-----BEGIN PRIVACY-ENHANCED MESSAGE-----
Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
Originator-Key-Asymmetric:
 MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen
 TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB
MIC-Info: RSA-MD5,RSA,
 GhTyXkmG4OMq7OO/diM5IgS7b+UlLqFCUO1PuznveSJp2K9EjLXtR9gIjgbNfnwN
 eLsvQAGcbhq79K77DHtQog==

<SEC-DOCUMENT>0001010549-05-000868.txt : 20051121
<SEC-HEADER>0001010549-05-000868.hdr.sgml : 20051121
<ACCEPTANCE-DATETIME>20051121172129
ACCESSION NUMBER:		0001010549-05-000868
CONFORMED SUBMISSION TYPE:	10QSB
PUBLIC DOCUMENT COUNT:		5
CONFORMED PERIOD OF REPORT:	20050930
FILED AS OF DATE:		20051121
DATE AS OF CHANGE:		20051121

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			CHINA DIGITAL WIRELESS INC
		CENTRAL INDEX KEY:			0000721693
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-BUSINESS SERVICES, NEC [7389]
		IRS NUMBER:				900093373
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		10QSB
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-12536
		FILM NUMBER:		051218921

	BUSINESS ADDRESS:	
		STREET 1:		429 GUANGDONG ROAD
		CITY:			SHANGHAI
		STATE:			F4
		ZIP:			200001
		BUSINESS PHONE:		86-21 6336-8686

	MAIL ADDRESS:	
		STREET 1:		429 GUANGDONG ROAD
		CITY:			SHANGHAI
		STATE:			F4
		ZIP:			200001

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	BOULDER ACQUISITIONS  INC
		DATE OF NAME CHANGE:	20020430

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	BOULDER BREWING CO
		DATE OF NAME CHANGE:	19920703
</SEC-HEADER>
<DOCUMENT>
<TYPE>10QSB
<SEQUENCE>1
<FILENAME>chinadig10qsb093005.txt
<TEXT>

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

                                   FORM 10-QSB

          [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                For the quarterly period ended September 30, 2005

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


              For the Transition Period From _________ to _________

                                     0-12536
                            (Commission File Number)

                          CHINA DIGITAL WIRELESS, INC.
             (Exact name of registrant as specified in its charter)




             Nevada                                      90-0093373
(State or other jurisdiction of                (IRS Employer Identification No.)
         Incorporation)


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


         Issuer telephone number, including area code: (86 21) 6336-8686





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

Indicate by check mark whether the  registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). [ ]Yes [X]No

As of October 13, 2005,  17,147,268 of the Issuer's $.001 par value common stock
were outstanding.

Transitional Small Business Disclosure Format: [ ]Yes [X] No -


<PAGE>

                                TABLE OF CONTENTS



                         PART I - FINANCIAL INFORMATION                     PAGE


    ITEM 1.    CONSOLIDATED FINANCIAL STATEMENTS

       Consolidated Balance Sheets as of December 31, 2004 (Audited)
            and September 30, 2005 (Unaudited)                                 3



       Consolidated Statements of Income and Comprehensive Income
           (Unaudited)  For the Three and Nine Months Ended September 30,
           2004 and 2005 (Unaudited)                                           4

       Consolidated Statements of Shareholders' Equity for the Year Ended
           December 31, 2004 (Audited) and the Nine Months Ended September 30,
           2005 (Unaudited)                                                    5

       Consolidated Statements of Cash Flows for the Nine Months               6
           Ended September 30, 2004 and 2005 (Unaudited)

       Notes to Consolidated Financial Statements                              7


    ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS
               OR PLAN OF OPERATION                                           19

    ITEM 3.    CONTROLS AND PROCEDURES                                        28


PART II - OTHER INFORMATION

    ITEM 2.    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS    28

    ITEM 6.    EXHIBITS                                                       28


    SIGNATURES                                                                29



<PAGE>
<TABLE>
<CAPTION>

                   CHINA DIGITAL WIRELESS INC. AND SUBSIDIARY

                           CONSOLIDATED BALANCE SHEETS




                                                                     December 31,   September 30,
                                                                         2004            2005
                                                                    -------------   -------------
                                                                                     (Unaudited)
<S>                                                                 <C>             <C>
ASSETS

Current assets:
   Cash and cash equivalents                                        $      75,511   $   1,021,697
   Accounts receivable, net of allowance for doubtful accounts of
   $47,922 and $17,242 (including $1,583,512 and $1,464,904  due
   from a related party)                                                4,619,809       2,223,489
   Inventories                                                            101,696         510,253
   Deferred tax assets                                                     28,772          10,000
   Common stock proceeds held in escrow                                 1,500,000            --
   Amounts due from related parties                                     4,987,956       6,786,313
   Advances & deposits to suppliers                                       150,412       3,560,710
                                                                    -------------   -------------
Total current assets                                                   11,464,156      14,112,462

Property and equipment, net                                             1,198,509       1,156,153
                                                                    -------------   -------------

Total assets                                                        $  12,662,665   $  15,268,615
                                                                    =============   =============


LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
   Accounts payable                                                 $      55,839   $     898,728
   Advance from customer                                                     --           430,990
   Deferred revenue                                                       617,694         449,524
   VAT payable                                                            213,535          39,750
   Income tax payable                                                     312,763         211,521
   Due to related parties                                                 100,260            --
   Other liabilities                                                      287,025         239,355
                                                                    -------------   -------------

Total current liabilities                                               1,587,116       2,269,868
                                                                    -------------   -------------



Shareholders' equity:
   Common stock - $0.001 par value, 100,000,000 shares
     authorized, 17,018,692 shares issued and outstanding
     at December 31, 2004 and 17,147,268 shares issued and
     outstanding at September 30, 2005                                     17,019          17,148
   Additional paid-in capital                                           4,229,974       4,229,845
   Retained earnings                                                    6,828,281       8,505,148
   Accumulated other comprehensive income                                     275         246,606
                                                                    -------------   -------------

Total shareholders' equity                                             11,075,549      12,998,747
                                                                    -------------   -------------

Total liabilities and shareholders' equity                          $  12,662,665   $  15,268,615
                                                                    =============   =============
</TABLE>


          See accompanying notes to consolidated financial statements.

                                       3
<PAGE>
<TABLE>
<CAPTION>

                   CHINA DIGITAL WIRELESS INC. AND SUBSIDIARY

                        CONSOLIDATED STATEMENTS OF INCOME
                            AND COMPREHENSIVE INCOME

                                                  Three Months ended September 30     Nine Months ended September 30
                                                  -------------------------------    -------------------------------
                                                       2004             2005              2004             2005
                                                  --------------   --------------    --------------   --------------
                                                   (unaudited)       (unaudited)       (unaudited)      (unaudited)
<S>                                               <C>              <C>               <C>              <C>
Revenues:
  Product sales                                   $         --     $    2,843,538    $    4,914,465   $    4,316,422
  Product sales to related parties                     6,239,802        2,048,309        10,512,821        9,856,854
  Information service revenue, net                       779,719          190,132         2,438,750        1,149,821
  Advertising service revenue, net                          --            614,136              --          1,738,878
                                                  --------------   --------------    --------------   --------------

Total revenues                                         7,019,521        5,696,115        17,866,036       17,061,975

Cost of goods sold                                          --          2,799,693         4,526,396        4,221,241
Cost of goods sold to related parties                  6,126,537        2,022,961        10,132,267        9,600,145
Cost of service                                          234,973          166,732           739,219          495,921
                                                  --------------   --------------    --------------   --------------
                                                       6,361,510        4,989,386        15,397,882       14,317,307

Gross profit                                             658,011          706,729         2,468,154        2,744,668

Operating expenses:
  Selling                                                 42,748           33,132           127,833          128,157
  General and administrative                             139,584          263,023         1,354,836          665,390
                                                  --------------   --------------    --------------   --------------

Total operating expenses                                 182,332          296,155         1,482,669          793,547
                                                  --------------   --------------    --------------   --------------

 Income from operations                                  475,679          410,574           985,485        1,951,121

Other revenue                                            130,060            7,089           130,060            7,216
Governmental subsidy                                        --            108,476              --            108,476
Interest income (expense)                                 18,339           (6,179)           31,931           (9,844)
                                                  --------------   --------------    --------------   --------------

 Income before income taxes                              624,078          519,960         1,147,476        2,056,969

Income tax provision                                      54,306          111,042           169,643          380,102
                                                  --------------   --------------    --------------   --------------

Net  income                                       $      569,772   $      408,918    $      977,833   $    1,676,867
                                                  ==============   ==============    ==============   ==============
Other comprehensive income :
  Foreign currency translation adjustment         $            3   $      246,335    $          155   $      246,331
                                                  --------------   --------------    --------------   --------------

Comprehensive  income                             $      569,775   $      655,253    $      977,988   $    1,923,198
                                                  ==============   ==============    ==============   ==============

Basic and diluted  earnings per share             $         0.03   $         0.02    $         0.07   $         0.10

Weighted average common shares outstanding            17,018,692       17,031,408        14,932,053       17,022,946
</TABLE>

          See accompanying notes to consolidated financial statements.

                                       4
<PAGE>
<TABLE>
<CAPTION>

                   CHINA DIGITAL WIRELESS INC. AND SUBSIDIARY

                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY


                                                                                               Accumulated
                                                                Additional                        Other           Total
                                        Common Stock             Paid-in         Retained     Comprehensive   Shareholders
                                    Shares         Amount         Capital        Earnings        Income          Equity
                                 ------------   ------------   ------------    ------------   -------------   ------------
<S>                              <C>            <C>            <C>             <C>            <C>             <C>
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

Foreign currency translation
adjustment                               --             --             --              --               263            263
                                 ------------   ------------   ------------    ------------   -------------   ------------

Balance at December 31, 2004       17,018,692   $     17,019   $  4,229,974    $  6,828,281   $         275   $ 11,075,549

Issuance of common stock in
exchange of lock up agreements        128,576            129           (129)           --              --             --

Net income (unaudited)                   --             --             --         1,676,867            --        1,676,867

Foreign currency  translation
adjustment (unaudited)                   --             --             --              --           246,331        246,331
                                 ------------   ------------   ------------    ------------   -------------   ------------

Balance at September 30, 2005      17,147,268   $     17,148   $  4,229,845    $  8,505,148   $     246,606   $ 12,998,747
                                 ============   ============   ============    ============   =============   ============
</TABLE>


          See accompanying notes to consolidated financial statements.

                                       5
<PAGE>
<TABLE>
<CAPTION>

                   CHINA DIGITAL WIRELESS INC. AND SUBSIDIARY

                      CONSOLIDATED STATEMENTS OF CASH FLOWS


                                                                    Nine Months ended September 30,
                                                                    -------------------------------
                                                                         2004              2005
                                                                    -------------     -------------
                                                                     (unaudited)       (unaudited)
<S>                                                                 <C>               <C>
Cash flows from operating activities:
  Net income                                                        $     977,833     $   1,676,867
  Adjustments to reconcile net income to net cash provided
     by operating activities:
       Depreciation and amortization                                      138,851           185,279
       Bad debt expenses                                                    4,257           (30,680)
       Issuance of common stock to consultants for services             1,014,423              --
       Deferred tax assets                                                 (4,069)           18,772
       Gain on disposal of property and equipment                            --              (7,368)
       Changes in assets and liabilities:

          Accounts receivable                                          (1,891,866)        2,427,000
          Inventories                                                     521,815          (408,557)
          Other current assets                                           (543,822)       (3,410,298)
          Accounts payable                                               (105,043)          842,889
          Advance from customer                                              --             430,990
          Deferred revenue                                                 42,950          (168,170)
          VAT recoverable  and payable                                     11,445          (173,785)
          Income tax payable                                                 --            (101,242)
          Due to related parties                                             --            (100,260)
          Other liabilities                                               123,588           (47,670)
                                                                    -------------     -------------

Net cash flows provided by operating activities                           290,362         1,133,767
                                                                    -------------     -------------

Cash flows from investing activities:
  Purchase of property and equipment                                      (19,162)         (332,650)
  Proceeds on disposal of property and equipment                             --             221,210
  Amounts due from related parties                                     (2,140,607)       (1,798,357)
                                                                    -------------     -------------

Net cash flows used in investing activities                            (2,159,769)       (1,909,797)
                                                                    -------------     -------------

Cash flows from financing activities:
  Recapitalization and reorganization                                     310,051              --
  Proceeds from issuing redeemable common stock                         1,690,000              --
  Issuing cost                                                           (217,481)             --
  Escrow receivable                                                    (1,500,000)        1,500,000
                                                                    -------------     -------------

Net cash flows provided by financing activities                           282,570         1,500,000
                                                                    -------------     -------------

Foreign currency translation adjustment                                       155           222,216
                                                                    -------------     -------------

Net increase (decrease) in cash and cash equivalents                   (1,586,682)          946,186

Cash and cash equivalents, beginning of the period                      1,713,748            75,511
                                                                    -------------     -------------

Cash and cash equivalents, end of the period                        $     127,066     $   1,021,697
                                                                    =============     =============

Supplemental disclosure of cash flow information:
  Cash paid during the period for:
       Interest                                                     $        --       $        --
       Income taxes                                                 $        --       $     467,509
       Issuance of common stock in exchange of lock up agreements   $        --       $         129
</TABLE>


          See accompanying notes to consolidated financial statements.

                                       6
<PAGE>

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 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 are 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
September  30,  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
September  30,  2004,  Boulder  Acquisitions  changed its name to China  Digital
Wireless, Inc.


                                       7
<PAGE>

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, and  collectively  with CDW and Sifang Holdings known
as the Company).  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  or Shanghai SFT Co.,  Ltd.).
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, the Company 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 analyses 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
the Company'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 its  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.




                                       8
<PAGE>

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-Q 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-Q 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-K for the year ended December
31, 2004.

The  Company's  consolidated  financial  statements  for the nine  months  ended
September 30, 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 nine months ended September 30,
2005 include the accounts of CDW, its wholly owned  subsidiary  Sifang Holdings,
and its  wholly-owned  subsidiary TCH.  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 September 30, 2005. 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 its financial  statements into U.S. dollars in accordance
with SFAS No.  52,  "Foreign  Currency  Translation."  All  asset and  liability
accounts  have been  translated  using the rate of  exchange  prevailing  at the
balance sheet date (at September 30, 2005, the  prevailing  exchange rate of the
US dollar against the RMB was 8.0930), and the statement of income is translated
at average rates during the reporting period (the average rates of the US dollar
against the RMB,  during the reporting  period,  were 8.2322).  Equity items are
translated at historical  rates.  Adjustments  resulting from the translation of
the Company'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



                                       9
<PAGE>

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.

Advertising Servicing Revenue, Net:

Advertising revenues are derived from advertisement designing, masterminding and
producing services. The Company recognizes service revenues over the term of the
noted  agreement at the time of completion of the services.  The Company records
the revenue from  Shanghai  Sifang Media Co.,  Ltd. on a net basis in compliance
with EITF 99-19, "Reporting Revenue Gross as a Principle versus Net as an Agent"
because  the  Company is not the  primary  obligor in the  arrangement  and they
receive  a fixed fee from  Shanghai  Sifang  Media  Co.,  Ltd.  and they have no
latitude in determining prices.

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
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  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 of the 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



                                       10
<PAGE>

subscription  and the Company has no control over 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:

         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 September 30, 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,    September 30,
                                                  -------------   -------------
                                                      2004            2005
                                                  -------------   -------------
                                                                   (Unaudited)
Beginning balance                                 $      28,158   $      47,922
Additions charged to expense                             19,764            --
Recovered                                                  --           (30,680)
Actual write off                                           --              --
                                                  -------------   -------------
Ending balance                                    $      47,922   $      17,242
                                                  =============   =============


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.



                                       11
<PAGE>

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 the  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 by the
Company,  through  affiliates,  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. There was no impairment of long-lived
assets in the nine months ended September 30, 2004 and 2005.

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.

Stock Based Compensation


The Company  utilizes SFAS No. 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.



                                       12
<PAGE>

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 nine
months ended September 30, 2004. The income tax provision presented for the nine
months  ended  September  30, 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 (Loss) Income

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.

Earnings 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



                                       13
<PAGE>

net income  (loss)  available to common  shareholders  by the  weighted  average
number of shares  outstanding  during the period.  Diluted  earnings  (loss) per
share  reflect  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 September 30, 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 nine 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
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 nine  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.  On August 9, 2005, the Company announced its intent
to apply for listing on the American Stock Exchange ("AMEX"). In connection with
the AMEX  application,  certain persons who hold more than 200,000 shares of the
Company's common stock entered in lockup  agreements with the Company where they
generally agreed to not offer,  sell, assign or otherwise  transfer a portion of
their stock or other equity  securities  of the Company  without  prior  written
consent of the  Company  until the earlier of (i) 180 days after the date of the
lockup  agreements or (ii) the date that AMEX has approved the Company's listing



                                       14
<PAGE>
<TABLE>
<CAPTION>

application.  The lockup  agreements became effective on September 21, 2005, and
were  executed  by  ten  of the  Company's  officers  and  directors  and  three
additional    stockholders.    Under   the    lockup    agreements    with   the
non-officer/director  stockholders,  the Company  issued an aggregate of 128,576
shares of common stock in consideration thereof.


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 September 30,
                                                                 2004             2005
                                                            --------------   --------------
                                                             (Unaudited)       (Unaudited)

<S>                                                         <C>              <C>
Shanghai Shantian Telecommunication Co. Ltd. ("Shantian")   $         --     $    2,048,309
                                                            --------------   --------------
                                                            $         --     $    2,048,309
                                                            ==============   ==============


During the three months ended  September  30, 2005,  TCH sold Samsung GSM mobile
phones valued at  $2,048,309 at a 3% gross profit margin to Shantian.  There was
no Samsung  GSM mobile  phone sales to Shantian  during the three  months  ended
September 30, 2004.

                                                            Nine months Ended September 30,
                                                                 2004             2005
                                                            --------------   --------------
                                                             (Unaudited)       (Unaudited)


Shanghai Shantian Telecommunication Co. Ltd. ("Shantian")   $    4,273,019   $    9,856,854
                                                            --------------   --------------
                                                            $    4,273,019   $    9,856,854
                                                            ==============   ==============


During the Nine months Ended  September  30,  2005,  TCH sold Samsung GSM mobile
phones valued at $9,856,854 (2004 - $4,273,019) at a 3% (2004 - 6%) gross profit
margin to Shantian.  Accounts  receivable include $1,464,904 (2004 $812,550) due
from Shantian.

Advertising Services Rendered to Related Party

                                                            Three months Ended September 30,
                                                                 2004              2005
                                                            --------------    --------------
                                                              (Unaudited)       (Unaudited)

Shanghai Tianci Real Estate Co. Ltd.                        $         --      $      614,136
                                                            --------------    --------------
                                                            $         --      $      614,136
                                                            ==============    ==============


                                                            Nine months Ended September 30,
                                                                  2004         2005
                                                            --------------   --------------
                                                              (Unaudited)      (Unaudited)


Shanghai Tianci Real Estate Co. Ltd.                        $         --     $    1,738,878
                                                            --------------   --------------
                                                            $         --     $      738,878
                                                            ==============   ==============
</TABLE>


In January 2005,  Shanghai  Sifang Media Co., Ltd and TCH entered into the "Bank
Digital TV's Cooperation  Agreement",  where TCH will assist in the promotion of
TV ads for  Shanghai  Tianci  Real  Estate Co.  Ltd.  TCH  received a net fee of
approximately  $1,800,000  for  providing  the  service  from  January  2005  to
September 30, 2005. There is an "Advertisement Agency Contract" between Shanghai
Tianci Real Estate Co., Ltd and Shanghai  Sifang Media Co., Ltd, 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.


                                       15
<PAGE>

As of September  30, 2005 the balance due from  Shanghai  Tianci Real Estate Co.
Ltd. was $460,275.

Service Provided by Related Party

                                                Three months Ended September 30,
                                                        2004           2005
                                                --------------    --------------
                                                 (Unaudited)       (Unaudited)

Shanghai SFT Co., Ltd.                            $    141,980    $      106,750
                                                --------------    --------------
                                                  $    141,980    $      106,750
                                                ==============    ==============

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
$141,980  and $92,081 for the three  months  ended  September  30, 2004 and 2005
respectively.   The  annual   payments  for  the  services  have  declined  from
approximately $567,000 to approximately $362,472 since January 1, 2005.

During the three  months  ended  September  30, 2005,  Sifang  Information  also
provided other management support and marketing services to TCH for $14,669.

                                                 Nine months Ended September 30,
                                                      2004             2005
                                                 --------------   --------------
                                                   (Unaudited)     (Unaudited)

Shanghai SFT Co., Ltd.                           $      425,900   $      336,358
                                                 --------------   --------------
                                                 $      425,900   $      336,358
                                                 ==============   ==============


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
$425,900  and $ 273,317 for the nine months  ended  September  30, 2004 and 2005
respectively.   The  annual   payments  for  the  services  have  declined  from
approximately $567,000 to approximately $362,472 since January 1, 2005.

During the nine  months  ended  September  30,  2005,  Sifang  Information  also
provided other management support and marketing services to TCH for $63,041.

Amounts Due from Related Parties

                                          December 31, 2004   September 30, 2005
                                         ------------------   ------------------
                                                                 (unaudited)

                                         $        4,987,956   $        6,326,038
Shanghai Tianci Real Estate Co. Ltd.                   --                460,275
                                         ------------------   ------------------
                                         $        4,987,956   $        6,786,313
                                         ==================   ==================



                                       16
<PAGE>
<TABLE>
<CAPTION>

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 an agent to
sell Nokia phones on Sifang  Information's  behalf.  In May, the final  approval
from Nokia was received by Sifang Information. As of September 30, 2005, TCH had
advanced  $2,407,852  (RMB19,900,000)  to  Sifang  Information  in order to help
Sifang  Information to maintain  enough working capital to purchase Nokia mobile
phones and to establish marketing for channel distribution.  As of September 30,
2005, TCH had also advanced $ to Sifang  Information  as the working  capital to
assist Sifang Information for business transformation.

Deposit for Business Acquisition

In March 2005, TCH signed an agreement  with Tianci Group for appointing  Tianci
Group 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 RMB20,000,000
(equivalent to  approximately  $2,418,000).  In June 2005, the  acquisition  was
finalized,  and the deposit to Tianci Group was fully  collected and all related
assets and business was transferred from Tianci Group to TCH with no mark up.

Due to Related Parties

                                         December 31, 2004    September 30, 2005
                                         ------------------   ------------------
                                                                 (unaudited)

Shanghai Tianci Real Estate Co. Ltd      $           51,350   $             --
Shanghai Tianci Industry Group Co. Ltd.              48,910                 --
                                         ------------------   ------------------
                                         $          100,260   $             --
                                         ==================   ==================



NOTE 5 - SEGMENT REPORTING

The Company currently operates in four 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
                                  Service                      Mobile Phone     Beep Pagers
                                  Revenue       Phone Sales       Service         Service       Corporate          Total
                                ------------    ------------   ------------    ------------    ------------    ------------
<S>                             <C>             <C>            <C>             <C>             <C>             <C>
Three months ended  September
30, 2004
Revenue                         $       --      $  6,239,802   $    748,601    $     31,118    $       --      $  7,019,521
Gross profit                            --           113,265        736,911        (192,165)           --           658,011
Depreciation                            --              --          (14,309)           --            14,315               6
Interest income                         --              --             --              --            18,339          18,339
Net income (loss)                       --           158,493        630,622        (162,389)        (56,954)        569,772
Expenditures  for  long-lived
assets                                  --              --          (23,171)           --              --           (23,171)





                                       17
<PAGE>

Three months ended  September
30, 2005
Revenue                         $    614,136    $  4,891,847   $      2,468    $    187,664    $       --      $  5,696,115
Gross profit                         614,136          69,193        (55,496)         78,896            --           706,729
Depreciation                            --              --           49,043            --            14,544         129,904
Interest (expense)                      --              --             --              --            (6,179)         (6,179)
Net income (loss)                    489,704          12,061        (90,782)         33,574         (35,639)        408,918
Expenditures  for  long-lived
assets                              (157,264)           --           68,285            --              --           (88,979)


Nine months  ended  September
30, 2004
Revenue                         $       --      $ 15,427,286   $  1,798,801    $    639,949    $       --      $ 17,866,036
Gross profit                         768,623       1,569,473        130,058            --         2,468,154
Depreciation                            --              --           95,911            --            42,940         138,851
Interest income                         --              --             --              --            31,931          31,931
Net income (loss)                       --           584,076      1,247,446         (16,449)       (837,240)        977,833
Expenditures  for  long-lived
assets                                  --              --           19,162            --              --            19,162

Total Assets,as of
December 31, 2004                       --         2,721,741      2,443,657            --         7,497,267      12,662,665

Nine months ended September
30, 2005
Revenue                         $  1,738,878    $ 14,173,276   $    623,074    $    526,747    $       --      $ 17,061,975
Gross profit                       1,738,878         351,890        349,974         303,926            --         2,744,668
Depreciation                            --              --          142,108            --            43,171         185,279
Interest (expense)                      --              --             --              --            (9,844)         (9,844)
Net income (loss)                  1,417,555         172,609        171,047         185,745        (270,089)      1,676,867
Expenditures for long-lived
assets                                  --              --          142,923            --              --           142,923

Total Assets, as of
September 30, 2005                      --         5,839,005        274,814            --         8,723,806      14,837,625
</TABLE>


NOTE 6 -GOVERNMENTAL SUBSIDY

During the third  quarter of 2005,  the  Company  received a general  government
subsidy from the local bureau,  which is equivalent to 7% of the taxable  income
of TCH  throughout  the period from September 2004 to December 2004. The subsidy
is non-recurring and subject to government approval.


NOTE 7 -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
contributions.  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 $29,743 and $41,745 to these
funds as part of  selling,  general  and  administrative  expenses  for the nine
months ended September 30, 2004 and 2005, respectively.



                                       18
<PAGE>

ITEM 3.    MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

         This report contains  certain  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,  uncertainties
and assumptions. Should one or more of these risks or uncertainties materialize,
or should  underlying  assumptions  prove  incorrect,  actual  results  may vary
materially from those described herein.

         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.  We do not undertake to publicly update or
revise  any of its  forward-looking  statements  even if  experience  or  future
changes show that the indicated results or events will not be realized.  You are
cautioned not to place undue reliance on these forward-looking statements, which
speak only as of the date hereof.

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 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 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 six months ended June 30, 2004 as if the spun-off business
had been a stand-alone  company for two years and one quarter. On June 30, 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 its equity interest in
TCH 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 provides 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.



                                       19
<PAGE>

         We launched a new digital  media  project to move into the media market
in  China  in  2005.  In  conjunction  with  charitable  organizations,  we have
installed donation boxes with digital TV incorporated on top of them in the main
lobbies of commercial  banks,  hotels,  malls and other public locations to call
the public's attention to the charity and broadcast commercial advertisements.


Discussion and Analysis of Operating Results

Nine months Ended September 30, 2005 Compared to Nine months Ended September 30,
2004

Revenue

Total Revenues

         Total sales revenues consist of product sales, product sales to related
parties,  and net  information  and  advertising  service  revenue.  Total sales
revenues for the nine months  ended  September  30, 2005  decreased by $804,061,
representing a 4.5% decrease,  to $17,061,975 as compared to $17,866,036 for the
same period of the prior  year.  The  decrease  was mainly due to the decline of
mobile  phone  sales and gross  profit  margins  thereon.  The demand for mobile
phones in the Chinese telecommunication market is gradually becoming saturated.

         In the nine months ended  September 30, 2005,  Samsung's  mobile phones
accounted  for about 97% of our total  product sales and other name brand mobile
phones  accounted for the remaining 3%, compared to the same period of the prior
year, in which Samsung and Nokia's mobile phones accounted for 93% and 4% 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 2.5% in order to maintain our market  position,  in
comparison with a mark-up ratio of 5.0% for the same period of the prior year.

Product Sales

         Revenue for product  sales in the nine months ended  September 30, 2005
decreased by $598,043,  representing a 12.2% decrease, to $4,316,422 as compared
to $4,914,465 for the same period of the prior year. The decrease was mainly due
to the  market  factors.  The demand  for  mobile  phones in  Chinese  market is
becoming  saturated along with the intensified  competition for the mobile phone
distributors.

         We entered an  agreement  to  distribute  select  Nokia  mobile  phones
exclusively  in the Shanghai  region of China in May 2005 and now have  obtained
the right to distribute two popular models of Nokia's mobile phones . We believe
that this agreement will enhance both our market share and profitability.  Since
June, we distributed  approximately $627,876 worth of Nokia mobile phones to our
customers  with a superior  mark-up of  approximately  8%  compared to the other
brands we have been selling.  We continue to strengthen  our  relationship  with
Nokia and to diversify  the mobile phone  portfolio to be  responsive  to market
changes and product  innovation.  The relationship will allow us to benefit from
Nokia's  position as the leading  manufacturer  of mobile  phones  worldwide and
Nokia's leadership in the rapidly growing mobile phone market in China.

Product sales to a related party

         We distributed Samsung mobile phones to our related party, Shantian, in
which Sifang  Information  holds a 51% equity  interest,  for its retail  market
channel and  facility.  During the nine month ended  September 30, 2005, we sold
$9,856,854  worth of mobile  phones to  Shantian,  with an  average  mark-up  of
approximately  2.6%, which represents a $665,967  decrease  compared to the same
period of the prior  year.  The  decrease  was also  attributable  to the market
factors mentioned above.


                                       20
<PAGE>

Information service revenue, net

         Total  information  service  revenue  net of related  business  tax and
surcharge for the nine months ended  September 30, 2005  decreased by $1,288,929
representing a 52.9% decrease, to $1,149,821 compared to $2,438,750 for the same
period of the prior year.  Value-added  service  revenue from mobile phone users
for  the  nine  months  ended   September  30,  2005   decreased  by  $1,175,727
representing a 65.4% decrease,  to $623,074  compared to $1,798,801 for the same
period of the prior  year.  The  decrease  was mainly due to the  decline of our
financial  value-added  service.  The sluggish  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 nine months ended September
30,  2005  dropped by $113,202  to $ 526,747  compared to $639,949  for the same
period of the prior year, representing a 17.7% 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

         We launched a new digital  media  project to move into the media market
in  China  in  2005.  In  conjunction  with  charitable  organizations,  we have
installed donation boxes with digital TV incorporated on top of them in the main
lobbies of commercial  banks,  hotels,  malls and other public locations to call
the public's attention to the charity and broadcast commercial advertisements.

         We reached  an  agreement  with China  Charity  Foundation  ("CCF"),  a
national  non-profit  charitable  organization,  which  enables  the  Company to
install  donation  boxes  for  CCF  in  banks  and  other  commercial  locations
throughout  China  that  will  also  have  the  Company's   out-of-home  digital
television advertising media platform attached. The completion of this agreement
enables  us to  accelerate  the  placement  of  out-of-home  digital  television
platforms,  particularly in banks across China. The Company negotiates placement
of the donation boxes and digital television media platform with banks and other
commercial entities that wish to support the national charity. The China Banking
Regulatory Commission ("CBRC") has previously agreed,  pending completion of the
agreement  with CCF, to support  and  coordinate  this  effort  with  respect to
approvals of donation box placements in banks throughout China.

         This agreement  facilitates  the continued  placement of platforms with
little or no direct costs.  We believe that such costs may constitute as much as
30% of the direct  costs of its  competitors  based upon an analysis of publicly
available information.

         We have placed more than 670  multimedia  donation boxes in the inbound
area of  Shanghai  and other  arranged  spots  will be rolled  out in the public
places with high traffic flow. Based on Shanghai,  our strategy is to expand our
network to  penetrate  other large and  mid-sized  developed  cities  throughout
China. We believe the earnings potential from the advertising  service will be a
new source of profit in view of the upcoming  Special Olympic World Summer Games
in 2007 and World Exposition in 2010 to be held in Shanghai.

         In addition,  during the nine months  ended  September  30,  2005,  TCH
rendered advertisement  designing and producing services to Shanghai Tianci Real
Estate  Co.  Ltd.  ("Tianci  Real  Estate")  for  publicity  and  promoting  its
apartment. Net service revenue of $1,738,878 was derived from this service.

Cost of goods sold

         The cost of goods sold for the nine  months  ended  September  30, 2005
decreased by $837,277 to $13,821,386 compared to $14,658,663 for the same period
of the prior year,  representing  a 5.7 % decrease.  The decrease was consistent
with the decrease of revenue from product sales.



                                       21
<PAGE>
<TABLE>
<CAPTION>

Cost of service


         The cost of  service  for the nine  months  ended  September  30,  2005
decreased  by $243,298 to $495,921  compared to $739,219  for the same period of
the prior year, representing a 32.9% decrease. The decline was mainly due 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  securities  information  fee
paid.  During 2005, we have  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 nine months  ended  September  30, 2005  increased  by
approximately $276,514 to $2,744,668,  representing an 11.2% increase,  compared
to gross  profit  of  $2,468,154  for the same  period of the  prior  year.  The
increase in gross profit was primarily  attributable  to the proceeds  generated
from the new advertising service during the three quarters of 2005.

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

                                                      Information
                        Advertising                   Service -      Information
                        Service                       Mobile         Service -
                        Revenue        Phone Sales    Phone          Pager          Total
                        --------------------------    -----------    -----------    -----------
<S>                     <C>            <C>            <C>            <C>            <C>
For nine months ended
September 30, 2005
                        --------------------------    -----------    -----------    -----------
Revenue                 $ 1,738,878    $14,173,276    $   623,074    $   526,747    $17,061,975
                        --------------------------    -----------    -----------    -----------
Cost                           --       13,821,386        292,759        203,162     14,317,307
                        --------------------------    -----------    -----------    -----------
Gross profit              1,738,878        351,890        330,315        323,585      2,744,668
                        --------------------------    -----------    -----------    -----------
Gross profit ratio             100%           2.5%          53.0%          61.4%          16.1%
                        --------------------------    -----------    -----------    -----------
For nine months ended
September 30, 2004
                        --------------------------    -----------    -----------    -----------
Revenue                 $      --       15,427,286    $ 1,798,801    $   639,949    $17,866,036
                        --------------------------    -----------    -----------    -----------
Cost                           --       14,658,663        229,328        509,891     15,397,882
                        --------------------------    -----------    -----------    -----------
Gross profit                   --          768,623      1,569,473        130,058      2,468,154
                        --------------------------    -----------    -----------    -----------
Gross profit ratio             --             5.0%          87.3%          20.3%          13.8%
                        --------------------------    -----------    -----------    -----------
</TABLE>

Selling expenses

         Selling expenses for the nine months ended September 30, 2005 increased
by $324 to $128,157  compared to $127,833 for the same period of the prior year,
representing  a slight  increase.  The increase was  primarily due to the office
expenses  and  fringe  benefits   attributable  to  our  marketing   department.
Furthermore,  the  commission  fees  paid  to the  salesmen  for  mobile  phones
increased, which was offset by the decline in advertising expenses.




                                       22
<PAGE>

General and administrative expenses

         General and administrative expenses for the nine months ended September
30, 2005  decreased by $689,446 to $665,390  compared to $1,354,836 for the same
period of the prior year,  representing a 50.9% decrease. The higher expenses in
2004 were mainly due to one time non-cash  compensation of $1,014,000 related to
the reverse merger that was generated at the parent level, consisting of 167,895
shares  issued to a consultant  in lieu of a 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 shares.

         General and  administrative  expenses incurred at the TCH level for the
nine months  ended  September  30, 2005  decreased  from  $238,224 to  $228,231,
representing a 4.2%  decrease.  The decrease was primarily  attributable  to the
collection of accounts 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.

         The other cash-based  expenses incurred at the parent level in the nine
months ended September 30, 2005 of $437,159 represented payments for audit fees,
retainer fees and other consultant fees.

Interest income (expense)

         During the nine  months  ended  September  30,  2004,  interest  income
derived from bank deposits was $31,931.

         During the nine  months  ended  September  30,  2004,  finance  expense
incurred in  discounting  bank drafts net of interest  income from bank deposits
was $9,844.

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 nine months ended September 30, 2004 and 15% for the
nine months ended  September 30, 2005.  For the nine months ended  September 30,
2004 and 2005, income tax expense was $169,643 and $380,102, respectively, based
on pre-tax  income of  $1,147,476  (which  included  the stock  compensation  of
$1,014,000 incurred in the U.S.) and pre-tax income $1,951,121. Because the loss
of  approximately  $1,014,000  incurred  in the U.S.  cannot  offset the taxable
income in China, the income tax expense of $169,643  incurred in China was based
on the taxable  income of  approximately  $2,162,000  during the nine months end
September 30, 2004.

Comprehensive income

         We  recorded  comprehensive  income of  $1,923,198  for the nine months
ended September 30, 2005, a $945,210  increase in comprehensive  income compared
to  comprehensive  income of  $977,988  for the same  period of the prior  year,
representing a significant  increase.  The increase in comprehensive  income was
attributable to (i) the non-cash  expenses that offset the net profit  generated
in the nine months ended  September 30, 2004,  (ii) the  contribution of our new
advertising  business that was  initiated in the first nine months of 2005,  and
(iii) the appreciation of Chinese RMB to US dollars.

Earnings per share

         The earnings per share for the nine months ended September 30, 2005 was
$0.10 compared to $0.07 for the same period of the prior year.



                                       23
<PAGE>

Three Months Ended  September 30, 2005 Compared to Three Months Ended  September
30, 2004

Revenue

Product Sales

         Revenue from product  sales for the three  months ended  September  30,
2005 was  $2,843,538,  compared to $0 for the three months ended  September  30,
2004.  We  entered  an  agreement  to  distribute  select  Nokia  mobile  phones
exclusively  in Shanghai  region of China in May 2005 and have now  obtained the
right to distribute two popular models of Nokia's mobile phones. We believe that
this  agreement  will enhance both our market  share and  profitability.  In the
third  quarter,  we distributed  approximately  $627,062 worth of Nokia's mobile
phone to our customers with a superior  mark-up of  approximately 8% compared to
the other brands we have been selling,  which was around 3%. We will continue to
strengthen  our  relationship  with  Nokia and to  diversify  the  mobile  phone
portfolio  to be  responsive  to market  changes  and  product  innovation.  The
relationship  will allow us to benefit  from  Nokia's  position  as the  leading
manufacturer  of mobile phones  worldwide and Nokia's  leadership in the rapidly
growing mobile phone market in China.

Product sales to a related party

         We distributed Samsung mobile phones to our related party, Shantian, in
which Sifang  Information  holds a 51% equity  interest,  for its retail  market
channel and facility. During the three month period ended September 30, 2005, we
sold $2,048,309 worth of mobile phones to Shantian, with a mark-up on average of
approximately  1.2%, which represents a $4,191,493 decrease compared to the same
period of the prior year. The decrease was mainly due to the market factors. The
demand for mobile  phones in Chinese  market is  becoming  saturated  along with
intensified competition for mobile phone distributors.

Information service revenue, net

         Total  information  service  revenue  net of related  business  tax and
surcharge for the three months ended  September  30, 2005  decreased by $589,587
representing  a 75.6%  decrease,  to $190,132  compared to $779,719 for the same
period of the prior year.  Value-added  service  revenue from mobile phone users
for the three months ended  September  30, 2005  decreased by $746,133 to $2,468
compared to  $748,601  for the same  period of the prior  year,  representing  a
material  decrease.  The decrease was due mainly to the decline of our financial
value-added service. The sluggish Chinese stock market along with inactive stock
exchanges  hindered  our growth in this  segment of  business.  The decrease was
offset by an increase in service  revenue  from pager users for the three months
ended  September  30, 2005 of $156,546 to $ 187,664  compared to $31,118 for the
same period of the prior year. The increase was due to the drop of pager service
revenue in the third quarter of last year. 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  September  30,  2005,  TCH  rendered
advertisement  designing  and  producing  services  to Tianci  Real  Estate  for
publicity  and promoting  its  apartment.  Net  advertising  service  revenue of
$614,136 was derived from this source.

Cost of goods sold

         The cost of goods sold for the three  months ended  September  30, 2005
decreased by $1,303,883 to $4,822,654 compared to $6,126,537 for the same period
of the prior year,  representing a 21.3%  decrease.  The decrease was consistent
with the decreases in revenue from product sales.



                                       24
<PAGE>
<TABLE>
<CAPTION>

Cost of service


         The cost of service  for the three  months  ended  September  30,  2005
decreased by $68,241 to $166,732 compared to $234,973 for the same period of the
prior  year,  representing  a 29%  decrease.  The costs of  service  consist  of
value-added  service costs and  advertising  service costs.  The decline was due
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  securities
information  fee paid.  During 2005, we have  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  September  30, 2005  increased by
$48,718 to $706,729,  representing a 7.4% increase,  compared to gross profit of
$658,011 for the same period of the prior year. The increase in gross profit was
primarily  attributable to the proceeds generated by the new advertising service
which offset the decrease in  information  service  during the third  quarter of
2005.

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

                                                      Information
                        Advertising                   Service -       Information
                        Service                       Mobile          Service -
                        Revenue        Phone Sales    Phone           Pager           Total
                        --------------------------    -----------     -----------     -----------
<S>                     <C>          <C>              <C>             <C>             <C>
For three months ended
September 30, 2005

                        --------------------------    -----------     -----------     -----------
Revenue                 $   614,136    $ 4,891,847    $     2,468     $   187,664     $ 5,696,115
                        --------------------------    -----------     -----------     -----------
Cost                           --        4,822,654         77,623          89,109       4,989,386
                        --------------------------    -----------     -----------     -----------
Gross profit (loss)         614,136         69,193        (75,155)         98,555         706,729
                        --------------------------    -----------     -----------     -----------
Gross profit ratio             100%           1.4%       (3045.2)%          52.5%           12.4%
                        --------------------------    -----------     -----------     -----------


For three months ended
September 30, 2004
                        --------------------------    -----------     -----------     -----------

Revenue                 $      --        6,239,802    $   748,601     $    31,118     $ 7,019,521
                        --------------------------    -----------     -----------     -----------
Cost                           --        6,126,537         11,690         223,283       6,361,510
                        --------------------------    -----------     -----------     -----------
Gross profit (loss)            --          113,265        736,911        (192,165)        658,011
                        --------------------------    -----------     -----------     -----------
Gross profit ratio             --             1.8%          98.4%         (617.5)%           9.4%
                        --------------------------    -----------     -----------     -----------
</TABLE>


Selling expenses

         Selling  expenses  for  the  three  months  ended  September  30,  2005
decreased  by $9,616 to $33,132  compared  to $42,748 for the same period of the
prior year,  representing a 22.5%  decrease.  The decrease was mainly due to the
decrease of  commission  fees paid to the salesmen  for mobile  phones which was
partly offset by the increase in advertising expense.




                                       25
<PAGE>

General and administrative expenses

         General  and  administrative   expenses  for  the  three  months  ended
September  30, 2005  increased by $123,439 to $263,023  compared to $139,584 for
the same period of the prior year,  representing an 88.4% increase. The increase
was mainly due to the expense incurred in our parent company.

         General and  administrative  expenses  incurred at the TCH level in the
three  months  ended  September  30,  2005  increased  from  $37,395 to $41,583,
representing a slight increase. At the parent level, we incurred an aggregate of
$221,440  for  audit  fees,  service  fees for  Investor  Relations  and  Public
Relations  and  application  fees for Amex  listing  in the three  months  ended
September  30, 2005,  compared to  consulting  fees of $102,189  incurred in the
prior year.

Interest income (expense)

         During the three  months ended  September  30,  2004,  interest  income
derived from deposits in banks was $18,339.

         During the three months ended  September  30,  2005,  finance  expenses
incurred in discounting the bank draft net of interest income from deposits were
$6,179.

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  September  30, 2004 and 15% for
the three months ended  September 30, 2005. In the three months ended  September
30, 2004 and 2005,  income tax expense was $54,306 and  $111,042,  respectively,
based on pre-tax income of $624,078 and $519,960.

Comprehensive income

         We recorded comprehensive income of $655,253 for the three months ended
September  30, 2005 compared to $ 569,772 for the same period of the prior year,
representing  a  15%  increase.   The  increase  in  comprehensive   income  was
attributable to (i) contribution of our new advertising  business,  and (ii) the
appreciation of Chinese RMB to US dollars.

Earnings per share

         The earnings per share for the nine months ended September 30, 2005 was
$0.02 compared to $0.03 for the same period of the prior year

Liquidity and Capital Resources

         Our net cash generated  during the nine months ended September 30, 2005
increased from $127,066 to approximately $1,021,697 as of September 30, 2005.

         Net cash flows generated in operating  activities was $1,133,767 during
the nine months ended by September 30, 2005 compared to $290,362 during the same
period  of the  prior  year.  The  increase  in  cash  provided  was  due to the
collection of accounts receivable and increase in accounts payable offset by the
cash used in other current assets and the increase in inventories.

         Net cash flows used in investing  activities  for the nine months ended
September 30, 2005 reached $1,909,797 compared to $2,159,769 for the same period
of the prior year.  The cash used in investing  activities was mainly due to the
amount due from related parties.  As of September 30, 2005, the amounts due from
Tianci Real Estate and Sifang  Information  represent  $460,275 and  $6,326,038,
respectively.


                                       26
<PAGE>

         Net cash  provided by  financing  activities  for the nine months ended
September  30, 2005 was  $1,500,000  compared to $282,570 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.

         On  August 9,  2005,  the  Company  announced  its  intent to apply for
listing on the AMEX. In connection  with the AMEX  application,  certain persons
who hold more than  200,000  shares of the  Company's  common  stock  entered in
lockup  agreements  with the Company where they  generally  agreed to not offer,
sell,  assign or  otherwise  transfer a portion of their  stock or other  equity
securities of the Company without prior written consent of the Company until the
earlier of (i) 180 days after the date of the lockup agreements or (ii) the date
that AMEX has approved the Company's listing application.  The lockup agreements
became  effective  on  September  21,  2005,  and  were  executed  by ten of the
Company's  officers and directors and three additional  stockholders.  Under the
lockup agreements with the non-officer/director stockholders, the Company issued
an aggregate of 128,576 shares of common stock in consideration thereof.

         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.

         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.

Recent Accounting Pronouncements

         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
estimated 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 No. 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,  which 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  that 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.


                                       27
<PAGE>

Item 3. Controls and Procedures

Prior to the conclusion of the period covered by this report,  we carried out an
evaluation,  under the supervision and with the participation of our management,
including  our Chief  Executive  Officer  and Chief  Financial  Officer,  of the
effectiveness  of the  design  and  operation  of our  disclosure  controls  and
procedures   pursuant  to  Exchange  Act  Rule  13(a)-14(c).   Based  upon  that
evaluation,  our Chief Executive  Officer and Chief Financial  Officer concluded
that our disclosure  controls and  procedures  are effective in timely  alerting
them  to  material  information  relating  to  us  (including  our  consolidated
subsidiaries) required to be included in our periodic SEC filings.

There have been no  significant  changes in our  internal  controls  or in other
factors that could significantly affect internal controls subsequent to the date
we carried out this evaluation.




PART II OTHER INFORMATION

Item 2.  Unregistered sales of equity securities and use of proceeds

As  previously  reported in the  Company's  Current  Report on Form 8-K filed on
September 27, 2005, the Company  entered into lockup  agreements with ten of the
Company's officers and directors and three additional stockholders in connection
with the Company's intended AMEX listing. The lockup agreements became effective
on September 21, 2005. Under the lockup agreements with the non-officer/director
stockholders,  the Company issued an aggregate of 128,576 shares of common stock
in  consideration  thereof in reliance on an exemption from  registration  under
Section 4(2) under the Securities Act.


Item 6.  Exhibits

The following documents are filed as part of this report:

31.1     Chief Executive Officer Certification furnished pursuant to Section 302
         of the Sarbanes-Oxley Act of 2002
31.2     Chief Financial Officer Certification furnished pursuant to Section 302
         of the Sarbanes-Oxley Act of 2002
32.1     Chief Executive Officer Certification furnished pursuant to Section 906
         of the Sarbanes-Oxley Act of 2002
32.2     Chief Financial Officer Certification furnished pursuant to Section 906
         of the Sarbanes-Oxley Act of 2002







                                       28
<PAGE>

                                   SIGNATURES

         In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                              CHINA DIGITAL WIRELESS, INC.
                                              (Registrant)




Date: November 21, 2005                        /s/   Fu Sixing
                                              ----------------------------------
                                              Fu Sixing, Chief Executive Officer



Date: November 21, 2005                        /s/   Qian Fang
                                              ----------------------------------
                                              Qian Fang, Chief Financial Officer



















                                       29
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.1
<SEQUENCE>2
<FILENAME>chinadig10qsbex311093005.txt
<DESCRIPTION>SECTION 302 CERTIFICATION OF CEO
<TEXT>

                                                                    EXHIBIT 31.1

            CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO
                      RULE 15d-14(a) (17 CFR 240.15d-14(a))

          (AUTHORIZED BY SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002)

I, FU  SIXING,  President  and  Chief  Executive  Officer  (principal  executive
officer) of China Digital Wireless, Inc. (the "Registrant"), certifies that:

1. I have reviewed this quarterly report on Form 10-QSB of the Registrant.

2. Based on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact  necessary to make the statements
made, in light of the  circumstances  under which such statements were made, not
misleading with respect to the period covered by this report;

3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information included in this report, fairly present in all material respects the
financial  condition,  results of operations and cash flows of the Registrant as
of, and for, the periods presented in this report;

4.  The  Registrant's  other  certifying  officer  and  I  are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Registrant and have:

         a) Designed such  disclosure  controls and  procedures,  or caused such
         disclosure   controls  and   procedures   to  be  designed   under  our
         supervision,  to  ensure  that  material  information  relating  to the
         Registrant,  including its consolidated subsidiaries,  is made known to
         us by others within those entities,  particularly  during the period in
         which this report is being prepared;

         b) Evaluated the effectiveness of the Registrant's  disclosure controls
         and procedures and presented in this report our  conclusions  about the
         effectiveness of the disclosure controls and procedures,  as of the end
         of the period covered by this report based on such evaluation; and

         c)  Disclosed  in this report any change in the  Registrant's  internal
         control over financial  reporting that occurred during the Registrant's
         most recent fiscal quarter (the  Registrant's  fourth fiscal quarter in
         the case of an  annual  report)  that has  materially  affected,  or is
         reasonably  likely to  materially  affect,  the  Registrant's  internal
         control over financial reporting; and

5. The Registrant's other certifying  officer(s) and I have disclosed,  based on
our most recent evaluation of internal control over financial reporting,  to the
Registrant's  auditors  and the audit  committee  of the  Registrant's  board of
directors (or persons performing the equivalent functions):

         a) All significant  deficiencies and material  weaknesses in the design
         or operation of internal  control over  financial  reporting  which are
         reasonably  likely to  adversely  affect  the  Registrant's  ability to
         record, process, summarize and report financial information; and

         b) Any fraud,  whether or not  material,  that  involves  management or
         other  employees  who  have a  significant  role  in  the  Registrant's
         internal control over financial reporting.


 /s/ Fu Sixing
 ------------------------------
 Name: Fu Sixing
 Title: Chief Executive Officer
 Date: November 21, 2005


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.2
<SEQUENCE>3
<FILENAME>chinadig10qsbex312093005.txt
<DESCRIPTION>SECTION 302 CERTIFICATION OF CFO
<TEXT>

                                                                    EXHIBIT 31.2

                  CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
                PURSUANT TO RULE 15d-14(a) (17 CFR 240.15d-14(a))

          (AUTHORIZED BY SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002)

I, QIAN FANG, Chief Financial  Officer  (principal  financial  officer) of China
Digital Wireless, Inc. (the "Registrant"), certifies that:

1. I have reviewed this quarterly report on Form 10-QSB of the Registrant;

2. Based on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact  necessary to make the statements
made, in light of the  circumstances  under which such statements were made, not
misleading with respect to the period covered by this report;

3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information included in this report, fairly present in all material respects the
financial  condition,  results of operations and cash flows of the Registrant as
of, and for, the periods presented in this report;

4.  The  Registrant's  other  certifying  officer  and  I  are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Registrant and have:

         a) Designed such  disclosure  controls and  procedures,  or caused such
         disclosure   controls  and   procedures   to  be  designed   under  our
         supervision,  to  ensure  that  material  information  relating  to the
         Registrant,  including its consolidated subsidiaries,  is made known to
         us by others within those entities,  particularly  during the period in
         which this report is being prepared;

         b) Evaluated the effectiveness of Registrant's  disclosure controls and
         procedures  and  presented  in this  report our  conclusions  about the
         effectiveness of the disclosure controls and procedures,  as of the end
         of the period covered by this report based on such evaluation; and

         c)  Disclosed  in this report any change in the  Registrant's  internal
         control over financial  reporting that occurred during the Registrant's
         most recent fiscal quarter (the  Registrant's  fourth fiscal quarter in
         the case of an  annual  report)  that has  materially  affected,  or is
         reasonably  likely to  materially  affect,  the  Registrant's  internal
         control over financial reporting; and

5. The Registrant's other certifying  officer(s) and I have disclosed,  based on
our most recent evaluation of internal control over financial reporting,  to the
Registrant's  auditors  and the audit  committee  of the  Registrant's  board of
directors (or persons performing the equivalent functions):

         a) All significant  deficiencies and material  weaknesses in the design
         or operation of internal  control over  financial  reporting  which are
         reasonably  likely to  adversely  affect  the  Registrant's  ability to
         record, process, summarize and report financial information; and

         b) Any fraud,  whether or not  material,  that  involves  management or
         other  employees  who  have a  significant  role  in  the  Registrant's
         internal control over financial reporting.


 /s/ Qian Fang
 ------------------------------
 Name: Qian Fang
 Title: Chief Financial Officer
 Date: November 21, 2005




</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.1
<SEQUENCE>4
<FILENAME>chinadig10qsbex321093005.txt
<DESCRIPTION>SECTION 906 CERTIFICATION OF CEO
<TEXT>

                                                                    EXHIBIT 32.1

                  CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
                         PURSUANT TO 18 U.S.C. ss. 1350

                 (SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002)

I, FU  SIXING,  President  and  Chief  Executive  Officer  (principal  executive
officer) of China Digital Wireless, Inc. (the "Registrant"), certify pursuant to
18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the  Sarbanes-Oxley Act of
2002,  that,  based upon a review of the Quarterly Report on Form 10-QSB for the
period ended September 30, 2005 of the Registrant (the "Report"):

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of
the Securities Exchange Act of 1934, as amended; and

(2) The  information  contained in the Report fairly  presents,  in all material
respects, the financial condition and results of operations of the Registrant.

A signed  original of this  written  statement  required by Section 906 has been
provided to the  Registrant and will be retained by the Registrant and furnished
to the Securities and Exchange Commission or its staff upon request.



 /s/ Fu Sixing
 ---------------------
 Name: Fu Sixing
 Date: November 21, 2005


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.2
<SEQUENCE>5
<FILENAME>chinadig10qsbex322093005.txt
<DESCRIPTION>SECTION 906 CERTIFICATION OF CFO
<TEXT>

                                                                    EXHIBIT 32.2

                  CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
                         PURSUANT TO 18 U.S.C. ss. 1350

                 (SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002)

I, QIAN FANG, Chief Financial  Officer  (principal  financial  officer) of China
Digital  Wireless,  Inc. (the  "Registrant"),  certify pursuant to 18 U.S.C. ss.
1350, as adopted  pursuant to ss. 906 of the  Sarbanes-Oxley  Act of 2002, that,
based upon a review of the Quarterly  Report on Form 10-QSB for the period ended
September 30, 2005 of the Registrant (the "Report"):

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of
the Securities Exchange Act of 1934, as amended; and

(2) The  information  contained in the Report fairly  presents,  in all material
respects, the financial condition and results of operations of the Registrant.

A signed  original of this  written  statement  required by Section 906 has been
provided to the  Registrant and will be retained by the Registrant and furnished
to the Securities and Exchange Commission or its staff upon request.



/s/ Qian Fang
- ---------------------
Name: Qian Fang
Date: November 21, 2005


</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
