CLUS 10-K Annual Report Dec. 31, 2011

CHINA TELETECH HOLDING INC

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10-K 1 f10k2011_chinateletechhold.htm FORM 10-K f10k2011_chinateletechhold.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

x	ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2011

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

For the transition period from ___________ to ___________

Commission File No. 333-130937

CHINA TELETECH HOLDING, INC.

(Exact name of registrant as specified in its charter)

Florida	59-3565377
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

c/o Corporation Service Company 1201 Hays Street Tallahassee, FL	32301
(Address of principal executive offices)	(Zip Code)

(850) 521-1000

(Registrant’s telephone number, including area code)

Securities registered under Section 12(b) of the Act: None

Securities registered under Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes o No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes o No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes o No x

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes o No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference Part III of this Form 10-K or any amendment to this Form 10-K.

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

Large accelerated filer	o	Accelerated filer	o

Non-accelerated filer (Do not check if a smaller reporting company)	o	Smaller reporting company	x

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

Yes o No x

Our common stock is traded thinly on the OTC Bulletin Board.

As of April 9, 2012, the registrant had 58,528,637 shares of its common stock outstanding.

Documents Incorporated by Reference: None.

TABLE OF CONTENTS

		Page
	PART I
Item 1.	Business.	1
Item 1A.	Risk Factors.	6
Item 2.	Properties.	6
Item 3.	Legal Proceedings.	6
Item 4.	Mine Safety Disclosures.	6

	PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.	6
Item 6.	Selected Financial Data.	7
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	7
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk.	12
Item 8.	Financial Statements and Supplementary Data.	F-
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.	13
Item 9A.	Controls and Procedures.	13

	PART III
Item 10.	Directors, Executive Officers and Corporate Governance.	14
Item 11.	Executive Compensation.	15
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.	16
Item 13.	Certain Relationships and Related Transactions, and Director Independence.	16
Item 14.	Principal Accounting Fees and Services.	17

	PART IV
Item 15.	Exhibits, Financial Statement Schedules.	17
SIGNATURES		19

PART I

Item 1. Business.

Overview

China Teletech Holding, Inc. (“we” or the “Company”) is a distributor of pre-paid calling card and integrated mobile phone handsets and a provider of mobile handset value-added services. We are an independent qualified corporation that serves as one of principal distributors of China Telecom, China Unicom, and China Mobile products in Guangzhou City. We maintain and operate the largest prepaid mobile phone card sales and distribution center in Guangzhou City. We have cooperative distribution relationships with Panasonic, Motorola, LG, GE, Bird, Samsung corporations for their mobile handsets. We are also developing an on-line refill platform with China Mobile to develop our on-line business in the Guangdong Province.

We also engage in the business of wholesale and distribution of mineral water as well as trading of wine in China.

Corporate History and Structure

We are incorporated as Avalon Development Enterprises, Inc. on March 29, 1999, under the laws of the State of Florida. From inception until January 2007, we engaged in the business of acquiring commercial property and expanding into building cleaning, maintenance services, and equipment leasing as supporting ancillary services and sources of revenue. On January 10, 2007, the Company, Global Telecom Holdings, Ltd., a British Virgin Islands company (“GTHL”), and the shareholders of GTHL, entered into a share exchange agreement, pursuant to which the Company issued 39,817,500 shares of its restricted common stock to the shareholders of GTHL in exchange for all of the issued and outstanding capital stock of GTHL. Following the transaction on March 27, 2007, GTHL became our wholly-owned subsidiary and we changed our name to Guangzhou Global Telecom Holdings, Inc. and succeeded to the business of GTHL.

In 2007, we established four subsidiaries; namely, Zhengzhou Global Telecom Equipment Limited (“ZGTE”), Macau Global Telecom Company Limited (“MGT”), Huantong Telecom Hongkong Holding Limited (“HTHKH”), and Huantong Telecom Singapore Company PTE Limited (“HTS”) with capital of RMB 500,000, Macau Dollar 300,000, Hong Kong Dollar 100 and Singapore Dollar 200,000, respectively. Simultaneously, we established a subsidiary; namely, Guangzhou Huantong Telecom Technology and Consultant Services, Ltd (“GHTTCS”) with capital of RMB 8,155,730. Pursuant to a Stock Purchase Agreement dated April 9, 2008 and July 29, 2008, respectively, the Company acquired 50% of the issued and outstanding shares in the capital of Beijing Lihe Jiahua Technology and Trading Company Ltd (“BLJ”) and 51% of the issued and outstanding shares in Guangzhou Renwoxing Telecom Co., Ltd. (“GRT”), a limited liability company incorporated in China. Pursuant to the terms of the Stock Purchase Agreements, the Shareholders agreed to sell and transfer the proportion of the shares to the Company for a purchase consideration of US$300,000 and US$291,833 respectively.

In 2009 and 2010, the Company disposed of its subsidiaries CHTTCS, ZGTE, MGT and BLJ due to their loss operations. HTHKH and HTS were not able to start its operation since its inception, so the Company deregistered them in 2010.

Financing

On July 31, 2007 and January 1, 2008, the Company completed two financing transactions with several investors (the “Holders”) issuing $2,000,000 and $1,000,000, respectively, Fixed Rate Convertible Debenture due in 2009 and a stock purchase warrant to purchase an aggregate of 2,090,592 shares of the Company common stock, subject to adjustments for stock splits or reorganizations as set forth in the warrant, that will expire in 2012 (the “Warrants”).

The Debentures were subscribed at a price equal to 87.5% of their principal amount, which is the issue price of $3,428,571 less a 12.5% discount. The Debentures were issued pursuant to, and are subject to the terms and conditions of, a trust deed dated July 31, 2007 (the “Trust Deed”).

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

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

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

On November 3, 2008, due to market conditions, the Company re-negotiated the terms of the Debentures and Warrants, and entered into a modification agreement (the “Amendment Agreement”) with the Holders. Pursuant to the Amendment Agreement, the Company agreed to completely remove the monthly interest payment of the Debentures and Increase the annual interest rate to 18%. Therefore, as described in the Schedule A of the Amendment Agreement, the Company will pay an aggregate of $2,151,110.85 and $1,485,714.10 to the Holders that are due on July 31, 2009 and February 21, 2010, respectively. The Company acknowledged that the conversion price of the Debentures on the conversion date shall be equal to the lesser of (a) $0.015 (subject to adjustment), and (b) 80% of the lowest closing bid price during the 20 Trading Days immediately prior to the applicable conversion date (subject to adjustment).

The Amendment Agreement further modified the terms of the transaction by reducing the exercise price of the Warrants to $0.015 (subject to further adjustment), and therefore the number of shares underlying Warrants issued to the Holders will be increased to an aggregate of 156,097,534 shares as described in Schedule B of the Amendment Agreement.

The Company further amended the Articles of Incorporation to increase the number of authorized shares of common stock to 1,000,000,000.

On December 29, 2009, the Company entered into a Settlement Agreement with the Holders. Pursuant to the Settlement Agreement, the Company would make a total payment of $1,300,000 to the Holders no later than January 21, 2010. The Convertible Debentures would be deemed satisfied and all outstanding Warrants held by the Holders would be cancelled. In addition, the Holders agreed to cancel all of the Company shares held by them at such time as the payment has been made. However, as of September 30, 2010, the Company has not paid the sum of $1,300,000 to the Holders.

In May 2010, the Holders commenced an action against the Company in the Supreme Court of the State of New York in order to recover the outstanding amount of $1,300,000 under the Settlement Agreement. The outcome and estimated loss from this lawsuit cannot be determined at this time.

On April 29, 2011, a judgment in the amount of $1,415,306.16 in favor of the Holders and against the Company was entered on August 5, 2011 in the Supreme Court of the State of New York.

On November 28, 2011, the Company and the Holders entered into a Settlement and Amendment Agreement. As partial consideration for the agreements of the Holders, upon execution of the Agreement, the Company shall pay the Holders, in the aggregate, the sum of $50,000. Within 20 business days of the execution of the Agreement, the Company shall pay the Holders, in the aggregate, the additional sum of $105,000, including $5,000 for the Holder’s legal fees and expenses as described in Section 10(d) herein. Wire instructions and respective pro-rata amounts shall be provided by the Holders in writing. Promptly following the payment of an aggregate of $155,000 by the Company, the Holders will surrender their respective Warrants and Restricted Shares to the Company’s counsel for cancellation. Following the payment of an aggregate of $155,000 by the Company, the Holders shall promptly file a satisfaction of judgment with the Supreme Court of the State of New York.

The amendments to the original debenture agreement are as follows:

(a)	The date included in the definition of “Maturity Date” in the second paragraph of the Debentures is hereby amended to read: November 23, 2013.

(b)

Section 4(b) of the Debentures is hereby amended to read as follows: “Conversion Price.” The conversion price in effect on any Conversion Date shall be equal to the lesser of (i) $.10 (the “ Set Price ”) and (ii) 90% of the average of the VWAPs for the 5 Trading Days immediately prior to the applicable Conversion Date (such lower price, as subject to adjustment herein, the “ Conversion Price ”).

(c)	For purposes of Sections 5(a), 5(b), 5(c) and 5(d) of the Debentures, the term “Conversion Price” shall be deemed to be the “Set Price”.

(d)

Reduction in Principal Amount of Debentures . Subject to the terms and conditions hereunder, the Holders and the Company hereby agree that the principal amount outstanding under the Debentures shall be reduced to, in the aggregate, $1,300,000. The individual amounts of each Holder’s Debenture, as reduced pursuant to this Section, shall be as set forth on Schedule A hereto.

(e)

Daily Trading Volume of the Conversion Shares . On any given Trading Day, the Holder shall not sell in open market transactions more than a number of Conversion Shares equal to the greater of (i) 20% of the trading volume on that day, or (ii) 20% of the daily average trading volume over the prior 5 trading days, however, provided that, in either case, the minimum daily trading volume shall be no less than 500,000 shares, subject to adjustment for reverse and forward stock splits and the like.

(f)

Mandatory Conversion . The Company shall have the right to force the Holders to convert the Debenture into Common Stock at such time that the VWAP of the Company’s Common Stock is no less than $1.00 per share (subject to adjustment for reverse and forward stock splits and the like) for a period of ten (10) consecutive trading days (the “ Mandatory Conversion ”); provided, however, during such 10 consecutive trading day period, the Equity Conditions (as defined in the original Debentures (prior to the Amended and Restated Debentures) have been met by the Company Holders may deliver to the Company at its executive office, or to the Company’s transfer agent, as applicable, the Amended and Restated Debenture (as defined in Section 9(c)) so converted. As promptly as practicable thereafter, the Company shall issue, or shall cause its transfer agent to issue and deliver to such holder a certificate or certificates for the number of shares of Common Stock to which such holder is entitled.

In additional to the amendment to the Debenture, the Company also agrees to become current with all obligations under the Exchange Act, and shall, at all times thereafter, remain current in accordance with the rules and regulations of the Commission and its obligations under the Exchange Act. On or before the earlier of (i) December 15, 2011 or (ii) the 30 th calendar day following the date the Company becomes current in its filing obligations under the Exchange Act, the Company shall hire an investor relations firm, specializing in small-cap and micro-cap public companies, with a term of engagement of not less than 12 months. On or before January 31, 2012 (subject to SEC or any other regulatory approval), the Company and Newco shall have consummated a merger transaction (the “Merger”) whereby the business of Newco is acquired by the Company. In addition, as a part of the Merger, Newco and its direct and indirect subsidiaries, if any, shall deliver each holder a Guarantee, in the form of the Subsidiary Guarantee attached to the Purchaser Agreement, and shall comply with all terms and conditions of the Security Agreement, including, without limitation, the granting of a first priority lien in their respective assets to the Holders.

Upon compliance with the terms, conditions, and covenants in the Settlement and Amendment Agreement, the Holders shall promptly file a satisfaction of judgment with the Supreme Court of the State of New York. Such filing is expressly conditioned upon the Company’s performance of such terms, conditions, and covenants. There shall be no settlement of the Litigation until such time as the Company complies with all of the terms, conditions, and covenants of this Agreement. The Holders reserve the right to take any and all actions to enforce the Judgment in the event that the Company does not comply with such terms, conditions, and covenants.

Reverse Split and Name Change

On December 9, 2011, the Board and the shareholders representing more than 50% of the Company’s common stock approved a 1-10 reverse split. The forward split was declared effective by FINRA as of February 16, 2012.

On March 2, 2012, the Board and the shareholders representing more than 50% of the Company’s common stock approved a change in the Company’s name. On March 8, 2012, we filed an Articles of Amendment to our Articles of Incorporation (the “Amendment”) to change the corporate name from “Guangzhou Global Telecom, Inc.” to “China Teletech Holding, Inc.” The Amendment was effective as of March 8, 2012. In connection with the name change, we have applied for a new trading symbol “CNCT” for the Company’s common stock, which is quoted on the OTCQB. Both the name change and symbol change have been approved by FINRA and became effective as of March 20, 2012.

Acquisition of China Teletech Limited

CTL is a British Virgin Islands Company, incorporated on January 30, 2008 under the British Virgin Islands Business Act 2004. Its primary business operations are concluded through two wholly owned subsidiaries located in China, namely, (a) Shenzhen Rongxin Investment Co., Ltd. (“Shenzhen Rongxin”) and (b) Guangzhou Rongxin Science and Technology Limited (“Guangzhou Rongxin”).

Pursuant to the agreement, we acquired all the outstanding capital stock of CTL from the former shareholders of CTL in exchange for the issuance of 40,000,000 shares of our common stock. The shares issued to the former shareholders of CTL constituted approximately 68.34% of our issued and outstanding shares of common stock as of an immediately after the commutation of the share exchange transaction. As a result of the share exchange, CTL became our wholly owned subsidiary and Dong Liu and Yuan Zhao, the former shareholders of CTL, became our principal shareholders.

In connection with the share exchange, Yankuan Li resigned as our Chief Financial Officer, Secretary and Chairman of the Board of Directors, effective as of March 30, 2012. Also effective upon closing of the share exchange, Dong Liu, Yuan Zhao, Yau Kwong Lee and Kwok Ming Wai Andrew were appointed as our directors. In addition, Kwok Ming Wai Andrew was appointed as our Chief Financial Officer and Secretary. Ms. Yankuan Li will remain President, Chief Executive Officer and a member of the board of directors of the Company. As of result of the merger, the Company believes that it can enjoy a greater management and capital resources and have a greater network and business opportunities. The Company will be able to expand its telecommunications business in Guangzhou and Shenzhen cities in China.

Organization Chart

Our organization structure is illustrated as follow:

Subsidiaries

We operate our business through our subsidiaries in China:

Guangzhou Renwoxing Telecom Co., Ltd.

GRT is located at Renwoxing Center, 139 Ying Yuan Road, Yue Xiu District, Guangzhou, China. It is principally engaged in the trading and distribution of rechargeable phone cards in Guangzhou City, China. We own 51% of GRT. The other 14% is beneficially owned by Yankuan Li, our President and Chief Executive Officer, and 35% is beneficially owned by Yuan Zhao, our Director.

Guangzhou Global Telecommunication Co., Ltd.

GGT is located at Room 1604, Jinke Building, No. 17-19 Guangwei Road, Guangzhou, China. It is principally engaged in the trading and distribution of cellular phones, cellular phone accessories and rechargeable phone cards in Guangzhou City, China.

Guangzhou Rongxin Technology Co., Ltd.

Guangzhou Rongxin is located at Renwoxing Center, 139 Ying Yuan Road, Yue Xiu District, Guangzhou, China. It is principally engaged in the trading and distribution of rechargeable phone cards in Guangzhou City, China.

Shenzhen Rongxin Investment Co., Ltd.

Shenzhen Rongxin is located at Room A, 20/F., International Trade Residential And Commercial Building, No. 3009 Nan Hu Road, Shenzhen, Guangdong, China. Its primary business is the wholesale and distribution of mineral water (Tibet Glacial 5100 Spring Water) as well as trading of wine in China.

Our Strategies

We devote significant resources to identifying and developing new software and value-added services through an expanded network of regional and neighborhood service centers. We plan to develop our distribution operations and to introduce current, new and innovative software and services through possible expanded network of regional and neighborhood services centers and business partners.

We are expanding our services by building an Air-Refill Platform with China Mobile in 2011. Air-Refill Platform is an on-line refill platform for mobile phone users to refill their rechargeable phone cards. We are investing on two sets of machines and software developments for the Air-Refill Platform. They are under pilot test-run since the fourth quarter of 2011 for Guangzhou City and Guangdong Province. They will be launched in the second quarter of 2012. The on-line platform can generate sales with lower costs and higher profit margin, compared to retail shops. This new sales channel can allow us to make direct sales and cross-sales of additional value-added services and add-on products to our customers in the future.

With merger with CTL, we have greater management and capital resources and greater network and business opportunities. This enables the Company to further expand its Air-Refill Platform business from Guangdong provinces to other provinces of China. At this stage, we plan to expand the business to other major cities in China such as Zhuhai, Wuhan, Zhengzhou, Shanghai and Beijing. We will also identify and acquire several investment projects of high technology and telecommunications in China for our corporation growth in future.

Distributions

We currently serve as a nationally distributor of pre-paid phone calling cards, mobiles and integrated mobile handsets and related communication equipment and a provider of mobile value-added services in Guangzhou City of China.

Both GRT and Guangzhou Rongxin have an established distribution network with mobile phone distributors, wholesalers and retail outlets in Guangzhou city. We anticipate that on-line sales from our Air-Refill Platform will become the significant sales channel of our rechargeable phone cards businesses in future. GRT and Guangzhou Rongxin will develop other value-added services through the Air-Refill Platform in future.

Shenzhen Rongxin is currently a major distributor of Tibet Glacial Spring Water within the Guangdong Province of China. It also distributes wine to major target customers in the same province. It will continue to develop and enhance its distribution networks of mineral water and wine in the Guangdong Province.

Revenue Sources

As of December 31, 2011, our revenue comes from principal business of GRT. After the merger, we anticipate that our revenue will come from principal businesses of GRT, Guangzhou Rongxin and Shenzhen Rongxin.

As mentioned above, we are developing Air-Refill Platform with China Mobile for our customers. During the product and value-added services development phase, our product lines and production levels will be kept at current size. We expect the Air-Refill platform business will increase its significance in revenue contributions to the company when it is officially launched in the second quarter of 2012.

We also plan to acquire investment projects of high technology and telecommunications in China. We do not have a target company so far.

Marketing

Our strategy is a natural follow on to our existing telephone distribution operation in China. We are building strong customer relationships in the local communities that we are serving and we can generate more sales from these existing loyal customers and through words of mouth and advertisement.

We anticipate that the on-line platform can distribute current products and provide mobile phone value added services in the future. Marketing strategies will be planned and enacted accordingly to the development of the Air-Refill Platform business (including direct selling and related cross-selling businesses) and acquisition and operation of the acquired investment projects in the future.

Our company has adopted its new name since March 20. We plan to build up and maintain “China Teletech” as a high-quality brand name. We anticipate that it can definitely help the sales and growth of our business and increase our corporate value in future.

Competition

China is the world’s largest mobile telecommunications market. According to an updated statistics from Ministry of Industry and Information Technology of China, there were about 997 million mobile cellular users in China as of January 2012. This represented about 77 percent of the population of 1.3 billion people in China.

As the Chinese population becomes saturated with multiple mobile handsets per person, demand will still exist for upgrade or replacement platforms and value-added services. One of the important value-added services is on-line add-value services for mobile users and some major distributors are developing, testing and upgrading of their own platforms.

Our strategy strives to be one of principal distributors and service providers for mobile users in Guangdong Province. The Company will continue in developing and upgrading its on-line platform for providing mobile phone value-added services and distributing current and new and innovative products to our customers.

Intellectual Property

We do not own any intellectual property.

Government Approval and Regulation

We do not need government approval for our principal products or services.

Employees

As of December 31, 2011, we have 15 full-time employees.

Item 1A. Risk Factors.

Not applicable because we are a smaller reporting company.

Item 2. Properties.

Before the merger with CTL, our corporate office was located at Room 1604 Jinke Building, No.17 - 19, Guangwei Road, Guangzhou, China 510030. This office is free of charge provided by Ms. Yankuan Li, our President and Chief Executive Officer. GGT is using this office free of charge.

Since the merger with CTL, our corporate office has been changed to Room A, 20/F., International Trade Residential And Commercial Building, No. 3009 Nan Hu Road, Shenzhen, Guangdong, China. This office is free of charge provided by Mr. Dong Liu, our Chairman and Director. Shenzhen Rongxin is using this office free of charge.

GRT and Guangzhou Rongxin are using the same office which is located at Renwoxing Center, 139 Ying Yuan Road, Yue Xiu District, Guangzhou, China. Guangzhou Rongxin pays full office rentals of USD35,035 in 2011.

Item 3. Legal Proceedings.

On May 28, 2010, Enable Growth Partners, LP, Enable Opportunity Partners, LP and Pierce Diversified Strategy Master Fund, LLC Ena (the “Plaintiffs”) commenced an action in the Supreme Court of the State of New York, index number 104262-2010, due to the Company’s failure to make any payment of the payoff amount to the Plaintiffs pursuant to a mutual release and settlement agreement entered into by and among the Plaintiffs and the Company on December 29, 2009. A judgment dated April 29, 2011 in the amount of $1,415,306.16 in favor of the Plaintiffs and against the Company was entered on August 5, 2011 in the Supreme Court of the State of New York.

On November 28, 2011, the Company entered into a settlement and amendment agreement with the Plaintiffs to settle the above judgment and litigation, pursuant to which the Company shall pay the Plaintiffs the sum of $50,000 upon execution of the settlement agreement and an additional sum of $105,000, including $5,000 for the Plaintiffs’ legal fees, within 20 business days of the execution of the settlement agreement. Following the payment of an aggregate of $155,000 by the Company, the Plaintiffs agree to file a satisfaction of judgment with the Supreme Court of the State of New York. As of the date hereof, the Company has paid a total of $155,000 to the Plaintiffs.

Item 4. Mine Safety Disclosures.

Not applicable.

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Market Information

Our common stock is currently traded on the OTCQB under the symbol “CNCT.” There is a limited trading market for our common stock.

Holders

As of April 9, 2012, there were 58,528,637 shares of our common stock outstanding held by approximately 67 stockholders of record. The number of our stockholders of record excludes any estimate by us of the number of beneficial owners of shares held in street name, the accuracy of which cannot be guaranteed.

Dividends

Holders of our common stock are entitled to receive dividends if, as and when declared by the Board of Directors out of funds legally available therefore. We have never declared or paid any dividends on our common stock. We intend to retain any future earnings for use in the operation and expansion of our business. Consequently, we do not anticipate paying any cash dividends on our common stock to our stockholders for the foreseeable future.

Securities Authorized for Issuance under Equity Compensation Plans

We do not have in effect any compensation plans under which our equity securities are authorized for issuance.

Item 6. Selected Financial Data.

Not applicable because we are a smaller reporting company.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The information and financial data discussed below is derived from the audited financial statements of the Company for its fiscal year ended December 31, 2011. The audited financial statements were prepared and presented in accordance with generally accepted accounting principles in the United States. The information and financial data discussed below is only a summary and should be read in conjunction with the historical financial statements and related notes contained elsewhere in this 10-K. The financial statements contained elsewhere in this 10-K fully represent the Company’s financial condition and operations; however, they are not indicative of the Company’s future performance. Although management believes that the assumptions made and expectations reflected in the forward-looking statements are reasonable, there is no assurance that the underlying assumptions will, in fact, prove to be correct or that actual results will not be different from expectations expressed in this 10-K.

Overview

We are a distributor of pre-paid calling card and integrated mobile phone handsets and a provider of mobile handset value-added services. We are an independent qualified corporation that serves as one of principal distributors of China Telecom, China Unicom, and China Mobile products in Guangzhou City. We maintain and operate the largest prepaid mobile phone card sales and distribution center in Guangzhou City. We have cooperative distribution relationships with Panasonic, Motorola, LG, GE, Bird, Samsung corporations for their mobile handsets. We are also developing an on-line refill platform with China Mobile to develop our on-line business in the Guangdong Province.

We also engage in the business of wholesale and distribution of mineral water as well as trading of wine in China.

Recent Development

Reverse Split and Name Change

Acquisition of China Teletech Limited

On March 30, 2012, the Company completed a share exchange transaction with CTL, by entering into a share exchange agreement with CTL and the former shareholders of CTL, dated March 30, 2012.

Going Concern

The consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the discharge of liabilities in the normal course of business for the foreseeable future.

As of December 31, 2011, the Company has an accumulated deficit of $6,548,179 due to the fact that the Company continued to incur losses over the past several years, and has difficulty to pay the PRC government Value Added Tax and past due Debenture Holders Settlement.

As a result, these consolidation financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of the Company’s ability to continue as a going concern.

Results of Operations

Results of operations for the year ended December 31, 2011 as compared to the year ended December 31, 2010

Total Revenue

During fiscal year ended December 31, 2011, we generated $18,847,061 in revenues as compared to $34,182,299 of during the fiscal year ended in 2010, representing a decrease of $15,335,238 or approximately 44.9%. The lower sales amount in 2011, was mainly due to the fact that a major supplier of store-value cards ceased its business with us since the second quarter of 2011 for its internal system upgrade in order to serve a greater customer base from the Guangzhou City extended to the Guangdong Province. We decided not to continue the business with the supplier at this time because we wanted to reserve our capital for investment projects which we are developing or will acquire in 2012. One of the projects was the Air-Refill Platform and we target to launch in the second quarter of 2012. We believed that it will generate more sales with high profit margins in near future.

Gross Profit

The gross profit decrease to $420,215 during the fiscal year ended December 31, 2011 from $985,563 in 2010, representing $565,348 or 57.4% decrease. The gross margin of 2011 was 2.23% roughly same as the gross margin 2.88% of 2010.

Other Income

Other Income decreased from $574,877 to $201,151 from 2010 to 2011. The substantial decrease by $373,726 or 65.0% was mainly due to the fact that there were adjustments on VAT payable which was treated as other income in 2010.

Expenses

Our general and administrative expenses were $806,388 during the fiscal year ended December 31, 2011 as compared to $2,832,570 for the fiscal year ended in 2010, representing a decrease of $2,026,182 or approximately 71.5%. The decrease was mainly due to bonus payments in 2010 was about $2.1million [2011: about $92k]. The business model was changed and the management became conservative on bonus payments since 2011.

There were no selling expenses during the fiscal year ended December 31, 2011 whereas the selling expenses were $82,611 during the fiscal year ended December 31, 2010. The selling expenses in 2010 were from a subsidiary paid in the form of expenses for software development on business in 2010.

Other expenses were $120,850 during the fiscal year ended December 31, 2011 whereas other expenses were $22,140 during the fiscal year ended December 31, 2010. Other expenses in 2010 mainly represented software development expenses for on-line platform sales of rechargeable phone cards.

Discontinued Operations

Resulted from unsatisfied operating results, we closed 4 branches in mainland China in 2010 to keep our core businesses. Since then, we maintained our core businesses through 2 subsidiaries. The discontinued operation losses, net of tax in 2010 were $874,981.

Net loss

Net loss recorded $348,123 during the fiscal year ended December 31, 2011, as compared to net loss of $2,289,852 during the fiscal year ended December 31, 2010. The substantial reduction (decrease by 84.8%) of net loss $1,941,729 was the resulting effects of changes of financial figures mentioned above.

Liquidity and Capital Resources

Cash provided by operating activities was $11,970 during the fiscal year ended December 31, 2011 as compared to cash used in operating activities was $92,031 during the fiscal year ended December 31, 2010. Cash used in operating activities during year 2011 was mainly resulted from net loss of $409,285, increase in amounts due to related parties $451,112, decrease in accrued liabilities and other payables $181,323, netting off by decrease in inventories $542,121, issuance of share based compensation $289,430, increase in income and VAT tax payables $158,527, increase in non-controlling interest of $61,161. Cash used in operating activities during year 2010 was mainly resulted from net loss of $2,322,647, increase of amount due from a related party $453,734, increase in inventories $292,548, decrease in VAT payable $223,580, by netting off by decrease of other receivables of $1,205,377 and decrease in purchase deposit $1,525,935.

Cash flows used in investing activities were $378,308 for the fiscal year ended December 31, 2011 as compared to $97,747 used in the fiscal year ended December 31, 2010. Cash used in investing activities during year 2011 was resulted from purchase for short-term investment $370,175 and payments for deposits $8,145. Cash used in investing activities during year 2010 was resulted from purchase of short-term investment $226,867 and purchase of property, plant and equipment $45,876, netting off by the sales proceeds of equipment $174,996.

Cash flows provided by financing activities was $254,322 for the fiscal year ended December 31, 2011 as compared to no cash used in or provided by the fiscal year ended December 31, 2010. Cash provided in financing activities during 2010 was mainly due to proceeds from issuance of common stock $343,275 less dividend paid to non-controlling shareholders of subsidiaries $88,953.

Critical Accounting Policies

Use of Estimates

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

Property, Plant, and Equipment, net

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

Building	20 years
Equipment	5 years
Furniture and Fixtures	5 years
Motor Vehicles	3 years

Accounting for Impairment of Long-Lived Assets

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

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

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

Revenue Recognition

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

Foreign Currency Translation

The Company maintains its 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 periods.

For financial reporting purposes, the financial statements of the Company, 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	12/31/2011		12/31/2010
Year end RMB : US$ exchange rate		6.3647		6.6118
Average year RMB : US$ exchange rate		6.4735		6.7788

Year end HKD : US$ exchange rate		7.7691		7.7832
Average year HKD : US$ exchange rate		7.7851		7.7695

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

Income Taxes

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

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

GGT and GRT are located in the PRC, and GTHL is located in the British Virgin Islands; all of these entities are subject to the relevant tax laws and regulations of the PRC and British Virgin Islands in which the related entity domiciled. The maximum tax rates of the subsidiaries pursuant to the countries in which they domicile are: -

Subsidiary	Country of Domicile	Income Tax Rate
GGT and GRT	PRC	25.0%
GTHL	British Virgin Islands	0.00%

Effective January 1, 2008, PRC government implements a new 25% tax rate across the board for all enterprises regardless of whether domestic or foreign enterprise without any tax holiday which is defined as "two-year exemption followed by three-year half exemption" hitherto enjoyed by tax payers. As a result of the new tax law of a standard 25% tax rate, tax holidays terminated as of December 31, 2007. However, PRC government has established a set of transition rules to allow enterprises already started tax holidays before January 1, 2008, to continue enjoying the tax holidays until being fully utilized.

·	Since Guangzhou Global Telecom, Inc. is primarily a holding company without any business activities in the United States, the Company shall not be subject to United States income tax for the year ended December 31, 2011.

Statutory Reserve

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

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

Other Comprehensive Income

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

Recent Accounting Pronouncements

In December 2010, FASB issued ASU No. 2010-29, Business Combinations (Topic 805): Disclosure of Supplementary Pro Forma Information for Business Combinations. The amendments in this update specify that if a public entity presents comparative financial statements, the entity should disclose revenue and earnings of the combined entity as though the business combination(s) that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only. The amendments also expand the supplemental pro forma disclosures to include a description of the nature and amount of material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings. The amendments in this update are effective prospectively for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2010. The Company adopted the disclosure requirements for the business combinations in 2011.

In May 2011, FASB issued ASU No. 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs, which is not expected to have a material impact on the Company’s consolidated financial statements upon adoption.

In June 2011, FASB issued ASU 2011-05, Comprehensive Income (ASC Topic 220): Presentation of Comprehensive Income. Under the amendments in this update, an entity has the option to present the total of comprehensive income, the components of net income and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. Under both options, an entity is required to present each component of net income along with total net income, each component of other comprehensive income along with a total for other comprehensive income and a total amount for comprehensive income. In a single continuous statement, the entity is required to present the components of net income and total net income, the components of other comprehensive income and a total for other comprehensive income, along with the total of comprehensive income in that statement. In the two-statement approach, an entity is required to present components of net income and total net income in the statement of net income. The statement of other comprehensive income should immediately follow the statement of net income and include the components of other comprehensive income and a total for other comprehensive income, along with a total for comprehensive income. In addition, the entity is required to present on the face of the financial statements reclassification adjustments for items that are reclassified from other comprehensive income to net income in the statement(s) where the components of net income and the components of other comprehensive income are presented. The amendments in this update should be applied retrospectively and are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. The Company is currently assessing the effect that the adoption of this pronouncement will have on its financial statements.

In September 2011, FASB issued ASU No. 2011-08, Intangibles-Goodwill and Other (ASC Topic 350): Testing Goodwill for Impairment, to simplify how entities test goodwill for impairment. ASU No. 2011-08 allows entities to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If greater than 50 percent likelihood exists that the fair value is less than the carrying amount then a two-step goodwill impairment test as described in Topic 350 must be performed. The guidance provided by this update becomes effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. Early adoption is permitted, including for annual and interim goodwill impairment tests performed as of a date before September 15, 2011. The Company does not intend to adopt this ASU No. 2011-08 before September 15, 2011, and does not expect it to have a material impact on the Company’s consolidated financial position and results of operations.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements, financings, or other relationships with unconsolidated entities or other persons, also known as “special purpose entities” (SPEs).

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Not applicable because we are a smaller reporting company.

Item 8. Financial Statements and Supplementary Data.

Guangzhou Global Telecom, Inc.

Audited Consolidated Financial Statements

December 31, 2011 and 2010

(Stated in US Dollars)

Guangzhou Global Telecom, Inc.

Contents	Pages


Report of Independent Registered Public Accounting Firm	F-1

Consolidated Balance Sheets	F-2 - F-3

Consolidated Statements of Income	F-4

Consolidated Statements of Changes in Stockholders’ Equity	F-5

Consolidated Statements of Cash Flows	F-6

Notes to Consolidated Financial Statements	F-7 - F-22

Board of Directors and Stockholders

Guangzhou Global Telecom, Inc.

Report of Independent Registered Public Accounting Firm

We have audited the accompanying consolidated balance sheets of Guangzhou Global Telecom, Inc. as of December 31, 2011 and 2010, and the related consolidated statements of income, stockholders' equity, and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Guangzhou Global Telecom, Inc. as of December 31, 2011 and 2010, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 10 to the consolidated financial statements, the Company has incurred substantial losses, and has difficulty to pay the PRC government Value Added Tax and past due Debenture Holders Settlement, all of which raise substantial doubt about its ability to continue as a going concern. These consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

	/s/ Samuel H. Wong & Co., LLP
San Mateo, California	Samuel H. Wong & Co., LLP
March 21, 2012	Certified Public Accountants

F-1

Guangzhou Global Telecom, Inc

Consolidated Balance Sheets

As of December 31, 2011 and 2010

(Stated in US Dollars)

ASSETS		12/31/2011		12/31/2010
	Note
Current Assets
Cash and Cash Equivalents		$	69,270	$	159,930
Short-term Investment			597,043		226,867
Other Receivables	4		204,252		212,170
Due from related parties	5		904,846		453,734
Purchase Deposits			23,049		-
Inventories			549,908		1,092,029
Total Current Assets			2,348,368		2,144,730

Non-Current Assets
Property, plant & equipment, net	6		-		17,594
Other non-current assets			71,145		63,000
Total Non-Current Assets			71,145		80,594

TOTAL ASSETS		$	2,419,513	$	2,225,324

LIABILITIES & STOCKHOLDERS' EQUITY

Current Liabilities
Taxes payable		$	859,315	$	746,164
VAT payable	7		1,221,729		1,176,353
Due to related parties	5		30,000		176,518
Accrued liabilities and other payables			127,548		162,352
Convertible debenture - current portion	8		2,866,323		2,866,323
Total Current Liabilities			5,104,915		5,127,710

TOTAL LIABILITIES		$	5,104,915	$	5,127,710

See Notes to Consolidated Financial Statements and Accountants’ Report

F-2

Guangzhou Global Telecom, Inc

Consolidated Balance Sheets

As of December 31, 2011 and 2010

(Stated in US Dollars)

		12/31/2011			12/31/2010
STOCKHOLDERS' EQUITY

Common stock US$0.01 par value; 1,000,000,000 authorized, 185,283,627 issued and outstanding as of December 31, 2011 and 2010, respectively	9	$	1,852,836		$	1,494,751
Additional Paid in capital			1,684,019			1,409,399
Other Comprehensive Income			32,231			10,875
Retained Earnings			(6,548,179	)		(6,138,894	)
Minority Interest			293,691			321,483

TOTAL STOCKHOLDERS' EQUITY		$	(2,685,402	)	$	(2,902,386	)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$	2,419,513		$	2,225,324

See Notes to Consolidated Financial Statements and Accountants’ Report

F-3

Guangzhou Global Telecom, Inc

Consolidated Balance Sheets

As of December 31, 2011 and 2010

(Stated in US Dollars)



	12/31/2011			12/31/2010
Sales	$	18,847,061		$	34,182,299
Cost of sales		18,426,846			33,196,736
Gross profit		420,215			985,563

Operating expenses
Selling expenses		-			82,611
Administrative and general expenses		806,388			2,832,570
Total operating expense		806,388			2,915,181
Loss from Operations		(386,173	)		(1,929,618	)

Other income		201,151			574,877
Interest income		15,461			9
Other expenses		(120,850	)		(22,140	)
Loss before taxation on Continuing Operations		(290,411	)		(1,376,872	)
Income tax		(57,713	)		(37,999	)
Loss from Continuing Operations		(348,124	)		(1,414,871	)
Discontinued Operation Income (Loss), net of tax		-			(874,981	)
Net Loss		(348,124	)		(2,289,852	)
Net income attributable to non-controlling interest		(61,161	)		(32,795	)
Net Income (Loss) Attributable to the Company	$	(409,285	)	$	(2,322,647	)

Earnings Per Share
Basic-Net Loss	$	(0.00	)	$	(0.02	)
-Loss from Continuing Operations		(0.00	)		(0.01	)
-Loss from non-controlling interest		(0.00	)		(0.00	)
-Income(Loss) from Discontinued Operations		(0.00	)		(0.01	)

Diluted- Net Loss		(0.00	)		(0.01	)
- Loss from Continuing Operations		(0.00	)		(0.00	)
-Loss from Non-controlling interest		(0.00	)		(0.01	)
-Income/(Loss) from Discontinued Operations		(0.00	)		(0.01	)
Weighted Average Shares Outstanding
-Basic		153,511,467			149,475,127
-Diluted		153,511,467			149,475,127

See Notes to Consolidated Financial Statements and Accountants’ Report

F-4

Guangzhou Global Telecom, Inc

Consolidated Statements of Changes in Stockholders’ Equity

As of December 31, 2011 and 2010

(Stated in US Dollars)

					Additional		Other
	Total Number		Common		Paid in		Comprehensiv e			Retained			Minority
	of Shares		Stock		Capital		Income			Earnings			Interest			Total

Balance, January 1, 2010		149,475,127	$	1,494,751	$	1,409,399	$	38,758		$	(3,816,247	)	$	221,197		$	(652,142	)
Net Income/(Loss)		-		-		-		-			(2,322,647	)		-			(2,322,647	)
Reclassified to profit or loss on disposal of subsidiaries		-		-		-		(39,374	)		-			67,491			28,117
Non-controlling Interest		-		-		-		-			-			32,795			32,795
Foreign Currency Translation		-		-		-		11,491			-			-			11,491
Balance at December 31, 2010		149,475,127	$	1,494,751	$	1,409,399	$	10,875		$	(6,138,894	)	$	321,483		$	(2,902,386	)

Balance, January 1, 2011		149,475,127	$	1,494,751	$	1,409,399	$	10,875		$	(6,138,894	)	$	321,483		$	(2,902,386	)
Issuance of common stock		6,865,500		68,655		274,620		-			-			-			343,275
Issuance of share based compensation		28,943,000		289,430		-		-			-			-			289,430
Net Income/(Loss)		-		-		-		-			(409,285	)		-			(409,285	)
Dividends paid to non-controlling shareholders		-		-		-		-			-			(88,953	)		(88,953	)
Non-controlling Interest		-		-		-					-			61,161			61,161
Foreign Currency Translation		-		-		-		21,356			-			-			21,356
Balance at December 31, 2011		185,283,627	$	1,852,836	$	1,684,019	$	32,231		$	(6,548,179	)	$	293,691		$	(2,685,402	)

See Notes to Consolidated Financial Statements and Accountants’ Report

F-5

Guangzhou Global Telecom, Inc

Consolidated Statements of Changes in Stockholders’ Equity

As of December 31, 2011 and 2010

(Stated in US Dollars)


Cash flow from operating activities	12/31/2011			12/31/2010
Net Income (Loss) Attributable to the Company	$	(409,285	)	$	(2,322,647	)

Discontinued Operation Loss, net of tax					-
Minority interest		61,161			32,795
Depreciation		10,083			38,105
Issuance of share based compensation		289,430			-
Loss/(Gain) on disposal of property, plant and equipment		7,499			335,330
Loss on disposal and dissolution of subsidiaries		-			92,549
Reclassified to profit or loss on disposal of subsidiaries		-			(39,374	)
Decrease/(increase) in other receivables		7,918			1,205,377
Decrease/(increase) in amount due from a related party		(451,112	)		(453,734	)
Decrease/(increase) in purchase deposit		(23,049	)		1,525,935
Decrease/(increase) in inventories		542,121			(292,548	)
Increase/(decrease) in tax payables		113,151			75,065
Increase/(decrease) in accrued liabilities and other payables		(181,323	)		(65,304	)
Increase/(decrease) in VAT payable		45,376			(223,580	)
Net cash provided by/(used in) operating activities		11,970			(92,031	)

Cash flows from investing activities
Sale of Equipment		12			174,996
Purchases of property, plant and equipment		-			(45,876	)
Payments for deposits		(8,145	)		-
Purchase for short-term investment		(370,175	)		(226,867	)
Net cash provided by/(used in) investing activities	$	(378,308	)	$	(97,747	)

Cash flows from financing activities
Issuance of Common Stock	$	343,275		$	-
Dividend paid to non-controlling shareholders of subsidiaries		(88,953	)		-
Net cash provided by financing activities		254,322			-

Net Increase/(Decrease) in Cash & Cash Equivalents for the Year		(112,016	)		(189,778	)
Effect of Currency Translation		21,356			(27,883	)
Cash & Cash Equivalents at Beginning of Year		159,930			377,591
Cash & Cash Equivalents at End of Year	$	69,270		$	159,930

See Notes to Consolidated Financial Statements and Accountants’ Report

F-6

Guangzhou Global Telecom, Inc.

Notes to Consolidated Financial Statements

As of December 31, 2011 and 2010

1.	ORGANIZATION AND PRINCIPAL ACTIVITIES

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

On March 27, 2007, the Company underwent a reverse-merger with Global Telecom Holding Limited (GTHL, a British Virgin Islands (BVI) Company incorporated on April 1, 2004 under the British Virgin Islands International Business Companies Act (CAP. 291)) and its wholly-owned subsidiary Guangzhou Global Telecommunication Company Limited (GGT, established on December 4, 2004 in PRC with a registered and paid-up capital of RMB 3,030,000 (approximate $375,307)) involving an exchange of shares whereby the Company issued an aggregate of 39,817,500 shares of common stock in exchange for all of the issued and outstanding shares of GTHL. In connection with the reverse merger, the Company issued 200,000 shares of common stock to Zenith Capital Management LLC in April 2007 at a price of $2.50 per share.

Pursuant to a Stock Purchase Agreement dated July 29, 2008, the Company acquired 51% of the issued and outstanding shares in Guangzhou Renwoxing Telecom (“GRT”), a limited liability company incorporated in China. Pursuant to the terms of the Stock Purchase Agreements, the Shareholders agreed to sell and transfer the proportion of the shares to the Company for a purchase consideration of US$291,833.

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

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

F-7

Guangzhou Global Telecom, Inc.

Notes to Consolidated Financial Statements

As of December 31, 2011 and 2010

The company owned the following subsidiaries since the reserve-merger and soon thereafter. As of September 30, 2011, detailed identities of the consolidating subsidiaries are as follows:-

Name of Company	Place of Incorporation	Attributable Equity Interest %	Registered Capital

Global Telecom Holding, Ltd.	BVI	100	HKD 7,800
Guangzhou Global Telecommunication Co., Ltd.	PRC	100	RMB 3,030,000
Guangzhou Renwoxing Telecom Co., Ltd.	PRC	51	RMB 3,010,000

(c)	Economic and Political Risks

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

(d)	Use of Estimates

(e)	Cash and Cash Equivalents

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

(f)	Accounts Receivable – Trade

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

F-8

Guangzhou Global Telecom, Inc.

Notes to Consolidated Financial Statements

As of December 31, 2011 and 2010

(g)	Inventories

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

(h)	Property, Plant, and Equipment, net

	Building	20 years
	Equipment	5 years
	Furniture and Fixtures	5 years
	Motor Vehicles	3 years

(i)	Accounting for Impairment of Long-Lived Assets

F-9

Guangzhou Global Telecom, Inc.

Notes to Consolidated Financial Statements

As of December 31, 2011 and 2010

(j)	Revenue Recognition

(k)	Cost of Sales

The Company’s cost of sales is comprised mainly of cost of goods sold.

(l)	Selling Expenses

Selling expenses are comprised of salaries for the sales force, client entertainment, commissions, advertising, and travel and lodging expenses.

(m)	General & Administrative Expenses

General and administrative expenses include executive compensation, general overhead such as the finance department and administrative staff, depreciation, office rental and utilities.

(n)	Advertising

The Company expensed all advertising costs as incurred.

(o)	Foreign Currency Translation

F-10

Guangzhou Global Telecom, Inc.

Notes to Consolidated Financial Statements

As of December 31, 2011 and 2010

Exchange Rates	12/31/2011		12/31/2010
Year end RMB : US$ exchange rate		6.3647		6.6118
Average year RMB : US$ exchange rate		6.4735		6.7788

Year end HKD : US$ exchange rate		7.7691		7.7832
Average year HKD : US$ exchange rate		7.7851		7.7695

(p)	Income Taxes

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

Subsidiary	Country of Domicile	Income Tax Rate
GGT and GRT	PRC	25.0%
GTHL	British Virgin Islands	0.00%

F-11

Guangzhou Global Telecom, Inc.

Notes to Consolidated Financial Statements

As of December 31, 2011 and 2010

·	Since Guangzhou Global Telecom, Inc. is primarily a holding company without any business activities in the United States, the Company shall not be subject to United States income tax for the year ended December 31, 2011.

(q)	Statutory Reserve

(r) Fair Value of Financial Instruments

For certain of the Company’s financial instruments, including cash and equivalents, accounts and other receivables, accounts and other payables, accrued liabilities and short-term debt, the carrying amounts approximate their fair values due to their short maturities. ASC Topic 820, “Fair Value Measurements and Disclosures,” requires disclosure of the fair value of financial instruments held by the Company. ASC Topic 825, “Financial Instruments,” defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The carrying amounts reported in the consolidated balance sheets for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The three levels of valuation hierarchy are defined as follows:

		· Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets.
		· Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
		· Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement.

F-12

Guangzhou Global Telecom, Inc.

Notes to Consolidated Financial Statements

As of December 31, 2011 and 2010

The Company analyzes all financial instruments with features of both liabilities and equity under ASC 480, “Distinguishing Liabilities from Equity,” and ASC 815.

As of December 31, 2011 and 2010, the Company did not identify any assets and liabilities that were required to be presented on the balance sheet at fair value.

(s)	Other Comprehensive Income

The Company’s functional currency is the Renminbi (“RMB”). For financial reporting purposes, RMB were translated into United States Dollars ("USD" or “$”) as the reporting currency. Assets and liabilities are translated at the exchange rate in effect at the balance sheet date. Revenues and expenses are translated at the average rate of exchange prevailing during the reporting period. Translation adjustments arising from the use of different exchange rates from period to period are included as a component of stockholders' equity as "Accumulated other comprehensive income".

Gains and losses resulting from foreign currency transactions are included in income. There has been no significant fluctuation in exchange rate for the conversion of RMB to USD after the balance sheet date.

The Company uses FASB ASC Topic 220, “Reporting Comprehensive Income”. Comprehensive income is comprised of net income and all changes to the statements of stockholders’ equity, except the changes in paid-in capital and distributions to stockholders due to investments by stockholders. Comprehensive income for the years ended December 31, 2011 and 2010 included net income and foreign currency translation adjustments.

(t)

Goodwill

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

F-13

Guangzhou Global Telecom, Inc.

Notes to Consolidated Financial Statements

As of December 31, 2011 and 2010

(u)	Segment Reporting

FASB ASC Topic 280, "Disclosures about Segments of an Enterprise and Related Information" requires use of the “management approach” model for segment reporting. The management approach model is based on the way a company's management organizes segments within the company for making operating decisions and assessing performance. Reportable segments are based on products and services, geography, legal structure, management structure, or any other manners in which management disaggregates a company.

(v)	Recent Accounting Pronouncements

F-14

Guangzhou Global Telecom, Inc.

Notes to Consolidated Financial Statements

As of December 31, 2011 and 2010

3.	CONCENTRATION

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

F-15

Guangzhou Global Telecom, Inc.

Notes to Consolidated Financial Statements

As of December 31, 2011 and 2010

4.	OTHER RECEIVABLES

Other receivables as of December 31, 2011 and 2010 pertained to the Company voluntarily extending financing to business associates for purchase of merchandise in return for 60% of gross profit in those transactions, in lieu of interest, as well as loans to third parties with no interest, security and specific terms of repayment.

	As of 12/31/2011		As of 12/31/2010
Type of Account
Trade financing to business associates	$	204,252	$	212,170
Allowance for bad debt		-		-
Other receivable, net	$	204,252	$	212,170

5.	DUE FROM/TO RELATED PARTIES

The following table presents the balances the Company due to and from related parties.

	As of 12/31/2011			As of 12/31/2010
Due from related parties	$	904,846		$	453,734
Due to related parties		(30,000	)		(176,518	)
Net due from/(due to) related parties		874,846		$	277,216

Amounts owing to the Company’s related parties are non-interest-bearing and payable on demand. For the year ended December 31, 2010, Guangzhou Huantong Telecom Technology and Consultant Services, Ltd., one of the Company’s wholly owned subsidiaries, sold a property to a shareholder of the Company for $134,608.

F-16

Guangzhou Global Telecom, Inc.

Notes to Consolidated Financial Statements

As of December 31, 2011 and 2010

6.	PROPERTY, PLANT, AND EQUIPMENT

Property, plant, and equipment consist of the following as of December 31, 2011 and 2010:

	As of 12/31/2011		As of 12/31/2010

At cost
Equipment	$	-	$	14,149
Furniture & Fixtures		-		39,511
Motor Vehicles		-		52,514
Building		-		-
Total	$	-	$	106,174

Less: Accumulated depreciation
Equipment	$	-	$	13,069
Furniture & Fixtures		-		27,451
Motor Vehicles		-		48,058
Building		-		-
	$	-	$	88,578

	$	-	$	17,594

The depreciation expenses were $10,083 and $38,105 for the year ended December 31, 2011 and 2010, respectively.

7. VALUE ADDED TAX PAYABLE

The Company has been collecting from its customers Value Added Tax (VAT), on behalf of the government. The Company was granted by the government to pay the balance dues under installments up to the end of 2008. The reason of this special arrangement is that the government may waive past due VAT after decision has been made in accordance with regulations for technology zone on tax-exemption matter. However, the Company has not received the approval notice from the government at December 31, 2011. Thus, the VAT payable as of December 31, 2011included the past due VAT possibly to be waived.

8. CONVERTIBLE BONDS AND BOND WARRANTS

On July 31, 2007 and January 1, 2008, the Company completed two financing transactions with several investors (the “Subscriber”) issuing $2,000,000 and $1,000,000, respectively, Fixed Rate Convertible Debenture due in 2009 and a stock purchase warrant to purchase an aggregate of 2,090,592 shares of the Company common stock, subject to adjustments for stock splits or reorganizations as set forth in the warrant, that will expire in 2012 (the “Warrants”).

F-17

Guangzhou Global Telecom, Inc.

Notes to Consolidated Financial Statements

As of December 31, 2011 and 2010

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

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

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

At July 31, 2007 and January 1, 2008, the dates of issuance, the Company determined the fair value of the Debenture to be $2,000,000 and $1,000,000, respectively. The values of the warrants and the beneficial conversion feature as at December 31, 2007 and 2008 determined under the Black-Scholes valuation method were immaterial. Accordingly, the interest discount on the warrants and beneficial conversion feature were recorded, and are being amortized by the straight-line method over 5 years and 2 years respectively.

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

(1	)	Convertible Debenture (after two rounds)	$	3,428,571
(2	)	Discount	$	428,571
(3	)	Warrant	$	-
(4	)	Beneficial Conversion Feature	$	-

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

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

F-18

Guangzhou Global Telecom, Inc.

Notes to Consolidated Financial Statements

As of December 31, 2011 and 2010

	12/31/2011		12/31/2010
Convertible Debenture - Principal and interest
Balance as at beginning of period	$	2,866,323	$	3,428,751
Addition		-		-
Redemption		-		(562,428	)
Interest charged for the current year		-		-
Repayment of interest in current year		-		-
Restructure cost		-		-
Balance as at end of year	$	2,866,323	$	2,866,323

Less: Interest discount – Beneficial conversion feature
Balance as at beginning of year	$	-	$	-
Addition		-		-
Amortization		-		-
Balance as at end of year		-		-

Less: Interest Discount – Warrant
Balance as at beginning of year		-		-
Addition		-		-
Amortization		-		-
Balance as at end of year		-		-
Convertible Debenture, net	$	2,866,323	$	2,866,323

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

	12/31/2011		12/31/2010

Current portion	$	2,866,323	$	2,866,323
Non - current Portion		-		-
	$	2,866,323	$	2,866,323

F-19

Guangzhou Global Telecom, Inc.

Notes to Consolidated Financial Statements

As of December 31, 2011 and 2010

The Company further amended the Articles of Incorporation to increase the number of authorized shares of common stock to 1,000,000,000.

On November 28, 2011, the Company entered into a settlement agreement with holders of its convertible debentures, warrants and restricted shares (the “Holders”). The parties in this settlement agreement agreed: i) principal amount of the debentures will be reduced from $3 million to $1.3 million; ii) the Holders will surrender common stock purchase warrants to purchase a total of 156,097,534 shares of the Company’s common stock, and surrender 32,704,376 restricted shares of the Company, in exchange for settlement payments in the sum of $155,000.

The Company has paid a total of $155,000 in settlement payments to the Holders. Gain or loss resulted from this settlement agreement have not been included in the financial statements as of and for the year ended December 31, 2011, but will be included in the financial statements as of and for the year ended December 31, 2012.

F-20

Guangzhou Global Telecom, Inc.

Notes to Consolidated Financial Statements

As of December 31, 2011 and 2010

9.	COMMON STOCK CAPITAL

The Company is authorized by its Memorandum of Association (i.e. equivalent to Articles of Incorporation) to issue a total of 1,000,000,000 shares at a par value of US$0.01 of which 185,283,627 shares have been issued and outstanding as of December 31, 2011 and December 31, 2010, respectively.

The presentation of recapitalization as of December 31, 2011 is depicted in the following table:

Name of Shareholders	Number of Shares		Common Stock Capital		Additional Paid-in Capital			% of Equity Holdings
Shell: Avalon Development of Enterprises Inc. prior to reverse-merger		13,072,500		130,725		-			7.06	%
Shareholders of Shell in exchange of all of GTHL shares upon reverse-merger		39,817,500		398,175		-			21.49	%
Zenith Capital Management LLC		200,000		2,000		498,000			0.11	%
Li Dongming		80,000		800		61,600			0.04	%
Beijing Lihe		1,500,000		15,000		285,000			0.81	%
Guangzhou Renwoxing		9,727,769		97,278		194,555			5.25	%
Private placement investors		68,027,358		680,273		511,628			36.72	%
Management / Insider		17,050,000		170,500		10,000			9.20	%
Li SiBei		220,000		2,200		8,000			0.12	%
Wu YiSha		400,000		4,000		16,000			0.22	%
He WenHui		125,000		1,250		5,000			0.07	%
Deng BoXiang		62,500		625		2,500			0.03	%
Zhang Yan		78,000		780		3,120			0.04	%
Kwok MingWai		230,000		2,300		8,000			0.12	%
Yan ShaoFeng		1,000,000		10,000		40,000			0.54	%
An HinMan		4,800,000		48,000		192,000			2.59	%
Liu Yong		10,231,000		102,310		-			5.52	%
Yuan Wei		5,231,000		52,310		-			2.82	%
Li JieWen		8,431,000		84,310		-			4.55	%
Zhou Jian		5,000,000		50,000		-			2.70	%
Less : Cost of Issue		-		-		(151,384	)		-
		185,283,627		1,852,836		1,684,019			100.00	%

F-21

Guangzhou Global Telecom, Inc.

Notes to Consolidated Financial Statements

As of December 31, 2011 and 2010

10.	GOING CONCERN UNCERTAINTIES

These consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the discharge of liabilities in the normal course of business for the foreseeable future.

F-22

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

None.

Item 9A. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

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

Management’s Annual Report on Internal Control over Financial Reporting.

The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting for the Company. Our internal control system was designed to, in general, provide reasonable assurance to the Company’s management and board regarding the preparation and fair presentation of published financial statements, but because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, 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.

Our management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2010. The framework used by management in making that assessment was the criteria set forth in the document entitled “ Internal Control – Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on that assessment, our management has determined that as of December 31, 2010, the Company’s internal control over financial reporting was effective for the purposes for which it is intended.

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

Changes in Internal Control over Financial Reporting

No change in our system of internal control over financial reporting occurred during the period covered by this report, fourth quarter of the fiscal year ended December 31, 2010 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART III

Item 10. Directors, Executive Officers and Corporate Governance.

On March 30, 2012, Yankuan Li submitted resignation letter pursuant to which she resigned as our Chief Financial Officer, Secretary and Chairman of the Board of Directors, effective immediately. Yankuan Li remains President, Chief Executive Officer and a member of the board of directors of the Company. The resignation was not in connection with any known disagreement with us on any matter.

On March 30, 2012, Dong Liu, Yuan Zhao, Yau Kwong Lee and Kwok Ming Wai Andrew were appointed by our Board of Directors as directors of the Company, and Kwok Ming Wai Andrew was appointed as our Chief Financial Officer and Secretary, effective immediately.

Our executive officers and directors and their ages as of April 9, 2012 are as follows:

Name	Age	Position	Position Since

Yankuan Li	53	President, Chief Executive Officer and Director	January 2007
Dong Liu	41	Chairman	March 2012
Yuan Zhao	31	Director	March 2012
Yau Kwong Lee	60	Director	March 2012
Kwok Ming Wai Andrew	42	Chief Financial Officer, Secretary and Director	March 2012

Yankuan Li was appointed as our President, Chief Executive Officer and Director since January 2007. She was appointed as our chief financial officer on April 15, 2010 and then subsequently resigned on March 30, 2012. She has been the Chairman of GGT since 2005. From 2004-2005, she was the General Manager of Guangzhou YueShen TaiYang Technology Ltd., a subsidiary of Pacificnet Inc. (Nasdaq: PACT). From 2003-2004, she was Managing Director of the phone card division of Guangzhou Trading Center of Renwoxing, responsible for phone cards. From 2000-2003, she was Department Manager of the Industrial and Commercial Bank of China Guangzhou Branch. Ms. Li holds a bachelor degree in Business Management of Beijing United University in 1998.

Dong Liu was appointed as our Chairman of the Board of Directors on March 30, 2012. Mr. Liu was the Director and General Manager of Shenzhen Rongxin Investment Company Limited, a company mainly engaged in the wholesale and distribution of mineral water and trading of wine in China since 2009. Mr. Liu had previously worked for China’s state-owned enterprises in Hainan Province and Shenzhen for more than 10 years and participated in business development of many government-sponsored projects of various industries.

Yuan Zhao was appointed as our Director on March 30, 2012. Mr. Zhao was the Director of Guangzhou Rongxin Science and Technology Limited, a company mainly engaged in distribution of rechargeable phone cards and prepaid subway tickets in Guangzhou City, China since 2010. Previously, Mr. Zhao studied BBA in Singapore. He was a business consultant for a Singapore investment company, Huantong Singapore Co. Ltd.

Yau Kwong Lee was appointed as our Director on March 30, 2012. Mr. Lee was engaged in the auto and property industries in the Mainland China over 30 years. Previously, Mr. Lee was the Managing Director of Xian XinHui Housing and Real Estate Development Company Ltd.

Kwok Ming Wai Andrew was appointed as our Chief Financial Officer, Secretary and Director on March 30, 2012. Mr. Kwok joined China Teletech Group as CFO-designate since October 2011. Mr. Kwok earned an MBA degree in 1996. He is a CPA of HKICPA since 2000 and is a fellow member of ACCA. Mr. Kwok started his career in auditing in 1997 and moved to in-house finance since 2002. He had previously worked as a Finance Manager and Company Secretary for an insurance broker firm in Hong Kong.

Committees and Meetings

We do not have a standing audit committee of the Board of Directors. We do not have a financial expert serving on the Board of Directors or employed as an officer based on management’s belief that the cost of obtaining the services of a person who meets the criteria for a financial expert under Item 407(d) of Regulation S-K is beyond its limited financial resources and the financial skills of such an expert are simply not required or necessary for us to maintain effective internal controls and procedures for financial reporting in light of the limited scope and simplicity of accounting issues raised in its financial statements at this stage of its development.

Family Relationships

Mr. Yuan Zhao is the son-in-law of Ms. Yankuan Li, our president and chief executive officer.

Involvement in Certain Legal Proceedings

To our knowledge, during the past ten (10) years, none of our directors, executive officers, promoters, control persons, or nominees has been: the subject of any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; convicted in a criminal proceeding or is subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; or found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law.

Code of Ethics

We current do not have a code of ethics that applies to our officers, employees and directors.

Item 11. Executive Compensation.

The following executives of the Company received compensation in the amounts set forth in the chart below for the fiscal years ended December 31, 2011 and 2010. No other item of compensation was paid to any officer or director of the Company other than reimbursement of expenses.

Summary Compensation Table

Name and Principal Position	Year		Salary ($)		Bonus ($)		Stock Awards ($)		Option Awards ($)		Non-Equity Incentive Plan Compensation ($)		Non-Qualified Deferred Compensation Earnings ($)		All Other Compensation ($)		Totals ($)
Yankuan Li CEO		2011	$	12,976		0		0		0		0		0		0	$	12,976
and Director		2010	$	64,780		125,905		0		0		0		0		0	$	190,685

Richard Yan Former CFO		2010	$	0		0		0		0		0		0		0	$	0

Outstanding Equity Awards at Fiscal Year-End Table

There were no outstanding equity awards for the year ended December 31, 2011.

Compensation of Directors

The Company has not compensated any of its directors for service on the Board of Directors. Management directors are not compensated for their service as directors, however they may receive compensation for their services as employees of the Company. The compensation received by our management directors is shown in the “Summary Compensation Table” above.

Employment Agreements

We do not have any employment agreements with our officers or directors.

Item 12. Security Ownership of Certain Beneficial Owners and Management.

The following table sets forth certain information regarding the ownership of our capital stock, as of April 9, 2012, for: by (i) each person known by us to be the beneficial owner of 5% or more of the outstanding common stock, (ii) each executive officer and director of the Company, and (iii) all of our executive officers and directors as a group.

Unless otherwise indicated, the Company believes that all persons named in the table have sole voting and investment power with respect to all shares of common stock beneficially owned by them.

Unless otherwise specified, the address of each of the persons set forth below is in care of the Company, Room 03/04, 16/F, Jinke Building, No.17-19, Guangwei Road, Guangzhou, China 510030.

Title of Class	Name and Address	Number of Common Shares Beneficially Owned			Percent of Class (1)
	Directors and Officers
Common Stock	Yankuan Li		2,796,021		4.78	%
Common Stock	Dong Liu		20,000,000		34.17	%
Common Stock	Yuan Zhao		20,943,100	(2)	35.78	%
Common Stock	Yau Kwong Lee		0		0	%
Common Stock	Kwok Ming Wai Andrew		23,000		*	%
Common Stock	All directors and executive officers as a group (5 persons)		43,762,121		74.77	%

	5% Holders
Common Stock	Enable Capital Management One Ferry Building, Suite 255 San Francisco, CA 94111		3,270,438	(3)	5.59	%

* less than 1%.

(1)	Based on 58,528,637 shares of common stock issued and outstanding as of April 9, 2012.
(2)	Including 843,100 shares held by his wife.
(3)	Including 2,779,872 shares of common stock held by Enable Growth Partners LP, 327,044 shares held by Enable Opportunity Partners LP and 163,522 shares held by Pierce Diversified Strategy Master Fund LLC (collectively, “Enable”). The Company and Enable agreed to cancel these shares.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

Acquisition of China Teletech Limited

On March 30, 2012, the Company completed a share exchange transaction with China Teletech Limited, a British Virgin Islands corporation (“CTL”), by entering into a share exchange agreement with CTL and the former shareholders of CTL, dated March 30, 2012. Pursuant to the agreement, we acquired all the outstanding capital stock of CTL from the former shareholders of CTL in exchange for the issuance of 40,000,000 shares of our common stock. The shares issued to the former shareholders of CTL constituted approximately 68.34% of our issued and outstanding shares of common stock as of an immediately after the commutation of the share exchange transaction. As a result of the share exchange, CTL became our wholly owned subsidiary and Dong Liu and Yuan Zhao, the former shareholders of CTL, became our principal shareholders.

Due To/From Related Parties

The following table presents the balances the Company due to and from related parties.

	As of 12/31/2011			As of 12/31/2010
Due from related parties	$	904,846		$	453,734
Due to related parties		(30,000	)		(176,518	)
Net due from/(due to) related parties		874,846		$	277,216

Acquisition of GRT

Pursuant to a Stock Purchase Agreement dated July 29, 2008, the Company acquired 51% of the issued and outstanding shares in Guangzhou Renwoxing Telecom Co., Ltd. (“GRT”), a limited liability company incorporated in China. The other 14% is beneficially owned by Yankuan Li, our President and Chief Executive Officer, and 35% is beneficially owned by Yuan Zhao, our Director.

Item 14. Principal Accounting Fees and Services.

Audit Fees

For the Company’s fiscal years ended December 31, 2011 and 2010, we were billed approximately $81,000 and $56,000 for professional services rendered for the audit and review of our financial statements.

Audit Related Fees

There were no fees for audit related services for the years ended December 31, 2011 and 2010.

Tax Fees

For the Company’s fiscal years ended December 31, 2011 and 2010, we were not billed for professional services rendered for tax compliance, tax advice, and tax planning.

All Other Fees

The Company did not incur any other fees related to services rendered by our principal accountant for the fiscal years ended December 31, 2011 and 2010.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Effective May 6, 2003, the Securities and Exchange Commission adopted rules that require that before our auditor is engaged by us to render any auditing or permitted non-audit related service, the engagement be:

-	approved by our audit committee; or

entered into pursuant to pre-approval policies and procedures established by the audit committee, provided the policies and procedures are detailed as to the particular service, the audit committee is informed of each service, and such policies and procedures do not include delegation of the audit committee's responsibilities to management.

We do not have an audit committee. Our entire board of directors pre-approves all services provided by our independent auditors. The pre-approval process has just been implemented in response to the new rules. Therefore, our board of directors does not have records of what percentage of the above fees was pre-approved. However, all of the above services and fees were reviewed and approved by the entire board of directors either before or after the respective services were rendered.

PART IV

Item 15. Exhibits, Financial Statement Schedules.

(a) The following documents are filed as part of this report:

(1) Financial Statements and Report of Independent Registered Public Accounting Firm, which are set forth in the index to Consolidated Financial Statements on pages F-1 through F-22 of this report.

Report of Independent Registered Public Accounting Firm — Samuel H. Wong & Co., LLP		F-2
Consolidated Balance Sheets		F-3
Consolidated Statements of Income and Comprehensive Income		F-4
Consolidated Statements of Shareholders’ Equity		F-5
Consolidated Statements of Cash Flows		F-6
Notes to Consolidated Financial Statements		F-7 to F-22

(2) Financial Statement Schedule: None.

(3) Exhibits

Exhibit No.		Description
3.1		Articles of Incorporation (1) Amendment to Articles of Incorporation
3.2		Bylaws (1)
3.3		Certificate of Amendment to Articles of Incorporation. (9)
10.1		Securities Purchase Agreement (2)
10.2		Registration Rights Agreement (2)
10.3		Subsidiary Guarantee (2)
10.4		Security Agreement (2)
10.5		Form of Senior Secured Convertible Debenture (2)
10.6		Form of Common Stock Purchase Warrant (2)
10.7		Amendment Agreement among the Company and certain investors, dated February 21, 2008 (3)
10.8		Share Transfer Agreement between Huantong Telecom Singapore Company Pte. Ltd. and TCAM Technology Pte. Ltd., dated February 14, 2008 (4)
10.9		Share Transfer Agreement between Global Telecom Holdings Limited and Guangzhou Renwoxing Telecom, dated July 29, 2008 (5)
10.10		Amendment Agreement between the Company and certain investors, dated November 3, 2008 (6)
10.11		Settlement Agreement, dated December 29, 2009 (7)
10.12		Settlement Agreement, dated November 28, 2011 (8)
10.13		Share Exchange Agreement, by and among the Company, CTL and the former shareholders of CTL. (9)
21.1		List of Subsidiaries *
31.1		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 *
31.2		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 *
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 **
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 **
101.INS		XBRL Instance Document
101.SCH		XBRL Taxonomy Schema
101.CAL		XBRL Taxonomy Calculation Linkbase
101.DEF		XBRL Taxonomy Definition Linkbase
101.LAB		XBRL Taxonomy Label Linkbase
101.PRE		XBRL Taxonomy Presentation Linkbase

(1)	Incorporated by reference to Form SB-2 filed on January 6, 2006.
(2)	Incorporated by reference to Form 8-K/A filed on August 8, 2007.
(3)	Incorporated by reference to Form 8-K filed on February 28, 2008.
(4)	Incorporated by reference to Form 8-K filed on March 11, 2008.
(5)	Incorporated by reference to Form 8-K filed on July 31, 2008.
(6)	Incorporated by reference to Form 8-K filed on November 5, 2008.
(7)	Incorporated by reference to the Form 8-K filed on January 4, 2010.
(8)	Incorporated by reference to the Form 8-K filed on December 1, 2011.
(9)	Incorporated by reference to the Form 8-K filed on April 5, 2012.
*	Filed herewith.
**	In accordance with SEC Release 33-8238, Exhibits 32.1 and 32.2 are furnished and not filed.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	CHINA TELETECH HOLDING, INC.

Date: April 16, 2012	By:	/s/ Yankuan Li
		Yankuan Li
		President, Chief Executive Officer and Director

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following person on behalf of the registrant and in the capacities and on the dates indicated.

Name	Title	Date

/s/ Yankuan Li
Yankuan Li	President, Chief Executive Officer and Director	April 16, 2012

/s/ Dong Liu
Dong Liu	Chairman	April 16, 2012

/s/ Yuan Zhao
Yuan Zhao	Director	April 16, 2012

/s/ Yau Kwong Lee
Yau Kwong Lee	Director	April 16, 2012

/s/ Kwok Ming Wai Andrew
Kwok Ming Wai Andrew	Chief Financial Officer, Secretary and Director	April 16, 2012

TABLE OF CONTENTS

Part I Item 1. Business Item 1A. Risk Factors Item 2. Properties Item 3. Legal Proceedings Item 4. Mine Safety Disclosures Part II Item 5. Market For Registrant S Common Equity, Related Stockholder Matters and Issuer Purchases Of Equity Securities Item 6. Selected Financial Data Item 7. Management S Discussion and Analysis Of Financial Condition and Results Of Operations Item 7A. Quantitative and Qualitative Disclosures About Market Risk Item 8. Financial Statements and Supplementary Data Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Item 9A. Controls and Procedures Part III Item 10. Directors, Executive Officers and Corporate Governance Item 11. Executive Compensation Item 12. Security Ownership Of Certain Beneficial Owners and Management Item 13. Certain Relationships and Related Transactions, and Director Independence Item 14. Principal Accounting Fees and Services Part IV Item 15. Exhibits, Financial Statement Schedules

CLUS 10-K Fiscal year ended Dec. 31, 2011