----

----

| ( X      ) | ANNUAL      REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF      1934. |
|------------|-------------------------------------------------------------------------------------------------|

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

----

|   | Ø | The      tariffs on mobile phone calls in China have fallen by approximately 80% in      the past two years.  As a result, the use of cell phones has      increased dramatically, with a concomitant slackening of demand for our      payphone services.  When we initiated our business, the average      cell phone tariff was five times the tariff on a call from our      payphones.  Now the difference is  insignificant. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Ø | In      January 2007 China Netcom (Beijing) Corporation Limited cancelled the      contract under which we distributed its fixed line call    times. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|   | § | Management’s      realization that it lacked the personnel and financial resources to      operate in both Shanghai and Beijing at this  time. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | § | As      a result of the successful Olympics and as the capital of China with      approximately 20 million residents, Beijing attracts 80-90% of foreign      tourists traveling to China, and thus has a much larger potential customer      base than Shanghai. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | § | Our      executive offices and connections are based in Beijing, which would      substantially reduce our operational cost and improve our      profitability. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | § | We      expect to market our call forwarding service at a very competitive      price.  Our international SIM card will be marketed at 0.80 RMB      per minute or per message, compared to the prevailing market price of      approximately 2.0 RMB per minute or permessage. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | § | We      expect to have an exclusive distribution contract for Beijing with      China Unicom Group Hong Kong International Ltd.  to distribute a      wide variety of cards. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | § | We      expect that two executive management members of the Beijing      Tourism Group, one of China’s largest travel agencies, will become      significant customers as soon as we open the  office. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

----

----

|                    |   | Bid    |   |
|-------------------------|--------|--------|--------|
| Quarter      Ending     |   | High   |   |   | Low |   |
| March      31, 2008     |   | $      | 0.87   |   |   | $ | 0.07 |   |
| June      30, 2008      |   | $      | 0.23   |   |   | $ | 0.05 |   |
| September      30, 2008 |   | $      | 0.05   |   |   | $ | 0.02 |   |
| December      31, 2008  |   | $      | 0.06   |   |   | $ | 0.02 |   |
|                    |   |   |   |   |   |   |   |   |
| March      31, 2009     |   | $      | 0.02   |   |   | $ | 0.02 |   |
| June      30, 2009      |   | $      | 0.03   |   |   | $ | 0.02 |   |
| September      30, 2009 |   | $      | 0.03   |   |   | $ | 0.03 |   |
| December      31, 2009  |   | $      | 0.03   |   |   | $ | 0.02 |   |

----

|                                                                                                                                                                                      | Number      of securities to be issued upon exercise of outstanding options, warrants      and rights | Weighted      average exercise price of outstanding options, warrants and      rights | Number      of securities remaining available for future issuance under equity      compensation plans |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------|
| Equity      compensation plans approved by security holders                                                                                                                               |  0                                                                                               | --                                                                                    |  0                                                                                                |
| Equity      compensation plans not approved by security holders                                                                                                                           |  0                                                                                               | --                                                                                    |  0                                                                                                |
|                               Total | 0                                                                                                     | --                                                                                    | 0                                                                                                      |

----

|   | Ø | The      tariffs on mobile phone calls in China have fallen by approximately 80% in      the past two years.  As a result, the use of cell phones has      increased dramatically, with a concomitant slackening of demand for our      payphone services.  When we initiated our business, the average      cell phone tariff was five times the tariff on a call from our      payphones.  Now the difference is  insignificant. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Ø | In      January 2007 China Netcom (Beijing) Corporation Limited cancelled the      contract under which we distributed its fixed line call      times.  This contract had generated $57,329 in revenue for us in      the first nine months of 2006. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

|                                                                                                                                |  Page(s) |
|-------------------------------------------------------------------------------------------------------------------------------------|---------------|
| Report      of Independent Registered Public Accounting Firm                                                                        | 14            |
|                                                                                                                                |          |
| Consolidated      Balance Sheets as of December 31, 2009 and 2008                                                                   | 15            |
|                                                                                                                                |          |
| Consolidated      Statements of Operations and Other Comprehensive Income for the Years      Ended December 31, 2009 and 2008       | 16            |
|                                                                                                                                |          |
| Consolidated      Statements of Changes in Stockholders’ Equity/(Deficit) for the Years      Ended December 31, 2009 and 2008 | 17            |
|                                                                                                                                |          |
| Consolidated      Statements of Cash Flows for the Years Ended December 31, 2009 and      2008                                      | 18            |
|                                                                                                                                |          |
| Notes      to Consolidated Financial Statements                                                                                     | 19            |

----

| KEITH      K. ZHEN, CPA                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| CERTIFIED      PUBLIC ACCOUNTANT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 2070      WEST 6TH STREET - BROOKLYN, NY 11223 - TEL (347) 408-0693 - FAX (347)      602-4868 - EMAIL :KEITHZHEN@GMAIL.COM                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| REPORT      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| Board      of Directors                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| Smooth      Global (China) Holdings, Inc.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| We      have audited the accompanying consolidated balance sheets of Smooth Global      (China) Holdings, Inc. and subsidiaries as of  December 31, 2009      and 2008, and the related statements of income, stockholders' equity and      comprehensive income, and cash flows for each of the years in the two-year      period ended December 31, 2009.  Smooth Global (China) Holdings,      Inc.'s management is responsible for these financial      statements.  Our responsibility is to express an opinion on      these financial statements based on our audit.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 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.      The company is not required to have, nor were we engaged to perform, an      audit of its internal control over financial reporting. Our audit included      consideration of internal control over financial reporting as a basis for      designing audit procedures that are appropriate in the circumstances, but      not for the purpose of expressing an opinion on the effectiveness of the      company’s internal control over financial reporting. Accordingly, we      express no such opinion. An audit also includes examining, on a test      basis, evidence supporting the amounts and disclosures in the financial      statements, 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 Smooth Global (China)      Holdings, Inc. and subsidiaries as of  December 31, 2009 and      2008, and the results of its operations and its cash flows for each of the      years in the two-year period ended December 31, 2009 in conformity with      accounting principles generally accepted in the United States of      America.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| The      accompanying consolidated financial statements have been prepared assuming      that the Company will continue as a going concern. As discussed in Note 2      to the consolidated financial statements, the Company incurred significant      losses and the revenue dropped dramatically in the year ended December 31,      2009 and 2008.  These factors raises substantial doubt about its      ability to continue as a going concern. Management’s plans concerning      these matters are also described in Note 2. The accompanying consolidated      financial statements do not include any adjustments that might result from      the outcome of this uncertainty.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| /s/Keith      K. Zhen, CPA                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| Keith      K. Zhen, CPA                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| Brooklyn,      New York                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| April      15, 2010                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |

----

| SMOOTH      GLOBAL (CHINA) HOLDINGS, INC. AND SUBSIDIARIES                                                                                                                                          |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                |   |   |   |   |   |   |
|                                                                                                                                                                                                |   |   |   |   |   |   |
| CONSOLIDATED      BALANCE SHEETS                                                                                                                                                                    |
|                                                                                                                                                                                                |   |   |   |   |   |   |
|                                                                                                                                                                                                |   |   |   |   |   |   |
|                                                                                                                                                                                                |   | December      31, |   |   | December      31, |   |
|                                                                                                                                                                                                |   | 2009 |   |   | 2008 |   |
| ASSETS                                                                                                                                                                                              |
|                                                                                                                                                                                                |   |   |   |   |   |   |
| Current      Assets:                                                                                                                                                                                |   |   |   |   |   |   |
|      Cash      and cash equivalents                                                                                                                                        |   | $ | 90,764 |   |   | $ | 33,415 |   |
|      Prepaid      expense (Note 5)                                                                                                                                         |   |   | 7,313 |   |   |   | 374,597 |   |
|           Total      current assets                                                                                                               |   |   | 98,077 |   |   |   | 408,012 |   |
|                                                                                                                                                                                                |   |   |   |   |   |   |   |   |
| Property,      Plant, and Equipment, net (Note 6)                                                                                                                                                   |   |   | 130,687 |   |   |   | 215,515 |   |
|                                                                                                                                                                                                |   |   |   |   |   |   |   |   |
| Long-term      Investment (Note 7)                                                                                                                                                                  |   |   | - |   |   |   | 233,434 |   |
|                                                                                                                                                                                                |   |   |   |   |   |   |   |   |
| Contract      Security Deposit (Note 8)                                                                                                                                                             |   |   | 229,626 |   |   |   | 89,114 |   |
|                                                                                                                                                                                                |   |   |   |   |   |   |   |   |
|           Total      Assets                                                                                                                       |   | $ | 458,390 |   |   | $ | 946,075 |   |
|                                                                                                                                                                                                |   |   |   |   |   |   |   |   |
| LIABILITIES      AND STOCKHOLDERS' EQUITY                                                                                                                                                           |   |
|                                                                                                                                                                                                |   |   |   |   |   |   |   |   |
| Current      Liabilities:                                                                                                                                                                           |   |   |   |   |   |   |   |   |
|      Accrued      expenses (Note 9)                                                                                                                                        |   |   | 54,838 |   |   |   | 53,667 |   |
|      Taxes      payable                                                                                                                                                    |   |   | 704 |   |   |   | 34 |   |
|      Deferred      revenue                                                                                                                                                 |   |   | - |   |   |   | 1,679 |   |
|      Due      to an officer (Note 13)                                                                                                                                      |   |   | 113,704 |   |   |   | - |   |
|      Agreement      security deposit (Note 10)                                                                                                                             |   |   | - |   |   |   | 320,971 |   |
|           Total      Current Liabilities                                                                                                          |   |   | 169,246 |   |   |   | 376,351 |   |
|                                                                                                                                                                                                |   |   |   |   |   |   |   |   |
| Commitments      and Contingencies (Note 19)                                                                                                                                                        |   |   | - |   |   |   | - |   |
|                                                                                                                                                                                                |   |   |   |   |   |   |   |   |
| Stockholders'      Equity:                                                                                                                                                                          |   |   |   |   |   |   |   |   |
|            Common stock, $0.001 par value, 200,000,000 shares authorized;      38,381,375 shares issued and outstanding as of December 31, 2009      and December 31, 2008 |   |   | 38,381 |   |   |   | 38,381 |   |
|      Additional      paid-in capital                                                                                                                                       |   |   | 799,255 |   |   |   | 799,255 |   |
|      Unamortized      contractual services costs                                                                                                                           |   |   | - |   |   |   | (29,333 | ) |
|      Statutory      reserves                                                                                                                                               |   |   | 236,875 |   |   |   | 236,875 |   |
|      Retained      earnings                                                                                                                                                |   |   | (949,252 | ) |   |   | (653,811 | ) |
|      Accumulated      other comprehensive income                                                                                                                           |   |   | 163,885 |   |   |   | 178,357 |   |
|                 Stockholders'      Equity                                                                                                         |   |   | 289,144 |   |   |   | 569,724 |   |
|                                                                                                                                                                                                |   |   |   |   |   |   |   |   |
|                 Total Liabilities and Stockholders' Equity                                                                                        |   | $ | 458,390 |   |   | $ | 946,075 |   |

----

| SMOOTH      GLOBAL (CHINA) HOLDINGS, INC. AND SUBSIDIARIES                                |
|-------------------------------------------------------------------------------------------|
|                                                                                      |   |   |   |   |   |   |
|                                                                                      |   |   |   |   |   |   |
| CONSOLIDATED      STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME                 |
|                                                                                      |   |   |   |   |   |   |
|                                                                                      |   |   |   |   |   |   |
|                                                                                      |   | For      the Year Ended |   |
|                                                                                      |   | December      31, |   |
|                                                                                      |   | 2009 |   |   | 2008 |   |
| Revenues                                                                                  |   |   |   |   |   |   |
|      (a)      GRT public telephone service                       |   | $ | 1,601 |   |   | $ | 16,265 |   |
|      (b)      GRT VoIP call time distribution                    |   |   | 67,104 |   |   |   | 212,305 |   |
|      (c)      GRT sales of call forwarding cards                 |   |   | - |   |   |   | 213,953 |   |
| Total      Revenue                                                                        |   |   | 68,705 |   |   |   | 442,523 |   |
|                                                                                      |   |   |   |   |   |   |   |   |
| Costs      of Revenue                                                                     |   |   |   |   |   |   |   |   |
|      (a)      GRT public telephone service                       |   |   | 6,944 |   |   |   | 22,981 |   |
|      (b)      GRT VoIP call time distribution                    |   |   | 76,876 |   |   |   | 163,309 |   |
|      (c)      GRT sales of call forwarding cards                 |   |   | - |   |   |   | 178,935 |   |
| Total      Costs of Revenue                                                               |   |   | 83,820 |   |   |   | 365,225 |   |
|                                                                                      |   |   |   |   |   |   |   |   |
| Gross      Profit                                                                         |   |   | (15,115 | ) |   |   | 77,298 |   |
|                                                                                      |   |   |   |   |   |   |   |   |
| QTC      Supplemental Income (Note 12)                                                    |   |   | - |   |   |   | 37,344 |   |
|                                                                                      |   |   |   |   |   |   |   |   |
| Operating      Expenses                                                                   |   |   |   |   |   |   |   |   |
|      Compensation      to CEO                                    |   |   | - |   |   |   | 85,650 |   |
|      Payroll      and employee benefit                           |   |   | 28,514 |   |   |   | 44,161 |   |
|      Depreciation      expenses                                  |   |   | 86,648 |   |   |   | 83,357 |   |
|      Office      expenses                                        |   |   | 48,792 |   |   |   | 37,268 |   |
|      Research      & development expenses                    |   |   | - |   |   |   | 105,448 |   |
|      Professional      fees                                      |   |   | 56,697 |   |   |   | 70,724 |   |
|      Consultant      fees (Note 11)                              |   |   | 41,235 |   |   |   | 706,384 |   |
|      Travel      and entertainment                               |   |   | 15,533 |   |   |   | 87,049 |   |
|      Other      general and administrative expenses              |   |   | 2,975 |   |   |   | 2,645 |   |
|           Total      Operating Expenses |   |   | 280,394 |   |   |   | 1,222,686 |   |
|                                                                                      |   |   |   |   |   |   |   |   |
| Income      (Loss) from Operations                                                        |   |   | (295,509 | ) |   |   | (1,108,044 | ) |
|                                                                                      |   |   |   |   |   |   |   |   |
| Other      Income                                                                         |   |   |   |   |   |   |   |   |
|      Interest      income                                        |   |   | 68 |   |   |   | 364 |   |
|           Total      other income       |   |   | 68 |   |   |   | 364 |   |
|                                                                                      |   |   |   |   |   |   |   |   |
| Income      (Loss) before provision for Income Tax                                        |   |   | (295,441 | ) |   |   | (1,107,680 | ) |
|                                                                                      |   |   |   |   |   |   |   |   |
| Provision      for Income Tax                                                             |   |   | - |   |   |   | - |   |
|                                                                                      |   |   |   |   |   |   |   |   |
| Income      (Loss) from Continuing Operations                                             |   |   | (295,441 | ) |   |   | (1,107,680 | ) |
|                                                                                      |   |   |   |   |   |   |   |   |
| Loss      from Discontinued Operations--VoIP Call Time Distribution of      QTC           |   |   | - |   |   |   | (47,607 | ) |
|                                                                                      |   |   |   |   |   |   |   |   |
| Net      Income                                                                           |   |   | (295,441 | ) |   |   | (1,155,287 | ) |
|                                                                                      |   |   |   |   |   |   |   |   |
| Other      Comprehensive Income (Loss)                                                    |   |   |   |   |   |   |   |   |
|     Effects      of Foreign Currency Conversion                       |   |   | (14,472 | ) |   |   | 87,276 |   |
|                                                                                      |   |   |   |   |   |   |   |   |
| Comprehensive      Income (Loss)                                                          |   | $ | (309,913 | ) |   | $ | (1,068,011 | ) |
|                                                                                      |   |   |   |   |   |   |   |   |
| Basic      and fully diluted earnings (loss) per share                                    |   | $ | (0.01 | ) |   | $ | (0.03 | ) |
|                                                                                      |   |   |   |   |   |   |   |   |
| Weighted      average shares outstanding                                                  |   |   | 38,381,375 |   |   |   | 38,381,375 |   |

----

| SMOOTH      GLOBAL (CHINA) HOLDINGS, INC. AND SUBSIDIARIES                |
|---------------------------------------------------------------------------|
|                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| CONSOLIDATED      STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIT) |
|                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| FOR      THE YEARS ENDED DECEMBER 31, 2009 AND 2008                       |
|                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                      |   |   |   |   |   |   |   |   |   |   | Unamortized |   |   |   |   |   |   |   |   | Accumulated |   |   |   |   |
|                                                                      |   | Common      Stock |   |   | Additional |   |   | Contractual |   |   |   |   |   |   |   |   | Other |   |   | Total |   |
|                                                                      |   | $0.001 Par      Value |   |   | Paid-in |   |   | Service |   |   | Statutory |   |   | Retained |   |   | Comprehensive |   |   | Owners' |   |
|                                                                      |   | Shares |   |   | Amount |   |   | Capital |   |   | Costs |   |   | Reserve |   |   | Earnings |   |   | Income |   |   | Equity |   |
|                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balances      at                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|       December      31, 2007                |   |   | 38,381,375 |   |   | $ | 38,381 |   |   | $ | 799,255 |   |   | $ | (261,213 | ) |   | $ | 236,875 |   |   | $ | 501,476 |   |   | $ | 91,081 |   |   | $ | 1,405,855 |   |
|                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Amortization      of costs of common stock                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      issued      for contractual services        |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 231,880 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 231,880 |   |
|                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      Income (Loss)                                                    |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (1,155,287 | ) |   |   | - |   |   |   | (1,155,287 | ) |
|                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other      comprehensive income-                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     effects      of exchange rates                    |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 87,276 |   |   |   | 87,276 |   |
|                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balances      at                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|       December      31, 2008                |   |   | 38,381,375 |   |   | $ | 38,381 |   |   | $ | 799,255 |   |   | $ | (29,333 | ) |   | $ | 236,875 |   |   | $ | (653,811 | ) |   | $ | 178,357 |   |   | $ | 569,724 |   |
|                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Amortization      of costs of common stocks                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      issued      for contractual services        |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 29,333 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 29,333 |   |
|                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      Income (Loss)                                                    |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (295,441 | ) |   |   | - |   |   |   | (295,441 | ) |
|                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other      comprehensive income-                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     effects      of exchange rates                    |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (14,472 | ) |   |   | (14,472 | ) |
|                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balances      at                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|       December      31, 2009                |   |   | 38,381,375 |   |   | $ | 38,381 |   |   | $ | 799,255 |   |   | $ | - |   |   | $ | 236,875 |   |   | $ | (949,252 | ) |   | $ | 163,885 |   |   | $ | 289,144 |   |

----

| SMOOTH      GLOBAL (CHINA) HOLDINGS, INC. AND SUBSIDIARIES                                                |
|-----------------------------------------------------------------------------------------------------------|
|                                                                                                      |   |   |   |   |   |   |
|                                                                                                      |   |   |   |   |   |   |
| CONSOLIDATED      STATEMENTS OF CASH FLOWS                                                                |
|                                                                                                      |   |   |   |   |   |   |
|                                                                                                      |   |   |   |   |   |   |
|                                                                                                      |   | For      the Year Ended |   |
|                                                                                                      |   | December      31, |   |
|                                                                                                      |   | 2009 |   |   | 2008 |   |
| Operating Activities                                                                                      |   |   |   |   |   |   |
|                                                                                                      |   |   |   |   |   |   |
| Net      income (loss)                                                                                    |   | $ | (295,441 | ) |   | $ | (1,155,287 | ) |
| Adjustments      to reconcile net income (loss) to net      cash provided (used) by operating activities: |   |   |   |   |   |   |   |   |
|         Depreciation                                              |   |   | 86,648 |   |   |   | 83,357 |   |
|         Loss      on disposal of fixed assets                     |   |   | - |   |   |   | 34,474 |   |
|         Deferred      consultant compensation                     |   |   | 29,333 |   |   |   | 231,880 |   |
| Changes      in operating assets and liabilities:                                                         |   |   |   |   |   |   |   |   |
|    (Increase)/Decrease      in accounts receivable                                         |   |   | - |   |   |   | 220,558 |   |
|    (Increase)/Decrease      in purchased SIM cards                                         |   |   | - |   |   |   | 422 |   |
|    (Increase)/Decrease      in prepaid expenses                                            |   |   | 367,929 |   |   |   | 20,579 |   |
|    (Increase)/Decrease      in contract security deposit                                   |   |   | (140,195 | ) |   |   | - |   |
|     Increase/(Decrease)      in accounts payable and accrued expenses                 |   |   | 1,040 |   |   |   | (9,723 | ) |
|     Increase/(Decrease)      in deferred revenue                                      |   |   | (1,682 | ) |   |   | 519 |   |
|     Increase/(Decrease)      in taxes payable                                         |   |   | 669 |   |   |   | (386 | ) |
|     Increase/(Decrease)      in agreement security deposit                            |   |   | (321,519 | ) |   |   | 315,990 |   |
| Net      cash provided (used) by operating activities                                                     |   |   | (273,218 | ) |   |   | (257,616 | ) |
|                                                                                                      |   |   |   |   |   |   |   |   |
| Investing Activities                                                                                      |   |   |   |   |   |   |   |   |
|                                                                                                      |   |   |   |   |   |   |   |   |
| Investment      in subsidiaries                                                                           |   |   | - |   |   |   | (229,811 | ) |
| Withdraw      from investment in subsidiaries                                                             |   |   | 233,833 |   |   |   | - |   |
| Proceeds      from disposal of fixed assets                                                               |   |   | - |   |   |   | 7,182 |   |
| Purchase      of fixed assets                                                                             |   |   | (1,331 | ) |   |   | (60,535 | ) |
| Net      cash provided (used) by investing activities                                                     |   |   | 232,502 |   |   |   | (283,165 | ) |
|                                                                                                      |   |   |   |   |   |   |   |   |
| Financing Activities                                                                                      |   |   |   |   |   |   |   |   |
|                                                                                                      |   |   |   |   |   |   |   |   |
| Payback      of loans from shareholders                                                                   |   |   | 113,622 |   |   |   | - |   |
| Net      cash provided (used) by financing activities                                                     |   |   | 113,622 |   |   |   | - |   |
|                                                                                                      |   |   |   |   |   |   |   |   |
| Increase      (decrease) in cash                                                                          |   |   | 72,907 |   |   |   | (540,781 | ) |
| Effects      of exchange rates on cash                                                                    |   |   | (15,558 | ) |   |   | 53,180 |   |
| Cash      at beginning of the period                                                                      |   |   | 33,415 |   |   |   | 521,016 |   |
| Cash      at end of the period                                                                            |   | $ | 90,764 |   |   | $ | 33,415 |   |
|                                                                                                      |   |   |   |   |   |   |   |   |
| Supplemental      Disclosures of Cash Flow Information:                                                   |   |   |   |   |   |   |   |   |
|    Cash      paid (received) during year for:                                              |   |   |   |   |   |   |   |   |
|        Interest                                                        |   | $ | - |   |   | $ | - |   |
|        Income      taxes                                               |   | $ | - |   |   | $ | - |   |

----

| SMOOTH      GLOBAL (CHINA) HOLDINGS, INC. AND SUBSIDIARIES |
|------------------------------------------------------------|
|                                                       |   |   |
|                                                       |   |   |
| NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS            |
|                                                       |   |   |
|                                                       |   |   |
|                                                       |   |   |
|                                                       | Note      1 - | ORGANIZATION      AND OPERATIONS |
|                                                       |   |   |
|                                                       |   | Organization      and Business Background |
|                                                       |   |   |
|                                                       |   | The      Bralorne Mining Company ("Bralorne") was incorporated under the laws of      the State of Nevada on December 2, 1998 with authorized common stock of      200,000,000 shares at $0.001 par value.  Currently, the Company      principally engages in the business to provide telecommunication services      in the People's Republic of China ("PRC'), through its wholly-owned      subsidiaries, Gold Profit (Asia) Group Limited ("Gold Profit") and Smooth      Global Services Limited ("Smooth Global").  On July 31, 2007,      Bralorne changed its name to Smooth Global (China) Holdings, Inc. ("Smooth      Global (China)" or the "Company"). |
|                                                       |   |   |
|                                                       |   | On      November 2, 2006, Bralorne entered into a Share Exchange Agreement (“the      Agreement") with the sole shareholder of Gold Profit to exchange 1,333,334      shares (40,000,000 shares prior to reverse stock split on July 31, 2007)      of common stock of Bralorne for 100% of the outstanding stock of Gold      Profit.  Upon the execution of the Agreement, Gold Profit became      a wholly-owned subsidiary of Bralorne. |
|                                                       |   |   |
|                                                       |   | Gold      Profit was incorporated as a limited liability company in the British      Virgin Islands (“BVI”) under the BVI Business Companies Act on July 28,      2006, for the purpose of seeking and consummating a merger or acquisition      with a business entity organized as a private corporation, partnership, or      sole proprietorship. |
|                                                       |   |   |
|                                                       |   | On      September 8, 2006, Gold Profit entered into a Share Purchase Agreement      with all the shareholders of Beijing Quan Tong Chang Information Service      Limited a/k/a Beijing Smooth Global Information Services Ltd. (”QTC') to      acquire 100% of QTC's registered capital for RMB500,000 (equivalent to      US$60,386).  Upon completion of this transaction, QTC became a      wholly-owned subsidiary of Gold Profit. |
|                                                       |   |   |
|                                                       |   | Under      the Company Law of PRC, QTC was incorporated in Beijing City, PRC on      August 2, 2003 with a registered capital of RMB500,000 (equivalent to      US$60,386).  QTC is engaged in the business of providing      telecommunication services in PRC. |

----

| SMOOTH      GLOBAL (CHINA) HOLDINGS, INC. AND SUBSIDIARIES |
|------------------------------------------------------------|
|                                                       |   |   |
|                                                       |   |   |
| NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS            |
|                                                       |   |   |
|                                                       |   |   |
|                                                       |   |   |
|                                                       | Note      1 - | ORGANIZATION      AND OPERATIONS (continued) |
|                                                       |   |   |
|                                                       |   | Organization      and Business Background (continued) |
|                                                       |   |   |
|                                                       |   | On      October 24, 2007 Smooth Global (China) completed the acquisition of all      the registered capital stock of Smooth Global.  In exchange for      the capital stock of Smooth Global, Smooth Global (China) issued      33,000,000 shares of its common stock to the prior owners of Smooth      Global.  The prior registered owners were Christina Nelson and      Shannon Lee Alsop.  They held the shares, however, as nominees      for nine residents of PRC.  Accordingly, upon closing of the      acquisition, Ms. Nelson and Ms. Alsop assigned the 33,000,000 shares to      those nine beneficiaries.  20,000,000 of the shares were      assigned to Ms. Zheng Shuying.  Ms. Zheng is the Chief Executive      Officer of Smooth Global (China).  Also, Smooth Global became a      wholly-owned subsidiary of Smooth Global (China) upon completion of the      acquisition. |
|                                                       |   |   |
|                                                       |   | Smooth      Global was incorporated on January 25, 2006 in the British Virgin Island      ("BVI") under the BVI Business Companies Act, 2004, as a BVI Business      Company.  The Company was formed for the purpose of seeking and      consummating a merger or acquisition with a business entity organized as a      private corporation, partnership, or sole  proprietorship. |
|                                                       |   |   |
|                                                       |   | On      June 28, 2007, Smooth Global established a wholly owned subsidiary, Smooth      Global (Beijing) Telecom Science Limited ("Beijing Telecom") in the      Beijing City, PRC.  Beijing Telecom was incorporated under the      Company Law of PRC as a limited liability company with registered capital      of $100,000.  Beijing Telecom was formed for the purpose of      seeking and consummating a merger or acquisition with a business entity      organized in PRC and engaged in the business of providing      telecommunication services. |
|                                                       |   |   |
|                                                       |   | On      September 20, 2007, Ms. Yianfang Jin and Ms. Yianxia Wang (collectively      the "Trustees"), both of whom are citizens of PRC and own a 100% equity      ownership interest in Beijing GRT Information Services Limited ( "GRT"      ),  executed Trust and Indemnity Agreements ("Agreements") with      Beijing Telecom, pursuant to which the Trustees assigned to Beijing      Telecom all of the beneficial interest in the Trustee's equity ownership      interest in GRT.  The Agreements provided for effective control      of GRT to be transferred to Beijing Telecom at September 20,      2007. |
|                                                       |   |   |
|                                                       |   | Through      the Agreements described in the preceding paragraph Beijing Telecom is      deemed a 100% beneficiary of GRT resulting in GRT being deemed a      subsidiary of Beijing Telecom under the requirements of FASB ASC 810-10      "Consolidation".   Accordingly, the consolidated financial      statements of Smooth Global and its wholly owned      subsidiary,  Beijing Telecom, will be prepared by including the      financial statements of GRT through September 20, 2007 and      thereafter. |

----

| SMOOTH      GLOBAL (CHINA) HOLDINGS, INC. AND SUBSIDIARIES |
|------------------------------------------------------------|
|                                                       |   |   |
|                                                       |   |   |
| NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS            |
|                                                       |   |   |
|                                                       |   |   |
|                                                       |   |   |
|                                                       | Note      1 - | ORGANIZATION      AND OPERATIONS (continued) |
|                                                       |   |   |
|                                                       |   | Organization      and Business Background (continued) |
|                                                       |   |   |
|                                                       |   | GRT      and QTC are the two of these affiliated companies that are engaged in      business operations.  Smooth Global (China), Gold Profit, Smooth      Global, and Beijing Telecom are all holding companies, whose business is      to hold an equity ownership interest in QTC and a beneficial interest in      GRT.   All these affiliated companies are hereafter      referred to as the "Company", whose structure is outlined as      following: |

----

| SMOOTH      GLOBAL (CHINA) HOLDINGS, INC. AND SUBSIDIARIES |
|------------------------------------------------------------|
|                                                       |   |   |
|                                                       |   |   |
| NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS            |
|                                                       |   |   |
|                                                       |   |   |
|                                                       |   |   |
|                                                       | Note      1 - | ORGANIZATION      AND OPERATIONS (continued) |
|                                                       |   |   |
|                                                       |   | Business      Operations |
|                                                       |   |   |
|                                                       |   | (a)  GRT      Public Telephone Service |
|                                                       |   |   |
|                                                       |   | GRT      provides public phone users with access to the network of  China      Unicom (Beijing) Limited (“CUBJ”) F/K/A China United Telecommunications      (Beijing) Corporation Limited, via paid phones installed in outlets      located in universities, convenience shops and street      corners.  These outlets are managed but not necessary owned by      GRT.  GRT signed non-exclusive distribution agreement with CUBJ      to distribute its traditional fixed line call time in Beijing City,      PRC. |
|                                                       |   |   |
|                                                       |   | CUBJ      is a subsidiary of China Unicom (Hong Kong) Limited ("CUHK") F/A/K China      United Telecommunications Corporation Limited.  On January 6,      2009, China United Telecommunications Corporation Limited merged with      China Netcom (Group) Corporation Limited and changed its name to China      Unicom (Hong Kong) Limited.  CUHK is one of the largest      telecommunications carriers in PRC. |
|                                                       |   |   |
|                                                       |   | (b)      GRT VoIP Call Time Distribution |
|                                                       |   |   |
|                                                       |   | Beginning      from January 2008, GRT provides enterprise phone users and public phone      users with access to the network of China Unicom (Shaoxing) Limited      (“CUSX”) F/K/A China Netcom (Shaoxing) Corporation Limited  and      China Unicom (Shanghai) Limited (“CUSH”) F/A/K China Netcom (Shanghai)      Corporation Limited,  via phones connected to GRT's      telecommunication server.  Both CUSX and CUGD are subsidiaries      of China Unicom (Hong Kong) Limited F/A/K China Netcom (Group) Company      Limited. GRT signed non-exclusive distribution agreement with CUSX and      CUGD to distribute their Voice Over Internet Protocol (“VoIP”) call time      in the PRC. |
|                                                       |   |   |
|                                                       |   | (c)      GRT International Call Forwarding Service |
|                                                       |   |   |
|                                                       |   | GRT      provides China mobile phone users with international call forwarding      service, which resembles the function of international roaming      services.  GRT provides subscribers with SIM cards of the      destination country or region with predefined call forwarding      time.  The subscribers forward their mobile phone calls to a      specified GRT number and instruct GRT to further forward the calls to a      telephone number in their destination country or region.  This      enables the mobile phone user to receive local calls for a competitive      tariff rate when they are traveling abroad. |
|                                                       |   |   |
|                                                       |   | Discontinued      Operation |
|                                                       |   |   |
|                                                       |   | QTC      provided enterprise phone users and public phone users with access to the      network of CUSX and China Unicom (Guangdong) Limited (“CUGD”) F/A/K China      Netcom (Guangdong) Corporation Limited  via phones connected to      QTC's telecommunication server.  On August 20, 2008, QTC's board      of directors decided to terminate this operation and disposed of the      relevant equipment.  QTC totally disposed of 65 pieces of      equipments with a carrying value of $61,929 (RMB 424,475), of which 59      pieces of equipment with a carrying value of $42,312 (RMB 290,017) were      sold to a third party for $7,295 (RMB 50,000. 00), resulting in a loss of      $34,474 (RMB 240,017), and 6 pieces of equipment with carrying value of      $19,617 (RMB 134,458) were transferred to GRT to satisfy a "due to GRT" of      $11,671 (RMB 80,000.00). No loss was recognized for this transfer due to      the elimination of intercompany transactions in    consolidation. |

----

| SMOOTH      GLOBAL (CHINA) HOLDINGS, INC. AND SUBSIDIARIES |
|------------------------------------------------------------|
|                                                       |
|                                                       |
| NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS            |

|   |          |                                                               |
|--------|---------------|--------------------------------------------------------------------|
|   |          |                                                               |
|   | Note      1 - | ORGANIZATION      AND OPERATIONS (continued)                       |
|   |          |                                                               |
|   |          | Discontinued      Operation (continued)                            |
|   |          |                                                               |
|   |          | Losses      from discontinued operation consist of the  following: |

|                                                                                                                              |   | For      The Year Ended |   |
|-----------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------|--------|
|                                                                                                                              |   | December      31,       |   |
|                                                                                                                              |   | 2009                    |   |   | 2008 |   |
| Losses      from discontinued operation                                                                                           |   |                    |   |   |   |   |
|     Revenue      from discontinued operation-                                                                 |   |                    |   |   |   |   |
|          QTC      VoIP call time distribution                                        |   | $                       | -      |   |   | $ | 8,155 |   |
|     Costs      of revenue from discontinued operation-                                                        |   |                    |   |   |   |   |   |   |
|          QTC      VoIP call time distribution                                        |   |                    | -      |   |   |   | 21,288 |   |
|                Losses      from discontinued operation |   |                    | -      |   |   |   | 13,133 |   |
| Loss      of disposal of fixed assets                                                                                             |   |                    | -      |   |   |   | 34,474 |   |
| Income      taxes                                                                                                                 |   |                    | -      |   |   |   | - |   |
|        Losses      on discontinued operation                                                   |   | $                       | -      |   |   | $ | 47,607 |   |
|                                                                                                                              |   |                    |   |   |   |   |   |   |
| Assets      to be disposed consist of the following:                                                                              |   |                    |   |   |   |   |   |   |
|                                                                                                                              |   | December      31,       |   |   | December      31, |   |
|                                                                                                                              |   | 2009                    |   |   | 2008 |   |
|                                                                                                                              |   |                    |   |   |   |   |   |   |
| Cost      of fixed assets to be disposed of                                                                                       |   | $                       | -      |   |   | $ | - |   |
| Accumulated      depreciation of fixed assets to be disposed of                                                                   |   |                    | -      |   |   |   | - |   |
|                                                                                                                              |   | $                       | -      |   |   | $ | - |   |

|   | Note      2 - | GOING      CONCERN                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|--------|---------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |          | As      reflected in the accompanying consolidated financial statements, the      Company incurred losses of $295,441 and $1,155,287 in the year ended      December 31, 2009 and 2008.  These amounts are significant      compared with the Company's shareholders'      equity.   Additionally, the revenue for the year ended      December 31, 2009 and 2008 dropped by $373,818 and $1,472,086, or 84% and      77%, respectively.  These factors raise substantial doubt about      the Company's ability to continue as a going concern.  In view      of the matters described above, recoverability of a major portion of the      recorded asset amounts shown in the accompanying consolidated balance      sheets is dependent upon continued operations of the Company, which in      turn is dependent upon the Company's ability to raise additional capital,      obtain financing and succeed in its future operations.  The      financial statements do not include any adjustments relating to the      recoverability and classification of recorded asset amounts or amounts and      classification of liabilities that might be necessary should the Company      be unable to continue as a going concern. |
|   |          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |          | Management      has taken the steps to revise its operating and financial requirements,      which it believes are sufficient to provide the Company with the ability      to continue as a going concern.  The Company is actively      pursuing additional funding and a potential merger or acquisition      candidate and strategic partners, which would enhance stockholders'      investment.  The Company is also developing new business lines,      including new telecommunication equipment and telecommunication      services.  Management believes that these actions will allow the      Company to continue operations through the next fiscal    year.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |

----

| SMOOTH      GLOBAL (CHINA) HOLDINGS, INC. AND SUBSIDIARIES |
|------------------------------------------------------------|
|                                                       |   |   |
|                                                       |   |   |
| NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS            |
|                                                       |   |   |
|                                                       |   |   |
|                                                       |   |   |
|                                                       | Note      3 - | CONTROL      BY PRINCIPAL STOCKHOLDERS |
|                                                       |   |   |
|                                                       |   | The      chief executive officer owns beneficially and in the aggregate, the      majority of the voting power of the Company. Accordingly, the chief      executive officer has the ability to control the approval of most      corporate actions, including approving significant expenses, increasing      the authorized capital stock and the dissolution, merger or sale of the      Company's assets. |
|                                                       |   |   |
|                                                       | Note      4 - | SIGNIFICANT      ACCOUNTING POLICIES |
|                                                       |   |   |
|                                                       |   | Basis      of Consolidation |
|                                                       |   |   |
|                                                       |   | The      consolidated financial statements include the accounts of the Company and      all its majority-owned subsidiaries which require      consolidation.  Inter-company transactions have been eliminated      in consolidation. |
|                                                       |   |   |
|                                                       |   | The      consolidated financial statements are prepared in accordance with      generally accepted accounting principles in the United States of America      ("US GAAP").  This basis of accounting differs from that used in      the statutory accounts of the Company, which are prepared in accordance      with the "Accounting Principles of China " ("PRC      GAAP").  Certain accounting principles, which are stipulated by      US GAAP, are not applicable in the PRC GAAP.  The difference      between PRC GAAP accounts of the Company and its US GAAP financial      statements is immaterial. |
|                                                       |   |   |
|                                                       |   | Certain      amounts in the prior year's consolidated financial statements and notes      have been revised to conform to the current year    presentation. |
|                                                       |   |   |
|                                                       |   | Subsequent      Events |
|                                                       |   |   |
|                                                       |   | The      Company evaluated subsequent events through the time of filing this Annual      Report on Form 10-K on April 15, 2010. We are not aware of any significant      events that occurred subsequent to the balance sheet date but prior to the      filing of this report that would have a material impact on our financial      statements. |
|                                                       |   |   |
|                                                       |   | Use      of Estimates |
|                                                       |   |   |
|                                                       |   | The      consolidated financial statements have been prepared in accordance with      accounting principles generally accepted in the United States of America.      In preparing these financial statements, management makes estimates and      assumptions that affect the reported amounts of assets and liabilities in      the balance sheets and revenues and expenses during the years reported.      Actual results may differ from these estimates. |
|                                                       |   |   |
|                                                       |   | Revenue      Recognition |
|                                                       |   |   |
|                                                       |   | The      Company recognizes its revenues net of sales taxes and sales-related      taxes. In accordance with the SEC’s Staff Accounting Bulletin No. 104,      Revenue Recognition , the Company recognizes revenue when persuasive      evidence of an arrangement exists, transfer of title and the risks and      rewards of ownership have occurred or services have been rendered and      accepted, the selling price is fixed or determinable and collectability is      reasonably assured. |

----

| SMOOTH      GLOBAL (CHINA) HOLDINGS, INC. AND SUBSIDIARIES |
|------------------------------------------------------------|
|                                                       |   |   |
|                                                       |   |   |
| NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS            |
|                                                       |   |   |
|                                                       |   |   |
|                                                       |   |   |
|                                                       | Note      4 - | SIGNIFICANT      ACCOUNTING POLICIES (continued) |
|                                                       |   |   |
|                                                       |   | Revenue      Recognition (continued) |
|                                                       |   |   |
|                                                       |   | (a)  GRT      Public Telephone Service |
|                                                       |   |   |
|                                                       |   | GRT      sets up outlets through CUBJ's network to provide public telephone service      to end users.  GRT buys call time from CUBJ in advance and then      distribute to end users via these outlets.  GRT recognizes      revenue when the tariff is collected after an end user places a telephone      call.  GRT records revenue from outlets after netting outlets'      operating expenses since such expenses are instable. |
|                                                       |   |   |
|                                                       |   | Pursuant      to the distribution agreement with CUBJ, GRT is entitled to refund a      certain percentage of call time cost and the percentage varies based on      the volume of call time which GRT distributes monthly.  GRT      records these refunds as revenue because GRT has to issue sales invoices      to CUBJ for the refunds. |
|                                                       |   |   |
|                                                       |   | (b)      GRT VoIP Call Time Distribution |
|                                                       |   |   |
|                                                       |   | Beginning      from January 2008, GRT contracted with CUSX and CUSH for the distribution      of their VoIP call time. VoIP call time distribution revenue is generally      recognized when the end user makes a call through the phone connected to      GRT's telecommunication server. |
|                                                       |   |   |
|                                                       |   | Pursuant      to the contracts with CUSX and CUSH, GRT pays tariff to the      telecommunication carriers in advance and connects its telecommunication      server to the carriers' network.  Then, GRT distributes the VoIP      call time to its customers who connect their phones to GRT’s      server.   The customers also pay tariff to GRT in      advance.  Monthly, the telecommunication carriers bill GRT for      the VoIP call time that it distributes.  In turn, GRT bills its      customers for the VoIP call time which the customers consume, based on the      records provided by its own server. |
|                                                       |   |   |
|                                                       |   | (c)      International Call Forwarding Service |
|                                                       |   |   |
|                                                       |   | GRT      purchases a foreign SIM card and then attaches it with a specified phone      number, which GRT bought from CUSH.   When a mobile phone      call is forwarded to that particular phone number, GRT will further      forward the call to the related SIM card, via the network of either CUSH      or CUSX.  GRT signed non-exclusive agreements with CUSH and CUSX      to forward phone calls via their network. |
|                                                       |   |   |
|                                                       |   | GRT      sells SIM cards either directly to end users or via its franchised      distributors, who signed non-exclusive Distribution Agreements with GRT to      distribute its SIM cards. |
|                                                       |   |   |
|                                                       |   | (1)   When      GRT sells SIM cards directly to end users, it recognizes revenue when the      SIM cards are expired as indicated in the description printed on the      envelop containing the SIM card. |
|                                                       |   |   |
|                                                       |   | (2)   When      GRT sells SIM cards to its franchised distributors, it recognizes revenue      when the SIM cards are delivered to the distributors and the payments have      been received, at which time Management believes the sales transactions      have been completed pursuant to the Distribution    Agreements. |

----

| SMOOTH      GLOBAL (CHINA) HOLDINGS, INC. AND SUBSIDIARIES |
|------------------------------------------------------------|
|                                                       |   |   |
|                                                       |   |   |
| NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS            |
|                                                       |   |   |
|                                                       |   |   |
|                                                       |   |   |
|                                                       | Note      4 - | SIGNIFICANT      ACCOUNTING POLICIES (continued) |
|                                                       |   |   |
|                                                       |   | Revenue      Recognition (continued) |
|                                                       |   |   |
|                                                       |   | Revenue      from discontinued operation-QTC VoIP call time  distribution |
|                                                       |   |   |
|                                                       |   | Before      QTC terminated its operation of VoIP call time distribution on August 20,      2008, QTC contracted with CUSX and CUGD for the distribution of their VoIP      call time. VoIP call time distribution revenue is generally recognized      when the end user makes a call through the phone connected to QTC's      telecommunication server. |
|                                                       |   |   |
|                                                       |   | Pursuant      to the contracts with CUSX and CUGD, QTC pays tariff to the      telecommunication carriers in advance and connects its telecommunication      server to the carriers' network.  Then, QTC distributes the VoIP      call time to its customers who connect their phones to QTC’s      server.   The customers also pay tariff to QTC in      advance.  Monthly, the telecommunication carriers bill QTC for      the VoIP call time that it distributes.  In turn, QTC bills its      customers for the VoIP call time which the customers consume, based on the      records provided by its own server. |
|                                                       |   |   |
|                                                       |   | Deferred      Revenue |
|                                                       |   |   |
|                                                       |   | Payments      received prior to satisfying the Company’s revenue recognition criteria      are recorded as deferred revenue. |
|                                                       |   |   |
|                                                       |   | Cost      of Revenue |
|                                                       |   |   |
|                                                       |   | (a)  GRT      Public Telephone Service |
|                                                       |   |   |
|                                                       |   | Costs      of public telephone service mainly include costs to buy call time from      CUBJ. |
|                                                       |   |   |
|                                                       |   | (b)      GRT VoIP Call Time Distribution |
|                                                       |   |   |
|                                                       |   | Costs      of VoIP call time distribution principally include the costs of VoIP call      time purchased from CUSX and CUSH. |
|                                                       |   |   |
|                                                       |   | (c)      International Call Forwarding Service |
|                                                       |   |   |
|                                                       |   | Costs      of international call forwarding services principally include the costs to      purchase SIM cards, the costs of telephone number, and the call forwarding      fees charged by the telecommunication carriers. |
|                                                       |   |   |
|                                                       |   | Cost      of revenue from discontinued operation-QTC VoIP call time      distribution |
|                                                       |   |   |
|                                                       |   | Costs      of QTC VoIP call time distribution principally include the costs of VoIP      call time purchased from CUSX andCUGD. |

----

| SMOOTH      GLOBAL (CHINA) HOLDINGS, INC. AND SUBSIDIARIES |
|------------------------------------------------------------|
|                                                       |   |   |
|                                                       |   |   |
| NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS            |
|                                                       |   |   |
|                                                       |   |   |
|                                                       |   |   |
|                                                       | Note      4 - | SIGNIFICANT      ACCOUNTING POLICIES (continued) |
|                                                       |   |   |
|                                                       |   | Cash      and Cash Equivalents |
|                                                       |   |   |
|                                                       |   | Cash      and cash equivalents are carried at cost and represent cash on hand,      demand deposits placed with banks or other financial institutions and all      highly liquid investments with an original maturity of three months or      less as of the purchase date of such investments. |
|                                                       |   |   |
|                                                       |   | Accounts      Receivable |
|                                                       |   |   |
|                                                       |   | Trade      accounts receivable are recorded at the invoiced amount and do not bear      interest. The allowance for doubtful accounts is the Management’s best      estimate of the amount of probable credit losses in the Company’s existing      accounts receivable. The Company determines the allowance based on      historical write-off experience. The Company reviews its allowance for      doubtful accounts on a regular basis. Past due balances over 90 days and      over a specified amount are reviewed individually for collectability. All      other balances are reviewed on a pooled basis by industry. Account      balances are charged off against the allowance after all means of      collection have been exhausted and the potential for recovery is      considered remote.  If actual collections experience changes,      revisions to the allowance may be required. |
|                                                       |   |   |
|                                                       |   | Concentrations      of Credit Risk |
|                                                       |   |   |
|                                                       |   | Financial      instruments that subject the Company to concentrations of credit risk      consist primarily of cash and cash equivalents. The Company maintains its      cash and cash equivalents with high-quality institutions. While deposits      held with banks are not insurance in PRC, these deposits generally may be      redeemed upon demand and therefore bear minimal risk. |
|                                                       |   |   |
|                                                       |   | Fair      Value of Financial Instruments |
|                                                       |   |   |
|                                                       |   | The      carrying value of the Company’s financial instruments, which include cash      and cash equivalents, accounts receivables and payables, and amounts due      from/to shareholders, approximate fair value due to the short maturities      of those instruments. |
|                                                       |   |   |
|                                                       |   | Impairment      of Long-life Assets |
|                                                       |   |   |
|                                                       |   | Long-lived      assets and certain identifiable intangibles are reviewed for impairment      whenever events or changes in circumstances indicate that the carrying      amount of an asset may not be recoverable. Recoverability of assets to be      held and used is measured by a comparison of the carrying amount of an      asset to future net cash flows expected to be generated by the asset. 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. |

----

| SMOOTH      GLOBAL (CHINA) HOLDINGS, INC. AND SUBSIDIARIES |
|------------------------------------------------------------|
|                                                       |   |   |
|                                                       |   |   |
| NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS            |
|                                                       |   |   |
|                                                       |   |   |
|                                                       |   |   |
|                                                       | Note      4 - | SIGNIFICANT      ACCOUNTING POLICIES (continued) |
|                                                       |   |   |
|                                                       |   | Property      and Equipment |
|                                                       |   |   |
|                                                       |   | Plant      and equipment are stated at cost less accumulated depreciation and      accumulated impairment losses, if any.  Depreciation is      calculated on the straight-line basis over the following expected useful      lives from the date on which they become fully operational and after      taking into account their estimated residual  values: |

|                              | Depreciable                       |   | Residual |
|-----------------------------------|-----------------------------------|--------|----------|
|                              | Life                              |   | Value    |
|                              |                              |   |     |
| Network      and office equipment | 5      years                      |   | 4%       |
|                              |                              |   |     |
| Leasehold      Improvements       | 5      years(Lease      duration) |   | 0%       |

|   |   | Expenditure      for maintenance and repairs is expended as incurred.                                                                                                                                                                                                                                                                                                                                                                                                                    |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   |   | Research      and Development Costs                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   |   | Research      and development costs are expensed when incurred.  Research and      development costs were $0 and $105,448 for the year ended December 31,      2009 and 2008, respectively.                                                                                                                                                                                                                                                                                    |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   |   | Advertising      Costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   |   | The      Company expenses advertising costs as incurred in accordance with FASB      guidance. Advertising expenses were immaterial for the year ended December      31, 2009 and 2008, respectively.                                                                                                                                                                                                                                                                                    |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   |   | Segment      Reporting                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   |   | FASB      guidance establishes standards for reporting information about operating      segments on a basis consistent with the Company’s internal organization      structure as well as information about geographical areas, business      segments and major customers in financial statements. The Company operates      in three principal business segments.                                                                                                                |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   |   | Related      Parties                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   |   | For      the purposes of these financial statements, parties are considered to be      related to the Company if the Company has the ability, directly or      indirectly, to control the party or exercise significant influence over      the party in making financial and operating decisions, or vice versa, or      where the Company and the party are subject to common control or common      significant influence. Related parties may be individuals or other      entities. |

----

| SMOOTH      GLOBAL (CHINA) HOLDINGS, INC. AND SUBSIDIARIES |
|------------------------------------------------------------|
|                                                       |   |   |
|                                                       |   |   |
| NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS            |
|                                                       |   |   |
|                                                       |   |   |
|                                                       |   |   |
|                                                       | Note      4 - | SIGNIFICANT      ACCOUNTING POLICIES (continued) |
|                                                       |   |   |
|                                                       |   | Foreign      Currencies Translation |
|                                                       |   |   |
|                                                       |   | The      functional currency of the Company is Renminbi (“RMB”). Transactions      denominated in currencies other than RMB are translated into RMB at the      exchange rates quoted by the People’s Bank of China (“PBOC”) prevailing at      the date of the transactions. Monetary assets and liabilities denominated      in foreign currencies are translated into RMB using the applicable      exchange rates quoted by the PBOC at the balance sheet dates. Exchange      differences are included in the statements of changes in shareholders'      equity.  Gain and losses resulting from foreign currency      transactions are included in operations. |
|                                                       |   |   |
|                                                       |   | The      Company’s financial statements are translated into the reporting currency,      the United States Dollar (“US$”), using exchange rates in effect at each      year end for assets and liabilities and average exchange rates during each      reporting year for the consolidated statements of operations. Contributed      capital accounts are translated using the historical rate of exchange when      capital is injected.  Translation adjustments resulting from      translation of these consolidated financial statements are reflected as      accumulated other comprehensive income in the shareholders’      equity. |
|                                                       |   |   |
|                                                       |   | Translation      adjustments resulting from this process are included in accumulated other      comprehensive income (loss) in the consolidated statement of changes in      shareholders’ equity and amounted to $163,967  as of December      31, 2009, and $178,357 as of December 31, 2008.  The balance      sheet amounts with the exception of equity at December 31, 2009 were      translated at 6.837 RMB to $1.00 USD as compared to 6.854 RMB at December      31, 2008. The equity accounts were stated at their historical      rate.  The average translation rates applied to income statement      accounts for the year ended December 31, 2009 and 2008 were 6.840 RMB and      6.962 RMB, respectively. |
|                                                       |   |   |
|                                                       |   | Statement      of Cash Flows |
|                                                       |   |   |
|                                                       |   | In      accordance with FASB guidance, cash flows from the Company’s operations      are calculated based upon the functional currency.  As a result,      amounts related to assets and liabilities reported on the statement of      cash flows may not necessarily agree with changes in the corresponding      balances on the balance sheet. |
|                                                       |   |   |
|                                                       |   | Comprehensive      Income |
|                                                       |   |   |
|                                                       |   | FASB      guidance establishes standards for reporting and display of comprehensive      income, its components and accumulated balances.  Comprehensive      income as defined includes all changes in equity during a period from      non-owner sources. Accumulated comprehensive income, as presented in the      accompanying statement of changes in shareholders' equity consists of      changes in unrealized gains and losses on foreign currency      translation.  This comprehensive income is not included in the      computation of income tax expense orbenefit. |

----

| SMOOTH      GLOBAL (CHINA) HOLDINGS, INC. AND SUBSIDIARIES |
|------------------------------------------------------------|
|                                                       |   |   |
|                                                       |   |   |
| NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS            |
|                                                       |   |   |
|                                                       |   |   |
|                                                       |   |   |
|                                                       | Note      4 - | SIGNIFICANT      ACCOUNTING POLICIES (continued) |
|                                                       |   |   |
|                                                       |   | Income      Taxes |
|                                                       |   |   |
|                                                       |   | The      Company accounts for income tax in accordance with FASB ASC 740-10-25,      which requires the asset and liability approach for financial accounting      and reporting for income taxes.  Deferred tax assets and      liabilities are recognized for the future tax consequences attributable to      differences between the financial statement carrying amounts of existing      assets and liabilities and their respective tax bases.  Deferred      tax assets and liabilities are measured using enacted tax rates expected      to apply to taxable income in the years in which those temporary      differences are expected to be recovered or settled.  The effect      on deferred tax assets and liabilities of a change in tax rates is      recognized in income in the period that includes the enactment      date.  A valuation allowance related to deferred tax assets is      recorded when it is more likely than not that some portion or all of the      deferred tax assets will not be realized. |
|                                                       |   |   |
|                                                       |   | Although      the PRC Income Tax Law allows the enterprises to offset their future net      income with operating losses carried forward, enterprise need approval      from local tax authority before they can claim such tax benefit, and the      outcome of the application is generally uncertain.  Therefore,      the Managements established a 100% valuation allowance for the operation      losses carried forward and no deferred tax assets have been      recorded. |
|                                                       |   |   |
|                                                       |   | Effective      January 1, 2007, the Company adopted a new FASB guidance, which clarifies      the accounting for uncertainty in income taxes recognized in an      enterprise’s financial statements. The new FASB guidance prescribes a      recognition threshold and measurement attribute for the financial      statement recognition and measurement of a tax position taken or expected      to be taken in a tax return.  The new FASB guidance also      provides guidance on de-recognition of tax benefits, classification on the      balance sheet, interest and penalties, accounting in interim periods,      disclosure, and transition.  In accordance with the new FASB      guidance, the Company performed a self-assessment and concluded that there      were no significant uncertain tax positions requiring recognition in its      consolidated financial statements. |
|                                                       |   |   |
|                                                       |   | Earnings      (Loss) Per Share |
|                                                       |   |   |
|                                                       |   | The      Company reports earnings per share in accordance with FASB guidance, which      requires presentation of basic and diluted earnings per share in      conjunction with the disclosure of the methodology used in computing such      earnings per share.  Basic earnings (loss) per share is computed      by dividing income (loss) available to common shareholders by the      weighted-average number of common shares outstanding during the      period.  Diluted earnings per share is computed similar to basic      earnings per share except that the denominator is increased to include the      number of additional common shares that would have been outstanding if the      potential common shares had been issued and if the additional common      shares were dilutive.  There are no potentially dilutive      securities outstanding (options and warrants) for the year ended December      31, 2009 and 2008, respectively. |

----

| SMOOTH      GLOBAL (CHINA) HOLDINGS, INC. AND SUBSIDIARIES |
|------------------------------------------------------------|
|                                                       |   |   |   |
|                                                       |   |   |   |
| NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS            |
|                                                       |   |   |   |
|                                                       |   |   |   |
|                                                       |   |   |   |
|                                                       | Note      4 - | SIGNIFICANT      ACCOUNTING POLICIES (continued) |
|                                                       |   |   |   |
|                                                       |   | Statutory      Reserves |
|                                                       |   |   |   |
|                                                       |   | Pursuant      to the applicable laws in PRC, PRC entities are required to make      appropriations to three non-distributable reserve funds, the statutory      surplus reserve, statutory public welfare fund, and discretionary surplus      reserve, based on after-tax net earnings as determined in accordance with      the PRC GAAP, after offsetting any prior years’ losses. Appropriation to      the statutory surplus reserve should be at least 10% of the after-tax net      earnings until the reserve is equal to 50% of the Company's registered      capital.  Appropriation to the statutory public welfare fund is      5% to 10% of the after-tax net earnings.  The statutory public      welfare fund is established for the purpose of providing employee      facilities and other collective benefits to the employees and is      non-distributable other than in liquidation.  Beginning from      January 1, 2006, enterprise is no more required to make appropriation to      the statutory public welfare fund. No appropriations to the discretionary      surplus reserve are made at the discretion of the Board of      Directors. |
|                                                       |   |   |   |
|                                                       |   | As      of December 31, 2007, Both GRT and QTC had made appropriation to the      statutory surplus reserve fund up to 50% of their registered capital.      Therefore, GRT and QTC are not required to make further appropriation to      the statutory surplus reserve fund any more. |
|                                                       |   |   |   |
|                                                       |   | Fair      Value of Measurements |
|                                                       |   |   |   |
|                                                       |   | Accounting      principles generally accepted in the United States define fair value as      the exchange price that would be received for an asset or paid to transfer      a liability (an exit price) in the principal or most advantageous market      for the asset or liability in an orderly transaction between market      participants at the measurement date. Additionally, the inputs used to      measure fair value are prioritized based on a three-level hierarchy. This      hierarchy requires entities to maximize the use of observable inputs and      minimize the use of unobservable inputs. The three levels of inputs used      to measure fair value are as follows: |
|                                                       |   |   |   |
|                                                       |   | Level      1: | Unadjusted      quoted prices in active markets for identical assets or      liabilities |
|                                                       |   |   |   |
|                                                       |   | Level      2: | Input      other than quoted market prices that are observable, either directly or      indirectly, and reasonably available.  Observable inputs reflect      the assumptions market participants would use in pricing the asset or      liability and are developed based on market data obtained from sources      independent of the Company. |
|                                                       |   |   |   |
|                                                       |   | Level      3: | Unobservable      inputs.  Unobservable inputs reflect the assumptions that the      Company develops based on available information about what market      participants would use in valuing the asset or  liability. |
|                                                       |   |   |   |
|                                                       |   | An      asset or liability’s level within the fair value hierarchy is based on the      lowest level of any input that is significant to the fair value      measurement.  Availability of observable inputs can vary and is      affected by a variety of factors.  The Company uses judgment in      determining fair value of assets and liabilities and Level 3 assets and      liabilities involve greater judgment than Level 1 and Level 2 assets or      liabilities. |

----

| SMOOTH      GLOBAL (CHINA) HOLDINGS, INC. AND SUBSIDIARIES |
|------------------------------------------------------------|
|                                                       |   |   |
|                                                       |   |   |
| NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS            |
|                                                       |   |   |
|                                                       |   |   |
|                                                       |   |   |
|                                                       | Note      4 - | SUMMARY      OF SIGNIFICANT ACCOUNTING POLICIES (continued) |
|                                                       |   |   |
|                                                       |   | Recent      Accounting Pronouncements |
|                                                       |   |   |
|                                                       |   | In      October 2009, the FASB issued ASU No. 2009-13, Multiple-Deliverable      Revenue Arrangements—a consensus of the FASB Emerging Issues Task Force,      that provides amendments to the criteria for separating consideration in      multiple-deliverable arrangements. As a result of these amendments,      multiple-deliverable revenue arrangements will be separated in more      circumstances than under existing U.S. GAAP. The ASU does this by      establishing a selling price hierarchy for determining the selling price      of a deliverable. The selling price used for each deliverable will be      based on vendor-specific objective evidence if available, third-party      evidence if vendor-specific objective evidence is not available, or      estimated selling price if neither vendor-specific objective evidence nor      third-party evidence is available. A vendor will be required to determine      its best estimate of selling price in a manner that is consistent with      that used to determine the price to sell the deliverable on a standalone      basis. This ASU also eliminates the residual method of allocation and will      require that arrangement consideration be allocated at the inception of      the arrangement to all deliverables using the relative selling price      method, which allocates any discount in the overall arrangement      proportionally to each deliverable based on its relative selling price.      Expanded disclosures of qualitative and quantitative information regarding      application of the multiple-deliverable revenue arrangement guidance are      also required under the ASU. The ASU does not apply to arrangements for      which industry specific allocation and measurement guidance exists, such      as long-term construction contracts and software      transactions.  The ASU is effective beginning January 1, 2011.      We are currently evaluating the impact of this standard on our financial      position and results of operations. |
|                                                       |   |   |
|                                                       |   | In      October 2009, the FASB issued ASU No. 2009-14, Certain Revenue      Arrangements That Include Software Elements—a consensus of the FASB      Emerging Issues Task Force, that reduces the types of transactions that      fall within the current scope of software revenue recognition guidance.      Existing software revenue recognition guidance requires that its      provisions be applied to an entire arrangement when the sale of any      products or services containing or utilizing software when the software is      considered more than incidental to the product or service. As a result of      the amendments included in ASU No. 2009-14, many tangible products and      services that rely on software will be accounted for under the      multiple-element arrangements revenue recognition guidance rather than      under the software revenue recognition guidance. Under the ASU, the      following components would be excluded from the scope of software revenue      recognition guidance:  the tangible element of the product,      software products bundled with tangible products where the software      components and non-software components function together to deliver the      product’s essential functionality, and undelivered components that relate      to software that is essential to the tangible product’s functionality. The      ASU also provides guidance on how to allocate transaction consideration      when an arrangement contains both deliverables within the scope of      software revenue guidance (software deliverables) and deliverables not      within the scope of that guidance (non-software deliverables). The ASU is      effective beginning January 1, 2011. We are currently evaluating the      impact of this standard on our financial position and results of      operations. |

----

| SMOOTH      GLOBAL (CHINA) HOLDINGS, INC. AND SUBSIDIARIES |
|------------------------------------------------------------|
|                                                       |   |   |
|                                                       |   |   |
| NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS            |
|                                                       |   |   |
|                                                       |   |   |
|                                                       |   |   |
|                                                       | Note      4 - | SUMMARY      OF SIGNIFICANT ACCOUNTING POLICIES (continued) |
|                                                       |   |   |
|                                                       |   | Recent      Accounting Pronouncements (continued) |
|                                                       |   |   |
|                                                       |   | In      December 2007, the FASB amended its guidance on accounting for business      combinations. The new accounting guidance resulted in a change in our      accounting policy effective January 1, 2009, and is being applied      prospectively to all business combinations subsequent to the effective      date. Among other things, the new guidance amends the principles and      requirements for how an acquirer recognizes and measures in its financial      statements the identifiable assets acquired, the liabilities assumed, any      noncontrolling interest in the acquiree and the goodwill acquired. It also      establishes new disclosure requirements to enable the evaluation of the      nature and financial effects of the business combination. The adoption of      this new accounting policy did not have a significant impact on our      consolidated financial statements. |
|                                                       |   |   |
|                                                       |   | In      December 2007, the FASB issued new accounting and disclosure guidance      related to noncontrolling interests in subsidiaries (previously referred      to as "minority interests"), which resulted in a change in our accounting      policy effective January 1, 2009. Among other things, the new guidance      requires that a noncontrolling interest in a subsidiary be accounted for      as a component of equity separate from the parent's equity, rather than as      a liability. The new guidance is being applied prospectively, except for      the presentation and disclosure requirements, which have been applied      retrospectively. The adoption of this new accounting policy did not have a      significant impact on our consolidated financial    statements. |
|                                                       |   |   |
|                                                       |   | In      December 2007, the FASB issued new accounting guidance that defines      collaborative arrangements and establishes reporting requirements for      transactions between participants in a collaborative arrangement and      between participants in the arrangement and third parties. It also      establishes the appropriate income statement presentation and      classification for joint operating activities and payments between      participants, as well as the sufficiency of the disclosures related to      those arrangements. This new accounting guidance was effective for our      Company on January 1, 2009, and its adoption did not have a significant      impact on our consolidated financial statements. |
|                                                       |   |   |
|                                                       |   | In      February 2007, the FASB issued new accounting guidance that permits      entities to choose to measure many financial instruments and certain other      items at fair value. Unrealized gains and losses on items for which the      fair value option has been elected will be recognized in earnings at each      subsequent reporting date. This new accounting guidance was effective for      our Company on January 1, 2008. The Company did not elect the fair value      option for any financial instruments or other items permitted under this      guidance; therefore, its adoption had no impact on our consolidated      financial statements. |
|                                                       |   |   |
|                                                       |   | In      September 2006, the FASB issued new accounting guidance that defines fair      value, establishes a framework for measuring fair value, and expands      disclosure requirements about fair value measurements. However, in      February 2008, the FASB delayed the effective date of the new accounting      guidance for all nonfinancial assets and nonfinancial liabilities, except      those that are recognized or disclosed at fair value in the financial      statements on a recurring basis (at least annually), until January 1,      2009. The accounting guidance related to recurring fair value measurements      was effective for our Company on January 1, 2008. The adoption of this      accounting guidance did not have a significant impact on our consolidated      financial statements. |

----

| SMOOTH      GLOBAL (CHINA) HOLDINGS, INC. AND SUBSIDIARIES |
|------------------------------------------------------------|
|                                                       |   |   |
|                                                       |   |   |
| NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS            |
|                                                       |   |   |
|                                                       |   |   |
|                                                       |   |   |
|                                                       | Note      5 - | PREPAID      EXPENSES |
|                                                       |   |   |
|                                                       |   | Prepaid      expenses consists of the following: |

|                                                                                                                                                                                                                                                                                                                                                                                                                                         |   | December      31, |   |   | December      31, |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------|--------|--------|-------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                         |   | 2009              |   |   | 2008              |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |              |   |   |              |   |
| Prepaid      telephone number usage fees                                                                                                                                                                                                                                                                                                                                                                                                     |   | $                 | -      |   |              | $      | 28,823 |   |
| Advance      to telecommunication carriers                                                                                                                                                                                                                                                                                                                                                                                                   |   |              | 7,313  |   |              |   | 43,769 |   |
| Advance      to purchase equipment *                                                                                                                                                                                                                                                                                                                                                                                                         |   |              | -      |   |              |   | 302,005 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                         |   | $                 | 7,313  |   |              | $      | 374,597 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |              |   |   |              |   |   |   |
| *      Advance to purchase equipment represents cash payments to three venders to      purchase telecommunication equipments which will be used in the Company's      new business lines. In late November 2009, the parties could not agree on      the final terms of the contracts, and determined it is the best interest      of all parties to terminate the contracts. Accordingly, the venders refund      all the advance payments. |   |

|   | Note      6 - | PROPERTY      AND EQUIPMENT, NET                                                                              |
|--------|---------------|---------------------------------------------------------------------------------------------------------------|
|   |          |                                                                                                          |
|   |          | The      following is a summary of property, plant and equipment-at cost, less      accumulated depreciation: |
|   |          |                                                                                                          |

|                                                                                                                                      |   | December      31, |     |   | December      31, |   |
|-------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------|----------|--------|-------------------|--------|
|                                                                                                                                      |   | 2009              |     |   | 2008              |   |
|                                                                                                                                      |   |              |     |   |              |   |
| Network      and office equipment                                                                                                         |   | $                 | 123,296  |   |              | $      | 121,660 |   |
| Leasehold      Improvements                                                                                                               |   |              | 325,409  |   |              |   | 324,603 |   |
|                                                                                                                                      |   |              | 448,705  |   |              |   | 446,263 |   |
|                                                                                                                                      |   |              |     |   |              |   |   |   |
| Less:      Accumulated depreciation                                                                                                       |   |              | (318,018 | )      |              |   | (230,748 | ) |
|                                                                                                                                      |   |              |     |   |              |   |   |   |
|      Total                                                                                                       |   | $                 | 130,687  |   |              | $      | 215,515 |   |
|                                                                                                                                      |   |              |     |   |              |   |   |   |
| Depreciation      expense charged to operations was $86,648 and $83,357 for the year ended      December 31, 2009 and 2008, respectively. |   |

----

| SMOOTH      GLOBAL (CHINA) HOLDINGS, INC. AND SUBSIDIARIES |
|------------------------------------------------------------|
|                                                       |   |   |
|                                                       |   |   |
| NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS            |
|                                                       |   |   |
|                                                       |   |   |
|                                                       |   |   |
|                                                       | Note      7 - | LONG-TERM      INVESTMENT |
|                                                       |   |   |
|                                                       |   | Long-term      investment consists of thefollowing: |

|                                                           |   | December      31, |   |   | December      31, |
|----------------------------------------------------------------|--------|-------------------|--------|--------|-------------------|
|                                                           |   | 2009              |   |   | 2008              |
|                                                           |   |              |   |   | Equity            |   |   |   |   |   | Equity |
|                                                           |   |                   |   |   | Ownership         |   |   |  |   |   | Ownership |
| Description                                                    |   | Amount            |   |   | Percentage        |   |   | Amount |   |   | Percentage |
|                                                                |   |              |   |   |              |   |   |   |   |   |   |
| Joint-venture      with Beijing Zhongheng Technology Co., Inc. |   |              | -      |   |              |   | - |   |   |   | 233,434 |   |   |   | 10% |
|                                                           |   | $                 | -      |   |              |   |   |   |   | $ | 233,434 |   |   |   |   |

|   |          | Joint-venture      with Beijing Zhongheng Technology Co., Inc.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|--------|---------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |          | On      October 9, 2008, GRT executed an agreement with Beijing Zhongheng      Technology Co., Inc., pursuant to which, GRT agreed to invest $233,434      (RMB 1,600,000), and Beijing Zhongheng Technology agreed to invest      $350,151 (RMB 2,400,000), totaling $584,855 (RMB 4,000,000) to establish a      joint-venture to sell international call-forwarding cards.  On      October 21, 2008, GRT wired $233,434 (RMB 1,600,000) to Beijing Zhongheng      Technology Co., Inc.                                                                                                               |
|   |          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |          | On      November 25, 2008, the parties amended the agreement, pursuant to which      both parties agreed that Beijing Zhongheng Technology Co., Inc. will      increase its investment to $2,100,960 (RMB      14,400,000).  Accordingly, Beijing Zhongheng Technology Co.,      Inc. owns 90% equity ownership interest of the joint-venture and GRT owns      the remaining 10% equity ownership interest.  As the project is      currently ongoing, the Management believes the amount invested      approximates the fair value and uses the cost method to record this      transaction. |
|   |          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |          | On      December 10, 2009, the parties anticipated that the joint-venture would      not be able to generate profit due to less revenue than originally      expected, and determined it is the best interest of all parties to      terminate the joint-venture. Accordingly, Beijing Zhongheng Technology      Co., Inc. refunded the original payment of $233,434 (RMB 1,600,000) to      GRT.                                                                                                                                                                                                                  |
|   |          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | Note      8 - | CONTRACT      SECURITY DEPOSIT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   |          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |          | Contract      security deposit consists of thefollowing:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |

|                                                                                                          |   | December      31, |    |   | December      31, |   |
|---------------------------------------------------------------------------------------------------------------|--------|-------------------|---------|--------|-------------------|--------|
|                                                                                                          |   | 2009              |    |   | 2008              |   |
| Security      deposit for GRT's public phone distribution contract with      CUBJ                             |   | $                 | -       |   |              | $      | 1,576 |   |
| Security      deposit for GRT and Beijing Telecom' Trust and Indemnity Agreement      with Ms. Yianfang Jin * |   |              | 87,755  |   |              |   | 87,538 |   |
| Security      deposit for Yurui Changtong Science Technology Co., Ltd.**                                      |   |              | 141,871 |   |              |   | - |   |
|                                                                                                          |   | $                 | 229,626 |   |              | $      | 89,114 |   |

|   |   | *On      September 20, 2007, Ms. Yianfang Jin who owns a 98% equity ownership      interest in GRT executed a Trust and Indemnity      Agreements,  pursuant to which Ms. Jin assigned to Beijing      Telecom all of the beneficial interest in her equity ownership interest in      GRT, as more fully disclosed in Note 1. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                     |
|   |   | **On      November 16, 2009, GRT executed an agency agreement with Yurui Changtong      Science Technology Co., Ltd to run a new business named "Wireless Public      Phone" beginning on May 1, 2010. Pursuant to the agreement, GRT wired a      cash of $141,871 as a security deposti for the  agreement.                            |

----

| SMOOTH      GLOBAL (CHINA) HOLDINGS, INC. AND SUBSIDIARIES |
|------------------------------------------------------------|
|                                                       |   |   |
|                                                       |   |   |
| NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS            |
|                                                       |   |   |
|                                                       |   |   |
|                                                       |   |   |
|                                                       | Note      9 - | ACCRUED      EXPENSES |
|                                                       |   |   |
|                                                       |   | Accrued      expenses consist of the following: |

|                                      |   | December      31, |   |   | December      31, |   |
|-------------------------------------------|--------|-------------------|--------|--------|-------------------|--------|
|                                      |   | 2009              |   |   | 2008              |   |
|                                      |   |              |   |   |              |   |
| Employee      pension and benefit payable |   | $                 | 19,709 |   |              | $      | 17,546 |   |
| Accrued      professional fees            |   |              | 35,129 |   |              |   | 36,121 |   |
|                                      |   | $                 | 54,838 |   |              | $      | 53,667 |   |

|   |                  |                                                      |
|--------|-----------------------|-----------------------------------------------------------|
|   | Note      10 -   | AGREEMENT      SECURITY DEPOSIT                           |
|   |                  |                                                      |
|   |                  | Agreement      security deposit consists of thefollowing: |

|                                                      |   | December      31, |   |   | December      31, |   |
|-----------------------------------------------------------|--------|-------------------|--------|--------|-------------------|--------|
|                                                      |   | 2009              |   |   | 2008              |   |
|                                                      |   |              |   |   |              |   |
| Security      deposit for the Business Transfer Agreement |   | $                 | -      |   |              | $      | 320,971 |   |
|                                                      |   | $                 | -      |   |              | $      | 320,971 |   |

|   |                 | On      October 18, 2008, GRT signed a “"Business Transfer Agreement" with      Shanghai Zhen Guang Travel Agent and Shanghai North Travel Agent, pursuant      to which, Shanghai Zhen Guang Travel Agent and Shanghai North Travel Agent      agreed to acquire GRT’s call-forwarding operation in Shanghai area for      $511,098 (RMB 3,500,000). On November 30, 2008, the parties agreed to      increase the sales price to $729,480  (RMB 5,000,000) and the      deal will be closed in December 2009.  On October 21, 2008, GRT      received $291,792 (RMB 2,000,000) from Shanghai Zhen Guang Travel Agent,      and $29,179 (RMB 200,000) from Shanghai North Travel Agent as security      deposit for the agreement. |
|--------|----------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   |                 | On      November 25, 2009, the parties could not agree on the final terms of the      transaction, and determined it is the best interest of all parties to      terminate the transaction. Accordingly, GRT refunded the security deposit      of $291,792 (RMB 2,000,000) to Shanghai Zhen Guang Travel Agent, and      $29,179 (RMB 200,000) to Shanghai North Travel Agent.                                                                                                                                                                                                                                                                                                                                                                                     |
|   |                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   |                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   | Note      11 -  | CONSULTANT      FEES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   |                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   |                 | Consultant      fees consist of the following:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |

|                                                                                                     |   | For      the Year Ended |   |
|----------------------------------------------------------------------------------------------------------|--------|-------------------------|--------|
|                                                                                                     |   | December      31,       |   |
|                                                                                                     |   | 2009                    |   |   | 2008 |   |
|                                                                                                     |   |                    |   |   |   |   |
| Investor      relationship fees                                                                          |   | $                       | -      |   |   | $ | 50,271 |   |
| Acquisition      consultancy fees                                                                        |   |                    | -      |   |   |   | 312,000 |   |
| PRC      Legal consultant for acquisition                                                                |   |                    | 11,022 |   |   |   | 100,000 |   |
| Amortization      of costs of common stock issued for compensation of consultant      services (Note 16) |   |                    | 29,333 |   |   |   | 231,880 |   |
| Other      consultancy fees                                                                              |   |                    | 880    |   |   |   | 12,233 |   |
|                                                                                                     |   | $                       | 41,235 |   |   | $ | 706,384 |   |

----

| SMOOTH      GLOBAL (CHINA) HOLDINGS, INC. AND SUBSIDIARIES |
|------------------------------------------------------------|
|                                                       |   |   |
|                                                       |   |   |
| NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS            |
|                                                       |   |   |
|                                                       |   |   |
|                                                       |   |   |
|                                                       | Note      12 -   | QTC      SUPPLEMENTAL INCOME |
|                                                       |   |   |
|                                                       |   | During      2006 and 2005, QTC entered a non-exclusive distribution contract with      China Unicom (Beijing) Limited (“CUBJ”) F/K/A China Netcom (Beijing)      Corporation Limited to distribute its traditional fixed line call      times.  The tariff was initially collected from end users by      CUBJ, which in turn would pay QTC according to the percentage sharing as      mentioned in the distribution agreement.  In January 2007, CUBJ      notified the Company to terminate the distribution      contract.  Based on the review of the implementation of the      distribution contract, CUBJ agreed to pay a supplemental payment of      $37,344 (RMB 260,000) to QTC.  QTC received this payment in June      2008. |
|                                                       |   |   |
|                                                       |   |   |
|                                                       | Note      13 - | RELATED      PARTIES TRANSACTIONS |
|                                                       |   |   |
|                                                       |   | Compensation      to Ms. Zheng Shuying, CEO |
|                                                       |   |   |
|                                                       |   | The      Company paid $0 and $85,650 in cash to Ms. Zheng Shuying, CEO, as      compensation for the year ended December 31, 2009 and 2008,      respectively. |
|                                                       |   |   |
|                                                       |   | Due      to officers consists of thefollowing: |

|                                              |   | December      31, |    |   | December      31, |   |
|---------------------------------------------------|--------|-------------------|---------|--------|-------------------|--------|
|                                              |   | 2009              |    |   | 2008              |   |
| (1) Due      to Ms. Shuying Zheng, CEO       |   | $                 | 78,163  |   |              | $      | - |   |
| (2)      GRT Office rent due to Mr. Guoqing Xu    |   |              | 17,990  |   |              |   | - |   |
| (3)      QTC Office rent due to Ms. Shuying Zheng |   |              | 17,551  |   |              |   | - |   |
|                                              |   | $                 | 113,704 |   |              | $      | - |   |

|   | (1)  | Due      to Ms. Shuying Zheng                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|--------|-----------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   |      | Due      to Ms. Shuying Zheng, CEO of the Company, represents loans from Ms. Zheng      to finance the Company's operations due to lack of cash resources. These      loans are unsecured, non-interest bearing and have no fixed terms of      repayment, therefore, deemed payable on demand.  Cash flows from      these activities are classified as cash flows from financing      activities.                                                                                                  |
|   |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | (2)  | GRT      Lease                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   |      | GRT      rents office premise at the market rate from Mr. Guoqing Xu, President of      QTC.  The lease is non-cancelable and will expire in June      2010.  Rent expense amounted to $17,990 and $9,483 for the year      ended December 31, 2009 and 2008, respectively.  As of December      31, 2009, there was an outstanding balance of $17,990 due to Mr.      Xu.  The future minimum lease payments for the leases are as      follows at December 31, 2009: |

| The      Six Months Ending June 30, 2010 |   | $ | 9,629 |   |   |   |   |
|------------------------------------------|--------|---|-------|--------|--------|--------|--------|

|   | (3)  | QTC      Lease                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|--------|-----------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   |      | QTC      rents office premise at the market rate from Ms. Shuying Zheng,      CEO.  The lease is non-cancelable and will expire in December      2010.  Rent expense amounted to $17,551 and $17,236 for the year      ended December 31, 2009 and 2008, respectively.  As of December      31, 2009, there was an outstanding balance of $17,551 due to Ms.      Zheng.  The future minimum lease payments for the leases are as      follows at December 31, 2009: |

| The      Year Ending December 31, 2010 |   | $ | 17,551 |   |   |   |   |
|----------------------------------------|--------|---|--------|--------|--------|--------|--------|

----

| SMOOTH      GLOBAL (CHINA) HOLDINGS, INC. AND SUBSIDIARIES |
|------------------------------------------------------------|
|                                                       |   |   |
|                                                       |   |   |
| NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS            |
|                                                       |   |   |
|                                                       |   |   |
|                                                       |   |   |
|                                                       | Note      14 -  | SEGMENT      REPORTING |
|                                                       |   |   |
|                                                       |   | GRT      Operation |
|                                                       |   |   |
|                                                       |   | GRT      operated in three reportable business segments that are determined based      upon differences in products and services. GRT does not allocate any      operating expenses or assets to its three business segments as management      does not use this information to measure the performance of the operating      segments. Certain costs of revenues are shared between business      segments.  Also, no measures of assets by segment are reported      and used by the chief operating decision maker. Hence, GRT has not made      disclosure of total assets by reportable segments. |
|                                                       |   |   |
|                                                       |   | Summarized      information by business segment for the year ended December 31, 2009 and      2008 is as follows: |

|                                                                  |   | For      the Year Ended |    |
|-----------------------------------------------------------------------|--------|-------------------------|---------|
|                                                                  |   | December      31,       |    |
|                                                                  |   | 2009                    |    |   | 2008 |   |
| REVENUE                                                               |   |                    |    |   |   |   |
|      GRT      public telephone service       |   | $                       | 1,601   |   |   | $ | 16,265 |   |
|      GRT      VoIP call time distribution    |   |                    | 67,104  |   |   |   | 212,305 |   |
|      GRT      sales of call forwarding cards |   |                    | -       |   |   |   | 213,953 |   |
|                                                                  |   |                    |    |   |   |   |   |   |
| COST      OF SALES                                                    |   |                    |    |   |   |   |   |   |
|      GRT      public telephone service       |   | $                       | 6,944   |   |   | $ | 22,981 |   |
|      GRT      VoIP call time distribution    |   |                    | 76,876  |   |   |   | 163,309 |   |
|      GRT      sales of call forwarding cards |   |                    | -       |   |   |   | 178,935 |   |
|                                                                  |   |                    |    |   |   |   |   |   |
| GROSS      PROFITS                                                    |   |                    |    |   |   |   |   |   |
|      GRT      public telephone service       |   | $                       | (5,343  | ) |   | $ | (6,716 | ) |
|      GRT      VoIP call time distribution    |   |                    | (9,772  | ) |   |   | 48,996 |   |
|      GRT      sales of call forwarding cards |   |                    | -       |   |   |   | 35,018 |   |
|                                                                  |   |                    |    |   |   |   |   |   |
|                                                                  |   | December      31,       |    |   | December      31, |   |
|                                                                  |   |                    | 2009    |   |   |   | 2008 |   |
|                                                                  |   |                    |    |   |   |   |   |   |
| TOTAL      ASSETS OF GRT                                              |   | $                       | 245,681 |   |   | $ | 725,765 |   |

|   | Note15      -   | REVERSE      STOCK SPLIT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|--------|----------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   |                 | Effective      on July 31, 2007, The Company filed with the Nevada Secretary of State a      Certificate of Amendment to its Articles of Incorporation.  The      amendment effected a reverse stock split of the Company's common stock in      the ratio of 1:30.  The number of common stocks issued and      outstanding immediately after the reverse stock split was 1,701,375,      including an addition of 40 shares for rounding up fractional      shares.  All share and per share information included in these      consolidated financial statements have been adjusted to reflect this      reverse stock split. |

----

| SMOOTH      GLOBAL (CHINA) HOLDINGS, INC. AND SUBSIDIARIES |
|------------------------------------------------------------|
|                                                       |   |   |
|                                                       |   |   |
| NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS            |
|                                                       |   |   |
|                                                       |   |   |
|                                                       |   |   |
|                                                       | Note      16 -  | COMMON      STOCK |
|                                                       |   |   |
|                                                       |   | On      August 20, 2007, the Company engaged a consultant, Jun Chen, for a period      September 2007 through April 2008.  The consultant provides      technical service to the Company.  The terms of the agreement      are for the consultant to receive 1,080,000 shares of common stock valued      at $0.11 per share, totaling $118,800, which should be amortized over the      beneficial period.  Due to the reverse merger, we only recorded      the consultant cost from the acquisition date, October 24, 2007, through      December 31, 2007, which was $29,700. The consultant cost for the year      ended December 31, 2008 was $59,400. |
|                                                       |   |   |
|                                                       |   | On      August 20, 2007, the Company engaged a consultant, Bayaer, for a period      August 28, 2007 through August 27, 2009.   The consultant      provides the Company with legal service.  The terms of the      agreement are for the consultant to receive 800,000 shares of common stock      valued at $0.11 per share, totaling $88,000, which should be amortized      over the beneficial period.  Due to the reverse merger, we only      recorded the consultant cost from the acquisition date, October 24, 2007,      through December 31, 2007, which was $7,333.  The consultant      cost for the year ended December 31, 2008 was $44,000. |
|                                                       |   |   |
|                                                       |   | On      August 21, 2007, the Company engaged a consultant, Jingli      Yao,  for a period September 10, 2007 through September 9,      2008.   The consultant provides the Company with promotion      service.  The terms of the agreement are for the consultant to      receive 1,320,000 shares of common stock valued at $0.11 per share,      totaling $145,200, which should be amortized over the beneficial      period.  Due to the reverse merger, we only recorded the      consultant cost from the acquisition date, October 24, 2007, through      December 31, 2007, which was $24,200.  The consultant cost for      the year ended December 31, 2008 was $96,800. |
|                                                       |   |   |
|                                                       |   | On      August 22, 2007, the Company engaged a consultant, Minxian      Zeng,  for a period August 22, 2007 through June 21,      2008.  The Company retained the consultant as a general      coordinator.  The terms of the agreement are for the consultant      to receive 480,000 shares of common stock valued at $0.11 per share,      totaling $52,800, which should be amortized over the beneficial      period.  Due to the reverse merger, we only recorded the      consultant cost from the acquisition date, October 24, 2007, through      December 31, 2007, which was $10,560.  The consultant cost for      the year ended December 31, 2008 was $31,680. |
|                                                       |   |   |
|                                                       |   | On      October 24, 2007 Smooth Global (China) completed the acquisition of all      the registered capital stock of Smooth Global.  In exchange for      the capital stock of Smooth Global, Smooth Global (China) issued      33,000,000 shares of its common stock to the prior owners of Smooth      Global.  Since the stockholders of Smooth Global owned a      majority of the outstanding shares of the Company's common stock      immediately following the share exchange, this transaction was treated for      accounting purposes as  a recapitalization and reverse      merger. |

----

| SMOOTH      GLOBAL (CHINA) HOLDINGS, INC. AND SUBSIDIARIES |
|------------------------------------------------------------|
|                                                       |   |   |
|                                                       |   |   |
| NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS            |
|                                                       |   |   |
|                                                       |   |   |
|                                                       |   |   |
|                                                       | Note      17 -  | INCOME      TAXES |
|                                                       |   |   |
|                                                       |   | The      Company’s operating subsidiaries, QTC and GRT are governed by the PRC      Income Tax Law and various local income tax laws, pursuant to which a      company generally is subject to an income tax at an effective rate of 33%      (30% national income tax and 3% local income tax) on income as reported in      its statutory financial statements after appropriate tax      adjustments. |
|                                                       |   |   |
|                                                       |   | Beginning      January 1, 2008, the new Enterprise Income Tax (“EIT”) law has replaced      the old laws for Domestic Enterprises (“DES”) and Foreign Invested      Enterprises (“FIEs”). |
|                                                       |   |   |
|                                                       |   | The      key changes are: |
|                                                       |   |   |
|                                                       |   | a.      The new standard EIT rate of 25% replaces the 33% rate applicable to both      DES and FIEs, except for High Tech companies that pay a reduced rate of      15%; |
|                                                       |   |   |
|                                                       |   | b.      Companies established before March 16, 2007 continue to enjoy tax holiday      treatment approved by local government for a grace period of either for      the next 5 years or until the tax holiday term is completed, whichever is      sooner. |
|                                                       |   |   |
|                                                       |   | In      addition, the new EIT also grants tax holidays to entities operating in      certain beneficial industries, such as the agriculture, fishing, and      environmental protection. Entities in beneficial industries enjoy a      three-year period tax exempt and a three-year period with 50% reduction in      the income tax rates. |
|                                                       |   |   |
|                                                       |   | QTC      Income Tax |
|                                                       |   |   |
|                                                       |   | QTC      is subject to effective income tax rate of 25% beginning from January 1,      2008. |
|                                                       |   |   |
|                                                       |   | The      provision for income taxes consists of the  following: |

|                                                    |   | For      the Year Ended |   |
|---------------------------------------------------------|--------|-------------------------|--------|
|                                                    |   | December      31,       |   |
|                                                    |   | 2009                    |   |   | 2008 |   |
| Provision      for US Income Tax                        |   | $                       | -      |   |   | $ | - |   |
| Provision      for PRC income tax                       |   |                    | -      |   |   |   | - |   |
|    Total      provision for income taxes |   | $                       | -      |   |   | $ | - |   |

|   |   | The      following table reconciles the US and PRC statutory rates to effective tax      rate: |
|--------|--------|------------------------------------------------------------------------------------------------|

|                                                         |   | For      the Year Ended |    |
|--------------------------------------------------------------|--------|-------------------------|---------|
|                                                         |   | December      31,       |    |
|                                                         |   | 2009                    |    |   | 2008 |   |
| U.S.      Statutory rate                                     |   |                    | 34.00%  |   |   |   | 34.00% |   |
| Foreign      income not recognized in USA                    |   |                    | -34.00% |   |   |   | -34.00% |   |
| China      income taxes                                      |   |                    | 25.00%  |   |   |   | 25.00% |   |
| Effect      of tax holiday                                   |   |                    | -25.00% |   |   |   | -25.00% |   |
|      Effective      income tax rate |   |                    |    |   |   |   |   |   |

----

| SMOOTH      GLOBAL (CHINA) HOLDINGS, INC. AND SUBSIDIARIES |
|------------------------------------------------------------|
|                                                       |   |   |
|                                                       |   |   |
| NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS            |
|                                                       |   |   |
|                                                       |   |   |
|                                                       |   |   |
|                                                       | Note      17 -  | INCOME      TAXES (continued) |
|                                                       |   |   |
|                                                       |   | GRT      Income Tax |
|                                                       |   |   |
|                                                       |   | According      to “Inland Revenue Law No. [2002] 208 from Finance Department”, if an      entity employed a required number of unemployed labor force for a term of      three years, it will be eligible to claim a full exemption from EIT ,      business taxes, city construction levy and education surcharge for a      three-year period. GRT fulfilled the criteria and its tax exemption claim      was approved by the Beijing Local Taxation Bureau (Shunyi Branch). As a      result, GRT exempted from EIT from January 1, 2005 through December 31,      2007, and exempted from business taxes, city construction levy and      education surcharge from January 1, 2006 to December 31,    2008. |
|                                                       |   |   |
|                                                       |   | The      provision for income taxes consists of the  following: |

|                                                    |   | For      the Year Ended |   |
|---------------------------------------------------------|--------|-------------------------|--------|
|                                                    |   | December      31,       |   |
|                                                    |   | 2009                    |   |   | 2008 |   |
|                                                    |   |                    |   |   |   |   |
| Provision      for US Income Tax                        |   | $                       | -      |   |   | $ | - |   |
| Provision      for PRC income tax                       |   |                    | -      |   |   |   | - |   |
|    Total      provision for income taxes |   | $                       | -      |   |   | $ | - |   |

|   |   | The      following table reconciles the US and PRC statutory rates to GRT’s      effective tax rate: |
|--------|--------|------------------------------------------------------------------------------------------------------------|

|                                                         |   | For      the Year Ended |    |
|--------------------------------------------------------------|--------|-------------------------|---------|
|                                                         |   | December      31,       |
|                                                         |   | 2009                    |    |   | 2008 |   |
|                                                         |   |                    |    |   |   |   |
| U.S.      Statutory rate                                     |   |                    | 34.00%  |   |   |   | 34.00% |   |
| Foreign      income not recognized in USA                    |   |                    | -34.00% |   |   |   | -34.00% |   |
| China      income taxes                                      |   |                    | 25.00%  |   |   |   | 25.00% |   |
| Effect      of tax holiday                                   |   |                    | -25.00% |   |   |   | -25.00% |   |
|      Effective      income tax rate |   |                    | -       |   |   |   | - |   |

----

| SMOOTH      GLOBAL (CHINA) HOLDINGS, INC. AND SUBSIDIARIES |
|------------------------------------------------------------|
|                                                       |   |   |
|                                                       |   |   |
| NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS            |
|                                                       |   |   |
|                                                       |   |   |
|                                                       |   |   |
|                                                       | Note      18 - | CONCENTRATIONS      AND RISKS |
|                                                       |   |   |
|                                                       |   | (a)      Major Suppliers |
|                                                       |   |   |
|                                                       |   | GRT      signed non-exclusive agreements with CUSH and CUSX to facilitate the      international call forwarding business and to distribute VoIP call time      purchased from the carriers.  If the strategic relationship with      either CUSH and CUSX is terminated or scaled-back, or if CUSH and CUSX      alter the co-operative arrangements, GRT’s revenue from international call      forwarding service and VoIP call time distribution might be adversely      affected. |
|                                                       |   |   |
|                                                       |   | (b)      Major Customer |
|                                                       |   |   |
|                                                       |   | GRT      had a diversified customer basis for VoIP call time distribution. None of      the customers accounted for 5% or more of the total revenue from VoIP call      time distribution in the year ended December 31, 2009 and 2008,      respectively; |
|                                                       |   |   |
|                                                       |   | In      the year ended December 31, 2008, one customer accounted for 94% of the      total revenue from sales of call forwarding cards. |
|                                                       |   |   |
|                                                       |   | (c)      Fluctuation in Revenue from Call Forwarding Service |
|                                                       |   |   |
|                                                       |   | GRT      derives revenue from sales of call forwarding cards.  The market      for our call forwarding service are those Chinese residents who travel      abroad for business or personal reasons.   The demand for      call forwarding cards is not stable, as it is high in busy travel seasons,      and low in less busy travel seasons.  Accordingly, GRT's revenue      from call forwarding service fluctuates time by time. |
|                                                       |   |   |
|                                                       | Note      19 -  | COMMITMENTS      AND CONTINGENCIES |
|                                                       |   |   |
|                                                       |   | PRC's      political and economic system |
|                                                       |   |   |
|                                                       |   | The      Company faces a number of risks and challenges not typically associated      with companies in North America and Western Europe, since its assets exist      solely in the PRC, and its revenues are derived from its operations      therein.  The PRC is a developing country with an early stage      market economic system, overshadowed by the state.  Its      political and economic systems are very different from the more developed      countries and are in a state of change.  The PRC also faces many      social, economic and political challenges that may produce major shocks      and instabilities and even crises, in both its domestic arena and in its      relationships with other countries, including the United      States.  Such shocks, instabilities and crises may in turn      significantly and negatively affect the Company's    performance. |

----

| SMOOTH      GLOBAL (CHINA) HOLDINGS, INC. AND SUBSIDIARIES |
|------------------------------------------------------------|
|                                                       |   |   |
|                                                       |   |   |
| NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS            |
|                                                       |   |   |
|                                                       |   |   |
|                                                       |   |   |
|                                                       | Note      19 -  | COMMITMENTS      AND CONTINGENCIES (continued) |
|                                                       |   |   |
|                                                       |   | Governmental      control of currency conversion |
|                                                       |   |   |
|                                                       |   | The      PRC government imposes controls on the convertibility of Renminbi into      foreign currencies and, in certain cases, the remittance of currency out      of the PRC. The Company receives all of its revenues in Renminbi, which is      currently not a freely convertible currency. Shortages in the availability      of foreign currency may restrict the Company’s ability to remit sufficient      foreign currency to satisfy foreign currency denominated      obligations.  Under existing PRC foreign exchange regulations,      payments of current account items, including profit distributions,      interest payments and expenditures from the transaction, can be made in      foreign currencies without prior approval from the PRC State      Administration of Foreign Exchange by complying with certain procedural      requirements. However, approval from appropriate governmental authorities      is required where Renminbi is to be converted into foreign currency and      remitted out of China to pay capital expenses such as the repayment of      bank loans denominated in foreign currencies. |
|                                                       |   |   |
|                                                       |   | The      PRC government may also at its discretion restrict access in the future to      foreign currencies for current account transactions. If the foreign      exchange control system prevents the Company from obtaining sufficient      foreign currency to satisfy its currency demands, the Company may not be      able to pay certain of its expenses as they come  due. |

----

----

----

|  Name         |  Age |  Position with the      Company                                 | DirectorSince |
|--------------------|-----------|----------------------------------------------------------------------|---------------|
| Zheng      Shuying | 43        | Chief      Executive Officer, Chief Financial      Officer, Director | 2007          |
| Liu      Meifeng   | 48        | Director                                                             | 2007          |
| Jin      Guodong   | 60        | Director                                                             | 2007          |

----

|               |  Year |  Salary |  Bonus | StockAwards | OptionAwards | OtherCompensation |
|--------------------|------------|--------------|-------------|-------------|--------------|-------------------|
| Zheng      Shuying | 2009       | $0           | --          | --          | --           | --                |
|               | 2008       | $85,650      | --          | --          | --           | --                |
|               | 2007       | $96,264      | --          | --          | --           | --                |

----

|               | Number      ofsecuritiesunderlyingoption | Percentof      totaloptionsgranted      toemployeesin      fiscal | ExercisePrice | Expiration | Potential      realizablevalue      at assumedannual      rates ofappreciationfor      option term |
|--------------------|------------------------------------------|-------------------------------------------------------------------|---------------|------------|----------------------------------------------------------------------------------------------------|
|               | granted                                  | year                                                              | ($/share)     | Date       | 5%                                                                                                 | 10% |
| Zheng      Shuying | --                                       | --                                                                | --            | --         | --                                                                                                 | -- |

|               | Number      ofShares      ThatHave      NotVested | Market      Valueof      Shares ThatHave      NotVested |
|--------------------|---------------------------------------------------|---------------------------------------------------------|
| Zheng      Shuying | --                                                | --                                                      |

|   | · | each      shareholder known by us to own beneficially more than 5% of our common      stock; |
|--------|--------|----------------------------------------------------------------------------------------------|

|   | · | Zheng      Shuying, our Chief ExecutiveOfficer; |
|--------|--------|-------------------------------------------------|

|   | · | each      of our directors; and |
|--------|--------|---------------------------------|

|   | · | all      directors and executive officers as agroup. |
|--------|--------|------------------------------------------------------|

----

|                                        | Amount      and Nature |          |
|---------------------------------------------|------------------------|---------------|
| Name      and Address                       | of      Beneficial     | Percentage    |
| of Beneficial      Owner(1)                 | Ownership(2)           | of      Class |
| Zheng      Shuying                          | 20,000,000             | 52.1%         |
| Liu      Meifeng                            | 0                      | --            |
| Jin      Guodong                            | 1,700,000              | 4.4%          |
|                                        |                   |          |
| All      officers and directors (3 persons) | 21,700,000             | 56.5%         |

|   | (1)   The      address of each shareholder is Room 618, Building Hui An Xuan, +17 Anyuan      Road, Chaoyang District, Beijing, P.R. China  100101. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2)    All      shares are owned of record and  beneficially. |
|--------|-----------------------------------------------------------------------------------|

----

|         |   | (a)      Exhibit List                                                                                                                                                                                                                                                                      |
|--------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3-a     |   | Articles      of Incorporation – filed as an exhibit to the Registration Statement on      Form 10-SB (SEC File #0-25707) filed on April 2, 1999, and incorporated      herein by reference.                                                                                              |
| 3-a(1)  |   | Certificate      of Amendment of Articles of Incorporation - filed as an exhibit to the      Current Report on Form 8-K filed on August 2, 2007, and incorporated      herein by reference.                                                                                                     |
| 3-b     |   | Restated      By-laws – filed as an exhibit to the Registration Statement on Form 10-SB      (SEC File #0-25707) filed on April 2, 1999, and incorporated herein by      reference.                                                                                                       |
| 10-a    |   | Trust      and Indemnity Agreement dated September 20, 2007 among Smooth Global      (Beijing) Telecom Science Limited and Jin Yanfang and Wang Yinxia – filed      as an exhibit to the Current Report on Form 8-K filed on October 29, 2007,      and incorporated herein by reference. |
|         |   |                                                                                                                                                                                                                                                                                            |   |
| 21           |   | Subsidiaries      –                                                                                                                                                                                                                                                                  | Gold      Profit (Asia) Group Limited, a BVI corporation |
|         |   |                                                                                                                                                                                                                                                                                            | Beijing      Quan Tong Chang Information Service Limited, a PRC    corporation |
|         |   |                                                                                                                                                                                                                                                                                            | Smooth      Global Services Limited, a BVI corporation |
|         |   |                                                                                                                                                                                                                                                                                            | Smooth      Global (Beijing) Telecom Science Limited, a PRC  corporation |
|         |   |                                                                                                                                                                                                                                                                                            |   |
| 31           |   | Rule      13a-14(a) Certification                                                                                                                                                                                                                                                               |
|         |   |                                                                                                                                                                                                                                                                                            |
| 32           |   | Rule      13a-14(b) Certification                                                                                                                                                                                                                                                               |

----

|   | Smooth      Global (China) Holdings, Inc.                                       |
|--------|---------------------------------------------------------------------------------|
|   |                                                                            |
|   | By: /s/ Zheng      Shuying                                                      |
|   |             Zheng Shuying, Chief ExecutiveOfficer |

----