UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

(Mark One)

(Mark One)

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

	FOR THE FISCAL YEAR ENDED DECEMBER 31, 2010

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

	For the transition period from _________ to __________

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

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2009

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

For the transition period from _________ to __________

Commission File Number 0-25707

SMOOTH GLOBAL (CHINA) HOLDINGS, INC.

(Exact Name of Registrant as Specified in Its Charter)

NEVADA 91-1948355

NEVADA	91-1948355
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

(State or other jurisdiction of (I.R.S. Employer

incorporation or organization) Identification No.)

Room 618, +17 Anyuan Road, Chaoyang District, Beijing, P.R. China 100029

(Address of principal executive offices)

(011)- 86-10-6498-7788

(Issuer's telephone number)

Securities Registered Pursuant to Section 12(b) of the Exchange Act: NONE

Securities Registered Pursuant to Section 12(g) of the Exchange Act:

COMMON STOCK, $.0001 PAR VALUE

(Title of Class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 406 of the Securities Act. Yes __ No √

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes __ No √

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes √ No __

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files.) Yes ___ No _____

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

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

Large accelerated filer ___ Accelerated filer ___ Non-accelerated filer ~~Small~~ ___ Smaller reporting company X

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes __ No √

As of June 30, ~~2009~~2010 (the last business day of the most recently completed second fiscal quarter) the aggregate market value of the common stock held by non-affiliates was approximately $~~417~~1,~~034~~167,693, based upon the closing sale price of $.~~025~~07 per share.

As of ~~April~~ 15May 18, ~~2010~~2011, there were 38,381,375 shares of common stock outstanding.

Documents incorporated by reference: NONE

PART I

FORWARD-LOOKING STATEMENTS: NO ASSURANCES INTENDED

In addition to historical information, this Annual Report contains forward-looking statements, which are generally identifiable by use of the words “believes,” “expects,” “intends,” “anticipates,” “plans to,” “estimates,” “projects,” or similar expressions. These forward-looking statements represent Management’s belief as to the future of Smooth Global (China) Holdings, Inc. Whether those beliefs become reality will depend on many factors that are not under Management’s control. Many risks and uncertainties exist that could cause actual results to differ materially from those reflected in these forward-looking statements. Factors that might cause such a difference include, but are not limited to, those discussed in the section entitled “Risk Factors.” Readers are cautioned not to place undue reliance on these forward-looking statements. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements.

ITEM 1.

BUSINESS

~~Development~~ The Company is engaged in the business of ~~our~~manufacturing ~~Organization~~and distributing rechargeable polymer lithium-ion (“PLI”) batteries in the People’s Republic of China (the “PRC”). PLI batteries produce a relatively high average of 3.8 volts per cell, which makes them attractive for their light weight and high volume. These cells can be configured in almost any prismatic shape and in a wide variety of sizes, which make them particularly useful in consumer products.

~~Smooth~~The ~~Global~~Company ~~(China)~~offers ~~Holdings~~over 300 products, ~~Inc.~~and is a ~~holding~~single ~~company~~battery ~~whose~~can ~~operating~~have ~~subsidiaries~~power ~~are~~capacity ~~located~~of inbetween 30 and 20,000 milliamp-hours. Our manufacturing facility has the ~~People’s Republic~~capacity to produce on a daily basis batteries with an aggregate production of ~~China~~20,000 amp-hours. ~~Until~~Our ~~October~~products ~~2007~~can ~~our~~be ~~only~~grouped ~~operating~~into ~~subsidiary was~~four ~~Beijing~~major ~~Quan~~categories: electronic ~~Tong~~systems ~~Chang~~for ~~Information~~mining ~~Service~~companies; ~~Limited~~batteries ~~(“Beijing~~for ~~QTC”),~~mining ~~a corporation~~equipment; ~~organized~~higher ~~under~~voltage and higher capacity batteries for use in the ~~laws~~automotive ofindustry; ~~The~~and ~~People’s~~batteries ~~Republic~~for ~~of China. We~~power ~~own,~~tools ~~through~~and anportable ~~offshore~~consumer ~~subsidiary~~products, ~~100%~~such ofas ~~the~~cellular ~~registered capital~~phones, ofdigital ~~Beijing~~cameras ~~QTC~~and laptop computers.

~~Beijing QTC~~Our ~~was~~PLI ~~founded~~batteries incan ~~2003~~be bybuilt ~~Guoqing~~to Xusatisfy ~~and~~the ~~Shuying~~capacity ~~Zheng. Its~~requirements ~~primary revenue~~for ~~source~~such ~~was~~diverse aproducts ~~network~~as ofmining ~~public payphones located in Beijing. With outlets located in universities~~lights, ~~shopping~~electronic ~~malls and street corners~~automobiles, ~~Beijing QTC distributed fixed line call times under distribution agreements with China Netcom (Beijing) Corporation Limited~~ and ~~China~~cellular ~~Netcom (Guangdong) Corporation Limited~~phones. InWe ~~2004,~~can ~~Beijing~~also ~~QTC~~design ~~controlled~~products ~~34% of~~to ~~the~~meet ~~public~~a ~~payphone~~client’s ~~market in Beijing~~specifications.

InThe ~~2006~~ Company’s production management and ~~2007~~quality ~~the~~control ~~revenue~~have received approval from ~~our~~an ~~payphone~~international ~~business~~accreditation ~~fell dramatically~~organization and certification from the European Community. ~~The~~Our ~~primary~~manganese ~~reasons~~and ~~for~~lithium iron phosphate batteries, types of PLI batteries, have received the ~~reduction~~PRC National Security certification for use in ~~revenue were:~~mining lights.

ØWe ~~The tariffs on mobile phone calls in China~~ have ~~fallen~~obtained byfour ~~approximately~~patents ~~80%~~from in the ~~past~~PRC ~~two~~in ~~years.~~order Asto aprotect ~~result, the use of cell phones has increased dramatically, with a concomitant slackening of demand for~~ our ~~payphone services~~technology. ~~When~~The wecompany ~~initiated~~does ~~our~~not ~~business,~~use ~~the~~any ~~average~~intellectual ~~cell~~property ~~phone~~owned ~~tariff~~by ~~was~~third ~~five times the tariff on a call from our payphones~~parties. ~~Now the difference is insignificant.~~

ØWe Inare ~~January~~a ~~2007~~member ~~China~~of ~~Netcom~~the ~~(Beijing)~~National ~~Corporation~~Electric ~~Limited~~Vehicle ~~cancelled~~Industry Association and the ~~contract~~committee ~~under~~of ~~which~~experts weconvened ~~distributed~~to ~~its~~draft ~~fixed~~standards ~~line~~for ~~call~~batteries ~~times~~used in mining lights. Both these groups were formed, and are managed, by the PRC governmental departments. The Company has obtained all the required licenses and approvals from the PRC.

Management recognized that its efforts to return the payphone business to profitability were futile. For that reason, on August 20, 2008, QTC's board of directors decided to terminate this operation and disposed of the relevant equipment. QTC disposed of 65 pieces of equipment 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), resulting in a loss of $34,474 (RMB 240,017); and 6 pieces of equipment with a carrying value of $19,617 (RMB 134,458) were transferred to another of the Company’s subsidiaries to satisfy a debt of $11,671 (RMB 80,000). No loss was recognized for this transfer due to the elimination of inter-company transactions in consolidation.

~~Beijing~~The ~~GRT~~demand for PLI batteries has rapidly increased over the last decade and currently accounts for the largest share of the market for small sized, secondary batteries. According to an analysis by the Singapore Stock Exchange, the global market for small sized PLI batteries in 2010 was approximately $52.6 billion. It anticipates that this market will grow by 15% per year over the next 5 years, reaching $106.9 million in 2015.

OnSales ~~October~~of ~~24,~~packs ~~2007 we acquired ownership~~ of ~~the~~PLI ~~registered~~batteries ~~capital~~for ~~stock~~use ofin ~~Smooth~~electric ~~Global~~automobiles ~~Services~~constitute ~~Limited,~~ a ~~corporation~~ ~~organized~~huge inpotential ~~the~~market ~~British~~for ~~Virgin~~the ~~Islands,~~Company. (Packs inof ~~exchange~~small ~~for~~PLI ~~33,000,000 shares~~batteries ofwired ~~our~~in ~~common~~a ~~stock. Smooth~~parallel ~~Global~~circuit ~~Services~~are ~~Limited~~more ~~has~~efficient ~~one wholly-owned~~in ~~subsidiary: Smooth~~powering ~~Global~~large ~~(Beijing) Telecom Science Limited~~devices, ~~which~~such ~~was~~as ~~organized~~electric ~~under~~cars, ~~the~~than ~~laws~~a ofsingle ~~The~~large ~~People’s Republic of China~~battery.) ~~Smooth~~According ~~Global~~to ~~(Beijing) Telecom Science Limited is~~ the ~~beneficiary~~ ~~under~~Japan aAutomobile ~~Trust~~Manufacturers ~~and Indemnity Agreement~~Association, inelectronic ~~which~~automobiles ~~Jin~~will ~~Yanfang~~account ~~and~~for ~~Wang Yanxia,~~13% ~~the~~of ~~registered~~global ~~equity~~automobile ~~owners~~sales ofin ~~Beijing~~2013. This ~~GRT~~percentage ~~Information~~of ~~Services~~the ~~Limited (“Beijing~~market ~~GRT”),~~is ~~have~~projected ~~transferred~~ to ~~Smooth~~increase ~~Global~~to ~~(Beijing)~~20% ~~Telecom~~by ~~Science Limited~~2020. In ~~all of~~ the ~~beneficial~~PRC, ~~interest in~~ the ~~equity~~government ofintends ~~Beijing GRT. Jin~~to ~~Yanfang~~increase ~~and~~the ~~Wang~~market ~~Yanxia~~share ~~remain~~attributable ~~the~~to ~~registered~~electronic ~~owners~~vehicles ofto ~~the equity~~10%, inor ~~Beijing~~1 ~~GRT~~million autos, ~~but~~by ~~have~~2012 ~~agreed~~through touse ~~act~~of asconsumer ~~trustees~~subsidies. At ~~for~~the ~~Smooth~~prevailing ~~Global (Beijing)~~average ~~Telecom~~price ~~Science~~of ~~Limited~~$7,625 ~~and~~for toeach ~~follow~~pack ~~directions~~of ~~given~~PLI tobatteries, ~~them~~this ~~with respect~~suggests toan ~~the~~aggregate ~~business~~market of ~~Beijing~~$7.625 ~~GRT~~billion.

~~Beijing~~Marketing ~~GRT~~and ~~entered~~sales ~~into~~for the ~~international~~ ~~call~~Company ~~forwarding~~is ~~business~~done ~~for~~by ~~the~~our ~~Shanghai~~employees and ~~Shaoxing~~takes ~~marketplace in~~place ~~February~~only ~~2007~~within bythe ~~obtaining~~PRC. Third aparty ~~license~~representatives ~~from~~or ~~China~~distributors ~~Netcom~~are ~~(Group)~~not ~~Company~~used. To ~~Ltd~~date, most of our sales have been to manufacturers of mining facilities and equipment. ~~Shanghai~~ While ~~Branch~~sales to the electric automobile industry have not yet been initiated, we anticipate our research and adevelopment ~~license~~efforts ~~from~~will ~~China~~enable ~~Netcom~~us ~~(Group)~~to ~~Company~~take ~~Ltd~~a share of this new market. ~~Shaoxing Branch~~We spent approximately $70,000 on research and development in 2010 and $31,000 in 2009.

~~International~~Following ~~call forwarding replaces~~ the ~~function~~commencement of ~~the~~operations ~~international~~in ~~roaming~~January ~~services~~of ~~provided by most mobile carriers. To utilize our international call forwarding service~~2009, ~~a subscriber~~the ~~will~~Company ~~obtain~~purchased ~~use~~PLI ofbatteries amanufactured ~~phone~~by ~~number~~Beijing inTian ~~the~~Rui ~~country~~Chi heEnergy orTechnology ~~she is visiting~~Co. He ~~will~~(“Tian ~~then~~Rui ~~purchase~~Chi”) ~~from~~and usresold athem ~~SIM card that will permit him~~ to ~~receive~~customers. In a2010, ~~fixed~~we ~~amount~~began ofmanufacturing ~~call-time from~~ our ~~server~~own ~~while~~PLI ~~in the foreign country~~batteries. ~~When~~Currently, hewe ~~uses~~sell ~~the~~both ~~call~~PLI ~~forwarding~~batteries ~~service provided by his mobile carrier to forward his inbound calls to a Beijing GRT phone number,~~ we ~~rout~~ ~~the~~produce ~~calls~~and tothose ~~the~~purchased ~~subscriber’s~~from ~~phone~~Tian ~~number~~Rui ~~in the destination country~~Chi.

~~The~~Tian ~~market~~Rui ~~for~~Chi ~~our~~is ~~call~~also ~~forwarding service~~the ~~are~~main ~~those~~supplier ~~Chinese~~for ~~residents~~the ~~who~~raw ~~travel~~materials ~~abroad~~(aluminum ~~for~~and ~~business~~plastic orfilm, ~~personal reasons. Between~~septem, ~~1999~~kapton ~~and~~tape, ~~2005~~terminating tape, ~~this~~methylprolidone, ~~market~~copper ~~grew~~foil, aluminum byfoil, ~~22%~~polyvinylidene, lithium ~~annually~~cobalt dioxide, ~~increasing~~ ~~from~~lithium 9manganate, ~~million~~carbon ~~travelers~~powder, inelectrolyte) ~~1999~~that towe ~~over~~use 31in ~~million~~manufacturing ~~travelers~~our ~~in 2005~~own batteries. AsFor ~~China’s~~the ~~entry~~years ~~into~~ended ~~the~~December ~~World~~31, ~~Trade~~2010 ~~Organization~~and ~~opens~~December ~~up more~~31, ~~countries~~2009, toTian ~~Chinese~~Rui ~~business~~Chi ~~travel,~~accounted wefor ~~expect~~76.6% ~~the~~and ~~growth~~99%, respectively, of ~~foreign travel~~the byCompany’s ~~residents~~total ofpurchases ~~China~~for tothe ~~continue~~period. ~~Since~~We ~~China~~believe ~~now~~that ~~has~~Tian ~~the largest~~Rui ~~mobile~~Chi’s ~~phone~~batteries ~~subscriber~~and ~~base~~raw inmaterials ~~the~~are ~~world~~attractively –priced, ~~463~~and ~~million~~we ~~subscribers~~have ~~at the~~strong, ~~end~~long-term ofrelations ~~2006~~with their personnel. However, ~~most~~we ofbelieve ~~those~~that ~~travelers~~if ~~will~~this relationship were to be terminated ~~potential~~for ~~subscribers~~any toreason, ~~our international~~we ~~call~~could ~~forwarding~~obtain ~~service~~these batteries and materials in the market at acceptable prices.

~~Although~~The ~~international~~market ~~call~~for ~~forwarding service~~PLI batteries is ~~popular~~characterized inby ~~Hong~~intense ~~Kong,~~completion wefrom ~~are~~both ~~not~~domestic ~~aware~~and ofmulti-national ~~any service provider offering the service in China~~enterprises. ~~Therefore,~~Many ~~initially~~of ~~our~~these ~~competition will~~competitors ~~come~~are ~~from~~significantly ~~the~~larger ~~roaming~~than ~~services provided by mobile carriers. Our primary competitive advantage will be price:~~ we ~~currently~~are ~~charge 2 RMB (approximately $.27) per minute for calls on our system~~ and ~~the~~have ~~subscriber also~~substantially ~~pays~~greater ~~the~~financial ~~local~~resources ~~phone~~that ~~tariff~~allow ~~for~~them ~~outbound~~to ~~calls;~~be ~~mobile roaming charges by the principal Chinese carriers generally exceed 8 RMB and are much higher~~ in ~~certain~~ ~~countries. One~~a ~~additional~~better ~~disadvantage~~position ofto ~~roaming~~withstand ~~services~~changes ~~is that they are not available~~ in ~~countries~~the ~~that use incompatible mobile communication systems~~industry. ~~For example~~However, ~~the~~we ~~GSM system~~believe ~~used~~that byour ~~China~~products ~~Mobile~~are ~~has~~attractively ~~not~~priced ~~been~~and ~~deployed~~that inour ~~Japan. So~~technology ~~China Mobile~~gives ~~customers~~us ~~cannot~~an ~~obtain~~advantage ~~roaming~~versus ~~services~~the ~~in Japan~~competition.

Our ~~other~~development ~~initial~~strategy ~~competition~~for ~~will~~the ~~come from~~near ~~mobile~~future ~~phone~~is ~~services~~to ~~provided~~continue insales ~~the~~of ~~destination countries. These~~PLI ~~services~~batteries ~~will~~to ~~often~~the bemining ~~price~~industry ~~competitive~~in ~~with~~the usPRC ~~– but~~and ~~the~~to ~~user~~produce ~~has~~packs toof ~~notify~~PLI ~~his~~batteries ~~friends~~for ~~and~~use ~~associates~~in ofunderground ~~his~~mine ~~new~~chambers, ~~(temporary) phone~~motorized ~~number~~bicycles, and electric automobiles.

InWe ~~2008,~~currently ~~GRT~~have ~~decided~~50 toemployees, ~~relocate~~all ~~its call~~on ~~forwarding~~a ~~business~~full-time ~~from~~basis. None ~~the~~of ~~Shanghai~~our ~~area~~employees belongs to ~~Beijing~~a collective bargaining unit. Our ~~The~~relationships ~~reasons~~with ~~for~~our ~~the business~~employees ~~relocation~~are ~~include:~~good.

§ 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.

In addition, our Management expects that this relocation will revitalize our company for the following reasons:

§ 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 per message.

§ 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.

As a result of the above business relocation decision, our management decided to sell the Shanghai operations of our call forwarding business. The proceeds of the sale were to be used to revitalize our international call forwarding business in its new Beijing location. Those operations were to be supplemented by the joint venture that we entered in October 2008 with Beijing Zhongheng Technology Co., Inc. Having invested 10% of the capital in this venture, we owned 10% of the equity, and planned to cooperate with our new partner in marketing international call forwarding cards. Unfortunately neither of these funding plans was brought to realization. In November our sale of the Shanghai operations was terminated, and we were required to refund the deposit we had received. Shortly thereafter we agreed with Zhongheng Technology that the prospects for the joint venture did not warrant continued investment, and the joint venture was terminated.

Because we lack the financial resources necessary to carry on our international call forwarding business, almost all of our revenue during 2009 arose from another of our telecommunications services: VoIP call time distribution. GRT entered this business in January 2008 by contracting with China Netcom (Shaoxing) Corporation Limited and with China Netcom (Shanghai) Corporation Limited. Those two carriers sell us usage units on their VoIP systems, which we in turn sell to customers who link to the systems through our servers. The sale of VoIP time yielded $212,305 in revenue during the 2008 and $67,104 in revenue during 2009. Due to our limited resources, however, the revenue from that business has dwindled in recent months.

Franchise Operations

Beijing GRT developed a low cost method of maximizing the opportunity that our call forwarding licenses afford us. During 2007 we established sixteen franchised distributors of our call forwarding services throughout China. In exchange for a franchise fee of approximately $33,000, we provide the franchisee all of the necessary training and materials necessary to enter into the business. The franchisee then purchases an inventory of our SIMS cards for resale to phone customers.

The sale of SIM cards through franchisees is not as profitable as direct sale by our own branch office, since we must afford the franchisee a substantial discount on the price of the SIM card. On the other hand, we can establish a franchise with virtually no cost – indeed, far less cost than the franchise fee. So the franchise business enables us to expand our market rapidly without a significant capital investment.

Franchise sales were suspended in 2008 as a result of the relocation from Shanghai to Beijing. We have been unable to revive that portion of our business, due to lack of capital.

Wireless Public Phones

In November 2009 we entered into a new telecommunications venture. Commencing on May 1, 2010 GRT will serve as an agent for Yurui Changtong Science Technology Co., Ltd. in distributing its wireless public phones. While this venture returns us to the industry sector that we originally occupied - public telephones - the substitution of mobile phones for a landlocked phone site will reduce our hardware and maintenance expenses by90% or more.

The target market for our wireless public phones will be the 70% of the Chinese population that remains classified as low income, including farmers, students, immigrants, soldiers, small traders, etc.. The members of this group often cannot meet the financial requirements for cell phone contracts, or are unwilling to commit a sizable portion of their limited financial resources to a cell phone. So we will provide cell phones on an as-needed basis.

We intend to locate our distribution bases in office buildings, busy streets, railway stations and other areas with concentrated populations. Our plan is to charge 18 RMB (approximately $2.60) for an hour of phone use. If from a single base we can sell 100 hours of use per day, the base will generate a monthly revenue of $7,800. Since the bases will occupy only a few square feet and require a single employee, they can be replicated at modest up front cost with a high revenue to expense ratio. We expect this new business will be profitable if we are able to capture sufficient users.

Employees

GRT currently employs 6 individuals, all on a full-time basis. None of our employees belongs to a collective bargaining unit. Our relationships with our employees are good.

ITEM 1A

RISK FACTORS

You should carefully consider the risks described below before buying our common stock. If any of the risks described below actually occurs, that event could cause the trading price of our common stock to decline, and you could lose all or part of your investment.

~~Implementation~~We ofmay ~~our~~be ~~international call~~unable ~~forwarding~~to ~~business~~gain ~~will~~a ~~require~~ substantial ~~additional~~share ~~capital, which may result in dilution~~ of ~~our~~the ~~existing~~market ~~shareholders~~for batteries.

InOur ~~order~~business tooperations ~~fully~~are ~~implement~~based ~~its business~~on ~~plan,~~the ~~Beijing~~marketing ~~GRT~~of ~~will~~rechargeable ~~require~~polymer alithium-ion ~~substantial~~batteries. There ~~amount~~are ofmany ~~additional capital. It~~companies, islarge ~~likely~~and ~~that~~small, involved in ~~order~~the tomarket ~~obtain~~for ~~that~~rechargeable ~~capital,~~batteries. Some ~~Beijing GRT~~of ~~will~~our beexisting ~~forced~~and topotential ~~issue~~competitors ahave ~~large~~longer ~~portion~~operating ofhistories ~~its~~and ~~equity. That financing,~~significantly ifgreater itfinancial, ~~occurs~~technical, ~~will~~marketing ~~reduce~~and ~~the~~other ~~portion~~resources. It ofwill ~~our~~be ~~equity~~difficult ~~held~~for byus ~~our existing~~to ~~shareholders,~~establish ~~and~~a ~~may~~reputation ~~reduce~~in the ~~value~~market ofso ~~their~~that ~~shares,~~manufacturers ifchose ~~the~~to ~~sale~~use ~~of equity~~our ~~occurs~~batteries atrather ~~prices lower~~ than ~~the~~those ~~current~~of ~~market~~our ~~price~~competitors. OnUnless ~~the other hand, if~~ we are ~~unable~~able to ~~obtain~~expand ~~the~~our ~~necessary~~sales ~~capital~~volume significantly, we will not be able to improve the ~~business~~efficiency ~~will fail~~of our operation.

Our international call forwarding business is new and untested, so it may fail.

Our business plan relies on the success of the international call forwarding business operated by Beijing GRT. This is a relatively new business for Beijing GRT – it commenced operations in February 2007 - and international call forwarding is, in fact, a new business in China. Because we have limited historical results to consider, there may be factors we have not considered or do not foresee that may cause the business to fail.

If a major carrier undertook to compete against us in the international call forwarding business, our resources might not be sufficient to compete effectively.

There are low barriers to entry into the international call forwarding business. We have no patents on the technology, nor are there significant trade secrets to give us a privileged position in the market. Our success in this new business will depend on our marketing acumen, our good relations with the major telephone carriers, and the quality of the service we provide. If a major telecommunications carrier or other highly capitalized business entered the market, our resources might not permit us to compete effectively against the competitor’s ability to devote vast capital and human resources to the project of accumulating the relationships that will be key to success in this business.

If the major carriers reduce their roaming charges, we will lose the key competitive advantage of our international call forwarding service.

For most subscribers to a mobile phone service, the default position when they travel is to use their carrier’s roaming services – primarily because it requires no planning or effort. Our business will succeed only if we persuade mobile phone users that the substantial cost advantage of our service over the carriers’ roaming services warrants the users’ investment of time and attention to subscribing and establishing the necessary call connections. If the mobile phone carriers reduce their roaming charges in the future, our competitive advantage will be proportionately reduced. Our business will fail if the major carriers reduce their roaming charges to a point where our price advantage becomes insignificant to the average traveler.

A recession in China could significantly hinder our growth.

The success of our international call forwarding services will depend on continuation and expansion oftrends in travel by the people of China developed in the past few years. Those travel habits depended, in turn, on the growth in business activity and disposable income in China during the same period. Currently, as a result of the worldwide recession, there is a downturn in business activity in China. This may reduce the market for our services. In addition, if business in China continues to wane, China itself could experience a recession. The occurrence of a recession would significantly hinder our efforts to implement our business plan.

Our business and growth will suffer if we are unable to hire and retain key personnel that are in high demand.

Our future success depends on our ability to attract and retain highly skilled engineers, technical, marketing and customer service personnel, ~~and technicians~~especially qualified personnel for our operations in China. Qualified individuals are in high demand in China, and there are insufficient experienced personnel to fill the demand. Therefore we may not be able to successfully attract or retain the personnel we need to succeed.

We may have difficulty establishing adequate management and financial controls in China and in complying with U.S. corporate governance and accounting requirements.

The People’s Republic of China has only recently begun to adopt the management and financial reporting concepts and practices that investors in the United States are familiar with. We may have difficulty in hiring and retaining employees in China who have the experience necessary to implement the kind of management and financial controls that are expected of a United States public company. If we cannot establish such controls, we may experience difficulty in collecting financial data and preparing financial statements, books of account and corporate records and instituting business practices that meet U.S. standards.

~~Government~~We ~~regulation~~ may ~~hinder~~be ~~our ability~~required to ~~function~~raise ~~efficiently~~additional financing by issuing new securities with terms or rights superior to those of our shares of common stock, which could adversely affect the market price of our shares of common stock.

~~The~~We ~~national~~will require additional financing to fund future operations, ~~provincial~~develop and ~~local governments~~exploit inexisting ~~the~~and ~~People’s~~new ~~Republic~~products ofand ~~China~~to ~~are~~expand ~~highly bureaucratized~~into new markets. ~~The~~ ~~day-to-day~~We ~~operations~~may ofnot ~~our~~be ~~business~~able ~~require frequent~~to ~~interaction~~obtain ~~with~~financing ~~representatives~~on offavorable ~~the~~terms, ~~Chinese~~if ~~government institutions~~at all. ~~The~~ ~~effort~~If towe ~~obtain~~raise ~~the~~additional ~~registrations,~~funds ~~licenses~~by ~~and permits~~issuing ~~necessary~~equity tosecurities, ~~carry~~the ~~out~~percentage ownership of our ~~business~~current ~~activities~~shareholders ~~can~~will be ~~daunting. Significant~~ ~~delays~~reduced, ~~can~~and ~~result~~the ~~from~~holders of the ~~need~~new equity securities may have rights superior to ~~obtain governmental~~those ~~approval~~of the holders of ~~our~~shares ~~activities. These~~of ~~delays~~common ~~can~~stock, ~~have~~which ~~an adverse~~could ~~effect~~adversely onaffect the ~~profitability~~market price and the voting power of shares of our ~~operations~~common stock. In ~~addition~~If we raise additional funds by issuing debt securities, ~~compliance~~ ~~with~~the ~~regulatory~~holders ~~requirements~~of ~~applicable~~these debt securities would similarly have some rights senior to ~~telecommunications services~~those ~~may~~of ~~increase~~the holders of shares of common stock, and the ~~cost~~terms of ~~our~~these debt securities could impose restrictions on operations, ~~which~~and ~~would~~create ~~adversely~~a ~~affect our~~significant ~~profitability~~interest expense for us.

Currency conversion and exchange rate volatility could adversely affect our financial condition and the value of our common stock.

The PRC government imposes control over the conversion of Renminbi, or RMB, into foreign currencies. Under the current unified floating exchange rate system, the People’s Bank of China publishes an exchange rate, which we refer to as the PBOC exchange rate, based on the previous day’s dealings in the inter-bank foreign exchange market. Financial institutions authorized to deal in foreign currency may enter into foreign exchange transactions at exchange rates within an authorized range above or below the PBOC exchange rate according to market conditions.

Pursuant to the Foreign Exchange Control Regulations of the PRC issued by the State Council which came into effect on April 1, 1996, and the Regulations on the Administration of Foreign Exchange Settlement, Sale and Payment of the PRC which came into effect on July 1, 1996, regarding foreign exchange control, conversion of RMB into foreign exchange by Foreign Investment Enterprises, or FIEs, for use on current account items, including the distribution of dividends and profits to foreign investors, is permissible. FIEs are permitted to convert their after-tax dividends and profits to foreign exchange and remit such foreign exchange to their foreign exchange bank accounts in China. Conversion of RMB into foreign currencies for capital account items, including direct investment, loans, and security investment, is still under certain restrictions. On January 14, 1997, the State Council amended the Foreign Exchange Control Regulations and added, among other things, an important provision, which provides that the PRC government shall not impose restrictions on recurring international payments and transfers under current account items.

Enterprises in China, including FIEs, which require foreign exchange for transactions relating to current account items, if within a certain limited amount may, without approval of the State Administration of Foreign Exchange, or SAFE, effect payment from their foreign exchange account or convert and pay at the designated foreign exchange banks by providing valid receipts and proofs. Convertibility of foreign exchange in respect of capital account items, such as direct investment and capital contribution, is still subject to certain restrictions, and prior approval from the SAFE or its relevant branches must be sought.

Between 1994 and 2004, the exchange rate for RMB against the U.S. dollar remained relatively stable, most of the time in the region of approximately RMB8.28 to US$1.00. However, in 2005, the Chinese government announced that it would begin pegging the exchange rate of the RMB against a number of currencies, rather than just the U.S. dollar. As our operations are primarily in China, any significant revaluation of the RMB may materially and adversely affect our cash flows, revenues, financial condition and the value of our common stock. For example, to the extent that we need to convert U.S. dollars into RMB for our operations, appreciation of this currency against the U.S. dollar could have a material adverse effect on our business, financial condition, results of operations and the value of our common stock. Conversely, if we decide to convert our Renminbi into U.S. dollars for the purpose of declaring dividends on our common stock or for other business purposes and the U.S. dollar appreciates against the RMB, the U.S. dollar equivalent of our earnings from our subsidiaries in China would be reduced.

We rely principally on dividends and other distributions on equity paid by our operating subsidiary to fund our cash and financing requirements, but such dividends and other distributions are subject to restrictions under PRC law. Limitations on the ability of our operating subsidiary to pay dividends or other distributions to us could have a material adverse effect on our ability to grow, make investments or acquisitions, pay dividends to you, and otherwise fund and conduct our business.

We are a holding company and conduct substantially all of our business through our operating subsidiary, which is a limited liability company established in China. We will rely on dividends paid by our Chinese subsidiary for our cash needs, including the funds necessary to pay dividends and other cash distributions to our shareholders, to service any debt we may incur and to pay our operating expenses. The payment of dividends by entities organized in China is subject to regulations that will permit our Chinese subsidiary to pay dividends to us only out of accumulated profits as determined in accordance with PRC accounting standards and regulations. Our Chinese subsidiary is also required to set aside at least 10% of its after-tax profit based on PRC accounting standards each year to its general reserves until the cumulative amount of such reserves reaches 50% of its registered capital. These reserves are not distributable as cash dividends. In addition, our Chinese subsidiary is required to allocate a portion of its after-tax profit to its enterprise expansion fund and the staff welfare and bonus fund at the discretion of its board of directors. Any limitations on the ability of our Chinese subsidiary to pay dividends or other distributions to us could have a material adverse effect on our ability to grow, make investments or acquisitions, pay dividends to you, and otherwise fund or conduct our business.

The scope of our business license in China is limited, and we may not expand or continue our business without government approval and renewal, respectively.

Our principal operating subsidiary is a limited liability company under PRC law. A PRC limited liability company can only conduct business within its approved business scope, which ultimately appears on its business license. In order for us to expand our business beyond the scope of our license, we would be required to enter into a negotiation with the authorities for the approval to expand the scope of our business. We cannot assure you that we would be able to obtain the necessary government approval for any change or expansion of our business scope. As a result, if there were adverse events affecting our battery business, our flexibility in crafting a corporate response would be limited.

We may be classified as a “resident enterprise” for PRC enterprise income tax purposes, which could result in unfavorable tax consequences to us and our non-PRC shareholders.

The Enterprise Income Tax Law provides that enterprises established outside of China whose “de facto management bodies” are located in China are considered “resident enterprises” and are generally subject to the uniform 25% enterprise income tax rate on their worldwide income. In addition, a recent circular issued by the State Administration of Taxation regarding the standards used to classify certain Chinese-invested enterprises controlled by Chinese enterprises or Chinese group enterprises and established outside of China as “resident enterprises” clarified that dividends and other income paid by such “resident enterprises” will be considered to be PRC source income, subject to PRC withholding tax, currently at a rate of 10%, when recognized by non-PRC shareholders. This circular also subjects such “resident enterprises” to various reporting requirements with the PRC tax authorities. Under the implementation regulations to the enterprise income tax, a “de facto management body” is defined as a body that has material and overall management and control over the manufacturing and business operations, personnel and human resources, finances and treasury, and acquisition and disposition of properties and other assets of an enterprise. In addition, the circular mentioned above details that certain Chinese-invested enterprises controlled by Chinese enterprises or Chinese group enterprises will be classified as “resident enterprises” if the following are located or resident in China: senior management personnel and departments that are responsible for daily production, operation and management; financial and personnel decision making bodies; key properties, accounting books, company seal, and minutes of board meetings and shareholders’ meetings; and half or more of the directors with voting rights or senior management. If the PRC tax authorities determine that we are a “resident enterprise,” we may be subject to enterprise income tax at a rate of 25% on our worldwide income and dividends paid by us to our non-PRC shareholders as well as capital gains recognized by them with respect to the sale of our stock may be subject to a PRC withholding tax. This will have an impact on our effective tax rate, a material adverse effect on our net income and results of operations, and may require us to withhold tax on our non-PRC shareholders.

We may be subject to fines and legal or administrative sanctions if we or our PRC citizen employees fail to comply with PRC regulations with respect to the registration of such employees’ share options and stock grants.

Pursuant to the Implementation Rules of the Administration Measure for Individual Foreign Exchange, issued in January 2007 by SAFE and the relevant guidance issued by SAFE in March 2007, PRC domestic individuals who have been granted shares or share options by an overseas listed company according to its employee share option or share incentive plan are required, through the PRC subsidiary of such overseas-listed company or other qualified PRC agents, to register with SAFE and complete certain other procedures related to the share option or other share incentive plan. Accordingly, our employees who are PRC nationals resident in China to whom we grant shares or share options will be subject to these rules. In addition, we, our PRC subsidiaries or other qualified PRC agent are required to appoint an asset manager or administrator and a custodian bank, as well as to open a foreign currency account to handle transactions relating to the share option or other share incentive plan. If we or our PRC option holders fail to comply with these rules, we may be subject to fines up to RMB300,000 and other legal or administrative sanctions.

We may have difficulty defending our intellectual property rights from infringement which may undermine our competitive position.

We have been designing and developing new technology. We rely on a combination of patents, trade secret laws, and restrictions on disclosure to protect our intellectual property rights. Unauthorized use of our technology could damage our ability to compete effectively. We regard our service marks, trademarks, trade secrets, patents and similar intellectual property as critical to our success. Our trade secrets may become known or be independently discovered by our competitors. Policing the unauthorized use of proprietary technology can be difficult and expensive. Also, litigation may be necessary to enforce our intellectual property rights, protect our trade secrets or determine the validity and scope of the proprietary rights of others. The outcome of such potential litigation may not be in our favor and any success in litigation may not be able to adequately protect our rights. Such litigation may be costly and divert management attention away from our business. An adverse determination in any such litigation would impair our intellectual property rights and may harm our business, prospects and reputation. Enforcement of judgments in China is uncertain and even if we are successful in such litigation it may not provide us with an effective remedy. In addition, we have no insurance coverage against litigation costs and would have to bear all costs arising from such litigation to the extent we are unable to recover them from other parties. The occurrence of any of the foregoing could have a material adverse effect on our business, financial condition and results of operations. In addition, there can be no assurance that we will be able to obtain licenses from third-parties that we may need to conduct our business or that such licenses can be obtained at a reasonable cost.

Capital outflow policies in China may hamper our ability to pay dividends to shareholders in the United States.

The People’s Republic of China has adopted currency and capital transfer regulations. These regulations require that we comply with complex regulations for the movement of capital. Although Chinese governmental policies were introduced in 1996 to allow the convertibility of RMB into foreign currency for current account items, conversion of RMB into foreign exchange for capital items, such as foreign direct investment, loans or securities, requires the approval of the State Administration of Foreign Exchange. We may be unable to obtain all of the required conversion approvals for our operations, and Chinese regulatory authorities may impose greater restrictions on the convertibility of the RMB in the future. Because most of our future revenues will be in RMB, any inability to obtain the requisite approvals or any future restrictions on currency exchanges will limit our ability to pay dividends to our shareholders.

Currency fluctuations may adversely affect our operating results.

Beijing GRT generates revenues and incurs expenses and liabilities in Renminbi, the currency of the People’s Republic of China. However, as a subsidiary of Smooth Global (China) Holdings, it will report its financial results in the United States in U.S. Dollars. As a result, our financial results will be subject to the effects of exchange rate fluctuations between these currencies. From time to time, the government of China may take action to stimulate the Chinese economy that will have the effect of reducing the value of Renminbi. In addition, international currency markets may cause significant adjustments to occur in the value of the Renminbi. Any such events that result in a devaluation of the Renminbi versus the U.S. Dollar will have an adverse effect on our reported results. We have not entered into agreements or purchased instruments to hedge our exchange rate risks.

We have limited business insurance coverage.

The insurance industry in China is still at an early stage of development. Insurance companies in China offer limited business insurance products, and do not, to our knowledge, offer business liability insurance. As a result, we do not have any business liability insurance coverage for our operations. Moreover, while business disruption insurance is available, we have determined that the risks of disruption and cost of the insurance are such that we do not require it at this time. Any business disruption, litigation or natural disaster might result in substantial costs and diversion of resources.

Smooth Global (China) Holdings is not likely to hold annual shareholder meetings in the next few years.

Management does not expect to hold annual meetings of shareholders in the next few years, due to the expense involved. The current members of the Board of Directors were appointed to that position by the previous directors. If other directors are added to the Board in the future, it is likely that the current directors will appoint them. As a result, the shareholders of Smooth Global (China) Holdings will have no effective means of exercising control over the operations of Smooth Global (China) Holdings.

Your ability to bring an action against us or against our directors, or to enforce a judgment against us or them, will be limited because we conduct all of our operations in China and because most of our management resides outside of the United States.

We conduct all of our operations in China through our wholly-owned subsidiary. All of our directors and officers reside in China and all of the assets of those Chinese residents are located outside of the United States. As a result, it may be difficult or impossible for you to bring an action against us or against these individuals in the United States in the event that you believe that your rights have been infringed under the securities laws or otherwise. Even if you are successful in bringing an action of this kind, the laws of the United States and of China may render you unable to enforce a judgment against our assets or the assets of our directors.

ITEM 1B	UNRESOLVED STAFF COMMENTS

Not Applicable.

ITEM 2.	DESCRIPTION OF PROPERTY

~~ITEM 1B UNRESOLVED STAFF~~Our ~~COMMENTS~~headquarters and manufacturing facility are located in the Yongle Economic/Technical Development Zone in the Tongzhou District of Beijing. We utilize a 67,000 square meter factory with 6,000 square meters dedicated to production. The Company rents the production facility from an unrelated third party under a lease that terminates on December 31, 2012. The minimum annual lease payments are $231,674.

Not Applicable.

ITEM 3.	LEGAL PROCEEDINGS

None.

ITEM 4.	RESERVED

~~ITEM 2. DESCRIPTION OF PROPERTY~~8

Our offices are located in 195 square meters of office space that we lease from our Chairman, Shuying Zheng. The lease terminates in June 2010. The annual rental is $17,236.

ITEM 3. LEGAL PROCEEDINGS

None.

PART II

ITEM 4 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

(a) Market Information

The Company’s common stock is quoted on the ~~OTC~~Pink ~~Bulletin~~Sheets ~~Board~~ under the symbol “SMGH.” Until February 2011 the common stock was quoted on the OTC Bulletin Board. Set forth below are the high and low bid prices for each of the quarters between January 1, ~~2008~~2009 and December 31, ~~2009~~2010. The reported bid quotations reflect inter-dealer prices without retail markup, markdown or commissions, and may not necessarily represent actual transactions.

The prices set forth below have been adjusted, as necessary, to reflect the effect of a 1-for-30 reverse stock split on July 31, 2007.

	Bid
Quarter Ending	High		Low
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

March 31, 2010	$	0.04	$	0.02
June 30, 2010	$	0.07	$	0.04
September 30, 2010	$	0.07	$	0.01
December 31, 2010	$	0.01	$	0.01

	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

(b) Shareholders

Our shareholders list contains the names of 7180 registered stockholders of record of the Company’s Common Stock.

The Company has not paid or declared any cash dividends on its Common Stock within the past three years and does not foresee doing so in the foreseeable future. The Company intends to retain any future earnings for the operation and expansion of the business. Any decision as to future payment of dividends will depend on the available earnings, the capital requirements of the Company, its general financial condition and other factors deemed pertinent by the Board of Directors.

(d) Securities Authorized for Issuance Under Equity Compensation Plans.

The information set forth in the table below regarding equity compensation plans (which include individual compensation arrangements) was determined as of ~~December 31, 2009.~~

December 31, 2010.

	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

(e) Sale of Unregistered Securities

The Company did not sell any unregistered securities during the 4th quarter of ~~2009~~2010.

(f) Repurchase of Equity Securities

The Company did not repurchase any of its equity securities that were registered under Section 12 of the Securities Act during the 4th quarter of ~~2009~~2010.

ITEM 5. SELECTED FINANCIAL DATA

ITEM 6.	SELECTED FINANCIAL DATA

Not applicable.

ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS

~~Not applicable~~In the fall of 2010 a subsidiary of the Company acquired the registered equity of Beijing Yupeng Hengli Technology Ltd. (“BJHL”) in exchange for twenty million (20,000,000) shares of Company common stock. For accounting purposes, this is a capital transaction treated for financial reporting purposes as a reverse merger. It is accounted for as a recapitalization of the accounting acquirer (BJHL) and a reorganization of the accounting acquiree (Beijing Telecom, the subsidiary that made the acquisition). Accordingly, the comparison below is done using the historical statements of BJHL for the period prior to the merger.

~~ITEM 6. MANAGEMENT’S~~Year ~~DISCUSSION~~Ended ~~AND~~December ~~ANALYSIS~~31, OF2010 ~~FINANCIAL~~Compared ~~CONDITIONS~~to ~~AND~~Year ~~RESULTS~~Ended ~~OF OPERATIONS~~December 31, 2009

~~Results~~ Revenue for the year ended December 31, 2010 was $4,164,057, an increase of ~~Operations~~$3,634,425 or 686% over the year ended December 31, 2009. This rapid growth is a result of the continued development of our sales and marketing effort and strengthened relations with clients in the mining industry. The large percentage increase in 2010 is also a reflection of the low base in 2009, as one would expect as start-up activities ramp up.

The Company generally recognizes revenue when products are shipped to unaffiliated customers or picked up by unaffiliated customers from the company’s warehouse, title and risk of loss have been transferred, collectability is reasonably assured and pricing is fixed and determinable. We warrant our products in the event of defect for a period of one year from the date of shipment. For the two years ended December 31, 2010, no returns have occurred. Accordingly, no allowances or product reserve was considered necessary.

OnAs ~~October~~revenues 24increased significantly, ~~2007~~the wecost ~~acquired beneficial ownership~~ of ~~Beijing~~goods ~~GRT~~sold ~~Information~~for ~~Services~~the ~~Limited~~year ~~(Beijing GRT”). Since~~ended ~~the~~December ~~acquisition~~31, ~~the~~2010 ~~business~~was of$3,261,160 ~~Beijing~~versus ~~GRT~~$475,010 ~~has gradually~~for ~~replaced~~ the ~~business~~year ofended ~~our~~December ~~other~~31, ~~subsidiary~~2009, ~~Beijing~~an ~~Quan~~increase ~~Tong~~of ~~Chang Information~~$2,786,150 ~~Service~~or ~~Limited (“Beijing QTC”)~~586%.

Beijing QTC had been primarily involved in the business of operating public payphones. We chose to replace Beijing QTC as the focus of our operations in 2007 because we saw that business waning. The primary reasons for the reduction were:

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.

The other business of Beijing QTC had been its distribution of internet VoIP phone systems. In August 2008 management of Beijing QTC decided to terminate that business as well due to languishing revenue. As a result, the revenue and expenses of Beijing QTC for 2008 are summarized as “Loss from Discontinued Operations – VoIP Call Time Distribution of QTC” on our Consolidated Statements of Operations and Other Comprehensive Income.

The acquisition of Beijing GRT provided the Company with a brief period of profitability in 2007. During 2007 we recorded $1,914,609 in revenue, most of which was recorded in the 4th quarter and most of which was attributable to the international call forwarding business of Beijing GRT: $1,196,996 from our sale of SIM cards and an additional $527,753 in fees paid by our franchisees. Beijing GRT achieved the above success in operating the call forwarding business from one office only: its office in Shanghai. The success of that initiative indicated that the business could be successful if we developed it from offices throughout China.

Despite the success of our international call forwarding business in Shanghai area in 2007, a hiatus occurred in that business in 2008. Compared to our revenue of $1,196,996 from the sale of call forwarding cards and $527,753 from the sale of franchises in 2007, we realized only $213,953 from the sale of call forwarding cards in 2008, and no revenue from the sale of franchises during this period. The decreased revenue in 2008 was primarily the result of Management’s decision to relocate our call forwarding business from the Shanghai area to Beijing. Because of that move, most of the revenue that we realized from the call forwarding business in 2008 came from one customer.

As a result of the above business relocation decision, our management decided to sell the Shanghai operations of our call forwarding business and use the proceeds of the sale to fund the establishment of our call forwarding business in Beijing. 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). 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 a security deposit for the agreement. In November 2009, however, we found ourselves unable to reach agreement with the purchaser on the terms of the closing. As a result, the agreement was terminated, and we refunded the deposits.

~~Our~~The ~~lack of~~Company’s ~~resources~~gross ~~left~~profit uswas ~~unable~~$902,897 for the year ended December 31, 2010 as opposed to ~~revive~~$54,622 for the ~~call~~year ~~forwarding business. As~~ended aDecember ~~result~~31, ~~almost~~2009. This ~~all~~represents ofan ~~our~~increase ~~revenue~~of in$848,275 ~~2009~~and ~~came~~reflects ~~from~~ the ~~distribution~~expanded ofand ~~VoIP~~intensified ~~call~~sales ~~time~~and marketing activities. ~~Even~~The ~~that~~overall ~~business,~~gross ~~however, declined~~profit rate rose by ~~68%~~11.4 ~~from~~percentage ~~2008~~points toin 2010 from 2009, asincreasing ~~our~~from ~~lack~~10.3% ofin ~~capital~~the ~~made~~year itended ~~difficult~~December 31, 2009 to ~~market~~ ~~our~~21.7% ~~services~~in the year ended December 31, 2010. ~~Unless~~The wemargin ~~obtain~~expansion ~~funding~~reflects orthe ~~develop~~initiation aof ~~new revenue~~original ~~source,~~manufacturing weof ~~cannot~~PLI ~~expect~~batteries ~~our~~as ~~revenues~~opposed to ~~increase~~resales ~~significantly~~and inscale ~~the near~~efficiencies ~~future~~in distribution.

~~Because of~~Net ~~the~~income ~~strategic~~for ~~change~~the inyear ~~our~~ended ~~call~~December ~~forwarding business~~31, ~~our~~2010 ~~operating~~was ~~expenses were significantly greater than our revenue in both 2009 and 2008. Primary among the components of operating expenses in 2009 were professional fees (~~$56487,~~697)~~979 ~~related~~compared to ~~sustaining our status as~~ a ~~U.S.~~loss ~~public company,~~of ~~and office expenses (~~$4815,~~792)~~001 ~~and~~for ~~depreciation ($86,648) that are disproportionate to our level of revenues due to financial commitments made when we operated at a much more robust level. In 2008~~ the ~~primary components~~year ofended ~~operating~~December ~~expense were (1) $85~~31,~~650~~ ~~compensation to our CEO (she took no compensation in~~ 2009~~); and (2) consulting fees of $706,384~~. ~~Included~~This inimprovement ~~the consulting fees~~ was ~~$231,880~~achieved ~~attributable to four contracts that we entered~~ in ~~August~~spite ~~and September 2007 with consultants who are assisting us in rebuilding our company’s business. To compensate these individuals we issued them shares~~ of ~~our common stock, which had~~ a ~~market~~meaningful ~~value~~increase of ~~$404,800. We~~operating ~~expensed that amount over the lives of the four contracts~~expenses, ~~which ranged~~ from ~~nine months to two years. In addition~~$69,782 ~~during~~in ~~2008~~2009 weto ~~incurred a research and development expense of~~ $~~105~~272,~~448~~790. This expense ~~arose~~growth ~~from~~is ~~our participation~~consistent inwith an ~~arrangement~~intensified ~~with~~sales ~~Xinjiang~~effort ~~Jinzhonghua~~and ~~Telecommuncation Services~~the ~~Co.,~~initiation ~~Inc.,~~of ~~whose~~manufacturing ~~purpose~~activities. The isfourth toquarter ~~develop~~of ~~and~~2010 ~~manufacture~~also ~~wireless~~reflected ~~network extension~~higher ~~equipment,~~professional ~~utilizing~~fees ~~that~~relating ~~company’s~~to ~~patented~~the ~~telecommunications technology~~acquisition.

~~Because of~~Net ~~our~~income ~~lack~~as ~~of revenues, we incurred~~ a ~~net~~percentage ~~loss~~ of ~~$295,441~~sales ($was 11.017% ~~per~~for ~~share)~~the ~~in 2009,~~year ~~compared~~ended toDecember ~~a net loss of $1~~31,~~155,287~~ ~~(($~~2010.~~03) per share) in 2008.~~ ~~Although~~We ~~the~~anticipate ~~PRC~~that ~~Income~~this ~~Tax~~percentage ~~Law~~will ~~allows~~improve ~~the~~in ~~enterprise to offset its~~ future ~~net~~periods ~~income~~as ~~with operating losses carried forward,~~ the ~~enterprise~~business ~~must obtain~~mix ~~approval~~shifts ~~from~~in ~~the~~favor ~~local~~of ~~tax~~sales ~~authority~~of ~~before~~PLI itbatteries ~~can claim~~ that ~~benefit, and~~we ~~the~~manufacture ~~outcome~~as ofopposed ~~the~~to ~~application is generally uncertain~~resales. ~~Therefore, Management established a 100% valuation allowance for the operating losses carried forward, and no deferred tax assets have been recorded.~~

Our business operates ~~primarily~~entirely in Chinese Renminbi, but we report our results in our SEC filings in U.S. Dollars. The conversion of our accounts from RMB to Dollars results in translation adjustments~~, which are reported as a middle step between net income and comprehensive income~~. ~~The~~While our net income is ~~added~~included toin the retained earnings on our balance sheet;, ~~while~~ the translation ~~adjustment~~adjustments ~~is added~~are toincluded in a line item on our balance sheet labeled “accumulated other comprehensive income,” since it is more reflective of changes in the relative values of U.S. and Chinese currencies than of the success of our business. InDuring ~~2009~~the year ended December 31, 2010, the effect of converting our financial results from RMB to U.S. Dollars was to ~~reduce~~increase our accumulated other comprehensive income by $1452,~~472~~683. During the year ended December 31, 2009, the effect of converting our financial results from RMB to U.S. Dollars was to increase our accumulated other comprehensive income by $172.

Liquidity and Capital Resources

~~We increased~~To ~~our~~date, ~~cash~~the ~~position~~Company has been financed by paid-in capital from the company founders, cash generated from operations, and a $72106,~~907~~808 innon-interest ~~2009~~bearing note from an individual who had been a shareholder at the time when the credit was extended. As a result of these factors, we had working capital of $1,681,860 at December 31, 2010, consisting primarily of accounts receivable, inventories and cash on hand. The ~~increase~~allowance ~~was achieved~~for doubtful accounts netted against the total accounts receivable is $1,856, ~~despite~~a relatively low level of .16%, reflecting our ~~operating~~confidence, ~~loss~~in light of all the circumstances, that we will be paid by ~~offsetting~~our customers. Our bad debt expenses were $745 in the ~~cash~~year ~~used~~ended December 31, 2009 and zero in ~~operating activities~~the ended December 31, 2010. Consistent with ~~cash~~ramped ~~obtained~~up bysales ~~terminating~~activities and the start of manufacturing operations, our ~~investment~~inventories inof ~~the~~finished ~~joint venture~~goods, ~~supplemented~~work-in-progress byand ~~funds~~raw ~~obtained~~materials increased from ~~shareholders. The~~ $9032,~~764~~410 inon ~~cash~~December ~~that~~31, we2009 ~~held~~to at$312,996 on December 31, ~~2009~~2010. Cash ison ~~inadequate~~hand rose from $35,447 ~~however~~on December 31, 2009 to ~~fund~~ a$95,261 ~~significant~~on ~~increase~~December in31, ~~operations~~2010.

The Company has no long term liabilities. Therefore, we believe that we can continue to fund operations at the current level of activity. However, in order to finance the Company’s continuing growth and construction of a new manufacturing facility, we will need to develop alternative sources of funds. The Company is currently negotiating with investment bankers and seeking loans from commercial banks. However, no financing agreements are yet in place.

Establishing our several telecommunications businesses in the public consciousness will cost money. At December 31, 2009 we had only $90,764 in cash and no other liquid assets on our balance sheet. Our plan, however, is to eventually expand our operations by opening additional sales offices throughout China, and hiring additional sales personnel to staff the offices. Fulfillment of this goal, however, will depend on our ability to obtain financing.

We have little on our balance sheet that could be pledged as collateral for debt. For that reason, our ability to finance growth will necessarily involve the sale of our equity. Our ability to sell equity at an acceptable price is not assured, and to date we have no commitments for funding. So we will continue to explore opportunities for financing. The cash flow from our business is sufficient to indefinitely sustain our operations as they are currently configured. But in order to take full advantage of our market opportunity, we will require additional funds.

Critical Accounting Policies and Estimates

We made no material changes to our critical accounting policies in connection with the preparation of financial statements for ~~2009~~2010.

Impact of Accounting Pronouncements

There were no recent accounting pronouncements that have had a material effect on the Company’s financial position or results of operations.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition or results of operations.

ITEM 7A QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

ITEM 7A	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not Applicable.

ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

Not Applicable.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

INDEX TO FINANCIAL STATEMENTS

	Page(s)
Report of Independent Registered Public Accounting Firm	14
Consolidated Balance Sheets as of December 31, 2009 and 2008	15
Consolidated Balance Sheets as of December 31, 2010 and 2009	15
Consolidated Statements of Operations and Other Comprehensive Income for the Years Ended December 31, 2009 and 2008	16
Consolidated Statements of Operations and Other Comprehensive Income
Consolidated Statements of Changes in Stockholders’ Equity/(Deficit) for the Years Ended December 31, 2009 and 2008	17
for the Years Ended December 31, 2010 and 2009	16
Consolidated Statements of Cash Flows for the Years Ended December 31, 2009 and 2008	18
Consolidated Statements of Changes in Stockholders’ Equity/(Deficit)
for the Years Ended December 31, 2010 and 2009	17
Consolidated Statements of Cash Flows for the Years Ended
December 31, 2010 and 2009	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~~2010 and ~~2008~~2009, 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~~2010. 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~~2010 and ~~2008~~2009, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, ~~2009~~2010 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~~2011

SMOOTH GLOBAL (CHINA) HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
	December 31,			December 31,
	2009			2008
	2010			2009
ASSETS
Current Assets:
Cash and cash equivalents	$	9095,~~764~~261		$	3335,~~415~~447
Prepaid expense (Note 5)		7,313			374,597
Notes receivable		75,621			-
Total current assets		98,077			408,012
Accounts receivable, net (Note 4)		1,176,039			112,408
Property, Plant, and Equipment, net (Note 6)		130,687			215,515
Advance to suppliers		21,943			549
Long-term Investment (Note 7)		-			233,434
Inventories (Note 5)		312,996			32,410
Contract Security Deposit (Note 8)		229,626			89,114
Total current assets		1,681,860			180,814
Total Assets	$	458,390		$	946,075
Property, Plant, and Equipment, net (Note 6)		102,770			13,997
Lease Security Deposit		15,835			687
Total Assets	$	1,800,465		$	195,498
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accrued expenses (Note 9)		54,838			53,667
Accounts payable		517,255			71,256
Taxes payable		704			34
Accrued expenses		88,640			1,540
Deferred revenue		-			1,679
Advance from customers		39,035			66,660
Due to an officer (Note 13)		113,704			-
VAT and other taxes payable		413,334			(622	)
Agreement security deposit (Note 10)		-			320,971
Corporate taxes payable		165,116			-
Total Current Liabilities		169,246			376,351
Due to a related party (Note 10)		106,807			-
Commitments and Contingencies (Note 19)		-			-
Total Current Liabilities		1,330,187			138,834
Commitments and Contingencies (Note 11)		-			-
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
Common stock, $0.001 par value, 200,000,000 shares authorized;
Additional paid-in capital		799,255			799,255
38,381,375 shares issued and outstanding as of December 31, 2010
Unamortized contractual services costs		-			(29,333	)
20,000,000 shares issued and outstanding as of December 31, 2009		38,381			20,000
Statutory reserves		236,875			236,875
Additional paid-in capital		(92,631	)		52,948
Retained earnings		~~(949~~471,~~252~~545	)		(~~653~~16,~~811~~434	)
Accumulated other comprehensive income		~~163~~52,~~885~~983			~~178,357~~150
Stockholders' Equity		~~289~~470,~~144~~278			~~569~~56,~~724~~664
Total Liabilities and Stockholders' Equity	$	~~458~~1,~~390~~800,465		$	~~946~~195,~~075~~498

See Notes to Consolidated Financial Statements

SMOOTH GLOBAL (CHINA) HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME
	For the Year Ended
	December 31,
	2009			2008
	2010			2009
Revenues
(a) GRT public telephone service	$	1,601		$	16,265
Sales		4,164,057			529,632
(b) GRT VoIP call time distribution		67,104			212,305
Costs of Sales		3,261,160			475,010
(c) GRT sales of call forwarding cards		-			213,953
Gross Profit		902,897			54,622
Total Revenue		68,705			442,523
QTC Consultancy Income		18,747			-
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
Selling expenses		70,193			31,024
Payroll and employee benefit		28,514			44,161
Payroll		44,969			15,700
Depreciation expenses		86,648			83,357
Pension and employee benefit		82,619			3,787
Office expenses		48,792			37,268
Depreciation expenses		7,702			2,295
Research & development expenses		-			105,448
Office rent		9,342			8,245
Professional fees		56,697			70,724
Office expenses		57,965			8,731
Consultant fees (Note 11)		41,235			706,384
Total Operating Expenses		272,790			69,782
Travel and entertainment		15,533			87,049
Income (Loss) from Operations		648,854			(15,160	)
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		68174			~~364~~159
Total other income		68174			~~364~~159
Income (Loss) before provision for Income Tax		(295,441	)		(1,107,680	)
Income (Loss) before provision
Provision for Income Tax		-			-
for Income Tax		649,028			(15,001	)
Income (Loss) from Continuing Operations		(295,441	)		(1,107,680	)
Provision for Income Tax		(161,049	)		-
Loss from Discontinued Operations--VoIP Call Time Distribution of QTC		-			(47,607	)
Net Income (Loss)		487,979			(15,001	)
Net Income		(295,441	)		(1,155,287	)
Other Comprehensive Income (Loss)
Effects of Foreign Currency Conversion		~~(14~~52,~~472~~683	)		~~87,276~~172
Comprehensive Income (Loss)	$	~~(309~~540,~~913~~662	)	$	(114,~~068,011~~829	)
Basic and fully diluted earnings (loss) per share	$	(0.01	)	$	(0.0300	)
Weighted average shares outstanding		38,381,375			3820,~~381~~000,~~375~~000

See Notes to Consolidated Financial Statements

SMOOTH GLOBAL (CHINA) HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIT)
FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008
FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009
										Unamortized									Accumulated
													Accumulated
	Common Stock						Additional			~~Contractual~~			Other			Total			~~Other~~			~~Total~~
	$0.001 Par Value						Paid-in			~~Service~~Retained			~~Statutory~~Comprehensive			~~Retained~~Owners'			~~Comprehensive~~			~~Owners'~~
	Shares			Amount			Capital			~~Costs~~Earnings			~~Reserve~~Income			~~Earnings~~Equity			~~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
December 31, 2008		1,000		$	1,000		$	71,948		$	(1,433	)	$	(22	)	$	71,493
Amortization of costs of common stock
Common stock issued for
issued for contractual services		-			-			-			231,880			-			-			-			231,880
acquisition of Smooth Global
Net Income (Loss)		-			-			-			-			-			(1,155,287	)		-			(1,155,287	)
(reverse merger)		20,000,000			20,000			(20,000	)		-			-			-
Other comprehensive income-
Smooth Global share exchange		(1,000	)		(1,000	)		1,000			-			-			-
effects of exchange rates		-			-			-			-			-			-			87,276			87,276
Net Income (Loss)		-			-			-			(15,001	)		-			(15,001	)
Balances at
Other comprehensive income-
December 31, 2008		38,381,375		$	38,381		$	799,255		$	(29,333	)	$	236,875		$	(653,811	)	$	178,357		$	569,724
effects of exchange rates		-			-			-			-			172			172
Amortization of costs of common stocks
Balances at
issued for contractual services		-			-			-			29,333			-			-			-			29,333
December 31, 2009		20,000,000		$	20,000		$	52,948		$	(16,434	)	$	150		$	56,664
Net Income (Loss)		-			-			-			-			-			(295,441	)		-			(295,441	)
Reverse merger adjustment*		18,381,375			18,381			(145,579	)		-			-			(127,198	)
Other comprehensive income-
Net Income (Loss)		-			-			-			487,979			-			487,979
effects of exchange rates		-			-			-			-			-			-			(14,472	)		(14,472	)
Other comprehensive income-
Balances at
effects of exchange rates		-			-			-			-			52,833			52,833
December 31, 2009		38,381,375		$	38,381		$	799,255		$	-		$	236,875		$	(949,252	)	$	163,885		$	289,144
Balances at
December 31, 2010		38,381,375		$	38,381		$	(92,631	)	$	471,545		$	52,983		$	470,278

* The reverse merger adjustment represents the recording of the minority shareholders’ shares outstanding at the time of the reverse merger.

See Notes to Consolidated Financial Statements

SMOOTH GLOBAL (CHINA) HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
	For the Year Ended
	December 31,
	2009			2008
	2010			2009
Operating Activities
Net income (loss)	$	~~(295~~487,~~441~~979	)	$	(115,~~155,287~~001	)
Adjustments to reconcile net income (loss) to net cash provided (used) by operating activities:
Adjustments to reconcile net income (loss) to
Depreciation		86,648			83,357
net cash provided (used) by operating activities:
Loss on disposal of fixed assets		-			34,474
Depreciation		7,702			2,295
Deferred consultant compensation		29,333			231,880
Reverse merger effect		(127,198	)		-
Changes in operating assets and liabilities:
(Increase)/Decrease in accounts receivable		-(1,051,966	)		~~220~~(112,~~558~~348	)
(Increase)/Decrease in purchased SIM cards		-			422
(Increase)/notes receivable		(75,062	)		-
(Increase)/Decrease in prepaid expenses		367,929			20,579
(Increase)/Decrease in advance to suppliers		(21,217	)		(549	)
(Increase)/Decrease in contract security deposit		(140,195	)		-
(Increase)/Decrease in inventories		(277,415	)		(32,393	)
Increase/(Decrease) in accounts payable and accrued expenses		1,040			(9,723	)
(Increase)/Decrease in contract security deposit		(15,013	)		(687	)
Increase/(Decrease) in deferred revenue		(1,682	)		519
Increase/(Decrease) in accounts payable		440,291			71,219
Increase/(Decrease) in taxes payable		669			(386	)
Increase/(Decrease) in accrued expenses		87,166			-
Increase/(Decrease) in agreement security deposit		(321,519	)		315,990
Increase/(Decrease) in advance from customers		(30,440	)		66,705
Net cash provided (used) by operating activities		(273,218	)		(257,616	)
Increase/(Decrease) in VAT and other taxes payable		410,918			(622	)
Increase/(Decrease) in corporate taxes payable		163,896			-
Net cash provided (used) by operating activities		(359	)		(21,381	)
Investing Activities
Investment in subsidiaries		-			(229,811	)
Purchase of fixed assets		(87,925	)		(16,283	)
Withdraw from investment in subsidiaries		233,833			-
Net cash provided (used) by investing activities		(87,925	)		(16,283	)
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			-
Proceeds from related parties		106,018			-
Net cash provided (used) by financing activities		~~113~~106,~~622~~018			-
Increase (decrease) in cash		7217,~~907~~734			(~~540~~37,~~781~~664	)
Effects of exchange rates on cash		~~(15~~42,~~558~~080	)		~~53,180~~163
Cash at beginning of the period		3335,~~415~~447			~~521~~72,~~016~~948
Cash at end of the period	$	9095,~~764~~261		$	3335,~~415~~447
Supplemental Disclosures of Cash Flow Information:
Cash paid (received) during year for:
Interest	$	-		$	-
Income taxes	$	-		$	-

See Notes to Consolidated Financial Statements

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

	Smooth Global (China) Holdings, Inc. ("Smooth Global (China)" or the "Company") 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 of design, manufacture and distribution of rechargeable polymer lithium-ion batteries in the People's Republic of China ("PRC'), through its wholly-owned subsidiaries, Smooth Global Services Limited ("Smooth Global"), a limited liability company incorporated on January 25, 2006 in the British Virgin Island ("BVI") .

	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.

	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.

	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.

	On December 16, 2010, the Trustees terminated the Agreements with Beijing Telecom, and accordingly, Beijing Telecom lost its effective control over GRT. Therefore, the consolidated financial statements of Smooth Global and its wholly owned subsidiary, Beijing Telecom, do not include the financial statements of GRT. In connection with the termination of the Agreements, Ms. Zheng Shuying transferred and surrendered 20,000,000 shares of the Company's common stock to the Company as treasury stock.

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)

	On December 16, 2010, Beijing Telecom finished the acquisition of 100% of the registered capital of Beijing Yupeng Hengli Technology Co., Ltd. ("Yupeng Hengli"). In connection with the acquisition, the Company issued 20,000,000 shares of its treasury stock to the two prior registered owners of Yupeng hengli, Mr. Wang, Xiaoping and Mr. Zhu, Chenyu, and their assignees, all of them are PRC citizen. Upon completion of this transaction, Yupeng Hengli became a wholly-owned subsidiary of Beijing Telecom.

	The acquisition of Yupeng Hengli resulted in a capital transaction accounted for as a reverse merger. The transaction was treated for accounting purposes as a recapitalization of the accounting acquirer (Yupeng Hengli) and a reorganization of the accounting acquiree (Beijing Telecom). Accordingly, the historical financial statements presented prior to the merger are the historical financial statements of Yupeng Hengli.

	Under the Company Law of PRC, Yupeng Hengli was incorporated on December 23, 2008 in Beijing City, PRC , as a limited liability company with a registered capital of RMB 500,000 (equivalent to US$72,948). Yupeng Hengli started its operation with distribution of rechargeable polymer lithium-ion batteries in PRC in 2009. Beginning from January 2010, Beijing Yupeng is engaged in the business of design, manufacture, and distribution of rechargeable polymer lithium-ion batteries in PRC.

	Smooth Global (China) also wholly own Gold Profit (Asia) Group Limited ("Gold Profit"), a limited liability company incorporated in the BVI on July 28, 2006, which in turn wholly own Beijing Quan Tong Chang Information Service Limited a/k/a Beijing Smooth Global Information Services Ltd. (”QTC”), a limited liability company incorporated in Beijing City, PRC on August 2, 2003. Currently, QTC is engaged to provide business information consultant services.

	Yupeng Hengli 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 Yupeng Hengli and QTC. 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)
		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)

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 2-	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 3-	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 date of issuance of these financial statements. 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, or all such material events have been fully disclosed.

	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.

SMOOTH GLOBAL (CHINA) HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

	Note 1 -	ORGANIZATION AND OPERATIONS (continued)
Note 3-	SIGNIFICANT ACCOUNTING POLICIES (continued)
		Discontinued Operation (continued)
	Foreign Currencies Translation
		Losses from discontinued operation consist of the following:
	The Company maintains its books and accounting records in PRC currency "Renminbi" ("RMB"), which is determined as the functional currency. 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 currencies other than RMB 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 owners' 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$”). Assets and liabilities of the Company are translated at the prevailing exchange rate at each reporting period end. Contributed capital accounts are translated using the historical rate of exchange when capital is injected. Income and expense accounts are translated at the average rate of exchange during the reporting period. Translation adjustments resulting from translation of these financial statements are reflected as accumulated other comprehensive income (loss) in the owners’ equity.
	The exchange rates used for foreign currency translation were as follows (USD$1 = RMB):

	For The Year Ended
Period Covered	Balance Sheet Date Rates		Average Rates
	December 31,
Year ended December 31, 2010		6.61180	6.661031434
	2009			2008
Year ended December 31, 2009		6.83720	6.84088
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.

	Statement of Cash Flows

	In accordance with ASC 830-230, “Statement of Cash Flows”, cash flows from the Company’s operations is 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.

	Cash and Cash Equivalents

	Cash and cash equivalents include cash on hand, deposits in banks with maturities of three months or less, and all highly liquid investments which are unrestricted as to withdrawal or use, and which have original maturities of three months or less at the time of purchase.

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 3-	SIGNIFICANT ACCOUNTING POLICIES (continued)

	Fair Value of Measurements

	The Company applies the provisions of ASC Subtopic 820-10, Fair Value Measurements, for fair value measurements of financial assets and financial liabilities and for fair value measurements of nonfinancial items that are recognized or disclosed at fair value in the financial statements. ASC Subtopic 820-10 also establishes a framework for measuring fair value and expands disclosures about fair value measurements.

	ASC Subtopic 820-10 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability.

	ASC Subtopic 820-10 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC Subtopic 820-10 establishes three levels of inputs that may be used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows:

	Level 1:	Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.

	Level 2:	Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other then quoted prices that are observable, and inputs derived from or corroborated by observable market data.

	Level 3:	Inputs are unobservable inputs which reflect the reporting entity’s own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information.

	The level in the fair value hierarchy within which a fair value measurement in its entirety falls is based on the lowest level input that is significant to the fair value measurement in its entirety.

	The carrying amounts reported in the balance sheets for cash and cash equivalents, accounts receivable, loan receivables, other receivables, advance to suppliers, short-term loan, accounts payable, advance from customers, other payables and accrued expenses, approximate their fair market value based on the short-term maturity of these instruments. The Company did not identify any assets or liabilities that are required to be measured at fair value on a recurring basis on the consolidated balance sheets in accordance with ASC 820.

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 3-	SIGNIFICANT ACCOUNTING POLICIES (continued)

	Revenue Recognition

	The Company recognizes its revenues net of sales taxes and sales-related taxes. In accordance with FASB ASC 605, "Revenue Recognition", the Company recognizes revenue when the earnings process is complete. This generally occurs when services have been rendered and accepted or products are shipped to unaffiliated customers or picked up by unaffiliated customers in the Company's warehouse, title and risk of loss have been transferred, collectability is reasonably assured and pricing is fixed or determinable. The corresponding shipping and handling costs are included in the selling expenses.

	The Company warrants the product only in the event of defects for one year from the date of shipment. Historically, the Company has not experienced significant defects, and replacements for defects have been minimal. For the years ended December 31, 2010 and 2009, no such returns and allowances have been recorded. Should returns increase in the future it would be necessary to adjust estimates, in which case recognition of revenues could be delayed. Payments received prior to satisfying the Company’s revenue recognition criteria are recorded as advance from customers.

	Product warranty

	The Company provides product warranties to its customers that all equipment manufactured by it will be free from defects in materials and workmanship under normal use for a period of one year from the date of shipment. The Company's costs and expenses in connection with such warranties has been immaterial and during the two-year period ended December 31 2010, no product warranty reserve was considered necessary.

	Accounts Receivable

	Accounts receivable are recorded at the invoiced amount and do not bear interest. Any allowance for doubtful accounts is established based on the management’s assessment of the recoverability of accounts and other receivables. Management regularly reviews the composition of accounts receivable and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the collectability of accounts receivable and the adequacy of the allowance. In circumstances in which we receive payment for accounts receivable which have previously been written off, we reverse the allowance and bad debt expenses.

	Inventory

	Inventories are stated at the lower of cost, as determined on a weighted average basis, or market. Costs of inventories include purchase and related costs incurred in bringing the products to their present location and condition. Market value is determined by reference to selling prices after the balance sheet date or to management’s estimates based on prevailing market conditions. Management writes down the inventories to market value if they are below cost. Management regularly evaluates the composition of the Company’s inventories to identify slow-moving and obsolete inventories to determine if a valuation allowance is required.

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 and CUGD.

SMOOTH GLOBAL (CHINA) HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 3-	SIGNIFICANT ACCOUNTING POLICIES (continued)

	Property, Plant and Equipment

	Property, plant and equipment are stated at cost less accumulated depreciation and amortization. Maintenance, repairs and betterments, including replacement of minor items, are charged to expense; major additions to physical properties are capitalized. Depreciation and amortization are provided using the straight-line method (after taking into account their respective estimated residual values) over the estimated useful lives of the assets as follows:

Building and warehouses		20 years
Machinery and equipment		7 to 10 years
Office equipment and furniture		5 years
Motor vehicles		5 years

	Valuation of Long-Lived assets

	In accordance with Impairment or Disposal of Long-Lived Assets Subsections of ASC Subtopic 360-10, Property, Plant, and Equipment - Overall, long-lived assets, such as property, plant and equipment, and purchased intangible asset subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset or asset group be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by that asset or asset group to its carrying value. If the carrying value of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, impairment is recognized to the extent that the carrying value exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. No impairment of long-lived assets was recognized for the years ended December 31, 2010 and 2009, respectively.

	Research and Development Costs

	The Company charges research and development costs to expense when incurred in accordance with the FASB ASC 730, “Research and Development”. Research and development costs were immaterial for the years ended December 31, 2010 and 2009, respectively.

	Advertising Costs

	The Company expenses advertising costs as incurred or the first time the advertising takes place, whichever is earlier, in accordance with the FASB ASC 720-35, “Advertising Costs”. Advertising expenses were included in selling expenses. Advertising expenses were immaterial for the years ended December 31, 2010 and 2009, respectively.

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 3-	SIGNIFICANT ACCOUNTING POLICIES (continued)

	Value-added Tax ("VAT") and other taxes

	Sales revenue represents the invoiced value of goods, net of a value-added tax (VAT). The VAT collected on sales is netted against the taxes paid for purchases of cost of goods sold to determine the amounts payable and refundable. The Company presents VAT on a net basis.

	The Company is subject to various taxes such as City Development Tax, and Education tax to the local government tax authorities. The City Development Tax and Education Tax are generally collected on a certain percentage of VAT.

	Comprehensive Income

	ASC 220, “Comprehensive Income”, 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 or benefit.

	Segment Reporting

	ASC 280 requires use of the “management approach” model for segment reporting. The management approach model is based on the way a company’s management organizes segments within the company for making operating decisions and assessing performance. Reportable segments are based on products and services, geography, legal structure, management structure, or any other manner in which management disaggregates a company. The Company operated in one business segment for the years ended December 31, 2010 and 2009, respectively.

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:

SMOOTH GLOBAL (CHINA) HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

	Depreciable	Residual
Note 3-	SIGNIFICANT ACCOUNTING POLICIES (continued)
	Life	Value
	Related parties
Network and office equipment	5 years	4%
	For the purposes of these financial statements, parties are considered to be related if one party 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.
Leasehold Improvements	5 years (Lease duration)	0%
	China Contribution Plan
	Full time employees of the PRC entities participate in a government mandated multi-employer defined contribution plan pursuant to which certain pension benefits, medical care, unemployment insurance, employee housing fund and other welfare benefits are provided to employees. Chinese labor regulations require the Company to pay to the local labor bureau a monthly contribution at a stated contribution rate based on the monthly basic compensation of qualified employees. The relevant local labor bureau is responsible for meeting all retirement benefit obligations; the Company has no further commitments beyond its monthly contribution.
	The Company made the provisions based on the number of qualified employees and the rate and base regulated by the government. However, the Company did not make full monthly contribution to these funds. In the event that any current or former employee files a complaint with the PRC government, the Company may be subject to administrative fines. The Company believes that these fines would be minimal, and accrual for such fines has been made in this regard.
	Statutory Reserves
	Pursuant to the applicable laws in the 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 longer required to make appropriation to the statutory public welfare fund. No appropriations to the discretionary surplus reserve have been made.

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 or benefit.

SMOOTH GLOBAL (CHINA) HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 3-	SIGNIFICANT ACCOUNTING POLICIES (continued)

	Income Taxes

	The Company accounts for income tax in accordance with FASB ASC 740,"Income Taxes", 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, an enterprise need approval from the local tax authority before it can claim such tax benefit, and the outcome of the application is generally uncertain. Therefore, the Management established a 100% valuation allowance for the operation losses carried forward and no deferred tax assets have been recorded.

	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.

	The Company accounts for income taxes in interim periods in accordance with FASB ASC 740-270, "Interim Reporting". The Company has determined an estimated annual effective tax rate. The rate will be revised, if necessary, as of the end of each successive interim period during the Company's fiscal year to its best current estimate. The estimated annual effective tax rate is applied to the year-to-date ordinary income (or loss) at the end of the interim period.

	Earnings (Loss) Per Share

	The Company reports earnings per share in accordance with FASB ASC 260, “Earnings Per Share” , 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 years ended December 31, 2010 and 2009, respectively.

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 3-	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

	Recent Accounting Pronouncements

	In December 2010, FASB issued an amendment to the disclosure of supplementary pro forma information for business combinations. The amendments in this ASU specify that if a public entity presents comparative financial statements, the entity should disclose revenue and earnings of the combined entity as though the business combination that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only. The amendments also expand the supplemental pro forma disclosures to include a description of the nature and amount of material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings. The amendments are effective prospectively for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2010. Early adoption is permitted. The adoption of this new guidance did not have a material effect on the Company’s financial position and results of operations.

	In December 2010, FASB issued an amendment to goodwill impairment test. The amendments modify Step 1 of the goodwill impairment test for reporting units with zero or negative carrying amounts. For those reporting units, an entity is required to perform Step 2 of the goodwill impairment test if it is more likely than not that a goodwill impairment exists. In determining whether it is more likely than not that goodwill impairment exists, an entity should consider whether there are any adverse qualitative factors indicating that impairment may exist. The qualitative factors are consistent with the existing guidance and examples, which require that goodwill of a reporting unit be tested for impairment between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The amendments are effective for fiscal years, and interim periods within those years, beginning after December 15, 2010. Early adoption is not permitted. The adoption of this new guidance did not have a material effect on the Company’s financial position and results of operations.

	In July 2010, the Financial Accounting Standards Board ("FASB") issued amendments to the disclosure requirements about the credit quality of financing receivables and the allowance for credit losses. The purpose of the additional disclosures is to enable users of financial statements to better understand the nature of credit risk inherent in an entity’s portfolio of financing receivables and how that risk is analyzed. For end of period balances, the new disclosures are required to be made in all interim and annual periods ending on or after December 15, 2010. For activity during a reporting period, the disclosures are required to be made in all interim and annual periods after January 1, 2011. The Management does not expect these changes will have a material impact on the Company’s financial position and results of operations as this guidance only relates to additional disclosures.

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 3-	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

	Recent Accounting Pronouncements (continued)

	In April 2010, FASB issued an amendment to Stock Compensation. The amendment clarifies that an employee stock-based payment award with an exercise price denominated in the currency of a market in which a substantial portion of the entity’s equity shares trades should not be considered to contain a condition that is not a market, performance, or service condition. Therefore, an entity would not classify such an award as a liability if it otherwise qualifies as equity. The amendments are effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2010. The adoption of this new guidance did not have a material effect on the Company’s financial position and results of operations.

	In January 2010, the FASB issued additional disclosure requirements for fair value measurements. The guidance requires previous fair value hierarchy disclosures to be further disaggregated by class of assets and liabilities. A class is often a subset of assets or liabilities within a line item in the statement of financial position. In addition, significant transfers between Levels 1 and 2 of the fair value hierarchy are required to be disclosed. These additional requirements became effective January 1, 2010 for quarterly and annual reporting. The adoption of this new guidance did not have a material effect on the Company’s financial position and results of operations. In addition, the fair value disclosure amendments also require more detailed disclosures of the changes in Level 3 instruments. These changes will be effective January 1, 2011 and the Management does not expect the adoption of this new guidance will have a material effect on the Company’s financial position and results of operations.

	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. The Management does not expect the adoption of this new guidance will have a material effect on the Company’s 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
		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-	ACCOUNTS RECEIVABLE

	Accounts receivable consists of the following:

	December 31,			December 31,
	2010			2009

Accounts receivable	$	1,177,895		$	114,264
Less: Allowance for doubtful accounts		(1,856	)		(1,856	)
Accounts receivable, net	$	1,176,039		$	112,408

	Bad debt expense charged to operations was $0 and $745 for the year ended December 31, 2010 and 2009, respectively.


Note 5-	INVENTORIES

	Inventories consist of following:

	December 31,		December 31,
	2010		2009

Finished goods	$	199,775	$	24,095
Work-in-progress		54,059		-
Raw materials		59,162		8,315
Total	$	312,996	$	32,410

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,
	2010			2009

Machinery and equipment	$	16,562		$	-
Office equipment and furniture		16,089			2,494
Motor vehicles		87,360			13,798
		120,011			16,292

Less: Accumulated depreciation		(17,241	)		(2,295	)

Total	$	102,770		$	13,997

Depreciation expense charged to operations was $56,540 and $2,296 for the year ended December 31, 2010 and 2009, respectively.

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 7-	CORPORATE INCOME TAX

	Gold Profit and Smooth Global are registered in the BVI. Under the current laws of the BVI, the Company is not subject to tax on income or capital gains. Additionally, upon payments of dividends by the Company to its shareholders, no BVI withholding tax will be imposed. Gold Profit and Smooth Global had no income during the period.

	PRC Income Tax

	Under the Income Tax Laws of the PRC, the Company is generally subject to tax at a statutory rate of 25%.

	QTC and Beijing Telecom Income Tax

	QTC and Beijing Telecom are subject to effective income tax rate of 25% beginning from January 1, 2008.

	The provision for income taxes on earnings consists of the following:

	For the Year Ended
	December 31,
	2010		2009
PRC Enterprise Income Taxes	$	-	$	-
United States Federal Income Taxes		-		-
Total Provision for Income Taxes	$	-	$	-

A reconciliation between the income tax computed at the U.S. statutory rate and the Company’s provision for income tax is as follows:

	For the Year Ended
	December 31,
	2010			2009
U.S. Statutory tax rate		34.00	%		34.00	%
Foreign income not recognized in the United States		-34.00	%		-34.00	%
PRC enterprise income tax rate		25.00	%		25.00	%
Effect of tax holiday		-25.00	%		-25.00	%
Effective income tax rate		-			-

	There are no significant permanent or temporary differences between book and taxable income.

	QTC had net operating losses of approximately $188,118 and $129,702 carried from prior years as of December 31, 2010 and 2009, respectively. Beijing Telecom had net operating losses of approximately $92,346 and $61,811 carried from prior years as of December 31, 2010 and 2009, respectively. Although the PRC Income Tax Law allows the enterprises to offset their future taxable income with operating losses carried forward in a 5-year period, enterprises need approval from local tax authority before they can claim such tax benefit, and the outcome of the application is generally uncertain. Therefore, the Management established a 100% valuation allowance for the operation losses carried forward and no deferred tax assets have been recorded as a result of these losses.

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

SMOOTH GLOBAL (CHINA) HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

		December 31,		December 31,
Note 7-	CORPORATE INCOME TAX (continued)
		2009		2008
	YPHL Income Tax
Prepaid telephone number usage fees		$	-	$	28,823
	YPHL subject to effective income tax rate of 25% beginning from January 1, 2008.
Advance to telecommunication carriers			7,313		43,769
	The provision for income taxes on earnings consists of the following:
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:

	For the Year Ended
	December 31,
	2010		2009
PRC Enterprise Income Taxes	$	161,049	$	-
United States Federal Income Taxes		-		-
Total Provision for Income Taxes	$	161,049	$	-

	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.

A reconciliation between the income tax computed at the U.S. statutory rate and the Company’s provision for income tax is as follows:

	For the Year Ended
	December 31,
	2010			2009
U.S. Statutory tax rate		34.00	%		34.00	%
Foreign income not recognized in the United States		-34.00	%		-34.00	%
PRC enterprise income tax rate		25.00	%		25.00	%
Effective income tax rate		25.00	%		25.00	%


	There are no material permanent or temporary differences between book and taxable income.

	Accounting for Uncertainty in Income Taxes

	The tax authority of the PRC Government conducts periodic and ad hoc tax filing reviews on business enterprises operating in the PRC after those enterprises complete their relevant tax filings. Therefore, the Company’s tax filings results are subject to change. It is therefore uncertain as to whether the PRC tax authority may take different views about the Company’s tax filings, which may lead to additional tax liabilities.

	The Company adopted the provisions of Accounting for Uncertainty in Income Taxes on January 1, 2007. The provisions clarify the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with the standard “Accounting for Income Taxes,” and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The provisions of Accounting for Uncertainty in Income Taxes also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.

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

SMOOTH GLOBAL (CHINA) HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31,

Note 7-

CORPORATE INCOME TAX (continued)

2009

2008

Accounting for Uncertainty in Income Taxes

Equity

Based on the Company’s evaluation, the Company has concluded that there are no significant uncertain tax positions requiring recognition in its financial statements.

Ownership

The Company may from time to time be assessed interest or penalties by major tax jurisdictions. In the event it receives an assessment for interest and/or penalties, it will be classified in the financial statements as tax expense.

Description

Amount

Percentage

Amount

Percentage

Note 8-

ACQUISITION

Joint-venture with Beijing Zhongheng Technology Co., Inc.

233,434

10%

On September 30, 2010, the prior owners of Yupeng Hengli entered into a Share Exchange Agreement (the “Agreement”) with Smooth Global (China). Pursuant to the Agreement, the prior owners of Yupeng Hengli agreed to transfer their 100% equity ownerships interest of Yupeng Hengli to Beijing Telecom for 20,000,000 shares of common stock of Smooth Global (China). Upon the completion of the transfer on December 16, 2010, Yupeng Hengli became a wholly-owned subsidiary of Beijing Telecom.

233,434

Note 9-

DUE TO A RELATED PARTY

Due to a related party represents loans from Ms. Zheng to finance the operations of QTC and Beijing Telecom 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.

		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 the following:

	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:

SMOOTH GLOBAL (CHINA) HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

		December 31,		December 31,
Note 10-	CONCENTRATIONS AND CREDIT RISKS
		2009		2008
	The Company maintains its cash and cash equivalents with various financial institutions in the PRC which do not provide insurance for amounts on deposit. The Company has not experienced any losses in such accounts and believes it is not exposed to significant credit risk in this area.
Employee pension and benefit payable		$	19,709	$	17,546
	The Company operates principally in the PRC and grants credit to its customers in this geographic region. Although the PRC is economically stable, it is always possible that unanticipated events in foreign countries could disrupt the Company’s operations.
Accrued professional fees			35,129		36,121
	Major Customer
		$	54,838	$	53,667
	For the years ended December 31, 2010 and 2009, no customer had net sales exceeding 10% of the Company’s total net sales for the respective period.
	Major Suppliers
	For the years ended December 31, 2010 and 2009, the Company’s one largest supplier accounted for 76.6% and 99%, respectively, of the Company’s total purchases. The account payable balances for the Company’s largest supplier was $79,048 and $26,268 as of December 31, 2010 and 2009, respectively.

Note 10 - AGREEMENT SECURITY DEPOSIT Agreement security deposit consists of the following:

	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 the following:

SMOOTH GLOBAL (CHINA) HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

		December 31,		December 31,
Note 11-	COMMITMENTS AND CONTINGENCIES
		2009		2008
	Minimum Lease Payments on Operating Lease
(1) Due to Ms. Shuying Zheng, CEO		$	78,163	$	-
	The Company rents a production facility and significant production equipment from a third party for a three-year period ended December 31, 2012. Rent expense amounted to $233,671 and $nil for the year ended December 31, 2010 and 2009, respectively. As of December 31, 2010, the future minimum lease payments for the lease are as following:
(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
Year ending		Lease
		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.
December 31,		Payment
	(2)	GRT Lease
2011			231,674
		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:
2012			231,674
		$	463,348

Lack of Insurance The ~~Six~~Company ~~Months~~does ~~Ending~~not ~~June~~carry 30any business interruption insurance, ~~2010~~products $liability 9insurance or any other insurance policy. As a result,~~629~~ the Company may incur uninsured losses, increasing the possibility that the investors would lose their entire investment in the Company. The Company could be exposed to liabilities or other claims for which the Company has no insurance protection. The Company does not currently maintain any business interruption insurance, products liability insurance, or any other comprehensive insurance policy. As a result, the Company may incur uninsured liabilities and losses as a result of the conduct of its business. There can be no guarantee that the Company will be able to obtain insurance coverage in the future, and even if it can obtain coverage, the Company may not carry sufficient insurance coverage to satisfy potential claims. Should uninsured losses occur, any purchasers of the Company’s common stock could lose their entire investment. Because the Company does not carry products liability insurance, a failure of any of the products marketed by the Company may subject the Company to the risk of product liability claims and litigation arising from injuries allegedly caused by the unqualified composition or quality of its products. The Company cannot assure that it will have enough funds to defend or pay for liabilities arising out of a products liability claim. To the extent the Company incurs any product liability or other litigation losses, its expenses could materially increase. There can be no assurance that the Company will have sufficient funds to pay for such expenses, which could end its operations and the investors would lose their entire investment. Environmental In the ordinary course of its business, the Company is subject to numerous environmental laws and regulations covering compliance matters or imposing liability for the costs of, and damages resulting from, cleaning up sites, past spills, disposals and other releases of hazardous substances. Currently, our environmental compliance costs are immaterial to our operating costs. However, changes in these laws and regulations may significantly increase our environmental compliance costs and therefore have a material adverse effect on the Company’s financial position and results of operations. Also, any failure by the Company to adequately comply with such laws and regulations could subject the Company to significant future liabilities.

(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:

SMOOTH GLOBAL (CHINA) HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

		For the Year Ended
Note 11-	COMMITMENTS AND CONTINGENCIES (continued)
		December 31,
	Risks of losses
		2009			2008
	The Company is potentially exposed to risks of losses that may result from business interruptions, injury to others (including employees) and damage to property. These losses may be uninsured, especially due to the fact that the Company’s operations are in China, where business insurance is not readily available. If: (i) information is available before the Company’s financial statements are issued or are available to be issued indicates that such loss is probable and (ii) the amount of the loss can be reasonably estimated, an estimated loss will be accrued by a charge to income. If such loss is probable but the amount of loss cannot be reasonably estimated, the loss shall be charged to the income of the period in which the loss can be reasonably estimated and shall not be charged retroactively to an earlier period. As of September 30, 2010 and December 31, 2009, the Company has not experienced any uninsured losses from injury to others or other losses.
REVENUE
	PRC's political and economic system
GRT public telephone service		$	1,601		$	16,265
	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.
GRT VoIP call time distribution			67,104			212,305
	Governmental control of currency conversion
GRT sales of call forwarding cards			-			213,953
	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.
COST OF SALES
	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.
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
ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Not applicable.
	Note 16 -	COMMON STOCK
ITEM 9A.	CONTROLS AND PROCEDURES
		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.

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Not applicable.

ITEM 8A. CONTROLS AND PROCEDURES

(a) Evaluation of disclosure controls and procedures.

The term “disclosure controls and procedures” (defined in SEC Rule 13a-15(e)) refers to the controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files under the Securities Exchange Act of 1934 (the “Exchange Act”) is recorded, processed, summarized and reported within required time periods. “Disclosure controls and procedures” include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

The Company’s management, with the participation of the Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered by this annual report (the “Evaluation Date”). Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer ~~has~~have concluded that, as of the Evaluation Date, such controls and procedures were effective.

(b) Changes in internal controls.

The term “internal control over financial reporting” (defined in SEC Rule 13a-15(f)) refers to the process of a company that is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Company’s management, with the participation of the Chief Executive Officer and Chief Financial Officer, has evaluated any changes in the Company’s internal control over financial reporting that occurred during the fourth quarter of the year covered by this annual report, and they have concluded that there was no change to the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934. We have assessed the effectiveness of those internal controls as of December 31, ~~2009~~2010, using the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) Internal Control – Integrated Framework as a basis for our assessment.

Because of inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

4439

A material weakness in internal controls is a deficiency in internal control, or combination of control deficiencies, that adversely affects the Company’s ability to initiate, authorize, record, process, or report external financial data reliably in accordance with accounting principles generally accepted in the United States of America such that there is more than a remote likelihood that a material misstatement of the Company’s annual or interim financial statements that is more than inconsequential will not be prevented or detected. In the course of making our assessment of the effectiveness of internal controls over financial reporting, we identified two material weaknesses in our internal control over financial reporting. These material weaknesses consisted of:

a. Inadequate staffing and supervision within the accounting operations of our company. The relatively small number of employees who are responsible for accounting functions prevents us from segregating duties within our internal control system. The inadequate segregation of duties is a weakness because it could lead to the untimely identification and resolution of accounting and disclosure matters or could lead to a failure to perform timely and effective reviews.

b. Lack of expertise in U.S accounting principles among the personnel in our Chinese headquarters. Our books are maintained and our financial statements are prepared by the personnel employed at our executive offices in ~~the~~ ~~City of Beijing~~China. Few of our employees have experience or familiarity with U.S accounting principles. The lack of personnel in our ~~Beijing~~executive office who are trained in U.S. accounting principles is a weakness because it could lead to improper classification of items and other failures to make the entries and adjustments necessary to comply with U.S. GAAP.

Management is currently reviewing its staffing and their training in order to remedy the weaknesses identified in this assessment. To date, we are not aware of significant accounting problems resulting from these weaknesses; so we have to weigh the cost of improvement against the benefit of strengthened controls. However, because of the above conditions, management’s assessment is that the Company’s internal controls over financial reporting were not effective as of December 31, ~~2009~~2010.

~~This annual~~ITEM ~~report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting~~9B. ~~Management’s~~ ~~report~~OTHER ~~was~~INFORMATION not subject to attestation by the Company’s registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this annual reportNone.

~~ITEM 8B. OTHER INFORMATION~~40

None.

PART III

ITEM 9 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The officers and directors of the Company are:

Name	Age	Position with the Company	Director Since
Zheng Shuying	43	Chief Executive Officer, Chief Financial Officer, Director	2007
Xiaojing Xu	26	Chief Executive Officer, Director	2010
Liu Meifeng	48	Director	2007
Hui Liang	27	Chief Financial Officer, Director	2010
Jin Guodong	60	Director	2007
Chenyu Zhu	28	Chief Operating Officer, Director	2010

Directors hold office until the annual meeting of the Company’s stockholders and the election and qualification of their successors. Officers hold office, subject to removal at any time by the Board, until the meeting of directors immediately following the annual meeting of stockholders and until their successors are appointed and qualified.

~~Zheng Shuying. Since~~Xiaojing ~~2003~~Xu ~~Ms. Zheng~~ has been ~~employed~~appointed asto ~~Chief Executive~~the ~~Officer~~Company’s board of ~~Beijing~~directors ~~QTC~~to ~~Information~~contribute &his ~~Services~~vision ~~Co., Ltd. Since~~for ~~2005~~the ~~Ms.~~growth ~~Zheng has also been employed as Chief Executive Officer~~ of ~~Beijing~~BJHL, ~~GRT~~a ~~Information~~company ~~Services~~that ~~Limited~~he founded. ~~Both of these companies are now subsidiaries of Smooth Global (China) Holdings, Inc~~Mr. ~~From~~Xu ~~1992 to~~has ~~2003,~~been ~~Ms.~~employed ~~Zheng~~by ~~was~~BJHL as Chief Executive Officer ~~of Beijing Haodu Science & Technology Co. Ltd.~~, ~~which~~Director ~~was engaged in the business of acquiring~~ and ~~marketing~~ ~~patents~~Senior ~~and~~Researcher ~~other~~since ~~technology~~2008. From ~~1988~~2007 to ~~1992~~2008 MsMr. ~~Zheng~~ Xu was aemployed ~~Team~~by ~~Leader in~~ the ~~Finance~~Shanxi ~~Bureau~~Chemical ofIndustry ~~the~~Institute ~~City~~as ofa ~~Harbin in China, with responsibilities for auditing~~researcher. In ~~1988~~2007 MsMr. ~~Zheng~~Xu was awarded a ~~graduate~~ ~~degree~~Bachelor’s inDegree ~~the~~with ~~Management~~a ~~Science~~concentration ~~College~~in ofchemistry by the ~~Zhengzhou~~Xi’an University ~~in China~~of Architecture and Technology.

~~Liu~~Hui ~~Meifeng. Since~~Liang ~~2003 Ms. Liu~~ has been ~~employed~~appointed asto athe ~~Manager~~Company’s board of ~~the~~directors ~~Accounting~~to ~~Department~~contribute ofhis ~~Beijing~~expertise ~~QTC Information~~in &cross-border ~~Services~~accounting Coand financial management., From ~~Ltd~~2008 to 2011 Mr. Liang was employed as Senior Associate by BDO China, the ~~subsidiary~~Chinese branch of ~~The~~the ~~Bralorne~~international ~~Mining Company~~accounting firm. From ~~1999~~2006 to ~~2003~~2008 MsMr. ~~Liu~~Liang was employed as aAssociate ~~Team~~by ~~Leader in~~ the ~~accounting~~Shu ~~department~~Lun ofPan ~~Beijing~~CPA ~~Zhonglian Architecture & Decoration Engineering Co~~Firm. ~~Ltd.~~ In ~~1999~~2006 MsMr. ~~Liu~~Liang was awarded ana ~~undergraduate degree~~Bachelor’s Degree with a concentration byin ~~accounting~~economics by ~~Renmin~~Sichuan University ~~of China~~.

~~Jin Guodong. Since~~Chenyu ~~2005~~Zhu ~~Jin Guodong~~ has been ~~employed~~appointed asto ~~Vice President~~the Company’s board of ~~Beijing~~directors ~~GRT~~to ~~Information~~contribute ~~Services~~his ~~Limited. From~~experience ~~1978 until~~in ~~2005~~the ~~Jin~~management ~~Guodong~~of high tech enterprises. Since it was ~~employed~~founded byin ~~the~~2008, ~~Heilongjiang~~Mr. ~~Branch~~Zhu ~~Company~~has ofbeen ~~the People’s~~employed ~~Insurance~~by ~~Company~~BJHL ~~(Group)~~as ofChief ~~China~~Technology ~~Property~~Officer and ~~Casualty Company Limited~~Director. ~~His~~From ~~final~~2005 ~~position~~to in2008 ~~that~~Mr. ~~employ~~Zhu was employed as ~~Manager~~a ofResearcher by the ~~Qiqihar~~ ~~Branch. In~~Institute ~~1978~~of ~~Jin~~Nickel ~~Guodong~~and ~~earned~~Cobalt aof ~~degree~~Gansu ~~from~~Province. In ~~Tianjin University~~2005 inMr. ~~China,~~Zhu ~~with~~was awarded a ~~specialty~~Diploma in ~~architecture~~Chemistry by Lanzhou University.

All of our directors hold offices until the next annual meeting of the shareholders of the Company, and until their successors have been qualified after being elected or appointed. Officers serve at the discretion of the board of directors.

Audit Committee; Compensation Committee; Nominating Committee.

Due to the small size of our Board of Directors, we have not constituted an audit committee, a compensation committee or a nominating committee. Decisions regarding nominations to the Board will be made by all currently-serving members of the Board. For the same reason, we do not have an audit committee financial expert among the members of our Board of Directors.

Code of Ethics

The Company does not have a written code of ethics applicable to its executive officers. The Board of Directors has not adopted a written code of ethics because there are so few executive officers of the Company.

Section 16(a) Beneficial Ownership Reporting Compliance

None of the officers, directors or beneficial owners of more than 10% of the Company’s common stock failed to file on a timely basis the reports required by Section 16(a) of the Exchange Act during the year ended December 31, ~~2009~~2010, except that ~~neither~~ ~~Zheng~~none ~~Shuying~~of ~~nor~~the ~~Liu~~officers ~~Meifeng~~and directors has filed a Form 3.

ITEM 10 11. EXECUTIVE COMPENSATION

Our current Chief Executive Officer, Xiaojing Xu, assumed that position at the end of 2010. The following table sets forth all compensation awarded to, earned by, or paid Smooth Global and its subsidiaries to Zheng Shuying, who served as its Chief Executive Officer, ~~for services rendered in all capacities to the Company~~ during the years ended December 31, ~~2009~~2010, ~~2008~~2009 and ~~2007~~2008. There were no other executive officers whose total salary and bonus for the fiscal year ended December 31, ~~2009~~ 2010 exceeded $100,000.

	Year	~~Salary~~	~~Bonus~~Salary	~~Stock Awards~~	~~Option Awards~~	~~Other Compensation~~	Bonus		Stock Awards		Option Awards		Other Compensation
Zheng Shuying	~~2009~~2010	$0	--$	--0	--	--		--		--		--		--
	2008	~~$85,650~~	--$	--0	--	--		--		--		--		--
	2007	$96,264	--	--	--	--
	2008		$	85,650				--		--		--		--

Employment Agreements

All of our executive officers are employed on an at-will basis.

Compensation of Directors

Employees who are also members of the Board of Directors are not additionally compensated for their services as a director. We currently have no directors who are not also employees.

4742

Equity Grants

The following tables set forth certain information regarding the stock options acquired by the Company’s Chief Executive Officer during the year ended December 31, ~~2009~~2010 and those options held by her on December 31, ~~2009~~2010.

Option Grants in the Last Fiscal Year

	Number of securities underlying option	Percent of total options granted to employees in fiscal	Exercise Price	Expiration	Potential realizable value at assumed annual rates of appreciation for option term
	granted	year	($/share)	Date	5%	10%
Zheng Shuying	--	--	--	--	--	--
Xiaojing Xu	--	--	--	--	--	--

The following tables set forth certain information regarding the stock grants received by the executive officers named in the table above during the year ended December 31, ~~2009~~2010 and held by them unvested at December 31, ~~2009~~ 2010.

Unvested Stock Awards in the Last Fiscal Year

Number of Shares That Have Not Vested Market Value of Shares That Have Not Vested ~~Zheng~~Xiaojing ~~Shuying~~Xu -- --

ITEM 11 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

There are 38,381,335 shares of Smooth Global common stock issued and outstanding. The following table sets forth information known to us with respect to the beneficial ownership of our common stock as of the date of this Report by the following:

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

· ~~Zheng~~Xiaojing ~~Shuying~~Xu, our Chief Executive Officer;

each of our directors; and

all directors and executive officers as a group.

Except as otherwise indicated, we believe that the beneficial owners of the common stock listed below have sole voting power and investment power with respect to their shares, subject to community property laws where applicable. Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission.

4843

	~~Amount and Nature~~	Amount and Nature
Name and Address	~~of Beneficial~~	~~Percentage~~of Beneficial		Percentage
of Beneficial Owner(1)	~~Ownership(2)~~	~~of Class~~Ownership(2)		of Class
Zheng Shuying	20,000,000	52.1%
Xiaojing Xu			3,665,000		9.5	%
Liu Meifeng	0	--
Hui Liang			2,475,000		6.4	%
Jin Guodong	1,700,000	4.4%
Chenu Zhu			0 --
All officers and directors (3 persons)	~~21,700,000~~	~~56.5%~~	6,140,039		16.0	%

________________________________

(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.

ITEM 12 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Certain Relationships and Related Transactions

None.

Director Independence

None of the members of the Company’s Board of Directors is an independent director, pursuant to the definition of “independent director” under the Rules of The NASDAQ Stock Market.

ITEM 13 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Audit Fees

Keith K. Zhen, CPA billed $~~47,000~~_________ to the Company for professional services rendered for the audit of fiscal ~~2009~~ 2010 financial statements and review of the financial statements included in fiscal ~~2009~~ 2010 10-Q filings. Keith K. Zhen, CPA billed $47,~~500~~000 to the Company for professional services rendered for the audit of fiscal 2008 financial statements.

Audit-Related Fees

Keith K. Zhen, CPA billed $0 to the Company during ~~2009~~2010 for assurance and related services that are reasonably related to the performance of the ~~2009~~2010 audit or review of the quarterly financial statements. Keith K. Zhen, CPA billed $0 to the Company during ~~2008~~2009 for assurance and related services that are reasonably related to the performance of the ~~2008~~2009 audit or review of the quarterly financial statements.

Tax Fees

Keith K. Zhen, CPA billed $0 to the Company during ~~2009~~2010 for professional services rendered for tax compliance, tax advice and tax planning. Keith K. Zhen, CPA billed $0 to the Company during ~~2008~~2009 for professional services rendered for tax compliance, tax advice and tax planning.

4944

All Other Fees

Keith K. Zhen, CPA billed $0 to the Company in ~~2009~~2010 and $0 in ~~2008~~2009 for services not described above.

It is the policy of the Company that all services other than audit, review or attest services must be pre-approved by the Board of Directors. No such services have been performed by Keith K. Zhen, CPA.

ITEM 14 15 EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

	(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

(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.
21	Subsidiaries – Gold Profit (Asia) Group Limited, a BVI corporation
	Beijing Quan Tong Chang Information Service Limited, a PRCcorporation
	Smooth Global Services Limited, a BVI corporation
	Smooth Global (Beijing) Telecom Science Limited, a PRC corporation
	Beijing Yupeng Hengli Technology Ltd., a PRC corporation
31.1	Rule 13a-14(a) Certification - CEO
31.2	Rule 13a-14(a) Certification - CFO
32	Rule 13a-14(b) Certification

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Smooth Global (China) Holdings, Inc. By: /s/ ~~Zheng~~Xiaojing ~~Shuying~~Xu ~~Zheng~~Xiaojing ~~Shuying~~Xu, Chief Executive Officer

In accordance with the Exchange Act, this Report has been signed below on ~~April~~May 1519, ~~2010~~ 2011 by the following persons, on behalf of the Registrant and in the capacities and on the dates indicated.

~~/s/~~Xiaojing ~~Zheng Shuying~~ Xu

~~Zheng Shuying~~Xiaojing Xu, Director,

Chief Executive Officer,

Hui Liang

Hui Liang, Director

Chief Financial Officer

~~/s/~~Chief ~~Liu Meifeng~~ Accounting Officer

~~Liu Meifeng,~~Chenyu ~~Director~~Zhu

~~/s/~~Chenyu ~~Jin Guodong~~ Zhu, Director

~~Jin Guodong, Director~~46

Filing Compare · Smooth Global (China) Holdings, Inc.