China Voice Holding (GREY:CHVC)

Since July 2008, the Company has been subject of an ongoing investigation by the U.S. Securities and Exchange Commission (“SEC”). The Company and its officers and directors have been cooperating with the investigation and will continue to do so. The SEC’s investigation has been wide in scope, but has focused on press releases and disclosures regarding the prospects of the Company’s business in China, press releases and disclosures related to Flint Telecom’s 2009 acquisition of certain of the Company’s subsidiaries, related party transactions and disclosures regarding the same, and investor awareness of the Company’s stock conducted by third parties. The Company and certain of its officers have received several subpoenas for documents and testimony during the SEC’s investigation. The Company cannot predict when the investigation will be completed or the further timing of any other developments in connection with the investigation nor can the Company predict the result or outcome of the SEC investigation. The outcomes could include payments of fines or disgorgement or other relief with respect to the Company or its officers, directors, or employees that could be material to the Company. Further, expenses incurred in connection with the investigation (which include substantial fees for lawyers) continue to adversely affect the Company’s cash position and profitability. From time to time we are involved in various claims and other legal proceedings which arise in the normal course of our business. Such matters are subject to many uncertainties and outcomes that are not predictable. However, based on the information available to us and after discussions with legal counsel, we do not believe any such proceedings have a material adverse effect on our business, results of operations, financial position or liquidity.

Since July 2008, the Company has been subject of an ongoing investigation by the U.S. Securities and Exchange Commission (“SEC”). The Company and its officers and directors have been cooperating with the investigation and will continue to do so. The SEC’s investigation has been wide in scope, but has focused on press releases and disclosures regarding the prospects of the Company’s business in China, press releases and disclosures related to Flint Telecom’s 2009 acquisition of certain of the Company’s subsidiaries, related party transactions and disclosures regarding the same, and investor awareness of the Company’s stock conducted by third parties. The Company and certain of its officers have received several subpoenas for documents and testimony during the SEC’s investigation. The Company cannot predict when the investigation will be completed or the further timing of any other developments in connection with the investigation nor can the Company predict the result or outcome of the SEC investigation. The outcomes could include payments of fines or disgorgement or other relief with respect to the Company or its officers, directors, or employees that could be material to the Company. Further, expenses incurred in connection with the investigation (which include substantial fees for lawyers) continue to adversely affect the Company’s cash position and profitability.

For the year ended June 30, 2011, the Company anticipates that profitability will be improved, although additional financing will be needed to fund anticipated Company expansion through acquisitions. The Company anticipates that its cash needs for the year ended June 30, 2011 will be met by issuances of equity and/or debt by the Company, although no assurance can be given that such funding will be available.

On September 28, 2010, China Voice Holding Corporation (the “China Voice”) filed a Form 12b-25, Notification of Late Filing, reporting that China Voice was unable to complete and file its Form 10-K Annual Report for the year ended June 30, 2010, within the time prescribed by the rules of the SEC. China Voice states in the Form 12b-25 that the delay was due to the inability to complete the audit of its financial statements for the year then ended.

China Voice will not be able to complete the audit of the June 30, 2010 financial statements in time to file the Form 10-K within the fifteen day extension period provided under Rule 12b-25 of the Securities Exchange Act of 1934. The inability to complete the audit is due mainly to the unavailability of financial information from Flint Telecom Group, Inc. (“Flint”), the results of which are included in China Voice’s financial statements under the equity method. In a Form 12b-25 filed by Flint on September 28, 2010, Flint reported that “the Registrant’s [Flint’s] Annual Report on Form 10-K for the year ended June 30, 2010 could not be filed within the prescribed time period because the Registrant, which has a small accounting staff, has devoted substantial time and effort to recent business matters affecting the Registrant, including the discontinuation and disposition of certain operations. As a result, the Registrant has not yet been able to finalize the Annual Report for the year ended June 30, 2010.”

Effective as of May 28, 2010, Flint Telecom Group, Inc. (Flint) executed a settlement agreement with China Voice Holding Corp. (CHVC) whereby CHVC has agreed to, among other things, cancel and terminate any and all rights it has under its $7,000,000 promissory note issued by Flint (the “Note”) and the Series C Preferred Shares of Flint (the “Preferred Shares”), including the repayment of any and all principal amounts underneath the Note and the Preferred Shares, and to return 15,800,000 shares of Flint’s common stock to Flint (thereby keeping 5,200,000 shares of common stock). In exchange Flint has agreed to pay a total of $1,520,242 to CHVC through installment payments over a period commencing August 31, 2010 and ending May 31, 2011 and abandon its claim to 15,000,000 shares of CHVC’s common stock. Flint will also transfer back to CHVC certain telecom subsidiaries operating in the State of Florida that were previously sold to Flint.

Revenues have been increased dramatically in 2007 ended in June and for the first 6 months of fiscal 2008 ended in December. despite revenue increases losses are widening. Shares outstanding have been steadily increasing, which may possibly make it difficult to achieve high EPS numbers.

financial report excerpt: "The increase in revenues can be attributed to the acquisitions
made after December 31, 2006, which accounted for 76.21% of revenues in the
quarter ended December 31, 2007. Gross profit for the quarter ended December 31, 2007 decreased.The decrease in gross profit is attributed to the increase in
revenues from its acquisitions which have a lower gross profit than businesses
owned by the Company on December 31, 2006."

"The Company projects that its sales increases from Chinese and U. S. operations
will eliminate losses from operations and produce a net cash flow for the year ended
June 30, 2008. However, the Company will continue to raise funds through sales of
common stock in order to finance its business expansion."