f10q0308_guangzhou.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_______________

FORM 10-Q

_______________

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

For the quarterly period ended March 31, 2008

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

For the transition period from ______to______.

GUANGZHOU GLOBAL TELECOM, INC.

(Exact name of registrant as specified in Charter

Florida		333-130937		59-3565377
(State or other jurisdiction of incorporation or organization)		(Commission File No.)		(IRS Employee Identification No.)

Room 03/04, 16/F, JinKe Building,

No.17/19, GuangWei Road

Guangzhou, China 510180

(Address of Principal Executive Offices)

_______________

(44) 1207-245-6131

(Issuer Telephone number)

_______________

(Former Name or Former Address if Changed Since Last Report)

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company filer. See definition of “accelerated filer” and “large accelerated filer” in Rule 12b-2 of the Exchange Act (Check one):

Large Accelerated Filer o

Accelerated Filer o

Non-Accelerated Filer o

Smaller Reporting Company x

Indicate by check mark whether the registrant is a shell company as defined in Rule 12b-2 of the Exchange Act.

Yes o No x

State the number of shares outstanding of each of the issuer’s classes of common equity, as of as of May 20, 2008: 61,311,302 shares of outstanding stocks

GUANGZHOU GLOBAL TELECOM, INC.

FORM 10-Q

March 31, 2008

INDEX

PART I-- FINANCIAL INFORMATION

Item 1.	Financial Statements
Item 2.	Management’s Discussion and Analysis of Financial Condition
Item 3	Quantitative and Qualitative Disclosures About Market Risk
Item 4T.	Control and Procedures

PART II-- OTHER INFORMATION

Item 1	Legal Proceedings
Item 1A	Risk Factors
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds
Item 3.	Defaults Upon Senior Securities
Item 4.	Submission of Matters to a Vote of Security Holders
Item 5.	Other Information
Item 6.	Exhibits and Reports on Form 8-K

SIGNATURE

Item 1. Financial Information

Guangzhou Global Telecom, Inc.

Unaudited Consolidated Financial Statements

March 31, 2008 and 2007

(Stated in US Dollars)

Guangzhou Global Telecom, Inc.

Table of Contents

	Pages

Report of Independent Registered Public Accounting Firm	1

Consolidated Balance Sheets	2 - 3

Consolidated Statements of Income	4

Consolidated Statements of Changes in Stockholders’ Equity	5

Consolidated Statements of Cash Flows	6 – 7

Notes to Consolidated Financial Statements	8 – 20

Board of Directors and Stockholders

Guangzhou Global Telecom, Inc.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We have reviewed the accompanying consolidated balance sheets of Guangzhou Global Telecom, Inc. as of March 31, 2008 and December 31, 2007, and the related consolidated statements of income, stockholders’ equity and cash flows for the three-month periods ended March 31, 2008 and 2007. These interim consolidated financial statements are the responsibility of the Company's management.

We conducted our review in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should be made to the accompanying interim consolidated financial statements for them to be in conformity with U.S. generally accepted accounting principles

South San Francisco, California Samuel H. Wong & Co. LLP

April 22, 2008 Certified Public Accountants

Guangzhou Global Telecom, Inc

Consolidated Balance Sheets

As of March 31, 2008 and December 31, 2007

(Stated in US Dollars)


ASSETS				Note		3/31/2008		12/31/2007
Current Assets
		Cash			$	1,069,827	$	228,202
		Other Receivable		4		599,373		515,862
		Note Receivable		5		33,028		31,751
		Due from Related Party				33,870		32,560
		Due from Shareholder				122,550		118,047
		Purchase Deposits		6		2,300,392		2,380,375
		Advance for Business Development				420,713		192,329
		Inventory				110,057		430,398
			Total Current Assets			4,689,810		3,929,524

Non-Current Assets
		Property, Plant & Equipment, Net		7		572,224		168,679
		Goodwill				287,246		173,958
Total Non-Current Assets						859,470		342,637

			Total Assets		$	5,549,280	$	4,272,161

LIABILITIES & STOCKHOLDERS' EQUITY

	Liabilities
Current Liabilities
		Taxes Payable			$	62,937	$	60,535
		VAT Payable		8		1,363,130		1,310,395
		Income Tax Payable				209,044		200,961
		Due to Shareholder				-		-
		Accrued Liabilities and Other Payable				384,694		259,326
		Convertible Debenture - Current Portion		10		1,373,560		1,373,560
			Total Current Liabilities			3,393,365		3,204,777

Non-Current Liabilities
		Convertible Debenture – Non-Current Portion		10		1,558,699		749,175

			Total Liabilities		$	5,137,470	$	3,953,952

Minority interest						185,406		-

See notes to the financial statements


Stockholders' Equity	Note	3/31/2008			12/31/2007

Common Stock US$0.01 par value;
75,000,000 authorized; 53,963,651 and 53,170,000 issued and outstanding as of
March 31, 2008 and December 31, 2007, respectively		$	539,637		$	531,700
Additional Paid-in Capital			590,756			408,216
Other Comprehensive Income			339,982			20,101
Retained Earnings			(1,058,565	)		(641,808	)

Total Stockholders' Equity			411,810			318,209

Total Liabilities & Stockholders' Equity		$	5,549,280		$	4,272,161

See Notes to Consolidated Financial Statements and Accountant’s Report

Guangzhou Global Telecom, Inc

Consolidated Statements of Income

For the three-month period ended March 31, 2008 and 2007

(Stated in US Dollars)

	Note		3/31/2008		3/31/2007

Revenues
Sales	2(j)	$	7,672,427	$	3,762,418
Cost of Sales			6,987,784		3,649,259
Gross profit		$	684,643	$	113,159

Operating Expenses

Selling Expenses			166,466		24,669
Administrative and general expenses			705,723		73,053
Total Operating Expense			872,189		97,722

Operating Income/(Loss)		$	(187,546)	$	15,437

Other Income & Expenses

Interest Income			11,328		10,536
Other Income			1,866		-
Interest Expense			(169,629)		-
Other Expenses			(291)		(922)

Income/(Loss) before taxation			(344,272)		25,051

Income tax benefit/(expense)	2(n)		-		(12,637)
Minority interest			(72,485)		-

Net income		$	(416,757)	$	12,414

Earnings Per Share
Basic		$	(0.0078)	$	0.0002
Diluted		$	(0.0078)	$	0.0002

Weighted Average Shares Outstanding
Basic			53,699,100		52,890,000
Diluted			53,699,100		52,890,000

See Notes to Consolidated Financial Statements and Accountant’s Report

Guangzhou Global Telecom, Inc

Consolidated Statements of Changes in Stockholders’ Equity

For the three-month period ended March 31, 2008 and 2007

(Stated in US Dollars)

	Total Number of Share		Common Stock		Additional Paid-in Capital		Subscription Receivable			Statutory Reserve	Other Comprehensive Income			Retained Earnings			Total

Balance, January 1, 2007		52,890,000		528,900		-		(86,384	)			25,664			268,322			736,502

Issue new share		280,000		2,800		408,216		86,384										497,400

Net income/(loss)				-		-		-				-			(910,130	)		(910,130	)

Foreign currency translation adjustment				-		-		-				(5,563	)		-			(5,563	)

Balance, December 31, 2007		53,170,000		531,700		408,216		-				20,101			(641,808	)		318,209

	Total Number of Share		Common Stock		Additional Paid-in Capital		Subscription Receivable			Statutory Reserve	Other Comprehensive Income			Retained Earnings			Total

Balance, January 1, 2008		53,170,000		531,700		408,216		-				20,101			(641,808	)		318,209

Issue new share				7,937		182,540												190,477

Net loss															(416,757	)		(416,757	)

Foreign currency translation adjustment												319,881						319,881

Balance, March 31, 2008		53,170,000		539,637		590,756		-		-		339,982			(1,058,565	)		411,810

Accumulated Comprehensive Income
For the three-month period ended March 31, 2008 and December 31, 2007 (Stated in US Dollars)
	3/31/2008			12/31/2007			Total
Comprehensive Income
Net (Loss)/Income	$	(416,757	)	$	(910,130	)	$	(1,326,887	)
Other Comprehensive Income
Foreign Currency Translation Adjustment		319,881			(5,563	)		314,318
Total Comprehensive Income	$	(96,876	)	$	(915,693	)	$	(1,012,569	)

See Notes to Consolidated Financial Statements and Accountant’s Report

Guangzhou Global Telecom, Inc

Consolidated Statements of Cash Flows

For the three-month period ended March 31, 2008 and 2007

(Stated in US Dollars)

	3/31/2008			3/31/2007
Cash Flow from Operating Activities

Cash Received from Customers	$	8,090,569		$	3,645,000
Cash Paid to Suppliers		(6,799,196	)		(3,524,489	)
Cash Paid for Selling, Administrative, and General Expenses		(872,189	)		(91,508	)
Cash received from other income		1,579			-
Cash Paid for Other Expenses		-			(922	)
Interest Received		11,328			-
Interest Paid		(169,629	)		-
Minority Interest		185,406			-

Cash Used in/(Sourced from) Operating Activities	$	447,868		$	28,081

Cash Flows from Investing Activities

Advance for business development	$	(228,384	)	$	-
Purchase of Property, Plant, & Equipment		(411,682	)		(10,641	)
Purchase of Intangible Assets		(113,288	)		-
Cash Used in Investing Activities	$	(753,354	)	$	(10,641	)

Cash Flows from Financing Activities

Issuance of common stock	$	190,477		$	100,000
Proceed from notes		(1,277	)		4,632
Repayment to shareholders		(4,503	)		-
Loan from shareholders		-			10,260
Cash received from issuance of Convertible debenture		809,524			-
Cash Sourced from/ (Used in) Financing Activities	$	994,221		$	114,892

Net Increase/ (Decrease) in Cash & Cash Equivalents for the Year		688,735			132,332

Effect of Currency Translation		152,890			488

Cash & Cash Equivalents at Beginning of Year		228,202			42,715

Cash & Cash Equivalents at End of Year	$	1,069,827		$	175,535

See Notes to Consolidated Financial Statements and Accountant’s Report

Guangzhou Global Telecom, Inc.

Reconciliation of Net Income to Cash Flow Used in Operating Activities

For the three-month period ended March 31, 2008 and December 31, 2007

(Stated in US Dollars)

	3/31/2008			12/31/2007

Net (Loss)/Income		(416,757	)		12,414

Adjustments to Reconcile Net (Loss)/Income to
Net Cash (Used in)/Sourced from Operating Activities:

Minority Interest		185,406			-
Depreciation		8,137			6,239
Increase in Other Receivable		19,128			(127,956	)
Increase in Purchase Deposit		79,983			-
(Increase)/ Decrease in related party		(1,310	)		-
(Increase) / Decrease in Inventory		320,341			(6,131	)
Increase in Taxes Payable		2,402			15,950
Increase /(Decrease) in Accrued Liabilities and Other Payable		189,720			4,364
Increase in VAT Payable		52,735			110,588
Increase in Income Tax Payable		8,083			12,613

Total of all adjustments		864,625			15,667

Net Cash (Used in)/ Sourced from Operating Activities		447,868			28,081

See Notes to Consolidated Financial Statements and Accountant’s Report

Guangzhou Global Telecom, Inc

Notes to the Financial Statements

For the three-month period ended March 31, 2008 and 2007

(Stated in US Dollars)

1.	ORGANIZATION AND PRINCIPAL ACTIVITIES

Guangzhou Global Telecom, Inc. (the Company) formerly Avalon Development Enterprise, Inc. was incorporated in the State of Florida, United States (an OTCBB Company) on March 29, 1999.

On March 27, 2007, the Company underwent a reverse-merger with Global Telecom Holding Limited (GTHL, a British Virgin Islands (BVI) Company incorporated on April 1, 2004 under the British Virgin Islands International Business Companies Act (CAP. 291)) and its wholly-owned subsidiary Guangzhou Global Telecommunication Company Limited (GGT, established on December 4, 2004 in PRC with a registered and paid-up capital of $375,307 (RMB 3,030,000)) involving an exchange of shares whereby the Company issued an aggregate of 39,817,500 shares of common stock in exchange for all of the issued and outstanding shares of GTHL. In connection with the reverse merger, the Company issued 200,000 shares of common stock to Zenith Capital Management LLC in April 2007 at a price of $2.50 per share. For financial reporting purposes, these two transactions are classified as a recapitalization of Guangzhou Global Telecom, Inc. and the historical financial statements of GTHL. The accompanying consolidated financial statements were adjusted to reflect the effects of the recapitalization at December 31, 2007, as well as retroactively at December 31, 2006, as if these two transactions occurred at the beginning of the year ended December 31, 2006 in wake of the reverse-merger presentation.

During the year, the Company newly established 4 subsidiaries; namely, Zhengzhou Global Telecom Equipment Limited (“ZGTE”), Macau Global Telecom Company Limited (“MGT”), Huantong Telecom Hongkong Holding Limited (“HTHKH”), and Huantong Telecom Singapore Company PTE Limited (“HTS”) with capital of RMB 500,000, Macau Dollar 300,000, Hong Kong Dollar 100 and Singapore Dollar 200,000, respectively.

The Company, through its subsidiaries, is principally engaged in the distribution and trading of rechargeable phone cards, cellular phones and accessories within cities in PRC. Customers of the Company embrace wholesalers, retailers, and final users.

The Company operates in a leased facility located at Room 29D, Block E, Zhu Jiang Di Jing Hao Jing Qian, Haizhu Qu, City of Guangzhou, PRC.

2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a)	Method of Accounting

The Company maintains its general ledger and journals with the accrual method of accounting for financial reporting purposes. The financial statements and notes are representations of management. Accounting policies adopted by the Company conform to generally accepted accounting principles in the United States of America and have been consistently applied in the presentation of financial statements, which are compiled on the accrual basis of accounting.

Guangzhou Global Telecom, Inc

Notes to the Financial Statements

For the three-month period ended March 31, 2008 and 2007

(Stated in US Dollars)

(b)	Consolidation

The consolidated financial statements include the accounts of Guangzhou Global Telecom, Inc. and eight wholly and partially owned subsidiaries. The consolidated financial statements were compiled in accordance with generally accepted accounting principles of the United States of America. All significant inter-company accounts and transactions have been eliminated in consolidation.

The company owned the following subsidiaries since the reserve-merger and soon thereafter.

As of March 31, 2008, detailed identities of the consolidating subsidiaries are as follows: -

Name of Company	Place of Incorporation	Attributable Equity interest %
Global Telecom Holding Ltd.	BVI	100
Guangzhou Global Telecommunication Company Ltd.	PRC	100
Zhengzhou Global Telecom Equipment Limited	PRC	100
Huantong Telecom Hong Kong Holding Ltd.	Hong Kong SAR	100
Macau Global Telecom Company Ltd.	Macau SAR	100
Huantong Telecom Singapore Company PTE Ltd.	Singapore	100
Guangzhou Huantong Telecom Technology and Consultant Services, Ltd.	PRC	100
Beijing Lihe Jiahua Technology and Trading Company Ltd.	PRC	50

(c)	Economic and Political Risks

The Company’s operations in the PRC are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic, legal environment and foreign currency exchange. The Company’s results may be adversely affected by changes in the political and social conditions in the PRC, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, restriction on international remittances, and rates and methods of taxation, among other things.

(d)	Use of Estimates

Our discussion and analysis is based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. In preparing financial statements in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the financial statements, as well as the reported amounts of revenues and expenses during the reporting years. These accounts and estimates include, but are not limited to, the estimation on useful lives of property, plant and equipment. Actual results could differ from those estimates.

(e)	Cash and Cash Equivalents

The Company considers all cash and other highly liquid investments with initial maturities of three months or less to be cash equivalents.

Guangzhou Global Telecom, Inc

Notes to the Financial Statements

For the three-month period ended March 31, 2008 and 2007

(Stated in US Dollars)

(f)	Accounts Receivable – Trade

Trade receivables are recognized and carried at the original invoice amount less allowance for any uncollectible amounts. An allowance for doubtful accounts is made when recovery of the full amount is doubtful.

(g)	Inventories

Inventories are stated at the lower of cost or market value. Cost is computed using the first-in, first-out method and includes all costs of purchase and other costs incurred in bringing the inventories to their present location and condition. Market value is determined by reference to the sales proceeds of items sold in the ordinary course of business or estimates based on prevailing market conditions. The inventories are telecommunication products such as mobile phone, rechargeable phone cards, smart chip, and interactive voice response cards.

(h)	Property, Plant, and Equipment

Property, plant and equipment are carried at cost net of accumulated depreciation. Depreciation is provided over their estimated useful lives, using the straight-line method with no salvage value. Estimated useful lives of the property, plant and equipment are as

follows: -

Equipment	5 years
Furniture and Fixtures	5 years
Leasehold Improvement	5 years
Motor Vehicles	3 years

(i)	Accounting for Impairment of Long-Lived Assets

The Company adopted Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long-Live Assets” (“SFAS 144”), which addresses financial accounting and reporting for the impairment or disposal of long-lived assets. The Company periodically evaluates the carrying value of long-lived assets to be held and used in accordance with SFAS 144.SFAS 144 requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amounts. In that event, a loss is recognized based on the amount by which the carrying amount exceeds the fair market value of the long-lived assets.

The long-lived assets held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of assets may not be recoverable. It is reasonably possible that these assets could become impaired as a result of technology or other industry changes. Determination of recoverability of assets to be held and used is by comparing the carrying amount of an asset to future net undiscounted cash flows to be generated by the assets.

If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. During the reporting periods, there was no impairment loss.

Guangzhou Global Telecom, Inc

Notes to the Financial Statements

For the three-month period ended March 31, 2008 and 2007

(Stated in US Dollars)

(j)	Revenue Recognition

Revenue from the sale of the products is recognized on the transfer of risks and rewards of ownership, which generally coincides with the time when the goods are delivered to customers and the title has passed.

(k)	Advertising

The Company expensed all advertising costs as incurred.

(l)	Research and Development

All research and development costs are expensed as incurred.

(m)	Foreign Currency Translation

The Company maintains its financial statements in the functional currency. The functional currency of the Company is the Renminbi (RMB). However, the accompanying financial statements are presented in United States dollars. Monetary assets and liabilities are translated at year-end exchange rates whereas revenues and expenses are translated at average exchange rates of the period. Capital accounts and fixed Assets/Long Term Assets are translated at the actual historical exchange rates when the capital transactions occurred. Any translation adjustments resulting are not included in determining net income, but are included in foreign exchange adjustment to other comprehensive income, as a component of stockholders’ equity.

Exchange Rates	3/31/2008	12/31/2007	3/31/2007
Period end RMB : US$ exchange rate	7.0222	7.3141	7.7409
Average period RMB : US$ exchange rate	7.1757	7.6172	7.7713

Period end HKD : US$ exchange rate	7.7827	7.8049	7.8140
Average period HKD : US$ exchange rate	7.7954	7.8026	7.8085

Period end MOP : US$ exchange rate	8.1539	8.1594	8.3270
Average period MOP : US$ exchange rate	8.1648	8.2166	8.3131

Period end SGD : US$ exchange rate	1.3813	1.4467	1.5175
Average period SGD : US$ exchange rate	1.4106	1.5072	1.5323

RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions. No representation is made that the RMB amounts could have been, or could be, converted into US$ at the rates used in translation.

Guangzhou Global Telecom, Inc

Notes to the Financial Statements

For the three-month period ended March 31, 2008 and 2007

(Stated in US Dollars)

2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

(n)	Income Taxes

The Company uses the accrual method of accounting to determine and report its taxable reduction of income taxes for the year in which they are available. The Company has implemented Statement of Financial Accounting Standards (SFAS) No. 109, Accounting for Income Taxes. Income tax liabilities computed according to the United States, Singapore, People’s Republic of China (PRC), Macau SAR, and Hong Kong SAR tax laws are provided for the tax effects of transactions reported in the financial statements and consists of taxes currently due plus deferred taxes related primarily to differences between the basis of fixed assets and intangible assets for financial and tax reporting. The deferred tax assets and liabilities represent the future tax return consequences of those differences, which will be either taxable or deductible when the assets and liabilities are recovered or settled. Deferred taxes also are recognized for operating losses that are available to offset future income taxes. A valuation allowance is created to evaluate deferred tax assets if it is more likely than not that these items will either expire before the Company is able to realize that tax benefit, or that future realization is uncertain.

In respect of the Company’s subsidiaries domiciled and operated in China, Singapore, Macau and Hong Kong, the taxation of these entities are summarized below: -

GGT and ZGTG are located in the PRC, and GTHL is located in the British Virgin Islands, HTHKN is in Hong Kong, MGT is in Macau SAR, and HTS is in Singapore; all of these entities are subject to the relevant tax laws and regulations of the PRC, Hong Kong SAR, Macau SAR, British Virgin Islands, and Singapore in which the related entity domiciled. The maximum tax rates of the subsidiaries pursuant to the countries in which they domicile are: -

Subsidiary	Country of Domicile	Income Tax Rate
GGT and ZGTG	PRC	25.0%
HTHKN	Hong Kong SAR	17.5%
MGT	Macau SAR	12.0%
GTHL	British Virgin Islands	0.00%
HTS	Singapore	18.0%

Effective January 1, 2008, PRC government implements a new 15% tax rate across the board for all enterprises regardless of whether domestic or foreign enterprise without any tax holiday which is defined as "two-year exemption followed by three-year half exemption" hitherto enjoyed by tax payers. As a result of the new tax law of a standard 15% tax rate, tax holidays terminated as of December 31, 2007. However, PRC government has established a set of transition rules to allow enterprises already started tax holidays before January 1, 2008, to continue enjoying the tax holidays until being fully utilized.

Guangzhou Global Telecom, Inc

Notes to the Financial Statements

For the three-month period ended March 31, 2008 and 2007

(Stated in US Dollars)

2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

·	The Company is subject to United States Tax according to Internal Revenue Code Sections 951 and 957. Corporate income tax is imposed on progressive rates in the range of: -

Taxable Income
Rate	Over	But Not Over	Of Amount Over
15%	0	50,000	0
25%	50,000	75,000	50,000
34%	75,000	100,000	75,000
39%	100,000	335,000	100,000
34%	335,000	10,000,000	335,000
35%	10,000,000	15,000,000	10,000,000
38%	15,000,000	18,333,333	15,000,000
35%	18,333,333	-	-

Based on the consolidated net income for the year ended December 31, 2007, the Company shall not be subject to income tax.

(o)	Statutory Reserve

Statutory reserve refers to the amount appropriated from the net income in accordance with PRC laws or regulations, which can be used to recover losses and increase capital, as approved, and, are to be used to expand production or operations. PRC laws prescribe that an enterprise operating at a profit, must appropriate, on an annual basis, from its earnings, an amount to the statutory reserve to be used for future company development. Such an appropriation is made until the reserve reaches a maximum equalling 50% of the enterprise’s capital.

However, since GGT being an operating company in PRC does not itself have any foreign shareholders and that the Memorandum and Articles do not provide for such appropriation, the Company is therefore not required to fund the Statutory Reserve.

(p)	Other Comprehensive Income

Comprehensive income is defined to include all changes in equity except those resulting from investments by owners and distributions to owners. Among other disclosures, all items that are required to be recognized under current accounting standards, as components of comprehensive income are required to be reported in a financial statement that is presented with the same prominence as other financial statements. The Company’s current component of other comprehensive income is the foreign currency translation adjustment.

(q)	Related party transactions

A related party is generally defined as (i) any person that holds 10% or more of the Company's securities including such person's immediate families, (ii) the Company's management, (iii) someone that directly or indirectly controls, is controlled by or is under common control with the Company, or (iv) anyone who can significantly influence the financial and operating decisions of the Company. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties. (See Note 11)

Guangzhou Global Telecom, Inc

Notes to the Financial Statements

For the three-month period ended March 31, 2008 and 2007

(Stated in US Dollars)

(r)	Accounting for Derivative instruments

The Company designates its derivatives based upon the criteria established by SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, which establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities. SFAS 133, as amended by SFAS 138 and SFAS 149, requires that an entity recognize all derivatives as either assets or liabilities in the statement of financial position and measure those instruments at fair value. The accounting for the changes in the fair value of the derivative depends on the intended use of the derivative and the resulting designation. For a derivative designated as a fair value hedge, the gain or loss is recognized in earnings in the period of change together with the offsetting loss or gain on the hedged item due to the risk being hedged. For a derivative designated as a cash flow hedge, the effective portion of the derivative's gain or loss is initially reported as a component of accumulated other comprehensive income (loss) and is subsequently reclassified to earnings when the hedge exposure affects earnings. The ineffective portion of the hedge is reported in earnings immediately. For a derivative that does not qualify as a fair value hedge or cash flow hedge, the change in fair value is recognized in net income in the current period. It is the Company's policy to classify all of its derivative instruments for cash flow purposes as operating activities.

(s)

Goodwill

Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in a business combination. In accordance with Statement of Financial Accounting Standards ("SFAS") No. 142, "Goodwill and Other Intangible Assets", goodwill is no longer subject to amortization. Rather, goodwill is subject to at least an annual assessment for impairment, applying a fair-value based test. Fair value is generally determined using a discounted cash flow analysis.

(t)	Recent accounting pronouncements

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities – Including an Amendment of SFAS 115” (SFAS No. 159), which allows for the option to measure financial instruments and certain other items at fair value. Unrealized gains and losses on items for which the fair value option has been elected are reported in earnings. The objective of SFAS 159 is to provide opportunities to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply hedge accounting provisions. SFAS 159 also establishes presentation and disclosure requirements designed to facilitate comparisons between companies that choose different measurement attributes for similar types of assets and liabilities. This statement is effective for financial statements issued for fiscal years beginning after November 15, 2007.

In December 2007, the FASB issued SFAS 141 (revised 2007), Business Combinations, (‘‘SFAS 141(R)’’). SFAS 141(R) retains the fundamental requirements of the original pronouncement requiring that the purchase method be used for all business combinations, but also provides revised guidance for recognizing and measuring identifiable assets and goodwill acquired and liabilities assumed arising from contingencies, the capitalization of in-process research and development at fair value, and the expensing of acquisition-related costs as incurred. SFAS 141(R) is effective for fiscal years beginning after December 15, 2008.

Guangzhou Global Telecom, Inc

Notes to the Financial Statements

For the three-month period ended March 31, 2008 and 2007

(Stated in US Dollars)

In the event that the Company completes acquisitions subsequent to its adoption of SFAS 141 (R), the application of its provisions will likely have a material impact on the Company’s results of operations, although the Company is not currently able to estimate that impact.

3.	CONCENTRATION

(a) Significant Relationships

A substantial portion of GGT’s business operations depend on mobile telecommunications in PRC; any loss or deterioration of such relationship may result in severe disruption to the business operations impacting the Company's revenue. GGT relies entirely on the networks and gateways of these phone operators to provide its services. The Company's agreements with these operators are generally for a short period of one year and generally do not have automatic renewal provision. If these providers are unwilling to continue with the Company, the Company's ability to conduct its existing business would be adversely affected.

4.	OTHER RECEIVABLE

Other Receivable at March 31, 2008 and December 31, 2007 pertained to the Company voluntarily extended financing to business associates for purchase of merchandise in return for 60% of gross profit in those transactions, in lieu of interest.

Type of Account	3/31/2008		12/31/2007

Trade financing to business associates	$	599,373	$	515,862

5.	NOTE RECEIVABLE

Note receivable at March 31, 2008 and December 31, 2007 pertained to the Company’s financing of two unrelated business associates without collateral on the following terms: -

Borrower	Terms	Interest			3/31/2008		12/31/2007

(a) Wai Zhou Wong Choy Cable Factory	On Demand		12	%	$	-	$	-
(b) Kit Yeung Twilight Telecommunication & Cable Factory	On Demand		12	%		33,028		31,751
					$	33,028	$	31,751

Interest receivable accrued were $17,088 and $16,097 at March 31, 2008 and December 31, 2007, respectively.

Guangzhou Global Telecom, Inc

Notes to the Financial Statements

For the three-month period ended March 31, 2008 and 2007

(Stated in US Dollars)

6.	PURCHASE DEPOSITS

Purchase Deposits of $2,300,392 and $2,380,375 at March 31, 2008 and December 31, 2007, respectively, consisted of advances to suppliers for the purchase of inventories, and prepayments for general operating costs.

7.	PROPERTY, PLANT, AND EQUIPMENT

Property, plant, and equipment consist of the following as of March 31, 2008 and December 31, 2007: -

	3/31/2008			12/31/2007
Category of Asset
Equipment		67,140			30,839
Furniture & Fixtures		11,909			16,734
Leasehold Improvement		20,774			125,991
Motor Vehicles		187,417			91,708
Building		389,714			-
		676,954			265,272

Less: Accumulated Depreciation		(104,730	)		(96,593	)
		572,224			168,679

The depreciation expenses were $ 8,137 and $6,239 for the period ended March 31, 2008 and the year ended December 31, 2007, respectively.

8.	VAT PAYABLE

The Company has been collecting from its customers Value Added Tax (VAT), on behalf of the government. The Company has been granted to pay the balance dues under installments up to March 31, 2008, by the government. The reason of this special arrangement is that the government may waive past due VAT after decision has been made in accordance with regulations for technology zone on tax-exemption matter.

Guangzhou Global Telecom, Inc

Notes to the Financial Statements

For the three-month period ended March 31, 2008 and 2007

(Stated in US Dollars)

9.	LEASE COMMITMENTS

The Company leases office space and retail stores under operating leases with non-cancelable terms of less than a year at fixed monthly rent. None of the leases included contingent rentals. Lease expense charged to operations for the period ended March 31, 2008 and the year ended December 31, 2007 amounted to $ 42,751 and $143,772, respectively. Future minimum lease payments under non-cancelable operating leases until termination of the leases amounted to $233,291 distributed as: -

Fiscal Year	Minimum Lease Payments

2008	$	128,254
2009		100,609
2010		4,428
Total	$	233,291

10.	CONVERTIBLE BONDS AND BOND WARRANTS

On July 31, 2007, the Company completed a financing transaction with several investors (the “Subscriber”) issuing (i) $2,000,000 Fixed Rate Convertible Debenture due in 2009 (the “Debenture”) and (ii) a stock purchase warrant to purchase an aggregate of 2,090,592 shares of our common stock, subject to adjustments for stock splits or reorganizations as set forth in the warrant, that will expire in 2012 (the “Warrants”).

The Debenture were subscribed at a price equal to 87.25% of their principal amount, which is the issue price of $2,285,714 less a 12.5% discount. The Debenture were issued pursuant to, and are subject to the terms and conditions of, a trust deed dated July 31, 2007 (the “Trust Deed”).

·	Interest Rate. The Debenture bears interest at the rate of 8% per annum of the principal amount of the Debenture.

·	Conversion. Each Debenture is convertible at the option of the holder at any time after July 31, 2007 up to July 31, 2009, into shares of our common stock at a fixed conversion price of $0.82 per share.

Guangzhou Global Telecom, Inc

Notes to the Financial Statements

For the three-month period ended March 31, 2008 and 2007

(Stated in US Dollars)

10.	CONVERTIBLE BONDS AND BOND WARRANTS (Continued)

On July 31, 2007, the Company also entered into a registration rights agreement with the Subscriber pursuant to which the Company agreed to include the Debenture, the Warrants, and the shares of common stock underlying the Debenture and Warrants in a pre-effective amendment to a registration statement that the Company have on file with the SEC. The Company intends to have the registration statement cover the resale of the Debenture, the Warrants, and the shares of common stock underlying the Debenture and Warrants.

At July 31, 2007, the date of issuance, the Company determined the fair value of the Debenture to be $2,000,000. The values of the warrants and the beneficial conversion feature as at December 31, 2007 determined under the Black-Scholes valuation method were immaterial. Accordingly, the interest discount on the warrants and beneficial conversion feature were recorded, and are being amortized by the straight-line method over 5 years and 2 years respectively.

Because of the fact that the Fixed Rate Convertible Debenture contain three separate securities and yet merged into one package, the Debenture security must identify its constituents and establish the individual value as determined by the Issuer as follows: -

(1	)	Convertible Debenture	$	2,285,714
(2	)	Discount	$	285,714
(3	)	Warrant	$	-
(4	)	Beneficial Conversion Feature	$	-

The above item (2) is to be amortized to interest expense over the term of the Debenture by the effective interest method as disclosed in the table below.

Guangzhou Global Telecom, Inc

Notes to the Financial Statements

For the three-month period ended March 31, 2008 and 2007

(Stated in US Dollars)

10.	CONVERTIBLE BONDS AND BOND WARRANTS (Continued)

The Convertible Debentures Payable, net consisted of the following: -

	3/31/2008		12/31/2007

Convertible Debenture - Principal and interest
Balance as at beginning of year	$	2,122,735	$	-
Addition		809,524		2,000,000
Redemption		-		-
Interest Charged for the current year		-		168,448
Repayment of interest in current year		-		(45,713	)
Balance as at end of year		2,932,259		2,122,735

Less: Interest discount – Beneficial conversion feature

Balance as at beginning of year	$	-	$	-
Addition		-		-
Amortization		-		-
Balance as at end of year	$	-	$	-

Less: Interest Discount – Warrant

Balance as at beginning of year	$	-	$	-
Addition		-		-
Amortization		-		-
Balance as at end of year	$	-	$	-

Convertible Debenture, net	$	2,932,259	$	2,122,735

The Convertible Debenture was classified as current and non-current as follows: -

	3/31/2008		12/31/2007

Non-current portion	$	1,558,699	$	749,175
Current Portion		1,373,560		1,373,560
	$	2,932,259	$	2,122,735

Guangzhou Global Telecom, Inc

Notes to the Financial Statements

For the three-month period ended March 31, 2008 and 2007

(Stated in US Dollars)

11.	COMMON STOCK CAPITAL

The Company is authorized by its Memorandum of Association (i.e. equivalent to Articles of Incorporation) to issue a total of 75,000,000 shares at a par value of US$0.01 of which 53,170,000 and 52,890,000 shares at a par value of US$0.01 per share have been issued and outstanding as of December 31, 2007 and 2006, respectively.

The retroactive presentation of recapitalization upon reverse-merger on March 7, 2007 being depicted in the following table:

Date	Name of Shareholders	Number of Shares		Common Stock Capital		Additional Paid-in Capital			% of Equity Holdings
3/7/2007	Shell: Avalon Development of Enterprises Inc. prior to reverse-merger		13,072,500	$	130,725	$	-			24.22	%
3/7/2007	Shareholders of Shell in exchange of all of GTHL shares upon reverse-merger		39,817,500		398,175		-			73.79	%
4/2/2007	Zenith Capital Management LLC		200,000		2,000		498,000			0.37	%
7/1/2007	Miss Li, Yan Kuan		80,000		800		61,600			0.15	%
	Less: Cost of Issue						(151,384	)
2/1/2008	Issue New Shares		793,651		7,937		182,540			1.47	%
			53,170,000	$	539,637	$	590,756			100.00	%

12. RELATED PARTY TRANSACTIONS

The following material transactions with related parties during the periods were in the opinion of the directors, carried out in the ordinary course of business and on normal commercial terms: -

(a) The due from related party at March 31, 2008 and December 31, 2007 were $33,870 and $32,560, respectively.

(b) The due from shareholder at March 31, 2008 and December 31, 2007 were $122,550 and $118,047, respectively.

(c) On July 1, 2007, the Group acquired the entire equity shares of MGT from a shareholder of the Company at a consideration of $150,000 cash plus new issuance of 80,000 common shares of the Company.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FORWARD LOOKING STATEMENTS

This quarterly report contains forward-looking statements that involve risks and uncertainties. We use words such as anticipate, believe, plan, expect, future, intend and similar expressions to identify such forward-looking statements. You should not place too much reliance on these forward-looking statements. Our actual results are likely to differ materially from those anticipated in these forward-looking statements for many reasons, including the risks faced by us described in this Risk Factors section and elsewhere in this annual report.

Plan of Operation

During the next twelve months, we expect to take the following steps in connection with the development of our business and the implementation of our plan of operations:

In addition to existing hardware distribution and retail sales, in the coming months, we will focus on expanding our services, building a retail presence and developing e-commerce business units in order to build and maintain a high-quality brand and service reputation. We currently serve as a nationally integrated mobile phone handset and pre-paid calling card distributor and provider of mobile handset value-added services. Future products and services include Mobile Messaging Service (“MMS”) and customer service operations.

We plan to focus our operations in the coming months on development activities, as they are a fundamental building block to our future financial success. More specifically, we will devote significant resources to identifying and developing new software and value-added services through an expanded network of regional and neighborhood service centers, shops and via a virtual store. We also plan to continue our distribution operations and to introduce current products and new and innovative software and services through an expanded network of regional and neighborhood retail service centers and shops. This new sales channel will allow us to sell direct to the consumer and to cross-sell additional value-added services and add-on products.

We anticipate building strong customer relationships in the local communities that are served in order to take advantage of future sales from existing loyal customers and through word of mouth advertisement.

We also plan to use our relationships within the distribution network to develop and offer value-added services and connected mobile handset services. After entry into a region, we will consult strategies used by existing and successful operations such as Virgin’s entry into England and America. GTL will penetrate the market in key cities and regions such as Beijing, Zhengzhou and Wuhan first. GTL aims to become the handset service distributor of China Mobile or China Unicom, by segmenting the market (for example, developing special communicated brands for young women) and through a demographically segmented, distributed cost model. Using resources from partners higher in the value chain and close agreements with other services, we will realize maximal profit via bundling communication, handset and value-added services within the networks. As of March 31, 2008, we have successfully expanded our operations in Zhengzhou, Wuhan, Beijing, Hong Kong and Macau. We will enhance the operation their and expand into other cities as more as possible.

Results of Operation

Three months ended March 31, 2008 compared with three months ended March 31, 2007

During the three months ended March 31, 2008, we earned $7,672,427 in revenues as compared to $3,762,418 during the same period ended in 2007, an increase of $3,910,009 or 104%. The significant increase in revenue is primarily contributed by the foundation laid in 2007 which saw new braches being set up, thereby increasing market share presence and in addition, fuelling the company’s expansion in other parts of China.

The cost of sales recorded $6,987,784 during the three months ended March 31, 2008, representing a 91% increase as compared to the same period of 2007. The increase is generally in line with the increase in sales.

The gross profit increased from $113,159 during the three months ended March 31, 2007 to $684,643 in the same period of 2008. The increase of gross profit is mainly generated from the increase in revenue. Meanwhile, the gross margin saw a markedly improvement from 3% during the quarter ended March 31, 2007 to 9% during the quarter ended March 31, 2008. Following changes in the sales model of a major supplier from the first quarter of 2007, the management responded by adopting several initiatives in expanding our sales segments and areas to eliminate this effect. The higher margin during this quarter ended March 31, 2008 was also due to certain rebates recorded in this quarter.

Selling expenses were $166,466 during the three months ended March 31, 2008 as compared to $24,669 for the same period of 2007, representing an increase of $141,797. The increase is mainly due to the company’s expansion into new sales geographical regions.

General and administrative expenses were $705,723 during the three month period ended March 31, 2008 as compared to $73,053 for the same period ended in 2007, an increase of $632,670. The increase resulted mainly from expanding network operations which included a one-time incentive bonus payment in this quarter; increased travelling and administrative expenses recorded in this quarter which are owing to a wider and additional set-ups of sales representative-offices.

Operating loss recorded $187,546 during the three months ended March 31, 2008, as compared to a gain of $15,437 during the same period of 2007. The loss was mainly due to the one-off incentive payment.

Interest expenses of $169,629 during the three months ended March 31, 2008, which mainly included the interest payment of convertible debt and fund-raising costs related to the second installment of convertible debt financing.

Net loss recorded $416,757 during the three months ended March 31, 2008, as compared to net profit of $12,414 during the same period of 2007. The loss was mainly due to a non-recurring payment which resulted in increased G&A expenses and convertible debt interest expenses recorded during this quarter.

Liquidity and Capital Resources

Cash provided by operating activities were $447,868 during the three months ended March 31, 2008 as compared to cash provided by operating activities of $28,081 for the same period ended in 2007. Cash provided by operating activities during the three months ended March 31, 2008 mainly consisted of cash receipts from customers of $8,090,569, other income of $1,579, interest received of $11,328 and by netting off the cash paid to suppliers of $6,799,196, cash paid for interest of $169,629 and selling and G&A expenses of $872,189. Cash provided in operating activities for the three months ended March 31, 2007 mainly resulted from cash received from customers of $3,645,000 and after netting off the cash paid to suppliers of $3,524,489, selling and general administrative expenses of $91,508 and others of $922.

Cash flows used in investing activities were $753,354 during the three month period ended March 31, 2008 as compared to $10,641 used during the same period of 2007. Cash provided by investing activities during the three months ended March 31, 2008 mainly consisted of advances for business development of $228,384, purchase of property and equipment of $411,682 and purchase of intangible assets of $113,288.

Cash flows provided by financing activities were $994,221 during the three month period ended March 31, 2008 as compared to $114,892 during the same period of 2007. During the three months ended March 31, 2008, the cash flows provided by financing activities consisted of $190,477 the subscription net proceeds of our common stock and advances from shareholders and $809,524 from the convertible debt and by netting off cash paid for notes receivable of 1,277 and repayment to related party of $4,503.

Critical Accounting Pronouncements

Guangzhou Global Telecom Inc.’s financial statements and related public financial information are based on the application of accounting principles generally accepted in the United States (“GAAP”). GAAP requires the use of estimates; assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenue and expense amounts reported. These estimates can also affect supplemental information contained in our external disclosures including information regarding contingencies, risk and financial condition. We believe our use if estimates and underlying accounting assumptions adhere to GAAP and are consistently and conservatively applied. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions. We continue to monitor significant estimates made during the preparation of our financial statements.

Our significant accounting policies are summarized in Note 2 of our financial statements. While all these significant accounting policies impact its financial condition and results of operations, Equity Ventures views certain of these policies as critical. Policies determined to be critical are those policies that have the most significant impact on Equity Ventures’ consolidated financial statements and require management to use a greater degree of judgment and estimates. Actual results may differ from those estimates. Our management believes that given current facts and circumstances, it is unlikely that applying any other reasonable judgments or estimate methodologies would cause effect on our consolidated results of operations, financial position or liquidity for the periods presented in this report.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no significant changes in the Company’s internal controls or in other factors that could significantly affect internal controls subsequent to the date the Chief Executive Officer and the Chief Financial Officer carried out this evaluation. – please update this.

Item 4T. Control and Procedures

Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 (“Exchange Act”), the Company carried out an evaluation, with the participation of the Company’s management, including the Company’s Chief Executive Officer (“CEO”) and Chief Accounting Officer (“CAO”) (the Company’s principal financial and accounting officer), of the effectiveness of the Company’s disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, the Company’s CEO and CAO concluded that the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including the Company’s CEO and CAO, as appropriate, to allow timely decisions regarding required disclosure.

Management’s Report on Internal Controls over Financial Reporting

Internal control over financial reporting is a process to provide reasonable assurance regarding the reliability of consolidated financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. There has been no change in the Company’s internal control over financial reporting during the quarter ended March 31, 2008 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

The Company’s management, including the Company’s CEO and CAO, does not expect that the Company’s disclosure controls and procedures or the Company’s internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of the controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.

Management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management concluded that the company’s internal control over financial reporting was effective as of March 31, 2008.

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

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

Currently we are not aware of any litigation pending or threatened by or against the Company.

Item 1A. Risk Factors.

None

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

None.

Item 3. Defaults Upon Senior Securities.

None

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

None.

Item 5. Other Information.

None

Item 6. Exhibits and Reports of Form 8-K.

(a) Exhibits

31.1 Certification of Chief Executive Officer pursuant to Section 302 of Sarbanes Oxley Act of 2002

31.2 Certification of Chief Financial Officer pursuant to Section 302 of Sarbanes Oxley Act of 2002

32.1 Certification Chief Executive Officer pursuant to Section 906 of Sarbanes Oxley Act of 2002

32.2 Certification Chief Financial Officer pursuant to Section 906 of Sarbanes Oxley Act of 2002

(b) Reports of Form 8-K

On January 8, 2008, we filed a Form 8-K with the SEC for the change in auditor.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Guangzhou Global Telecom, Inc.

Date: May 20, 2008	By:	//s/ Li Yankuan
		Li Yankuan
		President, Chief Executive Officer and Director