third quarter 4c.

I met with my accountant last night to ask for his opinion on the financial advice QTK reported yesterday.

He agreed that there was an anomoly that include $960k of capitalised development costs as income when in actual fact in his view it is clearly an expense into their infrastructure.

And Tex, search as i have it is true that i cant find any written evidence to show that QTK and the manufacturer are going to be paid seperately which means that QTK will not be required to part with cash for manufacturing. It must have been something i heard from someone over the past 6 or so months, but cannot recall exactly where or when. So we will have to wait and see how that goes i guess.

If cash does become an issue for QTK which will depend now on the speed with which cash flows can be received from China i believe the capital will come from a Hong Kong listing rather than an Australian based capital raising. There have been a few examples of Aussie companies dual listing at a premium on foreign exchanges in recent times, a fellow QTK holder has pointed out to me that CFE is expected to list on the AIM in the UK at a significant premium to its Australian shareprice.

QTK has major shareholders in Hong Kong (Apex) who will undoubtedly assist in making it a successful float. And before any Hong Kong listing occurs i would expect more progress to be reported on the China front which will further enhance the chances of a good price on the float.

My accountant does happen to be Chinese and he thinks the listing on Hong Kong is a positive. Apparently the speculators over there are "full on" and in his words, could send the shareprice rocketing on the Hong Kong exchange if they see QTK as rolling out a national system across China. I would expect some of that frenzy might taper across to the ASX.....