Why We Are Different

In China, we have obtained full legal status as a licensed telecommunications company with the ability to offer products throughout China. The Chinese telecommunications market is the largest and fastest growing in the world. China has 122 million broadband users, more than any other country. 60% access the internet over broadband DSL. A study by Atlantic ACM estimates that VoIP users will reach 70 million in China by 2011.

CHVC's focus is on providing innovative telecommunication applications and solutions to customers. CHVC plans to grow its customer base in China and other parts of the world through marketing and sales efforts as well as acquiring and merging with synergistic companies. Below are the competitive advantages that set CHVC apart and place it in a strong position to take advantage of the clear and compelling growth opportunities in China.

FULLY LICENSED, CHARTERED TELCO IN CHINA

CHVC has the ability to do business as a fully licensed, chartered Telco in China with complete government sanctioning for advanced hosted voice and data services. This legal status allows full operation in an open and visible way. This aspect of CHVC's operations in China is very difficult to achieve but provides a distinct competitive advantage over gray market unlicensed service providers.

In addition, CHVC has operational licenses with most of the large state-owned Telcos that permit co-location, fully legal interconnections among the Company's technical systems and China's public telephone system. This allows CHVC to be a facility-based provider employing its own technical platform under its own control and management, permitting the Company to set and maintain very high service standards.

NEW SERVICE MODELS IN CHINA WITH LITTLE COMPETITION

The Company's advanced hosted application services provide service models that are new to China with little competition and are very attractive to both corporate and government prospects. CHVC's technology has the advantage within China as it was Made in China around the specific needs of the Chinese Government and large Enterprise companies. The fact that CHVC's software was written in Chinese by Chinese Nationals and is patented and licensed in China gives the Company's government customers extra comfort in very sensitive and secure environments.

No other technology compares to the Company's full suite of voice and data communications, document management and workflow and related services and solutions. In addition, VoIP or Internet Telephony sold by itself is not legal in China, however when integrated into the SKY O/A application, it is perfectly legal and licensed by the Government. When VoIP is integrated into the OA platform it enables each agency to manage and administer all telephony functions and features.

CHINA'S FIRST PATENTED GROUPWARE

CHVC's service models, combined with the advanced next-generation application features such as China's first patented groupware, also makes CHVC an attractive partner for Chinese Telcos and service providers as a source of new products that can be distributed through their sales and agent channels. This aspect of the Company's business allows it to function as both a retailer as well as wholesaler of its products through the large well- developed channels of the large incumbent Telcos, Service Providers and other resellers.

LOW COST TECHNOLOGY

CHVC's wireless broadband service utilizes the Company's patent-pending technology to provide customers with high-speed yet low-cost Internet access. The cost per customer served under CHVC's unique technology can be 20% to 70% cheaper than other competitors currently in the market. In addition, due to its unique topology and its full quality of service support, CHVC's network supports a wide variety of applications, such as: video broadcasting, Voice over IP (VoIP), video conferencing, and digital radio. This allows the Company to provide VoIP services on its own network. It also allows flexible configuration for secure, inter-office virtual private networks and custom, high-data rate applications.

RELATIONSHIPS IN CHINA

Our growth strategy starts with our existing relationships with telecommunications companies and government entities. Our Chinese subsidiary, Candidsoft, has enjoyed many long-term relationships with numerous government and academic customers, such as China Foreign Trade Commission, China Telecommunication Administration Bureau, China Tourism Bureau, China National Anti-Poverty Organization (NAPO), Navigation Affair Administration Bureau of the GuangXi Autonomous Region, Guang Xi Land Transport Bureau, Beijing Normal University, and Zhong Shan University.

We have signed agreements with China's second largest telecommunications carrier, China Netcom (CNC), to provide us with preferential rates and cooperation. The agreements call for CNC to provide connectivity, network expansion, installation, billing, collection and on-going support of our government contracts. The initial phase of the CNC agreement addresses the GuangXi Autonomous Region where we have approximately half of our contracts for our SKY O/A integrated Office Automation and VoIP solution. In addition, CNC has plans to private label SKY O/A for their sales to the Private Sector in China under the ICT Business brand. CNC plans to market ICT following the installation of our government contracts in the GuangXi Region. China Netcom has recently merged with China Unicom (CUC) and the surviving name of the merged entity is China Unicom.

These relationships give us the opportunity to reach large numbers of customers quickly. In China, we will continue to expand and strengthen relationships with government entities and telecommunications companies to expand our market and customer reach.