Ann: China Revenue Update, page-81

I accounted for the payment terms. The clarification is not news to me.

My point is each new sale is at a loss, they only profit on retention but the retention drops off monthly. Go through the anns back say 1 year maybe a little longer its all there.

The fast growth will be there undoing as they run out of funds to pour in whilst the retention rate slips. Notice they are not talking about profit because they need to pour all that cash straight back into marketing to keep the momentum. If next quarter you see 3-4m on marketing then you will see for yourself. Even if they revenue 5 or 6m. This will make it very hard to sustain the following q. It could One Tel. I mean what do you think they needed the 5m CR for last year?

This is also why they need new content so they can re market to the same audience. I mean that is probably the biggest asset now and with the right providers maybe they can start that curve but it isn't there yet.

I know this company I've been in and out for 16 years. It seems to rebirth every so often with a new swing. I've always made good money on this but not by buy and hold.

Good luck.