As filed with the Securities and Exchange Commission on July 29, 2005
                                                     Registration No. 333-120431

================================================================================

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549
                               Amendment No. 3 to
                                   Form SB - 2
                             REGISTRATION STATEMENT
                                      Under
                           THE SECURITIES ACT OF 1933

                          CHINA DIGITAL WIRELESS, INC.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)
           Nevada                                           90-0093373
(State or other jurisdiction                      (IRS Employer incorporation or
      of organization)                                  identification No.)
                                      7374
                          (Primary Standard Industrial
                           Classification Code Number)

                               429 Guangdong Road
                                 Shanghai 200001
                           People's Republic of China
                              Ph: (86-21) 6336-8686
             ------------------------------------------------------
       (Address, including zip code, and telephone number, including area
               code, of registrant's principal executive offices)

                     The Corporation Trust Company of Nevada
                            6100 Neil Road, Suite 500
                               Reno, Nevada 89511
                               Ph: (775) 688-3061
             ------------------------------------------------------
            (Name, address, including zip code, and telephone number,
                   including area code, of agent for service)

                                 With copies to:

                            Preston Gates & Ellis LLP
                         Attention: Gary J. Kocher, Esq.
                             Kristy T. Harlan, Esq.
                          925 Fourth Avenue, Suite 2900
                            Seattle, Washington 98104
                               Ph: (206) 623-7580
                               Fax: (206) 623-7022

Approximate  date of  commencement  of proposed  sale to the public:  As soon as
practicable after the effective date of this registration statement.
If any of the  securities  being  registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act, check
the following box. [X]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the  Securities  Act,  check the following box and list the
Securities  Act  Registration   Statement   number  of  the  earlier   effective
Registration Statement for the same offering. [_]
If this Form is a  post-effective  amendment filed pursuant to Rule 462(c) under
the  Securities  Act,  check  the  following  box and  list the  Securities  Act
Registration  Statement number of the earlier effective  Registration  Statement
for the same offering. [_]
If this Form is a  post-effective  amendment filed pursuant to Rule 462(d) under
the  Securities  Act,  check  the  following  box and  list the  Securities  Act
Registration  Statement number of the earlier effective  Registration  Statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434, check
the following box. [_]

The Registrant hereby amends this  registration  statement on such date or dates
as may be necessary to delay its effective date until the registrant  shall file
a further amendment which specifically  states that this registration  statement
shall  thereafter  become  effective  in  accordance  with  section  8(a) of the
Securities  Act of  1933  or  until  the  registration  statement  shall  become
effective  on such  date  as the  Securities  and  Exchange  Commission,  acting
pursuant to said section 8(a), may determine.




                                2,737,381 Shares

                          CHINA DIGITAL WIRELESS, INC.

                                  Common Stock

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

     This is an  offering  of  2,737,381  shares of common  stock by the selling
stockholders. The shares are being registered to permit public secondary trading
of the shares that are being offered by the selling  stockholders  named in this
prospectus. We will not receive any of the proceeds from the sale of the shares.

     The selling  stockholders  may, but are not obligated to, offer all or part
of  their  shares  for  resale  from  time to time  through  public  or  private
transactions,  at either  prevailing  market  prices or at privately  negotiated
prices.

     Our  common  stock  is  currently  quoted  on the  NASD's  Over-the-Counter
Bulletin  Board under the symbol  "CHDW." On July 28,  2005,  the last  reported
sales price on our common stock was $3.12 per share.

     Investing in our common stock involves risks. See "Risk Factors"  beginning
on page 6 to read about factors you should  consider before buying shares of our
common stock.

     Neither the  Securities and Exchange  Commission  nor any state  securities
commission has approved or  disapproved  of these  securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is a
criminal offense.

     The date of this prospectus is July 29, 2005.

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


                              ABOUT THIS PROSPECTUS

     You should rely only on the  information  contained in this document or any
other  document to which we refer you.  Neither we nor the selling  stockholders
have  authorized  anyone to provide you with  different  information.  If anyone
provides you with different or inconsistent information,  you should not rely on
it.  Neither we nor the selling  stockholders  are making an offer to sell these
securities  in a  jurisdiction  where  the offer or sale is not  permitted.  The
information  contained  in  this  document  is  current  only  as of  its  date,
regardless of the time of delivery of this  prospectus or of any sales of shares
of common stock. Our business,  financial  condition,  results of operations and
prospects may have changed since that date.

The  information  in this  prospectus  is not complete  and may be changed.  The
selling  stockholders  may  not  sell  the  securities  until  the  registration
statement filed with the Securities and Exchange  Commission is effective.  This
prospectus  is not an offer to sell these  securities  and is not  soliciting an
offer to buy  these  securities  in any  state  where  the  offer or sale is not
permitted.





                                TABLE OF CONTENTS


PROSPECTUS SUMMARY.............................................................3
     CHINA DIGITAL WIRELESS, INC...............................................3
     THE OFFERING..............................................................5
RISK FACTORS...................................................................6
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS.............................19
MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND DIVIDEND POLICY.....19
MANAGEMENT'S DISCUSSION AND ANALYSIS OF PLAN OF OPERATION.....................20
BUSINESS......................................................................33
DIRECTORS AND EXECUTIVE OFFICERS..............................................45
PRINCIPAL STOCKHOLDERS........................................................49
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS..........................50
DESCRIPTION OF OUR CAPITAL STOCK..............................................51
SELLING STOCKHOLDERS..........................................................52
SHARES ELIGIBLE FOR FUTURE SALE...............................................53
PLAN OF DISTRIBUTION..........................................................53
INDEPENDENT PUBLIC ACCOUNTANTS................................................54
LEGAL MATTERS.................................................................54
EXPERTS.......................................................................55
INTERESTS OF NAMED EXPERTS AND COUNSEL........................................55
WHERE YOU CAN FIND MORE INFORMATION...........................................55
INDEX TO FINANCIAL STATEMENTS................................................F-1


















                                       2


                               PROSPECTUS SUMMARY

     This summary highlights selected information about us and the offering that
is contained elsewhere in this prospectus. You should read the entire prospectus
before making an investment decision, especially the information presented under
the heading  "Risk  Factors"  and the  financial  statements  and related  notes
included  elsewhere in this prospectus,  as well as the other documents to which
we refer you. Except as otherwise  indicated by the context,  references in this
prospectus to "we," "us," "our," or the  "company" are to the combined  business
of China Digital Wireless,  Inc. and its wholly-owned direct subsidiary,  Sifang
Holdings Company Limited, or Sifang Holdings,  and its wholly-owned  subsidiary,
Shanghai TCH Data  Technology  Co., LTD, or TCH, and in each case do not include
the selling stockholders.

                          CHINA DIGITAL WIRELESS, INC.

Our Business

     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  revenue  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.

     Leveraging  our experience and  understanding  of the wireless  value-added
services market in China,  we purchase and reformat  content,  applications  and
technologies  that we believe  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
technologies 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.

     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 percentage
of our value-added information services revenue at the present time.

     We primarily  conduct our business in China solely through our wholly-owned
subsidiary,  Sifang Holdings, and its wholly-owned subsidiary,  TCH. In order to
meet  ownership  requirements  under  Chinese law that 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:  Shanghai  Sifang  Information
Technology  Co., Ltd., or Sifang  Information,  and Shanghai  Tianci  Industrial
Group Co., Ltd., or Tianci.



                                       3


     The original stockholder  structure of Sifang Holdings was identical to the
current  stockholder  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, or
China Mobile, and China United Telecommunications  Corporation, or China Unicom,
respectively,  to provide wireless value-added  information services to wireless
receiver  customers  in  China  via  China  Mobile  and  China  Unicom.   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, Tianci and TCH, respectively.

     Distribution.  We distribute  various  mobile phone brands in the Shanghai,
China region.  We distribute  mobile  phones  manufactured  primarily by SAMSUNG
Electronics Co., Ltd., or Samsung, and to a lesser extent, by Motorola, Inc., or
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  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 Corporate Information

     We originally began operations as a Colorado  corporation  known as Boulder
Brewing  Company,  or Boulder  Brewing.  Boulder  Brewing  was  incorporated  in
Colorado on May 8, 1980 and operated as a microbrewery of various beers. 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   through  a  merger  and  changed  its  name  to  Boulder
Acquisitions,  Inc., or Boulder Acquisitions.  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  until June 23,
2004 Boulder Acquisitions had no material operations or assets.

     On June 23,  2004,  we  completed  a stock  exchange  transaction  with the
stockholders of Sifang Holdings.  The exchange was consummated  under Nevada and
Cayman  Islands law  pursuant to the terms of a  Securities  Exchange  Agreement
dated  effective as of June 23, 2004 by and among Boulder  Acquisitions,  Sifang
Holdings and the  stockholders  of Sifang  Holdings.  Pursuant to the Securities
Exchange  Agreement,  we issued 13,782,636 shares of our common stock, par value
$0.001  per  share,  to  the  stockholders  of  Sifang  Holdings,   representing
approximately 89.7% of our post-exchange issued and outstanding common stock, in
exchange  for 100% of the  outstanding  capital  stock of  Sifang  Holdings.  We
presently  carry on the business of Sifang  Holdings'  wholly-owned  subsidiary,
Shanghai TCH Data Technology Co., Ltd., a Chinese corporation, or TCH.

     Effective  August 6, 2004,  we changed our name from Boulder  Acquisitions,
Inc. to China Digital Wireless,  Inc. The name change was undertaken in order to
provide us with a name that is more  indicative  of the business  operations  we
conduct.

     Our  corporate  headquarters  is located at 429 Guangdong  Road,  Shanghai,
200001, Peoples Republic of China. Our telephone number is (86-21) 6336-8686.



                                       4




                                  THE OFFERING

                                                                      
Common stock outstanding prior to this offering.........   17,018,692 shares

Common stock offered by us..............................   0 shares

Common stock offered by the selling stockholders........   2,737,381 shares

Total shares of common stock offered....................   2,737,381 shares

Common stock to be outstanding after the offering.......   17,018,692 shares

Risk factors............................................   See "Risk  Factors"  and  other  information
                                                           included in this prospectus for a discussion
                                                           of  factors  you  should   consider   before
                                                           deciding  to invest in shares of our  common
                                                           stock.                                      

                                                        
                                    


















                                       5


                                  RISK FACTORS

     An investment in our securities  involves a high degree of risk. You should
carefully  consider  the  following  risks and the other  information  set forth
elsewhere in this  prospectus,  including our financial  statements  and related
notes, before you decide to purchase shares of our common stock. 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,  and  you  could  lose  part  or all  of  your
investment.

                          Risks Related to Our Business

Risks Related to Our Wireless Value-Added Information Services Business

We depend upon contractual  arrangements with our affiliated  value-added mobile
phone service  providers,  Sifang Information and 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 or 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  fails 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  possesses   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  its
obligations  under any  contracts  between it 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 Shanghai Chengao Industrial Co., Ltd., or 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 the mobile phone version of our Sifang Gutong software. If we lose our
relationship  with  Chengao,  we could have a difficult  time finding a suitable
replacement in the short term.



                                       6


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  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 Sifang  Information  and
Tianci.  We do not have any direct ownership  interest in Sifang  Information or
Tianci. The original  stockholder  structure of Sifang Holdings was identical to
the current  stockholder  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 principal  mobile phone operators
in China,  China  Mobile and China  Unicom,  to offer our  wireless  value-added
information services to mobile phone users through these 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 with Sifang  Information  and Tianci 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


                                       7


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 to continue 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  mobile  phone  users  and 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. 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 their
          networks which prevent the delivery of our services to the customer;
     o    we experience  technical  problems with our  technology  platform that
          prevent delivery of our services;
     o    our affiliates  experience  technical  problems with their  technology
          platforms that prevent 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.

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  arrangement 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 Sifang
Information  over China  Mobile's  network  exceeds the number of messages their


                                       8


customers  send to it,  Sifang  Information  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 Sifang  Information  will
exceed those sent by end-users,  for example, if a user sends Sifang Information
a single  message to order a game but Sifang  Information in turn must send that
user  several  messages to confirm his or her order and deliver the game itself.
Tianci's  service  fees owed to China  Unicom could also rise if Tianci fails 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 each 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,  the prospects of our value-added  information
service  business  should be considered  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.



                                       9


The  success  of  much  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  develop,  purchase  or  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  customers 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 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 our information  services and
cooperation agreement among us, Chengao, and Sifang Information.

We face intense competition from other wireless value-added service providers.

     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.  We compete  directly  or
indirectly with 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 phone 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  direct or 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



                                       10


are derived from those areas,  including  the  municipality  of Shanghai and the
provinces of Beijing and Jiangsu.  If our affiliates'  contracts with the mobile
operators with respect to those areas are terminated or adversely  modified,  or
if  there  is a  general  economic  downturn  in those  areas,  it could  have a
particularly adverse effect on our business.

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 Qian Fang, our chief  technology  officer.  Each of our
executive  officers  has  entered  into a  non-competition  agreement  with TCH.
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.  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,  which is a high risk  given the  competitive  nature of our
industry, we could lose customers and suppliers and incur additional expenses to
recruit and train personnel and it could disrupt our operations.

Rapid growth and a rapidly  changing  operating  environment  strain our limited
resources.

     As our value-added  information  services customer 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 value-added information services 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 our value-added
information  services customers . 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



                                       11


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 our  value-added  information
services customers 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 we purchase and reformat.

     We may face  liability for  defamation,  negligence,  copyright,  patent or
trademark  infringement  and other  claims based on the  reformatted  content to
which we provide access through 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.



                                       12


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 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 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



                                       13


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, 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  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.



                                       14


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  wireless  value-added  information  services
customer base and limit 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:



                                       15


     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 common stock 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  first-tier  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 mobile phone 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



                                       16


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.

We  rely on cash  flow to  purchase  mobile  phones  from  wholesalers,  and any
significant decrease in cash flow could have a negative impact on our ability to
meet customer demand.

     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  their mobile phones.  This development
would have a negative impact on our revenues.

Our  customers  are under no  obligation  to do  business  with us,  and if they
terminate or materially  reduce their  relationship  with us it would  adversely
impact our business.

     One of the factors the first-tier wholesalers on whom we rely consider when
determining  who  they  will  use as a  sub-wholesaler  is the  sub-wholesaler's
relationship  with retailers.  Currently  approximately  67% of our mobile phone
sales are made to five 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 five largest  retailers,  we will have a difficult  time
finding new large  retailers to purchase our Samsung  mobile phones and may lose
our  relationships  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,  and any resulting  problems
could adversely affect our sales.

     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 in
our net sales and could result in increased administrative and shipping costs.

We face risks associated with the  concentration of our distribution  operations
in one location.

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

We face competition from distributors selling other mobile phone models.

     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.  The first-tier  wholesalers on whom we rely or
Samsung may acquire,  startup, or expand their own distribution  systems to sell
directly to our customers.



                                       17


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 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.

     Neither  during the  preceding  two fiscal years nor during the three month
period  ended  March  31,  2005  did  we  pay   dividends  or  make  other  cash
distributions  on our common  stock,  and we do not expect to declare or pay any
dividends in the foreseeable future. We intend to retain any future earnings 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  Securities  and Exchange  Commission,  or 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



                                       18


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 prospectus 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 and are subject to certain risks and uncertainties, which could
cause actual results to differ  materially  from those projected due to a number
of factors beyond our control.  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.  You are  cautioned not to place undue
reliance on these  forward-looking  statements,  which speak only as of the date
hereof.  We are under no duty to update  any of the  forward-looking  statements
after the date of this  prospectus to conform such  statements to actual results
or to changes in our expectations.

     Factors that might cause actual  results,  performance or  achievements  to
differ  materially  from those  projected  or  implied  in such  forward-looking
statements include,  among other things: (i) the impact of competitive products;
(ii)  changes  in law  and  regulations;  (iii)  adequacy  and  availability  of
insurance coverage;  (iv) limitations on future financing;  (v) increases in the
cost of borrowings and unavailability of debt or equity capital; (vi) the effect
of adverse publicity regarding our products;  (vii) our inability to gain and/or
hold market  share;  (viii)  exposure to and expense of resolving  and defending
product liability claims and other litigation;  (ix) consumer  acceptance of our
products;  (x) managing and maintaining  growth;  (xi) customer  demands;  (xii)
market and industry conditions including pricing and demand for products, (xiii)
the  success of  product  development  and new  product  introductions  into the
marketplace;  (xiv) the departure of key members of management; (xv) our ability
to  efficiently  market its products;  as well as other risks and  uncertainties
that are described from time to time in our filings with the SEC.

                            MARKET FOR COMMON EQUITY,
                 RELATED STOCKHOLDER MATTERS AND DIVIDEND POLICY

     Our common stock is traded on the NASD's  Over-the-Counter  Bulletin  Board
under the  symbol  "CHDW." On August 6, 2004 we  changed  our name from  Boulder
Acquisitions,  Inc. to China Digital Wireless,  Inc. and changed our symbol from
"BAQI" to "CHDW." On July 28, 2005, the last reported sales price for our common
stock was $3.12 per share.



                                       19


     The following table sets forth,  for the quarters  indicated,  the range of
closing  high and low bid prices of our  common  stock as  reported  by the NASD
Over-the-Counter  Bulletin Board, as adjusted for all previously  effected stock
splits.

                                                              Common Stock
                                                         -----------------------
By Quarter Ended                                           High            Low  
----------------                                         --------        -------
                                                                     
Fiscal 2003
-------------------------------------------------
March 31, 2003................................             $.00            $.00 
June 30, 2003.................................             $.42            $.23
September 30, 2003............................             $.42            $.42
December 31, 2003.............................             $.42            $.42
                                                                         
Fiscal 2004                                                              
-------------------------------------------------                        
March 31, 2004................................             $5.00           $.42
June 30, 2004.................................             $4.05           $2.30
September 30, 2004............................             $3.90           $1.98
December 31, 2004.............................             $4.85           $2.80
Fiscal 2005                                                              
-------------------------------------------------                        
March 31, 2005................................             $4.25           $3.42
June 30, 2005.................................             $5.20           $1.40
September 30, 2005 (through July 28, 2005)....             $3.12           $1.41
------------------------                                                 
                                                     
     As of June 30,  2005  there  were  17,018,692  shares of our  common  stock
outstanding held by approximately 2,554 stockholders of record.

     We did not pay any cash  dividends  on our common  stock in fiscal  2003 or
2004  nor have  dividends  been  paid or  declared  in  fiscal  2005.  We do not
anticipate  paying any cash  dividends  on our common  stock in the  foreseeable
future.  We  currently  intend to retain  future  earnings,  if any,  to finance
operations and the expansion of our business.

            MANAGEMENT'S DISCUSSION AND ANALYSIS OF PLAN OF OPERATION

     The following  discussion  should be read in conjunction with our financial
statements and the notes thereto and the other financial  information  appearing
elsewhere in this document.

Overview of Business Background

     Sifang Holdings was formed under the laws of the Cayman Islands on February
9, 2004 for the  purpose  of  holding a 100%  equity  interest  in TCH.  TCH was
established as a foreign investment enterprise in Shanghai under the laws of the
PRC on May 25, 2004, with a registered capital of $7.2 million.

     Sifang   Information  is  a   Shanghai-based   privately  owned  enterprise
established under the laws of the PRC on August 14, 1998. Sifang  Information is
engaged in the  business of pager and mobile  phone  distribution  and  provides
value added information  services to the customers in the Shanghai  metropolitan
area. In March 2004, Sifang  Information spun off its mobile phone  distribution
business and the majority of its value added  information  services  business by
presenting a set of carve-out financial  statements for the years ended December
31,  2002 and 2003 and three  months  ended  March 31,  2004 as if the  spun-off
business had been a stand-alone  company for two years and one quarter. On March
31, 2004, Sifang Information transferred the spun-off business into TCH. Being a
receiving entity under common control,  TCH initially  recognized all the assets
and liabilities  transferred at their carrying amounts in the accounts of Sifang
Information at the date of transfer under the guidance of SFAS No. 141, Appendix
D. On May 26, 2004 Sifang  Information  exchanged 100% of equity interest in TCH



                                       20


for a 100% equity interest in Sifang Holdings.  Since the ultimate owners of the
three entities were the same owners and the three entities remained under common
control,  the  ownership  exchange  transaction  was accounted for at historical
costs under the  guidance of SFAS No.  141,  Appendix D. Prior to May 26,  2004,
there were no  activities  in Sifang  Holdings.  As a result of  exchanging  the
ownership between TCH and Sifang Holdings, TCH's historical financial statements
become the historical financial statements of Sifang Holdings.

     Sifang  Information  operates  in a  business  segment  that is  subject to
certain restrictions  imposed by the government of the PRC. For example,  paging
facilities,  radio  transmitting  stations and  transmitting  equipment owned by
Sifang Information are not allowed to be owned by foreign investment enterprises
in accordance with PRC government  regulations.  Therefore,  Sifang  Information
still  maintains a small part of its business and paging  facilities in order to
stay in compliance with relevant regulations and laws in PRC.

     As a result of the  spin-off,  TCH engages in the  business of mobile phone
distribution and the provision of pager and mobile phone (collectively "wireless
receiver")  users with access to certain  information  reformatted  by TCH.  TCH
purchases mobile phones from first tier distributors and sells them to retailers
with a mark-up.  In the process of providing  value-added  information  services
through  entering into monthly  subscription  agreements with various users, TCH
purchases  trading  activity  information  from stock  exchanges,  comments  and
analysis  on PRC stock  markets  provided  by  certain  reputable  security  and
investment  companies,   lottery  information,   weather  forecast,   and  other
value-added  products  and  reformats  the  aforementioned  information  through
decoding and recoding and then has the  reformatted  information  transmitted by
Sifang  Information,  via service contracts,  to pager users. The information is
constantly  saved in TCH's server in order for mobile phone users to dial in via
China  Mobile or China  Unicom.  By  signing a monthly  subscription  agreement,
wireless  users agree to make  advance  payments  for either  three or six-month
subscription periods.

Critical Accounting Policies

     We  prepare  our  consolidated  financial  statements  in  accordance  with
accounting  principles  generally accepted in the United States of America.  The
preparation  of these  financial  statements  requires the use of estimates  and
assumptions  that affect the reported  amounts of assets and liabilities and the
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements and the reported amount of revenues and expenses during the reporting
period.  Management  periodically  evaluates the  estimates and judgments  made.
Management  bases its estimates and  judgments on historical  experience  and on
various  factors that are  believed to be  reasonable  under the  circumstances.
Actual  results  may  differ  from  these  estimates  as a result  of  different
assumptions or conditions.

     The following  critical  accounting  policies  affect the more  significant
judgments and estimates used in the  preparation of our  consolidated  financial
statements.

Revenue Recognition

     We derive  revenues  from the sale of mobile  phones and the  provision  of
wireless information services that are used on mobile phones, pagers and prepaid
phone cards. We additionally earn commission income, or Agency Income,  from the
sale of CDMA  mobile  phones  on the  behalf of a related  party.  We  recognize
revenues net of related business taxes and value added taxes.

     Mobile Phone Sales

     Revenues  generated from the sale of mobile phones are recognized  when the
products are shipped to the distributor or retailer and when persuasive evidence
of an  arrangement  exists,  delivery of the  products  has  occurred,  customer
acceptance has been obtained,  which means the significant  risks and rewards of
ownership  have  been  transferred  to the  customer,  the  price  is  fixed  or
determinable and collectibility is reasonably assured.



                                       21


     Services

     We recognize  service  revenues over the term of the noted agreement and or
when the services have been provided to the end user.

     Information Services - TCH. By signing a subscription  agreement,  wireless
receiver users agree to make payments for three- to six-month  subscriptions  in
advance.  We record the  proceeds as deferred  revenue and amortize the deferred
revenue over the subscription  period.  When customers buy a pre-charged service
card, we record the proceeds as deferred revenue.  When a customer starts to use
this card to  access  to our  server  and  starts  to use a pager to access  the
aforementioned  information,  we identify the subscription  period and amortizes
the deferred revenue over the subscription period.

     Information  Services  -  Installing  Agent.  We have an  installing  agent
install our  software on mobile  phones,  which are owned by the  retailer.  The
retailer  sells  these  phones  for a premium  covering  a fee to be paid to the
installing agent and pre-charged  six-month  subscription fees to be paid to us.
After a customer  using such a phone dials into the server to access the desired
information,  the server records a unique identification number installed on the
mobile  phone,  which  indicates  that a specific  phone user  starts his or her
subscription  period. After we receive a detailed list from the installing agent
regarding the number of phones that have been  installed  with our software,  we
match this  information with a detailed list from the retailer setting forth how
many such phones have been sold.  Based on the number of such  phones  sold,  we
record accounts receivable and deferred revenue. At the date on which a customer
starts to dial into the server, the six-month  subscription period begins and we
amortize deferred revenue accordingly.

     Information  Services - China Mobile and / or Unicom. Since April 2004, the
revenue generated from selling  pre-charged cards has gradually  decreased while
the revenue  generated  through monthly  subscriptions  with China Mobile and/or
China Unicom  (collectively,  "Mobile Operators") has gradually increased as the
Mobile  Operators'  billing systems have been enhanced.  Our affiliates,  Sifang
Information and Tianci,  contract with the Mobile Operators for the transmission
of our value-added  information services.  The Mobile Operators bill and collect
from customers and then pass those fees (net of billing and  collection  service
fees charged by the Mobile  Operators) to Sifang  Information  and Tianci who in
turn pass those fees to us. We recognize net revenues  based on the total amount
paid by our  customers,  for which the Mobile  Operators bill and collect on our
behalf.  There is a time lag ranging  from 10 days to 45 days between the end of
the  service  period and the date the Mobile  Operators  send out their  billing
statements  due to the  segregated  billing  systems  of each of the  provincial
subsidiaries of the Mobile  Operators.  We received the December  invoice before
the issuance of our financial  statements  to reconcile the monthly  revenues to
the Mobile Operators billing  statement.  We have not recognized service revenue
based  on  the  records  provided  by  its  own  server  but  have  performed  a
reconciliation  on a monthly  basis of the revenues  recognized by our server to
the Mobile  Operator's  billing  statement.  In addition,  the Mobile  Operators
charge a network  usage fee based on a fixed per message fee  multiplied  by the
excess of  messages  sent over  messages  received.  This type of service is not
covered by a monthly service  subscription and we have no control whether or not
it will occur Network usage fees charged by the Mobile Operators are reduced for
messages  received  by us because  the Mobile  Operators  separately  charge the
sender a fee for these transmissions.

     We record the revenue  from China  Mobile / China  Unicom on a net basis in
compliance with EITF 99-19,  "Reporting Revenues Gross as a Principal versus Net
as an Agent" because we:

     o    are not the primary obligor in the  arrangement,  as we rely on Sifang
          Information to transmit the information services to the end user;
     o    have limited  ability to adjust the cost of services by adjusting  the
          design or marketing of the service,
     o    have limited ability to determine  prices, as we must follow the price
          policy within ranges prescribed by Mobile Operators; and
     o    have limited ability to assume risk of non-payment by customers.



                                       22


     Our  dependence on the  substance and timing of the billing  systems of the
mobile  telecommunications  operators may require us to estimate portions of our
reported revenue for wireless  Internet services from time to time. As a result,
subsequent  adjustments  may have to be made to our  wireless  Internet  service
revenue in our  financial  statements.  As we do not bill our wireless  Internet
services  users  directly,  we depend on the billing  systems and records of the
mobile  telecommunications  operators  to  record  the  volume  of our  wireless
Internet services provided,  charge our users through mobile telephone bills and
collect payments from our users and pay us.

Accounts Receivable and Concentration of Credit Risk

     During the normal  course of business,  we extend  unsecured  credit to our
retailers and distributors  who are mainly located in the Shanghai  metropolitan
area. Typically, for mobile phone distributors, the credit terms require payment
to be made  within 30 days of the sale.  We do not require  collateral  from our
customers. Our policy is to provide for delinquent

     We regularly evaluate and monitor the  creditworthiness of each customer on
a case-by-case  basis. We include any account balances that are determined to be
uncollectable in the overall allowance for doubtful accounts. After all attempts
to collect a receivable  have failed,  the receivable is written off against the
allowance. Based on the information available to management, we believe that our
allowance  for  doubtful  accounts  was  adequate as of March 31, 2005 and 2004.
However, actual write-offs might exceed the recorded allowance.

Cash and Cash Equivalents

     We consider all highly liquid  investments  with maturities of three months
or less to be cash  equivalents.  We maintain our cash accounts at credit worthy
financial institutions.

Inventories

     Inventories consist principally of mobile phones manufactured by name brand
manufacturers  with  various  features  and  are  stated  at the  lower  of cost
(weighted-average) or market.

Rebates and Credits Receivable

     In 2004 our major vendor began  providing  sales  rebates and credits if we
fulfill  certain sales  volumes  prescribed by the vendor in order to induce our
distributors  to sell more of our  products.  As a result,  we are  entitled  to
receive certain rebates and credits for the inventory held and sold by us within
the specified  period of time as defined by our vendor  through  submitting  the
necessary  application  forms.  In  general,  once  the  vendor  approves  these
applications  the amounts of these rebates and credits will be deducted from our
accounts  payable to our vendor and decrease the cost of goods sold or inventory
held correspondingly.

Impairment of Long-Lived Assets

     We apply the provisions of Statement of Financial  Accounting  Standard No.
144,  "Accounting for the Impairment or Disposal of Long-Lived  Assets," or SFAS
No. 144, issued by the Financial  Accounting  Standards Board, or FASB. SFAS No.
144 requires that long-lived  assets be reviewed for impairment  whenever events
or changes in  circumstances  indicate that the carrying  amount of an asset may
not be  recoverable  through the estimated  undiscounted  cash flows expected to
result from the use and eventual  disposition  of the assets.  Whenever any such
impairment exists, an impairment loss will be recognized for the amount by which
the carrying value exceeds the fair value. There was no impairment of long-lived
assets in the years ended  December 31, 2004 and 2003 and the three months ended
March 31, 2005.



                                       23


Income Taxes

     We account for income  taxes in  accordance  with  Statement  of  Financial
Accounting  Standards No 109,  "Accounting  for Income  Taxes," or SFAS No. 109.
SFAS No. 109  requires  an entity to  recognize  deferred  tax  liabilities  and
assets.  Deferred tax assets and  liabilities  are recognized for the future tax
consequence  attributable to the difference  between the tax bases of assets and
liabilities and their reported amounts in the financial statements. Deferred tax
assets and liabilities are measured using the enacted tax rate expected to apply
to taxable income in the years in which those temporary differences are expected
to be recovered or settled. The effect on deferred tax assets and liabilities of
a change in tax rates is  recognized  in income in the period that  included the
enactment  date.  We establish a valuation  when it is more likely than not that
the assets will not be recovered.

     TCH is registered at Pudong District in Shanghai and subject to a favorable
income tax rate of 15% compared to a normal  income tax rate of 33% (30% for the
central  government and 3% for the local government) under current PRC tax laws.
However,  Sifang  Information  registered in the Shanghai  downtown area and has
been treated by the Shanghai Municipal  Administration of Labor as an enterprise
that provides unemployed and handicapped people with jobs.  Accordingly,  Sifang
Information is entitled to be subject to a favorable  income tax rate of 15% and
qualifies  for  income tax  exemption  for three  years from  January 1, 2000 to
December 31, 2002,  and 50% of income tax reduction for three years from January
1, 2003 to  December  31,  2005.  The income  tax  provisions  presented  in our
financial  statements  are based on the  historical  actual  income tax rates of
Sifang  Information at 7.5% for the year ended December 31, 2003. The income tax
provision  presented  for the year ended  December 31, 2004 is based on 7.5% for
the months of January  to June and 15% for the months of July to  December.  The
income tax  provision  presented  for the three  months  ended March 31, 2005 is
based  on  $799,898.  The  deferred  tax  assets  are  determined  based  on the
historical income tax rates applicable at the TCH level.

     There is no income  tax for  companies  domiciled  in the  Cayman  Islands.
Accordingly,  Sifang Holdings financial statements do not present any income tax
provisions related to Cayman Islands tax jurisdiction.

Use of Estimates

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

     Three Months Ended March 31, 2005 Comparing to Three Months Ended March 31,
     2004

Total revenues

     Total  revenues  in the three  months  ended March 31,  2005  increased  by
approximately  $1,032,656,  representing an  approximately  21.8%  increase,  to
$5,775,362 as compared to $4,742,706  for the same period of the prior year. The
increase  was due mainly to our  marketing  effort and  further  facilitated  by
Samsung's marketing promotion.  Total revenues consist of product sales, product
sales to related parties,  information service revenues, and advertising service
revenue,  net.  In the  Chinese  telecommunication  market,  mobile  phones have
rapidly replaced beepers and pagers as the mobile communication device preferred
by  consumers,  resulting  in an increase in mobile phone  distribution.  In the
three months ended March 31, 2005,  Samsung's  mobile phones accounted for about
97% of our total product sales and other name brands mobile phones accounted for
the  remaining  3%,  compared  to the same  period of the prior  year,  in which
Samsung's  mobile phones  accounted for 94% of our total product sales and other
brands  accounted  for the balance.  During 2005 market  competition  for mobile
phone sales  intensified,  causing us to decrease our overall  mark-up  ratio to
3.4% in order to maintain our market position,  in comparison to a mark-up ratio
of 5.0% for the same period the prior year.



                                       24


Product sales

     Revenue  from  product  sales in the three  months  ended  March  31,  2005
decreased by  approximately  $1,429,685,  representing  an  approximately  68.2%
decrease, to $669,191 as compared to $2,098,876 for the same period of the prior
year.  In 2005,  we have  promoted  distribution  of mobile  phones  through our
related party, Shanghai Shantian by establishing its market channel and facility
from the fiscal year 2004. As we have focused our marketing efforts on Shanghhai
Shantian there was a decline in the mobile phones sales to direct customers.

Product sales to a related party

     As discussed  above,  we  distributed  Samsung mobile phones to our related
party,  Shanghai  Shantian,  in  which  Sifang  Information  holds a 51%  equity
interest.  During  the  three  months  period  ended  March  31,  2005,  we sold
$4,060,514  worth of mobile  phones to  Shantian,  with an  average  mark-up  of
approximately  2.4 % as compared to an average  mark-up of 3.4% for the products
sold to all of our other customers.

Information service revenue

     Total  service  revenue net of related  business tax and  surcharge for the
three   months  ended  March  31,  2005   increased  by  $211,127   representing
approximately  a 24.3% decrease,  to $657,703  compared to $868,830 for the same
period of the prior year.  Value-added  service  revenue from mobile phone users
for the three  months  ended  March 31,  2005  decreased  by $70,867 to $450,098
compared to $520,965 for the same period of the prior year, representing a 13.6%
decrease.  The  decrease  was  due  mainly  to  the  decline  of  our  financial
value-added  service  basically based on Chinese security market,  which was not
performing  well. The Chinese stock market along with inactive  stock  exchanges
hindered our growth in this segment of business.  In addition,  service  revenue
from pager users for the three months ended March 31, 2005 decreased by $140,260
to $ 207,605  compared  to  $347,865  for the same  period  of the  prior  year,
representing  approximately  a 40.3%  decrease.  We believe that service revenue
from pager users will  continue to decrease  given the  increased  popularity of
mobile  phones over beepers and pagers.  We project that the decrease in service
revenue  from pager users will likely  plateau at a certain  level as most lower
income pager users still like to use pagers to access our information services.

Advertising service revenue, net

     During the three months ended March 31,  2005,  TCH rendered  advertisement
designing  and  producing  services  to  Shanghai  Tianci  Real  Estate Co. Ltd.
("Tianci Real Estate") for publicity and promoting its apartment.

Cost of goods sold

     The cost of goods sold for the three months ended March 31, 2005  increased
by $890,314 to  $4,569,793  compared  to  $3,679,479  for the same period of the
prior year,  representing  an  approximately  24.2 % increase.  The increase was
consistent with the increases in revenue from product sales.

Cost of service

     The cost of service for the three months ended March 31, 2005  decreased by
$82,016 to $170,808  compared to $253,824 for the same period of the prior year,
representing an  approximately  32.7% decrease.  The costs of service consist of
value-added  service costs and  advertising  service costs.  The decline was due



                                       25




mainly to the decrease of  information  fees paid to content  providers  for the
value-added  service.  The breakdown of our service business has changed and the
proportion of beep services that are related to financial service has decreased,
resulting  in  a  decrease  in  associated  costs  pertaining  to  the  security
information  fee paid.  During  2005,  we  continued  to  maintain  current  fee
structures  and  establish  collaborative  relationships  or  partnerships  with
Chinese mobile operators and certain information content providers.

Gross profit

     After taking into  account the cost of goods sold and cost of service,  our
gross  profit  for  the  three   months  ended  March  31,  2005   increased  by
approximately $225,358 to approximately $1,034,761, representing approximately a
27.9% increase,  compared to gross profit of $809,403 for the same period of the
prior year.  The  increase in gross  profit was  primarily  attributable  to the
proceeds  generated in the new  advertising  service during the first quarter of
2005.

     The following table summarizes certain  information  related to the various
components of revenue.

                                                                       Information
                                                                         Service -     Information
                                        Advertising    Mobile Phone       Mobile        Service -
                                          Income       Distribution       Phone           Pager          Total
                                       ------------    ------------    ------------    ------------   ------------
                                                                                                 
For the quarter ended March 31, 2005                                                      
                                                                                          
Revenue ............................   $    459,131    $  4,729,705    $    450,098    $    207,605    $  5,846,539
Cost ...............................         71,177       4,569,793         103,327          67,482       4,811,778
Gross profit .......................        387,954         159,912         346,771         140,123       1,034,761
Gross profit ratio .................           84.5%            3.4%           77.0%           67.5%           17.7%
                                                                                                          
For the quarter ended March 31, 2004                                                                      
                                                                                                          
Revenue ............................   $       --      $  3,873,876    $    520,965    $    347,865    $  4,742,706
Cost ...............................           --         3,679,479          72,018         181,806       3,933,303
Gross profit .......................           --           194,397         448,947         166,059         809,403
Gross profit ratio .................           --               5.0%           86.2%           47.7%           17.1%

                                                                        
Selling expenses

     Selling  expenses for the three  months  ended March 31, 2005  increased by
$7,053 to $43,289  compared  to $36,236  for the same  period of the prior year,
representing a 19.5% increase. This increase was due to the fees charged related
to our beeper  service.  We have moved our marketing focus from beeper and pager
users to mobile phone users in line with  changing  consumer  demands.  Salaries
paid to our  marketing  team were  $1,273 and $5,499 in the three  months  ended
March 31, 2005 and the same period of the prior year, respectively.

General and administrative expenses

     General and  administrative  expenses  for the three months ended March 31,
2005  increased by $65,858 to $192,039  compared to $126,181 for the same period
of the prior year, representing a 52.2% increase. The increase was due mainly to
the audit and retainer fees for listing.

     General and administrative  expenses incurred at the TCH level in the three
months ended March 31, 2005 decreased from $126,181 to $102,002,  representing a
slight  decrease.  The decrease was  primarily  attributable  to the decrease of
account receivable from our clients, resulting in the recovery of provisions for
bad debts,  and cost control,  which lead to the decline of utility expenses and
communication fees.



                                       26


     The other  cash-based  expenses  incurred at the parent  level in the three
months ended March 31, 2005 of $90,037, represented payments for the audit fees,
a retainer fee and other consultant fees.

Interest income (expense)

     During the three months ended March 31, 2005,  interest income derived from
deposits in banks was $465.

Income tax

     The income tax provisions  presented in the Company's financial  statements
are based on the  historical  actual income tax rates of Sifang  Information  at
7.5% for the three  months  ended  March 31,  2004 and 15% for the three  months
ended March 31, 2005. In the three months ended March 31, 2004 and 2005,  income
tax expense was $48,524 and  $133,490  respectively,  based on pretax  income of
$646,986 and $799,898.

Net income

     We recorded  net income of $666,408  for the three  months  ended March 31,
2005, a $67,946  increase in net income compared to a net income of $598,462 for
the same period of the prior year, representing an approximately 11.4% increase.
The increase in net income was  attributable  to (i) the expansion of our mobile
phone  distribution  business,  and  (ii)  the  startup  of our new  advertising
business.

Earnings per share

     The earnings per share for the three months ended March 31, 2005 was $0.039
compared to $0.043 for the same period of the prior year.  The  decrease was due
mainly  to  the  increase  in the  weighted  average  number  of  common  shares
outstanding, even though the company was able to increase net income.

     Fiscal  Year Ended  December  31,  2004  Compared  to the Fiscal Year Ended
     December 31, 2003

Total revenues

     Total  revenues  for  our  2004  fiscal  year  increased  by  approximately
$7,488,572,  representing an  approximately  44.0%  increase,  to $24,520,950 as
compared to $17,032,378  for the same period of the prior year. The increase was
due  mainly  to our  marketing  effort  and  further  facilitated  by  Samsung's
marketing  promotion.  Total revenues consist of product sales, product sales to
related  parties and  service  revenue,  net.  In the Chinese  telecommunication
market,  mobile  phones have rapidly  replaced  beepers and pagers as the mobile
communication device preferred by consumers,  resulting in an increase in mobile
phone distribution.  For our 2004 fiscal year, Samsung's mobile phones accounted
for about 97% of our total  product  sales and other name brands  mobile  phones
accounted  for the  remaining  3%,  compared to our 2003 fiscal  year,  in which
Samsung's mobile phones accounted for 99.6% of our total product sales and other
brands  accounted  for the balance.  During 2004 market  competition  for mobile
phone sales  intensified,  causing us to decrease our overall  mark-up  ratio to
6.4% in order to maintain our market position,  in comparison to a mark-up ratio
of 8.2% for the same period the prior year.

Product sales

     Revenue  from  product  sales  for  our  2004  fiscal  year   decreased  by
approximately  $2,471,881,  representing an  approximately  18.3%  decrease,  to
$11,057,398  as compared to  $13,529,279  for the same period of the prior year.
The decrease was due mainly to the spun-off business of THC.



                                       27


Product sales to related parties

     Before  January  1,  2004 we only  distributed  CDMA  mobile  phones in the
Shanghai  area.  Beginning  in January 2004 we entered into the GSM mobile phone
distribution business. Since the retail market channel related to our GSM mobile
phone distribution was developed and maintained by Shanghai  Shantian,  in which
Sifang  Information  holds a 51% equity interest,  all of our Samsung GSM mobile
phones were sold to Shanghai  Shantian,  which made Shanghai Shantian our second
tier distributor in the first half of 2004. During our 2004 fiscal year, we sold
a total of  $9,891,691  worth of mobile  phones to  related  parties,  including
$9,178,674 worth of mobile phones to Shanghai  Shantian,  and $713,017 to Tianci
and Shanghai Tianci Industry Co.Ltd with a total competitive  mark-up on average
of  approximately  4.8 % as compared to an average mark-up ratio of 7.8% for the
products sold to all of our other customers.

Service revenue, net

     Total service revenue net of related  business tax for our 2004 fiscal year
increased by $68,762,  representing approximately a 2.0% increase, to $3,571,861
compared to $3,503,099  for the same period of the prior year. It was due mainly
to the increase of mobile  phone  value-added  services and the revenue  derived
from agent service income.

     Value-added  service  revenue  from mobile  phone users for our 2004 fiscal
year  increased by $1,090,855 to $2,388,178  compared to $1,297,323 for the same
period of the prior year,  representing a material  increase,  which resulted in
the overall  increase in our service  revenue.  Approximately  $1,973,842 of the
service revenue from mobile phone users was attributable to prepaid service fees
generated by an installing  agent,  Chengao  Industry Co. Ltd, who installed the
software on a retailer's  (Beijing Jianghe  Communication  Co., Ltd) inventories
and  collected  proceeds from the retailer and  transferred  the proceeds to the
Company,  representing  a $745,057  increase  compared to the same period of the
prior year. The remaining  $404,336 portion of the service revenue was generated
by our SMS service, representing a material increase compared to the same period
of the prior year.  The increase was mainly due to the  aggressive  expansion of
our  subscriber  base as the result of the  Company's  marketing  campaigns.  In
addition, service revenue from pager users for our 2004 fiscal year decreased by
$1,226,307 to $ 979,469  compared to $2,205,776 for the same period of the prior
year,  representing  approximately  a 55.6%  decrease.  We believe  that service
revenue  from  pager  users  will  continue  to  decrease  given  the  increased
popularity  of mobile  phones  over  beepers  and  pagers.  We project  that the
decrease in service  revenue  from pager users will likely  plateau at a certain
level as most lower  income  pager  users still like to use pagers to access our
information services.

     Moreover, On July 16, 2004, Tianci, a related party to TCH, entered into an
agreement  with China Unicom to promote CDMA mobile phones and agent service for
China  Unicom.  Under the  agreement,  Tianci  is  entitled  to  receive a sales
commission  from China  Unicom of $15.70  per unit,  $3.62 per SIM card based on
sales to  customers  who agree to  subscribe  for monthly  service for a minimum
period of two years at a  minimum  monthly  service  fee of $3.38.  Tianci  then
entered  into an agent  agreement  with TCH pursuant to which TCH agreed to sell
the CDMA mobile phones, SIM cards and monthly service subscriptions on behalf of
Tianci and,  consequently,  is entitled to receive sales commissions from Tianci
based on the terms agreed upon between Tainci Group and China Unicom.  The agent
relationship  began  in  August  2004 at the  same  time  as a  sales  promotion
initiated by China Unicom. We recognized agent service income of $204,214 during
the send half year of our 2004 fiscal year at the TCH level.

Total cost of goods sold

     The  total  cost of goods  sold  for our  2004  fiscal  year  increased  by
$8,230,371 to  $19,608,832  compared to  $12,424,454  for the same period of the
prior year,  representing  an  approximately  57,8%  increase.  The increase was
consistent with the increases in revenue from product sales.



                                       28




Cost of service

     The cost of  service  for our 2004  fiscal  year  increased  by  $29,675 to
$1,045,993  compared  to  $1,016,318  for the same  period  of the  prior  year,
representing an approximately 2.9% increase. In addition,  software amortization
for  mobile  phone  value-added  service  generated  in  the  2004  fiscal  year
represented  a $42,338  increase  compared to the prior year.  During  2004,  we
continued to strive to expand the content  offered by our  value-added  services
while  maintaining  current  fee  structures  and  to  establish   collaborative
relationships  or  partnerships   with  Chinese  mobile  operators  and  certain
information content providers.

Gross profit

     After taking into  account the cost of goods sold and cost of service,  our
gross  profit for our 2004 fiscal year  increased by  approximately  $274,519 to
approximately $3,866,125,  representing approximately a 7.6% increase,  compared
to gross  profit  of  $3,591,606  for the same  period of the  prior  year.  The
increase in gross profit was primarily attributable to the following factors (i)
the gross  profit  derived  from  mobile  phone  distribution  and mobile  phone
information services increased significantly, which offset the decrease in pager
information  service  income;  (ii) the agent  service  income  generated in the
second half of 2004.

     The following table presents in summary certain  information related to the
various components of revenue.

                                                                       Information           
                                                        Information     Service -
                                          Agency       Mobile Phone       Mobile        Service -
                                          Income       Distribution       Phone           Pager          Total
                                       ------------    ------------    ------------    ------------    ------------
                                                                                                 
For the year ended December 31, 2004                                                                     
                                                                                                         
Revenue ............................   $    204,214    $ 20,949,089    $  2,388,178    $    979,469    $ 24,520,950
Cost ...............................           --        19,608,832         498,194         547,799      20,654,825
Gross profit .......................        204,214       1,340,257       1,889,984         431,670       3,866,125
Gross profit ratio .................          100.0%            6.4%           79.1%           44.1%           15.8%
                                                                                                         
For the year ended December 31, 2003                                                                     
                                                                                                         
Revenue ............................   $       --      $ 13,529,279    $  1,297,323    $  2,205,776    $ 17,032,378
Cost ...............................           --        12,424,454         287,464         728,854      13,440,772
Gross profit .......................           --         1,104,825       1,009,859       1,476,922       3,591,606
Gross profit ratio .................           --               8.2%           77.8%           67.0%           21.1%

                                                                    
Other income, net                                                      

     On July 16, 2004, Tianci, a related party to TCH, entered into an agreement
with China  Unicom to promote  CDMA  mobile  phones and agent  service for China
Unicom.  Under the agreement,  Tianci is entitled to receive a sales  commission
from  China  Unicom of $15.70  per  unit,  $3.62 per SIM card  based on sales to
customers who agree to subscribe for monthly service for a minimum period of two
years at a minimum  monthly  service fee of $3.38.  Tianci then  entered into an
agent  agreement  with TCH  pursuant to which TCH agreed to sell the CDMA mobile
phones,  SIM cards and monthly  service  subscriptions  on behalf of Tianci and,
consequently,  is entitled to receive sales commissions from Tianci based on the
terms agreed upon between Tainci Group and China Unicom.  The agent relationship
began in August 2004 at the same time as a sales  promotion  initiated  by China
Unicom. As the sales commission  revenue from this business is more uncertain in
nature, we reported this revenue as other income instead of regular revenue.  We
recognized agency income of $204,214 in the 2004 fiscal year at the TCH level.



                                       29


Selling expenses

     Selling  expenses for our 2004 fiscal year increased by $93,202 to $246,639
compared  to  $153,437  for the same  period  of the  prior  year,  representing
approximately  a 61% increase.  This increase was due to promotion  expenses for
value-added information services related to mobile phone users. Advertising fees
and  expenses for a series of  marketing  campaigns  increased by $41,183 in our
2004 fiscal year, from $18,909 to $60,092,  representing a material  increase in
comparison to the prior year. We have moved our marketing  focus from beeper and
pager  users to mobile  phone  users in line  with  changing  consumer  demands.
Salaries paid to the Company's  marketing team in the 2004 fiscal year rose from
$33,836 to $84,946,  representing  a 151%  increase in  comparison  to the prior
year.

General and administrative expenses

     General and  administrative  expenses for our 2004 fiscal year increased by
$1,365,428 to  $1,656,841  compared to $291,413 for the same period of the prior
year,  representing  a material  increase.  The  increase  was due mainly to the
reorganization  and  recapitalization  transaction  and related  audit and legal
fees.

     General and  administrative  expenses incurred at the TCH level in the 2004
fiscal year increased from $286,058 to $456,445,  representing a 52.5% increase.
These general and administrative expenses were comprised of salaries paid to the
management,  which  increased  from $94,437 to $117,800,  representing a $23,363
increase, and office expenses, which rose from $11,888 to $20,015,  representing
a $8,127 increase.

     During  our  2004  fiscal  year  there  was  stock-based   compensation  of
$1,014,000  related to the reverse merger generated at parent level,  consisting
of  167,895  shares  issued to a  consultant  in lieu of cash  payment at a fair
market value of $604,000 and the issuance of 166,667  redeemable shares pursuant
to a stock purchase agreement resulting in a charge of $410,000 representing the
premium between the trading price ($3.60 per share) and the pre-negotiated stock
purchase price ($1.14 per share) of the purchased  shares.  The other cash-based
expenses incurred in the 2004 fiscal year of $205,376,  represented payments for
the audit fees, a retainer fee and other consultant fees.

Interest income (expense)

     During our 2003 fiscal year, we borrowed funds from Sifang  Information for
temporary  working capital and mobile phone  distribution.  As a result, we paid
interest totaling $12,082 to Sifang Information during the 2003 fiscal year.

     During our 2004 fiscal year,  the interest  income derived from deposits in
banks was $1,955.

Income tax

     TCH is subject to  taxation  under the laws of the PRC,  and the  statutory
income  tax rate  for  2003 and 2004  fiscal  years  was  33%.  The  income  tax
provisions  presented on our financial  statements  are based on the  historical
actual income tax rates of Sifang  Information  at 7.5% for the 2003 fiscal year
and the six months ended June 30, 2004.  The income tax provision  presented for
the six months ended December 31, 2004 are based on a 15% effective rate. In our
2003 and 2004  fiscal  years,  income tax  expense was  $246,694  and  $369,971,
respectively,  based on  pretax  income  of  $3,134,674  and  $1,964,600  (which
included the stock  compensation of $1,014,000  incurred in the U.S.). Since the
loss of approximately $1,014,000 incurred in the U.S. did not offset the taxable
income in China, a portion of income tax expense  totaling  $169,643,  which was
incurred in China, was based on taxable income of approximately $2,979,023.

Net income

     We recorded net income of $1,594,629 for our 2004 fiscal year, a $1,293,351
decrease in net income  compared to net income of $2,887,980 for the same period
of the prior year,  representing  approximately a 45% decrease.  The decrease in



                                       30


net income was  attributable  to (i) the increase in general and  administrative
expenses for the period compared to general and administrative  expenses for the
same  period of the prior year (we  incurred a  $1,014,423  charge for  services
performed by consultants  related to the reverse merger and related  activities,
and the  issuance of common  stock in 2004),  and (ii) the decrease of the gross
profit generated from mobile phone distribution and our pager service business.

Earnings per share

     Earnings  per share for our 2004  fiscal year  decreased  by $0.11 to $0.10
compared to $0.21for  the same period of the prior year.  The  decrease  was due
mainly  to the  decrease  in our  net  income  and  the  increase  in the  total
outstanding shares of our common stock, as the weighted average number of shares
of common stock  outstanding for the 2004 fiscal year increased by approximately
12.1%,  compared the weighted average number of common stock outstanding for the
same period of the prior year.

Liquidity and Capital Resources

     Our cash balance  decreased from  approximately  $1,249,000 as of March 31,
2004 to  approximately  $404,202 as of March 31, 2005. This decrease in cash and
cash equivalents was due primarily to the increase in the inventories,  advances
to suppliers for future purchases of inventory,  and advances to related parties
for investment activities.

     Net cash generated in operating  activities  was $311,208  during the three
months  ended by March 31, 2005  compared to $534,333  during the same period of
the  prior  year.  The  increase  in cash  generated  from  operations  resulted
primarily  from the  collection  of accounts  receivable  and slower  payment of
payables, which was offset by substantial inventory purchases.

     Net cash used in investing  activities for the three months ended March 31,
2005  increased  to  $1,482,475  compared to $998,445 for the same period of the
prior  year,  representing  a $484,030  increase.  The  increase in cash used in
investing  activities  was  mainly  due to the  start up of the new  advertising
business in the current quarter.

     Net cash provided by financing  activities for the three months ended March
31,  2005 was  $1,500,000  compared to $0 for the same period of the prior year.
The  $1,500,000  relates to proceeds  for shares that were issued in fiscal 2004
but were held in escrow until the Company filed a Registration Statement on Form
SB-2 with the SEC. The Company  treated the proceeds held in escrow as a current
asset as the entire  amount was  released  from escrow in March 2005 and paid to
the Company.

     We believe that current  cash  balance and cash flows from  operations,  if
any, will be sufficient to meet present growth  strategies  and related  working
capital.  In regards to the capital  expenditures,  we have sufficient  funds to
expand our operations.  We plan to utilize a combination of internally generated
funds from operations  with potential debt and/or equity  financings to fund its
longer-term  growth  over a period of two to five  years.  The  availability  of
future financings will depend on market  conditions.  There is no assurance that
the future funding will be available.

     Our cash balance decreased from approximately $1,713,748 as of December 31,
2003 to approximately $75,511 as of December 31, 2004. This decrease in cash and
cash  equivalents  was due  primarily  to the  decrease  in net  income  and the
increase in the amount due from parent.

     Net cash used in operating  activities was $1,788,915 during 2004, compared
to net cash  provided by operating  activities  of  $1,383,597  during the prior
year. We believe that the decrease of net cash provided by operating  activities
was due mainly to the decrease of  $1,293,351  in net income and the increase of
$4,497,420 in cash due from and advanced to a related party, partially offset by
cash generated from a non-cash  expense of $1,014,423 and a change of $1,911,527
in  inventories.  Net income of $1,594,629  for the 2004 fiscal year compared to
net income of  $2,887,980  for the 2003  fiscal year  represented  a decrease of
$1,293,351.  The amount due from a related party increased from $0 to $4,742,688



                                       31


in the 2004 fiscal year compared to the prior year, representing a large portion
of cash  used in  operating  activities.  The cash used in  accounts  receivable
increased  by  $2,276,245  in the 2004 fiscal year  compared to net cash used of
$1,790,616 in the 2003 fiscal year, representing a change of $485,629.  However,
the change in accounts  payable was in a net cash used  position  ended the year
December 31, 2004, representing an increase of approximately $55,730 compared to
positive  cash  inflow of $111,569  for the same  period of the prior year.  The
change in  deferred  revenue at  December  31,  2004 was less than the change in
deferred  revenue for the same period of the prior year.  The cash  generated in
the change of other  current  liabilities  increased  to  $404,769  compared  to
$25,737 in the prior year, representing a $379,032 increase.

     Net cash used in investing activities for the 2004 fiscal year increased to
$132,155   compared  to  $259,858  for  the  same  period  of  the  prior  year,
representing  a $ 127,703  decrease.  The  decrease  in cash  used in  investing
activities  was due mainly to the decrease of $127,703 cash used in the purchase
of property and equipment

     Net cash  provided  by  financing  activities  for the 2004 fiscal year was
$282,570  compared to cash used in $604,062 for the 2003 fiscal year. We believe
that the increase was due mainly to the proceeds from issuing  redeemable common
stocks and restricted common stocks in the 2004 fiscal year.

     Management  estimates  that our current cash balance and cash flow provided
by operating  activities  will be sufficient to meet our growth  strategies  and
working  capital for the next twelve  months.  We may  continue to lend money to
Sifang  Information on an as-needed  basis for Nokia's  mobile phone  provincial
distribution  business.  However,  management expects to collect certain amounts
due form Sifang  Information  after the termination of the provincial  franchise
agreement signed with Nokia.

     Management  predicts  that in the  upcoming  year,  the cash needed for our
growth strategy and related working  capital  requirements  will be derived from
the cash generated from operating activities and financing  activities.  We plan
to utilize a combination  of internally  generated  funds from  operations  with
potential debt and/or equity  financings to fund our  longer-term  growth over a
period of two to five years.  We intend to conduct a private  placement to raise
approximate  $5 million from  investors and a long-term  debt  financing,  as an
alternative  way, for the purpose of  developing  our new projects and expanding
current  operations,   which  focus  on  digital  television  and  mobile  phone
distribution.  No  assurance  can be given  that we will  succeed in our plan of
financing.

     The forecast of the period of time through  which our  financial  resources
will be adequate  to support  operations  is a  forward-looking  statement  that
involves risks and  uncertainties.  The actual funding  requirements  may differ
materially from this as a result of a number of factors including plans to fully
support our expansion.

Recent Accounting Pronouncements

     In January  2003,  the FASB  issued  FASB  Interpretation  No. 46 (FIN 46),
"Consolidation of Variable Interest  Entities." FIN 46, as amended by FIN 46(R),
issued in January  2003,  requires an investor  with a majority of the  variable
interests  in a  variable  interest  entity to  consolidate  the entity and also
requires majority and significant variable interest investors to provide certain
disclosures.  A  variable  interest  entity is an  entity  in which  the  equity
investors do not have a controlling  financial interest or the equity investment
at risk is insufficient  to finance the entity's  activities  without  receiving
additional  subordinated financial support from other parties. The provisions of
FIN 46(R) are  applicable for fiscal years ending after December 15, 2004. We do
not have any variable interest entities that must be consolidated.

     In December  2003,  the FASB issued  Interpretation  No. 46R, or FIN 46R, a
revision to FIN 46,  "Consolidation  of  Variable  Interest  Entities."  FIN 46R
clarifies some of the provisions of FIN46 and exempts certain  entities from its
requirements. FIN 46R is effective at the end of the first interim period ending
after March 15, 2004.  Entities that have adopted FIN 46 prior to this effective
date can continue to apply the  provisions of FIN 46 until the effective date of
FIN  46R.  The  adoption  of FIN 46R did not have any  effect  on the  Company's
consolidated financial statements.

     In March  2004,  the FASB  issued  EITF  Issue No.  03-1,  "The  Meaning of
Other-Than-Temporary  Impairment and Its Application to Certain Investments," or
EITF 03-1, which provides new guidance for assessing  impairment  losses on debt
and  equity  investments.   Additionally,  EITF  03-1  includes  new  disclosure
requirements  for  investments  that are deemed to be temporarily  impaired.  In
September  2004,  the FASB delayed the  accounting  provisions of EITF 03-1. The
Company will  evaluate the effect,  if any, of EITF 03-1 when final  guidance is
released.

     In  November  2004,  the FASB  issued  Statement  of  Financial  Accounting
Standards (SFAS) No. 151,  Inventory  Costs,  which clarifies the accounting for
abnormal amounts of idle facility expense,  freight,  handling costs, and wasted
material.  SFAS No. 151 will be effective for inventory  costs  incurred  during
fiscal years  beginning  after June 15, 2005.  We do not believe the adoption of
SFAS  No.  151  will  have  a  material  impact  on our  consolidated  financial
statements.

                                       32


     In December  2004,  the FASB issued SFAS No. 123-R,  Share Based  Payments,
which  requires  that the  compensation  cost  relating to  share-based  payment
transactions (including the cost of all employee stock options) be recognized in
the financial  statements.  The cost will be measured based on the estimate fair
value of the equity or liability  instruments  issued.  SFAS 123-R covers a wide
range  of  share-based   compensation   arrangements  including  share  options,
restricted share plans, performance-based awards, share appreciation rights, and
employee  share  purchase  plans.  Management  believes  the  adoption  of  this
pronouncement  will not have a  material  effect on our  consolidated  financial
statements.

     Also, in December 2004, the FASB issued SFAS 153, "Exchanges of Nonmonetary
Assets,  an  amendment  of  APB  Opinion  No.  29,  Accounting  for  Nonmonetary
Transactions."  The  amendments  made by SFAS No. 153 are based on the principle
that the exchange of  nonmonetary  assets should be measured using the estimated
fair market value of the assets  exchanged.  SFAS No. 153  eliminates the narrow
exception for nonmonetary  exchanges of similar  productive assets, and replaces
it with a broader  exception  for  exchanges of  nonmonetary  assets do not have
commercial substance.  A nonmonetary exchange has "commercial  substance" if the
future cash flows of the entity are expected to change significantly as a result
of the transaction.  This  pronouncement is effective for monetary  exchanges in
fiscal periods beginning after June 15, 2005.  Management  believes the adoption
of this  pronouncement  will  not have a  material  effect  on our  consolidated
financial statements.

     Other recent  accounting  pronouncements  issued by the FASB (including its
Emerging Issues Task Force),  the AICPA, and the SEC did not or are not believed
by  management  to have a  material  impact on the  Company's  present or future
consolidated financial statements.

Quantitative and Qualitative Disclosures About Market Risk

     Substantially  all our revenues and expenses are  denominated  in Renminbi,
but a portion of our cash is kept in U.S. dollars.  Although we believe that, in
general,  our exposure to foreign  exchange  risks  should be limited,  our cash
flows and revenues  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 cash flows would be reduced
which could materially adversely affect our business.  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.

     We have  experienced  minute  foreign  exchange  gains or  losses  to date.
However,  we do not engage in any hedging  activities,  and we may in the future
experience  economic  loss as a result of any  foreign  currency  exchange  rate
fluctuations.

                                    BUSINESS

                                     General

     Our current operations  include providing value added information  services
and cellular phone distribution through our Chinese operating subsidiary.

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.



                                       33


     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  revenue  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 that 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 technologies 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 that 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 Tianci.
We  hold  no  ownership  interest  in  Sifang  Information  or  Tianci.   Sifang
Information and Tianci contract with China Mobile Communications Corporation, or
China Mobile, and China United Telecommunications  Corporation, or China Unicom,
respectively,  to provide wireless value-added  information services to wireless
receiver  customers  in  China  via  China  Mobile  and  China  Unicom.   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 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. 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.

     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.



                                       34


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. Key strategies for achieving our goal are to:

     o    Continue to expand and diversify our portfolio of wireless value-added
          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  wireless  value-added
          information services in China;
     o    Continue to strengthen our  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  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.



                                       35


     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



                                       36


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 our experience in China to develop close ties
with the key  personnel of the mobile  operators  at the central and  provincial
levels.  As of March 31, 2005, we had  approximately  [two] 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;



                                       37


     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

     We spent  $18,909 and $60,092 on  marketing  and  advertising  fees for our
mobile phone  distribution and value-added  services business in fiscal 2003 and
2004, respectively.  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.



                                       38


     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.

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 December 31, 2003 and 2004:

                                                        December 31,
                              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

     All  of  our  personnel  are  employed  full-time  and  none  of  them  are
represented under collective  bargaining  agreements.  We consider our relations
with our employees to be good.



                                       39


                                   Facilities

     We currently occupy two office spaces in the Shanghai region.  We lease the
first office space, 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 office
space,  located at 689 Laoshandong  Road,  Shanghai,  People's Republic of China
200120,  which houses our  administration,  technical  team and servers,  and is
approximately  800 square  meters.  We believe  that  these two  properties  are
adequately covered by insurance. In addition, we believe that 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.




                                       40


     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.

                                 Market Overview

Wireless Value-Added Services as a Revenue Driver for the Mobile Operators

     As the wireless market in China continues to develop, an increasing portion
of the mobile  operators'  users have relatively low per capita  incomes.  These
subscribers  generally  yield lower levels of average revenue per user, or ARPU,
because they are  primarily  users of pre-paid  services.  In addition,  China's
wireless  market is becoming  increasingly  competitive,  as demonstrated by the
recent CDMA  promotions  by China  Unicom,  as well as the  intra-city  wireless
offerings by China's two fixed-line  operators,  China Telecom and China Netcom,
which  offer  users  limited  mobile  services  within a city based on  Personal
Handyphone  Service or Personal  Access System  technology.  In addition,  China
Telecom,  China Netcom and possibly other parties are expected to be awarded two
wireless  licenses,  although  the timing of such grants is unclear.  Both China
Telecom  and China  Netcom are large,  established  companies  with  significant
assets and the entry by them or other companies into the Chinese wireless market
could  lead to further  competition  among the  mobile  operators.  Due to these
pressures on the traditional  voice-related  businesses of the mobile operators,
SMS and other wireless value-added services have become a key differentiator and
increasingly important driver for the growth prospects of China Mobile and China
Unicom.  We believe  wireless  value-added  services will play a key role in the
mobile operators' competitive positioning when attracting and retaining users as
well as in their efforts to reverse declining ARPU levels.

     Against this  competitive  backdrop,  the market for  wireless  value-added
services in China has expanded significantly and is expected to continue to grow
at a fast pace.  Currently,  SMS services  continue to represent the bulk of the
wireless  value-added  services  market in China.  This  market is  increasingly
shifting towards next generation  technologies,  with mobile operators upgrading
their  networks to GPRS and CDMA 1x RTT and users  upgrading to next  generation
mobile  phones that can operate  with  technologies  such as MMS and WAP.  China
Mobile and China Unicom have recognized this  opportunity and are  collaborating
with  select  service   providers,   including  us,  to  further   develop  2.5G
applications and services.

Operators' Wireless Value-Added Services Initiatives in China

     China  Mobile  was the first to enter the market by  introducing  a popular
trial SMS program in  connection  with the Sydney  Olympic Games in August 2000.
China Mobile later  established  its  Monternet(TM)  platform in November  2000.
China  Unicom  started  its  Uni-Info  platform in May 2001.  Monternet(TM)  and
Uni-Info  offer  mobile  phone users a single  access point to order and pay for
wireless value-added services.



                                       41


     From the inception of  Monternet(TM)  and Uni-Info,  China Mobile and China
Unicom have outsourced  almost all content and applications for their platforms,
meaning that these operators,  much like NTT DoCoMo and SK Telecom,  rely almost
entirely upon  third-party  service  providers to drive their  network  traffic,
supply  attractive  wireless  services and increase  revenue from their wireless
value-added  services.  In turn,  the operators  focus on the operation of their
networks.  For their part, wireless  value-added service providers in China rely
on  the  two  operators,   China  Mobile  and  China  Unicom,  for  the  network
distribution  of  their  content  and  services,  billing  and  collection,  and
remittance  of  revenues.   Both   operators   have   established   similar  fee
arrangements.

     In  addition  to  their  working  relationships  with  third-party  service
providers,  China's  mobile  operators  will likely form closer  alliances  with
mobile  phone  vendors  in order to  standardize  user  friendly  access  to and
functionality for wireless value-added services in all mobile phones.

                              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.



                                       42


     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.



                                       43


     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,  or  Sifang  Communication,   has
registered one trademark with China's  Trademark  Office.  That trademark is our
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 our registered  trademark,  our
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.



                                       44


                        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,  2005.  The
directors  listed  below will serve until the next  annual  meeting of the China
Digital Wireless stockholders:

Name                     Age        Positions Held
----                     ---        --------------

Tai Caihua               48         President and Chairman of the Board
Shi Ying                 45         Director
Huang Tianqi             33         Director, Chief Technology Officer
Jing Weiping             41         Director
Mao Ming                 43         Director
Song Jing                29         Director
Fu Sixing                44         Director, Chief Executive Officer
Yu Ruijie                42         Director
Zhang Xiaodong           37         Director
Huang Wei                42         Director
Qian Fang                44         Chief Financial Officer
Jiang Hong Ming          51         Director
Juchen Li                40         Director
Yuan Feng                48         Director

     Tai  Caihua  has  served as our  President,  and  Chairman  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 our inception in May 2004;  (iii)  director and General
Manager of Shanghai  Tianci  Industry  (Group) Co., Ltd., 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 our  inception in May 2004.  For the past eight years she
has 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 inceptions 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
our  inception in May 2004 and as a director of Sifang  Information  since 2001.
Mr. Jing has served as the Manager of the  Technology  Assurance  Department  of
Sifang  Information  for the past nine years.  Mr. Jing  received his  Bachelors
Degree from Dong Hua University.

     Mao Ming has  served as a member of our board of  directors  since June 24,
2004. He has been (i) the General Manager and a member of the board of directors
of TCH since our  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.



                                       45


     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 our  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. Mr. Song holds a Masters of Business  Administration from Joseph
L. Rotman School of Management, University of Toronto.

     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 the  Head of the  Research  and
Development  Department and a director of TCH since their inceptions in February
2004 and May 2004, respectively.  During the past seven years, Mr. Fu has served
as (i) the Assistant to the General Manager of Shanghai Tianci Industry  (Group)
Co.,  Ltd.;  (ii) a director and the General  Manager of Shanghai  Sifang Health
Technology Co., Ltd. and (iii) 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  our  inception  in May  2004  and  (ii) as the  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 our  inception  in May 2004.  Mr.  Zhang also serves as a director and the
Head of the  Projection  Department  of  Sifang  Information.  For the past nine
years,  Mr. Zhang has 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.  Mr.  Huang has  served as (i) the  Vice-General  Manager of TCH since our
inception  in May 2004 and (ii)  Vice-General  Manager  and a director of Sifang
Information since 1993. Mr. Huang graduated from Nanjing University of Air Force
and Politics with a Bachelors Degree in Logistics.

     Qian Fang has served as our Chief Financial  Officer since January 1, 2005.
Ms.  Qian has  served as Manager  of  Accounting  of TCH since  1999.  Ms.  Qian
graduated from China Cable-TV  University with a Bachelors  Degree in Accounting
and is a Certified Public Accountant.

     Jiang  Hong Ming has  served as a member  of our board of  directors  and a
member of the audit  committee of the board of directors  since April 2005.  Mr.
Jiang worked as a certified  public  accountant at Shanghai Hua Cheng  Certified
Public  Accountants  from 1998 to 2003 and has been a director at  Shanghai  Hua
Cheng Certified  Public  Accountants  since 2003. Mr. Jiang received a Bachelors
Degree from Shanghai TV Cable University.

     Yuan Feng has served as a member of our board of directors  and a member of
the audit  committee  of the board of directors  since April 2005.  Mr. Yuan has
been the General Manager of Shanghai Guan Tong Telecommunication Technology Ltd.
since 1996.  Mr. Yuan  received a Bachelors  Degree in  Telecommunications  from
Chinese PLA Telecommunication Engineering College.



                                       46


     Juchen Li has served as a member of our board of directors  and a member of
the audit  committee  of the board of  directors  since April 2005.  Mr.  Juchen
founded Beijing Mon Long Software Developing Ltd. in 1997 and has served as that
company's chairman and chief technology  officer. In 1985, Mr. Juchen received a
Bachelors Degree in Computer Science from Chinese PLA Armored Force College, and
worked as a teacher at that college from 1985 to 1997.

Board Composition and Committees

     The board of directors is currently composed of thirteen members, including
Tai Caihua,  Song Jin, Shi Ying, Mao Ming, Fu Sixing,  Huang Tianqi,  Huang Wei,
Jing Weiping,  Yu Ruijie,  Zhang Xiaodong,  Jiang Hong Ming,  Juchen Li and Yuan
Feng.  All Board action  requires 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 nominating or compensation committees. We
intend, however, to establish a compensation committee of the board of directors
as soon as  practicable.  We envision that the  compensation  committee  will be
primarily  responsible  for  reviewing  and  approving  our salary and  benefits
policies  (including  stock  options),   including   compensation  of  executive
officers.  We established an audit  committee of the board of directors in April
2005. The audit  committee is primarily  responsible  for reviewing the services
performed by our independent  auditors,  evaluating our accounting  policies and
our system of internal controls.

Director Compensation

     Our  directors  are not paid for  attendance  at  meetings  of the board of
directors nor for their service on any committee of the board.

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.

Executive Compensation

     The  following  table  sets forth all cash  compensation  paid to our chief
executive  officer for services rendered in all capacities to the Company during
the  noted  periods.  No other  executive  officers  received  salary  and bonus
compensation in excess of $100,000 during fiscal 2004.













                                       47


Summary Compensation Table
                                                                  Long Term 
                                              Annual            Compensation   
                                            Compensation           Awards
                                            ------------   ---------------------
                                                           Securities Underlying
  Name and Principal Position       Year     Salary ($)          Options (#)
--------------------------------   ------   ------------   ---------------------
Tai Caihua(1)                       2004      $28,992               --      
Chief Executive Officer/Director                                 
Timothy P. Halter (2)               2004         --              131,722(4)
Chief Executive Officer/Director                                 
                                    2004         --                 --
Glenn Little (3)                    2003         --                 --
Chief Executive Officer/Director    2002         --                 --      

------------------------                                                       
(1)  Began service as Chief  Executive  Officer and a director of the Company in
     June 2004.
(2)  Appointed Chief Executive  Officer in March 2004 and resigned as an officer
     and director of the Company in June 2004.
(3)  Resigned as Chief Executive  Officer and a director of the Company in March
     2004.
(4)  On February 23, 2004,  Mr. Halter was granted a warrant for 200,000  shares
     of common stock at an exercise price of $0.20 per share. On April 28, 2004,
     a one-for-two  reverse stock split was declared by the Company and exercise
     price  and  number  of  shares   subject  to  the  warrant  were   adjusted
     accordingly.  Mr. Halter  exercised  this warrant in full on June 14, 2004.
     Subsequent to exercising this warrant,  the Company  declared a 1.31722 for
     1stock split. As adjusted for these splits,  this represents 131,722 shares
     of common stock issuable upon the exercise of this warrant.

Stock Option Grants in Last Fiscal Year

     The  following  table  sets  forth  information  for each of the  executive
officers of the Company named in the Summary  Compensation Table with respect to
options granted during fiscal 2004 to such officers.

                                   Percent of
                                     Total
                     Number of       Options
                    Securities      Granted
                    Underlying    to Employees    Exercise or
                      Options            in       Base Price      Expiration
   Name             Granted (#)   Fiscal Year      ($/Share)         Date
Tai Caihua             --             --              --              --
Timothy P. Halter   131,722(1)       100%          $0.3037     February 23, 2007
Glenn Little           --             --              --              --
                     

(1) On February 23, 2004, Mr. Halter was granted a warrant for 200,000 shares of
common  stock at an  exercise  price of $0.20 per share.  On April 28,  2004,  a
one-for-two  reverse stock split was declared by the Company and exercise  price
and number of shares  subject to the  warrant  were  adjusted  accordingly.  Mr.
Halter exercised this warrant in full on June 14, 2004. Subsequent to exercising
this warrant,  the Company declared a 1.31722 for 1 stock split. As adjusted for
these splits,  this represents  131,722 shares of common stock issuable upon the
exercise of this warrant.




                                       48


Aggregated  Option  Exercises  in Last  Fiscal Year and Fiscal  Year-End  Option
Values

     The following table sets forth  information for each of the named executive
officers  with respect to option  exercises  during fiscal 2004. No options were
held by any of the named executive officers as of December 31, 2005.

                                             Shares
                          Acquired on         Value
                           Exercise         Realized
   Name                      (#)               ($)

Tai Caihua                   --                --
Timothy P. Halter         131,722(1)       $157,579.03
Glenn Little                  --               --
                           

(1) On February 23, 2004, Mr. Halter was granted a warrant for 200,000 shares of
common  stock at an  exercise  price of $0.20 per share.  On April 28,  2004,  a
one-for-two  reverse stock split was declared by the Company and exercise  price
and number of shares  subject to the  warrant  were  adjusted  accordingly.  Mr.
Halter exercised this warrant in full on June 14, 2004. Subsequent to exercising
this warrant,  the Company declared a 1.31722 for 1 stock split. As adjusted for
these splits,  this represents  131,722 shares of common stock issuable upon the
exercise of this warrant.

                             PRINCIPAL STOCKHOLDERS

     The  following  table sets  forth,  as of March 31,  2005,  the  beneficial
ownership of our common  stock by (i) each  director  and  executive  officer of
China  Digital,  (ii) each person  known to China  Digital to be the  beneficial
owner of five percent or more of the outstanding shares of our common stock, and
(iii) all directors and officers of China Digital 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)
                                   ---------------------------------------------
                                      Number                      Percent of
Name and Address(2)                of Shares (3)                Voting Stock (4)
-------------------                -------------                ----------------
Tai Caihua ((5))                     11,301,764                       66.4%
Shi Ying ((6))                       11,301,764                       66.4%
Halter Financial Group, Inc. (7)      1,271,287                        7.5%
Chinamerica Fund, LP                    877,193                        5.2%
Mao Ming                                413,480                        2.4%
Song Jing                               413,480                        2.4%
Huang Tianqi                            275,652                        1.6%
Jing Weiping                            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%
------------------------------------                                           
(1)  On March  31,  2005,  there  were  17,018,692  shares of our  common  stock
     outstanding.  Each person named above 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)  Unless  otherwise  indicated,  the address of each stockholder is c/o China
     Digital Wireless, Inc., 429 Guangdong Road, Shanghai, China 200001.
(3)  Under  applicable  rules  promulgated by the SEC pursuant to the Securities
     Exchange Act of 1934,  as amended,  or 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, including through (x) the exercise of any option or
     warrant or (y) the conversion of another security.
(4)  In  determining  the percent of our common  stock owned by a person (a) the
     numerator is the number of shares of our common stock 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 our common stock  outstanding on March 31,
     2005 and (ii) any shares of our common stock 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.

                                       49


(5)  Includes  1,791,743  shares  held by Mr.  Tai's  wife,  Shi Ying.  Mr.  Tai
     disclaims  beneficial  ownership of those  shares.  (6) Includes  9,510,021
     shares held by Ms. Shi's husband,  Tai Caihua. Ms. Shi disclaims beneficial
     ownership of those shares.  (7) Includes  116,720 shares held by Timothy P.
     Halter, the president and sole stockholder of Halter Financial Group, Inc.

              CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

     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 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.

     During the 2004 fiscal year,  TCH purchased  local brand mobile phones from
Shanghai  Sifang   Telecommunication  Co.  Ltd.  ("Sifang  Telecom")  valued  at
$390,340, and all these mobile phones were sold to retailers in 2004.

     During the 2004 fiscal year,  TCH sold Samsung GSM mobile  phones valued at
$9,178,674 at a 4% gross profit margin to Shantian.  Accounts receivable include
$1,583,512 due from Shantian.  During the 2004 fiscal year, TCH also sold mobile
phones to other related parties,  which included Tianci Industy and Tianci Group
for $136,310 and $576,707 at gross profit margins of 17% and 16% respectively.

     On July 16, 2004,  the Tianci Group entered into an agency  agreement  with
TCH to sell CDMA  mobile  phones  owned by China  Unicom.  TCH  obtains the same
commission  structure that Tianci Group earns from China Unicom.  For each phone
sold, TCH receives $15.70 per unit,  sales commission of $3.62 per SIM card. TCH
recognized  commission  income of $204,214 in the year ended  December  31, 2004
from the Tianci Group, which is recorded in service revenues,  net on the income
statement.

     In accordance with terms contained in signed service agreements between TCH
and Sifang Information giving TCH the right to use Sifang Information's facility
(which may not be owned by foreign  investors at the present time under  Chinese
law)  to  transmit  the   reformatted   information  we  paid  service  fees  of
approximately  $567,000 in each of the 2003 and 2004 fiscal  years.  The service
agreements are in effect for ten years and became effective on June 1, 2004. The
annual  payments for the services  should  continue to approximate  $567,000 per
year.  During the 2004 fiscal  year,  Sifang  Information  also  provided  other
management  support and  marketing  services to TCH for $36,462 and none for the
year ended December 31, 2003.  TCH earned  information  service  revenues net of
costs from China  Mobile / China  Unicom  that were passed  through  from Sifang
Information and are recorded in Service  revenue,  net on the income  statement.
For the 2004 fiscal year, the total  revenues  generated were $846,416 and total
costs of services  were  $421,476 and none for the 2003 fiscal year.  TCH earned
paging  service  revenues  net of costs that were  passed  through  from  Sifang
Information and are recorded in Service  revenue,  net on the income  statement.
For the 2004 fiscal year, the total  revenues  generated were $964,869 and total
cost of services  were  $533,199 and none for the year ended  December 31, 2003.
TCH  launched a smart card  project as a joint  cooperation  project with Sifang
Information  in June 2004.  However,  the  project was  abandoned  in the fourth
quarter of 2004 due to government regulations. No revenue was generated from the
project in 2004.



                                       50


     Sifang  signed a lease  agreement  with  Tianci  Real  Estate  to lease its
apartment  for office  use,  which was assumed by TCH as a part of the carve out
transaction. The original lease term was from May 1, 2003 to April 30, 2008. The
lease agreement was terminated on September 30, 2004. The related rental expense
for the  years  ended  December  31,  2003  and 2004 was  $20,540  and  $30,810,
respectively.

     As a result of the  spin-off  transaction,  cash  collections  received and
payments made Sifang  Information on behalf of TCH, resulted in a net receivable
of $2,910,956  due from Sifang  Information at December 31, 2004. The amount due
from  related  party also  consists  of  $501,000  relating  to the value  added
information services provided to Sifang Information and sold to China Unicom and
another  $371,000  relating to the paging  revenues that are collected by Sifang
Information  on behalf of TCH. In the first  quarter of 2005,  TCH has collected
$3.2 million from Sifang  Information  subsequent  to March 31, 2005. We believe
that the collection of the remaining balance of $582,956 from Sifang Information
is  reasonably  assured and  accordingly,  no allowance  has been recorded as of
December 31, 2004. We also advanced US$1,205,000 to provide Sifang Information's
needs for working capital in order to complete  spin-off  procedures in the PRC.
The outstanding balance was fully collected in March 2005.

     On February 23, 2004, we sold 987,915 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
131,722  shares of common stock of the Company (as  adjusted for stock  splits).
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
stockholder,  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  98,792  shares of 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
stockholder 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  filed a  registration
statement on Form SB-2 with the SEC, (which registration  statement was declared
effective  on  February  8, 2005)  registering  the shares  purchased  by Halter
Financial Group, Inc., up to and including the earlier of (i) the date that such
registration statement is declared effective by the SEC or (ii) Halter Financial
Group, Inc.'s shares are eligible for resale under Rule 144 under the Securities
Act of 1933.

                        DESCRIPTION OF OUR CAPITAL STOCK

     The following description is a summary of the material terms of our capital
stock.  This summary is subject to and qualified in our entirety by our Articles
of  Incorporation,  as  amended,  and Bylaws as amended,  and by the  applicable
provisions of Nevada law.

     The authorized  capital stock of the company consists of 100,000,000 shares
of common stock, having a par value of $0.001 per share.



                                       51




     Common Stock.  Each  outstanding  share of common stock entitles the holder
thereof to one vote per share on all matters.  The Articles of  Incorporation do
not permit cumulative voting for the election of directors, which means that the
holders of more than 50% of such  outstanding  shares voting for the election of
directors  can elect all of the directors to be elected,  if they so choose;  in
such event, the holders of the remaining shares will not be able to elect any of
our directors.  Stockholders do not have preemptive rights to purchase shares in
any future issuance of our common stock.

     The holders of shares of our common stock are entitled to dividends  out of
funds  legally  available  when and as declared by our board of  directors.  Our
board of directors has not declared a dividend  during the two preceding  fiscal
years or during  calendar 2005 and does not  anticipate  declaring a dividend in
the foreseeable  future. In the event of liquidation,  dissolution or winding up
of the affairs of the company, holders are entitled to receive, ratably, the net
assets available to stockholders after payment of all creditors.

     All of the  issued  and  outstanding  shares of our  common  stock are duly
authorized,  validly issued, fully paid, and non-assessable.  To the extent that
additional  shares of our common  stock are issued,  the  relative  interests of
existing stockholders will be diluted.

     Transfer  Agent and Registrar.  Our transfer  agent is Securities  Transfer
Corporation, 2591 Dallas Parkway, Suite 102, Frisco, Texas 75034.

                              SELLING STOCKHOLDERS

     The following  table sets forth the names of the selling  stockholders  and
for each selling stockholder the number of shares and percentage of common stock
beneficially owned as of February 4, 2005, the number of shares being registered
and the  percentage  to be owned  after  this  offering  assuming  all of shares
covered by this  prospectus are sold and no other  purchases of our common stock
are made by the selling  stockholders.  All  information  with  respect to share
ownership  has been  furnished  by the selling  stockholders.  The shares  being
offered are being  registered to permit public  secondary  trading of the shares
and each  selling  stockholder  may  offer all or part of the  shares  owned for
resale from time to time. A selling stockholder is under no obligation, however,
to sell any shares  immediately  pursuant to this  prospectus,  nor is a selling
stockholder  obligated  to sell all or any  portion  of the  shares at any time.
Therefore,  no estimate  can be given as to the number of shares of common stock
that will be sold pursuant to this  prospectus or the number of shares that will
be owned by the selling  stockholders  upon  termination  of the  offering  made
hereby. The numbers and percentages are based on 17,018,692 shares of our common
stock outstanding.

                                                                          Shares of     Percentage
                                                                           Common         Owned 
                                              Shares of                     Stock          Upon
                                            Common Stock    Percentage      to be       Completion 
     Selling Stockholders                      Owned          Owned      Registered    of Offering
                                                                                
Halter Financial Group, Inc...............   1,154,567         6.8        1,154,567        -0-
John Zhang................................     167,895          *           167,895        -0-
Marat Rosenberg ..........................      57,367          *           34,367          *
Little & Company Investment Securities....
                                               192,259         1.1          64,763           *
Gary Evans................................     175,439         1.0          175,439        -0-
Chinamerica Acquisition, LLC..............     263,157         1.5          263,157        -0-
Chinamerica Fund, LP......................     877,193         5.2          877,193        -0-
----------------
* Indicates less than 1%




                                       52


                         SHARES ELIGIBLE FOR FUTURE SALE

     Upon completion of the offering,  we will have 17,018,692  shares of common
stock outstanding.  A current  stockholder who is an "affiliate" of the company,
defined in Rule 144 as a person who directly,  or indirectly through one or more
intermediaries,  controls, or is controlled by, or is under common control with,
the company, will be required to comply with the resale limitations of Rule 144.

     Purchasers of shares in the  offering,  other than  affiliates,  may resell
their shares immediately.  Sales by affiliates will be subject to the volume and
other  limitations of Rule 144,  including  certain  restrictions  regarding the
manner of sale,  notice  requirements,  and the  availability  of current public
information  about the  company.  The  volume  limitations  generally  permit an
affiliate to sell,  within any three month period,  a number of shares that does
not exceed the greater of one percent of the outstanding  shares of common stock
or the average weekly  trading  volume during the four calendar weeks  preceding
his sale. A person who ceases to be an  affiliate  at least three months  before
the sale of restricted securities  beneficially owned for at least two years may
sell the restricted  securities under Rule 144 without regard to any of the Rule
144 limitations.

                              PLAN OF DISTRIBUTION

     The 2,737,381 shares being offered by the selling  stockholders may be sold
or  distributed  from  time  to  time  by  the  selling  stockholders  or  their
transferees  directly to one or more purchasers or through brokers,  dealers, or
underwriters  who may act solely as agents or may acquire  shares as principals.
Such sales or distributions  may be made at prevailing  market prices, at prices
related to such  prevailing  market  prices,  or at variable  prices  negotiated
between the sellers and purchasers that may vary. The distribution of the shares
may be effected in one or more of the following methods:

o    ordinary brokerage transactions, including long or short sales;
o    transactions  involving  cross or block  trades,  or  otherwise  on the OTC
     Bulletin Board;
o    purchases by brokers, dealers, or underwriters as principals and subsequent
     resale  by  the  purchasers  for  their  own  accounts   pursuant  to  this
     prospectus;
o    sales "at the  market" to, or  through,  market  makers or into an existing
     market for the shares;
o    sales not involving market makers or established trading markets, including
     direct sales to purchasers or sales effected through agents;
o    transactions  involving  options,  swaps,  or  other  derivatives,  whether
     exchange-listed or otherwise;  or o transactions  involving any combination
     of the foregoing or any other legally available means.

     In addition, a selling stockholder may enter into hedging transactions with
one or more broker-dealers who may engage in short sales of shares in the course
of hedging the  positions  they assume with the selling  stockholder.  A selling
stockholder may also enter into options or other  transactions  with one or more
broker-dealers  requiring the delivery of the shares by such broker-dealers with
the  possibility  that such  shares may be resold  thereafter  pursuant  to this
prospectus.

     A broker, dealer,  underwriter,  or agent participating in the distribution
of the shares may receive compensation in the form of discounts, concessions, or
commissions from the selling  stockholders  and/or  purchasers of the shares for
whom such person may act as an agent, to whom such person may sell as principal,
or both;  and such  compensation  as to a particular  person may be in excess of
customary commissions. The selling stockholders and any broker-dealers acting in
connection  with the sale of the  shares  being  registered  may be deemed to be
underwriters  within the meaning of Section 2(11) of the Securities Act of 1933,
as amended, or the Securities Act, and any profit realized by them on the resale
of  shares  as  principals  may be deemed  underwriting  compensation  under the
Securities Act. We know of no existing  arrangements  between any of the selling
stockholders and any other stockholder,  broker, dealer,  underwriter,  or agent
relating  to the  sale or  distribution  of the  shares,  nor  can we  presently
estimate the amount, if any, of such compensation.



                                       53


     Although we will  receive no proceeds  from the sale of shares  pursuant to
this  prospectus,  we  have  agreed  to  bear  the  costs  and  expenses  of the
registration of the shares,  including legal and accounting fees, and such costs
and expenses are estimated to be approximately $230,000.

     We have informed the selling  stockholders that while they are engaged in a
distribution  of the shares included in this prospectus they will be required to
comply with certain  anti-manipulative rules contained in Regulation M under the
Exchange  Act.  With  certain  exceptions,  Regulation  M prohibits  any selling
stockholder, any affiliated purchaser, and any broker-dealer or other person who
participates in such distribution from bidding for or purchasing,  or attempting
to induce any person to bid for or purchase, any security that is the subject of
the distribution  until the entire  distribution is complete.  Regulation M also
prohibits  any  bids or  purchases  made in order to  stabilize  the  price of a
security in connection with the distribution of that security.

                         INDEPENDENT PUBLIC ACCOUNTANTS

     On January 4, 2005, the board of directors approved  resolutions to replace
our independent  registered  public auditors,  BDO Shanghai  Zhonghua  Certified
Public Accountant,  with Grobstein,  Horwath & Company,  LLP, which we appointed
effective as of January 6, 2005.

     During  June 2004,  we  completed  a stock  exchange  transaction  with the
stockholders  of Sifang  Holdings  Co.  Ltd.,  or  Sifang,  resulting  in Sifang
becoming our wholly  owned  subsidiary.  This stock  exchange  transaction  also
resulted in a recapitalization  of the company with Sifang becoming the survivor
of the  transaction for accounting  purposes.  Upon this  recapitalization,  our
independent  public accountant,  S.W. Hatfield,  CPA, resigned effective July 9,
2004.  As a result  of S.W.  Hatfield's  resignation,  our  board  of  directors
appointed BDO Shanghai  Zhonghua  Certified Public Accountant as our independent
public accountant.

     On January 4, 2005, the board of directors approved  resolutions to replace
our independent  registered  public auditors,  BDO Shanghai  Zhonghua  Certified
Public Accountant,  with Grobstein,  Horwath & Company,  LLP, which we appointed
effective as of January 6, 2005.

     Hatfield  audited  our  financial  statements  for the  fiscal  year  ended
December 31, 2003.  Hatfield's report for that period did not contain an adverse
opinion or a  disclaimer  of opinion,  and was not  qualified  or modified as to
uncertainty,  audit scope or accounting principles. During our fiscal year ended
December 31, 2003 and from  January 1, 2004 through July 9, 2004,  there were no
disagreements with Hatfield on any matter of accounting principles or practices,
financial statement  disclosure,  or auditing scope or procedure,  which, if not
resolved  to the  satisfaction  of  Hatfield,  would  have  caused  them to make
reference to the subject matter in their report.

     BDO Shanghai Zhonghua audited Sifang's financial  statements for the fiscal
year ended  December 31, 2003. BDO Shanghai  Zhonghua's  reports for that period
did not  contain an adverse  opinion or a  disclaimer  of  opinion,  and was not
qualified or modified as to uncertainty,  audit scope or accounting  principles.
During our fiscal year ended  December 31, 2003 through  January 6, 2005,  there
were no disagreements  with BDO Shanghai Zhonghua Certified Public Accountant on
any  matter  of  accounting   principles  or  practices,   financial   statement
disclosure,  or  auditing  scope or  procedure,  which,  if not  resolved to the
satisfaction of BDO Shanghai Zhonghua  Certified Public  Accountant,  would have
caused them to make reference to the subject matter in their report.

                                  LEGAL MATTERS

     Certain  legal  matters in this  offering,  including  the  legality of the
common stock offered pursuant to this prospectus, will be passed upon for us and
the selling stockholders by Kummer Kaempfer Bonner & Renshaw.



                                       54


                                     EXPERTS

     The financial  statements of the company  included in this  prospectus have
been audited by BDO Shanghai Zhonghua Certified Public Accountants,  independent
registered  public  accounting  firm,  as stated in the opinion,  which has been
rendered upon the authority of said firm as experts in accounting and auditing.

                     INTERESTS OF NAMED EXPERTS AND COUNSEL

     No  "Expert"  or  "Counsel"  as  defined  by  Item  509 of  Regulation  S-B
promulgated  pursuant to the  Securities  Act,  whose  services were used in the
preparation of this Form SB-2, was hired on a contingent  basis,  will receive a
direct or  indirect  interest  in the  company or was a  promoter,  underwriter,
voting trustee, director, officer or employee of China Digital.

                       WHERE YOU CAN FIND MORE INFORMATION

     We have filed a registration  statement on Form SB-2 with the SEC under the
Securities  Act of 1933 with  respect to the shares of common  stock  offered in
this offering prospectus.  This prospectus,  which is a part of the registration
statement, does not contain all of the information set forth in the registration
statement,  or the exhibits which are part of the  registration  statement.  You
should refer to the  registration  statement  and its  exhibits  for  additional
information that is not contained in this prospectus. Whenever we make reference
in this prospectus to any of our contracts,  agreements or other documents,  you
should refer to the exhibits  attached to the registration  statement for copies
of the actual contract, agreement or other document.

     WE ARE SUBJECT TO THE INFORMATIONAL REQUIREMENTS OF THE SECURITIES EXCHANGE
ACT OF  1934,  AS  AMENDED,  AND WE ARE  REQUIRED  TO FILE  REPORTS,  ANY  PROXY
STATEMENTS  AND  OTHER  INFORMATION  WITH THE SEC.  YOU CAN READ OUR SEC  FILES,
INCLUDING THIS REGISTRATION  STATEMENT,  OVER THE INTERNET AT THE SEC'S WEB SITE
AT HTTP://WWW.SEC.GOV. YOU MAY ALSO READ AND COPY ANY DOCUMENTS WE FILE WITH THE
SEC AT ITS PUBLIC REFERENCE FACILITY AT 450 FIFTH STREET, N.W., WASHINGTON, D.C.
20549.  YOU MAY ALSO  OBTAIN  COPIES OF THE  DOCUMENTS  AT  PRESCRIBED  RATES BY
WRITING TO THE PUBLIC  REFERENCE  SECTION OF THE SEC AT 450 FIFTH STREET,  N.W.,
WASHINGTON,  D.C.  20549.  PLEASE  CALL THE SEC AT  1-800-SEC-0330  FOR  FURTHER
INFORMATION ON THE OPERATION OF THE PUBLIC REFERENCE FACILITY.





                                       55


                          INDEX TO FINANCIAL STATEMENTS


Unaudited Consolidated Financial Statements

Consolidated Balance Sheets as of March 31, 2005 and 
     December 31, 2004.......................................................F-2
Consolidated Statements of Income and Comprehensive Income 
     for the Three Months Ended March 31, 2005 and 2004......................F-3
Consolidated Statements of Shareholders' Equity for the Twelve Months
     Ended December 31, 2004 and Three Months Ended March 31, 2005...........F-4
Consolidated Statements of Cash Flows for the Three Months Ended 
     March 31, 2005 and 2004.................................................F-5
Notes to Financial Statements................................................F-6

Consolidated Financial Statements

Reports of Independent Registered Public Accounting Firms...................F-18
Consolidated Balance Sheets as of December 31, 2004 and 2003................F-19
Consolidated Statements of Income and Comprehensive Income for the 
     Twelve Months Ended December 31, 2004 and 2003.........................F-20
Consolidated Statements of Shareholders' Equity for the Twelve Months 
     Ended December 31, 2004 and 2003.......................................F-21
Consolidated Statements of Cash Flows for the Twelve Months Ended
     December 31, 2004 and 2003.............................................F-22
Notes to Financial Statements...............................................F-23





















                                      F-1






                   CHINA DIGITAL WIRELESS INC. AND SUBSIDIARY

                           CONSOLIDATED BALANCE SHEETS

                                                                       December 31,     March 31,
                                                                           2004           2005
                                                                       ------------   ------------
                                                                        (Unaudited) 
                                                                                 
ASSETS                                                                                  
                                                                                        
Current assets:                                                                         
   Cash and cash equivalents                                           $     75,511   $    404,242
   Accounts  receivable,  net of allowance for doubtful  accounts of                    
   $47,922 and $27,237                                                    4,619,809      3,044,340
   Inventories                                                              101,696        895,270
   Deferred tax assets                                                       28,772         11,336
   Common stock proceeds held in escrow                                   1,500,000              0
   Amounts due from related parties                                       4,987,956      4,259,643
   Advances & deposits to suppliers                                         150,412      1,472,016
                                                                       ------------   ------------
Total current assets                                                     11,464,156     10,086,847
                                                                       ------------   ------------
                                                                                        
Property and equipment, net                                               1,198,509      1,181,277
Deposit for business acquisition                                               --        2,160,335
                                                                       ------------   ------------
                                                                                        
Total assets                                                           $ 12,662,665   $ 13,428,459
                                                                       ============   ============
                                                                                        
                                                                                        
LIABILITIES AND SHAREHOLDERS' EQUITY                                                    
                                                                                        
Current liabilities:                                                                    
   Accounts payable                                                    $     55,839   $    929,301
   Deferred revenue                                                         617,694        172,275
   VAT payable                                                              213,535         87,918
   Income tax payable                                                       312,763        210,577
   Due to related parties                                                   100,260         51,350
   Other liabilities                                                        287,025        235,083
                                                                       ------------   ------------
                                                                                        
Total current liabilities                                                 1,587,116      1,686,504
                                                                       ------------   ------------
                                                                                        
                                                                                        
Shareholders' equity:                                                                   
   Common stock - $0.001 par value, 100,000,000 shares                                  
     authorized, 17,018,692 shares issued and outstanding                    17,019         17,019
   Additional paid-in capital                                             4,229,974      4,229,974
   Retained earnings                                                      6,828,281      7,494,689
   Accumulated other comprehensive income                                       275            273
                                                                       ------------   ------------
                                                                                        
Total shareholders' equity                                               11,075,549     11,741,955
                                                                       ------------   ------------
                                                                                        
Total liabilities and shareholders' equity                             $ 12,662,665   $ 13,428,459
                                                                       ============   ============

                                                                       

           See accompanying notes to consolidated financial statements


                                      F-2




                   CHINA DIGITAL WIRELESS INC. AND SUBSIDIARY

                        CONSOLIDATED STATEMENTS OF INCOME
                            AND COMPREHENSIVE INCOME

                                                      Three Months ended March 31,
                                                      ----------------------------
                                                          2004            2005
                                                      ------------    ------------
                                                       (unaudited)     (unaudited)
                                                                         
Revenues:
  Product sales                                       $  2,098,876    $    669,191
  Product sales to related parties                       1,775,000       4,060,514
  Information service revenue                              868,830         657,703

  Advertising service revenue, net                            --           387,954
                                                      ------------    ------------

Total revenues                                           4,742,706       5,775,362
                                                      ------------    ------------

Cost of goods sold                                       1,940,054         605,888
Cost of goods sold to related parties                    1,739,425       3,963,905
Cost of information services                               253,824         170,808
                                                      ------------    ------------
Total cost of goods sold                                 3,933,303       4,740,601
                                                      ------------    ------------

Gross profit                                               809,403       1,034,761
                                                      ------------    ------------

Operating expenses:
  Sales and marketing                                       36,236          43,289
  General and administrative                               126,181         192,039
                                                      ------------    ------------

Total operating expenses                                   162,417         235,328
                                                      ------------    ------------

Income from operations                                     646,986         799,433

Interest income                                                  0             465
                                                      ------------    ------------

Income before income taxes                                 646,986         799,898

Income tax provision                                        48,524         133,490
                                                      ------------    ------------

Net income                                            $    598,462    $    666,408
                                                      ============    ============


Other comprehensive income
  Translation adjustments                             $       (330)   $         (2)
                                                      ------------    ------------

Comprehensive income                                  $    598,132    $    666,406
                                                      ============    ============


Basic earnings (loss) per share                       $       0.04    $       0.04

Weighted average shares of common stock outstanding     13,782,636      17,018,692



          See accompanying notes to consolidated financial statements.


                                      F-3




                   CHINA DIGITAL WIRELESS INC. AND SUBSIDIARY

                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                      (In U.S. dollars, except share data)

                                                                    Additional                         Other             Total
                                           Common Stock               Paid-in          Retained     Comprehensive    Shareholders'
                                      Shares          Amount          Capital          Earnings     Income (Loss)       Equity     
                                   -------------   -------------   -------------    -------------   -------------    -------------
                                                                                                             
Balance at December 31, 2003          13,782,636   $      13,783   $   1,436,217    $   5,233,652   $          12    $   6,683,664
                                                                                                                       
Recapitalization and                                                                                                   
reorganization                         1,585,705           1,586         308,465             --              --            310,051
                                                                                                                       
Shares issued for consulting                                                                                          
services                                 167,895             168         604,254             --              --            604,422
                                                                                                                       
Shares issued for proceeds of                                                                                       
$190,000 and  consulting                                                                                               
services                                 166,667             167         599,834             --              --            600,001
                                                                                                                       
Shares issued for net proceeds                                                                                       
of $1.5 million                        1,315,789           1,315       1,498,685             --              --          1,500,000
                                                                                                                       
Offset by issuing cost                      --              --          (217,481)            --              --           (217,481)
                                                                                                                       
Net income                                  --              --              --          1,594,629            --          1,594,629
                                                                                                                       
Translation adjustment                      --              --              --               --               263              263
                                                                                                                       
                                   -------------   -------------   -------------    -------------   -------------    -------------
Balance at December 31, 2004          17,018,692   $      17,019   $   4,229,974    $   6,828,281   $         275    $  11,075,549
                                                                                                                       
Net income (unaudited)                      --              --              --            666,408            --            666,408
                                                                                                                       
Translation adjustment                                                                                                 
(unaudited)                                 --              --              --               --                (2)              (2)
                                   -------------   -------------   -------------    -------------   -------------    -------------
                                                                                                                       
Balance at March 31, 2005             17,018,692   $      17,019   $   4,229,974    $   7,494,689   $         273    $  11,741,955
                                   =============   =============   =============    =============   =============    =============

                                                                          

          See accompanying notes to consolidated financial statements.


                                      F-4




                   CHINA DIGITAL WIRELESS INC. AND SUBSIDIARY

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                     
                                                       Three Months ended March 31,
                                                       ----------------------------
                                                              2004           2005
                                                       ------------    ------------
                                                        (unaudited)     (unaudited)                                     
                                                                 
Cash flows from operating activities:                                    
  Net income                                           $    598,462    $    666,408
  Adjustments  to  reconcile  net income to net cash                     
     provided by operating  activities:                                  
       Depreciation                                          68,856          67,684
       Bad debt expenses                                     48,624         (20,685)
       Deferred tax assets                                   (3,647)         17,437
       Changes in assets and liabilities:                                
          Accounts receivable                            (1,348,027)      1,596,154
          Inventories                                     1,305,562        (793,574)
          Advances & deposits to suppliers                 (659,649)     (1,321,604)
          Accounts payable                                  229,243         873,462
          Deferred revenue                                   (4,711)       (445,419)
          VAT payable                                        83,414        (125,617)
          Income tax payable                                      0        (102,186)
          Due to related parties                                  0         (48,910)
          Other liabilities                                 216,206         (51,942)
                                                       ------------    ------------
                                                                         
Net cash provided by operating activities                   534,333         311,208
                                                       ------------    ------------
                                                                         
Cash flows from investing activities:                                    
  Purchase of property and equipment                        (35,570)        (50,452)
  Amount due from related parties                          (962,875)     (1,432,023)
                                                       ------------    ------------
Net cash used in investing activities                      (998,445)     (1,482,475)
                                                       ------------    ------------
                                                                         
Cash flows from financing activities:                                    
                                                                         
  Escrow receivable                                               0       1,500,000
                                                       ------------    ------------
                                                                         
Net cash provided by (used in) financing activities               0       1,500,000
                                                       ------------    ------------
                                                                         
Foreign currency translation                                   (330)             (2)
                                                       ------------    ------------
                                                                         
Net increase (decrease) in cash and cash equivalents       (464,442)        328,731
                                                                         
Cash and cash equivalents, beginning of the period        1,713,748          75,511
                                                       ------------    ------------
                                                                         
Cash and cash equivalents, end of the period           $  1,249,306    $    404,242
                                                       ============    ============
                                                                         
                                                                         
Supplemental disclosure of cash flow information:                        
  Cash paid during the year for:                                         
       Interest                                        $          0               0
       Income taxes                                          48,524         218,239

                                                                        


          See accompanying notes to consolidated financial statements.

                                      F-5




NOTE 1 - ORGANIZATION AND BUSINESS BACKGROUND

         China  Digital  Wireless,   Inc.  ("CDW")  formerly  known  as  Boulder
Acquisitions,  Inc. sells mobile phones to retailers,  distributors, and related
parties and provides  information services to users of mobile phones and pagers.
Substantially  all of China Digital Wireless,  Inc.  operations are in Shanghai,
People's Republic of China (PRC).

         In order to meet ownership requirements under Chinese law that restrict
a foreign  company from  operating  in certain  industries  such as  value-added
telecommunication  and  Internet  services,  CDW's  subsidiary  has entered into
information service and cooperation agreements with two of CDW's affiliates that
are  incorporated  in the China:  Sifang  Information  and Tianci.  CDW holds no
ownership  interest in Sifang  Information  or Tianci.  Sifang  Information  and
Tianci contract with China Mobile Communications  Corporation,  or China Mobile,
and China United Telecommunications  Corporation, or China Unicom, respectively,
to provide  wireless  value-added  information  services  to  wireless  receiver
customers  in China  via  China  Mobile  and China  Unicom.  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.

Recapitalization and Reorganization

         On June 23, 2004, Boulder Acquisitions,  Inc. ("Boulder  Acquisitions")
entered into a stock exchange  agreement with Sifang Holdings Co. Ltd.  ("Sifang
Holdings") and certain  shareholders.  Pursuant to the stock exchange agreement,
Boulder  Acquisitions  issued  13,782,636 shares of its common stock in exchange
for a 100% equity interest in Sifang  Holdings,  making Sifang Holdings a wholly
owned subsidiary of Boulder Acquisitions.

         Boulder  Acquisitions was  incorporated  under the laws of the State of
Colorado on May 8, 1980 as Boulder Brewing Company ("Boulder Brewing").  Boulder
Brewing was the  successor  to a general  partnership  formed in 1979.  From the
initial inception of the original  partnership through 1990, Boulder Brewing was
in the business of operating a microbrewery in Boulder,  Colorado.  During 1990,
as a result of various debt defaults,  Boulder  Brewing's assets were foreclosed
upon and all business  operations  were ceased.  Boulder Brewing has effectively
had no operations,  assets or  liabilities  since its fiscal year ended December
31, 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,
a Nevada  corporation  formed on  September  6, 2001  solely for the  purpose of
effecting the  reincorporation.  The Articles of Incorporation and Bylaws of the
Nevada corporation are the Articles of Incorporation and Bylaws of the surviving
corporation. Such Articles of Incorporation eliminated the provision for Boulder
Acquisitions to issue preferred stock.

         The above stock exchange  transaction resulted in those shareholders of
Sifang Holdings  obtaining a majority  voting interest in Boulder  Acquisitions.
Generally accepted accounting principles in the United States of America require
that the company whose  shareholders  retain the majority interest in a combined
business be treated as the acquirer for accounting purposes.  Consequently,  the
stock  exchange  transaction  has been  accounted for as a  recapitalization  of
Sifang  Holdings as Sifang  Holdings  acquired a controlling  equity interest in
Boulder  Acquisitions,  as of June 23,  2004.  The reverse  acquisition  process
utilizes  the  capital  structure  of  Boulder  Acquisitions  and the assets and
liabilities of Sifang Holdings recorded at historical cost.

         Sifang  Holdings  is the  continuing  operating  entity  for  financial
reporting  purposes,  and  the  financial  statements  prior  to June  23,  2004
represent Sifang Holdings'  financial position and results of operations.  As of
June 23, 2004, Boulder Acquisitions had only cash of $310,051, and shareholders'
equity of $310,051 with  1,585,705  shares of common stock  outstanding,  all of
which were included in the consolidated financial statements of Sifang Holdings.
Please see the  shareholders'  equity  statement  for the period from January 1,
2004 to March 31, 2005.  Although  Sifang Holdings is deemed to be the acquiring
corporation for financial accounting and reporting purposes, the legal status of
Boulder Acquisitions as the surviving corporation did not change.  Subsequent to
June 30, 2004, Boulder  Acquisitions changed its name to China Digital Wireless,
Inc.



                                      F-6


Business History

         CDW's  business  is  primarily   conducted   through  its  wholly-owned
subsidiary  Sifang Holdings Co., Ltd.,  (Sifang  Holdings) and its  wholly-owned
subsidiary TCH Data Technology Co., Ltd. (TCH).  Sifang Holdings was established
under the laws of the Cayman  Islands  on  February  9, 2004 for the  purpose of
acquiring  a 100%  equity  interest  in TCH.  TCH was  established  as a foreign
investment  enterprise  in Shanghai  under the laws of the PRC on May 25,  2004,
with registered capital of $7.2 million.

         CDW's  current  operations  were  originally  a  business  division  of
Shanghai  Sifang  Information   Technology  Co.  (Sifang  Information).   Sifang
Information is a Shanghai-based privately owned enterprise established under the
laws of the PRC on  August  14,  1998.  Sifang  Information  is  engaged  in the
business  of pager and  mobile  phone  distribution  and  provides  value  added
information  services to the  customers in the Shanghai  metropolitan  area.  In
March 2004, Sifang Information spun off its mobile phone  distribution  business
and the majority of its value added information services business to TCH. As the
acquiring entity under common control,  TCH initially  recognized all the assets
and liabilities  transferred at their carrying amounts in the accounts of Sifang
Information at the date of transfer under the guidance of SFAS No. 141, Appendix
D.

         On May 26,  2004,  Sifang  Information  exchanged  100%  of the  equity
interest in TCH for 100% of the equity  interest in Sifang  Holdings.  Since the
ultimate  owners  of the  three  entities  were the same  owners  and the  three
entities remained under common control,  the ownership exchange  transaction was
accounted for at historical  costs under the guidance of SFAS No. 141,  Appendix
D. Prior to May 26, 2004,  there were no  activities  in Sifang  Holdings.  As a
result of the  exchange  of  ownership  between TCH and Sifang  Holdings,  TCH's
historical  financial  statements became the historical  financial statements of
Sifang Holdings.

         As a result of the  spin-off,  TCH  engages in the  business  of mobile
phone  distribution  and  provides  pager and mobile  phone users with access to
certain value-added  information reformatted by TCH. TCH purchases mobile phones
from first tier distributors and sells them to retailers and distributors with a
mark-up. In the process of providing  value-added  information  services through
entering into monthly subscription  agreements with various users, TCH purchases
trading activity information from stock exchanges,  comments and analysis on PRC
stock markets provided by certain reputable  security and investment  companies,
lottery  information,  weather  forecast,  and other  value-added  products  and
reformats the aforementioned  information through decoding and recoding and then
has the reformatted information  transmitted by Sifang Information,  via service
contracts,  to pager users.  The value-added  information is constantly saved on
TCH's  server in order for  mobile  phone  users to dial in via China  Mobile or
China Unicom.  By signing a monthly  subscription  agreement,  wireless receiver
users  agree to make  advance  payments  for our  services  for either  three or
six-month subscription periods.

         In the spin-off  process,  the cost of sales  included in the Company's
financial  statements is directly related to the product revenue and the cost of
services is directly  related to different types of service.  The business taxes
(similar to sales taxes in the U.S.) are  related  only to service  revenue at a
tax rate of approximately  3.3%. The selling expenses are allocated based on the
relationship  between  expense  and  revenue  (such as  commission)  and payroll
records.  The  general  and  administrative  expenses  are  allocated  based  on
management  hours spent and payroll  records.  The income tax provision has been
calculated on a separate company basis and is in line with the historical actual
income tax provision at the Sifang  Information  level  assuming that all income
taxes had been paid by Sifang  Information  and no income tax  liability  was in
existence  in the periods  reported in the  accompanying  financial  statements.
Management believes that the costs,  operating expenses,  interest expense,  and
income tax  provision  included  in the  Company's  financial  statements  are a
reasonable  representation  of the  costs  and  expenses  that  would  have been
incurred if the Company had performed these functions as a stand-alone company.



                                      F-7


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

         These unaudited consolidated financial statements have been prepared in
accordance with accounting principles generally accepted in the United States of
America ("GAAP") for interim financial  information and the instructions to Form
10-QSB and Article 10 of Regulation S-X. Accordingly, they do not include all of
the  information  and  footnotes   required  by  GAAP  for  complete   financial
statements. In the opinion of management,  all adjustments (consisting of normal
recurring  accruals)  considered  necessary  for  a  fair  presentation  of  the
Company's  financial condition and results of operations for the interim periods
presented  in this Form 10-QSB  have been  included.  Operating  results for the
interim periods are not necessarily indicative of financial results for the full
year.  These  unaudited  consolidated  financial  statements  should  be read in
conjunction with the audited consolidated financial statements and notes thereto
included  in the  Company's  Annual  Report on Form  10-KSB  for the year  ended
December 31, 2004.

         The Company's  consolidated  financial  statements for the three months
ended March 31, 2004 have been derived from the historical  financial statements
and accounting  records of Sifang  Information  using the  historical  operating
results and the historical  basis of the assets and  liabilities  transferred to
the Company in accordance with accounting  principles  generally accepted in the
United States of America.  Management  believes that the assumptions  underlying
the accompanying  financial  statements are reasonable.  However,  the financial
statements that are derived from Sifang Information's  financial records may not
necessarily  reflect the Company's  results of operations and cash flows had the
Company been a stand-alone company.

Principles of Consolidation:

         The consolidated  financial statements for the three months ended March
31,  2005 and March 31,  2004  include the  accounts  of CDW,  its wholly  owned
subsidiary Sifang Holdings,  and its wholly owned subsidiary TCH,  collectively,
the  "Company").  Substantially  all of  CDW's  revenues  are  derived  from the
operations of TCH,  which  represents  substantially  all of CDW's  consolidated
assets and  liabilities as of March 31, 2005 and March 31, 2004. All significant
intercompany accounts and transactions have been eliminated.

Foreign Currency Translations and Transactions

         The Renminbi ("RMB"),  the national currency of the PRC, is the primary
currency  of the  economic  environment  in  which  the  operations  of TCH  are
conducted.  The Company  uses the United  States  dollar  ("U.S.  dollars")  for
financial reporting purposes.

         The Company  translates  TCH's assets and liabilities into U.S. dollars
using  the rate of  exchange  prevailing  at the  balance  sheet  date,  and the
statement of income is translated at average rates during the reporting  period.
Adjustments  resulting from the translation of TCH's  financial  statements from
RMB  into  U.S.  dollars  are  recorded  in  shareholders'  equity  as  part  of
accumulated comprehensive income. Gains or losses resulting from transactions in
currencies  other  than RMB are  reflected  in the  statement  of income for the
reporting periods.

Revenue Recognition

         The  Company   derives   revenues  from  the  sale  of  mobile  phones,
advertisement  designing  service  and the  provision  of  wireless  information
services  that are used on cell  phones,  pagers and prepaid  phone  cards.  The
Company  additionally earns commission income ("Agency Income") from the sale of
CDMA mobile phones on the behalf of a related party. The Company  recognizes its
revenues net of related business taxes and value added taxes.

Mobile Phone Sales:

         Revenues  generated from the sale of mobile phones are recognized  when
the products  are shipped to the  distributor  or retailer  and when  persuasive
evidence of an  arrangement  exists,  delivery  of the  products  has  occurred,
customer  acceptance has been obtained,  which means the  significant  risks and
rewards of ownership have been  transferred to the customer,  the price is fixed
or determinable and collectibility is reasonably assured.



                                      F-8


Advertising Servicing Revenue, Net:

         Advertising   revenues  are  derived  from   advertisement   designing,
masterminding and producing  services.  The Company  recognizes service revenues
over the term of noted agreement at the time of completion of the services.

Information Services:

         The  Company  recognizes  service  revenues  over the term of the noted
agreement and or when the services have been provided to the end user.

i) Information Services - TCH:

         By signing a subscription  agreement,  wireless receiver users agree to
make payments for three to six-month  subscriptions in advance.  TCH records the
proceeds as  deferred  revenue  and  amortizes  the  deferred  revenue  over the
subscriptions period. When customers buy a pre-charged service card, the Company
records the  proceeds as deferred  revenue.  When a customer  starts to use this
card to access to the  Company's  server and starts to use a pager to access the
aforementioned  information,  the Company identifies the subscription period and
amortizes the deferred revenue over the subscription period.

ii) Information Services - Installing Agent.

         In  response to a  retailer's  request,  the Company has an  installing
agent install the Company's  software on mobile  phones,  which are owned by the
retailer.  The retailer  sells these  phones for a premium  covering a fee to be
paid to the installing  agent and pre-charged  six-month  subscription fee to be
paid to the Company.  After a customer  using such a phone dials into the server
to access the desired  information,  the server records a unique  identification
number installed on the mobile phone, which indicates that a specific phone user
starts his or her  subscription  period.  After the Company  receives a detailed
list from the  installing  agent  regarding  the number of phones that have been
installed with the Company's software, the Company matches this information with
a detailed  list from the retailer  setting forth how many such phones have been
sold.  Based on the number of such phones  sold,  the Company  records  accounts
receivable and deferred revenue correspondingly. At the date on which a customer
starts to dial into the server, the six-month subscription period begins and the
Company amortizes deferred revenue accordingly.

iii) Information Services - China Mobile and / or Unicom:

         Since April 2004, the revenue generated from selling  pre-charged cards
has  gradually   decreased   while  the  revenue   generated   through   monthly
subscriptions  with China  Mobile  and/or China  Unicom  (collectively,  "Mobile
Operators")  has gradually  increased as the Mobile  Operators'  billing systems
have been enhanced.  The Company's  affiliates,  Sifang Information and Shanghai
Tianci Industrial Group Co., Ltd. ("Tianci"), contract with the Mobile Operators
for the  transmission of the Company's  value-added  information  services.  The
Mobile  Operators  bill and collect from customers and then pass those fees (net
of billing and  collection  service  fees  charged by the Mobile  Operators)  to
Sifang  Information  and Tianci who in turn pass those fees to the Company.  The
Company recognizes net revenues based on the total amount paid by its customers,
for which the Mobile Operators bill and collect on behalf of the Company.  There
is a time lag  ranging  from 10 days to 45 days  between  the end of the service
period and the date the Mobile  Operators send out their billing  statements due
to the segregated billing systems of each provincial  subsidiaries of the Mobile
Operators.  The Company has not recognized  service revenue based on the records
provided by its own server but has performed a reconciliation on a monthly basis
of the revenues  recognized  by the  Company's  server to the Mobile  Operator's
billing statement.  In addition, the Mobile Operators charge a network usage fee
based on a fixed per message fee  multiplied by the excess of messages sent over
messages  received  (This type of service  is not  covered by a monthly  service
subscription  and the  Company  has no  control  whether it will occur or not.).
Network  usage fees  charged by the Mobile  Operators  are reduced for  messages
received  by the  Company  because the Mobile  Operators  separately  charge the
sender a fee for these transmissions.

         The Company  records the revenue  from China Mobile / China Unicom on a
net  basis  in  compliance  with  EITF  99-19,  "Reporting  Revenues  Gross as a
Principle versus Net as an Agent" because the Company:



                                      F-9


         o        Is not the primary obligor in the arrangement, as it relies on
                  Sifang Information to transmit the information services to the
                  end user
         o        Has  limited  ability  to  adjust  the  cost  of  services  by
                  adjusting the design or marketing of the service,
         o        Has limited  ability to  determine  prices,  the Company  must
                  follow the price policy  within  ranges  prescribed  by Mobile
                  Operators, and
         o        Has  limited   ability  to  assume  risk  of   non-payment  by
                  customers.

         The  Company's  dependence  on the  substance and timing of the billing
systems of the mobile  telecommunications  operators  may require us to estimate
portions of our reported  revenue for wireless  Internet  services  from time to
time. As a result,  subsequent  adjustments  may have to be made to our wireless
Internet  service  revenue in our  financial  statements.  As we do not bill our
wireless Internet services users directly,  we depend on the billing systems and
records of the mobile  telecommunications  operators to record the volume of our
wireless Internet services  provided,  charge our users through mobile telephone
bills and collect payments from our users and pay us.

Cash and Cash Equivalents

         The Company considers all highly liquid  investments with maturities of
three  months or less to be cash  equivalents.  The Company  maintains  its cash
accounts at credit worthy financial institutions.

Accounts Receivable and Concentration of Credit Risk

         During the normal  course of business,  the Company  extends  unsecured
credit to  retailers  and  distributors  who are mainly  located in the Shanghai
metropolitan  area.  Typically,  for mobile  phone  distributors,  credit  terms
require  payment to be made  within 30 days of the sale.  The  Company  does not
require collateral from its customers. The Company's policy is to provide for an
allowance  for  doubtful  accounts  that is based on 5% of total trade  accounts
receivable less amounts due from related parties and from the installing agent.

         The Company regularly  evaluates and monitors the  creditworthiness  of
each customer on a case-by-case basis. The Company includes any account balances
that are determined to be  uncollectible  in the overall  allowance for doubtful
accounts. After all attempts to collect a receivable have failed, the receivable
is written off against the  allowance.  The Company  believes that its allowance
for  doubtful  accounts  was  adequate as of March 31,  2004 and 2005.  However,
actual write-offs might exceed the recorded allowance.

The following table presents activities in the allowance for doubtful accounts.

                                                    December 31,     March 31,  
                                                    ------------   ------------
                                                        2004           2005   
                                                    ------------   ------------
                                                                    (Unaudited)
Beginning balance                                   $     28,158   $     47,922
Additions charged to expense                              19,764           --
Recovered                                                   --          (20,685)
Actual write off                                            --             --
                                                    ------------   ------------
Ending balance                                      $     47,922   $     27,237
                                                    ============   ============
                                               

Inventories

         Inventories  consist  principally of mobile phones manufactured by name
brand  manufacturers  with various  features and are stated at the lower of cost
(weighted-average) or market.

Rebates and Credits Receivable

         In 2004, the Company's major vendor began providing rebates and credits
if the Company meets certain sales volume levels  prescribed by the vendor. As a
result,  the Company is entitled to receive  certain rebates and credits for the
inventory  held and sold by the Company  within the specified  period of time as
defined by its vendor through  submitting the necessary  application  forms.  In



                                      F-10


general,  once the  vendor  approves  these  applications  the  amounts of these
rebates and credits will be deducted from the Company's  accounts payable to its
vendor and decrease the cost of goods sold or inventory held correspondingly.

Capitalization of Software Costs

         The Company's  software is developed by an  independent  third party to
enable pager users to accept certain recoded  information  which is transmitted,
through  affiliates,  by the Company and enables mobile phone users to dial into
the Company's server. The software is for internal use and gives the Company the
ability to provide value added information services. In accordance with SOP 98-1
"Accounting  for the  Costs of  Computer  Software  Developed  or  Obtained  for
Internal  Use," the Company  capitalizes  the external  cost incurred to develop
this  internal-use  software  by  an  engineering  company  at  the  application
development  stage and amortizes  that cost over the estimated  economic life of
the software (two or three years) which is consistent  with the expected life of
a particular type of mobile phone.

Property and equipment

         Property  and  equipment  are  recorded  at cost and are  stated net of
accumulated   depreciation.   Depreciation   expense  is  determined  using  the
straight-line method over the estimated useful lives of the assets as follows:

              Buildings                                 20 years
              Software                                  2-3 years
              Vehicles and other equipment              2-5 years

         Maintenance  and repairs are charged  directly to expense as  incurred,
whereas  betterment and renewals are generally  capitalized in their  respective
property accounts.

Impairment of Long-Lived Assets

The Company applies the provisions of Statement of Financial Accounting Standard
No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" ("SFAS
No. 144"), issued by the Financial Accounting Standards Board ("FASB"). SFAS No.
144 requires that long-lived  assets be reviewed for impairment  whenever events
or changes in  circumstances  indicate that the carrying  amount of an asset may
not be  recoverable  through the estimated  undiscounted  cash flows expected to
result from the use and eventual  disposition  of the assets.  Whenever any such
impairment exists, an impairment loss will be recognized for the amount by which
the carrying value exceeds the fair value. 

Fair Value of Financial Instruments

The carrying amount of cash and cash equivalents,  accounts receivable, advances
and deposits to supplier,  accounts  payable and other current  liabilities  are
reasonable  estimates of their fair value because of the short maturity of these
items.






                                      F-11


Stock Based Compensation

The Company  utilizes FAS 123 "Accounting for  Stock-Based  Compensation,"  when
accounting for stock based  compensation and recognizes the fair value impact of
the compensation  granted to employees and consultants as a charge to net income
in the period that the services  associated with the  compensation are incurred.
The Company does not currently have a stock option plan.

Value Added Tax

         TCH is subject to value added tax  ("VAT")  imposed by the PRC on TCH's
domestic  product  sales.  The output VAT is charged to  customers  who purchase
mobile  phones  from TCH and the  input VAT is paid  when TCH  purchases  mobile
phones from its vendors.  The VAT rate ranges from 13% to 17%,  depending on the
types of products  purchased and sold.  The input VAT can be offset  against the
output VAT.

Income Taxes

         The Company  accounts for income taxes in accordance  with Statement of
Financial  Accounting Standards No 109, "Accounting for Income Taxes" ("SFAS No.
109"). SFAS No. 109 requires an entity to recognize deferred tax liabilities and
assets.  For the future tax consequence  attributable to the difference  between
the tax bases of  assets  and  liabilities  and their  reported  amounts  in the
financial statements. Deferred tax assets and liabilities are measured using the
enacted tax rate expected to apply to taxable income in the years in which those
temporary  differences  are expected to be  recovered or settled.  The effect on
deferred tax assets and  liabilities  of a change in tax rates is  recognized in
income in the period that includes the enactment date. The Company establishes a
valuation  when it is more  likely  than not that  that the  assets  will not be
recovered.

         The Company's  Chinese  subsidiary TCH is registered at Pudong District
in  Shanghai  and subject to a  favorable  income tax rate of 15%  compared to a
normal  income tax rate of 33% (30% for the  central  government  and 3% for the
local government)  under current PRC tax laws.  However,  Sifang  Information is
registered  in the  Shanghai  downtown  and the  area has  been  treated  by the
Shanghai  Municipal  Administration  of Labor  as an  enterprise  that  provides
unemployed and handicapped people with jobs. Accordingly,  Sifang Information is
entitled to a favorable  income tax rate of 15% and  qualifies for an income tax
exemption  for three years from January 1, 2000 to December 31, 2002,  and a 50%
income tax  reduction for three years from January 1, 2003 to December 31, 2005.
The income tax provisions  presented in the Company's  financial  statements are
based on the  historical  actual  income  tax rates of SFT at 7.5% for the three
months ended March 31, 2004.  The income tax  provision  presented for the three
months  ended  March 31,  2005 is based on 15% . The  deferred  tax  assets  are
determined based on the historical income tax rates applicable at the TCH level.

         There is no income tax for companies  domiciled in the Cayman  Islands.
Accordingly,  the Company's  financial  statements do not present any income tax
provisions related to Cayman Islands tax jurisdiction.

Use of Estimates

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

Comprehensive Income (Loss)

         The Company has adopted Statement of Financial  Accounting Standard No.
130, "Reporting Comprehensive Income" ("SFAS No. 130"), issued by the FASB. SFAS
No. 130 establishes  standards for reporting and  presentation of  comprehensive
income  (loss) and its  components  in a full set of  general-purpose  financial
statements.  The Company has chosen to report comprehensive income (loss) in the
statements of income and comprehensive  income.  Comprehensive  income (loss) is
comprised of net income and all changes to stockholders' equity except those due
to investments by owners and distributions to owners.




                                      F-12


Earnings (Loss) Per Share

         The  Company  presents  earnings  per  share  in  accordance  with  the
Statement of Financial Accounting Standards No. 128, "Earnings per Share" ("SFAS
No. 128").  Basic earnings (loss) per share includes no dilution and is computed
by dividing  income  (loss)  available  to common  shareholders  by the weighted
average number of shares outstanding during the period.  Diluted earnings (loss)
per share reflects the potential  dilution of securities that could share in the
earnings  of an entity  if they were  converted.  The  Company  did not have any
potentially dilutive common share equivalents as of March 31, 2004 and 2005.

NOTE 3 - Equity Transactions

         On June 23, 2004, the Company issued 167,895 shares of its common stock
to a consultant  for services  relating to the reverse merger that was completed
in fiscal 2004. The trading price of the Company's common stock on June 23, 2004
was $3.60 per share, accordingly, the fair value of 167,895 shares was $604,422.

         On June 23, 2004, the Company issued 166,667 shares of its common stock
in exchange for services  performed by an existing major  shareholder of Boulder
Acquisitions for his consulting  services involved with the reverse merger.  The
common  stock was  issued at a price of $1.14  per share in  exchange  for gross
proceeds of $190,000  based on a stock purchase  agreement.  The $1.14 per share
price was  pre-negotiated  between the Company  and the  shareholder  before the
reverse merger had been completed. Pursuant to the stock purchase agreement, the
Company granted the existing shareholder an option which required the Company to
purchase up to the  aforementioned  166,667 shares of common stock 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 shareholder, up to and
including the earlier of the date that such  registration  statement is declared
effective  by the SEC or the  existing  shareholder's  shares are  eligible  for
resale under Rule 144 under the Securities Act of 1933.  According to Topic D-98
from the SEC,  "Classification and Measurement of Redeemable  Securities," these
shares should be presented  outside the permanent  equity section.  However,  on
November 12, 2004, the Company filed a Registration  Statement on Form SB-2 with
the SEC,  for  registration  of these  securities  to be sold to the public by a
small business  issuers.  On February 8, 2005, the SEC approved the registration
filing and  accordingly,  the Company has recorded these shares in shareholders'
equity as the  contingency  surrounding  these shares  expired as of February 8,
2005.  On June 23, 2004,  the trading  price at the end of the day was $3.60 per
share. Due to the relationship  between the parties,  the difference between the
price of $1.14 per share  and the  price of $3.60  per  share  was  recorded  as
compensation by presenting $410,001 in additional paid-in capital and in general
and administrative expenses.

         On June 28, 2004, the Company issued, in aggregate, 1,315,789 shares of
its common  stock to three  investors  at a price of $1.14 per share in exchange
for gross proceeds of $1,500,000 based on a stock purchase agreement.  The $1.14
per share price was  pre-negotiated  between the Company and the investor before
the reverse  merger had been  completed.  Pursuant to the signed stock  purchase
agreement,  the Company  granted to each of the three  investors an option which
requires the Company to purchase up to the  aforementioned  1,315,789 shares, in
aggregate,  of common  stock 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  shareholder's  shares are eligible for resale under Rule 144 under the
Securities  Act of 1933.  As of December 31, 2004,  the proceeds of $1.5 million
were held in an escrow account with an agent who is related to a shareholder. As
of December 31, 2004,  the Company has treated the proceeds  held in escrow as a
current  asset as the entire  amount was released  from escrow in March 2005 and
paid to the  Company.  According  to Topic  D-98 from SEC,  "Classification  and
Measurement of Redeemable  Securities," these shares should be presented outside
the permanent equity section. However, on November 12, 2004, the Company filed a
Registration  Statement  on Form SB-2 with the SEC,  for  registration  of these
securities to be sold to the public by small  business  issuers.  On February 8,
2005, the SEC declared the registration  statement effective.  Accordingly,  the
Company has recorded  these shares in  shareholders'  equity as the  contingency
surrounding these shares expired as of February 8, 2005.

         In connection  with the June 28, 2004,  issuance of common  stock,  the
Company  incurred  share  issue  costs of  $217,481  and  accounted  for it as a
reduction of additional paid-in capital.




                                      F-13




NOTE 4 - Related Party Transactions

Related Party Relationships

         The following related parties are related through common ownership with
the major shareholder of the Company.

Merchandise Sold to Related Parties

                                                            Three months Ended March 31,
                                                                2004            2005
                                                            ------------    ------------
                                                             (Unaudited)     (Unaudited)
                                                                         
      
Shanghai Shantian Telecommunication Co. Ltd. ("Shantian")   $  1,775,000    $  4,060,514
                                                            ------------    ------------
                                                            $  1,775,000    $  4,060,514
                                                            ============    ============

         During the three  months  ended March 31,  2005,  TCH sold  Samsung GSM
mobile  phones valued at  $4,060,514  (2004 - $1,775,000)  at a 2.4% (2004 - 2%)
gross profit margin to Shantian.  Accounts  receivable  include $2,526,838 (2004
$1,583,512) due from Shantian.

Advertising Services Rendered to Related Party

                                                            Three months Ended March 31,
                                                                2004            2005
                                                            ------------    ------------
                                                            (Unaudited)      (Unaudited)
                                                                                 
Shanghai Tianci Real Estate Co. Ltd.                        $       --      $    459,131
                                                            ------------    ------------
                                                            $       --      $    459,131
                                                            ============    ============
                                                       

         In January 2005,  Shanghai  Sifang Media Co., Ltd ("Sifang  Media") and
TCH entered into the "Bank Digital TV's Cooperation  Agreement",  where TCH will
assist in the promotion of TV ads for Tianci Real Estate.  TCH received a fee of
approximately  $459,000 for providing the service from January 2005 to March 31,
2005. There is an "Advertisement Agency Contract" between Tianci Real Estate and
Sifang Media,  which  continues  until November 2005 and it is expected that TCH
will  earn  additional  advertising  service  revenue  during  the  term  of the
Advertising Agency Contract.

Service Provided by Related Party

                                                            Three months Ended March 31, 
                                                                2004            2005
                                                            ------------    ------------
                                                             (Unaudited)     (Unaudited)
                                                                                 
Shanghai SFT Co., Ltd. ("Sifang Information")               $    141,960    $    121,556
                                                            ------------    ------------
                                                            $    141,960    $    121,556
                                                            ============    ============

                                                                 

         In accordance with terms contained in signed service agreements between
TCH and Sifang  Information  giving  TCH the right to use  Sifang  Information's
facility  (which may not be owned by foreign  investors at the present  time) to
transmit  the   reformatted   information  the  Company  paid  service  fees  of
approximately $141,960 and $90,618 for the three months ended March 31, 2004 and
2005  respectively.  The annual  payments for the services  have  declined  from
approximately $567,000 to approximately $362,472 from January 1, 2005.

         During the three months ended March 31, 2005,  Sifang  Information also
provided other management support and marketing services to TCH for $30,938.





                                      F-14


Amounts Due from Related Parties

                                           December 31, 2004     March 31, 2005 
                                           -----------------   -----------------
                                                                  (unaudited) 
                                                                       
Shanghai SFT Co., Ltd.                     $       4,987,956   $       4,259,643
                                           -----------------   -----------------
                                           $       4,987,956   $       4,259,643
                                           =================   =================
                                              

         In order to develop the Company's mobile phone  distribution  business,
the Company is  applying to become  Nokia's  distributor  (provincial  level) of
mobile phones. On March 20, 2005 TCH signed an agreement with Sifang Information
for  cooperation  on Nokia mobile phone's  distribution,  as TCH will act as the
agent to sell Nokia phones on Sifang Information's behalf.  Currently, the final
approval from Nokia has not been  received.  As at March 31, 2005,  TCH advanced
$3,020,600 (RMB25,000,000) to Sifang Information so that when Sifang Information
is approved to  distribute  Nokia's  products  there is enough  working  capital
available to purchase Nokia mobile phones and to establish marketing for channel
distribution.

         The Company  advanced  US$  1,239,043  (2004 -  $1,205,000)  to provide
Sifang Information with working capital in order to complete spin-off procedures
in the  PRC.  The  Company's  management  believes  that the  collection  of the
remaining balance from Sifang Information is reasonably assured and accordingly,
no allowance has been recorded as of March 31, 2005.

Deposit for Business Acquisition

         In March 2005,  TCH signed an agreement  with Tianci Group to act as an
agent for assisting with TCH's proposal to acquire assets and a related business
from Shanghai Oriental New Window Company Limited  ("Shanghai ONW"),  whose main
business was digital mobile  television and digital media services.  To initiate
the  acquisition,  TCH  advanced  Tianci  Group RMB  20,000,000  (equivalent  to
approximately  $2,418,000).  As of March 31, 2005, there remains a receivable of
$2,160,335 from the Tianci Group. The acquisition will be under the nominal name
of Tianci Group. After the completion of the acquisition, all related assets and
the business will transfer from Tianci Group to TCH with no mark up.

















                                      F-15




Due to Related Parties

                                           December 31, 2004     March 31, 2005 
                                           -----------------   -----------------
                                                                  (unaudited)
                                                                        
Shanghai Tianci Real Estate Co. Ltd        $          51,350   $          51,350
Shanghai Tianci Industry Group Co. Ltd.               48,910                --
                                           -----------------   -----------------
                                           $         100,260   $          51,350
                                           =================   =================
                                                              

         The  balance of $51,350  owed to Tianci  Real  Estate at March 31, 2005
represents  rental  payments for fiscal 2003 and 2004. The rental  agreement was
cancelled  as of September  30,  2004.  The $48,910 owed to the Tianci Group was
paid during the three  months  ended March 31,  2005.  The above  amounts due to
related parties are unsecured, non-interest bearing and due on demand.

NOTE 5 - SEGMENT REPORTING

         The Company currently  operates in three principal  business  segments.
Management  believes that the following table presents the useful information to
the chief  operation  decision  makers for measuring  business  performance  and
financing  needs  and  preparing  the  corporate  budget,  etc.  As  most of the
Company's  customers  are  located  in the  Shanghai  metropolitan  area and the
Company's   revenues  are  generated  in  Shanghai,   no  geographical   segment
information is presented.

                                Advertising   Mobile Phone   Mobile Phone    Beep Pagers
                                  Income      Distribution      Service        Service      Corporate        Total
                               ------------   ------------   ------------   ------------   ------------   ------------
                                                                                                 
Three months ended                                                                                          
March 31, 2004                                                                                              
Revenue                        $       --     $  3,873,876   $    520,965   $    347,865   $       --     $  4,742,706
Gross profit                           --          194,397        448,947        166,059           --          809,403
Depreciation                           --             --           54,544           --           14,312         68,856
Interest Income (Expense)              --             --             --             --             --             --
Net Income                             --          124,152        359,611        114,699           --          598,462
Expenditures for long-lived            --             --           35,570           --             --           35,570
assets                                                                                                      
                                                                                                            
Total Assets, as at December           --        2,721,741      2,443,657           --        7,497,267     12,662,665
31, 2004                                                                                                    
                                                                                                            
Three months ended                                                                                          
March 31, 2005                                                                                              
Revenue                        $    387,954   $  4,729,705   $    450,098   $    207,605   $          0   $  5,775,362
Gross profit                        387,954        159,912        346,771        140,124              0      1,034,761
Depreciation                           --             --           53,371           --           14,313         67,684
Interest Income (Expense)              --             --             --             --              465            465
Net Income                          323,211         97,491        253,167         99,037        106,498        666,408
Expenditures for long-lived            --             --           50,452           --             --           50,452
assets                                                                                                      
                                                                                                            
Total Assets, as at March              --        8,377,108        300,822           --        4,750,529     13,428,459
31, 2005                                                                                                    

       




                                      F-16

                                                                           
NOTE 6 -EMPLOYEE WELFARE AND RETIREMENT BENEFITS

         The PRC has been  undergoing  significant  reforms  with  regard to its
employee welfare and fringe benefits administration. Any enterprise operating in
the PRC is  subject  to  government-mandated  employee  welfare  and  retirement
benefit  contribution as a part of operating expense to the State Administration
of Labor Affairs. In accordance with PRC laws and regulations,  TCH participates
in a multi-employer  defined contribution plan pursuant to which TCH is required
to provide employees with certain retirement, medical and other fringe benefits.
PRC  regulations  require  TCH to pay the local  labor  administration  bureau a
monthly  contribution at a stated  contribution  rate based on the monthly basic
compensation  of qualified  employees.  The local labor  administration  bureau,
which manages various  investment funds, will take care of employee  retirement,
medical and other fringe  benefits.  TCH has no further  commitments  beyond its
monthly  contribution.  TCH contributed a total of $14,849 and $ 12,782 to these
funds as part of selling,  general  and  administrative  expenses  for the three
months ended March 31, 2004 and 2005, respectively.


















                                      F-17


                                    
                REPORT OF INDEPENDENT REGISTERED ACCOUNTING FIRM


To the Shareholders and Board of Directors
China Digital Wireless, Inc. and Subsidiary

We have audited the  accompanying  consolidated  balance  sheet of China Digital
Wireless,  Inc. and Subsidiary  (the  "Company") as of December 31, 2004 and the
related   consolidated   statements   of  income   and   comprehensive   income,
shareholders'  equity and cash flows for the year then ended. These consolidated
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is  to  express  an  opinion  on  these  consolidated  financial
statements based on our audit.

We conducted  our audit in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and  perform  the  audit  to  obtain  reasonable  assurance  about  whether  the
consolidated financial statements are free of material misstatement. The Company
is not  required  to  have,  nor were we  engaged  to  perform,  an audit of its
internal controls over financial reporting.  Our audit included consideration of
internal  controls  over  financial  reporting  as a basis for  designing  audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the  effectiveness  of the Company's  internal  control
over  financial  reporting.  Accordingly  we express no such  opinion.  An audit
includes  examining,  on a test  basis,  evidence  supporting  the  amounts  and
disclosures in the  consolidated  financial  statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall consolidated  financial statement
presentation.  We believe  that our audit  provides a  reasonable  basis for our
opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material respects,  the consolidated  financial position of China
Digital  Wireless,  Inc.  and  Subsidiary  as of  December  31,  2004,  and  the
consolidated  results of their operations and cash flows for the year then ended
in conformity with accounting principles generally accepted in the United States
of America.

GROBSTEIN, HORWATH & COMPANY LLP

Sherman Oaks, California
March 14, 2005

                                     




                     [LETTERHEAD OF BDO SHANGHAI ZHONGHUA]

             Report of Independent Registered Public Accounting Firm




The Board of Directors
China Digital Wireless, Inc. (formerly, Sifang Holdings Co. Ltd.)

We have audited the  accompanying  consolidated  balance sheets of China Digital
Wireless, Inc. (formerly,  Sifang Holdings Co. Ltd.) as of December 31, 2003 and
the  related  consolidated   statements  of  income  and  comprehensive  income,
stockholders'  equity and cash flows for the year then  ended.  These  financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audit.

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

In our opinion, the consolidated  financial statements referred to above present
fairly,  in all  material  respects,  the  financial  position of China  Digital
Wireless, Inc (formerly,  Sifang Holdings Co. Ltd.), as of December 31, 2003 and
the results of its  operations  and its cash flows for the year then  ended,  in
conformity with accounting principles generally accepted in the United States of
America.





                                                       

                                                     /s/ BDO Shanghai Zhonghua
                                                    BDO Shanghai Zhonghua
                                                    Certified Public Accountants





Shanghai, PRC
June 1, 2004



                                      F-18




                   CHINA DIGITAL WIRELESS, INC. AND SUBSIDIARY

                          CONSOLIDATED BALANCE SHEETS

                                                          December 31,   December 31,
                                                              2003           2004
                                                          ------------   ------------
                                                                    
ASSETS                                                                     
                                                                           
Current assets:                                                            
   Cash and cash equivalents                              $  1,713,748   $     75,511
   Accounts receivable, net of allowance for doubtful                      
     accounts  of $25,651 and $47,922                        2,363,327      4,619,809
   Inventories                                               1,591,223        101,696
   Deferred tax assets                                           4,955         28,772
   Common stock proceeds held in escrow                              0      1,500,000
   Amounts due from a related party                               --        4,987,956
   Deposits paid                                               245,268           --
   Other current assets                                        175,850        150,412
                                                          ------------   ------------
Total current assets                                         6,094,371     11,464,156
                                                          ------------   ------------
                                                                           
Property and equipment, net                                  1,354,238      1,198,509
                                                          ------------   ------------
                                                                           
Total assets                                              $  7,448,609   $ 12,662,665
                                                          ============   ============
LIABILITIES AND SHAREHOLDERS' EQUITY                                       
                                                                           
Current liabilities:                                                       
   Accounts payable                                       $    111,569   $     55,839
   Deferred revenue                                            537,046        617,694
   VAT payable                                                       0        213,535
   Income tax payable                                                0        312,763
   Due to related parties                                       20,540        100,260
   Other current liabilities                                    95,790        287,025
                                                          ------------   ------------
                                                                           
Total current liabilities                                      764,945      1,587,116
                                                          ------------   ------------
                                                                           
                                                                           
Shareholders' equity:                                                      
   Common stock - $0.001 par value, 100,000 000 shares                     
      authorized, 17,018,692 (2003 - 13,782,636) shares                    
      issued and outstanding                                    13,783         17,019
   Additional paid-in capital                                1,436,217      4,229,974
   Retained earnings                                         5,233,652      6,828,281
   Accumulated other comprehensive income                           12            275
                                                          ------------   ------------
                                                                           
Total shareholders' equity                                   6,683,664     11,075,549
                                                          ------------   ------------
                                                                           
Total liabilities and shareholders' equity                $  7,448,609   $ 12,662,665
                                                          ============   ============

                                                                          

           See accompanying notes to consolidated financial statements


                                      F-19




                   CHINA DIGITAL WIRELESS, INC. AND SUBSIDIARY

                        CONSOLIDATED STATEMENTS OF INCOME
                            AND COMPREHENSIVE INCOME

                                                        Years Ended December 31,
                                                      ----------------------------
                                                          2003            2004
                                                      ------------    ------------
                                                                         
Revenues:
   Product sales                                      $ 13,529,279    $ 11,057,398
   Product sales to related parties                              0       9,891,691
   Service revenue, net                                  3,503,099       3,571,861
                                                      ------------    ------------

Total revenues                                          17,032,378      24,520,950
                                                      ------------    ------------

Cost of goods sold                                      12,424,454      10,196,443
Cost of goods sold to related parties                            0       9,412,389
Cost of service                                          1,016,318       1,045,993
                                                      ------------    ------------
Total cost of goods sold                                13,440,772      20,654,825
                                                      ------------    ------------

Gross profit                                             3,591,606       3,866,125
                                                      ------------    ------------

Operating expenses:
   Sales and marketing                                     153,437         246,639
   General and administrative                              291,413       1,656,841
                                                      ------------    ------------

Total operating expenses                                   444,850       1,903,480
                                                      ------------    ------------

Income from operations                                   3,146,756       1,962,645

Interest income (expense)                                  (12,082)          1,955
                                                      ------------    ------------

Income before income taxes                               3,134,674       1,964,600

Income tax provision                                       246,694         369,971
                                                      ------------    ------------

Net income                                            $  2,887,980    $  1,594,629
                                                      ============    ============

Other comprehensive income
   Translation adjustments                            $        381    $        263

Comprehensive income                                  $  2,888,361    $  1,594,892
                                                      ============    ============

Basic earnings (loss) per share                       $       0.21    $       0.10

Weighted average shares of common stock outstanding     13,782,636      15,458,000





          See accompanying notes to consolidated financial statements.


                                      F-20




                   CHINA DIGITAL WIRELESS, INC. AND SUBSIDIARY

                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                      (In U.S. dollars, except share data)

                                                                  Additional                         Other            Total
                                          Common Stock              Paid-in          Retained     Comprehensive    Shareholders'
                                     Shares          Amount         Capital          Earnings     Income (Loss)       Equity      
                                 -------------   -------------   -------------    -------------   -------------    -------------
                                                                                                           
Balance at December 31, 2002        13,782,636   $      13,783   $   1,436,217    $   2,345,672   $        (369)   $   3,795,303
                                                                                                                     
Net income                                --              --              --          2,887,980            --          2,887,980
                                                                                                                     
Translation adjustment                    --              --              --               --               381              381
                                 -------------   -------------   -------------    -------------   -------------    -------------
                                                                                                                     
Balance at December 31, 2003        13,782,636          13,783       1,436,217        5,233,652              12        6,683,664
                                                                                                                     
Recapitalization and                                                                                          
reorganization                       1,585,705           1,586         308,465             --              --            310,051
                                                                                                                     
Shares issued for consulting                                                                                  
service                                167,895             168         604,254             --              --            604,422
                                                                                                                     
Shares issued for proceeds of                                                                                 
$190,000                               166,667             167         599,834             --               --           600,001
                                                                                                                     
Shares issued for net proceeds                                                                              
of $1.5 million                      1,315,789           1,315       1,498,685             --              --          1,500,000
                                                                                                                     
Offset by issuing cost                    --              --          (217,481)            --              --           (217,481)
                                                                                                                     
Net income                                --              --              --          1,594,629            --          1,594,629
                                                                                                                     
Translation adjustment                    --              --              --               --               263              263
                                 -------------   -------------   -------------    -------------   -------------    -------------
                                                                                                                     
Balance at December 31, 2004        17,018,692   $      17,019   $   4,229,974    $   6,828,281   $         275    $  11,075,549
                                 =============   =============   =============    =============   =============    =============

                                                                           





          See accompanying notes to consolidated financial statements.

                                      F-21




                   CHINA DIGITAL WIRELESS, INC. AND SUBSIDIARY

                      CONSOLIDATED STATEMENTS OF CASH FLOWS


                                                                    Years Ended December 31,
                                                                   --------------------------
                                                                       2003           2004
                                                                   -----------    -----------
                                                                                    
Cash flows from operating activities:
   Net income                                                      $ 2,887,980    $ 1,594,629
   Adjustments to reconcile net income to net cash
     provided by (used in) operating activities:
        Depreciation                                                   234,055        287,232
        Bad debt expenses                                                    0         19,764
        Issuance of common stock to consultants for services                 0      1,014,423
        Loss on disposal of fixed assets                                 5,361            652
        Deferred tax assets                                                601        (23,817)
        Changes in assets and liabilities:
           Accounts receivable                                      (1,790,616)    (2,276,245)
           Inventories                                                (422,000)     1,489,527
           Amounts due from a related party                                  0     (4,742,688)
           Deposits paid                                              (245,268)             0
           Other current assets                                         62,522         25,438
           Accounts payable                                            111,569        (55,730)
           Deferred revenue                                            493,116         80,648
           Income tax payable                                                0        312,763
           Due to related parties                                       20,540         79,720
           Other current liabilities                                    25,737        404,769
                                                                   -----------    -----------

Net cash provided by (used in) operating activities                  1,383,597     (1,788,915)
                                                                   -----------    -----------

Cash flows from investing activities:
   Purchase of property and equipment                                 (259,858)      (132,155)
                                                                   -----------    -----------
Net cash  used in investing activities                                (259,858)      (132,155)
                                                                   -----------    -----------

Cash flows from financing activities:

   Recapitalization and reorganization                                       0        310,051
   Proceeds from issuing common stock                                        0      1,690,000
   Common stock proceeds held in escrow                                      0     (1,500,000)
   Issuing cost                                                              0       (217,481)
   Due to a related party                                             (604,062)             0
                                                                   -----------    -----------

Net cash provided by financing activities                             (604,062)       282,570
                                                                   -----------    -----------

Foreign currency translation                                               381            263
                                                                   -----------    -----------

Net increase (decrease) in cash and cash equivalents                   520,058     (1,638,237)

Cash and cash equivalents, beginning of the period                   1,193,690      1,713,748
                                                                   -----------    -----------

Cash and cash equivalents, end of the period                       $ 1,713,748    $    75,511
                                                                   ===========    ===========
Supplemental disclosure of cash flow information: 
   Cash paid during the year for:
        Interest                                                   $    12,082    $         0

        Income taxes                                               $   246,093    $    76,339

 Non-cash financing activity:

 Issuance of common stock to consultants for consulting services   $         0    $ 1,014,423
                                                                   ===========    ===========



          See accompanying notes to consolidated financial statements.

                                      F-22


                   CHINA DIGITAL WIRELESS, INC. AND SUBSIDIARY
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1 - ORGANIZATION AND BUSINESS BACKGROUND

China Digital  Wireless,  Inc. ("CDW,"  formerly known as Boulder  Acquisitions,
Inc.) through its subsidiary sells mobile phones to retailers, distributors, and
related parties and provides  information services to users of mobile phones and
pagers.  Substantially  all  operations  are  conducted  in  Shanghai,  People's
Republic of China (PRC).

In order to meet  ownership  requirements  under  Chinese  law that  restrict  a
foreign  company,  from  operating  in certain  industries  such as  value-added
telecommunication  and  Internet  services,  CDW's  subsidiary  has entered into
information service and cooperation agreements with two of CDW's affiliates that
are  incorporated in China:  Shanghai SFT Co. Ltd.  ("Sifang  Information")  and
Shanghai  Tianci  Industry Co. Ltd ("Tianci  Industry").  CDW holds no ownership
interest in Sifang Information or Tianci Industry. Sifang Information and Tianci
Industry contract with China Mobile Communications Corporation, or China Mobile,
and China United Telecommunications  Corporation, or China Unicom, respectively,
to provide  wireless  value-added  information  services  to  wireless  receiver
customers  in China  via  China  Mobile  and China  Unicom.  Sifang  Information
transmits those services to customers of China Mobile and China Unicom on behalf
of itself and Tianci  Industry  pursuant to a signed  agreement  between  Sifang
Information and Tianci Industry.

Recapitalization and Reorganization

On June 23, 2004, Boulder Acquisitions,  Inc. ("Boulder  Acquisitions")  entered
into  a  stock  exchange  agreement  with  Sifang  Holdings  Co.  Ltd.  ("Sifang
Holdings") and certain  shareholders.  Pursuant to the stock exchange agreement,
Boulder  Acquisitions  issued  13,782,636 shares of its common stock in exchange
for a 100% equity interest in Sifang  Holdings,  making Sifang Holdings a wholly
owned subsidiary of Boulder Acquisitions.

Boulder Acquisitions was incorporated under the laws of the State of Colorado on
May 8, 1980 as Boulder Brewing Company ("Boulder Brewing").  Boulder Brewing was
the  successor  to a  general  partnership  formed  in 1979.  From  the  initial
inception of the original  partnership  through 1990, Boulder Brewing was in the
business of operating a  microbrewery  in Boulder,  Colorado.  During 1990, as a
result of various debt defaults,  Boulder  Brewing's assets were foreclosed upon
and all business operations were ceased.  Boulder Brewing has effectively had no
operations, assets or liabilities since its fiscal year ended December 31, 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,  a
Nevada  corporation  formed on  September  6, 2001  solely  for the  purpose  of
effecting the  reincorporation.  The Articles of Incorporation and Bylaws of the
Nevada corporation are the Articles of Incorporation and Bylaws of the surviving
corporation. Such Articles of Incorporation eliminated the provision for Boulder
Acquisitions to issue preferred stock.

The above stock exchange  transaction  resulted in those  shareholders of Sifang
Holdings obtaining a majority voting interest in Boulder Acquisitions. Generally
accepted accounting  principles in the United States of America require that the
company whose  shareholders  retain the majority interest in a combined business
be treated as the  acquirer for  accounting  purposes.  Consequently,  the stock
exchange  transaction  has been  accounted for as a  recapitalization  of Sifang
Holdings as Sifang  Holdings  acquired a controlling  equity interest in Boulder
Acquisitions,  as of June 23, 2004. The reverse acquisition process utilizes the
capital  structure of Boulder  Acquisitions  and the assets and  liabilities  of
Sifang Holdings recorded at historical cost.

Sifang  Holdings is the  continuing  operating  entity for  financial  reporting
purposes,  and the financial  statements prior to June 23, 2004 represent Sifang
Holdings'  financial  position and results of  operations.  As of June 23, 2004,
Boulder  Acquisitions  had only cash of $310,051,  and  shareholders'  equity of
$310,051 with 1,585,705  shares of common stock  outstanding,  all of which were
included in the consolidated  financial  statements of Sifang Holdings.  See the
shareholders'  equity  statement for the period from January 1, 2004 to December
31, 2004. Although Sifang Holdings is deemed to be the acquiring corporation for
financial  accounting  and  reporting  purposes,  the legal  status  of  Boulder
Acquisitions as the surviving corporation did not change. Subsequent to June 30,
2004, Boulder Acquisitions changed its name to China Digital Wireless, Inc.


                                      F-23


                   CHINA DIGITAL WIRELESS, INC. AND SUBSIDIARY
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


Business History

CDW's business is primarily conducted through its wholly-owned subsidiary Sifang
Holdings Co., Ltd.,  (Sifang Holdings) and its wholly-owned  subsidiary TCH Data
Technology  Co., Ltd. (TCH).  Sifang Holdings was established  under the laws of
the Cayman  Islands on February 9, 2004 for the purpose of holding a 100% equity
interest in TCH.  TCH was  established  as a foreign  investment  enterprise  in
Shanghai under the laws of the PRC on May 25, 2004, with  registered  capital of
$7.2 million.

CDW's  current   operations  were  originally  a  business  division  of  Sifang
Information.  Sifang Information is a Shanghai-based  privately owned enterprise
established under the laws of the PRC on August 14, 1998. Sifang  Information is
engaged in the  business of pager and mobile  phone  distribution  and  provides
value added information  services to the customers in the Shanghai  metropolitan
area. In March 2004, Sifang  Information spun off its mobile phone  distribution
business and the majority of its value added  information  services  business to
TCH. As the acquiring entity under common control,  TCH initially recognized all
the assets and liabilities transferred at their carrying amounts in the accounts
of Sifang  Information  at the date of transfer  under the  guidance of SFAS No.
141, Appendix D.

On May 25, 2004, Sifang  Information  transfered its 100% equity interest in TCH
in exchange  for 100% equity  interest in Sifang  Holdings.  Since the  ultimate
owners  of the  three  entities  were the same  owners  and the  three  entities
remained under common control,  the ownership exchange transaction was accounted
for at historical costs under the guidance of SFAS No. 141, Appendix D. Prior to
May 25, 2004,  there were no activities in Sifang  Holdings.  As a result of the
exchange  of  ownership  between  TCH  and  Sifang  Holdings,  TCH's  historical
financial  statements  became  the  historical  financial  statements  of Sifang
Holdings.

As a result of the  spin-off,  TCH  engages  in the  business  of  mobile  phone
distribution  and  provides  pager and mobile phone users with access to certain
value-added  information  reformatted  by TCH. TCH purchases  mobile phones from
first tier  distributors  and sells them to retailers  and  distributors  with a
mark-up. In the process of providing  value-added  information  services through
monthly  subscription  agreements  with various  users,  TCH  purchases  trading
activity  information from stock  exchanges,  comments and analysis on PRC stock
markets provided by certain reputable security and investment companies, lottery
information,  weather forecast, and other value-added products and reformats the
aforementioned  information  through  decoding  and  recoding  and  then has the
reformatted   information   transmitted  by  Sifang  Information,   via  service
contracts,  to pager users.  The value-added  information is constantly saved on
TCH's  server in order for  mobile  phone  users to dial in via China  Mobile or
China Unicom.  By signing a monthly  subscription  agreement,  wireless receiver
users  agree to make  advance  payments  for our  services  for either  three or
six-month subscription periods.

In the spin-off process,  the cost of sales included in the Company's  financial
statements is directly  related to the product  revenue and the cost of services
is directly  related to different types of service.  The business taxes (similar
to sales taxes in the U.S.) are related only to service revenue at a tax rate of



                                      F-24


                   CHINA DIGITAL WIRELESS, INC. AND SUBSIDIARY
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


approximately 3.3%. The selling expenses are allocated based on the relationship
between  expense and revenue  (such as  commission)  and  payroll  records.  The
general and  administrative  expenses are allocated  based on  management  hours
spent and payroll  records.  The income tax provision  has been  calculated on a
separate  company  basis and is in line with the  historical  actual  income tax
provision at the Sifang  Information  level  assuming  that all income taxes had
been paid by Sifang  Information and no income tax liability was in existence in
the  periods  reported  in the  accompanying  financial  statements.  Management
believes that the costs,  operating expenses,  interest expense,  and income tax
provision  included  in the  Company's  financial  statements  are a  reasonable
representation  of the costs and expenses  that would have been  incurred if the
Company had performed these functions as a stand-alone company.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The  consolidated  financial  statements  have been prepared in accordance  with
accounting  principles generally accepted in the United States of America (GAAP)
and  pursuant  to the rules  and  regulations  of the  Securities  and  Exchange
Commission (SEC) for annual  financial  statements.  The consolidated  financial
statements, in the opinion of management,  include all adjustments necessary for
a fair statement of the consolidated  results of operations,  financial position
and cash flows for each period presented.

The Company's  consolidated financial statements for the year ended December 31,
2003 have been derived from the historical  financial  statements and accounting
records of Sifang  Information  using the historical  operating  results and the
historical  basis of the assets and  liabilities  transferred  to the Company in
accordance with accounting principles generally accepted in the United States of
America.  Management  believes that the assumptions  underlying the accompanying
financial statements are reasonable.  However, the financial statements that are
derived from Sifang Information's  financial records may not necessarily reflect
the  Company's  results  of  operations  and cash flows had the  Company  been a
stand-alone company.

Principles of Consolidation

The  consolidated  financial  statements  for the year ended  December  31, 2004
include the accounts CDW, its wholly owned subsidiary  Sifang Holdings,  and its
wholly owned subsidiary TCH (collectively  the "Company").  Substantially all of
the Company's  revenues are derived from the operations of TCH, which represents
substantially  all of the Company's  consolidated  assets and  liabilities as of
December 31, 2004. All significant  intercompany  accounts and transactions have
been eliminated.

Foreign Currency Translations and Transactions

The Renminbi ("RMB"),  the national currency of the PRC, is the primary currency
of  the  economic  environment  in  which  the  operations  of the  Company  are
conducted.  The Company  uses the United  States  dollar  ("U.S.  dollars")  for
financial reporting purposes.

The Company  translates it's assets and liabilities  into U.S. dollars using the
rate of exchange  prevailing  at the balance  sheet date,  and the  statement of
income is translated at average rates during the reporting  period.  Adjustments
resulting from the  translation of its financial  statements  from RMB into U.S.
dollars  are   recorded  in   shareholders'   equity  as  part  of   accumulated
comprehensive  income. Gains or losses resulting from transactions in currencies
other  than RMB are  reflected  in the  statement  of income  for the  reporting
periods.


                                      F-25


                   CHINA DIGITAL WIRELESS, INC. AND SUBSIDIARY
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


Revenue Recognition

The Company derives revenues from the sale of mobile phones and the provision of
wireless information services that are used on mobile phones, pagers and prepaid
phone cards. The Company  additionally earns commission income ("Agency Income")
from the sale of CDMA  mobile  phones  on the  behalf of a  related  party.  The
Company  recognizes  its revenues net of related  business taxes and value added
taxes.

Mobile Phone Sales:

Revenues  generated  from the sale of  mobile  phones  are  recognized  when the
products are shipped to the distributor or retailer and when persuasive evidence
of an  arrangement  exists,  delivery of the  products  has  occurred,  customer
acceptance has been obtained,  which means the significant  risks and rewards of
ownership  have  been  transferred  to the  customer,  the  price  is  fixed  or
determinable and collectibility is reasonably assured.

Services:

The Company recognizes service revenues over the term of the noted agreement and
or when the services have been provided to the end user.

i) Information Services - TCH:

By signing a  subscription  agreement,  wireless  receiver  users  agree to make
payments for three- to six-month  subscriptions in advance.  The Company records
the proceeds as deferred  revenue and  amortizes  the deferred  revenue over the
subscription  period. When customers buy a pre-charged service card, the Company
records the  proceeds as deferred  revenue.  When a customer  starts to use this
card to access to the  Company's  server and starts to use a pager to access the
aforementioned  information,  the Company identifies the subscription period and
amortizes the deferred revenue over the subscription period.

ii) Information Services - Installing Agent:

The Company has an installing  agent  install the  Company's  software on mobile
phones,  which are owned by the retailer.  The retailer sells these phones for a
premium  covering  a fee to be  paid to the  installing  agent  and  pre-charged
six-month  subscription  fees to be paid to the Company.  After a customer using
such a phone dials into the server to access the desired information, the server
records a unique  identification  number  installed on the mobile  phone,  which
indicates  that a specific  phone user  starts his or her  subscription  period.
After the Company  receives a detailed list from the installing  agent regarding
the number of phones that have been installed with the Company's  software,  the
Company matches this  information with a detailed list from the retailer setting
forth how many such  phones  have been sold.  Based on the number of such phones
sold, the Company records accounts  receivable and deferred revenue. At the date
on which a customer starts to dial into the server,  the six-month  subscription
period begins and the Company amortizes deferred revenue accordingly.

iii) Information Services - China Mobile and / or Unicom:

Since April 2004,  the revenue  generated  from  selling  pre-charged  cards has
gradually  decreased while the revenue generated  through monthly  subscriptions
with China Mobile and/or China Unicom  (collectively,  "Mobile  Operators")  has
gradually increased as the Mobile Operators' billing systems have been enhanced.
The Company's  affiliates,  Sifang  Information and Shanghai  Tianci  Industrial



                                      F-26


                   CHINA DIGITAL WIRELESS, INC. AND SUBSIDIARY
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


Group Co., Ltd.  ("Tianci  Group"),  contract with the Mobile  Operators for the
transmission  of the  Company's  value-added  information  services.  The Mobile
Operators  bill and  collect  from  customers  and then pass  those fees (net of
billing and collection  service fees charged by the Mobile  Operators) to Sifang
Information  and Tianci  Group who in turn pass those fees to the  Company.  The
Company recognizes net revenues based on the total amount paid by its customers,
for which the Mobile Operators bill and collect on behalf of the Company.  There
is a time lag  ranging  from 10 days to 45 days  between  the end of the service
period and the date the Mobile  Operators send out their billing  statements due
to the segregated billing systems of each of the provincial  subsidiaries of the
Mobile Operators.  The Company received the December invoice before the issuance
of the  financial  statements  to reconcile  the monthly  revenues to the Mobile
Operators  billing  statement.  The Company has not recognized  service  revenue
based  on  the  records   provided  by  its  own  server  but  has  performed  a
reconciliation  on a monthly  basis of the revenues  recognized by the Company's
server to the Mobile  Operator's  billing  statement.  In  addition,  the Mobile
Operators charge a network usage fee based on a fixed per message fee multiplied
by the excess of messages sent over messages  received.  This type of service is
not  covered by a monthly  service  subscription  and the Company has no control
whether or not it will occur Network usage fees charged by the Mobile  Operators
are reduced for messages  received by the Company  because the Mobile  Operators
separately charge the sender a fee for these transmissions.

The Company  records the revenue from China Mobile / China Unicom on a net basis
in compliance with EITF 99-19,  "Reporting  Revenues Gross as a Principle versus
Net as an Agent" because the Company:

         o        Is not the primary obligor in the arrangement, as it relies on
                  Sifang Information to transmit the information services to the
                  end user
         o        Has  limited  ability  to  adjust  the  cost  of  services  by
                  adjusting the design or marketing of the service,
         o        Has limited  ability to  determine  prices,  the Company  must
                  follow the price policy  within  ranges  prescribed  by Mobile
                  Operators, and
         o        Has  limited   ability  to  assume  risk  of   non-payment  by
                  customers.

The Company's  dependence on the substance and timing of the billing  systems of
the mobile  telecommunications  operators may require us to estimate portions of
our reported  revenue for wireless  Internet  services  from time to time.  As a
result,  subsequent  adjustments  may have to be made to our  wireless  Internet
service  revenue in our  financial  statements.  As we do not bill our  wireless
Internet  services users directly,  we depend on the billing systems and records
of the mobile telecommunications  operators to record the volume of our wireless
Internet services provided,  charge our users through mobile telephone bills and
collect payments from our users and pay us.

Cash and Cash Equivalents

The Company  considers all highly liquid  investments  with  maturities of three
months or less to be cash  equivalents.  The Company maintains its cash accounts
at credit worthy financial institutions.

Accounts Receivable and Concentration of Credit Risk

During the normal course of business,  the Company extends  unsecured  credit to
retailers and distributors  who are mainly located in the Shanghai  metropolitan
area. Typically, for mobile phone distributors,  credit terms require payment to
be made within 30 days of the sale. The Company does not require collateral from
its  customers.  The  Company's  policy is to provide  for  delinquent  accounts



                                      F-27


                   CHINA DIGITAL WIRELESS, INC. AND SUBSIDIARY
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


receivable balances as an allowance for doubtful accounts that is based on 5% of
total trade accounts  receivable  less amounts due from related parties and from
the installing agent.

The Company  regularly  evaluates  and  monitors  the  creditworthiness  of each
customer on a case-by-case basis. The Company includes any account balances that
are  determined  to be  uncollectible  in the  overall  allowance  for  doubtful
accounts. After all attempts to collect a receivable have failed, the receivable
is written off against the  allowance.  The Company  believes that its allowance
for doubtful  accounts  was adequate as of December 31, 2003 and 2004.  However,
actual write-offs might exceed the recorded allowance.

As of December 31, 2004,  accounts  receivable  resulting from  pre-charged fees
amounted to $2,125,777, which was collected in March 2005.

The following table presents activities in the allowance for doubtful accounts.

                                                               December 31
                                                        ------------------------
                                                           2003          2004   
                                                        ------------------------
                                                                         
Beginning balance                                       $   30,143    $   28,158
Additions charged to expense                                  --          19,764
Recovered                                                   (4,492)         --
Actual write off                                              --            --
                                                        ----------    ----------
Ending balance                                          $   25,651    $   47,922
                                                        ==========    ==========
                                              
Inventories

Inventories  consist  principally  of mobile phones  manufactured  by name brand
manufacturers  with  various  features  and  are  stated  at the  lower  of cost
(weighted-average) or market.

Rebates and Credits Receivable

In 2004 the Company's  major vendor began  providing  rebates and credits if the
Company meets certain sales volume levels prescribed by the vendor. As a result,
the Company is entitled to receive certain rebates and credits for the inventory
held and sold by the Company  within the specified  period of time as defined by
its vendor through submitting the necessary  application forms. In general, once
the vendor approves these  applications the amounts of these rebates and credits
will be deducted from the Company's  accounts payable to its vendor and decrease
the cost of goods sold or inventory held correspondingly.

Capitalization of Software Costs

The  Company's  software is  developed by an  independent  third party to enable
pager users to accept certain recoded information which is transmitted,  through
affiliates,  by the  Company  and  enables  mobile  phone users to dial into the
Company's  server.  The  software is for  internal use and gives the Company the
ability to provide value added information services. In accordance with SOP 98-1
"Accounting  for the  Costs of  Computer  Software  Developed  or  Obtained  for
Internal  Use," the Company  capitalizes  the external  cost incurred to develop
this  internal-use  software  by  an  engineering  company  at  the  application
development  stage and amortizes  that cost over the estimated  economic life of
the software (two or three years) which is consistent  with the expected life of
a particular type of mobile phone.




                                      F-28


                   CHINA DIGITAL WIRELESS, INC. AND SUBSIDIARY
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


Property and equipment

Property and  equipment  are recorded at cost and are stated net of  accumulated
depreciation.  Depreciation expense is determined using the straight-line method
over the estimated useful lives of the assets as follows:

         Buildings                                                     20 years
         Software                                                      2-3 years
         Vehicles and other equipment                                  2-5 years

Maintenance  and repairs are charged  directly to expense as  incurred,  whereas
betterment and renewals are generally  capitalized in their respective  property
accounts.  When an item is  retired  or  otherwise  disposed  of,  the  cost and
applicable  accumulated  depreciation are removed and the resulting gain or loss
is recognized and reflected as an item before operating income (loss).

Impairment of Long-Lived Assets

The Company applies the provisions of Statement of Financial Accounting Standard
No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" ("SFAS
No. 144"), issued by the Financial Accounting Standards Board ("FASB"). SFAS No.
144 requires that long-lived  assets be reviewed for impairment  whenever events
or changes in  circumstances  indicate that the carrying  amount of an asset may
not be  recoverable  through the estimated  undiscounted  cash flows expected to
result from the use and eventual  disposition  of the assets.  Whenever any such
impairment exists, an impairment loss will be recognized for the amount by which
the carrying value exceeds the fair value. There was no impairment of long-lived
assets in the years ended December 31, 2003 and 2004.

Fair Value of Financial Instruments

The  carrying  amount of cash,  notes  receivable,  accounts  receivable,  other
receivables,  advances to vendor,  accounts payable and accrued  liabilities are
reasonable  estimates of their fair value because of the short maturity of these
items.

Advertising Expenses:

Advertising  expenses are expensed in the period incurred.  Advertising expenses
for the years  ended  December  31,  2004 and 2003  were $ 60,092  and $ 18,909,
respectively.

Stock Based Compensation

The Company  utilizes FAS 123 "Accounting for  Stock-Based  Compensation,"  when
accounting for stock based  compensation and recognizes the fair value impact of
the compensation  granted to employees and consultants as a charge to net income
in the period that the services  associated with the  compensation are incurred.
The Company does not currently have a stock option plan.

Value Added Tax

TCH is subject to value added tax ("VAT")  imposed by the PRC on TCH's  domestic
product sales. The output VAT is charged to customers who purchase mobile phones
from TCH and the input VAT is paid when TCH  purchases  mobile  phones  from its
vendors. The VAT rate ranges from 13% to 17%, in general, depending on the types
of products  purchased and sold.  The input VAT can be offset against the output
VAT.



                                      F-29


                   CHINA DIGITAL WIRELESS, INC. AND SUBSIDIARY
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


Income Taxes

The Company  accounts for income taxes in accordance with Statement of Financial
Accounting  Standards No 109,  "Accounting  for Income  Taxes" ("SFAS No. 109").
SFAS No. 109  requires  an entity to  recognize  deferred  tax  liabilities  and
assets.  Deferred tax assets and  liabilities  are recognized for the future tax
consequence  attributable to the difference  between the tax bases of assets and
liabilities and their reported amounts in the financial statements. Deferred tax
assets and liabilities are measured using the enacted tax rate expected to apply
to taxable income in the years in which those temporary differences are expected
to be recovered or settled. The effect on deferred tax assets and liabilities of
a change in tax rates is  recognized  in income in the period that  includes the
enactment date. The Company  establishes a valuation when it is more likely than
not that the assets will not be recovered.

The  Company's  Chinese  subsidiary  TCH is  registered  at Pudong  District  in
Shanghai and subject to a favorable  income tax rate of 15% compared to a normal
income  tax rate of 33% (30% for the  central  government  and 3% for the  local
government)  under  current  PRC  tax  laws.  However,   Sifang  Information  is
registered  in the Shanghai  downtown  area and has been treated by the Shanghai
Municipal  Administration of Labor as an enterprise that provides unemployed and
handicapped people with jobs.  Accordingly,  Sifang Information is entitled to a
favorable  income tax rate of 15% and  qualifies for an income tax exemption for
three years from  January 1, 2000 to  December  31,  2002,  and a 50% income tax
reduction for three years from January 1, 2003 to December 31, 2005.  The income
tax provisions  presented in the Company's financial statements are based on the
historical  actual  income tax rates of SFT at 7.5% for the year ended  December
31, 2003.  The income tax provision  presented  for the year ended  December 31,
2004 is based on 7.5% for the  months of  January to June and 15% for the months
of July to  December.  The  deferred  tax  assets  are  determined  based on the
historical income tax rates applicable at the TCH level.

There  is  no  income  tax  for  companies  domiciled  in  the  Cayman  Islands.
Accordingly,  the Company's  financial  statements do not present any income tax
provisions related to Cayman Islands tax jurisdiction.

Use of Estimates

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

Comprehensive Income (Loss)

The  Company  adopted  Statement  of  Financial  Accounting  Standard  No.  130,
"Reporting  Comprehensive Income" ("SFAS No. 130"), issued by the FASB. SFAS No.
130 establishes standards for reporting and presentation of comprehensive income
(loss) and its components in a full set of general-purpose financial statements.
The Company has chosen to report  comprehensive  income (loss) in the statements
of income and comprehensive income.  Comprehensive income (loss) is comprised of
net  income  and  all  changes  to  stockholders'  equity  except  those  due to
investments by owners and distributions to owners.



                                      F-30


                   CHINA DIGITAL WIRELESS, INC. AND SUBSIDIARY
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


Earnings (Loss) Per Share

The Company  presents  earnings per share in  accordance  with the  Statement of
Financial  Accounting  Standards No. 128, "Earnings per Share" ("SFAS No. 128").
Basic earnings (loss) per share includes no dilution and is computed by dividing
income (loss) available to common shareholders by the weighted average number of
shares outstanding during the period. Diluted earnings (loss) per share reflects
the  potential  dilution of  securities  that could share in the  earnings of an
entity,  similar to fully diluted earnings (loss) per share. The Company did not
have any potentially  dilutive common share  equivalents as of December 31, 2003
or 2004.

Reclassifications

Certain amounts included in the prior year's consolidated  financial  statements
have been  reclassified  to  conform  to the  current  year  presentation.  Such
reclassifications  did not  have any  effect  on  reported  net  income  and are
immaterial to the financial statements as a whole.

Recent Accounting Pronouncements

In December 2003, the FASB issued Interpretation No. 46R ("FIN 46R"), a revision
to FIN 46, "Consolidation of Variable Interest Entities". FIN 46R clarifies some
of the provisions of FIN46 and exempts certain  entities from its  requirements.
FIN 46R is effective at the end of the first  interim  period ending after March
15, 2004.  Entities  that have adopted FIN 46 prior to this  effective  date can
continue to apply the  provisions of FIN 46 until the effective date of FIN 46R.
The  adoption of FIN 46R did not have any effect on the  Company's  consolidated
financial statements.

In  March  2004,  the  FASB  issued  EITF  Issue  No.  03-1,   "The  Meaning  of
Other-Than-Temporary  Impairment  and Its  Application  to Certain  Investments"
("EITF  03-1") which  provides new guidance for assessing  impairment  losses on
debt and equity  investments.  Additionally,  EITF 03-1 includes new  disclosure
requirements  for  investments  that are deemed to be temporarily  impaired.  In
September  2004,  the FASB delayed the  accounting  provisions of EITF 03-1. The
Company will  evaluate the effect,  if any, of EITF 03-1 when final  guidance is
released.

In November 2004, the FASB issued  Statement of Financial  Accounting  Standards
(SFAS) No. 151,  Inventory  Costs,  which  clarifies the accounting for abnormal
amounts of idle facility expense,  freight, handling costs, and wasted material.
SFAS No. 151 will be effective for inventory  costs incurred during fiscal years
beginning  after June 15,  2005.  We do not believe the adoption of SFAS No. 151
will have a material impact on our consolidated financial statements.

In December 2004, the FASB issued SFAS No. 123-R,  Share Based  Payments,  which
requires that the compensation cost relating to share-based payment transactions
(including  the  cost  of all  employee  stock  options)  be  recognized  in the
financial statements. The cost will be measured based on the estimate fair value
of the equity or liability instruments issued. SFAS 123-R covers a wide range of
share-based compensation arrangements including share options,  restricted share
plans,  performance-based  awards, share appreciation rights, and employee share
purchase plans.  Management believes the adoption of this pronouncement will not
have a material effect on our consolidated financial statements.

Also, in December  2004,  the FASB issued SFAS 153,  "Exchanges  of  Nonmonetary
Assets,  an  amendment  of  APB  Opinion  No.  29,  Accounting  for  Nonmonetary
Transactions."  The  amendments  made by SFAS No. 153 are based on the principle
that the exchange of  nonmonetary  assets should be measured using the estimated



                                      F-31


                   CHINA DIGITAL WIRELESS, INC. AND SUBSIDIARY
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


fair market value of the assets  exchanged.  SFAS No. 153  eliminates the narrow
exception for nonmonetary  exchanges of similar  productive assets, and replaces
it with a broader  exception  for  exchanges of  nonmonetary  assets do not have
commercial substance.  A nonmonetary exchange has "commercial  substance" if the
future cash flows of the entity are expected to change significantly as a result
of the transaction.  This  pronouncement is effective for monetary  exchanges in
fiscal periods beginning after June 15, 2005.  Management  believes the adoption
of this  pronouncement  will  not have a  material  effect  on our  consolidated
financial statements.

Other  recent  accounting  pronouncements  issued  by the  FASB  (including  its
Emerging Issues Task Force),  the AICPA, and the SEC did not or are not believed
by  management  to have a  material  impact on the  Company's  present or future
consolidated financial statements.

NOTE 3 - Equity Transactions

On June 23, 2004,  the Company  issued  167,895  shares of its common stock to a
consultant  for services  relating to the reverse  merger that was  completed in
fiscal 2004.  The trading price of the  Company's  common stock on June 23, 2004
was $3.60 per share, accordingly, the fair value of 167,895 shares was $604,422.

On June 23,  2004,  the Company  issued  166,667  shares of its common  stock in
exchange for  services  performed by an existing  major  shareholder  of Boulder
Acquisitions for his consulting  services involved with the reverse merger . The
common  stock was  issued at a price of $1.14  per share in  exchange  for gross
proceeds of $190,000  based on a stock purchase  agreement.  The $1.14 per share
price was  pre-negotiated  between the Company  and the  shareholder  before the
reverse merger had been completed. Pursuant to the stock purchase agreement, the
Company granted the existing shareholder an option which required the Company to
purchase up to the  aforementioned  166,667 shares of common stock 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 shareholder, up to and
including the earlier of the date that such  registration  statement is declared
effective  by the SEC or the  existing  shareholder's  shares are  eligible  for
resale under Rule 144 under the Securities Act of 1933.  According to Topic D-98
from the SEC,  "Classification and Measurement of Redeemable  Securities," these
shares should be presented  outside the permanent  equity section.  However,  on
November 12, 2004, the Company filed a Registration  Statement on Form SB-2 with
the SEC,  for  registration  of these  securities  to be sold to the public by a
small business  issuers.  On February 8, 2005, the SEC approved the registration
filing and  accordingly,  the Company has recorded these shares in shareholders'
equity as the  contingency  surrounding  these shares  expired as of February 8,
2005. On June 23, 2004,  the trading price of the Company's  stock at the end of
the day was $3.60 per share.  Due to the relationship  between the parties,  the
difference between the price of $1.14 per share and the price of $3.60 per share
was  recorded as  compensation  by  presenting  $410,001 in  additional  paid-in
capital and in general and administrative expenses.

On June 28, 2004,  the Company  issued,  in aggregate,  1,315,789  shares of its
common  stock to three  investors  at a price of $1.14 per share in exchange for
gross proceeds of $1,500,000 based on a stock purchase agreement.  The $1.14 per
share price was pre-negotiated  between the Company and the investors before the
reverse  merger  had been  completed.  Pursuant  to the  signed  stock  purchase
agreement,  the Company  granted to each of the three  investors an option which
requires the Company to purchase up to the  aforementioned  1,315,789 shares, in
aggregate,  of common  stock 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  shareholder's  shares are eligible for resale under Rule 144 under the
Securities  Act of 1933.  As of December 31, 2004,  the proceeds of $1.5 million



                                      F-32


                   CHINA DIGITAL WIRELESS, INC. AND SUBSIDIARY
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS



were held in an escrow account with an agent who is related to a shareholder. As
of December 31, 2004,  the Company has treated the proceeds  held in escrow as a
current  asset as the entire  amount was released  from escrow in March 2005 and
paid to the  Company.  According  to Topic  D-98 from SEC,  "Classification  and
Measurement of Redeemable  Securities," these shares should be presented outside
the permanent equity section. However, on November 12, 2004, the Company filed a
Registration  Statement  on Form SB-2 with the SEC,  for  registration  of these
securities to be sold to the public by small  business  issuers.  On February 8,
2005, the SEC declared the registration  statement effective.  Accordingly,  the
Company has recorded  these shares in  shareholders'  equity as the  contingency
surrounding these shares expired as of February 8, 2005.

In  connection  with the June 28, 2004,  issuance of common  stock,  the Company
incurred  share issue costs of $217,481 and  accounted  for it as a reduction of
additional paid-in capital.

NOTE 4 - PROPERTY AND EQUIPMENT

A summary of property and equipment at cost is as follows:

                                                            December 31,
                                                     --------------------------
                                                         2003           2004
                                                     --------------------------
                                                     
                                                     
Buildings                                            $   943,368    $   943,391
Software                                                 391,660        489,103
Vehicles                                                  65,484         65,485
Other equipment                                          424,891        455,453
                                                     -----------    -----------
                                                       1,825,403      1,953,432
Accumulated depreciation                                (471,165)      (754,923)
                                                     -----------    -----------
                                                     
                                                     $ 1,354,238    $ 1,198,509
                                                     ===========    ===========
                           

Depreciation expense for the years ended December 31, 2003 and 2004 was $234,055
and $287,232, respectively.

As of December 31, 2004,  in accordance  with the  "Business and Related  Assets
Transfer Agreement" signed by TCH and Sifang  Information,  the ownership of the
building  suite and two motor  vehicles,  (collectively  known as "Assets")  are
recorded on TCH's books of record.  The net book value of the pledged assets was
$853,743.  The property is pledged as security for a $2.5 million line of credit
held under the credit  facility  agreement  between Sifang  Information  and the
bank.  The line of credit is  recorded on Sifang  Information's  books and has a
balance of  $2,416,334  as of December 31, 2004.  However,  the two parties have
declared  that the  ownership of the "Assets"  should be TCH's as of the balance
sheet date and have signed a legal agreement, as noted above. Sifang Information
is expected to pay off the line of credit  balance in May 2005 and at that point
they will transfer the legal title of the property and the motor vehicles within
one week after the pledge is to be released by the bank.




                                      F-33


                   CHINA DIGITAL WIRELESS, INC. AND SUBSIDIARY
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


NOTE 5 - RELATED PARTY TRANSACTIONS

Related Party Relationships

The following  related  parties are related  through  common  ownership with the
major shareholder of the Company:
================================================================================


Shanghai SFT Co., Ltd. ("Sifang Information")
Shanghai Tianci Industry Co. Ltd. ("Tianci Industry")
Shanghai Tianci Industry Group Co. Ltd. ("Tianci Group")
Shanghai Shantian Telecommunication Co. Ltd. ("Shantian")
Shanghai Sifang Telecommunication Co. Ltd. ("Sifang Telecom")
Shanghai Tianci Real Estate Co. Ltd. ("Tianci Real Estate")

Merchandise Sold to Related Parties

                                                        Years Ended December 31,
                                                        ------------------------
                                                            2003          2004
                                                        ------------------------
                                                                    
Shanghai Shantian Telecommunication Co. Ltd.            $     --      $9,178,674
Shanghai Tianci Industry Group Co. Ltd.                       --         136,310
Shanghai Tianci Industry Co. Ltd.                             --         576,707
                                                        ----------    ----------
                                                        $     --      $9,891,691
                                                        ==========    ==========
                                                                   
During the year ended  December  31, 2004,  TCH sold  Samsung GSM mobile  phones
valued  at $  9,178,674  at a 4%  gross  profit  margin  to  Shantian.  Accounts
receivable include $1,583,512 due from Shantian.  During the year ended December
31, 2004 TCH also sold mobile phones to other related  parties,  which  included
Tianci  Industy and Tianci  Group for  $136,310  and  $576,707  at gross  profit
margins of 17% and 16% respectively.

Agency Income from a Related Party

The Tianci Group entered into an agency  agreement  with TCH to sell CDMA mobile
phones owned by China Unicom.  TCH obtains the same  commission  structure  that
Tianci Group earns from China Unicom.  For each phone sold, TCH receives  $15.70
per unit,  sales  commission of $3.62 per SIM card.  TCH  recognized  commission
income of $204,214 in the year ended  December  31, 2004 from the Tianci  Group,
which is recorded in service revenues, net on the income statement.

Purchase from Related Party

                                                        Years Ended December 31,
                                                        ------------------------
                                                            2003          2004
                                                        ------------------------


Shanghai Sifang Telecommunication Co. Ltd.              $     --      $  390,340
                                                        ==========    ==========

During the year ended December 31, 2004, TCH purchased local brand mobile phones
from Sifang Telecom valued at $390,340, and all these mobile phones were sold to
retailers in 2004.




                                      F-34


                   CHINA DIGITAL WIRELESS, INC. AND SUBSIDIARY
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS



Service Provided by Related Party

                                                        Years Ended December 31,
                                                        ------------------------
                                                            2003          2004
                                                        ------------------------


Shanghai SFT Co., Ltd.                                  $  567,840    $  604,314
                                                        ==========    ==========

In accordance with terms contained in signed service  agreements between TCH and
Sifang  Information giving TCH the right to use Sifang  Information's  factility
(which may not be owned by foreign  investors  at the present  time) to transmit
the  reformatted  information  the Company paid service fees of  approximately $
567,000 in each of the years  ended  December  31,  2003 and 2004.  The  service
agreements are in effect for ten years and became effective on June 1, 2004. The
annual  payments for the services  should  continue to approximate  $567,000 per
year.

During the year ended December 31, 2004, Sifang  Information also provided other
management  support and  marketing  services to TCH for $36,462 and none for the
year ended December 31, 2003.

TCH earned  information  service revenues net of costs from China Mobile / China
Unicom that were passed  through  from Sifang  Information  and are  recorded in
Service revenue,  net on the income  statement.  For the year ended December 31,
2004, the total revenues generated were $846,416 and total cost of services were
$421,476 and none for the year ended December 31, 2003.

TCH earned paging  service  revenues net of costs that were passed  through from
Sifang  Information  and are  recorded  in  Service  revenue,  net on the income
statement.  For the year ended December 31, 2004,  the total revenues  generated
were  $964,869  and total cost of services  were  $533,199 and none for the year
ended December 31, 2003.

Leasing from Related Parties

Sifang  signed a leasing  agreement  with the Tianci Real Estate for leasing its
apartment  for office  use,  which was assumed by TCH as a part of the carve out
transaction.  The original  leasing term was from May 1, 2003 to April 30, 2008.
The lease  agreement was  terminated on September 30, 2004.  The related  rental
expense for the years ended  December 31, 2003 and 2004 was $20,540 and $30,810,
respectively.

Amounts Due from a Related Party

As a result of the spin-off transaction,  cash collections received and payments
made  Sifang  Information  on behalf of TCH,  resulted  in a net  receivable  of
$2,910,956 due from Sifang Information at December 31, 2004. The amount due from
related party also consists of $501,000  relating to the value added information
services  provided to Sifang  Information  and sold to China  Unicom and another
$371,000   relating  to  the  paging  revenues  that  are  collected  by  Sifang
Information  on behalf of TCH. In the first  quarter of 2005,  TCH has collected
$3.2 million from Sifang Information  subsequent to March 31, 2005 The Company's
management  believes that the  collection  of the remaining  balance of $582,956
from Sifang Information is reasonably assured and accordingly,  no allowance has
been recorded as of December 31, 2004.

The Company also advanced US$1,205,000 to provide Sifang Information's needs for
working  capital  in order  to  complete  spin-off  procedures  in the PRC.  The
outstanding balance was fully collected in March 2005.



                                      F-35


                   CHINA DIGITAL WIRELESS, INC. AND SUBSIDIARY
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS



Due to Related Parties

                                                       Years Ended December 31,
                                                      -------------------------
                                                          2003          2004
                                                      -----------   -----------
                                                                   
                                                                        
Shanghai Tianci Real Estate Co. Ltd                   $    20,540   $    51,350
Shanghai Tianci Industry Group Co. Ltd.                      --          48,910
                                                      -----------   -----------
                                                      $    20,540   $   100,260
                                                      ===========   ===========
                                                         

The balance  owed to Tianci Real Estate  represents  rental  payments for fiscal
2003 and 2004. The rental  agreement was cancelled as of September 30, 2004. The
balance  owed to Tianci Group  represents  cash paid in advance for mobile phone
purchases.  All of the above  amounts  due to  related  parties  are  unsecured,
non-interest bearing and due on demand.

NOTE 6 - INCOME TAXES

The income (loss)  generated in the Cayman Islands and China before income taxes
in 2003 and 2004, respectively, was as follows:


                                                       Years Ended December 31,
                                                      -------------------------
                                                          2003          2004
                                                      -----------   ----------- 
                                                      
                                                      
Loss in Cayman Islands before income taxes            $      --     $(1,199,738)
Income in China before income taxes                     3,134,674     3,164,338
                                                      -----------   -----------
                                                      
                                                      $ 3,134,674   $ 1,964,600
                                                      ===========   ===========


The income tax provision was as follows:


                                                       Years Ended December 31,
                                                      -------------------------
                                                         2003        2004
                                                      -----------   ----------- 
Current:                                                                
   Cayman Islands                                     $      --     $      --
   China                                                  246,093       389,102
                                                      -----------   -----------
Deferred:                                                               
   Cayman Islands                                            --            --
    China                                                     601       (19,131)
                                                      -----------   -----------
                                                      $   246,694   $   369,971
                                                      ===========   ===========
                                                                          
                    



                                      F-36




                   CHINA DIGITAL WIRELESS, INC. AND SUBSIDIARY
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS



         The difference  between the effective  income tax rate and the expected
federal statutory rate was as follows:


                                               Year ended       Year ended
                                              December 31,     December 31,
                                                  2003             2004
                                   ---------------------------------------------


Statutory rate                                    33.0%            33.0% 
Income tax holiday                               (25.5)           (21.9)
Permanent differences                              0.4              7.7
Change in valuation allowance                       --               --
                                                --------         --------                                                         
Effective income tax rate                          7.9%            18.8%
--------------------------------------------------------------------------------

The primary components of temporary differences which give rise to the Company's
deferred tax assets are as follows:

                                                         Year Ended December 31,
                                                         -----------------------
                                                            2003         2004
                                                         ----------   ----------
                                                                          
Allowance for receivables                                $    1,973   $    7,188
Accrued liabilities                                           2,982       21,584
                                                         ----------   ----------
                                                              4,955       28,772
Valuation allowance                                            --           --
                                                         ----------   ----------
                                                                          
Net deferred tax assets                                  $    4,955   $   28,772
                                                         ==========   ==========
                                                                       

NOTE 8 - SEGMENT REPORTING

The Company currently operates in three principal business segments.  Management
believes that the following  table presents the useful  information to the chief
operation decision makers for measuring business performance and financing needs
and preparing the corporate budget,  etc. As most of the Company's customers are
located  in the  Shanghai  metropolitan  area  and the  Company's  revenues  are
generated in Shanghai, no geographical segment information is presented.

                                                Mobile          Mobile         
                                Agency          Phone           Phone          Pagers 
                                Income       Distribution      Service         Service       Corporate       Total
                              ------------   ------------    ------------   ------------   ------------   ------------
                                                                                            

2003
Revenue                               --     $ 13,529,279    $  1,297,323   $  2,205,776   $       --     $ 17,032,378
Gross profit                          --        1,104,825       1,009,859      1,476,922           --        3,591,606
Depreciation                          --             --           187,171           --           46,884        234,055
Interest expense                      --          (12,082)           --             --             --           12,082
Net income                            --          848,218         766,918      1,272,844           --        2,887,980
Expenditures for long-lived           --             --           194,374           --           65,484        259,858
assets
Total assets                          --        2,039,505       2,196,789        286,376      2,925,939      7,448,609




                                      F-37


                   CHINA DIGITAL WIRELESS, INC. AND SUBSIDIARY
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS



2004
Revenue                       $    204,214     20,949,089       2,388,178        979,469           --       24,520,950
Gross profit                       204,214      1,340,257       1,889,984        431,670           --        3,866,125
Depreciation                          --             --           229,979           --           57,253        287,232
Interest income                       --             --              --             --            1,955          1,955
Net income                         165,757        802,854       1,271,078        176,742        821,801      1,594,629
Total assets                          --        2,721,741       2,443,657           --        7,497,267     12,662,665
Expenditures for long-lived           --             --           132,155           --             --          132,155
assets



NOTE 9 - CONCENTRATION OF CUSTOMERS AND VENDORS

Customers  and  vendors  who  account  for  10% or more  of  revenues,  accounts
receivable, purchases and accounts payable are presented as follows:


Customer                         Revenues                  Accounts Receivable
                                 2003          2004        2003          2004
                                             
A                                -             37%          -            34%
B                                12%           11%          1%            7%
C                                16%            5%          2%            3%
D                                14%            6%          2%            4%
E                                 7%            8%         76%           46%
                                 ---           ---         ---           ---
                                 49%           67%         81%           94%
                                                                   
Vendor                           Purchases                  Accounts Payable
                                 2003          2004         2003         2004
A (Shantian, a related party)    36%           33%          0            96%
B                                31%            0           0             0
C                                23%           32%          0             4%
D                                 0            17%          0             0
                                 90%           82%          0           100%
                                                                   
On December 31,  2004,  the  agreement  between the  installation  agent and the
Company was  terminated  and not renewed.  For the year ended December 31, 2004,
the  Company  earned  $2,058,681  (2003 -  $1,271,113)  of  information  service
revenues from the installation agent.

NOTE 10 -EMPLOYEE WELFARE AND RETIREMENT BENEFITS

The PRC has been  undergoing  significant  reforms  with regard to its  employee
welfare and fringe benefits administration.  Any enterprise operating in the PRC
is  subject to  government-mandated  employee  welfare  and  retirement  benefit
contribution as a part of operating expense to the State Administration of Labor
Affairs.  In accordance  with PRC laws and  regulations,  TCH  participates in a




                                      F-38


                   CHINA DIGITAL WIRELESS, INC. AND SUBSIDIARY
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS




multi-employer  defined  contribution  plan pursuant to which TCH is required to
provide  employees with certain  retirement,  medical and other fringe benefits.
PRC  regulations  require  TCH to pay the local  labor  administration  bureau a
monthly  contribution at a stated  contribution  rate based on the monthly basic
compensation  of qualified  employees.  The local labor  administration  bureau,
which manages various  investment funds, will take care of employee  retirement,
medical and other fringe  benefits.  TCH has no further  commitments  beyond its
monthly  contribution.  TCH  contributed a total of $58,501 and $39,391 to these
funds as part of selling,  general  and  administrative  expenses  for the years
ended December 31, 2003 and 2004, respectively.
























                                      F-39








                                     PART II

                     INFORMATION NOT REQUIRED IN PROSPECTUS

                    INDEMNIFICATION OF DIRECTORS AND OFFICERS

     The  company's  Articles  of  Incorporation,  filed as Exhibit  3.1 hereto,
provide that we may indemnify  our directors and officers to the fullest  extent
permitted  under Nevada law against any and all expenses,  liabilities  or other
matters  pursuant to which the company may  indemnify  such person  under Nevada
law. The  company's  Bylaws,  filed as Exhibit 3.2 hereto,  provide that we will
indemnify our  directors to the fullest  extent  permitted  under Nevada law and
may, if and to the extent  authorized  by the company's  board of directors,  so
indemnify  our officers and any other person whom we have the power to indemnify
against any liability, reasonable expense or other matter whatsoever. The effect
of these  provisions is  potentially  to indemnify  the company's  directors and
officers from all costs and expenses of liability incurred by them in connection
with any  action,  suit or  proceeding  in which they are  involved by reason of
their  affiliation  with the company.  Pursuant to Nevada law, a corporation may
indemnify a director,  provided that such  indemnity  shall not apply on account
of:

          (a)  acts  or  omissions  of  the  director  finally  adjudged  to  be
               intentional misconduct or a knowing violation of the law;
          (b)  unlawful distributions; or
          (c)  any  transaction  with  respect to which it was finally  adjudged
               that  such  director  personally  received  a  benefit  in money,
               property,  or  services  to which the  director  was not  legally
               entitled.

     The company's Bylaws also permit us to maintain  insurance on behalf of any
person  whom the  company  has the power to  indemnify  under  Nevada law or the
company's Articles of Incorporation or Bylaws.

                   OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

     Expenses incurred or (expected) relating to this Registration Statement and
distribution are as follows: The amounts set forth are estimates except for the
SEC registration fee:

                                                                        Amount  
SEC registration fee                                                $   1,529.50
Printing and engraving expenses*                                        5,000.00
Professional fees and expenses*                                       200,000.00
Transfer agent's and registrar's fees and expenses*                     1,500.00
Miscellaneous*                                                          2,500.00
                                                                    ------------
     Total*                                                         $ 226,529.50
                                                      
------------------------
*Estimates

     The Registrant will bear all of the expenses shown above.

                     RECENT SALES OF UNREGISTERED SECURITIES

     Set forth below is  information  regarding  the  issuance  and sales of the
company's  securities without registration for the past three (3) years from the
date of  this  Registration  Statement.  No such  sales  involved  the use of an
underwriter, no advertising or public solicitation were involved, the securities
bear a restrictive  legend and no commissions  were paid in connection  with the
sale of any securities.

     On February 23, 2004, the company sold 987,915 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 131,722 shares of common stock of the company (as adjusted for stock splits).



                                      II-1


     On  February  23,  2004,  the  company  agreed to pay  Little  and  Company
Investment  Securities,   an  entity  owned  by  Glenn  A.  Little,  its  former
controlling  stockholder,  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,  the company issued a $30,000  non-interest  bearing promissory note
maturing on February 23, 2005.  Concurrent with the transaction discussed in the
previous  paragraph,  the company and Little and Company  Investment  Securities
executed an Exchange  Agreement  whereby the  company  issued  98,792  shares of
common stock in satisfaction of the outstanding promissory note.

     On June 23, 2004 the company issued 167,895 shares of its common stock to a
consultant in lieu of a cash payment for services relating to the reverse merger
that was completed in fiscal 2004.  The trading  price of the  Company's  common
stock on June 23,  2004 was  $3.60 per  share,  accordingly,  the fair  value of
167,895 shares was $604,422.

     On June 23, 2004,  the company issued 166,667 shares of its common stock to
Halter Financial Group, Inc., an existing  stockholder,  at a price of $1.14 per
share in  exchange  for gross  proceeds of  $190,000  based on a stock  purchase
agreement.

     On June 23, 2004, the company  completed a stock exchange  transaction with
the stockholders of Sifang Holdings Co., Ltd. The exchange was consummated under
Nevada and Cayman  Islands law  pursuant to the terms of a  Securities  Exchange
Agreement dated effective as of June 23, 2004 by and among Boulder Acquisitions,
Sifang  Holdings  and the  stockholders  of  Sifang  Holdings.  Pursuant  to the
Securities Exchange  Agreement,  we issued 13,782,636 shares of our common stock
to the stockholders of Sifang Holdings,  representing approximately 89.7% of our
post-exchange  issued and outstanding  common stock, in exchange for 100% of the
outstanding capital stock of Sifang Holdings.

     The company issued the foregoing shares in private  transactions or private
placements  intending  in reliance  upon  Regulation  D and Section  4(2) of the
Securities Act of 1933, as amended (the "Act"). The investors were not solicited
through any form of general solicitation or advertising,  the transactions being
non-public offerings, and the sales were conducted in private transactions where
the investor  identified an investment  intent as to the  transaction  without a
view to an  immediate  resale of the  securities;  the shares  were  "restricted
securities"  in that they were both legended with  reference to Rule 144 as such
and the  investors  identified  they  were  sophisticated  as to the  investment
decision and in most cases we reasonably believed the investors were "accredited
investors" as such term is defined under  Regulation D based upon statements and
information  supplied  to us in writing  and  verbally  in  connection  with the
transactions. We never utilized an underwriter for an offering of our securities
and no sales  commissions  were paid to any third party in  connection  with the
above-referenced  sales. Other than the securities  mentioned above, we have not
issued or sold any securities.

                                    EXHIBITS

   Exhibit 
   Number         Description
    
    3.1*          Articles of Incorporation of the Registrant.
    
    3.2**         Second Amended and Restated Bylaws of the Registrant.
    
    4.1****       Common Stock Specimen.
    
    5.1****       Legal Opinion of Kummer Kaempfer Bonner & Renshaw.
    
    10.1**        Securities   Exchange   Agreement   by   and   among   Boulder
                  Acquisitions,   Inc.,   Sifang  Holdings  Co.,  Ltd.  and  the
                  stockholders  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.
    


                                      II-2


    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 May 26, 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.
    
    10.11         Selling   Stockholders   Agreement   by  and   among   Boulder
                  Acquisitions,  Inc.  and the  Selling  Stockholders  listed on
                  Schedule A thereto dated as of June 28, 2004.
    
    21.1****      Subsidiaries of the Registrant.
    
    23.1          Consent of BDO Shanghai Zhonghua, registered public accounting
                  firm.
    
    23.2****      Consent of Kummer  Kaempfer Bonner & Renshaw (filed as part of
                  Exhibit 5.1).
    
    23.3          Consent  of  Grobstein,  Horwath &  Company,  LLP,  registered
                  public accounting firm.
    
    24.1****      Power of  Attorney  for all  directors  other  than Jiang Hong
                  Ming, Juchen Li and Yuan Feng.
    
    24.2          Power of  Attorney  for Jiang  Hong  Ming,  Juchen Li and Yuan
                  Feng.  Reference  is  made  to the  signature  pages  of  this
                  Registration Statement
                           
----------------------
*      Filed as an exhibit to the Registrant's  Annual Report on Form 10-KSB for
       the  fiscal  year  ended  December  31,  2001,  which was filed  with the
       Commission  on January  28,  2002,  and which is  incorporated  herein by
       reference.
**     Filed as an exhibit to the Registrant's  Current Report on Form 8-K dated
       July 8, 2004, and which is incorporated herein by reference.
***    Filed as an exhibit to the  Registrant's  Quarterly Report on Form 10-QSB
       for the period ended June 30, 2004 as filed with the Commission on August
       23, 2004, and which is incorporated herein by reference.
****   Previously filed.

                                  UNDERTAKINGS

     The undersigned registrant hereby undertakes:

1) To file,  during  any  period in which  offers or sales  are  being  made,  a
post-effective amendment to this registration statement:

     (a)  To  include  any  prospectus  required  by  section  10(a)(3)  of  the
          Securities Act of 1933;
     (b)  To reflect in the prospectus  any facts or events which,  individually
          or in the aggregate, represent a fundamental change in the information
          set  forth  in  the  registration   statement.   Notwithstanding   the
          foregoing,  any increase or decrease in volume of  securities  offered
          (if the total dollar value of securities offered would not exceed that
          which is being  registered) and any deviation from the high or low end
          of the  estimated  maximum  range,  may be  reflected  in the  form of
          prospectus  filed with the  Commission  pursuant to Rule 424(b) if, in
          the aggregate,  the changes in volume and price represent no more than
          a 20% change in the maximum aggregate  offering price set forth in the
          "Calculation of Registration Fee" table in the effective  registration
          statement; and 
     (c)  To include any additional or changed material  information on the plan
          of distribution.



                                      II-3


2) For  determining  liability  under the  Securities Act of 1933, to treat each
post-effective  amendment  as a new  registration  statement  of the  securities
offered,  and the offering of the securities at that time to be the initial bona
fide offering.

3) To file a  post-effective  amendment to remove from  registration  any of the
securities being registered, which remain unsold at the end of the offering.

4) Insofar as indemnification  for liabilities  arising under the Securities Act
may be permitted to directors,  officers or  controlling  persons of the company
pursuant to the foregoing provisions or otherwise,  the company has been advised
that,  in  the  opinion  of  the  Securities  and  Exchange   Commission,   such
indemnification  is  against  public  policy  as  expressed  in that Act and is,
therefore, unenforceable.

     In the event  that a claim for  indemnification  against  such  liabilities
(other  than the  payment  by us of  expenses  incurred  or paid by a  director,
officer or  controlling  person of us in the  successful  defense of any action,
suit or proceeding) is asserted by such director,  officer or controlling person
in connection  with the  securities  being  registered,  we will,  unless in the
opinion of our counsel  the matter has been  settled by  controlling  precedent,
submit  to a  court  of  appropriate  jurisdiction  the  question  whether  such
indemnification  by us is against  public policy as expressed in the  Securities
Act and we will be governed by the final adjudication of such issue.
















                                      II-4


                                   SIGNATURES

     In accordance  with the  requirements  of the  Securities  Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the  requirements  for filing on Form SB-2 and authorizes  this  registration
statement  to be  signed  on its  behalf  by  the  undersigned,  thereunto  duly
authorized,  in the City of Shanghai,  People's Republic of China. China Digital
Wireless, Inc.

By: /s/ Tai Caihua                                           Date: July 29, 2005
    --------------------------------------------
 Tai Caihua, President and Chairman of the Board

By: /s/ Qian Fang                                            Date: July 29, 2005
    --------------------------------------------
 Qian Fang, Chief Financial Officer

     In accordance  with the  requirements  of the Securities Act of 1933,  this
registration  statement  has  been  signed  by  the  following  persons  in  the
capacities and on the date stated.

By:  /s/ Tai Caihua                                          Date: July 29, 2005
     -------------------------------                        
 Tai Caihua, Director                                       
                                                            
By:               *                                          Date: July 29, 2005
    --------------------------------                        
 Shi Ying, Director                                         
                                                            
By:               *                                          Date: July 29, 2005
    --------------------------------                        
 Huang Tianqi, Director                                     
                                                            
By:               *                                          Date: July 29, 2005
    --------------------------------                         
 Jing Weiping, Director                                      
                                                             
By:               *                                          Date: July 29, 2005
    --------------------------------                         
 Mao Ming, Director                                          
                                                             
By:               *                                          Date: July 29, 2005
    --------------------------------                         
 Song Jing, Director                                         
                                                             
By:               *                                          Date: July 29, 2005
    --------------------------------                         
 Fu Sixing, Director                                         
                                                             
By:               *                                          Date: July 29, 2005
    --------------------------------                         
 Yu Ruijie, Director                                         
                                                             
By:               *                                          Date: July 29, 2005
    --------------------------------                         
 Zhang Xiaodong, Director                                    
                                                             
By:               *                                          Date: July 29, 2005
    --------------------------------                         
 Huang Wei, Director                                         
                                                             
* By: /s/ Tai Caihua                                         Date: July 29, 2005
      ------------------------------                        
  Tai Caihua, As Attorney-in-fact







                                      II-5


     We, the below  signed  directors  and officers of China  Digital  Wireless,
Inc., do hereby  constitute and appoint Tai Caihua our true and lawful  attorney
in  fact  and  agent  to do any and  all  acts  and  things  in our  name in the
capacities  indicated  which he may deem  necessary  or  advisable to enable the
company to comply with the  Securities  Act of 1933, as amended,  and any rules,
regulations  and  requirements  of the  Securities  and Exchange  Commission  in
connection with this Registration  Statement,  including  specifically,  but not
limited to, the power and authority to sign for us, or any of us in our names in
the capacities  indicated and any and all amendments  (including  post-effective
amendments) to this Registration Statement;  and we do hereby ratify and confirm
all that he shall do or cause to be done by virtue hereof.

     In accordance  with the  requirements  of the Securities Act of 1933,  this
registration  statement  has  been  signed  by  the  following  persons  in  the
capacities and on the date stated.

By:   /s/ Hiang Hong Ming                                    Date: July 29, 2005
    --------------------------------                        
Hiang Hong Ming, Director

By:  /s/ Juchen Li                                           Date: July 29, 2005
    --------------------------------                        
Juchen Li, Director

By: /s/ Yuan Feng                                            Date: July 29, 2005
    --------------------------------                        
Yuan Feng, Director