~~U. S. SECURITIES AND EXCHANGE COMMISSION~~UNITED STATES

~~WASHINGTON, D.C. 20549~~SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

[X]		QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the quarterly period ended March 31, 2010
[ ]		TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

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

For the ~~transition~~quarterly period ~~from~~ended ~~___________~~June to30, ~~_____________~~2010

~~China Teletech Limited~~or

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

For the transition period from _______ to _________

CHINA TELETECH LIMITED

British Columbia	000-53372	27-1011540
(State or other jurisdiction	(Commission File Number)	(IRS Employer
of Incorporation)		Identification Number)

Room A, 20/F, International Trade Residential and Commercial Building Nanhu Road, Shenzhen, China
	(Address of principal executive offices)

	(86) 755-82204422
	(Issuer’s Telephone Number)

~~Indicate by~~Check ~~check mark~~ whether the ~~registrant~~issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act ~~of 1934~~ during the ~~past~~ preceding 12 months (or for such shorter period that the ~~registrant~~issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ~~[ X].~~x No o

Indicate by check mark whether the registrant ishas asubmitted ~~large~~electronically ~~accelerated~~and ~~filer,~~posted ~~an accelerated~~on ~~filer,~~its acorporate ~~non-accelerated~~Web ~~filer~~site, orif aany, ~~smaller~~every ~~reporting company. See~~Interactive ~~the~~Data ~~definitions~~File ofrequired ~~“large~~to ~~accelerated~~be ~~filer,” “accelerated~~submitted ~~filer”~~ and ~~“smaller~~posted ~~reporting~~pursuant ~~company”~~to inRule ~~Rule12b~~405 of Regulation S-2T (§232.405 of this chapter) during the ~~Exchange Act~~preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

~~Large~~Yes o ~~accelerated~~No ~~filer [ ] Accelerated filer [ ] Non-accelerated filer [ ] (Do not check if smaller reporting company) Smaller reporting company [X]~~o

Indicate by check mark whether the registrant is a ~~shell~~large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company ~~(as~~filer. See ~~defined~~definition of “accelerated filer” and “large accelerated filer” in Rule 12b-2 of the Exchange Act~~). No~~ ~~[ X~~(Check ]one):

~~APPLICABLE ONLY~~Large TOAccelerated ~~ISSUERS~~Filer ~~INVOLVED~~o Accelerated INFiler ~~BANKRUPTCY~~o Non-Accelerated Filer o Smaller Reporting Company x

~~PROCEEDINGS DURING~~Indicate ~~THE~~by ~~PRECEDING~~check ~~FIVE~~mark ~~YEARS~~whether the registrant is a shell company as defined in Rule 12b-2 of the Exchange Act. Yes o No x

~~Check whether~~State the ~~registrant~~number ~~filed~~of ~~all~~shares ~~documents~~outstanding ~~and~~of ~~reports~~each ~~required~~of tothe beissuer’s ~~filed~~classes ~~by Section~~of ~~12,~~common 13equity, orAs ~~15(d)~~ of ~~the~~August ~~Exchange~~16, ~~Act~~2010, ofthere ~~1934~~were ~~after~~240,919,945 ~~the~~shares ~~distribution~~ of ~~securities~~ ~~under~~our acommon ~~plan~~stock ~~confirmed~~were byissued aand ~~court~~outstanding. ~~Yes ___ No ____~~

~~APPLICABLE ONLY~~China TOTeletech ~~CORPORATE ISSUERS~~Limited

~~State~~FORM the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: As of March 31, 2010, there were 240,919,945 shares of our common stock were issued and outstanding.10-Q

June 30, 2010

TABLE OF CONTENTS


PART I— FINANCIAL INFORMATION

Item 1.	Financial Statements	1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	34
Item 4T.	Controls and Procedures	34

PART II— OTHER INFORMATION

Item 1.	Legal Proceedings	35
Item 1A.	Risk Factors	35
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	35
Item 3.	Defaults Upon Senior Securities	35
Item 4.	(Removed and Reserved)	35
Item 5.	Other Information	35
Item 6.	Exhibits	35

SIGNATURES		36

PART I

ITEM 1.FINANCIAL STATEMENTS

~~China Teletech~~CHINA ~~Limited~~TELETECH LIMITED

Unaudited Consolidated Financial Statements

~~March 31~~June 30, 2010 and December 31, 2009

(Stated in US Dollars)

China Teletech Limited

Contents	Pages
Report of Independent Registered Public Accounting Firm	A11
Consolidated Balance Sheets	A22
Consolidated Statements of Operations	A33
Consolidated Statements of Changes in Stockholders’ Equity	A44
Consolidated Statements of Cash Flows	A55 – A66
Notes to Consolidated Financial Statements	A77 –- ~~A24~~23

To: The Board of Directors and Stockholders of

China Teletech Limited

~~Report~~REPORT ofOF ~~Independent Registered~~REGISTERED ~~Public~~INDEPENDENT ~~Accounting~~PUBLIC ~~Firm~~ACCOUNTING FIRM

We have reviewed the accompanying interim consolidated balance sheets of China Teletech Limited (the “Company”) as of ~~March~~June 3130, 2010 and December 31, 2009, and the related ~~consolidated~~ statements of ~~operations~~income, ~~changes in~~ stockholders'’ equity, and cash flows for the three and six-month periods ended ~~March~~June 3130, 2010 and 2009. These interim consolidated financial statements are the responsibility of the Company's management.

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

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

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

~~April~~July 3020, 2010 Certified Public Accountants

A1-1-

China Teletech Limited

Consolidated Balance Sheets

As of ~~March~~June 3130, 2010 and December 31, 2009

(Stated in US Dollars)

ASSETS	~~Notes~~	~~3/31/2010~~Notes		~~12/31/2009~~	06/30/2010			12/31/2009
Current Assets
Cash and Cash Equivalents	2D	$ 382,839		$ 337,490
Cash and Cash Equivalent			2D		$	401,767		$	337,490
Other Receivable	3	~~300,776~~	3	~~284,639~~		293,178			284,639
Inventories	2F	~~350,865~~	2E	~~253,118~~		431,635			253,118
Advances to Suppliers	2G	-		117,008
Advance to Suppliers			2F			-			117,008
Total Current Assets		~~1,034,480~~		~~992,255~~		1,126,580			992,255
Non-Current Assets
Other Asset		258		258
Property, Plant & Equipment, net			2G,4			25,936			28,526
Property, Plant & Equipment, net	2H,4	27,125		28,526
Deposit						258			258
TOTAL ASSETS		~~$ 1,061,863~~		~~$ 1,021,039~~	$	1,152,774		$	1,021,039
LIABILITIES
Current Liabilities
Accounts Payable		~~$ 2,099~~		~~$ 2,116~~	$	1,980		$	2,116
Taxes Payable		~~233,931~~		~~225,197~~		248,085			225,197
Other Payable		~~95,515~~		~~86,724~~		81,798			86,724
Related Party Payable	5	~~75,202~~	5	~~52,887~~		140,344			52,887
Accrued Liabilities		~~28,000~~		~~40,000~~		40,000			40,000
Total Current Liabilities		~~434,747~~		~~406,924~~		512,207			406,924
TOTAL LIABILITIES		~~$ 434,747~~		~~$ 406,924~~	$	512,207		$	406,924
STOCKHOLDERS' EQUITY
Preferred Stock ($0.000 par value, 10,000,000 shares authorized, 0 share issued and outstanding at March 31, 2010 and December 31 2009)		$ -		$ -
Registered Capital					$	10		$	10
Common Stock ($0.000 par value, 250,000,000 shares authorized, 240,919,945 issued and outstanding at March 31, 2010 and December 31 2009)		-		-
Additional Paid in Capital						1,410,246			1,410,246
Additional Paid in Capital		1,410,256		1,410,256
Statutory Reserve			2I,6			-			-
Statutory Reserve	2J,6	-		-
Retained Earnings						(892,662	)		(915,942	)
Retained Earnings		(903,053)		(915,942)
Accumulated Other Comprehensive Income			2J			122,973			119,801
Accumulated Other Comprehensive Income	2K	119,913		119,801
TOTAL STOCKHOLDERS' EQUITY						640,567			614,115
TOTAL STOCKHOLDERS' EQUITY		627,116		614,115
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY					$	1,152,774		$	1,021,039
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$ 1,061,863		$ 1,021,039

See Notes to Consolidated Financial Statements and Accountant’s Report

A2-2-

China Teletech Limited

Consolidated Statements of Operations

For the three~~-month~~ ~~periods~~and six months ended ~~March~~June 3130, 2010 and 2009

(Stated in US Dollars)

	Notes	3/31/2010		3/31/2009
					3 Months			6 Months			3 Months			6 Months
Revenues
					Ended			Ended			Ended			Ended
Sales	2L	$ 3,334,185		$ 2,111,061
		Notes			06/30/2010			06/30/210			06/30/2009			06/30/2009
Cost of Sales	2M	3,234,336		2,043,320
Revenues
Gross Profit		99,849		67,741
Sales			2K		$	3,531,045		$	6,865,230		$	2,581,290		$	4,692,351
Operating Expenses
Cost of Sales			2L			3,412,583			6,646,919			2,455,811			4,499,131
Selling Expenses	2N	17,159		8,709
Gross Profit						118,462			218,311			125,479			193,220
General & Administrative Expenses	2O	61,136		38,485
Operating Expenses
Total Operating Expense		78,295		47,194
Selling Expenses			2M			1,491			18,650			9,575			18,284
Operating Income/(Loss)		21,554		20,547
General & Administrative Expenses			2N			93,356			154,492			84,472			122,957
Other Income (Expenses)
Total Operating Expense						94,847			173,142			94,047			141,241
Other Income		39		-
Operating Income/(Loss)						23,615			45,169			31,432			51,979
Other Expenses		(53)		-
Other Income (Expenses)
Interest Income		3		-
Other Income						-			39			1,213			1,213
Interest Expense		-		(13)
Other Expenses						(4	)		(57	)		(117	)		(117	)
Total Other Income/(Expense)		(11)		(13)
Interest Income						4			7			66			66
Earnings before Income Tax		21,543		20,534
Interest Expense						-			-			(129	)		(142	)
Income Tax	2R, 8	8,654		4,442
Total Other Income/(Expense)						-			(11	)		1,033			1,019
Net Income		$ 12,889		$ 16,092
Earnings before Tax						23,615			45,158			32,465			52,998
Income Tax			2Q			13,224			21,878			9,177			13,619
Net Income					$	10,391		$	23,280		$	23,288		$	39,379

Earnings per share
Basic	$ 0.00	$ 0.00
- Basic		1,039.10	2,328.00	2,328.80	3,937.90
Diluted	$ 0.00	$ 0.00
- Diluted		1,039.10	2,328.00	2,328.80	3,937.90
Weighted average shares outstanding
Basic	240,919,945	240,919,945
- Basic		10	10	10	10
Diluted	240,919,945	240,919,945
- Diluted		10	10	10	10

See Notes to Consolidated Financial Statements and Accountant’s Report

A3-3-

China Teletech Limited

Consolidated Statements of Changes in Stockholders’ Equity

~~For the~~As ~~three-month~~of ~~period~~June ~~ended March 31~~30, 2010 and ~~the year ended~~ December 31 , 2009

(Stated in US Dollars)

												~~Accumulated~~						Accumulated
		Number			~~Number~~			~~Additional~~		Additional		~~Other~~						Other
		of	~~Preferred~~		of	~~Common~~Registered		~~Paid in~~	~~Statutory~~	Paid in	~~Retained~~	~~Comprehensive~~	Statutory		Retained			Comprehensive
		Shares	~~Stock~~		~~Shares~~	~~Stock~~Capital		~~Capital~~	~~Reserve~~	Capital	~~Earnings~~	~~Income~~	~~Total~~Reserve		Earnings			Income		Total
Balance at January 1, 2009		-	-10		~~240,919,945~~	$-	10	~~$1,410,256~~	~~$ -~~	$	~~$(929~~1,~~770)~~410,246	~~$ 109,279~~	$ ~~589,765~~	-	$	(929,770	)	$	109,279	$	589,765
Net Income			-		-	-	-	-	-		~~13,828~~-	-	~~13,828~~	-		13,828			-		13,828
Appropriations of Retained Earnings					-	-		-	-		-	-	-
Distribution of Dividends			-				-				-			-		-			-		-
Distribution of Dividends					-	-		-	-		-	-	-
Unrealized Gain/(Loss) on Investment			-				-				-			-		-			9,004		9,004
Unrealized Gain/(Loss) in Investment					-	-		-	-		-	9,004	9,004
Foreign Currency Translation Adjustment			-				-				-			-		-			1,518		1,518
Foreign Currency Translation Adjustment					-	-		-	-		-	1,518	1,518
Balance at December 31, 2009			10			$	10			$	1,410,246		$	-	$	(915,942	)	$	119,801	$	614,115
Balance at December 31, 2009		-	-		240,919,945	$ -		$ 1,410,256	$ -		$ (915,942)	$ 119,801	$ 614,115
Balance at January 1, 2010			10			$	10			$	1,410,246		$	-	$	(915,942	)	$	119,801	$	614,115
Balance at January 1, 2010		-	-		240,919,945	$ -		$ 1,410,256	$ -		$(915,942)	$ 119,801	$ 614,115
Net Income			-				-				-			-		23,280			-		23,280
Net Income					-	-		-	-		12,889	-	12,889
Distribution of Dividends			-				-				-			-		-			-		-
Appropriations of Retained Earnings					-	-		-	-		-	-	-
Unrealized Gain/(Loss) on Investment			-				-				-			-		-			-		-
Distribution of Dividends					-	-		-	-		-	-	-
Foreign Currency Translation Adjustment			-				-				-			-		-			3,172		3,172
Unrealized Gain/(Loss) in Investment					-	-		-	-		-	-	-
Balance at June 30, 2010			10			$	10			$	1,410,246		$	-	$	(892,662	)	$	122,973	$	640,567
Foreign Currency Translation Adjustment					-	-		-	-		-	112	112
Balance at March 31, 2010		-	-		240,919,945	$ -		$1,410,256	$-		$ (903,053)	$119,913	$627,116
				Comprehensive Income
				12/31/2009			3/31/2010			Total
	Net Income			$ 13,828			$ 12,889			$ 26,717
	Unrealized Gain/(Loss) in Investment			9,004			-			9,004
	Foreign Currency Translation Adjustment			1,518			112			1,630
				$ 24,350			$ 13,001			$ 37,351


	Comprehensive Income				Accumulated
	12/31/2009		06/30/2010		Total
Net Income	$	13,828	$	23,280	$	37,108
Unrealized Gain/(Loss) in Investment		9,004		-		9,004
Foreign Currency Translation Adjustment		1,518		3,172		4,690
	$	24,350	$	26,452	$	50,802

See Notes to Consolidated Financial Statements and Accountant’s Report

A4-4-

China Teletech Limited

Consolidated Statements of Cash Flows

For the three~~-month~~ ~~periods~~and six months ended ~~March~~June 3130, 2010 and 2009

(Stated in US Dollars)

	3/31/2010		3/31/2009
		3 Months			6 Months			3 Months			6 Months
Cash Flows from Operating Activities
		Ended			Ended			Ended			Ended
Cash Received from Customers	$ 3,318,048		$ 1,741,230
		06/30/2010			06/30/2010			06/30/2009			06/30/2009
Cash Paid to Suppliers & Employees	(3,270,805)		(2,135,086)
Cash Flows from Operating Activities
Interest Received	3		-
Cash Received from Customers		$	3,538,643		$	6,856,691		$	2,638,517		$	4,379.747
Interest Paid	-		(13)
Cash Paid to Suppliers & Employees			(3,518,914	)		(6,789,718	)		(2,542,630	)		(4,677,716	)
Taxes Paid	(2,044)		1
Interest Received			4			7			66			66
Miscellaneous Receipts	39		-
Interest Paid			-			-			(129	)		(142	)
Cash Sourced from/(Used) in Operating Activities	45,241		(393,868)
Taxes Paid			(3,870	)		(5,914	)		(4	)		(4	)
Cash Flows from Investing Activities
Miscellaneous Receipts			-			39			1,213			1,213
Purchases of Property, Plant, and Equipment	-		(87)
Cash Sourced/(Used) in Operating Activities			15,863			61,105			97,033			(296,836	)
Cash Sourced from/(Used) in Investing Activities	-		(87)
Cash Flows from Investing Activities
Cash Flows from Financing Activities
Purchases of Property, Plant, and Equipment			-			-			87			-
Cash Sourced from/(Used) in Financing Activities	-		-
Proceeds from Disposal of Assets			-			-			19,014			19,014
Net Increase/(Decrease) in Cash & Cash Equivalents for the Period	$ 45,241		$ (393,955)
Payments for Deposits			-			-			(258	)		(258	)
Effect of Other Comprehensive Income	108		740
Cash Used/(Sourced) in Investing Activities			-			-			18,843			18,756
Cash & Cash Equivalents at Beginning of Period	337,490		709,791
Cash Flows from Financing Activities
Cash & Cash Equivalents at End of Period	$ 382,839		$ 316,577
Cash Sourced/(Used) in Financing Activities			-			-			-			-
Net Increase/(Decrease) in Cash & Cash Equivalents for the Period			15,863			61,105			115,876			(278,080	)
Effect of Other Comprehensive Income			3,065			3,172			56			797
Cash & Cash Equivalents at Beginning of Period			382,839			337,490			316,576			709,791
Cash & Cash Equivalents at End of Period		$	401.767		$	401,767		$	432,508		$	432,508

See Notes to Consolidated Financial Statements and Accountant’s Report

A5-5-

China Teletech Limited

Reconciliation of Net ~~Income to~~ Cash ~~Sourced/(Used)~~Provided inby ~~Operations~~Operating Activities

For the three~~-month~~ ~~periods~~and six months ended ~~March~~June 3130, 2010 and 2009

(Stated in US Dollars)

	3/31/2010		3/31/2009
		3 Months			6 Months			3 Months			6 Months
Net Income	$ 12,889		$ 16,092
		Ended			Ended			Ended			Ended
Adjustments to Reconcile Net Income to
		06/30/2010			06/30/2010			06/30/2009			06/30/2009
Net Cash Provided by Cash Activities:
Net Income		$	10,391		$	23,280		$	23,288		$	39,379
Depreciation	1,353		2,955
Adjustments to Reconcile Net Income to
Net Loss on Disposal of Property, Plant and Equipment	53		-
Net Cash Provided by Cash Activities:
Decrease/(Increase) in Accounts Receivable	-		14,582
Depreciation			1,184			2,591			(3,082	)		(127	)
Decrease/(Increase) in Other Receivable	(16,137)		(379,806)
Decrease/(Increase) in Accounts Receivable			-			-			(1	)		14,581
Decrease/(Increase) in Inventory	(97,747)		(57,462)
Decrease/(Increase) in Other Receivable			7,598			(8,539	)		107,331			(272,475	)
Decrease/(Increase) in Advance to Suppliers	117,007		(12,957)
Decrease/(Increase) in Inventories			(80,770	)		(178,517	)		31,019			(26,443	)
Increase/(Decrease) in Accounts Payable	(17)		3
Decrease/(Increase) in Advance to Suppliers			-			117,007			(2	)		(12,959	)
Increase/(Decrease) in Taxes Payable	8,734		4,677
Increase/(Decrease) in Accounts Payable			(119	)		(136	)		(141	)		(138	)
Increase/(Decrease) in Other Payable	8,791		22,656
Increase/(Decrease) in Taxes Payable			14,154			22,888			9,220			13,897
Increase/(Decrease) in Related Party Payable	22,315		-
Increase/(Decrease) in Other Payable			(13,717	)		(4,926	)		(20,497	)		2,159
Increase/(Decrease) in Accrued Liabilities	(12,000)		-
Increase/(Decrease) in Related Party Payable			65,142			87,457			-			-
Increase/(Decrease) in Customer Deposits	-		(4,608)
Increase/(Decrease) in Accrued Liabilities			12,000			-			-			-
Total of all adjustments	32,352		(409,960)
Increase/(Decrease) in Customer Deposits			-			-			(50,102	)		(54,710	)
Cash Sourced from/(Used) in Operation	$ 45,241		$ (393,868)
Total of all adjustments			5,472			37,825			(73,745	)		(336,215	)
		$	15,863		$	61,105		$	97,033		$	(296,836	)

See Notes to Consolidated Financial Statements and Accountant’s Report

A6-6-

China Teletech Limited

Notes to Consolidated Financial Statements

For the three~~-month~~ ~~periods~~and six months ended ~~March~~June 3130, 2010 and 2009

1.(Stated ~~The~~in ~~Company~~US ~~and Principal Business Activities~~Dollars)

~~China Teletech Limited, formerly known as Stream Horizon Studios, Inc. (the “Company”), was incorporated under the laws of the Province of British Columbia, Canada on October~~ 1~~, 2001~~. ~~The~~ ~~Company was formerly a subsidiary of Wavelit, Inc., a Nevada corporation.~~ The Company ~~will~~and bePrinciple ~~spun~~Business off from its parent to the shareholders of Wavelit, Inc where the shareholders of Wavelit, Inc. will receive an aggregate of 70,919,945 common shares. The Company is in the process of submitting a Form S-1 to register the securities that it will issue in this transaction. Concurrently, the Company is applying to have its common shares independently quoted on the Over the Counter Bulletin Board Market in the United States of America.Activities

~~Upon declaration~~China ofTeletech ~~effectiveness~~Limited by (the US“Company”), ~~Securities~~formerly ~~and~~“Sierra ~~Exchange~~Vista ~~Commission~~Group ofLimited,” ~~the Form~~is ~~S-1~~a British Virgin Islands Company, incorporated on January 30, 2008 under the British Virgin Islands Business Companies Act, 2004. The Company ~~will~~was ~~enter~~formed ~~into~~for ~~reverse~~the ~~merger~~purpose ~~transaction~~of ~~via~~providing a ~~share exchange~~group ~~agreement~~structure ~~with~~to ~~China~~enhance ~~Teletech~~the ~~Limited~~viable capacity as discussed below of its two operating subsidiaries located in the People’s Republic of China (“~~BVI~~PRC”); namely, ~~formerly~~(a) ~~known~~Shenzhen asRongxin ~~Sierra Vista~~Investment ~~Group Limited~~Co., aLtd. ~~company~~(“Shenzhen ~~incorporated~~Rongxin”) inand ~~the~~(b) ~~British~~Guangzhou ~~Virgin~~Yueshen ~~Islands.~~Taiyang ~~Under the~~Network ~~terms~~and ofTechnology ~~the~~Co., ~~share~~Ltd. ~~exchange~~(“Guangzhou ~~agreement~~Yueshen”), ~~the~~and ~~Company~~to ~~will~~undergo ~~issue~~a anreverse ~~aggregate of~~merger ~~170~~transaction with China Teletech Limited (“CTI”) ,~~000~~ formerly “Stream Horizon Studios,~~000~~ ~~shares~~Inc.”, ofwhich ~~common~~may ~~stock~~include toan equity financing in the ~~shareholders~~near offuture. ~~BVI~~The ~~for~~Company’s ~~100%~~primary ofbusiness ~~the outstanding~~operations ~~stock~~are ofconducted ~~BVI~~through Shenzhen Rongxin and Guangzhou Yueshen.

~~The Company~~CTI ~~has~~was ~~accounted~~incorporated ~~for~~under the ~~shares~~laws ~~exchange~~of ~~transaction~~the ~~between~~Province ~~itself~~of ~~and~~British ~~BVI as~~Columbia, aCanada ~~recapitalization~~on ofOctober ~~BVI~~1, ~~where~~2001. CTI ~~the~~was ~~Company~~formerly ~~(the~~a ~~legal~~subsidiary ~~acquirer)~~of ~~is considered~~Wavelit, ~~the~~Inc., ~~accounting~~a ~~acquiree~~Nevada ~~and~~corporation. ~~BVI~~CTI ~~(the~~will ~~legal~~be ~~acquiree)~~spun isoff ~~considered the~~from ~~accounting~~its ~~acquirer.~~parent ~~Accordingly,~~to the ~~financial~~shareholders ~~data~~of ~~included~~Wavelit, inInc where the ~~accompanying~~ ~~consolidated~~shareholders ~~financial statements is that~~ of ~~the~~Wavelit, ~~accounting acquirer BVI~~Inc. ~~The~~ ~~historical~~will ~~stockholders’~~receive ~~equity~~an aggregate of ~~the~~70,919,945 ~~accounting acquirer~~common ~~prior~~shares. toCTI is in the ~~share~~process ~~exchange~~of ~~has~~submitting ~~been~~a ~~retroactively~~Form ~~restated~~S-1 asto ifregister the ~~share~~ ~~exchange~~securities ~~transaction~~that ~~occurred~~it aswill ofissue ~~the~~in ~~beginning~~this ~~of the first period presented~~transaction. ~~Any~~ ~~assets~~Concurrently, orCTI ~~liabilities~~is ofapplying ~~the~~to ~~Company~~have ~~prior~~its tocommon ~~the share~~shares ~~exchange~~independently ~~transaction~~quoted ~~were~~on ~~immaterial.~~the ~~The~~Over ~~Company~~the isCounter ~~deemed~~Bulletin toBoard beMarket ~~a continuation~~in of the ~~business~~United States of ~~BVI~~America.

~~In accordance~~Upon ~~with~~declaration ~~the~~of ~~accounting~~effectiveness ~~rules~~by ~~for~~the ~~variable~~US ~~interest~~Securities ~~entities,~~and ~~BVI~~Exchange ~~has accounted~~Commission ~~for~~of ~~Shenzhen~~the ~~Rongxin~~Form ~~Investment Co.~~S-1, ~~Ltd.~~CTI ~~(“Shenzhen~~will ~~Rongxin”),~~enter ~~a company~~into ~~domiciled~~reverse inmerger ~~the~~transaction ~~People’s~~via ~~Republic~~a ofshare ~~China,~~exchange asagreement awith ~~wholly~~the ~~owned subsidiary~~Company. ~~BVI~~Under ~~has~~the ~~entered~~terms ~~into~~of ~~four~~the ~~agreements~~share ~~with~~exchange ~~Mr.~~agreement, ~~Liu~~CTI ~~Dong and~~will ~~Mr.~~issue ~~Zhao~~an ~~Yuan~~aggregate ~~who~~of ~~beneficially~~241,250,000 ~~own~~shares ~~Shenzhen~~of ~~Rongxin~~common ~~51%~~stock ~~and~~to ~~49%, respectively. The~~the ~~four~~shareholders ~~agreements~~of ~~between~~the ~~BVI~~Company ~~and~~for ~~Mr.~~100% ~~Zhao~~of ~~Yuan~~the ~~and Mr.~~outstanding ~~Liu~~stock ~~Dong~~of ~~are~~the ~~as follows:~~Company.

As the share exchange transaction between the Company and CTI has not been completed as at June 30, 2010, no recapitalization of the Company has occurred.

By virtue of the following agreements, the Company has accounted for and consolidated Shenzhen Rongxin as a variable interest entity. The Company has entered into four agreements with Mr. Liu Dong and Mr. Zhao Yuan who beneficially own Shenzhen Rongxin 51% and 49%, respectively. The four agreements between BVI and Mr. Zhao Yuan and Mr. Liu Dong are as follows:

(1). Entrusted Management Agreement

Mr. Liu Dong and Zhao Yuan will entrust to ~~BVI~~the Company the complete and exclusive right to manage the operations of Shenzhen Rongxin.

-7-

China Teletech Limited

Notes to Consolidated Financial Statements

For the three and six months ended June 30, 2010 and 2009

(Stated in US Dollars)

(2). Exclusive Option Agreement

Mr. Liu Dong and Zhao Yuan will grant ~~BVI~~the Company the exclusive right to purchase all the ~~assets and~~stock ~~the business~~ of Shenzhen Rongxin whenever legally possible under PRC laws. The total purchase price is $10,000,000 in RMB dollars or 80% of the appraised value of the purchased stock at the time of exercising the option right. BVI has discretion over the percentage of stock to be purchased.

(3). Shareholders' Voting Proxy Agreement

Mr. Liu Dong and Zhao Yuan will give the right to ~~BVI~~the Company to appoint designees to vote on shareholders’ matters on behalf of the owners of Shenzhen Rongxin.

(4). Shares Pledge Agreement

Shenzhen Rongxin will intend to sell itits ~~assets~~stock to ~~BVI~~the Company; however, before such transactions can be realized under PRC laws, in order to protect the interest of the shareholders of ~~BVI~~the Company, the owners of Shenzhen Rongxin will pledge all their ownership to ~~BVI~~the Company. In the event that there was a significant decline in value and the interest of the shareholders of the Company was undermined, the Company could sell all the stock at its discretion.

~~BVI~~By virtue of the following agreements, the Company has accounted for and consolidated Guangzhou Yueshen as a variable interest entity. The Company has entered into four agreements with Shanghai Classic Group Limited (“Shanghai Classic”), an investment holding company incorporated in the British Virgin Island. Shanghai Classic ~~wholly~~51% ~~owns~~of Guangzhou Yueshen ~~Taiyang Network and Technology Co~~.~~, Ltd. (“Guangzhou Yueshen”), a company domiciled in the People’s Republic of China.~~ The four agreements are detailed below.

(1). Entrusted Management Agreement

Shanghai Classic will entrust to ~~BVI,~~the Company the complete and exclusive right to manage the operations of Guangzhou Yueshen.

(2). Exclusive Option Agreement

Shanghai Classic will grant ~~BVI~~the Company the exclusive right to purchase all the ~~assets~~stock ~~and the business~~ of Guangzhou Yueshen whenever legally possible under PRC laws. The total purchase price is $1,200,000 in Hong Kong dollars or 80% of the appraised value of the purchased stock at the time of exercising the option right. The Company has discretion over the percentage of stock to be purchased.

-8-

China Teletech Limited

Notes to Consolidated Financial Statements

For the three and six months ended June 30, 2010 and 2009

(Stated in US Dollars)

(3). Shareholders' Voting Proxy Agreement

Shanghai Classic will give the right to ~~BVI~~the Company to appoint designees to vote on shareholders’ matters on behalf of the owners of Guangzhou Yueshen.

(4). Shares Pledge Agreement

Shanghai Classic will intend to sell its ~~assets~~stock to ~~BVI~~the Company; however, before such transactions can be realized under PRC laws, in order to protect the interest of the shareholders of ~~BVI~~the Company, Shanghai Classic will pledge all its ownership to ~~BVI~~ the Company. In the event that there was a significant decline in value and the interest of the shareholders of the Company was undermined, the Company could sell all the stock at its discretion.

BVI has accounted for Shenzhen Rongxin as a wholly owned subsidiary under the accounting rules for variable interest entities.

Under the foregoing agreements between BVI and the owners of Shenzhen Rongxin and Guangzhou Yueshen, and the anticipated share exchange between the Company and BVI, BVI will effectively take on all the rights and privileges of beneficial ownership of Shenzhen Rongxin and Guangzhou Yueshen.

Business

The Company conducts its primary business operations through its indirectly wholly owned operating subsidiaries: (a) Shenzhen Rongxin and (b) Guangzhou Yueshen.

Shenzhen Rongxin’s primary business is the wholesale and distribution of mineral water as well as trading of wine. Shenzhen Rongxin is the exclusive supplier of Tibet Glacial 5100 spring water to the Guangdong Province of PRC, which currently has a population of approximately 110 million people.

Guangzhou Yueshen is principally engaged in the trading and distribution of rechargeable phone cards, prepaid subway tickets, cellular phones, and cellular phone accessories in Guangzhou ~~City~~ in the PRC. Guangzhou Yueshen sells to wholesalers, retailers, and end users.

2.	Summary of Significant Accounting Policies

(A)	Method of Accounting

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

(B)	Consolidation

The consolidated financial statements include all the accounts of the Company and its two ~~indirectly~~variable ~~wholly-owned~~interest ~~subsidiaries~~entities. Inter-company transactions, such as sales, cost of sales, due to/due from balances, investment in subsidiaries, and subsidiaries’ capitalization have been eliminated.

~~As of March 31, 2010, the detailed identities of the consolidated subsidiaries are as follows:~~-9-

Name of Entities	Date of Incorporation	Place of Incorporation	Attributable Equity Interest	Registered Capital
China Teletech Limited, formerly known as Sierra Vista Group Limited	1/20/2008	BVI	100%	USD 10
Shenzhen Rongxin	11/21/1996	PRC	100%	RMB 10,000,000
Guangzhou Yueshen	4/19/2004	PRC	100%	HKD 1,200,000

China Teletech Limited

A9Notes to Consolidated Financial Statements

For the three and six months ended June 30, 2010 and 2009

(Stated in US Dollars)

As of June 30, 2010 and December 31, 2009, the detailed identities of the consolidated operating variable interest entities are as follows:-

Name of Entities	Date of Incorporation	Place of Incorporation	Attributable Equity Interest	Registered Capital
Shenzhen Rongxin	11/21/1996	PRC	100%	RMB 10,000,000
Guangzhou Yueshen	4/19/2004	PRC	100%	HKD 1,200,000

(C)	Use of Estimates

In the preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions that affect the reported amounts of assets, liabilities, and disclosures of contingent assets and liabilities at the dates of the financial statements, as well as the reported amounts of revenues and expenses during the reporting years. These accounts and estimates include, but are not limited to, the valuation of ~~receivables~~accounts ~~and~~receivable, inventories, and the estimation on useful lives of property, plant and equipment. Actual results could differ from those estimates.

(D) Cash and Cash ~~Equivalents~~Equivalent

Cash and cash equivalents are carried at cost and represent cash on hand, demand deposits placed with banks or other financial institutions and all highly liquid investments with an original maturity of three months or less as of the purchase date of such investments.

(E) ~~Accounts Receivable – Trade~~Inventories

~~Trade receivables~~Inventories are ~~recognized~~stated ~~and~~at ~~carried~~the atlower of cost or market value. Cost is computed using the ~~original~~first-in, ~~invoice~~first-out ~~amount~~method ~~less allowance~~and ~~for~~includes ~~any~~all ~~uncollectible~~costs ~~amounts.~~of Anpurchase ~~allowance~~and ~~for~~other ~~doubtful~~costs ~~accounts~~incurred in bringing the inventories to their present location and condition. Market value is ~~made~~ ~~when~~determined ~~recovery~~by reference to the sales proceeds of items sold in the ~~full~~ordinary ~~amount~~course isof ~~doubtful~~business or estimates based on prevailing market conditions. The inventories include bottles of mineral water, prepaid mineral water cards, rechargeable phone cards, prepaid subway tickets, and mobile phones.

(F) ~~Inventories~~Advances to Suppliers

Inventories are stated at the lower of cost or market value. Cost is computed using the first-in, first-out method and includes all costs of purchase and other costs incurred in bringing the inventories to their present location and condition. Market value is determined by reference to the sales proceeds of items sold in the ordinary course of business or estimates based on prevailing market conditions. The inventories include bottles of mineral water and wine, prepaid mineral water cards, rechargeable phone cards, prepaid subway tickets, and mobile phones.

(G) Advances to Suppliers

Advances to suppliers represent the cash paid in advance for the purchase of goods. The advances to suppliers are interest free and unsecured.

~~A10~~-10-

~~(H)~~China ~~Property,~~Teletech ~~Plant, and Equipment~~Limited

Notes to Consolidated Financial Statements

For the three and six months ended June 30, 2010 and 2009

(Stated in US Dollars)

(G)	Property, Plant, and Equipment

Property, plant, and equipment are stated at cost. Repairs and maintenance to these assets are charged to expense as incurred; major improvements enhancing the function and/or useful life are capitalized. When items are sold or retired, the related cost and accumulated depreciation are removed from the accounts and any gains or losses arising from such transactions are recognized.

Property, plant, and equipment are depreciated using the straight-line method over their estimated useful life with ~~20%~~a ~~and~~ 10% salvage ~~values on furniture & fixture and motor vehicles respectively~~value. Their useful lives are as follows:

Fixed Assets Classification	Useful Lives
Furniture & Fixture	4 Years
Office Equipment	3 Years
Furniture & Fixture	3 Years
Motor Vehicles	10 Years

(IH) Customer Deposits

Customer deposits represent money that the Company has received from customers in advance for the purchase of goods. The Company considers customer deposits as a liability until the title of goods have been transferred at which point the balance will be credited to sales revenue.

(JI) Statutory Reserve

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

(KJ) Comprehensive Income

In accordance with SFAS No. 130, “Reporting Comprehensive Income”, comprehensive income is defined to include all changes in equity except those resulting from investments by owners and distributions to owners. Among other disclosures, all items that are required to be recognized under current accounting standards as components of comprehensive income are required to be reported in a financial statement that is presented with the same prominence as other financial statements. The Company’s current components of other comprehensive income are unrealized gain or loss in investment and the foreign currency translation adjustment.

~~A11~~-11-

~~(L)~~China ~~Recognition~~Teletech ~~of Revenue~~Limited

~~Guangzhou Yueshen~~Notes establishes retail outlets in Guangzhou city for the trading and distribution of rechargeable phone cards, prepaid subway tickets, cellular phones and cellular phone accessories. Revenue from the sale of Yueshen’s products is recognized on the transfer of risk and ownership, which generally coincides with the time when the goods are delivered to ~~customers~~Consolidated ~~and~~Financial ~~the titles have been passed. Prepayments by customers for phone cards, subway tickets and cellular phone are presented as customer deposits.~~Statements

~~Shenzhen Rongxin~~For ~~establishes network in Guangdong Province for~~ the ~~resale~~three ~~of Tibet 5100 mineral water products~~ and ~~wine.~~six ~~Revenue~~months ~~from~~ended ~~the~~June ~~sale~~30, of2010 ~~mineral water~~ and ~~wine is recognized when goods are delivered to customers or loaded on customers’ pick-up trucks and the titles have been passed.~~ 2009

(Stated in US Dollars)

(K)	Recognition of Revenue

Guangzhou Yueshen establishes outlets in Guangzhou city for the trading and distribution of rechargeable phone cards, prepaid subway tickets, cellular phones and cellular phone accessories. Revenue from the sale of Yueshen’s products is recognized on the transfer of risk and ownership, which generally coincides with the time when the goods are delivered to customers and the titles have been passed at the outlets. Prepayments by customers for phone cards, subway tickets and cellular phone are presented as customer deposits. Guangzhou Yueshen is not responsible for the unused portion of rechargeable phone cards and prepaid subway cards.

Shenzhen Rongxin establishes network in Guangdong Province for the resale of Tibet 5100 mineral water products. Revenue from the sale of mineral water is recognized when goods are delivered to customers or loaded on customers’ pick-up trucks and the titles have been passed.

Neither Guangzhou Yueshen nor Shenzhen Rongxin has any refund policies for the return of goods.

(ML) Cost of Sales

~~Guangzhou Yueshen~~The Company’s cost of sales is primarily comprised of cost of goods, ~~and other purchasing and receiving overhead costs~~sold.

~~Shenzhen Rongxin’s~~(M) ~~cost~~Selling ~~of sales consists of cost of mineral water and wine, inbound freight, warehouse cost, and outbound freight.~~Expenses

(N) Selling Expenses

Selling expenses include outbound freight, salaries of the sales force, client entertainment, commissions, advertising, and office rental expenses.

(ON) General & Administrative Expenses

General and administrative expenses ~~are~~ comprised of executive compensation, general overhead such as the finance department and administrative staff, depreciation expenses, travel and lodging, meals and entertainment, utility, and ~~utility~~research and development expenses.

~~(P) Advertising Expense~~-12-

~~Costs related~~China toTeletech ~~advertising and promotion expenditures are expensed as incurred. Advertising costs are charged to selling expenses.~~Limited

~~A12~~Notes to Consolidated Financial Statements

~~(Q)~~For ~~Retirement~~the ~~Benefits~~three and six months ended June 30, 2010 and 2009

~~Full-time employees~~(Stated ofin ~~the~~US Company are entitled to staff welfare benefits including medicare, welfare subsidies, unemployment insurance, and pension benefits through a PRC government-mandated multi-employer defined contribution plan. The Company is required to accrue for these benefits based on certain percentages of the employees’ salaries. Costs related to the retirement benefits are charged to the Company’s statements of operations as incurred.Dollars)

(RO) ~~Income~~Advertising ~~Tax~~Expenses

~~The Company~~Costs ~~uses~~related ~~the accrual method of accounting~~ to ~~determine~~advertising and ~~report~~promotion ~~its~~expenditures ~~income taxes for the period in which they~~ are ~~available.~~expensed Inas ~~accordance~~incurred ~~with~~during ~~SFAS No. 109 “Accounting for Income Taxes”,~~ the ~~Company accounts for income tax using an asset and liability approach and allows for recognition of deferred tax benefits in future years~~year. ~~Under~~Advertising ~~the~~costs ~~asset and liability approach, deferred taxes~~ are ~~provided~~ ~~for~~charged the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more likely than not that such items will either expire before the Company is able to ~~realize~~selling ~~their benefits, or that future realization is uncertain~~expenses.

(P)	Retirement Benefits

Full-time employees of the Company are entitled to staff welfare benefits including Medicare, welfare subsidies, unemployment insurance, and pension benefits through a PRC government-mandated multi-employer defined contribution plan. The Company is required to accrue for these benefits based on certain percentages of the employees’ salaries. Costs related to the retirement benefits are charged to the Company’s statements of operations as incurred.

(Q)	Income Tax

The Company uses the accrual method of accounting to determine and report its taxable reduction of income taxes for the year in which they are available. In accordance with SFAS No. 109 “Accounting for Income Taxes”, the Company accounts for income tax using an asset and liability approach and allows for recognition of deferred tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more likely than not that such items will either expire before the Company is able to realize their benefits, or that future realization is uncertain.

In respect of the Company and its subsidiaries domiciled and operated in the British Virgin Islands and People’s Republic of China, the taxation of these entities are summarized below:

Entities	Countries of Domicile	Income Tax Rate
China Teletech Limited	Canada	28.50%
China Teletech Limited	BVI	0.00%
Shenzhen Rongxin	PRC	25.00%
Guangzhou Yueshen	PRC	25.00%

(SR) Foreign Currency Translation

The Company’s two operating subsidiaries Shenzhen Rongxin and Guangzhou Yueshen maintain their financial statements in the functional currency, which is the Renminbi (RMB). Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at rates of exchange prevailing at the balance sheet dates. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchanges rates prevailing at the dates of the transaction. Exchange gains or losses arising from foreign currency transactions are included in the determination of net income for the respective ~~period~~ periods.

~~A13~~-13-

China Teletech Limited

Notes to Consolidated Financial Statements

For the three and six months ended June 30, 2010 and 2009

(Stated in US Dollars)

For financial reporting purposes, the financial statements of Shenzhen Rongxin and Guangzhou Yueshen, which are prepared using the functional currency, have been translated into United States dollars. Assets and liabilities are translated at the exchange rates at the balance sheet dates and revenue and expenses are translated at the average exchange rates, and stockholders’ equity is translated at historical exchange rates. Translation adjustments are not included in determining net income but are included in foreign exchange adjustment to other comprehensive income, a component of stockholders’ equity.

Exchange Rates	~~03/31/10~~	1206/3130/0910	~~03/31/09~~	03/31/10		12/31/09		06/30/09
Period end RMB : US$ exchange rate	6.8361	6.8372	6.8456
Year end RMB : USD			6.8086		6.8361		6.8372		6.8448
Average period RMB : US$ exchange rate	6.8360	6.8409	6.8466
Average yearly RMB : USD			6.8335		6.8360		6.8409		6.8432
Period end HKD : US$ exchange rate	7.7647	7.7551	7.7505
Year end HKD : USD			7.7847		7.7647		7.7551		7.7504
Average period HKD : US$ exchange rate	7.7639	7.7522	7.7548
Average yearly HKD : USD			7.7794		7.7639		7.7522		7.7530

(TS) ~~Financial~~Recent ~~Instruments~~Accounting Pronouncements

The Company’s financial instruments are cash and cash equivalents, other receivable, advances to suppliers, accounts payable, other payable, and related party payable. The recorded values of cash and cash equivalents, accounts receivable, other receivable, advances to suppliers, accounts payable, other payable, related party payable approximate their fair values due to their short-term nature.

(U) Recent Accounting Pronouncements

In May 2009, the FASB issued SFAS No. 165, Subsequent Events (“SFAS 165”). SFAS 165 establishes general standards of accounting for and disclosing of events that occur after the balance sheet date but before the financial statements are issued or are available to be issued. SFAS 165 does not significantly change the types of subsequent events that an entity reports, but it requires the disclosure of the date through which an entity has evaluated subsequent events and the basis for that date. SFAS 165 is effective for interim or annual reporting requirements ending after June 15, 2009. The adoption of this standard did not have a material impact on our financial position, results of operations or cash flows of the Company.

In June 2009, the FASB issued Accounting Standards Update (“ASU”) 2009-01, The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles — a replacement of FASB Statement No. 162 (“ASU 2009-01”). ASU 2009-01 established the Accounting Standards Codification (the “Codification”) as the source of authoritative GAAP recognized by the FASB to be applied to nongovernmental entities. The Codification supersedes all prior non-SEC accounting and reporting standards. Following ASU 2009-01, the FASB will not issue new accounting standards in the form of FASB

~~A14~~-14-

China Teletech Limited

Notes to Consolidated Financial Statements

For the three and six months ended June 30, 2010 and 2009

(Stated in US Dollars)

Statements, FASB Staff Positions, or Emerging Issues Task Force abstracts. ASU 2009-01 also modifies the existing hierarchy of GAAP to include only two levels — authoritative and non-authoritative. ASU 2009-01 is effective for financial statements issued for interim and annual periods ending after September 15, 2009, and early adoption was not permitted. The adoption of this standard did not have an impact on the financial position, results of operations or cash flows of the Company.

In August 2009, the FASB issued ASU 2009-05, Fair Value Measurements and Disclosures (Topic 820) - Measuring Liabilities at Fair Value (“ASU 2009-05”). ASU 2009-05 addresses concerns in situations where there may be a lack of observable market information to measure the fair value of a liability, and provides clarification in circumstances where a quoted market price in an active market for an identical liability is not available. In these cases, reporting entities should measure fair value using a valuation technique that uses the quoted price of the identical liability when that liability is traded as an asset, quoted prices for similar liabilities, or another valuation technique, such as an income or market approach. ASU 2009-05 also clarifies that when estimating the fair value of a liability, a reporting entity is not required to include a separate input or adjustment to other inputs relating to the existence of a restriction that prevents the transfer of the liability. ASU 2009-05 is effective for the first reporting period subsequent to August 2009 and the adoption of this update did not to have a material impact on the financial position, results of operations, or cash flows of the Company.

In June 2009, the FASB issued SFAS No. 166, Accounting for Transfers of Financial Assets, an amendment of FASB Statement No. 140 (“SFAS 166”). SFAS 166 amends the application and disclosure requirements of SFAS No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities — a Replacement of FASB Statement 125 (“SFAS 140”), removes the concept of a “qualifying special purpose entity” from SFAS 140 and removes the exception from applying FASB Interpretation (“FIN”) No. 46(R), Consolidation of Variable Interest Entities — an Interpretation of ARB No. 51 (“FIN 46(R)”) to qualifying special purpose entities. SFAS 166 is effective for the first annual reporting period that begins after November 15, 2009, and early adoption is not permitted. The adoption of this standard did not have a material impact on the financial position, results of operations or cash flows of the Company.

~~A15~~-15-

China Teletech Limited

Notes to Consolidated Financial Statements

For the three and six months ended June 30, 2010 and 2009

(Stated in US Dollars)

of a selling price to separate deliverables in a multiple-deliverable selling arrangement. As a result of ASU 2009-13, multiple-deliverable arrangements will be separated in more circumstances than under current guidance. ASU 2009-13 establishes a selling price hierarchy for determining the selling price of a deliverable. The selling price will be based on VSOE if it is available, on third-party evidence if VSOE is not available, or on an estimated selling price if neither VSOE nor third-party evidence is available. ASU 2009-13 also requires that an entity determine its best estimate of selling price in a manner that is consistent with that used to determine the selling price of the deliverable on a stand-alone basis, and increases the disclosure requirements related to an entity’s multiple-deliverable revenue arrangements. ASU 2009-13 must be prospectively applied to all revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010, and early adoption is permitted. Entities may elect, but are not required, to adopt the amendments retrospectively for all periods presented. The Company does not believe that the adoption of this standard will have a material impact on the financial position, results of operations, or cash flows of the Company.

In December 2009, the FASB issued ASU 2009-17, Consolidations (Topic 810) — Improvements to Financial Reporting by Enterprises Involved with Variable Interest Entities. ASU 2009-17 replaces the quantitative-based risk and rewards calculation for determining which reporting entity, if any, has a controlling financial interest in a variable interest entity with an approach focused on identifying which reporting entity has the power to direct the activities of a variable interest entity that most significantly impact the entity’s economic performance and (1) the obligation to absorb losses of the entity or (2) the right to receive benefits from the entity. An approach that is expected to be primarily qualitative will be more effective for identifying which reporting entity has a controlling financial interest in a variable interest entity. ASU 2009-17 also requires additional disclosures about a reporting entity’s involvement in variable interest entities. The provisions of ASU 2009-17 are to be applied beginning in the first fiscal period beginning after November 15, 2009. The ~~adoption~~Company ofhas adopted this standard ~~did~~and ~~not~~included ~~have~~Guangzhou aYueshen ~~material~~and ~~impact~~Shenzhen onRongxin in the consolidated financial ~~position, results of operations or cash flows of the Company~~statements.

~~In January 2010, the FASB issued ASU 2010~~-~~02, Consolidation (Topic 810) — Accounting and Reporting for Decreases in Ownership of a Subsidiary — A Scope Clarification. ASU 2010~~16-02 clarifies that the scope of previous guidance in the accounting and disclosure requirements related to decreases in ownership of a subsidiary apply to (i) a subsidiary or a group of assets that is a business or nonprofit entity; (ii) a subsidiary that is a business or nonprofit entity that is transferred to an equity method investee or joint venture; and (iii) an exchange of a group of assets that constitutes a business or nonprofit activity for a noncontrolling interest in an entity. ASU 2010-02 also expands the disclosure requirements about deconsolidation of a subsidiary or derecognition of a group of

~~A16~~China Teletech Limited

~~assets~~Notes to ~~include~~ ~~(i)~~Consolidated ~~the~~Financial valuation techniques used to measure the fair value of any retained investment; (ii) the nature of any continuing involvement with the subsidiary or entity acquiring a group of assets; and (iii) whether the transaction that resulted in the deconsolidation or derecognition was with a related party or whether the former subsidiary or entity acquiring the assets will become a related party after the transaction. The provisions of ASU 2010-02 will be effective for the first reporting period beginning after December 13, 2009. The adoption of this standard did not have a material impact on the financial position, results of operations or cash flows of the Company.Statements

For the three and six months ended June 30, 2010 and 2009

(Stated in US Dollars)

In January 2010, the FASB issued ASU 2010-02, Consolidation (Topic 810) — Accounting and Reporting for Decreases in Ownership of a Subsidiary — A Scope Clarification. ASU 2010-02 clarifies that the scope of previous guidance in the accounting and disclosure requirements related to decreases in ownership of a subsidiary apply to (i) a subsidiary or a group of assets that is a business or nonprofit entity; (ii) a subsidiary that is a business or nonprofit entity that is transferred to an equity method investee or joint venture; and (iii) an exchange of a group of assets that constitutes a business or nonprofit activity for a noncontrolling interest in an entity. ASU 2010-02 also expands the disclosure requirements about deconsolidation of a subsidiary or derecognition of a group of assets to include (i) the valuation techniques used to measure the fair value of any retained investment; (ii) the nature of any continuing involvement with the subsidiary or entity acquiring a group of assets; and (iii) whether the transaction that resulted in the deconsolidation or derecognition was with a related party or whether the former subsidiary or entity acquiring the assets will become a related party after the transaction. The provisions of ASU 2010-02 will be effective for the first reporting period beginning after December 13, 2009. The adoption of this standard did not have a material impact on the financial position, results of operations or cash flows of the Company.

In January 2010 the FASB issued ASU 2010-06, Fair Value Measurements and Disclosures (Topic 820) —Improving Disclosures About Fair Value Measurements. ASU 2010-06 clarifies the requirements for certain disclosures around fair value measurements and also requires registrants to provide certain additional disclosures about those measurements. The new disclosure requirements include (i) the significant amounts of transfers into and out of Level 1 and Level 2 fair value measurements during the period, along with the reason for those transfers, and (ii) separate presentation of information about purchases, sales, issuances and settlements of fair value measurements with significant unobservable inputs. ASU 2010-06 is effective for interim and annual reporting periods beginning after December 15, 2009. The adoption of this standard did not have a material impact on the financial position, results of operations or cash flows of the Company.

3.	Other Receivable

		3/31/2010		12/31/2009
		06/30/2010			12/31/2009
Shenzhen Shengqing Technology Co., Ltd.	$	~~14,789~~$	$14,849	~~11,861~~	$	11,861
Beijing Xin Century Co., Ltd.		~~1,936~~	1,944	~~1,936~~		1,936
Tangcheng Longsheng Cell Phone Co., Ltd.		~~3,803~~	3,819	~~3,803~~		3,803
Mr. Xu		~~119,893~~	120,377	~~119,874~~		119,874
JinJing Co., Ltd.		~~105,323~~	105,749	~~105,306~~		105,306
Shenzhen Ziyang Investment Consultant Co., Ltd.		~~41,866~~	42,035	~~41,859~~		41,859
China Telecom Corporation Limited Settlement Center		~~4,389~~	4,406	-		-
Guangzhou Huantong Telecom Technology and Consultant Services, Ltd		146		-
		$	293,178		$	284,639
Guangzhou Yueshen Electron and Technology Company Limited		8,631		-
	$	300,776	$	284,639

All of the other receivable is unsecured and interest free.

~~A17~~-17-

4.China ~~Property,~~Teletech ~~Plant, and Equipment~~Limited

		Accumulated
03/31/2010	Cost	Depreciation	Net
Furniture & Fixture	$ 12,345	$ (9,529)	$ 2,816
Motor Vehicles	24,868	(559)	24,309
	$ 37,213	$ (10,088)	$ 27,125
		Accumulated
12/31/2009	Cost	Depreciation	Net
Furniture & Fixture	$ 14,622	$ (10,960)	$ 3,662
Motor Vehicles	24,864	-	24,864
	$ 39,486	$ (10,960)	$ 28,526

Notes to Consolidated Financial Statements

For the three and six months ended June 30, 2010 and 2009

(Stated in US Dollars)

4.	Property, Plant and Equipment

			Accumulated
06/30/2010	Cost		Depreciation			Net
Office Equipment		12,395		(10,303	)		2,092
Motor Vehicles		24,968		(1,124	)		23,844
	$	37,363	$	(11,427	)	$	25,936

			Accumulated
12/31/2009	Cost		Depreciation			Net
Office Equipment	$	14,622	$	(10,960	)	$	3,662
Motor Vehicles		24,864		-			24,864
	$	39,486	$	(10,960	)	$	28,526

5.	Related Party Payable

	03/31/2010		12/31/2009
		06/30/2010		12/31/2009
Mr. Liu Dong, shareholder of Shenzhen Rongxin	~~$ 22,309~~	$	~~$ -~~22,307	$	-
Mr. Liu Yong, brother of Mr. Liu Dong	~~7,841~~		7,~~835~~872		7,835
Mr. Zhao Yuan, shareholder of Shenzhen Rongxin	45,052		45,052
Ms. Li Yan Kuan, shareholder of Shanghai Classic			64,928
	$ 75,202		$ 52,887
Mr. Zhao Yuan, shareholder of Shenzhen Rongxin			45,237		45,052
		$	140,344	$	52,887

The outstanding related party payables do not bear any interest or collateral and are repayable on demand. There is no impact to the Company’s earnings for the three-month period ended ~~March~~June 3130, 2010 and for the year ended December 31, 2009.

~~A18~~-18-

6.China ~~Statutory~~Teletech ~~Reserve Commitment~~Limited

Notes to Consolidated Financial Statements

For the three and six months ended June 30, 2010 and 2009

(Stated in US Dollars)

6. Statutory Reserve

In compliance with PRC laws, the Company is required to appropriate a portion of its net income to its statutory reserve up to a maximum of 50% of an enterprise’s registered capital in the PRC. The Company had future unfunded commitments, as provided below.

	03/31/2010		12/31/2009
		06/30/2010		12/31/2009
PRC Subsidiaries Registered Capital
Shenzhen Rongxin	~~$ 1,206,753~~	$	$ 1,206,753	$	1,206,753
Guangzhou Yueshen	~~153,502~~		153,502		153,502
Statutory Reserve Ceiling based on 50% of PRC Registered Capital	~~680,128~~		680,128		680,128
Less: Retained Earnings appropriated to Statutory Reserve	-		-		-
Reserve Commitment Outstanding	~~$ 680,127~~	$	$ 680,~~127~~128	$	680,128

7. Operating Segments

The Company individually tracks the performance of its operating subsidiaries Shenzhen Rongxin and Guangzhou Yueshen. Shenzhen Rongxin’s business activities involve the trading of mineral water and wine. Guangzhou Yueshen is primarily engaged in distribution of prepaid phone cards and subway tickets.

Below is a presentation of the Company’s financial position and operation results for its operating ~~subsidiaries~~entities as of ~~March~~June 3130, 2010 and December 31, 2009, and for the ~~three-month~~ ~~periods~~period ~~ended~~and ~~March~~year ~~31,~~then ~~2010 and 2009~~ended.

A19

Financial Position
As of
6/30/2010	Phone Card		Subway Card		Water		Wine		Mobile Phone		Total
Current Assets	$	580,181	$	24,174	$	61,657	$	459,331	$	1,237	$	1,126,580
Non-Current Assets		23,037		960		254		1,895		48		26,194
Total Assets		603,218		25,134		61,911		461,226		1,285		1,152,774

Current Liabilities		282,433		11,768		25,439		191,971		596		512,207
Non-Current Liabilities
Total Liabilities		282,433		11,768		25,439		191,971		596		512,207

Net Assets		320,785		13,366		36,472		296,255		689		640,567

Total Liabilities
& Net Assets	$	603,218	$	25,134	$	61,911	$	461,226	$	1,285	$	1,152,774

Financial Position
As of
03/31/2010	Phone Card	Subway Card	Water	Wine	Mobile Phone	Total
Current Assets	$528,872	$27,889	$47,660	$428,943	$1,116	$ 1,034,480
Non-Current Assets	23,302	1,216	282	2,534	49	27,383
Total Assets	552,174	29,105	47,942	431,477	1,165	1,061,863
Current Liabilities	237,489	12,526	18,423	165,808	501	434,747
Non-Current Liabilities	-	-	-	-	-	-
Total Liabilities	237,489	12,526	18,423	165,808	501	434,747
Net Assets	314,685	26,579	29,519	265,669	664	627,116
Total Liabilities
& Net Assets	$552,174	$29,105	$47,942	$431,477	$1,165	$1,061,863

-19-

Results of Operations
For the three-month period ended
03/31/2010	Phone Card	Subway Card	Water	Wine	Mobile Phone	Total
Revenue	$2,499,378	$128,978	$64,610	$635,822	$5,397	$3,334,185
Cost of Goods sold	2,463,216	123,976	59,069	582,651	5,424	3,234,336
Gross Profit	36,162	5,002	5,541	53,171	(27)	99,849
Operating Expenses	28,357	3,923	4,344	41,693	(22)	78,295
Operating Profit	7,805	1,079	1,197	11,478	(5)	21,554
Other Income	(4)	(1)	(1)	(5)	-	(11)
Earnings before Tax	7,801	1,078	1,196	11,473	(5)	21,543
Income Tax Expense	3,134	434	480	4,608	(2)	8,654
Net Income/(Loss)	$4,667	$644	$716	$6,865	$(3)	$12,889

China Teletech Limited

~~A20~~Notes to Consolidated Financial Statements

For the three and six months ended June 30, 2010 and 2009

(Stated in US Dollars)

Results of Operations
For the 6-month period ended
6/30/2010	Phone Card			Subway Card			Water			Wine			Mobile Phone			Total
Revenue	$	5,114,594		$	213,108		$	161,724		$	1,365,333		$	10,471		$	6,865,230
Cost of Goods sold		5,026,584			209,441			146,729			1,253,624			10,541			6,646,919
Gross Profit		88,010			3,667			14,995			111,709			(70	)		218,311

Operating Expense		99,599			4,150			8,057			61,127			209			173,142
Operating Profit		(11,589	)		(483	)		6,938			50,582			(279	)		45,169

Other Income		36			2			(6	)		(43	)		-			(11	)
Earnings before Tax		(11,553	)		(481	)		6,933			50,539			(279	)		45,158
Income Tax Expense		5,862			244			1,865			13,895			13			21,878

Net Income	$	(17,415	)	$	(726	)	$	5,067		$	36,645		$	(292	)	$	23,280

Financial Position
As of
12/31/2009	Phone Card		Subway Card		Water		Wine		Mobile Phone		Total
Current Assets	$	386,451	$	165,622	$	121,881	$	317,118	$	1,183	$	992,255
Non-Current Assets		11,210		4,804		3,536		9,199		34		28,784
Total Assets		397,661		170,426		125,416		326,318		1,217		1,021,039

Current Liabilities		158,484		67,922		49,983		130,050		485		406,924
Non-Current Liabilities		-		-		-		-		-		-
Total Liabilities		158,484		67,922		49,983		130,050		485		406,924

Net Assets		239,178		102,505		75,433		196,267		732		614,115

Total Liabilities
& Net Assets	$	397,661	$	170,426	$	125,416	$	326,318	$	1,217	$	1,021,039

Results of Operations
For the three-month period ended
03/31/2009	Phone Card	Subway Card	Water	Wine	Mobile Phone	Total
Revenue	$1,927,669	$64,019	$84,833	$11,375	$23,183	$2,111,061
Cost of Goods sold	1,891,824	60,971	60,248	7,098	23,179	2,043,320
Gross Profit	35,845	3,048	24,585	4,259	4	67,741
Operating Expenses	(24,970)	(2,124)	(17,129)	(2,968)	(3)	47,194
Operating Profit	10,875	924	7,456	1,291	1	20,547
Other Income	(6)	(1)	(5)	(1)	-	(13)
Earnings before Tax	10,869	923	7,451	1,290	1	20,534
Income Tax Expense	(2,351)	(200)	(1,612)	(279)	-	4,442
Net Income	$ 8,518	$ 723	$ 5,839	$ 1,011	$ 1	$ 16,092

-20-

~~A21~~China Teletech Limited

~~8. Income Taxes~~Notes to Consolidated Financial Statements

~~All~~For of the ~~Company’s~~three ~~operations are in the People’s Republic of China (“PRC”),~~ and ~~in accordance~~six ~~with~~months ~~the~~ended ~~relevant~~June ~~tax laws and regulations of PRC~~30, ~~the corporate income tax rate is 25%. The provision for income taxes for PRC sourced net income amounted to $8,654 and $4,442 for the three-month periods ended March 31~~ 2010 and 2009~~, respectively.~~

(Stated in US Dollars)

Results of Operations
For the year ended
12/31/2009	Phone Card			Subway Card			Water			Wine			Mobile Phone			Total
Revenue	$	7,057,398		$	3,024,599		$	212,380		$	450,626		$	58,455		$	10,803,459
Cost of Goods sold		6,897,664			2,956,142			162,002			319,550			57,966			10,393,324
Gross Profit		159,734			68,458			50,378			131,077			489			410,135

Operating Expense		(141,074	)		(60,460	)		(44,493	)		(115,764	)		(432	)		(362,223	)
Operating Profit		18,660			7,997			5,885			15,312			57			47,912

Other Income		302			129			95			248			1			775
Earnings before Tax		18,962			8,127			5,980			15,560			58			48,687
Income Tax Expense		(13,576	)		(5,818	)		(4,282	)		(11,141	)		(42	)		(34,859	)

Net Income	$	5,386		$	2,308		$	1,699		$	4,419		$	16		$	13,828

8. Income Tax

All of the Company’s operations are in the PRC, and in accordance with the relevant tax laws and regulations of PRC, the corporate income tax rate is 25%. The provision for income taxes for PRC sourced net income amounted to $21,878 and $13,619 for the six-month periods ended June 30 2010 and 2009, respectively.

Income before taxes consists of the following:

		March 31, 2010			March 31, 2009
	June 30, 2010				June 30, 2009
Income (loss) before taxes:
Canada		$	-		$	-
BVI		$	(47,310	)		$	(1,477	)
BVI			(13,074)			(711)
PRC			92,468				54,475
PRC			34,617			21,245
Total income before taxes		$	45,158			$	52,998
Total income before taxes		$	21,543		$	20,534
Provision for taxes:
Provision for taxes:
Current:
Current:
BVI		$	-			$	-
Canadian Federal			-			-
PRC			21,878				13,619
Canadian Provincial			-			-
			21,878				13,619
PRC			8,654			4,442
Deferred:
		$	8,654		$	4,442
BVI			-				-
Deferred:
PRC			-				-
Canadian Federal			-			-
			-				-
Canadian Provincial			-			-
Total provision for taxes		$	21,878			$	13,619
PRC			-			-
Effective tax rate			48.31	%			25.79	%
			-			-
Total provision for taxes		$	8,654		$	4,442
Effective tax rate			40.17%			21.63%

-21-

China Teletech Limited

Notes to Consolidated Financial Statements

For the three and six months ended June 30, 2010 and 2009

(Stated in US Dollars)

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts for income tax purposes. Deferred tax assets and liabilities have not been accrued as at March 31, 2010 and December 31, 2009 because the accounting bases of assets and liabilities approximate their tax values and because the Company’s tax loss arose from BVI where the income tax rate is nil.

~~A22~~The differences between the PRC income tax rates and the Company's effective tax rate for the six-month periods ended June 30, 2010 and 2009 are shown in the following table:

The differences between the Canadian income tax rates and the Company's effective tax rate for the three-month periods ended March 31, 2010 and 2009 are shown in the following table:

	June 30, 2010			June 30, 2009
PRC income tax rates		25.00	%		25.00	%
Adjustments of prior periods	%			%
Effect of deferred income taxes		23.31	%		0.79	%
Effective tax rate		48.31	%		25.79	%

	March 31, 2010	March 31, 2009
Canadian income tax rates	28.50%	29.50%
Lower rates in PRC, net	-3.50%	-4.50%
Effect of deferred income taxes	15.17%	-3.37%
Effective tax rate	40.17%	21.63%

9. Concentration of Risk

Shenzhen Rongxin is subject to concentration of supply shortage risk because it purchases mineral water for resale from a single vendor, Tibet Glacial Mineral Water Co., Ltd. (“Tibet Glacial”). On October 8, 2007, Shenzhen Rongxin entered into purchase agreement whereby Tibet Glacial would provide spring water at fixed price until January 1, 2009 and in return, Shenzhen Rongxin needed to consume no less than 140,000 trunks of bottle water per year. ~~Concentration~~However, ~~Risk~~the Company’s operation result is correlated with Tibet Glacial’s availability to supply

Shenzhen Rongxin is subject to supply shortage risk because its purchases of mineral water for resale are sourced from a single vendor, Tibet Glacial Mineral Water Co., Ltd. (“Tibet Glacial”). On January 1, 2009, Shenzhen Rongxin entered into a purchase agreement whereby Tibet Glacial would provide spring water at fixed price until December 31, 2012 and in return, Shenzhen Rongxin needed to consume no less than 140,000 trunks of bottle water per year.-22-

9.China ~~Economic,~~Teletech ~~Political, and Legal Risks~~Limited

Notes to Consolidated Financial Statements

For the three and six months ended June 30, 2010 and 2009

(Stated in US Dollars)

10. Economic, Political, and Legal Risks

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

~~A23~~11. Spin-off

10Stream Horizons Studio, Inc. ~~Spin~~was engaged in the production of video for broadcast over the internet. The following tabulation summarizes its financial position and operation result as of and for the period ended July 31, 2009 following the spin-off from Wave-lit, Inc.

Stream Horizons Studio, Inc. is engaged in the production of video for broadcast over the internet. The following table summarizes its financial position and operating result as of and for the period ended July 31, 2009 following the spin-off from Wave-lit, Inc.

Stream Horizons Studio, Inc.
Condensed Balance Sheet				Condensed Statement of Income

Assets				Sales revenue	$	-
Current assets	$	-		Cost of sales		-
Non-current assets		-		Gross Profit		-
Total assets		-
				Other income		757,095
Liabilities
Current liabilities		-		Income tax		-
Total liabilities		-
				Net Income	$	757,095

Stockholders' Equity
Common Stock	$	-
Additional Paid in Capital		89,111
Accumulated Other Comprehensive Income		148,551
Retained Earnings		(237,662	)
Total Stockholders' Equity	$	-

Stream Horizons Studio, Inc.
Condensed Balance Sheet			Condensed Statement of Income
	Assets			Sales revenue	$ -
	Current assets	$ -		Cost of sales	-
	Non-current assets	-		Gross Profit	-
	Total assets	-		Other income	757,095
	Liabilities			Income tax	-
	Current liabilities	-		Net Income	$ 757,095
	Total liabilities	$ -

Other income of $757,095 comes from forgiveness of debts payable to the stockholders of Stream Horizon Studio Inc., whereas the other comprehensive income of $148,551 comes from accumulated foreign exchange gains between United States and Canadian dollars. Stream Horizon Studio Inc. ceased the production of video for broadcast over the internet in 2007. The Company has not included the results of operations for Stream Horizon up to and the end of July 31 2009 as shown above.

Stockholders' Equity
Common Stock	$ -
Additional Paid in Capital	89,111
Accumulated Other Comprehensive Income	148,551
Retained Earnings	(237,662)
Total Stockholders' Equity	$ -

-23-

~~For~~ITEM the purpose of the presentation of the financial statements of the Company as a continuation of business under BVI, the Company has not included the results of operations for Stream Horizon up to and the end of July 31 2009 as shown above2. No ~~transaction~~MANAGEMENT’S ~~occurred~~DISCUSSION ~~between~~AND ~~July~~ANALYSIS ~~31,~~OF ~~2009~~FINANCIAL ~~and~~CONDITION ~~March~~AND ~~31,~~RESULTS ~~2010.~~OF OPERATIONS

A24

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ORPLAN OF OPERATIONS

The following discussion and analysis should be read in conjunction with our unaudited consolidated financial statements and related notes included in this report. The statements contained in this report that are not historic in nature, particularly those that utilize terminology such as “may,” “will,” “should,” “expects,” “anticipates,” “estimates,” “believes,” or “plans” or comparable terminology are forward-looking statements based on current expectations and assumptions.

Various risks and uncertainties could cause actual results to differ materially from those expressed in forward-looking statements.

The forward-looking events discussed in this report, the documents to which we refer you and other statements made from time to time by us or our representatives, may not occur, and actual events and results may differ materially and are subject to risks, uncertainties and assumptions about us. For these statements, we claim the protection of the “bespeaks caution” doctrine. All forward-looking statements in this document are based on information currently available to us as of the date of this report, and we assume no obligation to update any forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results to differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements.

Organization

China Teletech Limited (formerly known as Stream Horizons Studio, Inc.) was incorporated under the laws of the Province of British Columbia, Canada on October 1, 2001 under the name Infotec Business Strategies, Inc. The Company is a wholly owned subsidiary of CN Dragon Corporation (formerly known as Wavelit). From its inception, the Company was engaged in the production of video for broadcast over the internet, both live streaming video and on-demand pre-recorded video. The full service studio offered full video editing, both post-production and live-editing, “green-screen” video production, digital still photography services, as well as the capability to broadcast and edit together live video feeds from any location with broadband internet services (virtual studio). The Company had historically been responsible for the broadcast of various live events and creation of corporate videos for the clients of its parent company, CN Dragon.

Although we continued to investigate the profitability of pursuing our prior production of internet video for broadcast business, management believed and still believes that there may be more value for our shareholders if we were able to (i) attract a more substantial operating company and engage in a merger or business combination of some kind, or (ii) acquire assets or shares of an entity actively engaged in business which generates revenues. We have investigated several possible merger candidates to determine whether or not they would add value to the Company for the benefit of our shareholders. Following such investigation, we entered into negotiations with Sierra Vista Group Limited, a British Virgin Islands Company, incorporated on January 30, 2008 under the British Virgin Islands Business Companies Act, 2004 as further described below. It shall be noted that Sierra Vista Group Limited changed its company name to China Teletech Limited (“CTL”) on June 2, 2009.

On or about February 12, 2009, in connection with a possible transaction with CTL, CN Dragon’s Board of Directors approved of a Spin-Off of China Teletech Limited (formerly known as Stream Horizons Studio, Inc.), its wholly owned subsidiary (the “Spin-Off”). The purpose of the Spin-Off was to provide an independent company in which to engage in a business transaction with CTL. The proposed Spin Off was disclosed in CN Dragon’s Preliminary Form 14C filed with the United States Securities and Exchange Commission (the “SEC”) on February 12, 2009 and subsequently amended on March 16, 2009. Pursuant to the terms of the Spin-Off, CN Dragon has agreed to distribute the 70,919,945 shares to be issued in the Spin-Off as a stock dividend (the “Distribution”) to its shareholders of record as of February 12, 2009 (the “Record Date”).

Following the filing of the Preliminary Form 14C, on or about May 20, 2009 the Company entered into a share exchange agreement (the “Exchange Agreement”) with CTL. Pursuant to the Exchange Agreement, the Company agreed to exchange 170,000,000 shares of its common stock for 10 shares of CTL representing 100% of CTL’s issued and outstanding shares, thus making CTL a wholly owned subsidiary of the Company. However, pursuant to the terms of the Exchange Agreement, the transaction will not close until the Company is able to properly consummate the Spin-Off, obtain SEC approval and effectiveness of this Registration Statement and file the Definitive Form 14C with the SEC (the “Closing Transaction”).

In connection with the Spin-Off and as explained above, CN Dragon will distribute the 70,919,945 shares to be issued in the Spin-Off as a Distribution to its shareholders of record as of the Record Date. This Distribution will constitute our initial public offering. The Distribution is expected to be effected as soon as practicable after the date the Registration Statement, of which this Prospectus is a part, is declared effective and the effectiveness of the Closing Transaction. CN Dragon will distribute one (1) share of our common stock for each one (1) share of CN Dragon common stock that you own on the Record Date. You will not be charged or assessed for the shares and neither we nor CN Dragon will receive any proceeds from the Distribution of the shares.

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Following the effectiveness of this Registration Statement and the Closing Transaction, the Company plans to cease its video for broadcast operations and direct its business focus to CTL’s business operations. Currently, CTL maintains two operating subsidiaries in the People’s Republic of China (“PRC”); namely, (a) Shenzhen Rongxin Investment Co., Ltd. (“Shenzhen Rongxin”) and (b) Guangzhou Yueshen Taiyang Network and Technology Co., Ltd. (“Guangzhou Yueshen”).

This Report and related information, including the financial statements and business operations, takes into account and references the effectiveness of the Closing Transaction, specifically the Exchange Agreement, as described herein.

The Company’s current headquarters are located at CN Dragon’s corporate headquarters at 7216 West Enterprise Dr., Las Vegas, Nevada, 89417. The Company’s current telephone number is 702-951-5682. Following the Closing Transaction, the Company plans to move its corporate headquarters to CTL’s headquarters located at Room A, 20/F, International Trade Residential and Commercial Building, Nanhu Road, Shenzhen, PRC 518002, which is also the registered office of CTL. CTL’s telephone number is (86) 755-82204422. CTL’s subsidiaries, Shenzhen Rongxin is located at Room A, 20/F, International Trade Residential and Commercial Building, Nanhu Road, Shenzhen, PRC 518002, and Guangzhou Yueshen is located at 1/F, No. 139, Yingyuan Road, Yuexiu District, Guangzhou, PRC.

General Company Info

The Company conducts its primary business operations through its operating subsidiaries, Guangzhou Yueshen and Shenzhen Rongxin.

Guangzhou Yueshen is principally engaged in the trading and distribution of rechargeable phone cards, prepaid subway tickets, cellular phones and cellular phone accessories in Guangzhou city in China. Guangzhou Yueshen sells to wholesalers, retailers, and end users.

Shenzhen Rongxin’s primary business is the wholesale and distribution of mineral water as well as trading of wine. Shenzhen Rongxin’s is the exclusive supplier of Tibet Glacial 5100 spring water to the Guangdong Province of China which has a population of approximately 110 million. (Source – Guangdong population: People’s Government of Guangdong Province http://www.gd.gov.cn/, http://en.wikipedia.org/wiki/Guangdong#Demographics)

Business Strategy

The Company plans to expand the trading and distribution of rechargeable phone cards, prepaid subway tickets, cellular phones and cellular phone accessories in Guangzhou and Shenzhen cities in China, while maintaining its existing position in the trading of mineral water and wine. The Company intends to introduce new software and value-added services through an expanded network of regional stores and strategic partners covering the Guangdong Province and via a virtual store.

Guangzhou Yueshen plans to duplicate its successful mobile phone related operation in Shenzhen city by utilizing the existing distribution connections Shenzhen Rongxin maintains in such areas through its network of regional stores and strategic partnership in connection with its mineral water and wine business. While it plans to increase service and retail stores for the mobile phone related operation across Guangzhou and Shenzhen, Guangzhou Yueshen intends to build further alliances with all available distributors, wholesalers and other retail outlets such as neighborhood convenience stores across Guangdong Province. Guangzhou Yueshen also plans to develop and acquire mobile phone applications and software to expand its product offerings.

The company was looking to expand its mobile phone related services in the Shenzhen city, PRC and collaborated with Shenzhen Rongxin. Shenzhen Rongxin, a distributor and wholesaler of mineral water in Shenzhen city, intended to diversify its business and develop the mobile phone related service business in the Shenzhen city, PRC together with the know-how and experience of Guangzhou Yueshen. The principals from both companies formed CTL, and CTL acquired Shenzhen Rongxin and Guangzhou Yueshen as wholly owned subsidiaries in 2008. The Company, following the effectiveness of the Closing Transactions, intends to develop the trading and distribution of mobile phone related services in Shenzhen city and expand the existing operations in Guangzhou city.

Shenzhen Rongxin will continue its successful distribution of mineral water and wine in Guangdong Province. It is currently the exclusive supplier of Tibet Glacial spring water to the Guangdong Province of China.

Competition

China mobile phone user base increased to 747 million in January 2010 according to statistics published by China’s Ministry of Industry and Information Technology. The mobile phone related services industry is competitive and highly fragmented with no standout industry leaders. Rechargeable phone cards are usually sold though convenience stores, mobile phone service stores and other retail outlets. Customer demand for rechargeable phone cards is steady with no particular brand loyalty. Guangzhou Yueshen’s competitive advantage is to offer better customer service, shopping convenience in prime location, and strategic collaboration with mobile phone distributors, wholesalers and other retail outlets. In addition, as described above, Guangzhou Yueshen will be able to strategically utilize Shenzhen Rongxin’s existing distribution networks to move its rechargeable phone cards, prepaid subway tickets, cellular phones and cellular phone accessory business into these new geographical areas. (Source – China mobile service subscribers: China’s Ministry of Industry and Information Technology http://tmt.interfaxchina.com/news/2579, http://www.miit.gov.cn/)

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Distribution Methods of Products and Services

Guangzhou Yueshen has an established distribution network with mobile phone distributors, wholesalers and retail outlets in Guangzhou city. Products are traded on site with little distribution and shipping costs. We project revenue increase from future expansion by adding additional retail outlets, wholesalers and distributors in the Guangdong Province. There is no assurance of the revenue increase from future expansion or that expansion will occur at all.

Shenzhen Rongxin also has an established distribution network in Guangdong Province for the resale of mineral water product from a single vendor. In the case for wine trading, a simple distribution is set up for a single major customer.

The Company’s new website, www.chinateletech.com, is currently under development to provide corporate information. The Company plans to develop a virtual store online will be executed after the new mobile phone related service operation in Shenzhen city has been established.

In addition, the Company plans to add more services to its current product lines, specifically the value-added services which include the provision of personalized information to users’ mobile phones, 3G contents and other software applications. An example of such value-added services is the provision of travel service related information and reservation of travel products (hotel, transportation and other ticketing) via the mobile phone Internet platform.

Suppliers

Shenzhen Rongxin is subject to supply shortage risk because its purchases of mineral water for resale are sourced from a single vendor, Tibet Glacial Mineral Water Co., Ltd. (“Tibet Glacial”). On January 1, 2009, Shenzhen Rongxin entered into purchase agreement whereby Tibet Glacial would provide spring water at fixed price until December 31, 2012 and in return, Shenzhen Rongxin needed to consume no less than 140,000 trunks of bottle water per year.

Guangzhou Yueshen has a more diverse group of suppliers for the mobile phone related services and does not plan to rely upon any one major supplier for such products. We believe that there are a number of readily available sources for such products, contributing to our ability to obtain competitive pricing.

Dependence on Major Customers

Guangzhou Yueshen has a diverse customer base for the mobile phone related services that focuses on individual retail customers. As such, we do not expect to be dependent on any major customers and do not expect that this will change in the near future.

Patents, Trademarks, Licenses

We do not have any designs which are copyrighted, trademarked or patented.

Environmental and Regulatory Issues

The expense of complying with environmental regulations is of minimal consequence.

Research and Development

We foresee minimal future research and development costs related to the development of mobile phone applications and software, as the development cost in China is relatively low. Many applications are readily available and can be acquired at low prices. We foresee high demands for such applications but for relatively short periods of time. New applications are needed every now and then to keep merchandise fresh and fashionable.

Effect of existing or probable governmental regulations on the business, and economic and political risks

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

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Employees

The Company has 18 full-time employees. We intend to hire full time employees and additional independent contract labor on an as needed basis when our website is complete.

~~Results of~~RESULTS ~~Operations~~OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2010 COMPARE TO THE THREE AND SIX MONTHS ENDED JUNE 30, 2009

The ~~discussion~~ offollowing ~~the~~table ~~financial~~presents ~~condition~~the statement of operations for the ~~company~~three and ~~its~~six ~~results~~months ~~of operations~~ended isJune ~~presented~~30, on2010 as compared to the ~~basis~~comparable period of the ~~completed~~three ~~Spin-off transaction~~and six months ended June 30, 2009. The discussion following the table is based on these results.

			3 Months			6 Months			3 Months			6 Months
			Ended			Ended			Ended			Ended
	Notes		06/30/2010			06/30/210			06/30/2009			06/30/2009
Revenues
Sales		2K	$	3,531,045		$	6,865,230		$	2,581,290		$	4,692,351
Cost of Sales		2L		3,412,583			6,646,919			2,455,811			4,499,131
Gross Profit				118,462			218,311			125,479			193,220

Operating Expenses
Selling Expenses		2M		1,491			18,650			9,575			18,284
General & Administrative Expenses		2N		93,356			154,492			84,472			122,957
Total Operating Expense				94,847			173,142			94,047			141,241

Operating Income/(Loss)				23,615			45,169			31,432			51,979

Other Income (Expenses)
Other Income				-			39			1,213			1,213
Other Expenses				(4	)		(57	)		(117	)		(117	)
Interest Income				4			7			66			66
Interest Expense				-			-			(129	)		(142	)
Total Other Income/(Expense)				-			(11	)		1,033			1,019

Earnings before Tax				23,615			45,158			32,465			52,998

Income Tax		2Q		13,224			21,878			9,177			13,619

Net Income			$	10,391		$	23,280		$	23,288		$	39,379

Earnings per share
- Basic	1,039.10	2,328.00	2,328.80	3,937.90
- Diluted	1,039.10	2,328.00	2,328.80	3,937.90

Weighted average shares outstanding
- Basic	10	10	10	10
- Diluted	10	10	10	10

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Results of Operation for the three months ended June 30, 2010 compared with three months ended June 30, 2009

Total Revenue

During the three months ended June 30, 2010, we earned $3,531,045 in revenues as compared to $2,581,290 during the same period in 2009, representing an increase of $949,755 or approximately 26.9%. The increase of sales amount is mainly resulted from our marketing strategy which expands our business into more wide area.

Gross Profit

The gross profit decreased to $118,462 during the three months ended June 30, 2010 from $125,479 in the same period of 2009, representing $7,017 or 5.6% decrease, in spite of sales amount increase of 26.9%. The gross margin decreased from 4.9% to 3.4%. The decrease of gross profit and margin is mainly resulted from our sales strategy of lowering our selling price for market expanding.

Expenses

Our selling, general and administrative expenses (“SG&A expenses”) were $94,847 during the three months ended June 30, 2010 as compared to $94.047 during the same period of 2009, representing an increase of $800.

Operating income

We recorded an operating income of $23,615 during the three months ended June 30, 2010, as compared to $31,432 during the same period of 2009. The decrease of operating income is mainly resulted from decrease of gross profit as explained above.

Net income

We recorded a net income of $10,391 during the three months ended June 30, 2010, as compared to $23,280 during the same period of 2009. The decrease of net income is mainly resulted from decrease of gross profit as explained above.

Results of Operation for the six months ended June 30, 2010 compared with six months ended June 30, 2009

Total Revenue

During the six months ended June 30, 2010, we earned $6,865,230 in revenues as compared to $4,692,351 during the same period in 2009, representing an increase of $2,172,879 or approximately 46%. The increase of sales amount is mainly resulted from our marketing strategy which is expand our business into more wide area. Especially the wine business, the revenue in this sector during the six months ended June 30, 2010 contributed approximately $1.3 million sales, which is approximately US$1 million higher than that in the same period of 2009.

Gross Profit

The gross profit increased to $218,311 during the six months ended June 30, 2009 from $193,220 in the same period of 2008, representing $25,091 or 11% increase. The gross profit increase is mainly resulted from increase of sales. However, the margin drops from 4% during the six months ended June 30, 2009 to 3% during the six months ended June 30, 2010. The drop is mainly resulted from change in our sales strategy, which is lower price strategy, to earn more sales. Especially on our wine business, the gross margins during the six months ended June 30, 2010 are 8%, while that during the same period of 2009 is 29%.

Expenses

Our selling, general and administrative expenses (“SG&A expenses”) were $173,142 during the six months ended June 30, 2010 as compared to $141,241 during the same period of 2009, representing an increase of $31,901 or approximately 23%. The increase in SG&A expenses are generally resulted from the additional charges for business expanding.

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Operating income

Operating income during the six months ended June 30, 2010 is $45,169, as compared to $51,979 during the same period of 2009, representing a decrease of $6,810. The decrease is mainly resulted from the increase of SG&A expenses by offset the increment of gross profit.

Net income

Net income recorded $23,280 during the six months ended June 30, 2009, as compared to a net income of $39,379 during the six months ended June 30, 2009. The decrease of net income is mainly resulted from the decrease of operating income as explained above and increase of income tax due to certain un-deductible expenses.

LIQUIDITY AND CAPITAL RESOURCES

Cash provided by operating activities were $61,105 during the six months ended June 30, 2010 as compared to cash used in operating activities $296,836 for the six months ended June 30, 2009. Cash provided by operating activities during the six months ended June 30, 2010 was mainly resulted from net income of $23,280, and decrease of advance to suppliers, increase of tax payable and related party payables, which are $227,352 in total, by offset the increase of inventories of $178,517.

Cash flows provided by investing activities were $0 for the six months ended June 30, 2010 as compared to cash provided by investing activities were $18,843 for the six months ended June 30, 2009. Cash provided by investing activities during the same period of 2009 represent the cash proceeds from sale of property and equipment.

There is no cash flows occurred in financing activities for both periods.

Critical Accounting Policies

The Company’s policy is to use the accrual method of accounting to prepare and present financial statements, which conform to generally accepted accounting principles. The company has elected a December 31, year-end.

Method of Accounting

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

Consolidation

The consolidated financial statements include all the accounts of the Company and its three wholly-owned subsidiaries. Inter-company transactions, such as sales, cost of sales, due to / due from balances, investment in subsidiaries, and subsidiaries’ capitalization have been eliminated.

As of ~~March~~ 31June 30, 2010, the detailed identities of the consolidated subsidiaries are as follows:

Name of Entities	Date of Incorporation	Place of Incorporation	Attributable Equity Interest	Registered Capital
China Teletech Limited, formerly known as Sierra Vista Group Limited	1/20/2008	BVI	100%	USD 10
Shenzhen Rongxin	11/21/1996	PRC	100%	RMB 10,000,000
Guangzhou Yueshen	4/19/2004	PRC	100%	HKD 1,200,000

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Use of Estimates

In the preparation of the financial statements in conformity with accounting principle generally accepted in the United States of America, management makes estimates and assumptions that affect the reported amount of assets, liabilities, and disclosures of contingent assets and liabilities at the dates of the financial statements, as well as the reported amounts of revenues and expenses during the reporting years. These accounts and estimates include, but are not limited to, the valuation of accounts receivable, inventories, and the estimation on useful lives of property, plant and equipment. Actual results could differ from those estimates.

Cash and Cash Equivalent

Cash and cash equivalent are carried at cost and represent cash on hand, demand deposits placed with banks or other financial institutions and all highly liquid investments with an original maturity of three months or less as of the purchase date of such investments.

Accounts Receivable – Trade

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

Inventories

Inventories are stated at the lower of cost or market value. Cost is computed using the first-in, first out method and includes all costs of purchase and other costs incurred in bringing the inventories to their present location and condition. Market value is determined by reference to the sales proceeds of items sold in the ordinary course of business or estimates based on prevailing market conditions. The inventories include bottles of mineral water, prepaid mineral water cards, rechargeable phone cards, prepaid subway tickets, and mobile phones.

Advances to Suppliers

Advances to suppliers represent the cash paid in advance for the purchase of goods. The advances to suppliers are interest free and unsecured.

Property, Plant and Equipment

Property, plant and equipment are stated at cost. Repairs and maintenance to these assets are charged to expense as incurred; major improvements enhancing the function and / or useful life are capitalized. When items are sold or retired, the related cost and accumulated depreciation are removed from the accounts and any gains or losses arising from such transactions are recognized.

Property, plant, and equipment are depreciated using the straight-line method over their estimated useful life with 20% and 10% salvage values on furniture & fixture and motor vehicles respectively. Their useful lives are as follows:

Fixed Asset Classification	Useful Lives
Furniture & Fixture	4 Years
Motor Vehicles	10 Years

Customers Deposits

Customers deposit represents the money the Company has received from customers in advance for the purchase of goods. The Company considers customer deposits as a liability until the title of goods have been transferred at which point the balance will be credited to sales revenue.

Statutory Reserve

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

Comprehensive Income

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Recognition of Revenue

Guangzhou Yueshen establishes retail outlets in Guangzhou city for the trading and distribution of rechargeable phone cards, prepaid subway tickets, cellular phones and cellular phone accessories. Revenue from the sale of Yueshen’s products is recognized on the transfer of risk and ownership, which generally coincides with the time when the goods are delivered to customers and the titles have been passed. Prepayments by customers for phone cards, subway tickets and cellular phone are presented as customer deposits.

Shenzhen Rongxin establishes network in Guangdong Province for the resale of Tibet 5100 mineral water products and wine. Revenue from the sale of mineral water and wine is recognized when goods are delivered to customers or loaded on customers’ pick-up trucks and the titles have been passed.

Neither Guangzhou Yueshen nor Shenzhen Rongxin has any refund policies for the return of goods.

Cost of Sales

Guangzhou Yueshen’s cost of sales is primarily comprised of cost of goods, and other purchasing and receiving overhead costs.

Shenzhen Rongxin’s cost of sales consists of cost of mineral water and wine, inbound freight, warehouse cost, and outbound freight.

Selling Expenses

Selling expense include outbound freight, salaries of the sale force, clients entertainment, commission, advertising, and office rental expense.

General & Administrative Expenses

General and administrative expenses are comprised of executive compensation, general overhead such as the finance department and administrative staff, depreciation, travel and lodging, meals and entertainment and utility.

Advertising Expenses

Cost related to advertising and promotion expenditures are expensed as incurred during the year. Advertising costs are charge to selling expenses.

Retirement Benefits

Income Tax

The Company uses the accrual method of accounting to determine and report its taxable reduction of income taxes for the year in which are available. In accordance with SFAS No. 109 “Accounting for Income Taxes”, the Company accounts for income tax using an asset and liability approach and allows for recognition of deferred tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more likely than not that such items will either expire before the Company is able to realize their benefits, or that future realization is uncertain.

In respect of the Company and its subsidiaries domiciled and operated in the British Virgin Islands and People’ Republic of China, the taxation of these entities are summarized below:

Entities	Countries of Domicile	Income Tax Rate
China Teletech Limited	Canada	28.50%
China Teletech Limited	BVI	0.00%
Shenzhen Rongxin	PRC	25.00%
Guangzhou Yueshen	PRC	25.00%

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Foreign Currency Translation

The Company’s two operating subsidiaries Shenzhen Rongxin and Guangzhou Yueshen maintain their financial statements in the functional currency, which is the Renminbi (RMB). Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at rates of exchange prevailing at the balance sheet dates. Transactions denominated in currencies other than the functional currency are translated into the financial currency at the exchanges rates prevailing at the dates of the transaction. Exchange gains or losses arising form foreign currency transactions are included in the determination of net income for the respective periods.

For financial reporting purpose, the financial statements of Shenzhen Rongxin and Guangzhou Yueshen, which are prepared using the functional currency, have been translated into United States dollars. Assets and liabilities are translated at the exchange rates at the balance sheet dates and revenue and expenses are translated at the average exchange rates, and stockholders’ equity is translated at historical exchange rates. Translation adjustments are not included in determining net income but are included in foreign exchange adjustment to other comprehensive income, a component of stockholders’ equity.

Exchange Rates	3-31-2010	12-31-2009	12-31-2008
Period end RMB: US$ exchange rate	6.8361	6.8372	6.8542
Average period RMB: US$ exchange rate	6.8360	6.8409	6.9623
Period end HKD: US$ exchange rate	7.7647	7.7551	7.7507
Average period HKD: US$ exchange rate	7.7639	7.7522	7.7874

Recent Accounting Pronouncements

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In October 2009, the FASB issued ASU 2009-13, Revenue Recognition (Topic 605) — Multiple-Deliverable Revenue Arrangements, a consensus of the FASB Emerging Issues Task Force (“ASU 2009-13”). ASU 2009-13 addresses the accounting for multiple-deliverable arrangements where products or services are accounted for separately rather than as a combined unit, and addresses how to separate 71 deliverables and how to measure and allocate arrangement consideration to one or more units of accounting. Existing GAAP requires an entity to use vendor-specific objective evidence (“VSOE”) or third-party evidence of a selling price to separate deliverables in a multiple-deliverable selling arrangement. As a result of ASU 2009-13, multiple-deliverable arrangements will be separated in more circumstances than under current guidance. ASU 2009-13 establishes a selling price hierarchy for determining the selling price of a deliverable. The selling price will be based on VSOE if it is available, on third-party evidence if VSOE is not available, or on an estimated selling price if neither VSOE nor third-party evidence is available. ASU 2009-13 also requires that an entity determine its best estimate of selling price in a manner that is consistent with that used to determine the selling price of the deliverable on a stand-alone basis, and increases the disclosure requirements related to an entity’s multiple-deliverable revenue arrangements. ASU 2009-13 must be prospectively applied to all revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010, and early adoption is permitted. Entities may elect, but are not required, to adopt the amendments retrospectively for all periods presented. The Company does not believe that the adoption of this standard will have a material impact on the financial position, results of operations, or cash flows of the Company.

In December 2009, the FASB issued ASU 2009-17, Consolidations (Topic 810) — Improvements to Financial Reporting by Enterprises Involved with Variable Interest Entities. ASU 2009-17 replaces the quantitative-based risk and rewards calculation for determining which reporting entity, if any, has a controlling financial interest in a variable interest entity with an approach focused on identifying which reporting entity has the power to direct the activities of a variable interest entity that most significantly impact the entity’s economic performance and (1) the obligation to absorb losses of the entity or (2) the right to receive benefits from the entity. An approach that is expected to be primarily qualitative will be more effective for identifying which reporting entity has a controlling financial interest in a variable interest entity. ASU 2009-17 also requires additional disclosures about a reporting entity’s involvement in variable interest entities. The provisions of ASU 2009-17 are to be applied beginning in the first fiscal period beginning after November 15, 2009. The adoption of this standard did not have a material impact on the financial position, results of operations or cash flows of the Company.

~~Results of~~OFF-BALANCE ~~Operations~~SHEET ARRANGEMENTS

~~Management’s~~We ~~Discussion~~do ~~and Analysis~~not ofhave ~~Financial~~any ~~Condition~~off-balance ~~and~~sheet ~~Results~~arrangements, offinancings, ~~Operations~~or other relationships with unconsolidated entities or other persons, also known as “special purpose entities” (SPEs).

For the three months ended March 31, 2010, the Company had revenue of $3,334,185 and gross profit of $99,849. The operating expense was $78,295 and a net income of $12,889. The gross profit ratio was 2.99% and net profit ratio was 0.39%. 2009 was a difficult year but the Company’s first quarter result of 2010 was encouraging as the China economy recovers. Revenue for the first quarter 2010 increased 57.94% from the same period last year. The gross profit ratio declined slightly as the Company offered discounted pricing in all mobile phone related products in the first quarter 2010 in a promotional bid to boost sales and entice new customers amid keen competition.-33-

Recent Trends and Future Growth

The 3G mobile phone services have commenced recently in PRC and coupled with the right kind of promotions, the Company can expect substantial growth in revenues. Changes in the telecommunications policy in PRC directly affect the Company’s operations.

Mobile phone related service operation was previously established in Guangzhou city by Guangzhou Yueshen. The Company would like to duplicate and develop this operation in Shenzhen city. The Company expects to increase sales over the next 18 months due primarily to the planned new mobile phone related service operations in Shenzhen and expand the sales network in Guangzhou.

Liquidity and Capital Resources

At March 31, 2010, we had cash of $382,839.

The Company currently has sufficient cash flow to support its operations. The Company is actively monitoring the business environment as it recovers from the effects of the financial tsunami, and adjusting to market needs while maintaining a healthy cash position.

It will need approximately US$5,000,000 in additional funding for the expansion projects of the new retail stores and service locations for the next 12 months. The funds will be used to increase the number of chain stores and increase inventory for higher turnover. We estimate to increase 10 new retail stores in Guangzhou and 10 new retail stores in Shenzhen, spending about US$146,400 per new store. Due to the high demand for mobile phone related services in China, we expect that increased inventory would lead to higher turnover for the Company. In the event that the Company fails to raise the needed funding, we expect to open a total of 3 new stores and maintain a small growth over the current turnover level.

We expect to incur approximately $50,000 per year in additional costs associated with becoming a public company. These costs are generally associated with administrative, attorney and auditing fees. In the event we are unable to generate sufficient capital from operations or other funding sources, we intend to secure loans from our existing shareholders for operating capital.

Future Goals

In the next 12 months, our goal is to develop the mobile phone related service operation in Shenzhen and expand the sales network in Guangzhou. In the event that expansion is successful, we plan on adding additional mobile phone application and software and market them in both Guangzhou and Shenzhen.

Following becoming a reporting company which we hope to achieve within the next 60 days, we plan on making a private placement of our securities to raise the funds for our initial expansion plans. The private placement should close within the next six (6) months and we have contacted a securities firm to assist us with the private placement. Assuming the private placement is successful, we plan on expanding in Shenzhen during the second half of 2010 and starting the mobile phone application and software development thereafter. The development of mobile phone application is dependent upon sufficient financing and the identification of suitable mobile phone application suppliers and distributors.

Off-balance Sheet Arrangements

We maintain no significant off-balance sheet arrangements

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We currently do not utilize sensitive instruments subject market risk in our operations. In the event that we borrow money for our operations, our principal exposure to financial market risks is the impact that interest rate changes could have on our loans.

ITEM 4 4T. CONTROLS AND PROCEDURES.

~~In accordance~~a) Evaluation ~~with~~of Disclosure Controls. Pursuant to Rule 13a-15(b) ofunder the Securities Exchange Act of 1934 (“Exchange Act”), asthe ofCompany carried out an evaluation, with the ~~end~~ participation of the ~~period~~Company’s ~~covered~~management, byincluding ~~this~~the ~~Report~~Company’s onChief ~~Form~~Executive ~~10-Q,~~Officer ~~our~~(“CEO”) ~~management~~and ~~evaluated, with~~Chief ~~the~~Financial ~~participation~~Officer of(“CFO”) ~~our~~(the Company’s principal ~~executive~~financial and ~~financial~~accounting officer), ~~the effectiveness~~ of the ~~design~~effectiveness ~~and operation~~ of the Company'’s disclosure controls and procedures (as defined inunder Rule 13a-15(e) ~~or Rule 15d-15(e)~~ under the Exchange Act). ~~Disclosure~~as ~~controls~~of ~~and~~the ~~procedures~~end ~~are~~of ~~defined~~the asperiod ~~those~~covered ~~controls and~~by ~~other~~this ~~procedures~~report. ofBased anupon ~~issuer~~that evaluation, the Company’s CEO and CFO concluded that the Company’s disclosure controls and procedures are ~~designed~~effective to ensure that ~~the~~ information required to be disclosed by the ~~issuer~~Company in the reports itthat the Company files or submits under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the ~~Commission'~~SEC’s rules and forms~~. Disclosure controls and procedures include~~, ~~without limitation, controls~~ and ~~procedures designed to ensure~~ that such information ~~required to be disclosed by an issuer in the reports that it files or submits under the Act~~ is accumulated and communicated to the ~~issuer'~~Company’s management, including ~~its~~the ~~principal~~Company’s ~~executive~~CEO ~~officer~~ and ~~principal~~ ~~financial officer~~CFO, oras ~~persons performing similar functions~~appropriate, ~~as appropriate~~ to allow timely decisions regarding required disclosure.

~~Based~~(b) Changes ~~on their~~in ~~evaluation~~internal ofcontrol ~~these~~over ~~disclosure~~financial ~~controls~~reporting. ~~and~~There ~~procedures,~~have ~~our~~been ~~chairman~~no ~~of the~~changes ~~board~~in ~~and~~our ~~chief~~internal ~~executive~~control ~~and~~over financial ~~officer~~reporting ~~has~~that ~~concluded~~occurred during the last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our ~~disclosure~~ ~~controls~~internal ~~and~~control ~~procedures~~over ~~are~~financial ~~effective~~reporting.

~~Item 4T. Controls and Procedures.~~-34-

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. The Company's internal control over financial reporting has been designed 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 generally accepted in the United States of America. The Company's internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and dispositions of assets of the Company; provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures are being made only in accordance with authorization of management and directors of the Company; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on the Company's financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management assessed the effectiveness of the Company's internal control over financial reporting at March 31, 2010. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") in Internal Control--Integrated Framework. Based on that assessment under those criteria, management has determined that, at December 31, 2009, the Company's internal control over financial reporting was effective.

This Annual Report on Form 10-Q does not include an attestation report of the Company's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to temporary rules of the SEC that permit the Company to provide only management's report in this annual report.

Inherent Limitations of Internal Controls

Our internal control over financial reporting is designed 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. Our internal control over financial reporting includes those policies and procedures that:

● pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; ● provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and ● provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements.

Our management does not expect that our internal controls will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of internal controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Also, any evaluation of the effectiveness of controls in future periods are subject to the risk that those internal controls may become inadequate because of changes in business conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management has not identified any change in our internal control over financial reporting in connection with the its evaluation of our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are currently not involved in any litigation that we believe could have a ~~party~~material toadverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any ~~pending~~court, ~~legal~~public ~~proceedings~~board, ~~responsive~~government agency, self-regulatory organization or body pending or, to ~~this~~the ~~Item Number~~knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

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

None.

ITEM 31A.~~DEFAULT~~ ~~UPON~~RISK ~~SENIOR SECURITIES~~FACTORS

Not applicable because we are a smaller reporting company.

ITEM 3. DEFAULT UPON SENIOR SECURITIES

None.

ITEM 4. (REMOVED AND RESERVED)

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

Statements
Exhibit No.		Description
Report of Independent Registered Public Accounting Firm
31.1		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Balance Sheets at March 31, 2010 and December 31, 2009
31.2		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Statements of Operations for the three-month periods ended March 31, 2010 and 2009
32.1		Certification of Chief Executive Officer of the Company, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Statement of Changes in Stockholders’ Equity for the three-month period ended March 31, 2010 and the year ended December 31, 2009
32.2		Certification of Chief Financial Officer of the Company, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Statements of Cash Flows for the three-month periods ended March 31, 2010 and 2009
Notes to Financial Statements
Schedules
All schedules are omitted because they are not applicable or the required information is shown in the Financial Statements or notes thereto.
	Exhibit	Form	Filing	Filed with
Exhibits	#	Type	Date	This Report
Articles of Incorporation filed with the British Columbia Ministry of Finance on October 1, 2001.	3.1	10-SB	11/20/2009
Certificate of Name Change filed with the British Columbia Ministry of Finance on November 17, 2005.	3.2	10-SB	11/20/2009
Certificate of Restoration filed with the British Columbia Ministry of Finance on August 28, 2009.	3.3	10-SB	11/20/2009
Notice of Alteration filed with the British Columbia Ministry of Finance on October 7, 2009.	3.3	10-SB	11/20/2009
Stock Purchase and Share Exchange Agreement effective May 20, 2009.	14.1	10-SB	11/20/2009
Certification of Henry Liguori, pursuant to Rule 13a-14(a)	31.1			X
Certification of Henry Liguori pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	32.1			X

	Signatures
Pursuant to the requirements of the Securities Exchange Act 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Signatures	Title	Date
/s/ Henry Liguori Henry Liguori	Secretary, Chief Financial Officer Principal Accounting Officer Director	June 8, 2010

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SIGNATURES

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

	CHINA TELETECH LIMITED

Date: August 16, 2010	By:	/s/ Dong Liu
		Dong Liu
		President and Chief Executive Officer

Date: August 16, 2010	By:	/s/ Yuan Zhao
		Yuan Zhao
		Chief Financial Officer and Principal Accounting Officer

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