Pink Sheets

Before joining the Company, Mr. Huang worked for the Bank of China from 1981 to 2004. His last position was the Deputy General Manager of Retail Banking Department of the Headquarters. He was a member of Marketing Committee of MasterCard International (Asia Pacific Region) and the Marketing Advisor of Visa International (Asia Pacific Region) from 1998 to 2000. Mr. Huang has over 20 years extensive experience in banking industry and has established good relations with financial institutions and provincial governments in China. Mr. Huang holds a Bachelor Degree for English Language from the Nanjing Normal University and a Master Degree of Business Economy from the College of Graduate Students of the Chinese Academy of Social Sciences. His duties included business development in retail banking and personal banking, marketing and promotion and later the management of overseas branches’ business. He joined the Company in March 2005 and his duties include business development and marketing, as well as management decision making.

Mr. Fu joined the Group in November 2005 and is responsible for the financial control and management of the Group. He was appointed as the Chief Financial Officer on April 19, 2006. Mr. Fu is a fellow member of the Association of Chartered Certified Accountants and holds a Bachelor Degree in Accountancy from the Hong Kong Polytechnic University. Before joining the Group, Mr. Fu worked for Innovative Information Systems Limited, a subsidiary of Itochu Corporation, as the Financial Controller from March 2001 to August 2005. Mr. Fu was appointed as Director of the Company on August 11, 2006.

Michael Huang
[Mr Huang begins in a very deliberate and quite capable English, which is not surprising. Regardless of his age, he strikes me as having the demeanor of a young, entrepreneurial person.]
Basic intro followed by an apology for the late correspondence. Mr Huang has been traveling both in China and in Europe on a business development trip [yikes, not more financing!] and he is actually still on the road as of the conference call. "While that's not a suitable excuse", he at least wants investors to know he's been working on CXTI related business.

As everyone is now aware, CXTI announced the resignation of the CFO on July 20. Mr Huang would like to provide "more color" and some detail about how they plan to move forward.

[Right here, Mr Huang becomes more animated and personal in his speech, in a careful and controlled way. I'm not entirely sure he was reading from a script as he seemed to pause at times that would indicate constructing the speech on the fly.]

"Simon was a valuable asset to China Expert. And we are very appreciative of his many contributions to our company during his tenure as CFO. Before I get into the specifics, I thought it might be helpful to provide investors with an introduction [garbled] experiences and current role at China Expert.

"I joined China Expert in March 2005 as the Chairman and Director at the company where I have been primarily responsible for business development and marketing, in addition to assisting with key management decisions.

[At this point, I'm beginning to like this guy: quiet, thoughtful, deliberate, well educated.]

"Currently, I am [an] independent director of a software company, Yucheng Technologies* [YTEC], based in Beijing, and , in the US on the NASDAQ. Prior to joining China Expert, I have held several positions including the Deputy General Manager of the Retail Banking Department of the Bank of China from 1981 to 2004, while also being a member of the Marketing Committee for MasterCard International for the Asia/Pacific region and a market advisor of Visa International for the Asia/Pacific region from 1998 to 2000. I'm a graduate of Nanjing [Normal] University with a Bachelor's degree in English and I hold a Master's degrees in Business Economy, Economics, from the College of Graduate Students of the Chinese Acadamy of Social Sciences. In total, I have over 20 years of business experience and plan on leveraging my background to take on the additional role of interim CFO at China Expert Technology until we can announce a new successor. Along with this increased commitment, I'll be allocating a significant portion of my time to China Expert's overall business, to help accomplish our stated objectives.

"As not only the Chairman and a Director, but also a shareholder, I'm truly despondent in the chain of events that have occured over the last week. Admittedly, we made a mistake by not working out an arrangement with Simon prior to appointing a new CFO. And secondly, by not hosting this call sooner.

[You'll get no complaints from me. These things allowed me to buy back into CXTI.]

"This transition period would have alleviated many investors' concerns and provided a more seamless integration process. China Expert recently decided to relocate our Hong Kong operations to Shenzhen, which is a part of Mainland China [as opposed to the Hong Kong Special Administrative Region which historically had been separate from China due to British colonization of the 1800s until the expiration of their lease in 1997]. The primary reason for this move was to manage the significant growth that China Expert has been experiencing for the past several quarters as evidenced by the signing of several large contracts. From a conceptual and practical standpoint, this makes sense for China Expert, given that all of our business is conducted with Mainland China, also our CEO, Mr Zhu, also primarily resides in Shenzhen.

"With the increase in new business wins, we believe this consolidation will help us to better control and manage [account these?] operations by providing one truly integrated company. This will facilitate improved interaction with both current and future government customers which we believe will optimize execution in addition to helping facilitate increase in future business for China Expert.

"Taken from a qualitative standpoint, we have historically accrued approximately 1.2 million US dollars a year in operating expenses directly from our Hong Kong office. This includes related office expenses, salaries for employees operating in a variety of accounting, mid-level manage [ego??] and support functions. We believe we will replace these employees with staff well versed in both PRC contract law and business practice at a significant cost savings.

"Our organization, which includes 50 full-time employees, in addition to numerous consultants and sub-contractors will collectively fulfill these obligations in the near term while we [plan?] and train new team members. Given the strength of the Hong Kong market pressures, my belief is that our former employees will find new business opportunities suited for very skilled [deaths? That's what it sounds like. Geez!] And we plan on completing these relocations by the end of August to our current location, located, which will take place at our current office location, located in the development center of [Ruminanbro?], Shenzhen, People's Republic of China.

[I'm guessing these layoffs were very painful.]

"As it relates to naming a new CFO at China Expert, we are actively interviewing three qualified candidates and I'll personally meet with all of them in the coming week. We now understand intimately how important the CFO position is within the public traded US company, especially one based in China. [I had the pause the call here the first time to stop laughing] Whereas [the] senior management team is not bi-lingual, our goal is to have this person retained as soon as possible.

"But we are also confident that having the right person in place in [???], the applicable person will possess a strong accounting background including GAAP experience and some knowledge of business operations, will be bi-lingual [have capital market experiences?] and will be capable of serving as a public liason to [communicate] with investors, attend financial conference and road shows. We'll look forward to providing investors with an update as this negotiation progress. Until this new person is retained, I will be taking the responsibility of signing off on all related financial statements and will be working closely with our internal accounting and financial teams in addition to our outside auditors to ensure accurate and timely reporting.

"In addition, several of you met with Mr. Song Feng [COO] during his February visit to the US. I want to mention that he did not proceed with the new employment contract which came up for renewal at the end of May. Now our CEO, Mr. Zhu, has been carrying for [COO's] responsibility and obligations. And in our most recent, most recent press release, we provided preliminary 2nd quarter results. I want to mention to investors that these are preliminary results which have not been formally reviewed by our auditors. We will provide more specific operating results and guidance during our 2nd quarter 2007 conference call which is expected to be no later than August 15. [garbled stuff here] I will reiterate again, I see no reason why we will not be able to file our 2nd quarter 2007 results by the mended, mandate deadline.

"In addition, I want to assure shareholders that there'll be no discrepencies in the financial statements previously filed with the [SEC] which we understand has been a recent concern of many shareholders.

"In conclusion, while these have been difficult times, I look forward to keeping an open dialog with the investment community and our shareholders on a go forward basis as we continue to execute against our business' plan, the entire management team continues to believe that the e-government opportunity is still in its infancy as major agency and [manicifully?] look to outfit their current, antiquated infrastructure to improve efficiency, transparency, while better serving those living in their jurisdiction. During the past several months, we have announced several significant news, including contracts in two provinces outside of Fujian which are initiating e-government development, thus diversifying our business. This has been a major initiative and I'm pleased to see the results of our entire team's collective efforts paying off.

"Let me reinforce that the entire management team of, at China Expert is intent on [maximizing] shareholder value. Both the CEO and I have a strong personal interest in maximizing shareholder value because we are all shareholders. We understand that building shareholder value is a process and a combination of [urgent?] business decisions, execution and a [conificominication???]. We look forward to providing updates on these objectives as we strive to attain both our short and long term goals. And thank you again. I look forward to interacting directly with investors on our upcoming 2nd quarter conference call. Thank you again."

And that's the end of the call.

* thanks to mkoza1 for identifying this company.

// posted by Bruce @ 12:11 PM