Edgar Filing: BOULDER ACQUISITIONS INC

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): JUNE 23, 2004

BOULDER ACQUISITIONS, INC.
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

NEVADA 0-12536 90-0093373
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(State or other jurisdiction of (Commission File Number) (IRS Employer
incorporation or organization) Identification No.)

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429 Guangdong Road
Shanghai People's Republic of China 200001
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(Address of principal executive offices) (Zip Code)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (86-21) 6336-8686
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TABLE OF CONTENTS

ITEM 1. CHANGES IN CONTROL OF REGISTRANT......................................1
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT...2
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS..................................3
THE SHARE EXCHANGE...............................................3
DESCRIPTION OF BOULDER ACQUISITIONS' PREDECESSOR BUSINESS........3
DESCRIPTION OF CURRENT BUSINESS..................................4
General..........................................................4
Overview.................................................4
Our Business Strategy....................................5
Our Value-Added Information Services.............................5
Financial Services.......................................5
Other Services...........................................6
Content Relationships....................................6
Marketing Relationships..................................7
Operator Channels........................................7
Non-Operator Channels....................................8
Customer Research........................................8
Customer Services........................................8
Competitive Landscape....................................9
Distribution.....................................................9
Our Distribution Operation...............................9
Competition.............................................10
Employees.......................................................10
Facilities......................................................10
Legal Proceedings...............................................11
Wireless Technology Standards in China..........................11
Government Regulation...........................................12
Regulation of Telecommunication Services................12
Other Laws and Their Application........................13
Intellectual Property and Proprietary Rights............14
cautionary statements...........................................15
Risks Related to Our Business...................................15
Risks Related to Our Wireless Value-Added Information
Services Business....................................15
Risks Related to the Wireless Value-Added Services
Industry.............................................21
Risks Related to Doing Business in China................23
Risks Related to the Mobile Phone Distribution
Industry.............................................25
Risks Related to our Common Stock.......................26
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS...............27
DIRECTORS AND EXECUTIVE OFFICERS................................29
Board Composition and Committees........................30
Director Compensation...................................30
Indebtedness of Directors and Executive Officers........31
Family Relationships....................................31
Legal Proceedings.......................................31
EXECUTIVE COMPENSATION..........................................31
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS............32
ITEM 5. OTHER EVENTS AND REGULATION FD DISCLOSURE............................33
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS....................................34

ITEM 1. CHANGES IN CONTROL OF REGISTRANT

On June 23, 2004, Boulder Acquisitions, Inc. ("Boulder Acquisitions")
completed a stock exchange transaction with the shareholders of Sifang Holdings
Co., Ltd., an exempted company incorporated in the Cayman Islands with limited
liability ("Sifang Holdings"). The exchange was consummated under Nevada and
Cayman Islands law and pursuant to the terms of the Securities Exchange
Agreement dated effective as of June 23, 2004 (the "Exchange Agreement"). A copy
of the Exchange Agreement is filed as an exhibit to this Current Report on Form
8-K.

Prior to consummating the exchange, Boulder Acquisitions effected a
forward split of its common stock on the basis of 1.31722 shares for each one
share issued and outstanding. Immediately prior to the exchange there were
1,585,705 shares of common stock of Boulder Acquisitions issued and outstanding
(on a post-forward split basis).

Pursuant to the Exchange Agreement, Boulder Acquisitions issued
13,782,636 shares of its common stock, par value $0.001 per share (on a
post-forward split basis), to the shareholders of Sifang Holdings, representing
approximately 89.7% of Boulder Acquisition's post-exchange issued and
outstanding common stock, in exchange for 100% of the outstanding capital stock
of Sifang Holdings. After giving effect to the exchange, Boulder Acquisitions
had 15,368,341 shares of its common stock outstanding. Pursuant to the exchange,
Sifang Holdings became a wholly-owned subsidiary of Boulder Acquisitions.

The shares of Boulder Acquisitions common stock issued to stockholders
of Sifang Holdings in connection with the exchange were not registered under the
Securities Act of 1933, as amended (the "Securities Act") and, as a result, are
"restricted securities" that may not be offered or sold in the United States
absent registration or an applicable exemption from registration requirements.
Certificates representing these shares contain a legend stating the same.
Boulder Acquisitions intends to carry on the business of Sifang Holdings'
wholly-owned subsidiary, Shanghai TCH Data Technology Co., Ltd. ("TCH"). Boulder
Acquisitions has relocated its executive offices to those of TCH at 429
Guangdong Road, Shanghai, People's Republic of China 200001 and its telephone
number is (86-21) 6336-8686.

The exchange was approved in accordance with the laws of the State of
Nevada and the Cayman Islands. Pursuant to the Exchange Agreement, at the
closing of the exchange, the membership of the board of directors of Boulder
Acquisitions was increased from one to two directors, and Tai Caihua was
appointed to serve in the newly created directorship. Also under the terms of
the Exchange Agreement, all existing officers resigned as officers of Boulder
Acquisitions effective immediately following the closing of the transaction and
Mr. Tai, Fu Sixing, Lu Qin and Huang Tianqi were elected as President, Chief
Executive Officer, Chief Financial Officer and Chief Technical Officer of
Boulder Acquisitions, respectively. On June 24, 2004, the membership of the
board of directors of Boulder Acquisitions was increased from two to ten, and
Song Jing, Shi Ying, Mao Ming, Mr. Fu, Mr. Huang, Huang Wei, Jing Weiping and Yu
Ruijie were appointed to serve in the newly created directorships. Also on June
24, 2004, Timothy P. Halter resigned as a director of Boulder Acquisitions and
Zhang Xiaodong was appointed to fill the vacancy on the board of directors
caused by Mr. Halter's resignation.

For accounting purposes, the exchange is being treated as a reverse
acquisition, because the shareholders of Sifang Holdings own a majority of the
issued and outstanding shares of common stock of Boulder Acquisitions
immediately following the exchange. Except as described in the previous
paragraph and in this Current Report under the caption "Certain Relationships
and Related Party Transactions," no arrangements or understandings exist among
present or former controlling stockholders with respect to the election of
members of the board of directors of Boulder Acquisitions, and to the knowledge
of Boulder Acquisitions, no other arrangements exist that might result in a
change of control of Boulder Acquisitions. Further, due to the issuance of the
13,782,636 shares of Boulder Acquisitions common stock, a change in control of
Boulder Acquisitions occurred on June 23, 2004, the date of the consummation of
the exchange.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth, as of June 30, 2004, certain
information with respect to the beneficial ownership of common stock of Boulder
Acquisitions by (i) each director and officer of Boulder Acquisitions, (ii) each
person known to Boulder Acquisitions to be the beneficial owner of five percent
or more of the outstanding shares of common stock of Boulder Acquisitions, and
(iii) all directors and officers of Boulder Acquisitions as a group. Unless
otherwise indicated, the person or entity listed in the table is the beneficial
owner of, and has sole voting and investment power with respect to, the shares
indicated.

Amount and Nature of Beneficial Ownership(1)
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Number Percent of
Name of Beneficial Owner of Shares(2) Voting Stock(3)
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Tai Caihua(4) 11,301,764 66.4%
Shi Ying(5) 11,301,764 66.4%
Halter Financial Group, Inc.(6) 1,271,304 7.5%
Chinamerica Fund, LP 877,193 5.2%
Huang Tianqi 413,480 2.4%
Jing Weiping 413,480 2.4%
Mao Ming 275,652 1.6%
Song Jing 275,652 1.6%
Fu Sixing 275,652 1.6%
Yu Ruijie 275,652 1.6%
Zhang Xiaodong 275,652 1.6%
Huang Wei 275,652 1.6%

Directors and executive officers as a group (10 persons) 13,782,636 81.0%

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* Less than 1%
(1) On June 30, 2004, there were 17,018,692 shares of common stock of
Boulder Acquisitions outstanding. Each person named below has sole
investment and voting power with respect to all shares of our common
stock shown as beneficially owned by the person, except as otherwise
indicated below.

(2) Under applicable rules promulgated by the Securities and Exchange
Commission ("SEC") pursuant to the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), a person is deemed the "beneficial owner"
of a security with regard to which the person, directly or indirectly,
has or shares (a) the voting power, which includes the power to vote or
direct the voting of the security, or (b) the investment power, which
includes the power to dispose or direct the disposition of the
security, in each case irrespective of the person's economic interest
in the security. Under these SEC rules, a person is deemed to
beneficially own securities which the person has the right to acquire
within 60 days through (x) the exercise of any option or warrant or (y)
the conversion of another security.

(3) In determining the percent of common stock of Boulder Acquisitions
owned by a person (a) the numerator is the number of shares of common
stock of Boulder Acquisitions beneficially owned by the person,
including shares the beneficial ownership of which may be acquired
within 60 days upon the exercise of options or warrants or conversion
of convertible securities, and (b) the denominator is the total of (i)
the 17,018,692 shares of common stock of Boulder Acquisitions
outstanding on June 30, 2004 and (ii) any shares of common stock of
Boulder Acquisitions which the person has the right to acquire within
60 days upon the exercise of options or warrants or conversion of
convertible securities. Neither the numerator nor the denominator
include shares which may be issued upon the exercise of any other
options or warrants or the conversion of any other convertible
securities.

(4) Includes 1,791,743 shares held by Mr. Tai's wife, Shi Ying. Mr. Tai
disclaims beneficial ownership of those shares.

(5) Includes 9,510,021 shares held by Ms. Shi's husband, Tai Caihua. Ms.
Shi disclaims beneficial ownership of those shares.

(6) Includes 131,722 shares held by Timothy P. Halter, the president and
sole shareholder of Halter Financial Group, Inc.

ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS

Set forth below is certain information concerning (i) the principal
terms of the share exchange and (ii) the business of the combined company.

THE SHARE EXCHANGE

The Share Exchange. On June 23, 2004, Boulder Acquisitions, Sifang
Holdings and the shareholders of Sifang Holdings consummated the transactions
contemplated by the Exchange Agreement. The Exchange Agreement specified that
Boulder Acquisitions would acquire all 50,000 shares of the issued and
outstanding stock of Sifang Holdings in exchange for the issuance of an
aggregate of 13,782,636 shares of common stock of Boulder Acquisitions (on a
post-split basis). On the exchange closing date, Boulder Acquisitions issued an
aggregate of 13,782,636 shares of common stock to the shareholders of Sifang
Holdings, representing approximately 89.7% of the issued and outstanding Boulder
Acquisitions common stock following the exchange. All of Boulder Acquisitions'
business operations are now conducted through Sifang Holdings' wholly-owned
subsidiary, TCH.

Forward Stock Split. Prior to the exchange, Boulder Acquisitions' board
of directors approved and effected a forward stock split of Boulder Acquisitions
common stock on the basis of 1.31772 shares for each share of common stock
outstanding. After giving effect to the forward stock split and immediately
prior to the exchange, 1,585,705 shares of Boulder Acquisitions common stock
were outstanding.

Election of Board of Directors. Pursuant to the Exchange Agreement, at
the closing of the exchange, the membership of the board of directors of Boulder
Acquisitions was increased from one to two directors, and Tai Caihua was
appointed to serve in the newly created directorship. Also, under the terms of
the Exchange Agreement, all existing officers resigned as officers of Boulder
Acquisitions effective immediately following the closing of the transaction and
Mr. Tai, Fu Sixing, Lu Qin and Huang Tianqi were elected as President, Chief
Executive Officer, Chief Financial Officer and Chief Technical Officer of
Boulder Acquisitions, respectively.

DESCRIPTION OF BOULDER ACQUISITIONS' PREDECESSOR BUSINESS

Boulder Brewing Company ("Boulder Brewing") was incorporated in
Colorado on May 8, 1980 and operated as a microbrewery of various beers. In
1984, Boulder Brewing began constructing a brewery which was substantially
completed in October 1984 and opened in June 1985. The construction of this
facility along with the movement of equipment and personnel interrupted product
sales and hampered cash flow. Boulder Brewing was unable to become profitable
within any segment of its core business, became illiquid and was forced to
divest itself of all of its assets. Boulder Brewing became dormant without any
operations or assets in the second quarter of 1990.

In September 2001, Boulder Brewing changed its state of incorporation
from Colorado to Nevada by means of a merger with and into Boulder Acquisitions,
which was formed on September 6, 2001 solely for the purpose of effecting the
reincorporation. The articles of incorporation and bylaws of the Nevada
corporation became the articles of incorporation and bylaws of the surviving
corporation. From the date of reincorporation through the consummation of the
exchange, Boulder Acquisitions had no material operations or assets.

DESCRIPTION OF CURRENT BUSINESS

Except as otherwise indicated by the context, references in this
Current Report to "we," "us," "our," or the "company" are to the combined
business of Boulder Acquisitions and its wholly-owned direct subsidiary, Sifang
Holdings, and Sifang Holdings' wholly-owned subsidiary, TCH.

General

Our current operations were originally a business division of Shanghai
Sifang Information Technology Co., Ltd. ("Sifang Information"), which was
originally formed as a Chinese limited liability company in August 1998. In May
2004, Sifang Information's business divisions focusing on value-added
information services and distribution of mobile phones were spun off to a newly
established Chinese company, TCH. Pursuant to a series of transactions, TCH
became a wholly-owned subsidiary of our wholly-owned subsidiary, Sifang
Holdings. We conduct our business in China solely through Sifang Holdings and
TCH.

Overview

Value-Added Information Services. We render value-added information
services in China by purchasing content from third-party providers and
reformatting that content. Our value-added information services enable wireless
receiver (mobile phone and pager) users in China to access financial information
and various entertainment-related services. We contract with our affiliated
wireless service providers to transmit the reformatted content to customers of
China's various network operators.

The primary focus of our value-added information services is on
providing wireless receiver users in China with access to financial information.
We derive the vast majority of our value-added information services revenues
from our financial information business. Our financial information software,
Sifang Gutong, allows our customers to access stock and currency exchange
information and execute stock trades. We are one of the largest stock
information and trading value-added information service providers in China.

We began providing our entertainment-related services, including icons,
screen savers, multiplayer games, Western horoscopes, jokes, and sports and
entertainment news during the latter part of 2003. These services are ancillary
to our financial information services and they represent only a small portion of
our value-added information services revenue at the present time.

Leveraging our experience and understanding of the wireless value-added
services market in China, we have consistently purchased and reformatted
content, applications and technologies which are popular in the Chinese wireless
market. To further enhance and differentiate our services, we have entered into,
and will continue to actively pursue, collaborative relationships with third
parties to customize, market and provide access to their content through various
wireless technology platforms to Chinese consumers. In addition, all of our
services are promoted by our sales force and supported by our customer service
team, each of which is strategically based in Shanghai.

In order to meet ownership requirements under Chinese law which
restrict us, as a foreign company, from operating in certain industries such as
value-added telecommunication and Internet services, we have entered into
information service and cooperation agreements with two of our affiliates that
are incorporated in the People's Republic of China: Sifang Information and
Shanghai Tianci Industrial Group Co., Ltd. ("Tianci"). The original shareholder
structure of Sifang Holdings was identical to the current shareholder structure
of Sifang Information, and each of Sifang Information and Tianci are owned
approximately 69%, through direct and indirect ownership, by Tai Caihua, our
president and the chairman of our board of directors. We hold no ownership
interest in Sifang Information or Tianci. Sifang Information and Tianci contract
with China Mobile Communications Corporation ("China Mobile") and China United
Telecommunications Corporation ("China Unicom"), respectively, to provide
wireless value-added information services to wireless receiver customers in
China via China Mobile and China Unicom, respectively. Sifang Information
transmits those services to customers of China Mobile and China Unicom on behalf
of itself and Tianci pursuant to a signed agreement between Sifang Information
and Tianci.

Distribution. We primarily distribute nine different SAMSUNG
Electronics Co., Ltd. ("Samsung") mobile phone models in the Shanghai, China
region. Six of the Samsung models we distribute are compatible with the CDMA
network and three of the Samsung models we distribute are compatible with the
GSM network. We plan to pre-install the end-user portion of our Sifang Gutong
software in all of the Samsung mobile phones we distribute, and market our stock
information, stock trading, and currency exchange services by placing brochures
touting those services in the packaging of those Samsung mobile phones before we
distribute the phones to retailers. We believe this process will increase name
recognition of our financial information and stock trading services with
wireless receiver users.

There are three main first-tier wholesalers of Samsung phones in China:
Shanghai Taili Communication Equipment Co., Ltd., Shenzhen Tianyin Communication
Development Co., Ltd., and Guangzhou Yingtai Data Power Technology Co., Ltd.
These wholesalers contract, through local branches, with sub-wholesalers to
distribute each model in a defined area. We have contracts with Shanghai branch
offices of the three main first-tier wholesalers on whom we rely, making us a
sub-wholesaler distributor of nine Samsung mobile phone models in the Shanghai
region. We sell approximately 52% of our mobile phones to three retailers.

Our Business Strategy

Our objective is to maintain and strengthen our position both as a
provider of wireless value-added information services and as a distributor of
mobile phones in the Shanghai region. In order to achieve our objective, we plan
to, among other things, increase the number of subscribers to our value-added
information services by increasing the number of mobile phones we distribute and
pre-installing those phones with the end-user portion of our Sifang Gutong
software. Other key strategies for achieving our objective are to:

o Continue to expand and diversify our portfolio of consumer wireless
information services, including new SMS, 2.5G and other next generation
services such as those compatible with 3G,

o Increase investment in sales, marketing and branding, both in
conjunction with network operators and through independent activities,
in order to promote customer awareness of our value-added information
service provider in China,

o Continue to strengthen existing relationships with China Mobile and
China Unicom by increasing our sales presence at the national and local
levels and through joint marketing and promotion activities,

o Expand our marketing channels by continuing to develop integrated
marketing campaigns with traditional media outlets,

o Continue to be a sub-wholesaler of Samsung mobile phones and increase
the number of models of mobile phones that we distribute, and

o Work on establishing relationships with new mobile phone manufacturers
and wholesalers in order to diversify our distribution business.

Our Value-Added Information Services

Financial Services

Our primary focus with regard to value-added information services is
the provision of financial information services utilizing our Sifang Gutong
software. This software, developed by Shanghai Chengao Industrial Co. Ltd.
("Chengao"), utilizes the JAVA and BREW platforms. JAVA and BREW utilize the
more advanced 2.5G technology standard, which enables high-capacity wireless
data transmissions. As a result, services offered over these platforms are more
sophisticated and offer users higher quality graphics and richer content and
interactivity, commanding a premium price over our other services. Our Sifang
Gutong software enables our mobile phone and pager customers to access quotes
and retrieve customized investment-related information, as well as access our
currency exchange information.

Sifang Gutong provides our mobile phone and pager customers with the
ability to receive streaming real-time quotes, including stocks, most active
issues, largest gainers and losers, and mutual funds for securities trading on
the Shenzhen and Shanghai stock exchanges. Our Sifang Gutong software available
to mobile phone users includes a stock trading function that enables our mobile

phone customers to directly place orders to buy and sell securities listed on
the two aforementioned stock exchanges. Our trading window corresponds with the
hours that securities markets are open from 9:30 a.m. to 11:30 a.m., and from
1:00 p.m. to 3:00 p.m., Beijing Time.

We receive a continuous direct feed of detailed quote data, market
information and news. Our customers can create customized lists of stocks for
quick access to current trading information. Through our relationships with
financial information companies such as Shanghai Stock Information Company, we
also provide access to breaking news, charts, market commentary and analysis.

The value-added financial information we offer can only be accessed by
a customer on whose mobile phone or pager the end-user portion of our Sifang
Gutong software has been installed. We plan to pre-install the end-user portion
of our Sifang Gutong software in all of the Samsung mobile phones that we
distribute. With regard to mobile phones and pagers not distributed by us, we
will provide installation of our Sifang Gutong software free of charge upon
request.

Pursuant to the request of a Beijing retailer, we entered into an
agreement with Chengao and Sifang Information whereby Chengao installs the
end-user portion of our Sifang Gutong software into mobile phones owned by the
retailer. The retailer sells these phones at a premium price to consumers. In
return for the premium price, the consumers receive our value-added information
services for six months free of charge. The retailer passes the premium back to
Chengao, who retains a small installation fee and then passes the remainder on
to us. This relationship helps us market our value-added information services
and enables us to establish relationships with new customers.

Other Services

We also provide icons and screen savers, multiplayer action games,
Western horoscopes, jokes and event-driven or entertainment news updates. These
services represent only a small portion of our value-added information services
revenues at the present time. However, we believe that providing wireless
receiver users in China access to entertainment-related services increases our
ability to retain our financial information subscribers and expand our
subscriber base, and we expect the entertainment-related services portion of our
value-added information services business will grow over time.

o Horoscopes. With this service, users can obtain daily Western
horoscopes via their mobile phones or pagers.

o Games. We offer interactive SMS, JAVA and WAP-based games that can be
played on the screens of mobile phones. These games are designed to be
easy to play on the dial pad of a mobile phone and to maximize the
graphics available on mobile phone screens. Our current game offerings
include our popular titles Ant Kingdom and English Island. Ant Kingdom,
designed for the WAP platform, is a role-playing game set in the
kingdom of Ant. Players begin play as a soldier, and as they gain
experience in the game, gradually build their character to higher
levels such as captain, officer and eventually, king. The goal of the
game is to be the king. In English Island, a JAVA-based educational
game, players are given English words and must spell them correctly.
Every time a player spells a word correctly, the player's score
increases. The faster a player can spell words correctly, the higher
the score he can achieve.

o Jokes. We send users of this service a variety of jokes on demand or
via automatic daily messages.

o News. We automatically send periodic SMS messages on recent
event-driven news, sports (especially soccer), or entertainment events
to subscribers of this service. Mobile phone users can also download
desired information on demand. We obtain our news content from
government affiliated media companies, such as XinhuaNet and other
local media.

Content Relationships

Our content collaborators authorize the inclusion of their content in
one or more of our value-added information services for a fixed fee which we pay
directly to the provider. Our agreements with our content collaborators usually
have a one-year term, and are non-exclusive. Currently, our key content
collaborators are:

o Shanghai Stock Information Company.

o Xinhua News Agency (Shanghai).

o Shanghai Wanguo Stock Information Company.

o Shanghai Yibang Stock Information Company.

o Shanghai Shiji Stock Information Company.

o Korea Techall Co., Ltd. (which provides game content).

o Shanghai Shenfa Software Co., Ltd. (which provides game content).

Marketing Relationships

Sifang Information and Tianci, our affiliated value-added mobile phone
service providers, have marketing relationships with China Mobile and China
Unicom. We sell and market our services principally through China Mobile and
China Unicom. We also sell and market through Sifang Information's Web site,
www.sifang.net, and promotional events, direct marketing, media advertising and
other activities.

We are also focused on expanding our marketing channels by developing
integrated marketing campaigns with traditional media outlets and multinational
corporations. For example, we have been involved in several marketing campaigns
with Motorola whereby our wireless value-added services are promoted in their
in-store and media advertising in China, and Motorola is in turn promoted
through our services.

We sell all of our paging value-added information services through our
affiliated value-added paging service provider, Sifang Information. We contract
directly with end users to settle all payments from pager users. We market our
paging value-added information services through traditional media outlets,
including newspapers and magazines, and directly to end-users.

Operator Channels

General.

All of our paging value-added information services are provided through
the paging network owned by Sifang Information. We contract directly with the
pager users to collect all fees generated from our value-added information
services. We have an information service and cooperation agreement with Sifang
Information that provides us exclusive access to their paging network for ten
years. This agreement is automatically renewable for additional one year terms
unless we decide to terminate. All of our mobile phone value-added information
services are provided to mobile phone users by Sifang Information through the
networks of China Mobile and China Unicom. Previously, mobile phone users paid
for our services by purchasing pre-paid services cards. Now, our services are
billed to mobile phone customers in one of two ways: (1) certain of our
customers pay for our services in advance when they purchase our services and a
mobile phone together in a premium package (through our relationship with
Chengao and Sifang Information), and (2) our other customers (who do not
purchase our services as part of any such premium package) are billed by the
mobile operators, who collect the fees for our services, including both our data
access and short message services, from their mobile phone subscribers. The
mobile operators then pass those fees (net of fees charged by the mobile
operator) to our affiliated value-added service providers, Sifang Information
and Tianci, who in turn pass those fees to us in return for a small fee pursuant
to the terms of information service and cooperation agreements between us and
each of them.

Our management team utilizes its extensive experience in China to
develop close ties with the key personnel of the mobile operators at the central
and provincial levels. As of June 30, 2004, we had approximately 25 sales
professionals strategically located in provinces and municipalities concentrated
in the eastern and southern regions of China to work closely with the mobile
operators at the local level, where pricing and important marketing and
operational decisions are made. Our sales network enables us to work closely
with operators to facilitate the approval required for new service offerings and
for related pricing and to enjoy enhanced marketing and promotional support. We
are also able to gain insight into developments in the local markets and the
competitive landscape, as well as new market opportunities. Our sales
professionals are well-incentivized; most of their compensation is tied to usage
of our services in the applicable region.

Coordinated Marketing Campaigns

Our affiliated wireless service providers cooperate in marketing
campaigns with China Mobile and China Unicom. These network operators distribute
literature marketing us and our affiliates.

Non-Operator Channels

We also focus on non-mobile operator sales and marketing activities,
such as:

o promoting Sifang Information's Web site, www.sifang.net, to potential
users as a fun, easy-to-access place to request our wireless content
and applications,

o engaging in direct marketing to mobile phone users by, for example,
including advertising inserts in users' bills from Shanghai Mobile and
Shanghai Unicom,

o engaging in direct marketing to stock market investors by, for example,
including advertising inserts in investors' bills from brokerage
companies such as GF Securities Co., Ltd., Guotai Junan Securities Co.,
Ltd., Everbright Securities Co., Ltd. and Guoxin Securities Co., Ltd.,

o utilizing our database of users to create targeted marketing campaigns,

o advertising in traditional media outlets such as newspapers and
magazines, and

o we plan to pre-install the Samsung mobile phones we distribute with the
end-user portion of our Sifang Gutong software, and place brochures
touting our stock information, stock trading and currency exchange
services in the packaging of those phones, before distributing them to
retailers.

Customer Research

Our sales, marketing and product development activities are supported
by our five-member customer research department. This department focuses our
sales efforts in the following three distinct phases:

Customer Acquisition

Our customer research department analyzes the success rates of various
national and local marketing campaigns in which we are involved, including by
user segment and cost per user, in order to determine which campaigns are the
most effective. Using phone surveys, focus groups and analyses of usage
patterns, the department also considers demographic and other market factors to
identify product mixes and product categories which are suitable for the current
market environment.

Customer Conversion

To enhance our ability to convert one-time or occasional customers into
regular users of our services, our customer research department analyzes
customer and product churn rates across the market, average revenue per user
data and other information. In this way, it can identify different customer
segments and develop targeted marketing campaigns for those segments, including
cross-selling and up-selling marketing campaigns.

Customer Retention

Our customer research department evaluates ways to maximize user
interest in our services through, for example, providing feedback to our product
developers to improve product features based on customer information and
bundling older services with newly launched services. It also creates various
reward programs designed to enhance customer loyalty.

Customer Services

We pride ourselves in providing high quality customer service. Our
dedicated customer service center based in Shanghai provides our users real-time
support and is staffed by 20 full-time professionals. The center currently
operates everyday from 7:00 a.m. to 10:00 p.m. We strive to achieve the fastest
response times and highest customer satisfaction levels in the industry.

Competitive Landscape

There are currently three broad categories of wireless service
providers in China:

o Portal service providers, which have established expertise in Internet
content and have subsequently branched into mobile space. The portals
serve as content aggregators offering a variety of wireless value-added
services. These national portal operators include Sohu, NetEase, SINA,
and Tom.com.

o Dedicated service providers, whose businesses focus on offering a
variety of wireless content directly to mobile users. These providers
include Linktone, Newpalm and Mtone Wireless.

o Niche service providers, which focus on a particular market segment or
application that often builds on a pre-existing sector competency.
These providers include Tencent, Enorbus, and Solute. We belong in this
category because of our focus on financial information services.

We may also face competition from international wireless service providers.

As the mobile operators are becoming more selective in choosing their
service providers to promote high quality content, ensure high levels of
customer service and limit the number of providers with which they have to deal,
scale is becoming more important, and we believe the industry will likely
experience consolidation with the leading nationwide providers gaining more
market share at the expense of smaller local providers. Nationwide providers may
also acquire some of their smaller competitors to gain access to local
relationships with the mobile operators in China or new product expertise.

Distribution

Our Distribution Operation

We distribute various mobile phone brands in the Shanghai, China
region. We distribute mobile phones manufactured primarily by Samsung, and to a
lesser extent, by Motorola, Inc. ("Motorola"). We began distributing Motorola
mobile phones in early 2002 and Samsung mobile phones in November 2002. We began
discontinuing our Motorola mobile phone distribution business on June 30, 2004.
We will remain a distributor, for the Shanghai region, of nine different mobile
phone models manufactured by Samsung, and plan to increase our sales of Samsung
mobile phones.

Six of the Samsung models we distribute are compatible with the CDMA
network and three of the Samsung models we distribute are compatible with the
GSM network. We plan to pre-install the end-user portion of our Sifang Gutong
software in all of the Samsung mobile phones we distribute, and market our stock
information, stock trading, and currency exchange services by placing brochures
touting those services in the packaging of those Samsung mobile phones before we
distribute the phones to retailers. We believe this process will increase name
recognition of our financial information and stock trading services with
wireless receiver users.

We have rebate programs with Shanghai Taili Communication Equipment
Co., Ltd. and Shenzhen Tianyin Communication Development Co., Ltd. whereby we
are credited a certain portion of the sales price we paid to the first-tier
wholesaler if we are able to fulfill certain sales volume prescribed by that
first-tier wholesaler. As a result, we are entitled to receive certain rebates
and credits for the inventory held and sold by us within a specified period of
time as set by the first-tier wholesaler offering the rebate program.

Competition

We estimate that we compete with between ten and 20 other
sub-wholesalers for the rights to distribute Samsung phones in the Shanghai
region. The three main competitive factors the wholesalers consider in granting
a sub-wholesaler the rights to distribute a particular model include:

Available Cash Flow.

Sub-wholesalers must be able to pay for the mobile phones they desire
to purchase from first-tier wholesalers. First-tier wholesalers will be hesitant
to grant rights to distribute a particular model to a sub-wholesaler if that
sub-wholesaler does not have sufficient capital to make large purchases. We
believe that having adequate cash flow gives us a competitive advantage.

Relationships with Retailers.

The wholesalers look to the types of relationships sub-wholesalers have
with large retailers when deciding which sub-wholesaler to utilize. We have
strong relationships with three large retailers in Shanghai and sell
approximately 52% of our mobile phones to these three retailers.

Relationships with Wholesalers.

We have relationships with the three major wholesalers of Samsung
phones in China and have been sub-wholesalers for those three wholesalers for
more than a year.

Employees

The following table summarizes the functional distribution of our
employees as of June 30, 2003 and 2004:

-------------------------------- --------------------------------------
June 30,
-------------------------------- --------------------------------------
Department 2003 2004
-------------------------------- ------------------ -------------------
Business Development 5 5
-------------------------------- ------------------ -------------------
Customer Research 5 5
-------------------------------- ------------------ -------------------
Customer Service 20 20
-------------------------------- ------------------ -------------------
Finance 3 3
-------------------------------- ------------------ -------------------
Human Resources 2 2
-------------------------------- ------------------ -------------------
Investor Relations 2 2
-------------------------------- ------------------ -------------------
Legal and Administrative 2 2
-------------------------------- ------------------ -------------------
Sales and Marketing 25 25
-------------------------------- ------------------ -------------------
Product Development 20 20
-------------------------------- ------------------ -------------------
Technical Support 10 10
-------------------------------- ------------------ -------------------
-------------------------------- ------------------ -------------------
Total 94 94
-------------------------------- ------------------ -------------------

None of our personnel are represented under collective bargaining
agreements. We consider our relations with our employees to be good.

Facilities

We currently occupy two office spaces in the Shanghai region. We lease
the first, located at 429 Guangdong Road, Shanghai, People's Republic of China
200001, for approximately $41,000 a year, pursuant to an operating lease that
expires in December 2006. This office space contains our corporate headquarters,
and is approximately 250 square meters. We own the second, located at 689
Laoshandong Road, Shanghai, People's Republic of China 200120, which houses our
technical team and servers, and is approximately 800 square meters. We believe
we will be able to obtain adequate facilities, principally through the leasing
of appropriate properties, to accommodate our future expansion plans.

Legal Proceedings

No legal proceedings have been or are currently being undertaken for or
against the company, nor are we aware of any contemplated proceedings.

Wireless Technology Standards in China

Several different wireless technology standards have been developed
which operate at different frequencies with both analog and digital radio
signals. First generation wireless telephone systems employ analog technology,
while newer systems employ digital technology. Digital wireless technology,
commonly referred to as second generation technology, or 2G, multiplies the
number of users that can be served by the same band of spectrum using analog
technology. The wireless technologies most relevant in China currently include:

o Global System for Mobile Communications, or GSM -- initially developed
in order to facilitate unification and integration of
telecommunications within the European Union has become widespread
throughout most Asian countries. GSM technology breaks audio signals
into sequential pieces of data of a defined length, places each piece
into an information conduit at specific intervals and then reconstructs
the pieces at the end of the conduit. A key component of the GSM system
is the SIM card. Data stored on the card identifies the subscriber to
the mobile network as well as the service authorized for that
subscriber. Since the identity of the subscriber is held on the card,
any mobile phone can be used in conjunction with the SIM card.

o Code Division Multiple Access, or CDMA -- a digital technology standard
which has been used in commercial operation by several operators in
certain countries such as the United States and Korea. Unlike GSM, CDMA
technology is a continuous transmission technology which uses a coding
system to mix discrete audio signals together during transmission and
then separates those signals at the end of transmission.

Prior to the commercial rollout of third generation, or 3G, networks,
2.5G technology standards have been developed for both the GSM and CDMA
technologies to offer higher data transmission speeds, enabling the use of more
data intensive products. Current 2.5G wireless technologies include:

o General Packet-Switched Radio Service, or GPRS -- offers faster data
transmission with speeds ranging from 56 kilobits per second, or Kbps,
to 114 Kbps via a GSM network. GPRS supports a wide range of bandwidths
and is particularly suited for sending and receiving small bursts of
data, such as e-mail and Web browsing, as well as large volumes of
data. GPRS also makes it possible for users to make telephone calls and
transmit data simultaneously.

o CDMA 1x RTT -- an advanced CDMA-based technology which allows
transmission of data at speeds of up to 144 Kbps, compared to a maximum
of 64 Kbps for second generation CDMA networks.

3G represents several technology standards developed by The
International Telecommunications Union. Third generation technology has been
developed for both the GSM standard and CDMA standard.

Wireless value-added services can be offered through all of these
technology standards and most commonly include:

o Short Messaging Services, or SMS -- a service that enables a user to
send and receive text messages comprised of words or numbers or an
alphanumeric combination. SMS was created when it was incorporated into
the GSM standard.

o Wireless Application Protocol, or WAP -- a software protocol standard
that defines a standardized means of transmitting Internet-based
content and data to handheld devices such as mobile phones and pagers
with secure access to e-mail and text-based Web pages. WAP supports
most wireless networks including GSM and CDMA.

o Multimedia Messaging Services, or MMS -- a method of transmitting
graphics, video clips, sound files and short text messages over
wireless networks using the WAP protocol. MMS, however, is not the same
as e-mail in that MMS is based on the concept of multimedia messaging.
An MMS message is coded so that the images, sounds and text are
displayed in a predetermined order as one singular message.
Furthermore, MMS does not support attachments as e-mail does.

o JAVA -- a general programming environment that creates applications for
the Internet or any other distributed networks. JAVA applications are
intended to be independent of the hardware platform.

Government Regulation

The following is a summary of the principal governmental laws and
regulations that are or may be applicable to wireless service providers like us
in China. The scope and enforcement of many of the laws and regulations
described below are uncertain. We cannot predict the effect of further
developments in the Chinese legal system, including the promulgation of new
laws, changes to existing laws or the interpretation or enforcement of laws,
particularly with regard to wireless value-added services, which is an emerging
industry in China.

Regulation of Telecommunication Services

The telecommunications industry, including certain wireless value-added
services, is highly-regulated in China. Regulations issued or implemented by the
State Council, the Ministry of Information Industries, and other relevant
government authorities cover many aspects of telecommunications network
operation, including entry into the telecommunications industry, the scope of
permissible business activities, interconnection and transmission line
arrangements, tariff policy and foreign investment.

The principal regulations governing the telecommunications services
business in China include:

o Telecommunications Regulations (2000), or the Telecom Regulations. The
Telecom Regulations categorize all telecommunications businesses in
China as either infrastructure telecommunications businesses or
value-added telecommunications businesses. The latter category includes
SMS and other wireless value-added services. Under the Telecom
Regulations, certain services are classified as being of a value-added
nature and require the commercial operator of such services to obtain
an operating license, including telecommunication information services,
online data processing and translation processing, call centers and
Internet access. The Telecom Regulations also set forth extensive
guidelines with respect to different aspects of telecommunications
operations in China.

o Regulations for the Administration of Foreign-Invested
Telecommunications Enterprises (2002), or the FI Telecom Regulations.
The FI Telecom Regulations set forth detailed requirements with respect
to capitalization, investor qualifications and application procedures
in connection with the establishment of a foreign-invested telecom
enterprise. Under the FI Telecom Regulations, a foreign entity is
prohibited from owning more than 50% of the total equity in any
value-added telecommunications business in China, subject to certain
geographic limitations.

o Administrative Measures for Telecommunications Business Operating
License (2001), or the Telecom License Measures. Under the Telecom
License Measures, an approved value-added telecommunications service
provider must conduct its business in accordance with the
specifications recorded on its Telecom Business Operating License.

In addition to regulations promulgated at the national level by the
Chinese government, the Shanghai municipal government has issued provisional
regulations requiring SMS service providers to obtain licenses from or register
with the local Ministry of Information Industries branch office before providing
SMS service within the city. At this time, it is unclear whether national
regulations will be promulgated regulating SMS services.

Our affiliates, Sifang Information and Tianci, each have a value-added
telecommunication services license issued by the Shanghai Municipal
Telecommunications Administration Bureau, which is the local office of the
Ministry of Information Industries. They are each also in the process of
applying for an inter-provincial value-added telecommunication license with the
Ministry of Information Industries.

Other Laws and Their Application

Regulation of Internet Content Services. As a wireless value-added
information services provider, we do not engage in the Internet portal business
which typically involves the provision of extensive Internet content services,
including Chinese language Web navigational and search capabilities, content
channels, web-based communications and community services and a platform for
e-commerce, such as auction houses. Sifang Information registered with the
Shanghai Telecommunication Administration Bureau in January 2001 to provide
commercial services at the WWW.SIFANG.NET Web site.

As a commercial ICP provider, Sifang Information is prohibited from
posting or displaying any content that:

o opposes the fundamental principles determined in China's Constitution;

o compromises state security, divulges state secrets, subverts state
power or damages national unity;

o harms the dignity or interests of the state;

o incites ethnic hatred or racial discrimination or damages inter-ethnic
unity;

o sabotages China's religious policy or propagates heretical teachings or
feudal superstitions;

o disseminates rumors, disturbs social order or disrupts social
stability;

o propagates obscenity, pornography, gambling, violence, murder or fear
or incites the commission of crimes;

o insults or slanders a third party or infringes upon the lawful rights
and interests of a third party; or

o includes other content prohibited by laws or administrative
regulations.

Failure to comply with these prohibitions may result in the closing of Sifang
Information's Web site.

Regulation of News Dissemination through SMS Services. Pursuant to a
circular issued by the Shanghai Communications Administration, distribution of
news content through wireless applications like SMS must be approved by relevant
government agencies. Both Sifang Information and Tianci have all necessary
approvals.

Regulation of Advertisements. The State Administration of Industry and
Commerce, or the SAIC, is the government agency responsible for regulating
advertising activities in China. The SAIC has not promulgated regulations
specifically aimed at wireless advertising through a media other than the
Internet, such as through SMS services. One provisional regulation issued by
Shanghai municipal government prohibits service providers from sending SMS
advertisements without the client's consent.

As part of our non-mobile operator marketing activities, we have
developed integrated marketing campaigns with traditional media outlets such as
magazines and newspapers and multinational corporations through certain
cross-selling efforts with companies, including Motorola and Samsung. If the
SAIC were to treat our integrated marketing campaigns or other activities as
being advertising activities, we would need to apply to the local SAIC for an
advertising license to conduct wireless advertising business (through SMSs, for
example). We can give no assurance that such application would be approved by
the SAIC. Failure to obtain such approval could result in penalties including
being banned from engaging in online advertising activities, confiscation of
illegal earnings and fines.

Foreign Exchange Controls. The principal regulations governing foreign
exchange in China are the Foreign Exchange Control Regulations (1996) and the
Administration of Settlement, Sale and Payment of Foreign Exchange Regulations
(1996), or the Foreign Exchange Regulations. Under the Foreign Exchange
Regulations, Renminbi is freely convertible into foreign currency for current
account items, including the distribution of dividends. Conversion of Renminbi
for capital account items, such as direct investment, loans and security
investment, however, is still subject to the approval of the State
Administration of Foreign Exchange, or SAFE.

Under the Foreign Exchange Regulations, foreign-invested enterprises
are required to open and maintain separate foreign exchange accounts for capital

account items (but not for other items). In addition, foreign-invested
enterprises may only buy, sell and/or remit foreign currencies at those banks
authorized to conduct foreign exchange business after providing valid commercial
documents and, in the case of capital account item transactions, obtaining
approval from SAFE.

Intellectual Property and Proprietary Rights

We rely primarily on a combination of copyright laws and contractual
restrictions to establish and protect our intellectual property rights. We
require our employees to enter into agreements requiring them to keep
confidential all information relating to our customers, methods, business and
trade secrets during and after their employment with us. Our employees are
required to acknowledge and recognize that all inventions, trade secrets, works
of authorship, developments and other processes, whether or not patentable or
copyrightable, made by them during their employment are our property. They also
sign agreements to substantiate our sole and exclusive right to those works and
to transfer any ownership that they may claim in those works to us.

While we actively take steps to protect our proprietary rights, such
steps may not be adequate to prevent the infringement or misappropriation of our
intellectual property. This is particularly the case in China where the laws may
not protect our proprietary rights as fully as in the United States.
Infringement or misappropriation of our intellectual property could materially
harm our business. Sifang Information has registered the following Internet and
WAP domain name www.sifang.net.

Shanghai Sifang Communication Company ("Sifang Communication") has
registered one trademark with China's Trademark Office. That trademark is its
logo, a square (the English translation of "Sifang" is "square"). China's
trademark law utilizes a "first-to-file" system for obtaining trademark rights.
As a result, the first applicant to file an application for registration of a
mark will preempt all other applicants. Prior use of unregistered marks, except
"well known" marks, is generally not a basis for legal action in China. We may
not be able to successfully defend or claim any legal rights in any trademarks
for which we apply in the future.

Pursuant to a license agreement between our affiliate, Sifang
Communication, and us, we have the right to use its registered trademark, its
square logo, whenever necessary. We also acquired all of Sifang Information's
interest in the Sifang Gutong software pursuant to the terms of the spin-off of
Sifang Information's business divisions focusing on value-added information
services and distribution of mobile phones. We have the right to use the word
"Sifang" and to market ourselves through www.sifang.net with regard to both of
the spun-off divisions.

Many parties are actively developing and seeking patent protection for
wireless services-related technologies. We expect these parties to continue to
take steps to protect these technologies, including seeking patent protection.
There may be patents issued or pending that are held by others and that cover
significant parts of our technology, business methods or services. Disputes over
rights to these technologies are likely to arise in the future. We cannot be
certain that our products do not or will not infringe valid patents, copyrights
or other intellectual property rights held by third parties. We may be subject
to legal proceedings and claims from time to time relating to the intellectual
property of others.

CAUTIONARY STATEMENTS

You should carefully consider the following risks and the other
information set forth elsewhere in this Current Report. If any of these risks
occur, our business, financial condition and results of operations could be
adversely affected. As a result, the trading price of our common stock could
decline, perhaps significantly.

RISKS RELATED TO OUR WIRELESS VALUE-ADDED INFORMATION SERVICES BUSINESS

WE DEPEND UPON CONTRACTUAL ARRANGEMENTS WITH OUR AFFILIATED VALUE-ADDED MOBILE
PHONE SERVICE PROVIDERS, SHANGHAI SIFANG INFORMATION TECHNOLOGY CO., LTD., OR
SIFANG INFORMATION, AND SHANGHAI TIANCI INDUSTRIAL GROUP CO., LTD., OR TIANCI,
FOR THE SUCCESS OF OUR BUSINESS. THESE ARRANGEMENTS MAY NOT BE AS EFFECTIVE IN
PROVIDING OPERATIONAL CONTROL AS DIRECT OWNERSHIP OF THESE BUSINESSES AND MAY BE
DIFFICULT TO ENFORCE.

Because we conduct our business only in China, and because we are
restricted by the Chinese government from owning telecommunications or Internet
operations in China, we depend on our affiliated value-added mobile phone
service providers, Sifang Information and Tianci, in which we have no direct
ownership interest, but with which we have entered into information service and
cooperation agreements, to provide those services to mobile phone users in China
through contractual agreements with the mobile operators, China Mobile and China
Unicom. These arrangements may not be as effective in providing control over our
value-added information services to mobile phone users in China as would be
direct ownership of these businesses. For example, Sifang Information or Tianci
could fail to take actions required to operate our business, such as entering
into service contracts with China Mobile and China Unicom. Moreover, a portion
of the fees for our services are paid by the mobile operators directly to Sifang
Information and Tianci, which are then obligated to transfer all of those fees
to us, in return for a small fee. If Sifang Information or Tianci fail to
perform their obligations under these agreements, we may have to rely on legal
remedies under Chinese law, which we cannot assure you would be effective or
sufficient.

In the opinion of our Chinese counsel, Grandall Legal Group (Shanghai),
Sifang Information and Tianci each possess such licenses, permits, certificates,
authorities and approvals, issued by appropriate governmental agencies or bodies
in the People's Republic of China, as are necessary to conduct its business as
presently conducted as well as to perform their obligations under any contracts
between them and China Mobile and China Unicom, respectively. In addition, to
the best knowledge of Grandall Legal Group (Shanghai), TCH is not in breach of
or in default under any laws of the People's Republic of China or any approval,
consent, waiver, authorization, exemption, permission, endorsement or license
granted by any People's Republic of China governmental agencies. There are,
however, substantial uncertainties regarding the interpretation and application
of current and future Chinese laws and regulations, as discussed below.

WE DEPEND ON ONE SOFTWARE DEVELOPER FOR A SIGNIFICANT PORTION OF OUR SOFTWARE
DEVELOPMENT, AS WELL AS FOR IMPORTANT MARKETING RELATIONSHIPS.

We rely on Chengao to develop a significant portion of our software,
including our Sifang Gutong software. We also rely on Chengao to provide us with
an important marketing relationship regarding Sifang Gutong. If we were to lose
our relationship with Chengao we may have a difficult time finding a suitable
replacement in the short term.

Our corporate structure could be deemed to be in violation of current or future
Chinese laws and regulations which could adversely affect our ability to operate
our business effectively or at all.

In connection with China's entry into the World Trade Organization, or
WTO, foreign investment in value-added telecommunications and Internet services
in China was liberalized to allow for 30.0% foreign ownership in value-added
telecommunication and Internet services in 2002, 49.0% in 2003 and 50.0%
thereafter. In order to meet these ownership requirements, we have entered into
information service and cooperation agreements with two of our Chinese affiliate
companies: Sifang Information and Tianci. We do not have any direct ownership

interest in Sifang Information or Tianci. The original shareholder structure of
Sifang Holdings was identical to the current shareholder structure of Sifang
Information, and each of Sifang Information and Tianci are beneficially owned
69% by Tai Caihua, our president and the chairman of our board of directors. It
is possible that the relevant Chinese authorities could, at any time, assert
that any portion or all of TCH's, Sifang Information's, or Tianci's existing or
future ownership structure and businesses violate existing or future Chinese
laws, regulations or policies. It is also possible that the new laws or
regulations governing the telecommunication or Internet sectors in China that
have been adopted or may be adopted in the future will prohibit or restrict
foreign investment in, or other aspects of, TCH's, Sifang Information's or
Tianci's current or proposed businesses and operations. In addition, these new
laws and regulations may be retroactively applied. In any such case, we could be
required to restructure our operations which could adversely affect our ability
to operate our business effectively or at all.

WE DEPEND ON CHINA MOBILE AND CHINA UNICOM FOR DELIVERY OF OUR VALUE-ADDED
INFORMATION SERVICES TO MOBILE PHONE USERS IN CHINA, AND THE TERMINATION OR
ALTERATION OF SIFANG INFORMATION'S AND TIANCI'S VARIOUS CONTRACTS WITH EITHER OF
THEM OR THEIR PROVINCIAL OR LOCAL AFFILIATES COULD MATERIALLY AND ADVERSELY
IMPACT OUR BUSINESS.

Our affiliated value-added mobile phone service providers, Sifang
Information and Tianci, contract with the two mobile phone operators in China,
China Mobile and China Unicom, to offer our wireless value-added information
services to mobile phone users through those two mobile phone operators, which
service nearly all of China's approximately 282.2 million mobile phone
subscribers. Given their dominant market position, our affiliated value-added
mobile phone service providers' negotiating leverage with these operators is
limited. If our affiliated value-added mobile phone service providers' various
contracts with either operator are terminated or adversely altered, it may be
impossible for our affiliated value-added mobile phone service providers to find
appropriate replacement operators with the requisite licenses and permits,
infrastructure and customer base to offer our services, and our business would
be significantly impaired.

Our value-added information services are provided to mobile phone users
in China pursuant to contracts our affiliates have with China Mobile and China
Unicom and their provincial or local affiliates. Each of these contracts is
non-exclusive, and has a limited term (generally one year). Our affiliates
usually renew these contracts or enter into new ones when the prior contracts
expire, but on occasion the renewal or new contract can be delayed by periods of
one month or more. The terms of these contracts vary, but the operators are
generally entitled to terminate them in advance for a variety of reasons or, in
some cases, for no reason in their discretion. For example, several of our
affiliates' contracts with the mobile operators can generally be terminated if:

o our affiliate fails to achieve performance standards which are
established by the applicable operator from time to time,

o our affiliate breaches its obligations under the contracts, which
include, in many cases, the obligation not to deliver content that
violates the operator's policies and applicable law,

o the operator receives high levels of customer complaints about our
affiliate's services, or

o the operator sends written notice to our affiliate that it wishes to
terminate the contract at the end of the applicable notice period.

Our affiliates may also be compelled to alter their arrangements with
these mobile operators in ways which adversely affect our business. China Mobile
and China Unicom have unilaterally changed their policies as applied to
third-party service providers in the past, and may do so again in the future. We
may not be able to adequately respond to negative developments in the
contractual relationships between our affiliates and China Mobile or China
Unicom in the future because we do not have a contractual relationship with
China Mobile or China Unicom.

OUR BUSINESS COULD BE ADVERSELY AFFECTED IF CHINA MOBILE OR CHINA UNICOM OR BOTH
BEGIN PROVIDING THEIR OWN WIRELESS VALUE-ADDED SERVICES.

Our wireless value-added information services business may be adversely
affected if China Mobile or China Unicom or both decide to begin providing their
own wireless value-added services to mobile phone users. In that case, we would
face enhanced competition, and our services could be fully or partially denied
access to their networks.

WE DEPEND IN PART ON CHINA MOBILE AND CHINA UNICOM TO MAINTAIN ACCURATE RECORDS
AND THEIR WILLINGNESS TO PAY OUR AFFILIATED VALUE-ADDED WIRELESS SERVICE
PROVIDERS.

We depend in part on China Mobile and China Unicom to maintain accurate
records of the fees paid by users and their willingness to pay our affiliated
value-added wireless service providers. Specifically, the mobile operators
provide our affiliates with monthly statements that do not provide itemized
information regarding which of our services are being paid for. As a result,
monthly statements that our affiliates receive and provide to us from the mobile
operators cannot be reconciled to our internal records. In addition, we have
only limited means to independently verify the information provided to us by our
affiliates in this regard because we do not have access to the mobile operators'
internal records. Our business and results of operation could be adversely
affected if these mobile phone companies miscalculate the revenue generated from
our services and our affiliates' portion of that revenue, or refuse to pay our
affiliates altogether.

OUR REVENUES AND COST OF SERVICES ARE AFFECTED BY BILLING AND TRANSMISSION
FAILURES WHICH ARE OFTEN BEYOND OUR CONTROL.

Our affiliates do not collect fees for our services owed to them by
China Mobile and China Unicom in a number of circumstances, including if:

o the delivery of our service to a customer is prevented because his or
her phone is turned off for an extended period of time, the customer's
prepaid phone card has run out of value or the customer has ceased to
be a customer of the applicable operator,

o China Mobile or China Unicom experiences technical problems with its
network which prevent the delivery of our services to the customer,

o we experience technical problems with our technology platform that
prevents delivery of our services,

o our affiliates experience technical problems with their technology
platform which prevents delivery of our services, or

o the customer refuses to pay for our service due to quality or other
problems.

These situations are known in the industry as billing and transmission
failures, and we do not recognize any revenue for services which are
characterized as billing and transmission failures. The failure rate can vary
among the operators, and by province, and also has fluctuated significantly in
the past. If actual billing and transmission failures exceed our estimates, our
revenues could be materially adversely affected.

BECAUSE CHINA MOBILE AND CHINA UNICOM DO NOT SUPPLY OUR AFFILIATED VALUE-ADDED
MOBILE PHONE SERVICE PROVIDERS WITH REVENUE AND TRANSMISSION INFORMATION ON A
SERVICE-BY-SERVICE BASIS, WE CAN ONLY ESTIMATE OUR ACTUAL GROSS REVENUE AND OUR
COST OF SERVICES BY SERVICE TYPE, AND AS A RESULT, WHICH OF OUR SERVICES ARE OR
MAY BE PROFITABLE, ALL OF WHICH MAKE IT DIFFICULT TO ANALYZE THE FACTORS
AFFECTING OUR FINANCIAL PERFORMANCE.

China Mobile's and China Unicom's monthly statements to value-added
service providers regarding the services provided through their networks
currently do not contain revenue and billing and transmission failure
information on a service-by-service basis. Although we maintain our own records
reporting the services provided, we can only estimate our actual gross revenue
and cost of services by service type in this business because we are unable to
confirm which services were transmitted but resulted in billing and transmission
failures. As a result, we are not able to definitively calculate and monitor
service-by-service revenue, margins and other financial information, such as
average revenue per user by service and total revenue per user by service, and
also cannot definitively determine which of our services are or may be
profitable.

CHINA MOBILE AND CHINA UNICOM MAY IMPOSE HIGHER SERVICE OR NETWORK FEES ON OUR
AFFILIATED VALUE-ADDED SERVICE PROVIDERS IF WE ARE UNABLE TO SATISFY CUSTOMER
USAGE AND OTHER PERFORMANCE CRITERIA.

Fees for our wireless value-added information services are charged on a
monthly subscription or per use basis. Based on our contractual arrangements and
those of our wireless value-added service providers, we rely on China Mobile and
China Unicom to bill and collect fees for our services from mobile phone users.

China Mobile and China Unicom generally charge our affiliated
value-added service providers service fees of 15% and 30% of the revenues
generated by their services, respectively. To the extent that the number of
messages sent by our affiliates over China Mobile's network exceeds the number
of messages their customers send to them, our affiliates must pay per message
network fees, which decrease in several provinces as the volume of customer
usage of our services increases. The number of messages sent by our affiliates
will exceed those sent by their users, for example, if a user sends us a single
message to order a game but our affiliates in turn must send that user several
messages to confirm his or her order and deliver the game itself. Our
affiliates' service fees for China Unicom could also rise if our affiliates fail
to meet certain customer usage, revenue and other performance criteria. We
cannot be certain that our affiliates will be able to continue to satisfy these
criteria in the future or that the mobile operators will keep the criteria at
their current levels. Any increase in China Mobile's or China Unicom's network
fees and service charges could reduce our gross margins.

CHINA MOBILE AND CHINA UNICOM MAY TERMINATE THEIR RELATIONSHIPS WITH OUR
AFFILIATES IF OUR AFFILIATES FAIL TO ACHIEVE MINIMUM CUSTOMER USAGE, REVENUE AND
OTHER CRITERIA.

Our business could be adversely affected if our affiliated value-added
mobile phone service providers fail to achieve minimum customer usage, revenue
and other criteria imposed or revised by China Mobile and China Unicom at their
discretion from time to time. China Mobile and China Unicom, through their
national and local offices, have historically preferred to work only with a
small group of the best performing wireless value-added service providers, based
upon the uniqueness of the service offered by each provider, total number of
users, usage and revenue generated in the applicable province or municipality,
the rate of customer complaints, and marketing expenditures in the applicable
province or municipality.

THE SERVICES OUR AFFILIATED VALUE-ADDED MOBILE PHONE SERVICE PROVIDERS OFFER AND
THE PRICES THEY CHARGE ARE SUBJECT TO APPROVAL BY CHINA MOBILE AND CHINA UNICOM,
AND IF REQUESTED APPROVALS ARE NOT GRANTED IN A TIMELY MANNER, OUR BUSINESS
COULD BE ADVERSELY AFFECTED.

Our affiliated value-added mobile phone service providers must obtain
approval from China Mobile and China Unicom with respect to each service that
they propose to offer to their customers and the pricing for such service. In
addition, any changes in the pricing of our affiliates' existing services must
be approved in advance by these operators. There can be no assurance that such
approvals will be granted in a timely manner or at all. Moreover, under some of
our affiliates' contracts with the operators, prices cannot be changed more than
once every six months and prices must be within fixed parameters, depending on
the service. Any failure of our affiliates to obtain, or any delay in, obtaining
such approvals could place us at a competitive disadvantage in the market and
adversely affect our business.

WE OPERATE IN A RAPIDLY EVOLVING INDUSTRY, WHICH MAKES IT DIFFICULT FOR
INVESTORS TO EVALUATE OUR BUSINESS.

We began commercially offering wireless value-added information
services to mobile phone and pager users in China in January 2002, and since
that time, the technologies and services used in the wireless value-added
information services industry in China have developed rapidly. As a result of
this rapid and continual change in the industry, you should consider the
prospects of our value-added information service business in light of the risks
and difficulties frequently encountered by businesses in an early stage of
development. These risks include our ability to:

o attract and retain users for our wireless value-added information
services,

o expand the content and services that we offer and, in particular,
develop and aggregate innovative new content and service offerings,

o respond effectively to rapidly evolving competitive and market dynamics
and address the effects of mergers and acquisitions among our
competitors,

o build relationships with strategic partners, and

o increase awareness of our brand and user loyalty.

Due to these factors, there can be no certainty that we will maintain
or increase our current share of the highly competitive wireless value-added
information services market in which we operate.

THE SUCCESS OF SOME OF OUR WIRELESS VALUE-ADDED INFORMATION SERVICES IS
SIGNIFICANTLY DEPENDENT ON OUR ABILITY TO OBTAIN AND REFORMAT DESIRABLE CONTENT
AND TECHNOLOGY FROM THIRD PARTIES.

We obtain much of our content, including financial information, games,
logos, music, news and other information, from third parties. Furthermore, we
expect that we will develop and purchase technology in connection with our
development of next generation services such as MMS, JAVA and BREW. As the
market for wireless value-added information services develops, content and
technology providers may attempt to increase their profits from distribution
arrangements by demanding greater fees or a share of revenues, which would
adversely affect our financial performance. Many of our arrangements with
content and technology providers are non-exclusive, have a term of one year and
are subject to renewal. If our competitors are able to obtain such content in a
similar or superior manner or to license the same technologies, it could
adversely affect the popularity of our services and our negotiating leverage
with third-party providers.

If we fail to establish and maintain economically attractive
relationships with content and technology providers and to thereafter
successfully reformat their products, we may not be able to attract and retain
users or maintain or improve our financial performance.

WE DEPEND ON OUR SIFANG GUTONG SOFTWARE CONTINUING TO BE COMPATIBLE WITH NEW
MOBILE PHONE MODELS.

There can be no assurance that our Sifang Gutong software will be
compatible with new mobile phones developed by manufacturers such as Samsung. If
the software is no longer compatible, we will be forced to engage Chengao or an
alternative software developer to develop software that is compatible with the
new mobile phones or we will have to develop the software ourselves. If we are
unable to either engage a software developer or develop software in house that
is compatible with the new mobile phones, we will lose a significant portion of
our value-added information services revenue, including all of the pre-charged
subscription fee revenues we receive pursuant to the information service and
cooperation agreement among us, Chengao, and Sifang Information.

WE FACE INTENSE COMPETITION.

The Chinese market for wireless value-added services is intensely
competitive. We believe there are more than 800 service providers (including the
three groups discussed below) as of June 30, 2004, and is changing rapidly. We
compete indirectly with the following three groups of wireless value-added
service providers in China:

o portal service providers, which have established expertise in Internet
content and have subsequently branched into mobile space. The portals
serve as content aggregators offering a variety of wireless value-added
services,

o dedicated service providers, whose businesses focus on offering a
variety of wireless content directly to mobile users, and

o niche service providers, which focus primarily on a particular market
segment or application that often builds on a pre-existing sector
competency.

We have faced indirect competition from all three groups since our
entry into this market. Moreover, there are low barriers to entry for new
competitors in the wireless value-added services market. As a result, our
existing or potential competitors may in the future achieve greater market
acceptance and gain additional market share, which in turn could reduce our
revenues.

MOST OF OUR VALUE-ADDED INFORMATION SERVICES REVENUES ARE DERIVED FROM THE
SHANGHAI MUNICIPAL AREA AND SURROUNDING PROVINCES, AND THE TERMINATION OR
ALTERATION OF OUR AFFILIATES' CONTRACTS WITH THE MOBILE OPERATORS, OR A GENERAL
ECONOMIC DOWNTURN IN THOSE AREAS COULD HAVE A PARTICULARLY ADVERSE EFFECT ON OUR
BUSINESS.

Per capita income levels and mobile phone penetration rates (i.e., the
number of mobile subscribers divided by the population of China) in China are
generally higher in the coastal and southern provinces, and most of our revenues
derive from those areas, including the municipality of Shanghai and the
provinces of Beijing and Jiangsu.

WE DEPEND ON KEY PERSONNEL FOR THE SUCCESS OF OUR BUSINESS. OUR BUSINESS MAY BE
SEVERELY DISRUPTED IF WE LOSE THE SERVICES OF OUR KEY EXECUTIVES AND EMPLOYEES
OR FAIL TO ADD NEW SENIOR AND MIDDLE MANAGERS TO OUR MANAGEMENT.

Our future success is heavily dependent upon the continued service of
our key executives, particularly Tai Caihua, our president and chairman of our
board of directors, Fu Sixing, our chief executive officer, Lu Qin, our chief
financial officer, and Huang Tianqi, our chief technology officer. Our future
success is also dependent upon our ability to attract and retain qualified
senior and middle managers to our management team. If one or more of our current
or future key executives and employees are unable or unwilling to continue in
their present positions, we may not be able to easily replace them, and our
business may be severely disrupted. In addition, if any of these key executives
or employees joins a competitor or forms a competing company, we could lose
customers and suppliers and incur additional expenses to recruit and train
personnel. Each of our executive officers has entered into an employment
agreement and a confidentiality, non-competition and non-solicitation agreement
with us. We do not maintain key-man life insurance for any of our key
executives. Management will spend approximately 30% of its time managing Sifang
Information.

We also rely on a number of key technology staff for the operation of
our company. Given the competitive nature of our industry, the risk of key
technology staff leaving our company is high and could disrupt our operations.

RAPID GROWTH AND A RAPIDLY CHANGING OPERATING ENVIRONMENT STRAIN OUR LIMITED
RESOURCES.

As our user base increases, we will need to increase our investment in
our technology infrastructure, facilities and other areas of operations, in
particular our product development, customer service and sales and marketing
departments, which are important to our future success. If we are unable to
manage our growth and expansion effectively, the quality of our services and our
customer support could deteriorate and our business may suffer. Our future
success will depend on, among other things, our ability to:

o develop and quickly introduce new services, adapt our existing services
and maintain and improve the quality of all of our services,
particularly as new mobile technologies such as 3G are introduced,

o expand the percentage of our revenues which are recurring and are
derived from monthly subscription based services,

o continue to enter into and maintain relationships with desirable
content providers,

o continue training, motivating and retaining our existing employees and
attract and integrate new employees, including our senior management,
most of whom have been with our company for less than one year,

o develop and improve our operational, financial, accounting and other
internal systems and controls, and

o maintain adequate controls and procedures to ensure that our periodic
public disclosure under applicable laws, including U.S. securities
laws, is complete and accurate.

ANY FAILURES OF THE MOBILE TELECOMMUNICATIONS NETWORK, THE INTERNET OR OUR
TECHNOLOGY PLATFORM MAY REDUCE USE OF OUR SERVICES.

Both the continual accessibility of China Mobile's and China Unicom's
mobile networks and the performance and reliability of China's Internet
infrastructure are critical to our ability to attract and retain users.
Moreover, our business depends on our ability to maintain the satisfactory
performance, reliability and availability of our technology platform. The
servers which constitute the principal system hardware for our operations are
located in one location in Shanghai. Any server interruptions, break-downs or
system failures, including failures caused by sustained power shutdowns, floods
or fire causing loss or corruption of data or malfunctions of software or
hardware equipment, or other events outside our control that could result in a
sustained shutdown of all or a material portion of the mobile networks, the
Internet or our technology platform, could adversely impact our ability to
provide our services to users and decrease our revenues.

COMPUTER VIRUSES AND HACKING MAY CAUSE DELAYS OR INTERRUPTIONS ON OUR SYSTEMS
AND MAY REDUCE USE OF OUR SERVICES AND HARM OUR REPUTATION.

Computer viruses and hacking may cause delays or other service
interruptions on our systems. "Hacking" involves efforts to gain unauthorized
access to information or systems or to cause intentional malfunctions or loss or
corruption of data, software, hardware or other computer equipment. In addition,
the inadvertent transmission of computer viruses could expose us to a material
risk of loss or litigation and possible liability. We may be required to expend
significant capital and other resources to protect our systems against the
threat of such computer viruses and hacking and to rectify any damage to our
systems. Moreover, if a computer virus or hacking which affects our systems is
highly publicized, our reputation could be materially damaged and usage of our
services may decrease.

WE MAY BE HELD LIABLE FOR INFORMATION DISPLAYED ON OR RETRIEVED FROM OUR SERVICE
OFFERINGS.

We may face liability for defamation, negligence, copyright, patent or
trademark infringement and other claims based on the nature and content of the
materials that we provide in our wireless value-added information services. For
example, SMS news updates provided by us could possibly be deemed to contain
state secrets in violation of applicable Chinese law. In addition, third parties
could assert claims against us for losses incurred in reliance on information
distributed by us. We may incur significant costs in investigating and defending
these claims, even if they do not result in liability.

WE MAY NOT BE ABLE TO ADEQUATELY PROTECT OUR INTELLECTUAL PROPERTY, AND WE MAY
BE EXPOSED TO INFRINGEMENT CLAIMS BY THIRD PARTIES.

We rely on contractual restrictions on disclosure to protect our
intellectual property rights. Monitoring unauthorized use of our information
services is difficult and costly, and we cannot be certain that the steps we
take will effectively prevent misappropriation of our technology and content.
Our management may determine in the future to make application for copyright,
trademark or trade secret protection if management determines that such
protection would be beneficial and cost-effective.

From time to time, we may have to resort to litigation to enforce our
intellectual property rights, which could result in substantial costs and
diversion of our resources. In addition, third parties may initiate litigation
against us for alleged infringement of their proprietary rights. In the event of
a successful claim of infringement and our failure or inability to develop
non-infringing technology or content or license the infringed or similar
technology or content on a timely basis, our business could suffer. Moreover,
even if we are able to license the infringed or similar technology or content,
license fees that we pay to licensors could be substantial or uneconomical.

WE HAVE LIMITED BUSINESS INSURANCE COVERAGE.

The insurance industry in China is still at an early stage of
development. Insurance companies in China offer limited business insurance
products, and do not, to our knowledge, offer business liability insurance. As a
result, we do not have any business liability insurance coverage for our
operations. Moreover, while business disruption insurance is available, we have
determined that the risks of disruption and cost of the insurance are such that
we do not require it at this time. Any business disruption, litigation or
natural disaster might result in substantial costs and diversion of resources.

RISKS RELATED TO THE WIRELESS VALUE-ADDED SERVICES INDUSTRY

OUR ABILITY TO GENERATE REVENUES COULD SUFFER IF THE CHINESE MARKET FOR WIRELESS
VALUE-ADDED SERVICES DOES NOT DEVELOP AS ANTICIPATED.

The wireless value-added services market in China has evolved rapidly
over the last four years, with the introduction of new services, development of
consumer preferences, market entry by new competitors and adaptation of
strategies by existing competitors. We expect each of these trends to continue,
and we must continue to adapt our strategy to successfully compete in our
market.

In particular, we currently offer a wide range of wireless value-added
information services for mobile phones using 2.5G technologies. There can be no
assurance, however, that these 2.5G technologies and any services compatible
with them will be accepted by consumers or promoted by the mobile operators.
Moreover, there are numerous other technologies in varying stages of
development, such as third generation mobile technologies, which could radically
alter or eliminate the market for SMS or 2.5G services.

Accordingly, it is extremely difficult to accurately predict consumer
acceptance and demand for various existing and potential new offerings and
services, and the future size, composition and growth of this market.
Furthermore, given the limited history and rapidly evolving nature of our
market, we cannot predict the price that wireless subscribers will be willing to
pay for our services or the services of our affiliated value-added service
providers or whether subscribers will have concerns about security, reliability,
cost and quality of service associated with wireless services. If acceptance of
our wireless value-added information services is different than anticipated, our
ability to maintain or increase our revenue and profits could be materially and
adversely affected.

THE POPULARITY OF OUR SERVICES WHICH OPERATE WITH NEXT GENERATION TECHNOLOGY
STANDARDS ARE NECESSARILY DEPENDENT ON THE MARKET PENETRATION OF MOBILE PHONES
THAT ARE COMPATIBLE WITH THOSE STANDARDS, WHICH IS BEYOND OUR CONTROL.

Mobile phone users can access our MMS, WAP, JAVA, BREW and other
services which operate with next generation technology standards only if they
purchase mobile phones that are compatible with those standards. In particular,
mobile phones that are 2.5G-compatible have historically been significantly more
expensive in China than mobile phones using older technology such as GSM.
Although the prices of 2.5G-compatible mobile phones have been dropping rapidly
in recent quarters, we cannot be certain whether this trend will continue or the
extent to which existing users will be willing to upgrade their mobile phones to
obtain the latest technology. The pricing, marketing and other factors which
affect the sales of more sophisticated mobile phones are all outside of our
control, and weak sales of mobile phones for which we have developed services
could adversely affect our business.

THE TELECOMMUNICATION LAWS AND REGULATIONS IN CHINA ARE EVOLVING AND SUBJECT TO
INTERPRETATION AND WILL LIKELY CHANGE IN THE NEAR FUTURE. IF WE ARE FOUND TO BE
IN VIOLATION OF CURRENT OR FUTURE CHINESE LAWS OR REGULATIONS, WE COULD BE
SUBJECT TO SEVERE PENALTIES.

Although wireless value-added services are subject to general
regulations regarding telecommunication services, we believe that currently
there are no Chinese laws at the national level explicitly governing wireless
value-added services, such as our services related to SMS, MMS, WAP, JAVA, and
BREW, and no Chinese government authority has been specifically designated to
regulate these services. Many providers of wireless value-added services have
obtained various value-added telecommunication services licenses, such as the
licenses possessed by our Chinese affiliates, Sifang Information and Tianci.
These value-added telecommunication licenses were issued by the local Shanghai
Municipal Telecommunications Administration Bureau, and they may not be
sufficient to offer wireless value-added services on a national basis. Sifang
Information and Tianci are in the process of applying with the Ministry of
Information Industries for an inter-provincial value-added telecommunication
license in accordance with the Ministry's general regulations regarding
telecommunication services. However, we cannot predict whether either will be
granted that license. Moreover, we cannot be certain that any local or national
value-added telecommunication license requirements will not conflict with one
another or that any given license will be deemed sufficient by the relevant
governmental authorities for the provision of this category of service. It is
also possible that new national legislation might be adopted to regulate such
services.

If we or our affiliates are found to be in violation of any existing or
future Chinese laws or regulations regarding wireless value-added services or
Internet access which is discussed in the following risk factor, the relevant
Chinese authorities have the power to, among other things:

o levy fines;

o confiscate our income or the income of our affiliated value-added
service providers;

o revoke our business license or the business licenses of our affiliated
value-added service providers;

o shut down our servers or the servers of our affiliated value-added
service providers and/or block any Web sites that we or our affiliated
value-added service providers may operate;

o require us to discontinue any portion or all of our wireless
value-added information services business; or

o require our affiliated value-added service providers to discontinue any
portion or all of their wireless value-added services business.

THE CHINESE GOVERNMENT, CHINA MOBILE OR CHINA UNICOM MAY PREVENT US FROM
DISTRIBUTING, AND WE MAY BE SUBJECT TO LIABILITY FOR, CONTENT THAT ANY OF THEM
BELIEVE IS INAPPROPRIATE.

China has enacted regulations governing telecommunication service
providers, Internet access and the distribution of news and other information.
In the past, the Chinese government has stopped the distribution of information
over the Internet that it believes violates Chinese law, including content that
is obscene, incites violence, endangers national security, is contrary to the
national interest or is defamatory. In addition, our affiliated value-added
service providers may not publish certain news items, such as news relating to
national security, without permission from the Chinese government. Furthermore,
the Ministry of Public Security has the authority to cause any local Internet
service provider to block any Web site maintained outside China at its sole
discretion.

China Mobile and China Unicom also have their own policies regarding
the distribution of inappropriate content by wireless value-added service
providers and have recently punished certain providers for distributing content
deemed by them to be obscene. Such punishments have included censoring of
content, delaying payments of fees by the mobile operators to the offending
service provider, forfeiture of fees owed by the mobile operators to the
offending service provider and suspension of the service on the mobile
operators' networks. Accordingly, even if our affiliated wireless value-added
service providers comply with Chinese governmental regulations relating to
licensing and foreign investment prohibitions, if the Chinese government, China
Mobile or China Unicom were to take any action to limit or prohibit the
distribution of information or to limit or regulate any current or future
content or services available to users, our revenues could be reduced and our
reputation harmed.

The Chinese government is expected to grant licenses to offer wireless
services in China to China Telecom, China Netcom and possibly other parties with
which our affiliated wireless value-added service providers have not yet
developed close relationships. If those parties receive licenses and are
successful in the market but our affiliates are unable to develop cooperative
relationships with them, our business could be adversely affected.

It is also possible that China Telecom, China Netcom and any other
parties receiving wireless licenses may decide to offer wireless value-added
services created by them, rather than by third-party service providers such as
our affiliated wireless value-added service providers. In that case, our
business could be adversely affected.

RISKS RELATED TO DOING BUSINESS IN CHINA

A DOWNTURN IN THE CHINESE ECONOMY MAY SLOW DOWN OUR GROWTH AND PROFITABILITY.

The growth of the Chinese economy has been uneven across geographic
regions and economic sectors. There can be no assurance that growth of the
Chinese economy will be steady or that any downturn will not have a negative
effect on our business. Our profitability will decrease if expenditures for
wireless value-added services decrease due to a downturn in the Chinese economy.
More specifically, increased penetration of wireless value-added services in the
less economically developed central and western provinces of China will depend
on those provinces achieving certain income levels so that mobile phones and
related services become affordable to a significant portion of the population.

GOVERNMENT REGULATION OF THE TELECOMMUNICATIONS AND INTERNET INDUSTRIES MAY
BECOME MORE COMPLEX.

Government regulation of the telecommunications and Internet industries
is highly complex. New regulations could increase our costs of doing business
and prevent us from efficiently delivering our services. These regulations may
stop or slow down the expansion of our user base and limit the access to our
services.

THE UNCERTAIN LEGAL ENVIRONMENT IN CHINA COULD LIMIT THE LEGAL PROTECTIONS
AVAILABLE TO YOU.

The Chinese legal system is a civil law system based on written
statutes. Unlike common law systems, it is a system in which decided legal cases
have little precedential value. In the late 1970s, the Chinese government began
to promulgate a comprehensive system of laws and regulations governing economic
matters. The overall effect of legislation enacted over the past 20 years has
significantly enhanced the protections afforded to foreign invested enterprises
in China. However, these laws, regulations and legal requirements are relatively
recent and are evolving rapidly, and their interpretation and enforcement
involve uncertainties. These uncertainties could limit the legal protections
available to foreign investors, such as the right of foreign invested
enterprises to hold licenses and permits such as requisite business licenses.

ANY RECURRENCE OF SEVERE ACUTE RESPIRATORY SYNDROME, OR SARS, OR ANOTHER
WIDESPREAD PUBLIC HEALTH PROBLEM, COULD ADVERSELY AFFECT OUR BUSINESS AND
RESULTS OF OPERATIONS.

A renewed outbreak of SARS or another widespread public health problem
in China, where all of our revenue is derived, and in Shanghai, where our
operations are headquartered, could have a negative effect on our operations.
Our operations may be impacted by a number of health-related factors, including
the following:

o quarantines or closures of some of our offices which would severely
disrupt our operations,

o the sickness or death of our key officers and employees, and

o a general slowdown in the Chinese economy.

Any of the foregoing events or other unforeseen consequences of public
health problems could adversely affect our business and results of operations.

CHANGES IN CHINA'S POLITICAL AND ECONOMIC POLICIES COULD HARM OUR BUSINESS.

The economy of China has historically been a planned economy subject to
governmental plans and quotas and has, in certain aspects, been transitioning to
a more market-oriented economy. Although we believe that the economic reform and
the macroeconomic measures adopted by the Chinese government have had a positive
effect on the economic development of China, we cannot predict the future
direction of these economic reforms or the effects these measures may have on
our business, financial position or results of operations. In addition, the
Chinese economy differs from the economies of most countries belonging to the
Organization for Economic Cooperation and Development, or OECD. These
differences include:

o economic structure;

o level of government involvement in the economy;

o level of development;

o level of capital reinvestment;

o control of foreign exchange;

o methods of allocating resources; and

o balance of payments position.

As a result of these differences, our business may not develop in the
same way or at the same rate as might be expected if the Chinese economy were
similar to those of the OECD member countries.

RESTRICTIONS ON CURRENCY EXCHANGE MAY LIMIT OUR ABILITY TO RECEIVE AND USE OUR
REVENUES EFFECTIVELY.

Because almost all of our future revenues may be in the form of
Renminbi, any future restrictions on currency exchanges may limit our ability to
use revenue generated in Renminbi to fund any future business activities outside
China or to make dividend or other payments in U.S. dollars. Although the
Chinese government introduced regulations in 1996 to allow greater
convertibility of the Renminbi for current account transactions, significant
restrictions still remain, including primarily the restriction that foreign
invested enterprises may only buy, sell or remit foreign currencies, after
providing valid commercial documents, at those banks authorized to conduct
foreign exchange business. In addition, conversion of Renminbi for capital
account items, including direct investment and loans, is subject to governmental
approval in China, and companies are required to open and maintain separate
foreign exchange accounts for capital account items. We cannot be certain that
the Chinese regulatory authorities will not impose more stringent restrictions
on the convertibility of the Renminbi, especially with respect to foreign
exchange transactions.

THE VALUE OF OUR SECURITIES WILL BE AFFECTED BY THE FOREIGN EXCHANGE RATE
BETWEEN U.S. DOLLARS AND RENMINBI.

The value of our common stock will be affected by the foreign exchange
rate between U.S. dollars and Renminbi. For example, to the extent that we need
to convert U.S. dollars into Renminbi for our operational needs and should the
Renminbi appreciate against the U.S. dollar at that time, our financial position
and the price of our common stock may be adversely affected. Conversely, if we
decide to convert our Renminbi into U.S. dollars for the purpose of declaring
dividends on our ordinary shares or for other business purposes and the U.S.
dollar appreciates against the Renminbi, the U.S. dollar equivalent of our
earnings from our subsidiaries in China would be reduced.

RISKS RELATED TO THE MOBILE PHONE DISTRIBUTION INDUSTRY

WE ARE DEPENDENT ON THREE MAIN FIRST-TIER WHOLESALERS TO SUPPLY ALL OF OUR
MOBILE PHONES.

Our performance depends on whether we can continue to secure contracts
with the three wholesalers of Samsung mobile phones on whom we rely. We have no
long-term purchase contracts or other contracts that provide continued supply,
pricing or access to new models and any of the first-tier wholesalers on whom we
rely could discontinue selling to us at any time. We may not be able to acquire
new Samsung models in the future and we may not be able to acquire the models
that we need in sufficient quantities or on terms that are acceptable to us in
the future. As a result, our revenues may decrease.

OUR PERFORMANCE IS DEPENDENT ON THE POPULARITY OF SAMSUNG'S MOBILE PHONE MODELS.

We primarily distribute mobile phones manufactured by Samsung and thus
are dependant on Samsung's ability to create and deliver high quality mobile
phone models in a cost effective and timely manner. Samsung is a leading
manufacturer of mobile phones based on both the CDMA network and the GSM network
in China. There can be no assurance that Samsung will continue to create high
quality mobile phone models that are popular with consumers. As a result, our
revenues may decrease. In addition, our success depends on our ability to
anticipate and respond to changing mobile phone model trends and consumer
demands in a timely manner. The models we distribute must appeal to a broad
range of consumers whose preferences cannot always be predicted with certainty
and may change between sales seasons. If we misjudge which mobile phone models
will be popular or the market for the models we distribute, our sales may
decline or we may be required to sell our models at lower prices.

CASH FLOW.

It is important that we have sufficient cash flow to purchase enough
mobile phones from the first-tier wholesalers on whom we rely. If our cash flow
decreases significantly, we will not be able to purchase a sufficient quantity
of inventory to meet our customers' demands, which would have a negative impact
on our sales, and may cause the first-tier wholesalers on whom we rely to look
to other sub-wholesalers to distribute mobile phones. This development would
have a negative impact on our revenues.

CUSTOMERS.

One of the factors the first-tier wholesalers on whom we rely considers
when determining who they will use as a sub-wholesaler is the sub-wholesaler's
relationship with retailers. Currently approximately 52% of our mobile phone
sales are made to three retailers. We have no long-term sales contracts or other
contracts that provide continued selling or pricing and any of the retailers we
supply could discontinue buying from us at any time. If we lose our
relationships with our three largest retailers, we will have a difficult time
finding new large retailers to purchase our Samsung mobile phones and may lose
our contracts with the first-tier wholesalers on whom we rely. This would have a
negative impact on our business.

WE FACE CERTAIN RISKS RELATING TO CUSTOMER SERVICE.

Any material disruption or slowdown in our order processing systems
resulting from labor disputes, mechanical problems, human error or accidents,
fire, natural disasters, or comparable events could cause delays in our ability
to receive and distribute orders and may cause orders to be lost or to be
shipped or delivered late. As a result, customers may cancel orders or refuse to
receive goods on account of late shipments, which would result in a reduction
net sales and could mean increased administrative and shipping costs.

WE FACE RISKS ASSOCIATED WITH DISTRIBUTION.

We conduct all of our distribution operations from one facility in
Shanghai, China. Any disruption in the operations at the distribution center
could have a negative impact on our business.

COMPETITION.

Despite the fact that we distribute nine Samsung mobile phone models in
the Shanghai, China region, we face competition from distributors of different
models of mobile phones manufactured by Samsung in the Shanghai region and from
distributors of phones manufactured by companies other than Samsung that
distribute in the Shanghai region.

Competition is based on a variety of factors including maintenance of
product quality, competitive pricing, delivery efficiency, customer service and
satisfaction levels and the ability to anticipate technological changes and
changes in customer preferences. No assurances can be given that any of the
first-tier wholesalers on whom we rely or Samsung will not acquire, startup, or
expand their own distribution systems to sell directly to our customers.

RISKS RELATED TO OUR COMMON STOCK

THE MARKET PRICE FOR OUR COMMON STOCK MAY BE VOLATILE.

The market price for our common stock is likely to be highly volatile
and subject to wide fluctuations in response to factors including the following:

o actual or anticipated fluctuations in our quarterly operating results,

o announcements of new services by us or our competitors,

o changes in financial estimates by securities analysts,

o conditions in the wireless value-added services market,

o changes in the economic performance or market valuations of other
companies involved in wireless value-added information services or
distribution of mobile phones,

o announcements by our competitors of significant acquisitions, strategic
partnerships, joint ventures or capital commitments,

o additions or departures of key personnel,

o potential litigation, or

o conditions in the mobile phone market.

In addition, the securities markets have from time to time experienced
significant price and volume fluctuations that are not related to the operating
performance of particular companies. These market fluctuations may also
materially and adversely affect the market price of our common stock.

STOCKHOLDERS COULD EXPERIENCE SUBSTANTIAL DILUTION.

We may issue additional shares of our capital stock to raise additional
cash for working capital. If we issue additional shares of our capital stock,
our stockholders will experience dilution in their respective percentage
ownership in the company. We have no present intention to pay dividends.

We have never paid dividends or made other cash distributions on our
common stock, and do not expect to declare or pay any dividends in the
foreseeable future. We intend to retain future earnings, if any, for working
capital and to finance current operations and expansion of our business.

A LARGE PORTION OF OUR COMMON STOCK IS CONTROLLED BY A SMALL NUMBER OF
STOCKHOLDERS.

A large portion of our common stock is held by a small number of
stockholders. As a result, these stockholders are able to influence the outcome
of stockholder votes on various matters, including the election of directors and
extraordinary corporate transactions including business combinations. In
addition, the occurrence of sales of a large number of shares of our common
stock, or the perception that these sales could occur, may affect our stock
price and could impair our ability to obtain capital through an offering of
equity securities. Furthermore, the current ratios of ownership of our common
stock reduce the public float and liquidity of our common stock which can in
turn affect the market price of our common stock.

WE MAY BE SUBJECT TO "PENNY STOCK" REGULATIONS.

The SEC has adopted rules that regulate broker-dealer practices in
connection with transactions in "penny stocks." Penny stocks generally are
equity securities with a price of less than $5.00 (other than securities
registered on certain national securities exchanges or quoted on the NASDAQ
system, provided that current price and volume information with respect to
transactions in such securities is provided by the exchange or system). Penny
stock rules require a broker-dealer, prior to a transaction in a penny stock not
otherwise exempt from those rules, to deliver a standardized risk disclosure
document prepared by the SEC, which specifies information about penny stocks and
the nature and significance of risks of the penny stock market. A broker-dealer
must also provide the customer with bid and offer quotations for the penny
stock, the compensation of the broker-dealer, and our sales person in the
transaction, and monthly account statements indicating the market value of each
penny stock held in the customer's account. In addition, the penny stock rules
require that, prior to a transaction in a penny stock not otherwise exempt from
those rules, the broker-dealer must make a special written determination that
the penny stock is a suitable investment for the purchaser and receive the
purchaser's written agreement to the transaction. These disclosure requirements
may have the effect of reducing the trading activity in the secondary market for
stock that becomes subject to those penny stock rules. Whenever any of our
securities become subject to the penny stock rules, holders of those securities
may have difficulty in selling those securities.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Current Report contains forward-looking statements that involve
risks and uncertainties. These statements relate to future events or our future
financial performance. In some cases, you can identify forward-looking
statements by terminology such as "may," "will," "could," "expect," "plan,"
"intend," "anticipate," "believe," "estimate," "predict," "potential," or
"continue," or the negative of such terms or other comparable terminology. These
statements are only predictions. Actual events or results may differ materially.
In evaluating these statements, you should specifically consider various
factors, including the risks outlined in the "Risk Factors" section above. These
factors may cause our actual results to differ materially from any
forward-looking statement.

Although we believe that the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee future results,
levels of activity, performance or achievements. We are under no duty to update
any of the forward-looking statements after the date of this Current Report to
conform such statements to actual results or to changes in our expectations.

DIRECTORS AND EXECUTIVE OFFICERS

The following table provides information about our executive officers
and directors and their respective ages and positions as of June 30, 2004. The
directors listed below will serve until the next annual meeting of the Boulder
Acquisitions stockholders:

NAME AGE POSITIONS HELD AND TENURE

Tai Caihua 47 Director, President, Chairman of the Board
Shi Ying 44 Director
Huang Tianqi 32 Director, Chief Technology Officer
Jing Weiping 40 Director
Mao Ming 42 Director
Song Jing 28 Director
Fu Sixing 43 Director, Chief Executive Officer
Yu Ruijie 41 Director
Zhang Xiaodong 36 Director
Huang Wei 41 Director
Lu Qin 35 Chief Financial Officer

Tai Caihua has served as President, Chairman of our Board of Directors
and a member of our Board of Directors since June 23, 2004. Mr. Tai has been (i)
the President and sole Director of our wholly owned subsidiary, Sifang Holdings,
since February 2004; (ii) Chairman of the Board of Directors of Sifang Holdings
wholly owned subsidiary, TCH, since its inception in May 2004; (iii) Director
and General Manager of Tianci, one of our affiliates, since January 1994 and
(iv) a Director of Sifang Information, one of our affiliates, since December
2001. Mr. Tai holds a Masters of Business Administration from the Macau
University of Science and Technology.

Shi Ying has served as a member of our Board of Directors since June
24, 2004. Ms. Shi has been the Head of Operations and a member of the Board of
Directors of TCH since its inception in May 2004. For the past eight years she
headed the Operations Department of Sifang Information. Ms. Shi graduated from
the Shanghai Sports college with a Bachelors degree.

Huang Tianqi has served as our Chief Technology Officer since June 23,
2004 and a member of our Board of Directors since June 24, 2004. Mr. Huang has
served as Chief Technology Officer of Sifang Holdings and Vice-General Manager,
Chief Technology Officer and a Director of TCH since their inception in February
2004 and May 2004, respectively. Mr. Huang also serves as the Vice-General
Manager and a member of the Board of Directors of Sifang Information. Before
becoming Vice-General Manager, Mr. Huang was the Chief Technology Officer at
Sifang Information for seven years. Mr. Huang graduated from Nanjing University
of Posts and Telecommunications with a Bachelors Degree and from Shanghai Jiao
Tong University with a Masters of Science Degree.

Jing Weiping has served as a member of our Board of Directors since
June 24, 2004. Mr. Jing has served as a member of the Board of Directors of TCH
since its inception in May 2004 and as a Director of Sifang Information since
2001. Mr. Jing served as the Manager of Technology Assurance Department for
Sifang Information for the past nine years. Mr. Jing received his Bachelors
Degree from Dong Hua University.

Mao Ming serves as a member of the Board of Directors. He was elected
to the Board of Directors June 24, 2004. He has been (i) the General Manager and
a member of the Board of Directors of TCH since its inception in May 2004; and
(ii) the General Manager and a Director of Sifang Information since January
1998. Mr. Mao graduated from China PLA Measurement College with a Bachelors
Degree and from the Macau University of Science and Technology with a Masters of
Business Administration.

Song Jing has served as a member of our Board of Directors since June
24, 2004. Mr. Song has served as Vice-General Manager and a member of the Board
of Directors of TCH since its inception in May 2004 and as General Manager of

Shanghai Shan Tian Telecommunication Co., Ltd., an affiliate of ours, since
November 2003. Previously, Mr. Song served as Director and General Manager of
Shanghai Zhong Si Hua Hao Co., Ltd. for one year and Assistant General Manager
of both Shanghai Hua Si Trading Co., Ltd. and Shanghai Qi Shi Trading Co., Ltd
for five years.

Fu Sixing has served as our Chief Executive Officer since June 23, 2004
and a member of our Board of Directors since June 24, 2004. Mr. Fu has served as
Executive Manager of Sifang Holdings and as Head of Research and Development and
a Director of TCH since their inception in February 2004 and May 2004,
respectively. For the past seven years, Mr. Fu was (i) the Assistant to General
Manager of Tianci; (ii) a Director and the General Manager of Shanghai Sifang
Health Technology Co., Ltd. and Directorate Secretary of Sifang Information. Mr.
Fu received a Bachelors of Science in Physics from Nanjing University, a Masters
of Social Science in Economics from Huadong Normal University and a Doctorate of
Business Administration from the University of Southern California.

Yu Ruijie has served as a member of our Board of Directors since June
24, 2004. Mr. Yu has served (i) as Head of the Systems Department and a Director
of TCH since its inception in May 2004 and (ii) as Head of the Systems
Department of Sifang Information since January 1994. Mr. Yu received a Bachelors
Degree in Computer Science from Shanghai University of Engineering Science.

Zhang Xiaodong has served as a member of our Board of Directors since
June 24, 2004. Mr. Zhang has served as the Head of the Projection Department of
TCH since its inception in May 2004. Mr. Zhang also serves as a Director and
Head of the Projection Department of Sifang Information. For the past nine
years, Mr. Zhang served as head of the Wireless Engineering Department at Sifang
Information. Mr. Zhang graduated from Shanghai Jiao Tong University with a
Bachelors Degree and received a Masters Degree from the Macao University of
Science and Technology.

Huang Wei has served as a member of our Board of Directors since June
24, 2004. Ms. Huang has served as (i) the Vice-General Manager of TCH since its
inception in May 2004 and (ii) Vice-General Manager and a Director of Sifang
Information since 1993. Ms. Huang graduated from Nanjing University of Air Force
and Politics with a Bachelors Degree in Logistics.

Lu Qin has served as our Chief Financial Officer since June 23, 2004.
Ms. Lu has served as the (i) Head of the Accounting Department of TCH and Sifang
Information since May 2004 and April 1998, respectively and (ii) Financial
Controller of Sifang Holdings since February 2004. Ms. Lu graduated from
Shanghai Television University with a Bachelors Degree in Financial Accounting
and is a Certified Public Accountant.

Board Composition and Committees

The board of directors is currently composed of ten members, including
Tai Caihua, Song Jin, Shi Ying, Mao Ming, Fu Sixing, Huang Tianqi, Huang Wei,
Jing Weiping, Yu Ruijie and Zhang Xiaodong. All Board action shall require the
approval of a majority of the directors in attendance at a meeting at which a
quorum is present.

We currently do not have standing audit, nominating or compensation
committees. We intend, however, to establish an audit committee and a
compensation committee of the board of directors as soon as practicable. We
envision that the audit committee will be primarily responsible for reviewing
the services performed by our independent auditors, evaluating our accounting
policies and our system of internal controls. The compensation committee will be
primarily responsible for reviewing and approving our salary and benefits
policies (including stock options), including compensation of executive
officers.

Director Compensation

We do not pay our directors a fee for attending scheduled and special
meetings of our board of directors. We do reimburse each director for reasonable
travel expenses related to such director's attendance at board of directors and
committee meetings.

Indebtedness of Directors and Executive Officers

None of our directors or officers or their respective associates or
affiliates is indebted to us.

Family Relationships

Except as set forth herein, there are no family relationships among our
directors or officers. Mr. Tai Caihua, President and a member of our Board of
Directors is married to Ms. Shi Ying, a member of our Board of Directors and Ms.
Ying is also a sibling of Huang Wei, a member of our Board of Directors.

Legal Proceedings

As of the date of this Current Report, there is no material proceeding
to which any director, officer, affiliate or stockholder of the Company is a
party adverse to the Company.

EXECUTIVE COMPENSATION

The following table sets forth certain information concerning the
compensation paid by the company for services rendered in all capacities to the
company from January 1, 2003 through the fiscal year ended December 31, 2003, of
all officers and directors of the company.

Name and Principal Underlying
Positions at 12/31/03 Salary Bonus Other Compensation Options
-------------------------------- ------ ----- ------------------ -------

Tai Caihua
President/Chairman of the Board $2,416 $0 $0 --

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

On June 1, 2004, we entered into two information service and
cooperation agreements with Sifang Information, and one information service and
cooperation agreement with Tianci. Pursuant to those agreements, Sifang
Information and Tianci transmit all of our value-added information services to
customers of China's various wireless receiver networks. The agreements have
ten-year terms and we pay each of Sifang Information and Tianci a fee based on
the costs the two companies incur for the transmission of our reformatted
content.

During the normal course of our business, we incurred debt from related
parties and loaned money to related parties, including Sifang Information, for
financing purposes. In 2002, we borrowed funds from Sifang Information to start
our mobile phone distribution business. At December 31, 2002, the outstanding
balance of the loan was $604,062, and interest expense incurred on the borrowed
amount was $36,245. During 2003, we paid off all outstanding balances and loaned
certain amounts to Sifang Information, which amounts were repaid by Sifang
Information before year end. We continued to borrow funds from and lend funds to
Sifang Information, however, as of December 31, 2003, all such amounts had been
repaid. Interest expense incurred on amounts borrowed from Sifang Information
for the year ended December 31, 2003 was $12,082.

We advanced $966,522 to Sifang Information for financing purposes on
March 28, 2004. At March 31, 2004, the outstanding principal amount due from
Sifang Information was $966,522 and interest income on that amount was
immaterial because the amount was advanced at the end of March 2004. Sifang
Information repaid us the entire amount advanced, plus interest, on June 29,
2004.

We purchased a building located at 689 Laoshandong Road, Shanghai,
People's Republic of China 200120, from our related party, Shanghai Fude
Industry Co., for a price of $910,925. This building now houses our technical
team and our servers.

On February 23, 2004, we sold 1,500,000 pre-reverse and forward split
shares (987,915 net shares) of restricted common stock for gross proceeds of
$300,000, pursuant to a subscription agreement, to Halter Financial Group, Inc.,
an entity owned by Timothy P. Halter, a former member of the Board of Directors
and the Company's former Chief Executive Officer. Additionally, in consideration
for agreeing to serve as an officer and director of the Company, Timothy P.
Halter was granted a warrant to purchase up to 200,000 pre-reverse and forward
split shares (131,722 net shares) of restricted common stock of the Company. The
warrant was exercised on June 14, 2004, and we received gross proceeds of
$40,000 upon exercise.

On February 23, 2004, we agreed to pay Little and Company Investment
Securities, an entity owned by Glenn A. Little, our former controlling
shareholder, officer and director, $30,000 in consulting fees related to the
transaction discussed in the previous paragraph and in consideration for
maintaining the corporate entity. To formalize this obligation, we issued a
$30,000 non-interest bearing promissory note maturing on February 23, 2005.
Concurrent with the transaction discussed in the previous paragraph, we and
Little and Company Investment Securities executed an Exchange Agreement whereby
we issued 150,000 pre-reverse and forward split shares (98,792 net shares) of
unregistered, restricted common stock in satisfaction of the outstanding
promissory note.

On June 23, 2004, we entered into a Stock Purchase Agreement with
Halter Financial Group, Inc. pursuant to which we sold 166,667 shares of common
stock of the Company in exchange for $190,000. Timothy P. Halter is the sole
shareholder and President of Halter Financial Group, Inc. Pursuant to the Stock
Purchase Agreement, we granted to Halter Financial Group, Inc. an option to
require the Company to purchase up to 166,667 shares of common stock of the
Company at a price of $1.14 per share, such option being exercisable at any time
after the date that is six months after the Company files a registration
statement on Form SB-2 with the SEC, registering the shares purchased by Halter
Financial Group, Inc., up to and including the earlier of the date that such
registration statement is declared effective by the SEC or Halter Financial
Group, Inc.'s shares are eligible for resale under Rule 144 under the Securities
Act of 1933.

ITEM 5. OTHER EVENTS AND REGULATION FD DISCLOSURE

On June 23, 2004, the Company entered into a Stock Purchase Agreement
with an existing stockholder pursuant to which the Company sold 166,667
post-reverse and forward split shares of common stock of the company in exchange
for $190,000. Pursuant to the Stock Purchase Agreement, the company granted to
the existing stockholder an option to require the Company to purchase up to
166,667 post-reverse and forward split shares of common stock of the company at
a price of $1.14 per share, such option being exercisable at any time after the
date that is six months after the company files a registration statement on Form
SB-2 with the SEC, registering the shares purchased by the existing stockholder,
up to and including the earlier of the date that such registration statement is
declared effective by the SEC or the existing stockholder's shares are eligible
for resale under Rule 144 under the Securities Act of 1933.

On June 28, 2004, the Company entered into three Stock Purchase
Agreements pursuant to which the company sold an aggregate of 1,315,789
post-reverse and forward split shares of common stock of the company in exchange
for an aggregate amount of $1,500,000. All three Stock Purchase Agreements had
put options similar to the one described above, whereby the investors have the
option to require the Company to purchase an aggregate amount of 1,315,789
post-reverse and forward split shares of common stock of the company at a price
of $1.14 per share. In connection with the execution of the Stock Purchase
Agreements, the Company and the investors entered into an Escrow Agreement.
According to the Escrow Agreement, the $1,500,000 will not be released to the
Company until a registration statement, registering all 1,315,789 post-reverse
and forward split shares of common stock of the company purchased by the
investors, has been declared effective by the SEC.

ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS

a. Financial Statements of the Business Acquired. Our audited financial
statements required by this Item 7(a) are not yet available. We expect that our
audited financial statements will be completed and filed by amendment to this
Current Report within the permitted time period.

b. Pro Forma Financial Information (Unaudited). Our pro forma financial
statements required by this Item 7(b) are not yet available. We expect that our
pro forma financial statements will be completed and filed by amendment to this
Current Report within the permitted time period.

c. Exhibits. Except as otherwise noted, the following exhibits have
been filed as a part of this Current Report:

Exhibit
Number Description of Exhibit
------- ----------------------

3.1* Second Amended and Restated Bylaws of Boulder
Acquisitions, Inc.

10.1* Securities Exchange Agreement by and among Boulder
Acquisitions, Inc., Sifang Holdings Co., Ltd. and the
shareholders of Sifang Holdings Co., Ltd. dated effective
as of June 23, 2004.

10.2** Information Service and Cooperation Agreement by and among
Shanghai Sifang Information Technology Co. Ltd. and
Shanghai TCH Data Technology Co. Ltd. dated as of June 1,
2004.

10.3** Information Service and Cooperation Agreement by and among
Shanghai Sifang Information Technology Co. Ltd. and
Shanghai TCH Data Technology Co. Ltd. dated as of June 1,
2004.

10.4** Information Service and Cooperation Agreement by and among
Shanghai Sifang Information Technology Co. Ltd., Shanghai
Chengao Industrial Co. Ltd. and Shanghai TCH Data
Technology Co. Ltd. dated as of June 1, 2004.

10.5** Information Service and Cooperation Agreement by and among
Shanghai Tianci Industrial (Group), Co. Ltd. and Shanghai
TCH Data Technology Co. Ltd. dated as of June 1, 2004.

10.6** Business and Related Assets Transfer Agreement between
Shanghai Sifang Information Technology Co. Ltd. and
Shanghai TCH Data Technology Co. Ltd. dated as of June 1,
2004.

10.7* Stock Purchase Agreement by and between Halter Financial
Group, Inc. and Boulder Acquisitions, Inc. dated as of
June 23, 2004.

10.8* Stock Purchase Agreement by and between Chinamerica Fund,
LP and Boulder Acquisitions, Inc. dated as of June 28,
2004.

10.9* Stock Purchase Agreement by and between Chinamerica
Acquisition, LLC and Boulder Acquisitions, Inc. dated as
of June 28, 2004.

10.10* Stock Purchase Agreement by and between Gary Evans and
Boulder Acquisitions, Inc. dated as of June 28, 2004.

*Filed herewith.
**To be filed by amendment.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934,
Boulder Acquisitions has duly caused this report to be signed on its behalf by
the undersigned hereunto authorized.

BOULDER ACQUISITIONS, INC.

By: /s/ Tai Caihua
------------------------
Tai Caihua, President

DATED: July 8, 2004

INDEX TO EXHIBITS