 2009
		USD		USD
ASSETS
Current assets
Cash and cash equivalents	2(e)	$	937,131	$	575,523
Accounts receivable, net	2(g)		1,465		1,464
Deposits, prepayment and other receivables	3		2,271,615		741,680
Other loan receivables	5		474,622		474,825

Total current assets		$	3,684,833	$	1,793,492
Restricted cash	2(f)		-		-
Unlisted investment	2(h)		943,500		943,072
Plant and equipment, net	6		95,032		119,690
Goodwill	4		-		-
Intangible assets, net			9,021		12,416
Investment in associated companies	2(l)		1		1

TOTAL ASSETS		$	4,732,387	$	2,868,671

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable		$	-	$	-
Accrued liabilities and other payable	7		505,636		518,927
Customers deposits			7,350		5,468
Advance from a shareholder			-		-
Advance from a related company	9		-		-
Business and other taxes payable			1,058		1,034

Total current liabilities		$	514,044	$	525,429

TOTAL LIABILITIES		$	514,044	$	525,429

See accompanying notes to consolidated financial statements

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ITEM 1. FINANCIAL STATEMENTS.

INTERMOST CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

	Notes	Dec 31, 2009			June 30, 2009
		USD			USD
Minority interests		$	768,180		$	446,361

STOCKHOLDERS’ EQUITY

Common stock at $0.001 par value, 500,000,000 shares authorized, 224,031,873 shares issued and outstanding at June 30, 2009;	10		224,032			213,282
Additional paid-in capital	10		27,530,431			24,997,931
Treasury stock	10		1,750			0
Accumulated deficit			(24,274,550	)		(23,282,270	)
Accumulated other comprehensive income	2(s),10		(31,500	)		(32,062	)

		$	1,560,163		$	1,896,881

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY		$	4,732,387		$	2,868,671

See accompanying notes to consolidated financial statements

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INTERMOST CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

	Three months ended Dec 31,
	2009			2008
	USD			USD
Net revenue		16,875			277
Cost of revenues		-6,063			-2,176
Gross profit		10,812			-1,899
Costs and expenses:
Selling, general and administrative expenses		-914,050			-282,537
Impairment of goodwill					0
Exchange differences		-5,724			-321
Amortization of intangible assets		-2,689			-2,497
Total costs and expenses		-922,463			-285,355

Loss from operations		-911,651			-287,254
Interest income		394			2,354
Loan interest income		0			14,337
Investment income (loss)		0			0
Other income (loss), net		16,828			-2,057

Loss before income taxes and minority interests		-894,429			-272,620
Income taxes		0			0

Loss before minority interests		-894,429			-272,620
Minority interests		84,813			760

Net loss		-809,616			-271,860

Net loss per common share-basic and diluted		(0.0036	)		(0.001	)
Weighted average number of common shares outstanding-basic and diluted		222,338,938			213,281,873

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INTERMOST CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

	Six months ended Dec 31,
	2009			2008
	USD			USD
Net revenue		21,067			797
Cost of revenues		-6,292			-2,268
Gross profit		14,775			-1,471
Costs and expenses:
Selling, general and administrative expenses		-1,139,641			-529,142
Impairment of goodwill					0
Exchange differences		-6,123			737
Amortization of intangible assets		-3,400			-3,149
Total costs and expenses		-1,149,164			-531,554

Loss from operations		-1,134,389			-553,025
Interest income		476			4,977
Loan interest income		0			29,047
Investment income (loss)		0			0
Other income (loss), net		-16,970			-4,114

Loss before income taxes and minority interests		-1,150,883			-503,115
Income taxes		0			0

Loss before minority interests		-1,150,883			-503,115
Minority interests		158,604			1,788

Net loss		-992,279			-501,327

Net loss per common share-basic and diluted		(0.0046	)		(0.002	)
Weighted average number of common shares outstanding-basic and diluted		218,060,406			213,281,873

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INTERMOST CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

	Six months ended Dec 31,
	2009		2008
	USD		USD
Cash flows from operating activites
Net loss		-992,279		-501,327
Amortization of intangible assets		3,401		3,149
Depreciation		29,988		41,047
Minority interests		321,617		-1,788
Adjustments to reconcile net loss to net cash provided by operating activities:-
Accounts receivables		0		3,492,347
Deposits, prepayments and other receivables		-1,529,598		183,031
Accounts payable		0		-3,318,430
Accrued liabilities		-13,109		114,753
Cutomer deposits		1,655		2,328
Deferred revenue		225		632
Business taxes and government surcharges payable		23		-24
Net cash generated from/(used in) operating activities		-2,178,077		15,768
Cash flows from investing activities
Acquisition of plant and equipment		-5,276		-121,365
Increase n short term investment		0		0
Increase (decrease) in short term loan		0		322
Net cash used in investing activities		-5,276		-121,043
Cash flows from financing activities
Advances from related parties		0		-161,606
Restricted cash		0		-242
Net proceeds from issuance of common stock		2,545,000		0
Net cash generated from/(used in) financing activities		2,545,000		-161,848

Cash and cash equivalents
Net increase (decrease)		361,647		-267,123
Accumulated other comprehensive loss		-39		69,840
Balance at beginning of period		575,523		640,200
Balance at end of period		937,131		442,917

Supplemental cash flow information:
Interest received		0		0

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

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

THREE MONTHS ENDED DEC 31, 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 December 31, 2009, the results of operations for the three months ended December 31, 2009 and 2008, and the cash flows for the three months ended December 31, 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 December 31, 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 December 31, 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 Rmb6.8271 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.

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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 Rmb6.8271 for US$1 at this quarter ended December 31, 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 Rmb6.8271.

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 December 31, 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 December 31, 2009. Accordingly, no pro forma financial disclosure is provided herein.

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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.

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.

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.

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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. During the spin off process, China Equity Platform Holding Group Limited has issued 9,500,000 ordinary stock at US$0.05 each to raise a working capital fund of US$475,000. The subsidiary and associate companies will be spin off are listed as following:

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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

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 six months period ended December 31, 2009 is as follows:

(a) Net revenues:

	Six Months Ended December 31, 2009
	Rmb’000		US$’000

E-commerce solutions		89		13
Consultancy		55		8
		144		21

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

	Six Months Ended December 31, 2009
	Rmb’000			US$’000

E-commerce solutions		(1,175	)		(172	)
Consultancy		(475	)		(69	)
Corporate		(5,126	)		(751	)
		(6,776	)		(992	)

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(c)

Assets:

	As of December 31, 2009

	Rmb’000		US$’000
E-commerce solutions		7,193		1,053
Consultancy		6		1
VOIP call minutes		103		15
Corporate		25,006		3,663
		32,308		4,732

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

(d)

Other items:

	Six Months Ended December 31, 2009
	Rmb’000		US$’000
Depreciation:
E-commerce solutions		200		29
Corporate expenses		5		1
		205		30

There was fixed expenditure for fixed assets $5K during the six months ended December 31, 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.

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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.

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.

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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.

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.

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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.

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.

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Results of Operations - Three Months Ended December 31, 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 December 31, 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:

	Net Revenue					Net Revenue
	2009		2009			2008		2008
3 months ended December 31	USD'000		%			USD'000		%

E-commerce solutions		13		74	%		0		100	%
Consulting		4		26	%		-		0	%
		17		100	%		0		100	%

Total net revenues increased by 6092% to $13K during the three months ended December 31, 2009, as compared to $0K during the three months ended December 31, 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 Revenue
	2009		2009			2008		2008
3 months ended December 31	USD'000		%			USD'000		%

Salaries of technicians / engineers		0		0	%		0		0	%
Depreciation		0		0	%		0		0	%
Others		6		36	%		2		786	%
		6		36	%		2		786	%

Cost of revenues during the three months ended December 31, 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.

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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 Expenses
	2009		2009			2008		2008
3 months ended December 31	USD'000		%			USD'000		%

Sales & Marketing salaries & commissions		35		205	%		42		15207	%
Advertising & other sales & marketing expenses		8		48	%		15		5586	%
Rentals		35		207	%		56		20018	%
Administrative salaries		115		681	%		72		25970	%
Consultancy fee		645		3820	%		-		-	%
Corporate overhead		76		455	%		98		35218	%
		914		5417	%		283		101999	%

For the three months ended December 31, 2009, SG&A expense increased by 223% to $914K, as compared to $283K for the three months ended December 31, 2008.

The increase in SG&A expense in 2009 as compared to 2008 was principally the Company entering a consultancy agreement with a unrelated company, Star Fair Ventures Corp. for rendering the consulting service of business opportunities and strategic business planning by the payment of 12,000,000 Company’s shares and on the date of issuance of shares (October 15, 2009), the market price of Company’s share was US$0.21. In the quarterly ended Dec 31, 2009, the Company has absorbed US$630K in the SG&A expenses.

Income Taxes

There was no income tax for both the three months ended December 31, 2009 and the three months ended December 31, 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 $810K during the three months ended December 31, 2009, as compared to a net loss of $272K during the three months ended December 31, 2008.

Results of Operations - Six months Ended December 31, 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 six months ended December 31, 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.

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

	Net Revenue					Net Revenue
	2009		2009			2008		2008
6 months ended December 31	USD'000		%			USD'000		%

E-commerce solutions		13		62	%		1		100	%
Consulting		8		38	%		-		0	%
		21		100	%		1		100	%

Total net revenues increased by 2543% to $21K during the six months ended December 31, 2009, as compared to $1K during the six months ended December 31, 2008. The increase in total net revenues was primarily due to the increase in sales of E-commerce solutions and consulting.

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 Revenue
	2009		2009			2008		2008
3 months ended December 31	USD'000		%			USD'000		%

Salaries of technicians / engineers		0		0	%		0		0	%
Depreciation		0		0	%		0		0	%
Others		6		30	%		2		285	%
		6		30	%		2		286	%

Cost of revenues during the six months ended December 31, 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

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:

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	SG&A Expenses					SG&A Expenses
	2009		2009			2008		2008
3 months ended December 31	USD'000		%			USD'000		%

Sales & Marketing salaries & commissions		81		385	%		80		9996	%
Advertising & other sales & marketing expenses		19		88	%		31		3857	%
Rentals		70		331	%		76		9586	%
Administrative salaries		187		887	%		145		18273	%
Consultancy fee		658		3123	%		-		-	%
Corporate overhead		125		597	%		197		24680	%
		1140		5410	%		529		66392	%

For the six months ended December 31, 2009, SG&A expense increased by 116% to $1140K, as compared to $529K for the six months ended December 31, 2008.

Income Taxes

There was no income tax for both the six months ended December 31, 2009 and the six months ended December 31, 2008.

Other Items

Net Income (Loss)

The Company had net loss of $992K during the six months ended December 31, 2009, as compared to a net loss of $501K during the six months ended December 31, 2008.

Liquidity and Capital Resources – December 31, 2009

At December 31, 2009, the Company had cash and cash equivalents of $937K and working capital of $3,171K, as compared to $443K of cash and cash equivalents and $1,152K of working capital at December 31, 2008.

Net cash used in operating activities was $2178K for the six months ended December 31, 2009, as compared to net cash generated from operating activities of $16K for the xix months ended December 31, 2008. The net cash used in operating activities in 2009 is mainly from the prepayment of consultancy fee to unrelated company, Star Fair Ventures Corp. $1,890K and there was no such payment in 2009.

Net cash used in investing activities was $5K and $121K for the six months ended December 31, 2009 and December 31, 2009 respectively, mainly consisting of an increase in additions of fixed assets.

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Net cash generated financing activities was $2,545K for six months ended December 31, 2009, was mainly the issuance of share capital for the payment of consultancy fee to Star Fair Ventures Corp. Net cash used in financing activities was $162K for the six months ended December 31, 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 December 31, 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 December 31, 2009.

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 December 15, 2009, the Company purchased (1) 50,215,449 shares of APT Paper Group Limited (“APT”) from FG Management Company Limited, (2) 63,279,037 shares of APT from Global Golden Group Investments Co, Ltd., (3)12,409,143 shares of APT from Wise Link Management Ltd., (4)5,989,798 shares of APT from Plan Star Development Limited, and (5) 2,046,604 shares of APT from Sure Strong Limited by five sale and purchase agreements. The consideration of the APT shares is subject to the valuation suggested in the valuation report of the APT to be issued on or before 28 February, 2010.

On December 30, 2009, the Company entered into 5 Supplemental Agreement with (1) FG Management Company Limited, (2) Global Golden Group Investments Co, Ltd., (3) Wise Link Management Ltd., (4) Plan Star Development Limited, and (5) Sure Strong Limited to amend and supplement the 5 sale and purchase agreements dated 28th November 2009 (the “S&P Agreements”) entered by the same parties respectively in respect of the purchase of 133,940,031 shares in aggregate in APT Paper Group Limited (“APT”) by IMOT. The terms of the Supplemental Agreement provided for the allotment of 110,000,000 IMOT shares in aggregate at the fixed price of US$0.05 per share, such allotment to be held by IMOT as stakeholder for ONE (1) year and not to be delivered to the vendors and shall be utilized as part payment upon completion of the S&P Agreements.

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.

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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.

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.

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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.

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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

domestic and international economic, business and political conditions.

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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.

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings

We had no legal proceedings outstanding as at December 31, 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 Exhibit

2.1		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)

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10.8		Joint Venture Agreement among Intermost Corporation and Entities and/or Individuals Collectively Referred to as “Investors.” (9)
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-K Amendment filed with the SEC on November 7, 2008.

Filed herewith.

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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: February 12, 2010		INTERMOST CORPORATION

	By:
		Chia Hsun Wu
		Chief Executive Officer

	By:
		Thomas Lee
		Chief Financial Officer

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