UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)
[X]	QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 2009
For the quarterly period ended March 31, 2010
[ ]	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from _________________ to _________________
Commission file number 000-53366


CHINA VOICE HOLDING CORP. (Exact name of small business issuer as specified in its charter)

Nevada (State or other jurisdiction of incorporation or organization)	16-1680725 (IRS Employer Identification No.)

327 Plaza Real, Suite 319, Boca Raton, Florida 33432 (Address of principal executive offices)

(561) 394-2482 (Issuer’s telephone number)

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 such filing requirements for the past 90 days: Yes [X] No [ ].

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company (as defined in Rule 12b-2 of the Exchange Act:

Large accelerated filer [ ] Accelerated filer [ ]

Non-accelerated filer [ ] 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 [ ] No [X ]

APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer’s classes of common equity, as of ~~December~~March 31, ~~2009~~2010: 185,440,688 shares of common stock.

TABLE OF CONTENTS

Page

PART I – FINANCIAL INFORMATION

3F-1

Item 1.

Financial Statements

3F-1

Condensed Balance Sheet

3F-2

Condensed Statements of Operations (Unaudited)

4F-3

Condensed Statements of Cash Flows (Unaudited)

5F-4

Notes to Condensed Financial Statements (Unaudited)

6F-5

Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

312

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

345

Item 4T.

Controls and Procedures

345

PART II – OTHER INFORMATION

356

Item 1.

Legal Proceedings

356

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

356

Item 3.

Defaults Upon Senior Securities

368

Item 4.

Submission of Matters to a Vote of Security Holders

368

Item 5.

Other Information

368

Item 6.

Exhibits

378

SIGNATURES

388

EXPLANATORY NOTE

Rule 10-01(d) of Regulation S-X requires that interim financial statements included in quarterly reports on Form 10-Q be reviewed by an independent public accountant using professional standards and procedures for conducting such reviews, as established by generally accepted auditing standards, as may be modified or supplemented by the securities and Exchange Commission (SEC). The Company has been unable to obtain a review of its financial statements included in the report before the filing date because material information from an unconsolidated investment reported under the equity method of accounting is not available. Consequently, the accompanying consolidated financial statements as of ~~December~~March 31, ~~2009~~2010 and for the quarter ended ~~December~~March 31, ~~2009~~2010 have not been reviewed by an independent public accountant in accordance with Statement of Auditing Standards No. 100, Interim Financial Information (“SAS 100”).

Furthermore, Section 302 of the Sarbanes-Oxley Act of 2002 (“Section 302”) requires our Chief Executive Officer and our Chief Financial Officer to certify concerning the Company’s disclosure controls and procedures, internal controls over financial reporting in accordance with rules of the SEC, and disclosures concerning their evaluation of those controls to the Company’s auditors and Audit Committee. Additionally, Section 906 of the Sarbanes-Oxley Act (“Section 906”) requires our Chief Executive Officer and Chief Financial Officer to certify that this Quarterly Report on information contained in the report fairly presents, in all material respects, our financial condition and results of operations. Those certifications are omitted from this filing only because the financial statements accompanying this report have not been reviewed by an independent public accountant under SAS 100. The Company believes that this report otherwise meets all of the qualifications of the Exchange Act and the rules and regulations thereunder governing the preparation and filing of periodic reports as referenced in the certifications. Before our officers can make such certifications, our independent public accounting firm must complete its review of the consolidated financial statements appearing elsewhere in this report under SAS 100, as required by SEC rules. Once our auditor completes its review under SAS 100, we will file an amendment to this report pursuant to which our Chief Executive Officer and Chief Financial Officer will make the certifications required under Section 302 and Section 906.

			PART I - FINANCIAL INFORMATION
			ITEM 1. FINANCIAL STATEMENTS
			CHINA VOICE HOLDING CORP.
			Condensed Consolidated Balance Sheets
			December 31, 2009 and 2008
				December 31, 2009	June 30, 2009
				(Unaudited and Unreviewed)	(Audited)
ASSETS
Current assets:
	Cash and cash equivalents			$ 284,813	$185,420
	Accounts receivable, net			1,013,677	577,768
	Inventories			115	115
	Prepaid expenses and other current assets			51,072	53,247
	Related party receivables			92,300	92,300
	Total Current Assets			1,441,977	908,850
Long-term assets:
	Note receivable			3,850,000	3,850,000
	Investment in an affiliate			5,948,442	7,821,566
	Property and Equipment, net			355,686	381,645
	Other assets			15,000	15,000
	Goodwill			6,009,404	6,009,404
	Other intangible assets, net			36,496	41,896
	TOTAL ASSETS			$ 17,657,005	$ 19,028,361
LIABILITIES AND EQUITY
Current liabilities:
	Accounts payable and accrued expenses			$ 603,834	$ 400,464
	Related party payables			132,119	80,038
	Current portion of long term debt, net of debt discount			227,333	305,947
	Current portion of capital lease obligation			48,367	38,184
	Current portion of related party notes			1,233,772	-
	Total Current Liabilities			2,245,426	824,633
Long-term liabilities
		Long-term debt, net of current portion		-	16,667
		Related party payables		322,784	322,784
		Capital lease obligation, net of current portion		29,591	39,774
		Non-current portion of related party notes		-	341,000
		Deferred gains on disposal of six subsidiaries		3,850,000	3,850,000
		Long-term contingent liabilities		-	-
		Total liabilities		6,447,801	5,394,858
Equity
		Common Stock: par value $0.001; 400,000,000
		shares authorized; 185,440,688 and 185,273,438 shares issued
		at December 31, 2009 and June 30, 2009,respectively		185,440	185,273
		Series A Preferred Stock-par value $0.001
		20,000 shares authorized: 5,248 and 5,248 shares issued		5	5
		at Decemberr 31, 2009 and June 30, 2009, respectively
		(liquidation value of $5,248,000 and $5,248,000 on
		December 31, 2009 and June 30, 2009, respectively)
		Subscriptions receivable		(3,150,000)	(3,150,000)
		Additional paid-in capital		46,441,603	46,401,473
		Accumulated deficit		(32,143,037)	(29,576,504)
		Cumulative currency translation adjustment		(177,442)	(205,575)
		Total stockholders' equity		11,156,569	13,654,672
		Noncontrolling interests		52,635	(21,168)
		Total stockholders' equity		11,209,204	13,633,504
		Total liabilities and equity		$ 17,657,005	$ 19,028,361
The accompanying notes are an integral part of the condensed consolidated financial statements.


CHINA VOICE HOLDING CORP.

Condensed Consolidated Balance Sheets
March 31, 2010 and 2009

		March 31, 2010	June 30, 2009
		(Unaudited and Unreviewed)	(Audited)
ASSETS
Current assets:
	Cash and cash equivalents	$177,730	$185,420
	Accounts receivable, net	999,168	577,768
	Inventories	41,403	115
	Prepaid expenses and other current assets	49,302	53,247
	Related party receivables	92,300	92,300

	Total Current Assets	1,359,903	908,850

Long-term assets:
	Note receivable	3,850,000	3,850,000
	Investment in an affiliate	5,655,442	7,821,566
	Property and Equipment, net	467,939	381,645
	Other assets	15,000	15,000
	Goodwill	6,009,404	6,009,404
	Other intangible assets, net	33,796	41,896

	TOTAL ASSETS	$17,391,484	$19,028,361

LIABILITIES AND EQUITY

Current liabilities:
	Accounts payable and accrued expenses	$547,887	$400,464
	Related party payables	199,746	80,038
	Current portion of long term debt, net of debt discount	327,333	305,947
	Current portion of capital lease obligation	48,367	38,184
	Current portion of related party notes	1,822,100	-

	Total Current Liabilities	2,945,434	824,633

Long-term liabilities
	Long-term debt, net of current portion	-	16,667
	Related party payables	322,784	322,784
	Capital lease obligation, net of current portion	29,591	39,774
	Non-current portion of related party notes	-	341,000
	Deferred gains on disposal of six subsidiaries	3,850,000	3,850,000

	Total liabilities	7,147,809	5,394,858

Equity
	Common Stock: par value $0.001; 400,000,000
	shares authorized; 185,440,688 and 185,273,438 shares issued
	at December 31, 2009 and June 30, 2009,respectively	185,440	185,273
	Series A Preferred Stock-par value $0.001
	20,000 shares authorized: 5,248 and 5,248 shares issued	5	5
	at Decemberr 31, 2009 and June 30, 2009, respectively
	(liquidation value of $5,248,000 and $5,248,000 on
	December 31, 2009 and June 30, 2009, respectively)
	Subscriptions receivable	(3,150,000)	(3,150,000)
	Additional paid-in capital	46,441,603	46,401,473
	Accumulated deficit	(32,779,556)	(29,576,504)
	Cumulative currency translation adjustment	(385,027)	(205,575)
	Total stockholders' equity	10,312,465	13,654,672

	Noncontrolling interests	(68,790)	(21,168)
	Total stockholders' equity	10,243,675	13,633,504
	Total liabilities and equity	$17,391,484	$19,028,361

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

F-1

CHINA VOICE HOLDING CORP.
Condensed Consolidated Statements of Operations
For the Six months Ended December 31, 2009 and 2008
For the Nine months Ended March 31, 2010 and 2009
(Unaudited and Unreviewed)
		Six Months Ended	Six Months Ended	Three Months Ended	Three Months Ended
		Three Months Ended	Three Months Ended	Nine Months Ended	Nine Months Ended
		December 31,	December 31,	December 31,	December 31,
		March 31,	March 31,	March 31,	March 31,
		2009	2008	2009	2008
		2010	2009	2010	2009
Sales		$ ~~472~~1,~~047~~188,880	$ ~~420~~302,~~436~~666	$ ~~458~~1,~~624~~660,927	$ ~~324~~867,~~451~~757
Cost of revenues		~~389~~897,~~348~~161	~~286~~134,~~904~~739	~~371~~1,~~030~~286,509	~~105~~566,~~723~~299
Gross profit		82291,~~699~~719	~~133~~167,~~532~~927	87374,~~594~~418	~~218~~301,~~728~~458
Operating expenses:
	Professional fees	~~262~~77,~~808~~492	-305,753	~~154~~340,~~585~~300	-1,406,920
	Non-cash impairment charges	-	-	-
	Other selling, general and administration expenses	235,283	421,706	453,241	1,594,102
	Other selling, general and administration expenses	217,958	2,132,706	26,891	1,092,441
	Depreciation	38,730	19,226	87,174	83,805
	Depreciation	48,444	34,398	24,238	21,451
	Total operating expenses	351,505	746,685	880,716	3,084,827
	Total operating expenses	529,211	2,167,104	205,714	1,113,892
Loss from operations		(59,787)	(578,758)	(506,298)	(2,783,369)
Loss from operations		(446,512)	(2,033,572)	(118,120)	(895,164)
Other income (expenses)
Other income (expenses)
	Tax credit	-	242,730	-	242,730
	Gain from sale of subsidiary
	Interest income	110	1,003	141	8,463
	Tax credit	-	-	-	(2,035)
	Interest expense	(159,657)	(76,046)	(344,687)	(147,831)
	Interest income	31	7,316	5	176
	Loss from disposal of fixed assets	-	(274)	-	(274)
	Interest expense	(185,031)	(71,757)	(123,894)	(46,677)
	Other nonoperating income (expense)	6,144	(10,934)	128,164	(41,949)
	Minority interest			-
	Total other income (expense)	(153,403)	156,479	(216,383)	61,139
	Impairment of investment	-	-	-
		-
	Gain on discontinuing segments	-		-
	Loss on investment in Flint			-
	Loss from disposal of fixed assets	-		-
	Other financing charges			-
	Other nonoperating income (expense)	122,020	(22,874)	1,580	(38,231)
	Total other income (expense)	(62,981)	(87,315)	(122,309)	(86,767)
Loss before Income taxes, loss on equity investment
	and noncontrolling interest	(~~509~~213,~~492~~189)	(2422,~~120,887~~279)	(~~240~~722,~~429~~681)	(~~981~~2,~~931~~722,230)
	Income tax expenses	-	-	-	-
Loss before loss on equity investment and noncontrolling interest		(~~509~~213,~~492~~189)	(2422,~~120,887~~279)	(~~240~~722,~~429~~681)	(~~981~~2,~~931~~722,230)
	Loss on equity investment	(1,679,361)	-	(840,000)	-
		-
Net loss from continuing operations		(2,188,853)	(2,120,887)	(1,080,429)	(981,931)
	Loss on equity investment	(293,000)	(340,114)	(1,972,361)	(340,114)
Discontinued operations
		-
	Income on discontinued operations, net of tax	-	433,178	-	162,826
Net loss from continuing operations		(506,189)	(762,393)	(2,695,041)	(3,062,344)
	Gain from disposal of subsidiaries	-	-
		-
Net income from discontinuing operations		-	433,178	-	162,826
Discontinued operations		-
Net loss		(2,188,853)	(1,687,709)	(1,080,429)	(819,105)
	Income on discontinued operations, net of tax	-	(191,188)	-	421,054
Less: Net loss attributable
	Gain from disposal of subsidiaries	-	3,516,912	-	3,516,912
	to noncontrolling interest	58,655	114,513	69,932	17,796
Net income from discontinuing operations		-	3,325,724	-	3,937,966
Net loss before preferred dividend		(2,247,508)	(1,802,222)	(1,150,361)	(836,901)
		-
Preferred dividend		(319,025)	(335,390)	(166,712)	(186,090)
Net loss		(506,189)	2,563,331	(2,695,041)	875,622
Net loss attributable to common stockholders		(2,566,534)	(2,137,612)	(1,317,073)	(1,022,991)
		-
Other comprehensive loss
Less: Net loss attributable		-
	Total foreign currency translation gain (loss)	43,283	-	40,008	-
	to noncontrolling interest	(9,648)	84,841	49,006	199,354
	Less: foreign currency translation gain (loss) attributable to noncontrolling interests	15,149	-	14,003	-
		-
	Foreign currency translation gain (loss) attributable to CHVC common stockholders	28,134	-	26,005	-
Net loss before preferred dividend		(496,541)	2,478,490	(2,744,047)	676,268
Comprehensive loss attributable to common stockholders		$ (2,538,400)	$ (2,137,612)	$ (1,291,068)	(1,022,991)
		-
Preferred dividend		(139,980)	(217,610)	(459,005)	(553,000)
		-
Net loss attributable to common stockholders		(636,520)	2,260,880	(3,203,052)	123,268
		-
Other comprehensive loss		-
	Total foreign currency translation gain (loss)	(319,362)	-	(276,079)	-
	Less: foreign currency translation gain (loss) attributable to noncontrolling interests	(111,777)	-	(96,628)	-
	Foreign currency translation gain (loss) attributable to CHVC common stockholders	(207,585)	-	(179,452)	-
		-
Comprehensive loss attributable to common stockholders		$(844,106)	$2,260,880	$(3,382,504)	$123,268
Net loss attributable to common stockholders per common share - basic and diluted
Net loss from continuing operations per shares - basic and diluted		(0.~~014~~003)	(0.~~016~~006)	(0.~~007~~017)	(0.~~006~~022)
Net income from discontinued operations per shares - basic and diluted		0.000	0.~~003~~018	0.000	0.~~000~~023
Net loss attributable to
Net	loss attributable to common stockholders per common share - basic and diluted	(0.003)	0.012	(0.017)	0.001
	common stockholders per common share - basic and diluted	(0.014)	(0.013)	(0.007)	(0.006)
Common shares used in calculation per share data- basic and diluted		185,440,688	180,927,159	185,407,731	171,586,089
Common shares used in calculation per share data- basic and diluted		185,389,846	163,108,451	185,419,740	165,250,182
The accompanying notes are an integral part of the condensed consolidated financial statements.

F-2 4

CHINA VOICE HOLDING CORP.
Condensed Consolidated Statements of Cash Flows
For the Six months ended December 31, 2009 and 2008
For the Nine months ended March 31, 2010 and 2009
(Unaudited and Unreviewed)
			2009		2008
				2010		2,009
Operating activities
	Net loss		~~$ (2,247,508)~~	$(2,744,047)	~~$ (1,802,222)~~	$875,622
	Loss from discontinued operations		-	-	~~(433,178)~~	3,516,912
	Loss from continuing operations		~~(2,247,508)~~	(2,744,047)	~~(1,369,044)~~	(2,641,290)
	Adjustments to reconcile net loss to net cash used in operations activities
	operating activities:
		Depreciation and amortization	~~53,844~~	95,274	~~304,006~~	477,982
		Common shares issued for services	~~6,433~~	15,433	-	(29,490)
		Loss on equity investment	~~1,679,361~~	1,972,361	-	340,114
		Loss from disposal of property and equipment	-	-	~~164,224~~	164,498
		Net income attributable to noncontrolling interest	~~58,655~~	49,006	~~114,513~~	-
	Change in operating assets and liabilities
		Accounts receivable	~~(435,909)~~	(421,400)	~~(684,527)~~	(853,715)
		Inventories	-	(41,288)	~~(51,925)~~	(85,196)
		Prepaid expenses and other current assets	~~2,175~~	3,945	~~(170,373)~~	(21,883)
		Other assets	-	-	~~(394,462)~~	(13,018)
		Related party receivables	-		-
		Accounts payable and accrued expenses		147,423		183,198
		Accounts payable and accrued expenses	203,369		623,843
		Due From related parties				82,776
		Other current liabilities	-	-	~~(27,328)~~	53,032
	Total Adjustments		~~1,567,927~~	1,820,754	~~(122,029)~~	381,074
Net cash used in operating activities of continuing operations			(679,581)		(1,491,073)
Net Cash Used In Operating Activities				(923,294)		(2,260,216)
Net cash used in operating activities of discontinuing operations			-		(433,178)
Investing activities
Net cash used in operating activities			(679,581)		(1,924,251)
	Purchase of property and equipment			(10,540)		(132,521)
Investing activities
	Repayment of redeemable preferred stock from affiliate			193,763		-
	Purchase of property and equipment		(10,540)		(287,678)
	Cash received from disposal of subsidiaries			-		700,000
	Purchase of assets in business combination		-		(279,838)
Net cash provided by (used in) investing activities of continuing operations				183,223		567,479
	Repayment of redeemable preferred stock from affiliate		193,763		-
Net cash used in investing activities of discontinuing operations				-		-
	Cash received from disposal of subsidiaries		-		-
Net cash provided by (used in) investing activities				183,223		567,479
Net cash provided by (used in) investing activities of continuing operations			183,223		(567,516)
Financing activities
Net cash used in investing activities of discontinuing operations			-		-
Net increase (decrease) in:
Net cash provided by (used in) investing activities			183,223		(567,516)
		Repayments of long term debt		4,719		-
Financing activities
		Proceeds from short term loan		-		450,000
Net increase (decrease) in:
		Pepayments of short term loan		-		(608,461)
		Repayments of long term debt	(95,281)		(393,461)
		Redemption of preferred stock to related parties		-		(1,060,021)
		Redemption of preferred stock to related parties	-		(661,000)
		Proceeds from issuance of common stock, net of issuance costs		33,864		2,156,936
		Proceeds from issuance of common stock, net of issuance costs	33,864		1,916,208
		Decreased from notes receivable		-		(800,000)
		Proceeds from related party notes	~~892,772~~	1,481,100	~~15,084~~	12,363
		Payment of preferred dividends	~~(319,025)~~	(459,005)	~~(335,390)~~	(553,000)
Net cash provided by financing activities of continuing operations			~~512,330~~	1,060,678	~~541,441~~	(402,183)
Effect of exchange rate on changes in cash			~~83,421~~	(328,297)	~~41,359~~	52,822
Net increase (decrease) in cash and cash equivalents			~~$ 99,393~~	$ (7,690)	~~$ (1,908,967)~~	$(2,042,098)
Cash and cash equivalents - beginning of period			~~185,420~~	185,420	~~2,096,070~~	2,096,070
Cash and cash equivalents - end of period			~~$ 284,813~~	$177,730	~~$ 187,103~~	$ 53,972
Supplemental cash flow information
		Interest paid	~~$ 76,893~~	$ 344,687	~~$ 71,785~~	$ 147,831
		Income taxes paid	~~$ -~~	$ -	~~$ -~~	$ -
The accompanying notes are an integral part of the condensed consolidated financial statements.

5 F-3

CHINA VOICE HOLDING CORP.

Notes to Condensed Consolidated Financial Statements

~~Six~~Nine Months Ended ~~December~~March 31, ~~2009~~2010 and ~~2008~~2009

~~Unaudited~~NOTE 1 – DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The unaudited condensed financial statements and ~~Not~~accompanying ~~Reviewed~~notes have not be reviewed by an independent public accountant as required by 10-01 (d) of Regulation X.

~~NOTE~~Description 1of Business – ~~DESCRIPTION~~China OFVoice ~~BUSINESS~~Holding Corp. (the “Company” or “CHVC”), ~~BASIS~~a OFNevada ~~PRESENTATION~~corporation ~~AND~~formed ~~SUMMARY~~on OFAugust ~~SIGNIFICANT~~7, ~~ACCOUNTING~~2003, ~~POLICIES~~is a diversified telecommunications company headquartered in Boca Raton, Florida. The Company operates in two countries, the United States and China. In the United States, the Company is a provider of Prepaid Calling Cards and VoIP Telecommunications services, and has offices and operations located in Boca Raton, Florida and in Dallas, Texas. In China, the Company operates in Beijing and Nanning. The Company has developed patented Office Automation and Internet Telephony technology platforms for large enterprise and government applications. The web-based technology was designed around the specific needs of the Chinese Government and allows multiple workers to collaborate on a single project and enables management to effectively monitor virtually every aspect of the workers on-line and telephony experience.

The unaudited condensed Consolidated Financial Statements and accompanying notes have not been reviewed by an independent public accountant as required by Rule 10-01(d) of Regulation S-X.

Description of Business – China Voice Holding Corp. (the “Company” or “CHVC”), a Nevada corporation formed on August 7, 2003, is a diversified telecommunications company headquartered in Boca Raton, Florida. The Company operates in two countries, the United States and China. In the United States, the Company has offices and operations located in Boca Raton, Florida; and in Dallas, Texas. In China, the Company operates in Beijing and Nanning. The Company has developed patented Office Automation and Internet Telephony technology platforms for large enterprise and government applications. The web-based technology was designed around the specific needs of the Chinese Government and allows multiple workers to collaborate on a single project and enables management to effectively monitor virtually every aspect of the workers on-line and telephony experience.

On January 29, 2009 the Company sold six subsidiaries which it had operated in the United States in the telecommunications services, calling card distribution, and advanced hardware distribution segments.

Ownership in China Operations – CHVC through its subsidiaries offers network design and international office-automation software and technology services to third party customers and government agencies in the People’s Republic of China (“PRC”). To meet ownership requirements under Chinese laws, CHVC has entered into technology service, asset ownership, and ownership trust agreements with two of CHVC’s affiliates that are incorporated in China: Candidsoft Technologies Co, Ltd of Beijing (“Candidsoft”) and Beijing Techview System Engineering Co. Ltd. (“BTSE”). Based on these agreements the Company owns 65% of Candidsoft and 70% of BTSE, representing a controlling interest in its Chinese operations, and consolidated them into financial statements pursuant to ARB 51 and FAS 94. Management periodically evaluates its effective legal control over its Chinese subsidiaries on an ongoing basis in accordance with new developments in China and/or laws passed by the PRC. Based on this review, it believes it has the ability to effectively maintain control of the operations of the subsidiaries and consolidate them accordingly. BTSE was sold on January 1, 2008.

Recapitalization and Reorganization – On April 1, 2004, Surf Franchise, Inc. (“Surf”), incorporated in the State of New York on August 7, 2003, entered into a stock exchange agreement with China Voice Corporation (“CVC”), incorporated in the State of Nevada on January 15, 2004, and certain shareholders. CVC was formed to effectuate an exchange of shares between VoIUM Technologies, Ltd. (“VoIUM”) and certain shareholders. The shareholders of VoIUM exchanged ownership interest in CVC to certain shareholders in exchange for an agreement to assign their exclusive interest in value-added telecommunication licenses issued by the PRC to CVC. Upon the exchange, VoIUM became a wholly-owned subsidiary of CVC.

Pursuant to the stock exchange agreement, Surf cancelled 43,012,500 shares of its previously issued and outstanding 49,602,500 common shares and issued 50,000,000 Rule 144 restricted Surf common shares to CVC shareholders in exchange for a 100% equity interest in CVC, making CVC a wholly-owned subsidiary of Surf.

Surf was a subsidiary of a public Company through April 2004, and it operated as a shell corporation and had no business operations, assets or liabilities.

6 F-4

CHINA VOICE HOLDING CORP.

Notes to Condensed Consolidated Financial Statements (Continued)


	NOTE 1 – DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

The above stock exchange transaction between Surf and CVC resulted in those shareholders of CVC obtaining a majority voting interest in Surf. Accounting principles generally accepted 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 CVC as CVC acquired a controlling equity interest in Surf, as of April 1, 2004. The reverse acquisition process utilizes the capital structure of Surf and the assets and liabilities of CVC recorded at historical cost.

Subsequent to the stock exchange, a restructuring resulted in CVC leaving the group with VoIUM, remaining as the continuing operating entity for financial reporting purposes. Although VoIUM is deemed to be the acquiring corporation for financial accounting and reporting purposes, the legal status of Surf as the surviving corporation did not change. On April 22, 2004, Surf changed its name to China Voice Holding Corp. On June 10, 2008, the Company reorganized from a New York Corporation to a Nevada Corporation.

Basis of Consolidation – The consolidated financial statements include 100% of the assets, liabilities, revenues, expenses and cash flows of China Voice Holding Corp (“CHVC”), Wize Prepaid Inc., CVC Globalcall Inc., VoIUM Technologies, LTD (“VoIUM”), Sino-Connection Corp. (“Sino-Connection”), Voium USA Inc. (“Voium USA”), SteamJet Net, Inc. (“SJN”), Sino Beyond Ltd. (“SBL”), Vastland Holding Beijing Co. Ltd., and East West Global Communications, Inc. (“EWGC”). The Company additionally consolidated the financial statements of Candidsoft Technologies Co, Ltd of Beijing (“Candidsoft”) for which the Company owned a 65% interest for the six months ended December 31, 2009 and 2008. The financial statements include consolidated income information for Communications Business Services Corp. (“CBSC”), China Voice Communications Corp (“CVCC”), VCG Technologies (“VCG”), Cable & Voice Corporation (“Cable & Voice”), StarCom Alliance Inc. (“StarCom”), Dial Tone Communications (“Dial Tone”), CVC ~~International~~Int’l Inc. (“CVC ~~International~~INTL”), and Phone House Inc. (“Phone House”) only through the date of disposition. All intercompany accounts and transactions have been eliminated in consolidation. The results of subsidiaries acquired or disposed of during the respective periods are included in the consolidated statements of operations from the effective date of acquisition or up to the effective date of disposal, as appropriate. The portion of the income applicable to non-controlling interests in subsidiary undertakings is reflected in the consolidated statements of operations.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements and should be read in conjunction with the audited financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2009.

In the opinion of management, the unaudited condensed consolidated financial statements contain all adjustments consisiting only of normal recurring accruals considered necessary to present fairly the Company's financial position at ~~December~~March 31, ~~2009~~2010, the results of operations for the ~~six~~nine-month periods ended ~~December~~March 31, ~~2009~~2010 and ~~2008~~2009, and cash flows for the ~~six~~nine months ended ~~December~~March 31, ~~2009~~2010 and ~~2008~~2009. The results for the period ended ~~December~~March 31, ~~2009~~2010 are not necessarily indicative of the results to be expected for the entire fiscal year ending June 30, 2010.

Use of Estimates – The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and footnotes thereto. Actual results could differ from those estimates.

assumptions that affect the amounts reported in the financial statements and footnotes thereto. Actual results could differ from those estimates.

Significant estimates inherent in the preparation of the accompanying consolidated financial statements include accounting for depreciation and amortization, valuation of goodwill and other intangibles, business combinations, equity transactions, and contingencies.

Reclassifications - The Company has reclassified certain prior period amounts to conform to the current period's presentation.

7F-5

CHINA VOICE HOLDING CORP.

Notes to Condensed Consolidated Financial Statements (Continued)

NOTE 1 – DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Recent Accounting Pronouncements

In June 2009, the FASB issued Statement of Financial Accounting Standards No. 166, Accounting for Transfers of Financial Assets — an amendment of FASB Statement No. 140 (“FAS 166”) [FASB ASC 860], which requires entities to provide more information regarding sales of securitized financial assets and similar transactions, particularly if the entity has continuing exposure to the risks related to transferred financial assets. FAS 166 eliminates the concept of a “qualifying special-purpose entity,” changes the requirements for derecognizing financial assets and requires additional disclosures. FAS 166 is effective for fiscal years beginning after November 15, 2009. The Company has not completed the assessment of the impact FAS 166 will have on the Company’s financial condition, results of operations or cash flows.

In June 2009, the FASB issued Statement of Financial Accounting Standards No. 167, Amendments to FASB Interpretation No. 46(R) (“FAS 167”) [FASB ASC 810-10], which modifies how a company determines when an entity that is insufficiently capitalized or is not controlled through voting (or similar rights) should be consolidated. FAS 167 clarifies that the determination of whether a company is required to consolidate an entity is based on, among other things, an entity’s purpose and design and a company’s ability to direct the activities of the entity that most significantly impact the entity’s economic performance. FAS 167 requires an ongoing reassessment of whether a company is the primary beneficiary of a variable interest entity. FAS 167 also requires additional disclosures about a company’s involvement in variable interest entities and any significant changes in risk exposure due to that involvement. FAS 167 is effective for fiscal years beginning after November 15, 2009. The Company has not completed the assessment of the impact FAS 167 will have on the Company’s financial condition, results of operations or cash flows.

In June 2009, the FASB issued Statement of Financial Accounting Standards No. 168, The FASB Accounting Standards Codification™ and the Hierarchy of Generally Accepted Accounting Principles a Replacement of FASB Statement No. 162 (“FAS 168”). This Standard establishes the FASB Accounting Standards Codification (the “Codification”) as the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with U.S. GAAP. The Codification

“Codification”) as the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with U.S. GAAP. The Codification does not change current U.S. GAAP, but is intended to simplify user access to all authoritative U.S. GAAP by providing all the authoritative literature related to a particular topic in one place. The Codification is effective for interim and annual periods ending after September 15, 2009, and as of the effective date, all existing accounting standard documents will be superseded. The Codification is effective for the Company in the third quarter of 2009, and accordingly, the Company’s Quarterly Report on Form 10-Q for the quarter ending ~~December 31~~September 30, 2009 and all subsequent public filings will reference the Codification as the sole source of authoritative literature.

In August 2009, the FASB issued an Accounting Standards Update (“ASU”) regarding measuring liabilities at fair value. This ASU provides additional guidance clarifying the measurement of liabilities at fair value in circumstances in which a quoted price in an active market for the identical liability is not available; under those circumstances, a reporting entity is required to measure fair value using one or more of valuation techniques, as defined. This ASU is effective for the first reporting period, including interim periods, beginning after the issuance of this ASU. The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements.

In October 2009, the FASB issued an ASU regarding accounting for own-share lending arrangements in contemplation of convertible debt issuance or other financing. This ASU requires that at the date of issuance of the shares in a share-lending arrangement entered into in contemplation of a convertible debt offering or other financing, the shares issued shall be measured at fair value and be recognized as an issuance cost, with an offset to additional paid-in capital. Further, loaned shares are excluded from basic and diluted earnings per share unless default of the share-lending arrangement occurs, at which time the loaned shares would be included in the basic and diluted earnings-per-share calculation. This ASU is effective for fiscal years beginning on or after December 15, 2009, and interim periods within those fiscal years for arrangements outstanding as of the beginning of those fiscal years. The Company is currently evaluating the impact of this ASU on its consolidated financial statements.

F-6

In December 2009, the FASB issued FASB ASU 2009-17, Consolidation (“FASB ASC 810): Improvements to Financial Reporting by Enterprises involved with Variable Interest Entities. This ASU amends the FASB Accounting Standards Codification for statement No.167. In June 2009, the FASB issued SFAS No.167, Amendments to FASB Interpretation No. 46(R), which requires an enterprise to perform an analysis and ongoing reassessments to determine whether the enterprises variable interest or interests give it a controlling financial interest in a variable interest entity and amends certain guidance for determining whether an entity is a variable interest entity. It also requires enhanced disclosures that will provide users of financial statements with more transparent information about an enterprises involvement in a variable interest entity. SFAS No.167 is effective as of the beginning of each reporting entity’s first annual reporting period that begins after November 15, 2009 and for all interim reporting periods after that, with early application prohibited. The Company is currently evaluating the impact of the adoption of SFAS No.167.

In January 2010, the FASB issued ASU 2010-06, Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements, which will require companies to make new disclosures about recurring or nonrecurring fair value measurements including significant transfers into and out of Level 1 and Level 2 fair value hierarchies and information on purchases, sales, issuance and settlements on a gross basis in the reconciliation of Level 3 fair value measurements. The ASU is effective prospectively for financial statements issued for fiscal years and interim periods beginning after December 15, 2009. The new disclosures about purchases, sales, issuance and settlements on a gross basis in the reconciliation of Level 3 fair value measurements is effective for interim and annual reporting periods beginning after December 15, 2010. The Company expects that the adoption of ASU 2010-06 will not have a material impact on its consolidated financial statements.

Management does not believe that there are any other recently-issued accounting pronouncements, but not yet effective accounting standards, which could have a material effect on the accompanying financial statements.

CHINA VOICE HOLDING CORP.

Notes to Condensed Consolidated Financial Statements (Continued)

NOTE 1 – DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Summary of Significant Accounting Policies

Cash and Cash Equivalents

The Company considers all highly liquid accounts with an original maturity date of three months or less to be cash equivalents. The Company maintains bank accounts in US banks which, at times, may exceed federally insured limits. The Company has not experienced any losses on such accounts and believes it is not exposed to any significant risk on bank deposit accounts. Cash accounts of foreign subsidiaries are maintained on deposit in established financial institutions in their respective jurisdiction. Although these deposits are not subject to FDIC insurance coverage provided in the United States, the Company has not experienced any losses and believes that exposure to such risk is minimized by the quality of the institutions being utilized.

Accounts Receivable

Accounts receivable represent amounts currently due to the Company under contractual obligations for services performed or products sold. When necessary, the Company evaluates and maintains an allowance for these accounts to reduce such balances to the amount deemed collectible. The allowance for doubtful accounts is based on the Company's assessment of collectability of customer accounts. The Company regularly reviews the allowance by considering factors such as historical experience, credit quality, ~~age~~Age of the accounts receivable balances, and current economic conditions that may affect a customer's ability to pay.

Inventories

Inventory consists of finished goods and is valued at the lower of cost or market using the first-in, first-out method.

Investments

The Company values the equity investments in private companies and restricted stock of public companies using the cost method of accounting. The Company monitors these investments for factors indicating a permanent impairment of value. The Company recognized no impairment loss on investments for the ~~six~~nine months ended ~~December~~March 31, ~~2009~~2010 and ~~2008~~2009, respectively.

9F-7

CHINA VOICE HOLDING CORP.

Notes to Condensed Consolidated Financial Statements (Continued)

NOTE 1 - DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Summary of Significant Accounting Policies (Continued)

Property and Equipment

Property and equipment are stated at cost, less accumulated depreciation and any impairment loss where the recoverable amount of the asset is estimated to be lower than its carrying amount. The cost of an asset comprises its purchase price and any directly attributable costs of bringing the asset to working condition for its intended use. Expenditures for additions, improvements and renewals are capitalized and normal expenditures for maintenance and repairs are charged to the income statement whereas significant improvements which materially increase values or extend useful lives are capitalized and depreciated over the remaining estimated useful lives of the related assets. When assets are sold or retired, their cost and accumulated depreciation are removed from the financial statements and any gain or loss resulting from their disposal is included in the income statement. Depreciation is provided using the straight line method over the estimated useful lives of the related assets, ranging from 3 - 5 years, or over the lesser of the term of the lease or the estimated useful life of the assets under lease.

Capitalized Software Development Costs

The Company accounts for software and development costs under SFAS 86 [FASB ASC-985-20], Accounting for the Costs of Software to be Sold, Leased, or Otherwise Marketed. All of the Company’s Software related costs pertained to the communications software development segment of the business. The Company capitalized software costs of $72,250 related to the Company’s interest in Candidsoft. In 2007, the Company performed an impairment review on its software costs and recorded an aggregate impairment of $69,240 for the software development costs.

Business Combinations

The Company accounts for business combinations in accordance with Statement of Financial Accounting Standard No. 141(R) [FASB ASC 805], "Business Combinations". SFAS No. 141(R) [FASB ASC 805] requires that the purchase method of accounting be used for all business combinations. SFAS No. 141 [FASB ASC 805] requires that goodwill and intangible assets with indefinite useful lives no longer be amortized, but instead be tested for impairment at least annually by comparing carrying value to the respective fair value in accordance with the provisions of Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets" (SFAS No. 142) [FASB ASC 350]. This pronouncement also requires that the intangible assets with estimated useful lives be amortized over their respective estimated useful lives.

Goodwill and Other Intangible Assets

In accordance with Statement of Financial Accounting Standards No.142 [FASB ASC 350], "Goodwill and Other Intangible Assets," the Company tests its goodwill for impairment at least annually by comparing the fair value of these assets to their carrying values. As a result of such tests, the Company may be required to record impairment charges for these assets if in the future their carrying values exceed their fair values.

Other intangible assets are amortized using the straight-line method over their estimated useful period of 10 to 15 years. We evaluate the recoverability of intangible assets periodically and take into account events or circumstances that warrant revised estimates of useful lives or that indicate that impairment exists.

10F-8

CHINA VOICE HOLDING CORP.

Notes to Condensed Consolidated Financial Statements (Continued)

NOTE 1 - DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Summary of Significant Accounting Policies (Continued)

Stock Based Compensation

The Company applies the fair value method of Statement of Financial Accounting Standards No. 123R, "Accounting for Stock Based Compensation" (SFAS No. 123R) [FASB ASC 718] in accounting for its stock options. This standard states that compensation cost is measured at the grant date based on the value of the award and is recognized over the service period, which is usually the vesting period. The fair value for each option granted is estimated on the date of the grant using the Black-Scholes option pricing model.

The fair value of all vested options granted has been charged to salaries, wages and benefits in accordance with SFAS No. 123R [FASB ASC 718]. Common stock granted to employees, directors, and consultants is charged to operating expense based on the fair value of the stock at the date the stock purchase rights are granted. In accordance with EITF 96-18 [FASB ASC 505-50], the non-employee stock options or warrants are measured at their fair value by using the Black-Scholes option pricing model as of the earlier of the date at which a commitment for performance to earn the equity instruments is reached ("performance commitment date") or the date at which performance is complete ("performance completion date"). The stock-based compensation expenses are recognized on a straight-line basis over the shorter of the period over which services are to be received or the vesting period. Accounting for non-employee stock options or warrants which involve only performance conditions when no performance commitment date or performance completion date has occurred as of reporting date requires measurement at the equity instruments then-current fair value. Any subsequent changes in the market value of the underlying common stock are reflected in the expense recorded in the subsequent period in which that change occurs.

Foreign Currency Translation

Assets and liabilities of non-U.S. subsidiaries that operate in a local currency environment are translated to U.S. dollars at exchange rates in effect at the balance sheet date; with the resulting translation adjustments directly recorded to cumulative currency translation adjustment. Income and expense accounts are translated at average exchange rates during the period. Where the U.S. dollar is the functional currency, translation adjustments are recorded in other comprehensive loss.

Impairment of Long-Lived Assets and Other Intangible Assets

The Company reviews the carrying value of its long-lived assets, including indefinite-lived intangible assets consisting primarily of goodwill and telecommunications licenses in China, whenever events or changes in circumstances indicate that the historical cost carrying value of an asset may no longer be appropriate. The Company assesses recoverability of the carrying value of the assets by estimating the future net cash flows expected to result from the assets, including eventual disposition. If the future net cash flows are less than the carrying value of the assets, an impairment loss is recorded equal to the difference between the asset's carrying value and its fair value. As of ~~December~~March 31, ~~2009~~2010 and ~~2008~~2009, the Company recorded no impairment of assets.

11 F-9

CHINA VOICE HOLDING CORP.

Notes to Condensed Consolidated Financial Statements (Continued)

NOTE 1 - DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Summary of Significant Accounting Policies (Continued)

Leases

The Company leases its office space. Certain leases contain scheduled rent increases, and may include an initial period of free or reduced rent as an inducement to enter into the lease agreement ("rent holidays").The company recognizes rental expense for rent increases and rent holidays on a straight-line basis over the terms of the underlying leases, without regard to when rent payments are made. The calculation of straight-line rent is based on the "reasonably assured" lease term as defined in SFAS No. 98 [FASB ASC 840-40], Accounting for Leases: Sale-Leaseback Transactions Involving Real Estate, Sales Type Leases of Real Estate, Definition of the Lease Term, and Initial Direct Costs of Direct Financing Leases - an amendment of FASB Statements No. 13, 66 and 91 and a rescission of SFAS Statement No. 26 and Technical Bulletin No. 79-11 [FASB ASC 840-40]. This amended definition of the lease term may exceed the initial non-cancelable lease term.

holidays on a straight-line basis over the terms of the underlying leases, without regard to when rent payments are made. The calculation of straight-line rent is based on the "reasonably

assured" lease term as defined in SFAS No. 98 [FASB ASC 840-40], Accounting for Leases: Sale-Leaseback Transactions Involving Real Estate, Sales Type Leases of Real Estate, Definition of the Lease Term, and Initial Direct Costs of Direct Financing Leases - an amendment of FASB Statements No. 13, 66 and 91 and a rescission of SFAS Statement No. 26 and Technical Bulletin No. 79-11 [FASB ASC 840-40]. This amended definition of the lease term may exceed the initial non-cancelable lease term.

Fair Value of Financial Instruments

The carrying amount of cash, accounts receivable, accounts payable, capital lease obligation and notes payable, as applicable, approximates fair value due to the short term nature of these items and/or the current interest rates payable in relation to current market conditions.

Revenue Recognition

Revenue from calling cards, prepaid cellular products and broadband hardware sales are recognized upon delivery or shipment of the hardware to broadband service providers at which time title is passed; there are no uncertainties regarding customer acceptance; persuasive evidence of an arrangement exits; the sales price is fixed and determinable; and collectability is deemed probable. The Company recognizes revenues based on Gross Revenues Reporting pursuant to EITF 99-19 [FASB ASC 605-45]. Revenue from telecommunications services is recognized when the services are provided. Revenue from installation contracts is recognized on the completed contract method. A contract is considered complete when all costs except insignificant items have been incurred and the installation is operating according to specifications and has been accepted by the customer. Revenue from software communications development is recognized upon completion of installation and delivery to customers at which time title is passed; there are no uncertainties regarding customer acceptance; persuasive evidence of an arrangement exits; the sales price is fixed and determinable; and collectability is deemed probable.

Shipping and Handling Costs

Shipping and handling costs are included in cost of revenues. Shipping and handling costs invoiced to customers, if any, are included in revenues.

12F-10

CHINA VOICE HOLDING CORP.

Notes to Condensed Consolidated Financial Statements (Continued)

NOTE 1 - DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Summary of Significant Accounting Policies (Continued)

Convertible Debt

Convertible debt with beneficial conversion features, whereby the conversion feature is "in the money" are accounted for in accordance with guidance supplied by Emerging Issues Task Force

("EITF") No. 98-5 [FASB ASC 470-20], "Accounting for Convertible Securities with Beneficial Conversion Features or Contingently Adjustable Conversion Ratios" and EITF No. 27, "Application of Issue 98-5 to Certain Convertible Instruments". For convertible debt and related warrants, the recorded debt discount is calculated at the issuance date as the difference between the conversion price and the relative fair value of the common stock into which the security is convertible or exercisable. The fair value of the financial instruments related to warrants associated with convertible promissory notes was determined utilizing the Black-Scholes option pricing model and the respective allocated proceeds to warrants is recorded in additional paid-in capital.

Debt discount resulting from allocation of proceeds to the beneficial conversion feature, it is amortized to other financing charges over the term of the notes from the respective dates of issuance, using the effective yield method. The relative fair value of the beneficial conversion feature of $675,000 has been amortized to other financing charges over the term of the notes from the date of issuance related to the convertible debenture issued for purchase of ~~VCG~~DTNet.

Net Income (Loss ) per Share

The Company follows the guidelines of Statement of Financial Accounting Standards No. 128, “Earnings per share” (“SFAS No. 128”) [FASB ASC 260-10] in calculating its loss per share. SFAS No. 128 [FASB ASC 260-10], states basic and diluted earnings per share are based on the weighted average number of common shares and equivalent common shares outstanding during the period. Common stock equivalents for purposes of determining diluted earnings per share include the effects of dilutive stock options, warrants and convertible securities. The effect on the number of shares of such potential common stock equivalents is computed using the treasury stock method or the if-converted method, as applicable. The Company has excluded all outstanding stock options and warrants as well as shares issued upon conversion of debt from the calculation of diluted loss per share because these securities are anti-dilutive.

The following table sets forth potential shares of common stock that are not included in the diluted net loss per share calculation because to do so would be anti-dilutive for the ~~six~~nine months ended ~~December~~March 31, ~~2009~~2010 and ~~2008~~2009.

	For the six months ended December 31,	For the six months ended December 31,
	For the nine months ended March 31,	For the nine months ended March 31,
	2009	2008
	2010	2009
Warrants issued in conjunction with financing	350,000		563,200
Contingent shares potentially issuable for acquisitions	--		~~200~~950,000
Common stock options	--		48,513

13 F-11

CHINA VOICE HOLDING CORP.

Notes to Condensed Consolidated Financial Statements (Continued)

NOTE 1 - DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Summary of Significant Accounting Policies (Continued)

Income Taxes

The Company recognizes deferred tax assets and liabilities for the future tax consequences attributed to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under SFAS 109 [FASB ASC 740], 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. If it is more likely than not that some portion of a deferred tax asset will not be realized, a valuation allowance is recognized.

Segmental Reporting

SFAS No. 131 [FASB ASC 280],“Disclosures about Segments of an Enterprise and Related Information” establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organization structure as well as information about geographical areas, business segments and major customers in financial statements. In January 2009, sold six subsidiaries which operated in the United States in the telecommunications services, calling card distribution, and advanced hardware distribution segments. The Company continues to have business operations in the telecommunications services segment in China and the U.S. Accordingly, the Company operates in one business segment.

F-12

NOTE 2 – GOING CONCERN

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. During the ~~six~~nine months ended ~~December~~March 31, ~~2009~~2010 and ~~2008~~2009, the Company had significant operating losses which raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s plans regarding those concerns are addressed in the following paragraphs. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

As shown in the accompanying financial statements, the Company has incurred net losses of approximately $2,~~247~~695,~~508~~041 and compared to a gain of $1875,~~802,222~~622 for the ~~six~~nine months ended ~~December~~March 31, ~~2009~~2010 and ~~2008~~2009, respectively. Additionally, during the ~~six~~nine months ended ~~December~~March 31, ~~2009~~2010 and ~~2008~~2009, the Company has used cash flow in ~~continuing~~ operations of approximately $~~679~~923,~~581~~294 and $12,~~491~~260,~~073~~216. Accumulated deficit amounted to $ 32,~~143~~779,~~037~~556 and $29,576,504 as of ~~December~~March 31, ~~2009~~2010 and June 30, 2009, respectively.

Currently, the operations of the Company are funded through issuance of debt and equity instruments and borrowings from related parties. Management’s plans to generate cash flow include sale of company assets, expanding the Company’s existing operations, as well as through additional acquisitions. Additionally, the Company may raise additional funds by raising additional capital through debt of equity offerings in an effort to fund the Company’s anticipated expansion. There is no assurance additional capital will be available to the Company on acceptable terms.

CHINA VOICE HOLDING CORP.

Notes to Condensed Consolidated Financial Statements (Continued)

NOTE 3 - BUSINESS COMBINATIONS

A. Businesses Owned as of ~~December~~March 31, ~~2009~~ 2010


	1.	The Company has entered into an agreement with a licensed Chinese Telecommunications Company which will permit CHVC to offer advanced communications services along with domestic and international long distance service into and out of China. Effective June 30, 2005, CHVC had issued 20,028,000 common shares valued at $5,007,000 to acquire all of the stock of East West Global Communications Inc., the Corporation which had obtained the Chinese licenses. The telecommunications licenses associated with this acquisition were valued at $5,007,000. The Company has acquired rights to these licenses which are owned by Chinese nationals and controlled by the Company. The licenses are required to be utilized by entities authorized to operate in China. Currently, one entity controlled by the Company uses the licenses.

The allocation of the purchase price was to the estimated value of two licenses issued by the Telecommunication Bureau of Beijing. The licenses permit mobile network telecommunication value-added service, fax storage and forwarding services, certain internet content service, electronic bulletin board service, internet connection service, and call center service. The licenses expire in 2010. The Company has assigned a 15 year life to the licenses as it believes these will be renewed for as long as the licenses are required to support the Company’s services.

F-13

CHINA VOICE HOLDING CORP.

Notes to Condensed Consolidated Financial Statements (Continued)

NOTE 3 - BUSINESS COMBINATIONS (Continued)

The company determined that the value of the license has been fully impaired at June 30, 2009 because the license was not generating current revenue. Accordingly an impairment loss of $3,671,800 was recognized as of June 30, 2009.


	2.	Effective January 18, 2006, the Company acquired a 65% interest in the operations of Candid Soft Technologies Co. Ltd of Beijing (“Candidsoft”), an international office-automation software and technology company headquartered in Beijing, China. The purchase price was $5,171,250 in current consideration paid by issuance of 4,925,000 shares of the Company’s common stock. The shares were issued in September 2006. As the effective date of the agreement was January 18, 2006 and management of the Company assumed control of its operations at that time. The Company treated the stock issuance as being effective on the effective date of the acquisition. In addition, the total purchase price also included contingent consideration of 2,000,000 shares of the Company’s common stock which were issued on June 30, 2008 at a value of $1,033,000. The Company has valued the equity of Candidsoft at $6,204,250 .

The following table presents the allocation of the acquisition cost of Candidsoft, including the assets acquired and liabilities assumed, based on their fair value:



Goodwill	$	6,056,654
Capitalized software		69,240
Other assets		118,927
Total assets Acquired		6,244,821

Minority interest		(40,571)
Net Assets acquired	$	2,882,250


	3.	On March 23, 2007, the Company entered into an agreement to acquire 100% of the common stock of StreamJet.Net, Inc. (“StreamJet”), a broadband data streaming company. The Company issued 4,725,000 shares of common stock to shareholders of StreamJet in escrow pending closing of a subsidiary merger agreement. The Company had not completed the merger at March 31, 2007 because certain deliverables of StreamJet had not been received. The shares are shown as outstanding at June 30, 2007, but no asset value has been placed on the Company’s books. On October 22, 2007, the Company completed the merger and valued the equity of StreamJet at $2,882,250.

15The following table presents the allocation of the acquisition cost of StreamJet, including the assets acquired and liabilities assumed, based on their fair value:


Software license	$	2,974,293

Liabilities assumed		(92,043	)

Net assets acquired	$	2,882,250

F-14

CHINA VOICE HOLDING CORP.

Notes to Condensed Consolidated Financial Statements (Continued)

The following table presents the allocation of the acquisition cost of StreamJet, including the assets acquired and liabilities assumed, based on their fair value:

Software license	$	2,974,293
Liabilities assumed		(92,043)
Net assets acquired	$	2,882,250

NOTE 3 - BUSINESS COMBINATIONS (Continued)

The Company determined that the value of the software license has been fully impaired at June 30, 2009 because the license was not generating current revenue. Accordingly an impairment loss of $2,542,774 was recognized as of June 30, 2009.

B. Companies disposed of prior to ~~December~~March 31, ~~2009~~2010

1. Effective August 1, 2006, the Company acquired a 70% interest in the operations of Beijing Techview System Engineering Co. Ltd. (“BTSE”), a network design and installation company headquartered in Beijing, China. The purchase price was $1,920,000 in current consideration paid by issuance of 2,100,000 shares of the Company’s common stock. In addition, the total purchase price also includes contingent consideration of 4,000,000 shares of the Company’s common stock issuable upon the attainment of certain performance milestones, expiring December 31, 2009. The Company has valued the equity of Techview at $1,920,000.

The following table presents the allocation of the acquisition cost of BTSE, including the assets acquired and liabilities assumed, based on fair value:

Goodwill	$	2,087,852
Minority interest		61,278
Total assets acquired		2,149,130
Liabilities assumed		(229,130)	)
Net assets acquired	$	1,920,000

Effective on January 1, 2008, the Company sold its Techview subsidiary for 2,100,000 shares of Company common stock valued at $2,415,000. As a result of this transaction a gain of $505,733 was recognized.


	2.	Effective December 31, 2006, the Company acquired 100% of the common stock of VCG Technologies Inc. (“VCG”), a value added distributor of advanced broadband products and services company headquartered in Florida. The purchase price was $2,150,000 in current consideration paid by issuance of 1,000,000 shares of the Company’s common stock and notes payable for $1,000,000. In addition, the total purchase price also includes contingent consideration of 1,000,000 shares of the Company’s common stock issuable upon the attainment of certain performance milestones, of which 595,360 were issued in satisfaction of the contingent consideration. The Company has valued the equity of VCG at $2,150,000 upon acquisition plus $509,521 (595,360 common shares) of contingent consideration for a total of $2,659,521.

16 F-15

CHINA VOICE HOLDING CORP.

Notes to Condensed Consolidated Financial Statements (Continued)

NOTE 3 - BUSINESS COMBINATIONS (Continued)

The following table presents the allocation of the acquisition cost of VCVCG, including the assets acquired and liabilities assumed, based on their fair value:


Goodwill	$	2,811,028

Liabilities assumed		(151,507)

Net assets acquired	$	2,659,521

Effective on November 1, 2008, the Company sold its VCG subsidiary by transferring stock in the subsidiary to a related party. The excess of liabilities of the subsidiaries over the asset values, was treated as additional paid in capital on the Series A Preferred stock. As a result of this transaction no gain or loss was recognized.


	3.	On June 14, 2007, the Company closed a subsidiary merger agreement to acquire Phone House, Inc. (“Phone House”) a leading distributor of prepaid phone cards. The Company paid cash of $100,000, issued a six month note for $159,179 and issued 650,000 shares of common stock at closing. In addition, the total purchase price also includes contingent consideration of up to 1,500,000 shares of the Company’s common stock issuable upon the attainment of certain performance milestones, expiring June 30, 2010. The Company has valued the equity of Phone House at $545,179 on acquisition plus $598,050 (1,500,000 common shares) of contingent consideration for a total $1,143,229.

The following table presents the allocation of the acquisition cost of PhoneHouse, including the assets acquired and liabilities assumed, based on their fair value:

Accounts Receivable	$	421,519
Accounts receivable		$	421,519
Inventory		~~156,545~~	156,545
Property and equipment		~~9,900~~	9,900
Goodwill		~~1,060,508~~	1,060,508
Total assets acquired		~~1,648,472~~	1,648,472
Accounts payable and accrued expenses		~~(498,884~~	(498,884)
Other liabilities		~~(6,359~~	(6,359)
Total liabilities assumed		~~(505,243~~	(505,243)
Net assets acquired	$	~~1,143,229~~$	1,143,229


	4.	On July 19, 2007, the Company closed a subsidiary merger agreement to acquire Dial Tone Communications, Inc. (“Dial Tone”) a leading distributor of prepaid phone cards. The Company paid cash of $27,501, issued a three month note for $20,000 and issued 450,000 shares of common stock at closing. In addition, the total purchase price also includes contingent consideration of up to 200,000 shares of the Company’s common stock issuable upon the attainment of certain performance milestones, expiring July 31, 2010. On June 13, 2008, the Company renegotiated the terms of acquisition and canceled 300,000 of total 450,000 shares previously issued. The Company has valued the equity of Dial Tone at $157,759 .

17 F-16

CHINA VOICE HOLDING CORP.

Notes to Condensed Consolidated Financial Statements (Continued)

NOTE 3 - BUSINESS COMBINATIONS (Continued)

The following table presents the allocation of the acquisition cost of Dial Tone, including the assets acquired and liabilities assumed, based on their fair value:


Accounts Receivable	$	45,933
Goodwill		111,826
Total assets acquired		157,759

Total liabilities assumed		None

Net assets acquired	$	157,759

6. On March 31, 2008, CVC ~~International~~INTL, a subsidiary of the Company acquired all of the assets of Brilliant Telecom Group, LLC (“Brilliant Assets”) a VoIP service provider. The Company issued 1,000,000 shares of common stock at closing. The Company has valued the Brilliant Assets at $1,040,000.

The following table presents the allocation of the acquisition cost of the Brilliant Assets, including the assets acquired and liabilities assumed, based on their fair value:


Software	$	125,000
Property and equipment		151,750
Goodwill		763,250
Total assets acquired		1,040,000

Total liabilities assumed		None

Net assets acquired	$	1,040,000

CHINA VOICE HOLDING CORP.

Notes to Condensed Consolidated Financial Statements (Continued)

On January 29, 2009 the Company sold Phone House, Dial Tone, and CVC INTL, along with StarCom and Cable and Voice for $700,000 cash, $1,800,000 in redeemable preferred stock, Notes Receivable of $4,350,000, and 21,000,000 shares of common stock of Flint Telecom Group Inc. valued at $7,980,000, for a total consideration of $14,830,000. The Company recognized a gain of $4,648,937 on the sale. See Note 16.

NOTE 4 - DISCONTINUED OPERATIONS

On November 1, 2008 the Company disposed of its ownership interest in two wholly owned subsidiaries, CVC Communications Corp and VCG Technologies Inc. (“VCG”) by transferring stock in the subsidiaries to a related party. In addition to transferring the stock, the Company also issued 1,250 shares of Series A Preferred stock to the transferee. The excess of liabilities of the subsidiaries over the asset values, $361,243, was treated as additional paid in capital on the Series A Preferred stock.

On January 29, 2009 the Company sold Cable and Voice, Star Com, Dial Tone, CVC INTL, and Phone House which operated in the United States in the telecommunications services, calling card distribution, and advanced hardware distribution segments.

The Company recognized gain of $4,648,937 on the sale for the year ended June 30, 2009. The following summarizes the combined operating results of these six subsidiaries and VCG for the ~~years~~nine months ended ~~June~~March 3031, ~~2009~~2010 and ~~2008~~2009 (through representative dates of sale or termination), classified as discontinued operations for all periods presented.

	For the six months ended December 31,		For the six months ended December 31,
	For the nine months ended March 31,		For the nine months ended March 31,
	2009		2008
	2010		2009
Revenue		--		2933,~~378~~687,~~636~~278
Cost of revenues		--		2832,~~739~~983,~~607~~340
Gross profit				~~639~~703,~~029~~938
Expenses		--		~~464~~707,~~204~~877
Other income		--		~~258~~423,~~353~~993
Net income (loss)		--		~~433~~421,~~178~~054

19 F-17

CHINA VOICE HOLDING CORP.

Notes to Condensed Consolidated Financial Statements (Continued)

NOTE 5 - PROPERTY AND EQUIPMENT

Major categories of property and equipment at ~~December~~March 31, ~~2009~~2010 and June 30, 2009 were as follows:

	December 31, 2009		June 30, 2009
	March 31, 2010		June 30, 2009
Computer equipment	$	~~516~~550,~~296~~885	$	266,217
Furniture, fixtures and equipment		38186,~~081~~821		265,657
Motor vehicles		6114,~~516~~059		61,448
Less: accumulated depreciation and amortization		(~~260~~283,~~207~~826)		(211,677)
Total property and equipment	$	~~355~~467,~~686~~939	$	381,645

The Company leased a computer information integration system under a capital lease (see Note 7). Accumulated depreciation of the leased assets as of ~~December~~March 31, ~~2009~~2010 was $ 135,437 .

For the ~~six~~nine months ended ~~December~~March 31, ~~2009~~2010 and ~~2008~~2009 depreciation expense totaled ~~$48~~87,~~444~~174 and ~~$34~~83,~~398~~805, respectively. For the three months ended ~~December~~March 31, ~~2009~~2010 and ~~2008~~2009 expenses totaled ~~$24~~38,~~238~~730 and ~~$21~~19,~~451~~226, respectively.

As of ~~December~~March 31, ~~2009~~2010, all furnishings and equipment located in United States amounting to $223,~~048~~048were ~~were~~ pledged by the Company to secure notes payable (see Note 8).

20F-18

CHINA VOICE HOLDING CORP.

Notes to Condensed Consolidated Financial Statements (Continued)


	NOTE 6 – GOODWILL AND OTHER INTANGIBLE ASSETS

In accordance with Statement of Financial Accounting Standards No. 142 (SFAS No. 142) [FASB ASC 350], the Company performs an evaluation of the fair values of its operating segments annually, and more frequently if an event occurs or circumstances change that may indicate that the fair value of a reporting unit is less than the carrying amount.

The Company’s balance sheet reflects goodwill of $6,009,404 and $6,009,404 as of ~~December~~March 31, 2010 and June 30, 2009, respectively.

During the ~~six~~nine months ended ~~December~~March 31, ~~2009~~2010 and ~~2008~~2009, the Company did not capitalize any costs related to internal software development. The Company recorded amortization expense related to the internal software development costs placed in service as of January 18, 2006, the acquisition date of Candidsoft.

Other identifiable intangible assets consist of the acquired licenses to provide telecom services in certain districts within China, capitalized software, and a patent. Other intangible assets as of ~~December~~March 31, ~~2009~~2010 and June 30, 2009 are as follows:

	Lives	December 31, 2009			June 30, 2009
	Live	March 31, 2010			June 30, 2009
Patent – software	10 Years		49,000		49,000
Total			49,000		~~49,000~~	49,000
Less accumulated amortization			(1215,~~504~~204)	)	~~(7,104)~~	(7,104)
		$	3633,~~496~~796		~~41,896~~	41,896

For the ~~six~~nine months ended ~~December~~March 31, ~~2009~~2010 and ~~2008~~2009 amortization expense totaled $58,~~400~~100 and $15,~~704~~400, respectively. For the three months ended ~~December~~March 31, ~~2009~~2010 and ~~2008~~2009 amortization expense totaled $2,700 and $1,704, respectively.

The company determined the values of the telecom license and the software license has been fully impaired at June 30, 2009 because the Company had experienced delays in implementation and the licenses were not generating current revenue. Accordingly an impairment loss of $3,671,800 and $2,542,774 respectively, were recognized June 30, 2009. The total loss recognized amounted to $6,214,574 for the year ended June 30, 2009.

NOTE 7 –CAPITAL LEASE OBLIGATIONS

	December 31, 2009					June 30, 2009
	March 31, 2010					June 30, 2009
Capital lease obligation bearing an interest rate of 6.676% per annum		$	77,958		$	77,958
Less: Current portion of capital lease obligation				(48,367)			(38,184)
Non-current portion of capital lease obligation, less current portion		$		29,591	$		39,774

21F19

CHINA VOICE HOLDING CORP.

Notes to Condensed Consolidated Financial Statements (Continued)

NOTE 7 –CAPITAL LEASE OBLIGATIONS(Continued)

Future minimum lease payments required under the capital lease and the present value of the net minimum lease payments as of ~~December~~March 31, ~~2009~~2010 are as follows:

Year ending June 30,

2010	$	40,733
2011		40,733
2012		1,697
Total minimum lease payments		83,163
Less: amount representing interest		(5,205)
Present value of net minimum lease payments		77,958
Less: current portion of capital lease obligation		(48,367)
Non-current portion capital lease obligation	$	29,591

Total minimum lease payments		83,163
Less: amount representing interest		(5,205	)
Present value of net minimum lease payments		77,958
Less: current portion of capital lease obligation		(48,367	)
Non-current portion capital lease obligation	$	29,591

The term of the capital lease entered into during 2009 is 3 years. Interest rate is fixed at the contract date.

~~NOTE 8 –NOTES PAYABLE~~F-20

The Company’s notes payable to financial institutions and third parties consist of the following as of:

	December 31	June 30
	2009	2009
Not Note payable to a third party with interest at 12% and collateralized by certain assets hheld by a related party. The note is due on demand. Additionally, this note included edetachable warrants to purchase 560,000 shares of the Company’s common stock,which expired May 31, 2006.	$ -	$	25,614
Not Note payable to an individual, interest accrues at 24% and is payable monthly. The note is collateralized by certain assets held by a related party, and is due on demand.	50,000		50,000
Not Note payable to an individual due October 5, 2009 with interest at 18% and collateralized by certain assets held by a related party.	44,000		47,000
Not Note payable to an individual due July 31, 2010 without interest and collateralized by certain Company Stock.	133,333		200,000
Les Total discounts	-		-
Sub Total	227,333		322,614
Les current portion	227,333		305,947
Lon Long Term Debt	-	$	16,667

CHINA VOICE HOLDING CORP.

Notes to Condensed Consolidated Financial Statements (Continued)

NOTE 8 –NOTES PAYABLE

The Company’s notes payable to financial institutions and third parties consist of the following as of:


	March 31		June 30
	2010		2009

Not Note payable to a third party with interest at 12% and collateralized by certain assets hheld by a related party. The note is due on demand. Additionally, this note included edetachable warrants to purchase 560,000 shares of the Company’s common stock, whiwhich expired May 31, 2006.	$	-	$	25,614

Not Note payable to an individual, interest accrues at 24% and is payable monthly. The note is collateralized by certain assets held by a related party, and is due on demand.		50,000		50,000

Not Note payable to an individual due October 5, 2009 with interest at 18% and collateralized by certain assets held by a related party.		44,000		47,000

Not Note payable to an individual due July 31, 2010 without interest and collateralized by certain Company Stock.		133,333		200,000

Note payable to a third party with interest at 18% and collateralized by certain assets held by a related party.		100,000

Les Total discounts		-		-

Sub Total		327,333		322,614
Les current portion		327,333		305,947

Lon Long Term Debt	$	-	$	16,667

F-21

NOTE 8 –NOTES PAYABLE (Continued)

The Company’s notes payable to related parties consist of the following as of:

	December 31,		June 30,
	March 31,			June 30,
	2009		2009
	2010			2009
Not Notes Payable to investment entities controlled by a related party with interest at 18% and due on August 15, 2010. The notes are secured by certain assets of the Company.	~~839,000~~	1,239,100	~~341,000~~		341,000
Note Payable to a relative of a company officer, payable on demand.	100,000		-
Advance from investment entity controlled by a related party with interest at 6%and due on June 30, 2010. The note is secured by certain assets of the Company.	294,772		.
	1,233,772		341,000
Les current portion	1,233,772		-
Lon Long term debt	-		341,000

Note Payable to a relative of a company officer, payable on demand. 100,000 -

Advance from investment entity controlled by a related party with interest at 6% and due

on June 30, 2010. The note is secured by certain assets of the Company. 483,000 -


		.		.
		1, 822,100		341,000
Les current portion		1,822,100		-

Lon Long term debt	$	-	$	341,000

The future maturities of the notes payable to third parties and related parties are as follows:

2010		12,~~461~~039,~~105~~333
2011		-
2012		-
Total	$	12,~~461~~039,~~105~~333

23F-22

CHINA VOICE HOLDING CORP.

Notes to Condensed Consolidated Financial Statements (Continued)

NOTE 9 –EQUITY

Preferred Stock

All of the Company’s preferred stock shares are directly or indirectly owned by entities that are owned or controlled by an officer and director of the Company. As such, this officer has all voting rights relating to this class of stock.

During the year ended June 30, 2006, the Company’s board of directors authorized the issuance of up to 20,000 shares of $0.001 par value Series A Preferred Stock. The Series A Preferred Stock is preferred as to dividends and liquidation over common stock, has a liquidation value of $1,000 per share, and has a dividend rate of 12% of liquidation value per year.

No preferred shares were issued or redeemed during the three months ended ~~December~~March 31, ~~2009~~2010.

NOTE 9 –EQUITY (Continued)

Common Stock

During the three months ended ~~December~~March 31, ~~2009~~2010 the Company issued no common stock ~~as follows:~~.

Category	Number of Shares	Value
Issued to correct prior issuance	31,250	-
	31,250	-

F-23

CHINA VOICE HOLDING CORP.

Notes to Condensed Consolidated Financial Statements (Continued)

NOTE 10 - COMMITMENTS AND CONTINGENCIES

Employment Agreements

On August 31, 2006, the Company entered into an employment agreement with Bill Burbank, the Company’s Chief Executive Officer. The employment agreement is for an initial term of three years with automatic renewals on six month intervals thereafter; and provides entitlement to a base salary equal to $15,500 per month with discretionary cash or stock option bonuses based on performance. ~~On January 9, 2009 the agreement was modified to change the base salary to $10,000 per month.~~

Litigation

The Company also is involved in various claims and legal proceedings in the ordinary course of its business activities. In addition, the Company has been notified that it is under review by the SEC to examine its history of financings, stock issuances and press releases chronicling the Company’s development. The company had fully cooperated with the SEC and has provided all requested data. The Company believes that any potential liability associated with the ultimate outcome of these matters will not have a material adverse effect on its financial position or results of operations.

CHINA VOICE HOLDING CORP.

Notes to Condensed Consolidated Financial Statements (Continued)

NOTE 10 - COMMITMENTS AND CONTINGENCIES (Continued)

Operating Leases

The Company’s rent expense amounted to $3956,~~441~~382 and ~~$81~~100,~~147~~250 for the ~~six~~nine months ended ~~December~~March 31, ~~2009~~2010 and ~~2008~~2009. The Company’s rent expense amounted to $18,794 and 4119,~~706~~103 for the three months ended ~~December~~March 31, ~~2009~~2010 and ~~2008~~2009. The Company did not have any long-term non-cancelable lease commitments for its offices, warehouse and other facilities. There were no minimum rental commitments under non-cancelable long-term operating leases within the next five years.


	NOTE 11 - RELATED PARTY TRANSACTIONS

Related Party Payables

A company owned or controlled by a major shareholder, director and officer of CHVC has loaned funds to the Company secured by all of the assets of the Company. These advanced funds are due on demand and bear interest at 18%. The balance as of ~~December~~March 31, 2010 and June 30, 2009 and was $322,784 and $322,784, respectively.

An individual who is an employee and/or director of the Company has advanced funds to the Company on unsecured terms bearing interest at 8%. The balance on these advances was $5897,990 and $6,990 as of ~~December~~March 31, 2010 and June 30, 2009, respectively.

An employee of one of the Company’s China subsidiaries has advanced funds to the Company on unsecured terms. This advance does not bear interest. The balance due on this advance was $73,129 and $73,048 as of ~~September~~March 3031, 2010 and June 30, 2009, respectively.

Related Party Notes Payables

As disclosed in Note 8, notes payable of $~~839~~1,129,000 and $341,000 as of ~~December~~March 31, ~~2009~~2010 and June 30, 2009, respectively, were issued to investment entities controlled by a related party. The notes are secured by certain assets of the Company and bear interest at 18% per annum and are due on August 15, 2010.

As disclosed in Note 8, notes payable of $100,000 were issued to an individual who is a relative of an employee and/or director of the Company as of ~~December~~March 31, ~~2009~~2010. The note is secured by certain assets of the Company and does not bear interest and is due on demand.

~~Interest~~As ~~paid~~disclosed ~~under~~in ~~these~~Note ~~notes~~8, ~~was~~an ~~$81,795~~investment ~~and~~entity ~~none~~controlled ~~for~~by a related party advanced $483,000 to the ~~three~~Company ~~months~~as ~~ended~~of ~~December~~March 31, ~~2009~~2010. The Note bears interest at 0% and ~~2008~~is secured by certain assets of the Company.

25Interest paid under these notes was none and $48,061 for the three months ended March 31, 2010 and 2009.

F-24

CHINA VOICE HOLDING CORP.

Notes to Condensed Consolidated Financial Statements (Continued)

NOTE 11 - RELATED PARTY TRANSACTIONS (Continued)

Related Parties receivables

As of ~~December~~March 31, ~~2009~~2010 and June 30, 2009, the Company had the loaned $92,300 to Wrio as discussed below under Joint Venture.

Agency Agreement

A Corporation controlled by Hin Hiong Khoo, ana ~~officer~~related ~~and director~~party, acts as agent for the Company by holding a Singapore bank account and shares of Vastland for the benefit of the Company.

Joint Venture

The Company has entered into a joint venture with WRIO, Corp., dated May 31, 2006, wherein WRIO, Corp. and the Company, through contributions of $1,000 each, are 50/50 partners in the exploitation of wireless broadband technology owned by WRIO, Corp. in China. WRIO, Corp is controlled by an officer and director of the Corporation. No revenues were earned under this joint venture during 2009 and 2008, accordingly, no revenues or expense have been reflected in these financial statements. In addition, the Company has loaned $92,300 to Wrio as of ~~December~~March 31, ~~2009~~2010 and June 30, 2009.

Preferred Stock

As disclosed Note 9, all of the Company’s preferred stock shares are directly or indirectly owned by entities that are owned or controlled by an officer and director of the Company. As such, this officer has all voting rights relating to this class of stock.

Guarantees

As disclosed in Note 8, certain of the Company’s notes payable due to third parties have been guaranteed by companies owned or controlled by an officer and director of the Company.


	NOTE 12 - CONCENTRATION OF RISK

Major Customers – The Company did not have any customers that would account for over 10% of its revenue.

Assets in Foreign Country – The Company has assets related to its China operations which are located in the Peoples Republic of China. Assets held outside of the United States were as follows:

	December 31, 2009		June 30, 2009
	March 31, 2010		June 30, 2009
Tangible assets	$	1,~~172~~126,~~417~~720	$	900,587
Goodwill and other identifiable intangible assets		6,~~045~~043,~~900~~200		6,051,300
Total assets	$	7,~~218~~169,~~317~~920	$	6,951,887

26 F-25

CHINA VOICE HOLDING CORP.

Notes to Condensed Consolidated Financial Statements (Continued)

NOTE 13 – INCOME TAXES

China Taxation – Prior to January 1, 2008, the Company’s subsidiaries were governed by the previous Income Tax Law (the “Previous IT Law”) of China. Under the Previous IT Law, the Company’s subsidiaries were generally subjected to enterprise income taxes at a statutory rate of 33% (30% state income tax plus 3% local income tax) or 15% for qualified new and high technology enterprises. Effective January 1, 2008, the new Enterprise Income Tax Law (the “EIT Law”) in China supersedes the Previous IT Law and unifies the enterprise income tax rate for FIEs at 25%. New and high technology enterprises will continue to enjoy a preferential tax rate of 15% but must meet the new set of criteria defined under the EIT Law and related regulations. The EIT Law provides a five-year transitional period for certain entities that enjoyed a favorable income tax rate of less than 25% under the Previous IT Law and were established before March 16, 2007, to gradually increase their rates to 25%. The EIT Law also imposes a withholding income tax of 10% on dividends distributed by a Foreign-Invested Enterprises (“FIE”) to its immediate holding company outside of China, if such immediate holding company is considered as a no-resident enterprise without any establishment or place within China or if the received dividends have no connection with the establishment or place of such immediate holding company within China, unless such immediate holding company’s jurisdiction of incorporation has a tax treaty with China that provides for a different withholding arrangement. Such withholding income tax was exempted under the Previous IT Law. In accordance with APB Option No. 23, “accounting for Income Taxes – Special Area,” all undistributed earnings are presumed to be transferred to the parent company and are subject to the withholding taxes. The withholding tax imposed on the dividend income will reduce the Company’s net income. If a withholding tax were imposed to retained earnings prior to January, 2008, the Company would elect to reinvest these retained earnings in PRC. Accordingly, the Company has not recorded any withholding tax on the retained earnings of its FIEs in China.

The EIT Law also provides that an enterprise established under the laws of foreign countries or regions but whose “de facto management body” is located in the PRC be treated as a resident enterprise for PRC tax purposes and consequently be subject to the PRC income tax at the rate of 25% for its global income. The Implementing Rules of the EIT Law merely defines the location of the “de facto management body” as “the place where the exercising, in substance, of the overall management and control of the production and business operation, personnel, accounting, properties, etc., of a non-PRC company is located.” The determination of tax residency requires a review of surrounding facts and circumstances of each case. If the Company is treated as a resident enterprise for PRC tax purposes, the Company will be subject to PRC tax on worldwide income at a uniform tax rate of 25% starting from January 1, 2008.

Like its predecessor, the EIT Law mainly provides a framework for general income tax provisions. There are currently divergent views on how the EIT Law will be implemented. Details on the definition of numerous terms as well as the interpretation and specific application of various provisions are left to the detailed implementing regulations and supplementary tax circulars, which are still being issued. The Company’s ultimate effective tax rate will depend on many factors, including but not limited to, whether certain of the Company’s subsidiaries in China will receive the new and high technology enterprise status under the new criteria.

27 F-26

CHINA VOICE HOLDING CORP.

Notes to Condensed Consolidated Financial Statements (Continued)

NOTE 13 – INCOME TAXES (Continued)


	The current and deferred portion of income tax expenses of the Company’s China subsidiaries, which were included in the consolidated statements for the periods presented have no significant deferred tax assets or liabilities and the statutory rate and effective rate for China operations approximates 30%.

The following table represents the effective tax rate of the Company:

	December 31, 2009		December 31, 2008
	March 31, 2010			March 31, 2009
Loss from operations	2,247,508		1,802,222
Gain <Loss> from operations	<2,744,047>			676,268
Tax benefit:
Federal current	-	-	-		-
Federal deferred	-	-	-		-
U.S. State	-	-	-		-
Foreign	-	-	-		-
Total tax benefit	-$	-	-	$	-
Effective tax benefit rate	~~0.0%~~	0.0	~~0.0~~%		0.0	%


	The difference between the tax benefit rate and the statutory benefit rate is as follows:

	December 31, 2009			December 31, 2008
	March 31, 2010			March 31, 2009
Statutory benefit rate		34.0	%		34.0	%
Non taxable income		(34.0	%)		(34.0	%)
Effective tax benefit rate		0.0	%		0.0	%

28F-27

CHINA VOICE HOLDING CORP.

Notes to Condensed Consolidated Financial Statements (Continued)

NOTE 13 – INCOME TAXES (Continued)

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets are as follows:

	December 31, 2009		June 30, 2009
	March 31, 2010		June 30, 2009
Deductible temporary differences:
U.S. federal deferred operating loss	$	3,~~692~~731,~~250~~203	$~~3,489,746~~	3,489,746
State deferred operating loss		~~337~~322,~~123~~782	~~337,799~~	337,799
Foreign deferred operating loss		96101,~~400~~795	~~129,032~~	129,032
Less: valuation allowance	(<4,~~125~~155,~~773)~~780>		(3,956,577)
Total tax assets	$	-	-$	-

At ~~December~~March 31, ~~2009~~2010, the Company had carry forward losses for income tax purposes of approximately $10,~~859~~974,~~560~~128 that may be offset against future taxable income. Due to the uncertainty regarding the success of future operations, management has recorded a valuation allowance equal to 100% of the resultant deferred tax asset.

The carry forward losses expire in future years through 2029 as follows:

Expiration Year	Amount
2025	$	109,872
2026		1,499,867
2027		4,790,794
2028		3,863,427
2029		~~595~~710,~~600~~168

29F-28

CHINA VOICE HOLDING CORP.

Notes to Condensed Consolidated Financial Statements (Continued)

NOTE 14 – WARRANTS

The Company has issued warrants to purchase its common stock in connection with financing transactions. As of ~~December~~March 31, ~~2009~~2010, the warrants are exercisable and have terms as follows:


	Exercise Price per Share		Termination Date	In connection with financing transactions		Shares

	$	0.40	July 2010		350,000		350,000

Total					350,000		350,000

As of ~~December~~March 31, ~~2008~~2009, the warrants are exercisable and have terms as follows:


	Exercise Price per Share		Termination Date	In connection with financing transactions		Shares

	$	0.40	July 2009		350,000		350,000
	$	0.40	January 2009		213,200		213,200

Total					563,200		563,200

NOTE 15 – DISPOSITION OF CERTAIN SUBSIDIARIES

On November 1, 2008 the Company disposed of its ownership interest in two wholly owned subsidiaries, CVC Communications Corp and VCG Technologies Inc. by transferring stock in the subsidiaries to a related party. In addition to transferring the stock, the Company also issued 1,250 shares of Series A Preferred stock to the transferee. The excess of liabilities of the subsidiaries over the asset values, $361,243, was treated as additional paid in capital on the Series A Preferred stock.

NOTE 16 – TRANSACTION WITH FLINT TELECOM GROUP INC.

On January 29, 2009, the Company entered into an Agreement and Plan of Merger (“Merger Agreement”) and a Stock Purchase Agreement with Flint Telecom Group, Inc. (“FLTT”), a U.S. Telecommunications Technology and Services Company which is traded on the OTC BB market under the symbol FLTT. The agreement was modified on April 24, 2009.

Under the Merger Agreement, the Company’s six subsidiaries having U.S. business operations will merge into subsidiaries of FLTT. The six subsidiaries, CVC INTL Inc, Phone House Inc. (CA), Cable and Voice Corporation, StarCom Alliance Inc., Dial Tone Communication Inc., and Phone House Inc. (FL), (“U.S. Subsidiaries”), will become wholly owned subsidiaries of FLTT. The U.S. Subsidiaries accounted for sales of $35,486,367 in the year ended June 30, 2008 and $29,356,234 in the six months ended December 31, 2008, representing 97.4% and 99%, respectively, of the Company’s sales. The total assets of the U.S. Subsidiaries as of December 31, 2008 were $9,112,691, or 41% of total assets. Contemporaneously with the Merger Agreement, pursuant to the Stock Purchase Agreement, the Company issued 15,000,000 shares of Restricted Common Stock to FLTT on January 29, 2009 at closing.

30 F-29

CHINA VOICE HOLDING CORP.

Notes to Condensed Consolidated Financial Statements (Continued)

NOTE 16 – TRANSACTION WITH FLINT TELECOM GROUP INC. (Continued)

The Company received total consideration of $500,000 cash and 21,000,000 shares of Restricted Common Stock of FLTT at the January 29, 2009 closing. In addition, the Company has received payments of $700,000, for a total cash payment of $1,200,000 cash and $1,800,000 worth of FLTT Preferred Stock, along with FLTT’s non interest bearing Promissory Note for $7,000,000 payable in three equal installments on December 31, 2009, July 31, 2010, and December 31, 2010 FLTT has redeemed $550,000 worth of Preferred Stock and is obligated to redeem $250,000 worth per month on the 15th day of July through November, 2009. The total consideration is $1,200,000 cash, $1,800,000 of redeemable Preferred Stock the, $7,000,000 Promissory Note and 21,000,000 shares of Restricted Common Stock of FLTT, valued at $7,980,000, for a total consideration of $17,980,000. The Company has allocated $3,150,000 of the total consideration for the issuance of stock and $14,830,000 to the sale of the subsidiaries and recognized a gain of $4,648,937. The Company has deferred a gain of $3,850,000 as of June 30, 2009 until the receipt of the proceeds of the $7,000,000 Promissory Note is no longer uncertain. The $7,000,000 is due from FLTT in three equal installments on December 31, 2009, July 31, 2010 and December 31, 2010. Flint failed to make the payments and December 31, 2009, and has issued an 8-K outlining a retrenchment of its business.

~~Restricted~~As ~~Common Stock~~ of ~~FLTT~~March 31, ~~valued~~2010 atthe ~~$7,980,000,~~Company’s ~~for~~investment ain ~~total~~FLTT ~~consideration~~represented ~~of $17,980,000~~25.2% ~~The Company has allocated $3,150,000~~ of the ~~total~~ownership ~~consideration~~of ~~for~~FLTT. ~~the~~The ~~issuance~~Company ofaccounts ~~stock~~for ~~and~~its ~~$14,830,000~~interest toin ~~the~~FLTT ~~sale~~under of the ~~subsidiaries~~equity ~~and~~method ~~recognized a gain~~ of $4accounting and,~~648,937. The~~ the Company ~~has~~must ~~deferred~~report aits ~~gain~~portion of ~~$3,850,000~~the asFLTT ofloss ~~June~~for ~~30, 2009 until~~ the ~~receipt~~three ofmonths ~~the~~ended ~~proceeds~~March ~~of the $7~~31,~~000,000~~ ~~Promissory Note is no longer uncertain~~2010. Flint ~~The~~has ~~$7,000,000~~not isreleased ~~due~~its ~~from~~earnings ~~FLTT~~for inthe three ~~equal~~months ~~installments~~ended onMarch ~~December~~ 31, ~~2009, July 31,~~ 2010 and ~~December~~the ~~31,~~company ~~2010. Flint~~has ~~failed~~recorded toan ~~make~~estimated ~~the~~loss ~~payments~~of ~~due December 31~~$293,000 ~~2009,~~based ~~and~~on isthe inoperating ~~default.~~loss Itreported ~~has~~in ~~issued~~the anthree ~~8-K~~months ~~outlining~~ended aDecember ~~retrenchment~~31, ~~of its business~~2009.

As of December 31, 2009 the Company’s investment in FLTT represented 27.5% of the ownership of FLTT. The Company accounts for its interest in FLTT under the equity method of accounting and, the Company must report its portion of the FLTT loss for the three months ended December 31, 2009. Flint has not released its earnings for the three months ended December 31, 2009 and the company has recorded an estimated loss of $840,000 based on the $839,361 loss reported in the three months ended September 30, 2009.

NOTE 17 – SINO BEYOND LTD. TRANSACTIONS

During the ~~year~~nine-months ended ~~December~~March 31, ~~2009~~2010 the Company incorporated Sino Beyond Ltd., a wholly owned Hong Kong subsidiary, in order to facilitate acquisitions of companies in China. On September 10, 2009 the Company issued 100,000,000 shares of its common stock to Sino Beyond Limited in exchange for a note receivable of $15,000,000, which has substantially contributed to capital. As of ~~September~~March 3031, ~~2009~~2010, the stock is treated as being outstanding because it is owned by a wholly owned subsidiary ~~and the note receivable is not recorded in the consolidated balance sheet because it is owed by a wholly owned subsidiary~~.

F-30

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

General

Certain statements contained in this Report and other written material and oral statements made from time to time by us do not relate strictly to historical or current facts. As such, they are considered “forward-looking statements” that provide current expectations or forecasts of future events. Such statements are typically characterized by terminology such as “believe,” “anticipate,” “should,” “intend,” “plan,” “will,” “expect,” “estimate,” “project,” “strategy” and similar expressions. Our forward-looking statements generally relate to the prospects for future sales of our products, the success of our marketing activities, and the success of our strategic corporate relationships. These statements are based upon assumptions and assessments made by our management in light of its experience and its perception of historical trends, current conditions, expected future developments and other factor our management believes to be appropriate. These forward-looking statements are subject to a number of risks and uncertainties, including the following: our ability to achieve profitable operations and to maintain sufficient cash to operate its business and meet its liquidity requirements; our ability to obtain financing, if required, on terms acceptable to it, if at all; the success of our research and development activities; competitive developments affecting our current products; our ability to successfully attract strategic partners and to market both new and existing products; exposure to lawsuits and regulatory proceedings; our ability to protect our intellectual property; governmental laws and regulations affecting operations; our ability to identify and complete diversification opportunities; and the impact of acquisitions, divestiture, restructurings, product withdrawals and other unusual items. A further list and description of these risks, uncertainties and other mattes can be found elsewhere in this Registration Statement. Except as required by applicable law, we undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

Plan of Operation

We were incorporated on August 7, 2003 and began business as China Voice Holding Corp after a reorganization and name change on April 1, 2004. The Company obtained licenses to provide telecommunications services in The People’s Republic of China in 2005 and acquired its Chinese operating subsidiary, Candidsoft Technologies Co. Ltd. of Beijing (“Candidsoft”) effective January 18, 2006. Candidsoft had developed its patented SKY O/A ™ office automation platform, which is currently supporting over one million users in China, and during 2006 we began to develop the SKY O/A ™ platform into an Office Automation with VOIP and Telephony services platform capable of providing fully integrated voice and data telephony solutions to Government Agencies and large enterprises. This service offering proved to be very popular and we were awarded five contracts with three large Chinese government agencies.

31During the year ended June 30, 2008 our focus in China has revolved around improving the SKY O/A ™ Enhanced Services Platform and establishing the infrastructure to support our Chinese government contracts. As a result of the narrowed focus, the Company completed the abandonment of an unsuccessful operation in China and then sold another Chinese company which proved to be incompatible with our plans. Candidsoft’s revenues also stagnated, as its efforts were concentrated on developing the SKY O/A ™ product and transitioning to an application service provider (ASP) reoccurring revenue model. The Company also gained a significant partner to provide connectivity, installation, first level customer support and billing to Candidsoft’s customers with China Netcom (CNC), which merged with China Unicom, a major Chinese telco. Also, in July 2007 Vastland Holdings (Beijing) Co. Ltd. (“Vastland”) was formed as a Wholly Owned Foreign Entity (“WOFE”) incorporated in the People’s Republic of China through a Singapore-domiciled company VoIUM Communications Pte. Ltd. Vastland is registered as a high-tech industry Company in China. This entity enables foreigners to legally operate and move funds in and out of China through an established banking relationship with HSBC.

During the year ended June 30, ~~2008~~2009, our ~~focus~~products inbegan ~~China~~to ~~has~~be ~~revolved~~utilized ~~around~~in ~~improving~~China. ~~the~~We ~~SKY~~began ~~O/A~~realizing ~~™ Enhanced~~sales ~~Services~~in ~~Platform~~the ~~and~~quarter ~~establishing~~ended ~~the~~December ~~infrastructure~~31, to2008, ~~support~~but ~~our~~were ~~Chinese~~subjected ~~government~~to ~~contracts. As~~ a ~~result~~long ofdelay ~~the~~in ~~narrowed~~implementing ~~focus,~~our ~~the~~plan ~~Company~~because ~~completed~~of the ~~abandonment~~merger ofbetween anChina ~~unsuccessful~~Netcom ~~operation~~and in China ~~and~~Unicom. ~~then~~The ~~sold~~delay ~~another~~led ~~Chinese~~to ~~company~~the ~~which~~Company ~~proved~~ to bedetermine ~~incompatible~~that ~~with~~the ~~our~~values ~~plans. Candidsoft’s~~of ~~revenues~~its ~~also~~telecom ~~stagnated,~~licenses asand ~~its~~software ~~efforts~~licenses, ~~were~~totaling ~~concentrated~~$6,214,574, onhad ~~developing~~been ~~the~~impaired ~~SKY~~as ~~O/A~~of ™June ~~product~~30, ~~and~~2009 ~~transitioning~~because tothe anlicenses ~~application~~were ~~service~~not ~~provider~~generating ~~(ASP)~~current ~~reoccurring~~ revenue ~~model~~. ~~The~~ ~~Company~~Subsequent ~~also gained a significant partner~~ to ~~provide~~June ~~connectivity~~30, ~~installation,~~2009 ~~first~~the ~~level~~Company ~~customer~~has ~~support~~partnered ~~and~~with ~~billing~~a toSingapore ~~Candidsoft’s~~internet ~~customers~~appliance ~~with~~company ~~China Netcom (CNC),~~ which ~~recently~~enables ~~merged~~the ~~with~~Company ~~China~~to ~~Unicom,~~utilize amultiple ~~major~~forms ~~Chinese~~of ~~telco. Financially,~~connectivity including ~~the years ended June 30, 2008 in~~ China’s ~~was~~3G awireless ~~year~~network. ofWe ~~development~~expect ~~for~~to ~~our~~begin ~~products,~~installations ~~and~~again wein ~~incurred~~the ~~losses~~next ~~during~~few ~~this period~~months.

~~During~~In ~~the~~July ~~year ended June 30,~~ 2009, ~~our~~CHVC ~~products~~acquired ~~began~~Sino toBeyond ~~be utilized in China. We began realizing sales in the quarter ended December 31~~Limited, ~~2008, but were subjected to~~ a ~~long~~Hong ~~delay~~Kong ~~in implementing our plan because of the merger between China Netcom and China Unicom~~company. ~~The~~Shortly ~~delay~~after ~~led to~~ the ~~Company~~acquisition, toCHVC ~~determine~~injected ~~that~~company ~~the~~valuable ~~values~~assets ofinto ~~its~~this ~~telecom~~entity ~~licenses~~which ~~and~~have ~~software licenses, totaling $6,214,574, had~~ been ~~impaired~~certified asby ofCertified ~~June~~Public 30Accountants, ~~2009~~BDO ~~because~~Limited. ~~the~~During ~~licenses~~2010 ~~were~~CHVC ~~not~~plans ~~generating current revenue. Subsequent~~ to ~~June~~use ~~30,~~Sino ~~2009~~Beyond’s ~~the~~securities ~~delay~~to ~~was~~acquire ~~ended~~complementary ~~and~~Chinese webusinesses ~~expect~~ to ~~achieve~~support ~~profitability~~CHVC’s incurrent China ~~in 2010~~operations.

-2-

In addition to our business in China, during the years ended June 30, 2008 and 2009, we have established businesses in the United States in telecommunications services, prepaid calling card distribution, prepaid cellular products and services distribution and advanced broadband hardware distribution. The Company acquired and established companies operating in the broadband and VoIP hardware and VoIP telecommunication services and calling card distribution segments to provide infrastructure to cross market Asian products as well as to provide profits to cover U.S. corporate overhead. Using these companies as a base, the Company entered the telecommunications services segment and greatly expanded its prepaid calling card and cellular distribution business. As a result, the Company has realized substantial sales growth from the year ended June 30, 2008 and the six months ended December 31, 2008.

On January 29, 2009, the Company entered into an Agreement and Plan of Merger (“Merger Agreement”) and a Stock Purchase Agreement with Flint Telecom Group, Inc. (“FLTT or Flint”), a U.S. telecommunications technology and services company which is traded on the OTCBB market under the symbol FLTT. Under the Merger Agreement, Company’s subsidiaries having U.S. business operations merged into subsidiaries of FLTT. Contemporaneously with the Merger Agreement, pursuant to the Stock Purchase Agreement, the Company issued 15,000,000 shares of Restricted Common Stock to FLTT on January 29, 2009 at closing.

The Company received total consideration of $500,000 cash and 21,000,000 shares of Restricted Common Stock of FLTT at the January 29, 2009 closing. In addition, the Company has received payments of $700,000, for a total cash payment of $1,200,000 cash and $1,800,000 worth of FLTT Preferred Stock, along with FLTT’s non interest bearing Promissory Note for $7,000,000 payable in three equal installments on December 31, 2009, July 31, 2010, and December 31, 2010. FLTT has redeemed $550,000 worth of Preferred Stock and is obligated to redeem $250,000 worth per month on the 15th day of July through November, 2009. The total consideration is $1,200,000 cash, $1,800,000 of redeemable Preferred Stock the, $7,000,000 Promissory Note and 21,000,000 shares of Restricted Common Stock of FLTT, valued at $7,980,000, for a total consideration of $17,980,000. The Company has allocated $3,150,000 of the total consideration for the issuance of stock and $14,830,000 to the sale of the subsidiaries, and recognized a gain of $4,648,937. The Company has deffered a gain of $3,850,000 as of June 30, 2009 until the receipt of the proceeds of the $7,000,000 Promissory Note is no longer uncertain. Flint has not made the payments due December 31, 2009, and has issued an 8-K outlining a retrenchment of its business.

~~The~~Because ~~Merger~~of ~~was~~delays ~~undertaken~~experienced toin ~~enhance~~receiving ~~the~~payments ~~Company’s~~fom ~~ability~~Flint, toin ~~exploit~~late ~~its~~2009 ~~business~~and ~~opportunities~~early ~~and~~2010, ~~provide~~CHVC ~~funds~~established two U.S. subsidiary companies to ~~cover~~rebuild its U.S. ~~overhead. Because~~operations, ofWize ~~the~~Prepaid ~~delays~~Inc, ~~experienced~~and inCVC ~~receiving~~Globalcall ~~payments,~~Inc. In the ~~Company reinstituted~~ U.S. ~~business~~the ~~operations~~companies engage in ~~December~~two related activities; as a provider of ~~2009~~Prepaid Calling Cards targeted at large population ethinic groups and ~~expects~~as toa ~~realize~~provider ~~substantial~~of ~~sales~~wholesale VoIP telecommunications services focused on selling high volumes of international termination minues to Carrier and ~~operating~~other ~~profits~~Service ~~from~~Provider Ucustomers.S Wize Prepaid, Inc. ~~business~~is a provider of low cost prepaid calling cards to make international long distance calls. The company has built its reputation on providing high quality with great customer service at one of the nation’s most competitive prices. Wize branded prepaid calling cards are currently sold on the east coast but the company expects to add additional master distributors to provide complete nationwide coverage by the end of ~~its~~ 2010 ~~fiscal year~~.

32CVC GLOBALCALL, INC. serves fixed line, mobile, wholesale and VoIP carriers as well as calling card, ISPs and content providers around the world who buy and sell voice and IP telecommunications capacity. The Company’s Network Operations Center (NOC) is fully manned 24 x 7. Our NOC is a secure location that contains battery backup and power generators to eliminate electrical outages, and several rack-mounted servers and other equipment needed to support our network. The NOC monitors all aspects of the technical environment, from its extensive backbone to network routers, SIP proxies, numerous routing gateways and soft switches. The company’s network consists primarily of communications service providers that buy and sell international voice minutes through our enhanved services platform. Most of the Company’s business is generated by us acting as a cost-effective middleman to direct connections. In this very fluid and ever changing business, rates change frequently as do the availability of quality routes. Additional information on the Company may be found at www.cvcglobalcall.com.

Our current revenue sources are as follows:

Wize branded prepaid calling cards distributed in the U.S.

VoIP wholesale international termination services.

SKY O/A – Candidsoft’s Office Automation Application Licensing

SKY O/A with integrated next generation proprietary Digital Telephone Services (VoIP) or wireless GSM terminal (referred to as a “seat”).

SKY O/A based custom government and logistics applications.

The Company is experiencing substantial growth from its U.S. operations and anticipates that U.S. growth will continue and China Operations will expand substantially in its fiscal year ended June 30, 2011.

-3-

Comparisons by Period

The financial information discussed herein has not been reviewed by our independent public accountant as required by Rule 10-01(d) of Regulation S-X.

~~Six~~Nine Months Ended ~~December~~March 31, ~~2009~~2010 and ~~2008~~2009

Revenues . Revenues for the ~~six~~nine months ended ~~December~~March 31, ~~2009~~2010 were $~~472~~1,~~047~~660,927, a $51793,~~611~~170 increase as compared to $~~420~~867,~~436~~757for ~~for~~ the ~~six~~nine months ended ~~December~~March 31, ~~2008~~2009 (reclassified to exclude discontinued operations). The increase in revenues for the ~~six~~nine months is primarily attributed to U.S. business activities begun during the ~~six~~nine months ended ~~December~~March 31, ~~2009~~2010.

Gross Income . Gross income for the ~~six~~nine months ended ~~December~~March 31, ~~2009~~2010 was $82374,~~699~~418, a $5072,~~833~~960 ~~decrease~~increase as compared to $~~133~~301,~~532~~458 for the ~~six~~nine months ended ~~December~~March 31, ~~2008~~2009 (reclassified to exclude discontinued operations). The ~~decrease~~increase in gross income is attributed to increased lower margin sales in the U.S.

Operating Expenses . For the ~~six~~nine months ended ~~December~~March 31, ~~2009~~2010 expenses were $~~529~~880,~~211~~716- versus the $23,~~167~~084,~~104~~827 reported for the ~~six~~nine months ended ~~December~~March 31, ~~2008~~2009 (reclassified to exclude discontinued operations). The $12,~~637~~204,~~873~~111 decrease in expenses is attributed primarily to reductions in corporate overhead expenses resulting from the sale of the Company’s U.S. operations.

Non Operating Income and Expenses . The Company’s non operating ~~losses~~loss for the ~~six~~nine months ended ~~December~~March 31, ~~2009~~2010 was $62216,~~981~~383 compared to a ~~loss~~net income of $8761,~~315~~139 for the ~~six~~nine months ended ~~December~~March 31, ~~2008~~2009. The $24277,~~334~~522 ~~decrease~~increase in net loss was caused primarily by an accounting fee refund of $115,000, decrease in a tax credit income of $242,730, and an increase of ~~113~~$196,~~274~~856 in interest expense and other financing costs.

Loss on Equity Investment. For the ~~six~~nine months ended ~~December~~March 31, ~~2009~~2010 the Company recorded a loss on its equity investment in Flint of $1,~~679~~972,~~367~~361, representing the Company’s estimated portion of the Flint loss for the ~~six~~nine months, an increase of $1,632,247 over the $340,114 loss reported in the nine months ended March 31, 2009.

Net Loss. For the ~~six~~nine months ended ~~December~~March 31, ~~2009~~2010 the Company reported a net loss of $2,~~247~~744,~~508~~047 compared to a ~~loss~~net income of $1676,~~802,222~~268for ~~for~~ the prior period. The increased net loss of $~~445~~3,~~286~~420,215 was primarily the result of the $~~443~~3,~~178~~937,966 income from discontinued operations and the $1,~~679~~632,~~361~~247 loss on equity investment, reduced by the $12,~~637~~204,~~893~~111 decrease in operating expenses.

Quarter Ended ~~December~~March 31, ~~2009~~2010 and ~~2008~~2009

Revenues . Revenues for the quarter ended ~~December~~March 31, ~~2009~~2010 were $~~458~~1,~~624~~188,880 aan $~~134~~886,~~173~~214 increase as compared to $~~324~~32,~~451~~666 for the quarter ended ~~December~~March 31, ~~2008~~2009 (reclassified to exclude discontinued operations). The increase in revenues for the quarter is primarily attributed to U.S. business activities begun during the quarter ended December 31, 2009.

Gross Income . Gross income for the quarter ended ~~December~~March 31, ~~2009~~2010 was $87291,~~594,~~719 a $~~131~~123,~~134 decrease~~792 increase as compared to $~~218~~167,~~728~~927 for the quarter ended ~~December~~March 31, ~~2008~~2009 (reclassified to exclude discontinued operations). The decrease in gross income is attributed to increased lower margin sales in the U.S.

Operating Expenses . For the quarter ended ~~December~~March 31, ~~2009~~2010 expenses were $~~205~~351,~~714~~505 versus the $1746,~~113,892~~685 reported for the quarter ended ~~December~~March 31, ~~2008~~2009 (reclassified to exclude discontinued operations). The $~~908~~395,~~178~~180 decrease in expenses is attributed primarily to reductions in corporate overhead expenses resulting from the sale of the Company’s U.S. operations.

Non Operating Income and Expenses . The Company’s non operating loss for the quarter ended ~~December~~March 31, ~~2009~~2010 was $~~122~~153,~~308~~403 compared to a ~~loss~~net income of $86156,~~707~~479 for the quarter ended ~~December~~March 31, ~~2008~~ 2009. The $35309,~~542~~882 increase in net loss was caused primarily by a decrease of tax credit income of $242,730 and an increase of $7783,~~217~~611 in interest expense and other financing costs.

Loss on Equity Investment. For the quarter ended ~~December~~March 31, ~~2009~~2010 the Company recorded a loss on its equity investment in Flint of $~~840~~293,000, representing the Company’s estimated portion of the Flint loss for the quarter, a decrease of $47,114 over the $340,114 loss recorded in the three months ended March 31, 2005.

Net Loss. For the quarter ended ~~December~~March 31, ~~2009~~2010 the Company reported a net loss of $1496,~~150,361~~541compared ~~compared~~ to a ~~loss~~net income of $~~836~~2,~~901~~478,490 for the prior period. The increased net loss of $~~313~~2,~~460~~975,031 was primarily the result of the $~~162~~3,~~826~~325,724 income from discontinued operations, ~~and~~ the $~~840~~47,~~000~~114 decreased loss on equity investment, ~~reduced~~and by the $~~908~~395,~~178~~180 decrease in operating expenses.

33-4-

Discontinued Operations

The operating income or loss from the discontinued operations is reported as a single net number on the income statement. The Company reported no net operating income offor ~~$433~~the nine months ended March 31,~~178~~ 2010, and net operating income of $~~162~~421,~~826~~054 from sales of $2933,~~328~~687,~~636~~278 ~~and $15,868,367~~ in the ~~six~~nine months ~~and quarter~~ ended ~~December~~March 31, 2009 ~~and 2008~~.

Liquidity and Cash Resources

For the quarter ended ~~December~~March 31, ~~2009~~2010 the Company reported a net loss of $1496,~~150,361~~541 compared to a ~~loss~~net income of $~~836~~2,~~901~~478,490 for the prior period. The Company’s cash balance at ~~December~~March 31, ~~2009~~2010 was $~~284~~177,~~813~~730.

The Company had ana ~~increase~~decrease in cash of $997,~~393~~690 for the ~~six~~nine months ended ~~December~~March 31, ~~2009~~2010, compared to a decrease in cash of $12,~~458~~042,~~967~~898 for the comparable period of ~~2008~~2009. Cash resources of $~~679~~923,~~581~~294 were used in continuing operations for the ~~six~~nine months ended ~~December~~March 31, ~~2009~~2010 as compared to $12,~~491~~260,~~073~~216 used in continuing operations for the same period of ~~2008~~2009. Cash provided by investing activities of continuing operations was $183,223 for the ~~six~~nine months ended ~~December~~March 31, ~~2009~~2010 as compared to $567,~~516~~479 ~~used~~provided inby investing activities for the same period of ~~2008~~2009. Cash provided by financing activities of continuing operations was $~~512~~1,~~330~~060,678 for the ~~six~~nine months ended ~~December~~March 31, ~~2009~~2010 as compared to $~~991~~402,~~441~~183 used in the same period in ~~2008. Net cash provided by discontinued operations for the six months ended December 31,~~ 2009 ~~was none as compared to $433,178 net cash used in discontinued operations for the same period of 2008~~. Our principal sources of cash during the quarter ended ~~December~~March 31, ~~2009~~2010 were the proceeds from short term borrowing.

Currently, the operations of the Company are funded through the issuance of debt and equity instruments and borrowings from related parties. Management’s plans to generate cash flow include sale of company assets, expanding the Company’s existing operations, as well as through additional acquisitions. Additionally, the Company may raise additional funds by raising additional capital through debt of equity offerings in an effort to fund the Company’s anticipated expansion. There is no assurance additional capital will be available to the Company on acceptable terms.


ITEM 3.	QUALITATIVE AND QUANTITATIVE DISCLOSURE ABOUT MARKET RISK

Not applicable to Smaller Reporting Companies.


ITEM 4T.	CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures

The Company’s Chief Executive Officer and Chief Financial Officer evaluated the effectiveness of the design and operation of its disclosure controls and procedures as defined in Exchange Act Rule 13a-15(e). The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, (the Exchange Act) means controls and other procedures of a company that are designed to ensure that this information is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Based upon their evaluation of its disclosure controls and procedures, our Chief Executive Officer and Chief Financial Officer have concluded that, as of ~~December~~March 31,~~2009~~ 2010 and as of the date of filing, the controls, and procedures were effective at a reasonable assurance level and will continue to operate as designed, except for data required from an unconsolidated subsidiary which was not provided and has resulted in the Company’s inability to receive a review of its Financial Statements from its independent auditors.

Registrant maintains certain internal controls over financial reporting that are appropriate, consistent with cost-benefit considerations, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

34-5-


	(b)	Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Our management assessed the effectiveness of our internal control over financial reporting as of ~~December~~March 31, ~~2009~~2010. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework. Our management has concluded that, as of ~~December~~March 31, ~~2009~~2010, our internal control over financial reporting is effective based on these criteria. This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the SEC that permit us to provide only management’s report in this annual report.

Changes in Internal Control over Financial Reporting

There were no changes in the company’s internal control over financial reporting that occurred during the period covered by this quarterly report that have materially affected, or are reasonably likely to materially affect, the company’s internal control over financial reporting.

PART II — OTHER INFORMATION

Item 1. Legal Proceedings

From time to time we are involved in various claims and other legal proceedings which arise in the normal course of our business. In addition, the Company has been notified that it is under review by the SEC to examine its history of financings, stock issuances and press releases chronicling the Company’s development. The Company had fully cooperated with the SEC and has provided all requested data. Such matters are subject to many uncertainties and outcomes that are not predictable. However, based on the information available to us and after discussions with legal counsel, we do not believe any such proceedings will have a material adverse effect on our business, results of operations, financial position or liquidity. We cannot provide assurance, however that damages that result in a material adverse effect on our financial position or results of operations will be not be imposed in these matters.

Item 1A. Risk Factors - Not applicable to Smaller Reporting Companies.

Item 2. Unregistered Sales of Equity Securities

The following issuances have occurred during the Quarter Ended ~~December~~March 31, ~~2009~~2010:

Common Stock

~~From~~We ~~October~~issued 1,no ~~2009~~shares toof ~~December~~Common ~~31,~~Stock ~~2009,~~during wethe ~~issued~~Quarter Ended March 31,~~250~~ ~~shares.~~2010

· 31,250 shares were issued to 1 non-US person to correct an issuance error in a transaction under Regulation S. (3)

Preferred Stock

We have issued no shares of our Series A Preferred Stock during the Quarter Ended ~~December~~March 31, ~~2009~~2010.

The information above is a summary of transactions by our company within the Quarter Ended ~~December~~ March 31, ~~2009~~2010 involving sales of its securities that were not registered under the Securities Act of 1933 (the “Act”). For each transaction we relied upon the following exemption(s) from registration under the Act, and each such issuance is noted at the end to correspond to one of these exemptions:

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	(1)	Exempt under Section 4(2) of the Act as a sale for cash to a small group of accredited or otherwise sophisticated investors not involving any public offering.


	(2)	Exempt under Section 4(2) of the Act as an issuance of securities as consideration for an acquisition of a company or block of assets from a small group of sophisticated sellers.


	(3)	Exempt under Regulation S promulgated under the Act as issuances of restricted shares to non-US persons who provided subscription representations in private transactions without any advertising or public solicitation.


	(4)	Exempt under Regulation D promulgated under the Act and Rule 506 thereof as sales to all accredited investors who provided subscription representations in offerings that were not subject to public solicitation and in which Form D notices were filed.


	(5)	Exempt under Section 4(2) as issuances of stock in lieu of compensation or consulting fees to a small member of sophisticated persons not involving any public offering.


	(6)	Exempt under such 3(a)(9) of the Act as an exchange of securities for other outstanding securities of the Registrant.


	(7)	Exempt under Section 4(2) of the Act as issuance of shares as additional consideration for loans to the Registrant or in lieu of interest on loans, to institutional and other accredited investors.

In the case of all issuances other than pursuant to Regulation D or Regulation S, the Company believes the investor or its purchase representative was reasonably believed to have such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of the investment, (b) the investor or its purchaser representative were provided with required information and an opportunity to obtain additional information a reasonable period of time prior to the transaction, (c) the investor or its purchaser representative were advised of the limitations on resale of the Common Stock, (d) the investor represented its intention to acquire the securities for investment only and not with view to or for sale in connection with any distribution thereof, and (e) appropriate legends were affixed to the instruments issued in the transactions.

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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 .

Exhibits 31.1, 31.2, and 32.1 are not being filed as required until the Company has obtained a review of its Financial Statements by an independent accounting firm.

SIGNATURE

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.

Date: ~~February~~May 1921, 2010

CHINA VOICE HOLDING CORP.

By: /s/ D. Ronald Allen

D. Ronald Allen, Chief Financial Officer

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Filing Compare · China Voice Holding Corp.