QT Globe, Inc.

Table of Contents

1. Executive Summary .................................................................................................... 1 1.1. Objectives ........................................................................................................... 2 1.2. Mission ................................................................................................................ 2 1.3. Keys to Success................................................................................................... 2

2. Company Summary .................................................................................................... 3 2.1. Company Management ....................................................................................... 3 2.2. Start-up Summary ............................................................................................... 5

3. Products & Services .................................................................................................... 4 3.1. Carrier Division .................................................................................................. 4 3.2. QT-Talk............................................................................................................... 7

4. Market Analysis Summary ......................................................................................... 7 4.1. Carrier Division .................................................................................................. 7 4.2. QT-Talk............................................................................................................... 9

4.2.1. History of VoIP ........................................................................................... 9 4.2.2. Current Market Trends .............................................................................. 10 4.2.3. Projected Trends ....................................................................................... 10

4.3. Competition......................................................................................................... 9 5. Strategy and Implementation Summary .................................................................... 11

5.1. Competitive Edge.............................................................................................. 11 5.2. Marketing Strategy ............................................................................................ 11 5.3. Sales Strategy .................................................................................................... 13

5.3.1. Sales Forecast ............................................................................................ 14 6. Personnel ................................................................................................................... 16 7. Financial Plan............................................................................................................ 17

7.1. Start-up Funding ............................................................................................... 17 7.2. Important Assumptions ..................................................................................... 17 7.3. Projected Profit and Loss .................................................................................. 18 7.4. Projected Cash Flow ......................................................................................... 19 7.5. Projected Balance Sheet .................................................................................... 21

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1. Executive Summary

Capitalizing on the explosive growth of Voice over IP (VoIP) Internet-enabled telecommunications services, QT Globe offers investors not one, but two, unique opportunities to profit from this multi-billion-dollar-a-year global market.

Through its burgeoning VoIP retail division that targets millions of immigrants and ethnic users looking for a cost-effective way to phone home, QT Globe offers investors a ground-floor opportunity to participate in a market that is taking the traditional copper-wire telecom market by storm. According to the research firm of Frost & Sullivan, VoIP will balloon to 75% of worldwide voice service by the end of 2007, exceeding US$171 billion in revenue. Vonage, one of the pioneers in the industry, is already adding customers at a rate of 15,000 per week – and, unlike QT, they don’t own the backbone technology, can’t set their own rates, and have not penetrated the valuable ethic market that relies on international telecommunications.

Through its well-established wholesale division, QT acts as a “carrier’s carrier,” establishing its own, proprietary termination routes in developing nations across the globe and reselling them at a profit to the U.S. that require them, the likes of which include high-caliber organizations like AT&T and IDT.

Taken together, QT Globe offers investors an unbeatable combination of cash-producing recurring revenue streams and the ability to participate in the upside of the next big technological revolution in international telephony. What’s more, QT’s unsurpassed wholesale purchasing power enables it to undercut its retail competitors to gain market share while, at the same time, boosting gross margins to generate internal cash flow for future growth.

QT Globe’s management team possesses a total of more than 30 years of experience in building exclusive, profitable relationships with a worldwide network of suppliers of dialup and VoIP telecom services. Management has also established secure, long-term relationships with the leading U.S. carriers that buy those minutes from QT Globe at wholesale prices. Together, the team has generated more than US$30 million in annual sales in this market and boasts network operations in New York, Miami, Los Angeles, London and Tel Aviv.

Once the company completes its financing, QT Globe intends to launch an aggressive strategy designed to take the company to the next level of growth and profitability. On the wholesale level, QT Globe management has negotiated a string of highly profitable partnerships with leading international suppliers to purchase minutes at extremely attractive rates. The company can “switch on” these deals by putting down cash deposits to secure these routes. Management believes that, on average, each route will be worth US$1.2 million in annual revenue upon activation. Once it raises the necessary capital, the carrier side will be able to open 22 such routes immediately.

On the retail side, QT Globe plans to leverage the marketing efforts of competitors like Vonage to expand the market for low-cost, high quality VoIP services worldwide through its proprietary VoIP technology. The company believes that it can meet the growing needs of consumers, businesses and resellers through a flexible infrastructure that can quickly and cost-effectively meet the exacting technological demands of end users and strategic partners alike. While QT’s most synergistic market is the ethic and immigrant communities in the United States, the company also intends to strike strategic alliances with broadband resellers and major retail chains through co-branding and private label offerings.

But the company’s plans don’t end there. QT aims to establish beachheads in Europe, particularly in countries like Italy and Spain, which have growing broadband telecom needs but disproportionately high telecom costs.

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In order to transform its vision into reality, QT Globe is seeking to raise investment capital in order to “switch on” its lucrative wholesale deals and launch a compelling marking campaign for its VoIP product. With its technological leadership, global network of strategic partnerships and experienced management team, QT believes that it presents a unique and exciting opportunity for investors looking to join them in pioneering the next frontier in international telecommunications services.

1.1. Objectives

QT Globe will bring together experts in international telephony, and leverage their long-standing relationships with vendors and carriers – as well as a proprietary VoIP technology – to create a full-fledged phone company. Specifically, measurable objectives include:

1. Raise $10 million in investment capital.

2. Use a portion of that capital to “switch on” profitable international communications routes (referred to herein as “Specialty Routes”) and leverage management’s contacts to “switch on” various international A to Z routes (referred to herein as “Standard Routes”).

3. Sell a portion of Specialty and Standard minutes to established U.S. carriers, and use a portion of these minutes to allow QT’s VoIP division to offer customers the lowest rates in market.

4. Execute a well-planned, targeted marketing campaign that will allow QT to take an important position in the rapidly growing VoIP industry.

5. Achieve net profits of nearly $6 million by QT’s third year of operation.

1.2. Mission

QT will provide major carriers with competitively priced international minutes, and exploit its propriety VoIP technology and its unique position in the industry to offer individuals and corporations the lowest-priced telephone service available.

1.3. Keys to Success

Keys to success include:

1. A qualified management team that brings years of experience, a history of high-revenue ventures and key telecom relationships to the table.

2. A proprietary VoIP technology that surpasses the competition in flexibility and end-user features.

3. Access to and familiarity with the infrastructure required to carry the traffic of the venture’s Carrier and VoIP divisions.

4. A marketplace that has already come to trust VoIP technology and will respond enthusiastically to QT’s ability to offer the lowest telecom costs in the market.

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2. Company Summary

QT Globe is comprised of two synergistic divisions: the Carrier Division (marketed as MEDCom) and the VoIP/Broadband Division (marketed as “QT-Talk”).

The Carrier Division essentially leverages management’s strong relationships with a global network of telecommunications vendors to purchase minutes at the lowest possible rates. These minutes are then sold wholesale to leading B2C telephone companies.

The QT-Talk Division will use its proprietary VoIP technology to enter the growing VoIP market. Because of the Carrier Division, QT-Talk can do what no other VoIP service provider can match: offer retail-level customers the same wholesale international rates that have never before been available in the B2C marketplace. Put directly, QT-Talk will offer customers the lowest rates in the market – rates that VoIP competition can’t match.

These two divisions will work severally and wholly to create a full-fledged, profitable phone company that will build upon today’s communications revolution and firmly plant itself in tomorrow’s telecom industry.

2.1. Company Management

QT Globe has an exemplary management team whose expertise in international telecommunications has generated tens of millions of dollars in previous ventures. They are eager to leverage their know-how, proprietary technology and global contacts to meet and surpass the goals set in this business plan.

Key management includes:

DAVID COOPER

David Cooper is senior vice president of corporate development and strategy for QT Globe. He leads the company's mergers and acquisitions, corporate strategy and business development activities, including joint ventures and partnerships. Mr. Cooper played a critical role in the development of QT Globe. Mr. Cooper has nearly 10 years of experience in the telecommunications industry including a variety of executive finance and business development functions, including vice president of corporate planning for a global carrier.

ERIC RAMOS

Eric Ramos is Senior Vice President of Carrier Sales at QT Globe and has nearly a decade of experience in the telecommunications industry. In this role, he oversees the company's carrier sales organization, which provides data, voice and Internet services to emerging and established telecommunications companies and service providers.

Previously VP of sales for one of the largest VoIP companies in New York, Mr. Ramos was responsible for developing and overseeing business strategy for enterprise and wholesale accounts, as well as directing all sales force activities.

CARLTON A. BARLOW

Carlton Barlow is Vice President of Information Technology for QT Globe. He is responsible for overseeing all the company's IT operations.

Mr. Barlow has significantly improved the quality, timeliness and cost management of IT operations. Additionally, he has overseen the development of several architecture plans, including

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those that directly impact the ability of QT Globe to provide superior service and delivery to customers.

Prior to joining QT Globe Mr. Barlow was FCNY Communications' Director of Information Technologies. He previously designed and managed networks intellectual properties for law firms, an international laser vision correction company, and a national dental referral service company. Mr. Barlow has over sixteen years of hands-on experience in hardware/software integration, database management, and call center management.

2.2. Start-up Summary

QT’s two divisions will work together to create a full-fledged phone company.

To meet its goals, the Carrier Division requires financing that it can apply in the form of security deposits that will “switch on” profitable and desirable telecommunications routes. Due to the nature of billing and payment cycles in the industry, each route also requires a cash reserve. This is further explained in the next section.

Generally speaking, the more capital available to the Carrier Division, the more Specialized routes it can “switch on.” With $5 million in capital earmarked for this division, the venture will have the capacity to operate tremendous traffic, and approximately 22 specialized routes can be activated within two years, with profits from the first routes providing the funds required to activate new routes in the future.

The venture requires an equal amount to develop and operate its innovative product lines and bring them to the public’s attention through various innovative and cost-effective marketing campaigns (as described in the Marketing Strategy section of this document).

Start-up Requirements Start-up Expenses Carrier Route Acquisition $5,000,000VoIP/Broadband Launch $5,000,000Total Start-up Expenses $10,000,000 Total Requirements $10,000,000

3. Products & Services

QT Network’s Carrier and VoIP divisions work together, providing in-demand wholesale minutes to copper carriers and by offering VoIP customers the lowest domestic and international calling rates available – rates that no competitor can bring to the market.

3.1. Carrier Division

QT Globe will be a "carrier's carrier," purchasing long distance minutes from a global network of vendors at the best possible rates, and then selling them wholesale to other carriers, who then sell the minutes to end-users.

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SUPPLY SIDE

QT’s management has established a unique and valuable position among international carriers. With regard to supply, they have developed and maintained solid relationships with “boutique” telecom suppliers. These can be Third World PTTs, private individuals, entrepreneurs, or families that monopolize the voice traffic coming into a country. In other cases, they have forged relationships with governments or foreign telephone companies that welcome traffic into their country to reciprocate for telecom terminations that management has done for them in the past. There is a very strong value here; QT is able to offer what the industry refers to as “boutique” routes or “exotic” destinations at lowest pricing with highest available capacity. At issue here is that security deposits are needed by these suppliers to make them comfortable. And in most cases, these suppliers want to be paid weekly. This is the nature of maintaining foreign suppliers in a competitive marketplace.

DEMAND SIDE

On the demand side, the company will sell to Tier I carriers, the likes of which include AT&T, IDT and NTT. As “A to Z” worldwide carriers, and publicly owned companies, these companies are not in a position to place securities or make weekly payments to every country in the world to maintain the volume or capacity they need reserved for them as they compete for traffic here in the U.S. The following chart illustrates the cash flow aspects of these relationships:

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This will be QT’s niche. It will be positioned as the capacity provider to the exotic destinations for the U.S. Tier I carriers.

It should be noted that QT’s potential corporate customers are financially secure, well-established carriers that pay their bills reliably and punctually. By securing the investment called for in this document, the company can reserve maximum capacity and maintain favored customer status.

3.2. QT-Talk

Through QT-Talk, QT’s VoIP/Broadband telephony service, individuals and corporations are presented with the low domestic VoIP rates they’re demanding, as well as the guaranteed lowest international rates – made possible by QT’s carrier division.

FULL VOIP PACKAGE

The venture offers “Full Package” VoIP service to end users who have established subscriptions to a broad-band Internet service like DSL or cable-modem Internet service. The product provides customers with a small customer-premise-equipment (CPE) device that connects to their broadband modem or to their PC Local-Area-Network (LAN), providing one or more dial-tone ports that connect to simple phone, fax, or office phone-system trunks. Through these ports, the customer obtains a dial-tone directly from the venture’s wholesale carrier switch in New York, and this connection allows them the best rates possible in today’s telephony markets. Moreover, customers may obtain telephone numbers associated with their service without geographical limitations. For example, a customer in Chicago may obtain a New York or London phone number. One of the key advantages of this product lies in the ability to provide dial-tone to any broadband customer world-wide without needing to contract with local-exchange-carriers (LECs) or pass through complex regulatory requirements.

VOIP ADD-ON

Since QT-Talk’s U.S. competitors do not offer competitive international calling plans, customers of other VoIP carriers (who already have a CPE) can still become a QT-Talk subscriber and take advantage of the lowest available international calling rates.

CALLING CARDS

International travelers and people who make frequent international calls can take advantage of QT-Talk's rates and services by purchasing a QT-Talk (or co-branded) prepaid calling card – and even this option allows customers to obtain a country-specific phone number so that friends, relatives and business associates overseas can reach them through a local telephone number.

FEATURES AND UPSELLING

In all cases, basic service from QT-Talk will provide customers with the lowest rates available. For additional fees, customers can upgrade their subscription or membership to include one or more additional features from the most comprehensive selection on the market.

A short summary of features for the end-user is listed below:

ReachMeAnywhere - Portable system that can go anywhere – never miss a call while away from home. Hook the device to any broadband connection to (a) receive inbound calls at the same number regardless of location; and (b) take advantage of the unlimited calling rate plan regardless of where in the globe the user connects to a broadband port.

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AccessAnywhere – Users can easily register their mobile phone or other phones so they can benefit from the service anywhere via local access numbers.

OptiReach - End users can have inbound calls forwarded to any number of their choice based on time-of-day, day-of-week and any date in the year – while still receiving originating caller-ID information.

Unified Messaging – Voice mail and fax mail access via the Internet.

Reduced MRC for end user – Subscribers do not pay incumbent last-mile phone carriers (such as Verizon) as they would with standard phone service or with competing VoIP services.

Standard Features - Call Waiting, Caller ID, Web Access Voicemail.

FreeReach – Free unlimited calling between all QT-Talk customers when using their QT-Talk account.

BeAnywhere – Customers can add telephone numbers (DID lines) from any country to their account, regardless of where the end-user resides.

Multiparty Conferencing – Able to connect many parties to one call.

4. Market Analysis Summary

4.1. Carrier Division

Long distance telephone service was historically provided by monopolies. Each country had its national, often government-controlled, long distance carrier. A citizen of Spain would have to place all long distance calls through Telefonica and a citizen of France would place all long distance calls through France Telecom. As recently as 1990, relatively few exceptions to this rule existed. Because of the national carrier monopolies, all countries experienced the natural effects of monopolies in their long distance telephone service: artificially high prices and inefficient allocation of resources. Even as advances in technology permitted carriers to lower prices, prices remained high. In addition, even though cooperation among countries would permit long distance carriers to share connections with distant countries, the national monopolies did not exploit this cost-effective option. Instead, virtually every country established direct telephone connections with every other country - whether or not there was sufficient demand to justify the expense. In fact, almost every telephone company in the world established international connections with virtually every other telephone company in the world.

With the development of the international telecommunications industry, what the market demands is a carrier's carrier - a firm that is capable of constructing its own long distance network and has little interest in marketing its services to consumers. A carrier's carrier builds an international telecommunications network for the sole purpose of serving entrants in the retail market. A carrier's carrier can offer rates that are much lower than the former monopolists would ever consider offering to the entrants. The availability of low long distance rates to market entrants enables them to introduce true competition in the retail long distance market. Such competition has worked to reverse the effects of monopolization of the telecommunications markets.

QT, as a wholesale carrier, will target medium to large telecommunications companies. Targeted geographic markets are selected based on ease of entry and availability of international traffic and establishing interconnects and reciprocal agreements with other long distance carriers. Additional

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criteria include population, concentration of potential customers, level of competition, and availability of switch sites. QT may consider entering established strategic markets for non-competing traffic without jeopardizing existing relationships.

4.2. QT-Talk

4.2.1. History of VoIP

The VoIP industry started around 1996 with the introduction of the first VoIP gateway by the Israeli company Vocal-Tec. Shortly after, a subsidiary of IDT named Net-2-Phone started offering PC users globally the ability to place calls from their PC into any phone world-wide. During the Internet financial market’s golden-era, several more players joined – DeltaThree, MediaRing, GRIC Communications and WorldQuest Network, to name a few examples. These companies did not live up to expectations due primarily to the collapse of the dot.com boom and resulting drought of funding sources.

In the aftermath of the dot-com breakdown, Net-2-Phone emerged as the clear industry leader in the PC-to-phone area, with DeltaThree trailing far behind as industry’s number two. However, the “legacy” VoIP players, while concentrating on providing service to the supposedly high-margin developing economy’s target markets, neglected the opportunities in the broad-band communities of the western-world, and in particular at home – the U.S. domestic market. Into this void emerged a new player – Vonage Telecom, making its marketing debut during 1st quarter of 2003. Soon after, Vonage managed to become the industry leader in the USA domestic market. Vonage managed to subscribe more than 200,000 US-based, mainly residential customers, thus possessing about 90% market share by the end of its first year.

4.2.2. Current Market Trends

Estimates for a rapid increase in subscriptions for VoIP services, and the positive cash flow generated by subscription-based services, has led large cable carriers into the market. The large carriers, including the likes of Time Warner and Cox, have the advantage of an existing customer base which they provide broadband access -- the prerequisite for end-use of VoIP. Several carriers, like Cablevision, have plans to outfit substantial portions of their customer base with necessary equipment by the end of 2005. Meanwhile, the Baby Bells are emerging to compete on a residential and business scale. Regulatory trends have not been completely established, but all indications are for a "light touch" from both federal and state regulators.

4.2.3. Projected Trends

Kagan Media published a comprehensive report on the outlook for VoIP. It forecast the following with regard to the competitive climate for major carriers and alternative providers like QT-Talk.

Large Carriers

Large cable carriers will find themselves rushing to the market to compete with independent VoIP providers and with local exchange carriers that are more and more adopting an "if you can't beat them, join them" approach to IP telephony.

The Baby Bells can leverage their sizable cash flows to compete on price, which now stands at an industry average of US$39.95 per month.

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Verizon has started a deal with Nortel with US$2 billion which, in part, will call for instituting the VoIP technology exclusively at all new central offices -- some 9,000 in total. It is expected to take a decade to complete.

Comcast entered three trial markets in 2004, and will ramp up to 20 markets.

According to Infonetics Research, VoIP subscribers jumped 900 percent from 2003 to 2004. Vonage has announced that it’s subscribing new customers at a rate of 15,000 per week.

Alternative Carriers

According to Kagan:

[...] alternative internet phone services are finding some real momentum, though on a smaller scale. In addition to Vonage, companies such as Net2Phone, GoBeam and Skype are finding some traction with early adopters looking for an end run around traditional telephone services. Vonage has led the charge. Relying on third-party broadband services for the last-mile connections and current internet infrastructure for distribution, Vonage has managed to build a phone company -- of sorts -- without the enormous capital expense that previously barred effective completion. Although Vonage is potentially a competitor to cable IP voice services, it has also positioned itself as a partner with a private-label agreement particularly attractive to smaller cable operators. [...] Vonage may have something to teach cable operators. Singled out during the 2003 Western Cable show was the level and ease of control [that] Vonage subs have via the Web interface. The online account management not only allows customers to easily navigate, but also provides and example of how such a feature can reduce requirements for customer service representatives.

By all accounts, consumers are demanding VoIP and companies are getting involved. Most recently, Google launched a VoIP beta and reports indicate that Vonage is raising $600 million through an IPO. Both of these recent developments underscore the growing consumer and corporate demand for VoIP.

4.3. Competition

Competition is not a barrier to QT’s Carrier Division’s projected revenue. Put simply, the division’s management team has already negotiated terms for scores of standard and specialized international carrier routes by leveraging their existing reputation and contacts within the market. There is no fear that potential clients such as AT&T and IDT will negotiate these deals directly, as no major B2C carrier is structured to purchase minutes without the assistance of vendors like QT . Underlying causes range from political factors to the mere fact that it’s more effective for major carriers to purchase minutes from niche vendors, rather than strike deals themselves for every one of the thousands of routes they depend upon.

Meanwhile, competition among VoIP providers – including major players like Vonage, Net2Phone and Cable/Broadband services – is escalating. These competitors have spent millions to educate the public, and the public is embracing high-quality VoIP connections for costs far below the copper carriers. And most of these competitors are targeting the same markets: residential users and major corporations seeking lower domestic rates.

The genius of QT’s VoIP marketing strategy is:

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1. QT will be able to take advantage of the major marketing campaigns paid for by the competition, and can more cost-effectively promote its products and services now that the demand for VoIP has been created.

2. Because of the synergy between QT’s Carrier and VoIP divisions, the venture can offer customers something that no competitor can match: international calling rates at wholesale price points. It will have the lowest cost in market.

3. QT will target the valuable potential client bases that competitors have overlooked, including ethnic markets, tourists and small and home-based businesses.

5. Strategy and Implementation Summary

This section demonstrates how QT’s competitive edge, unique position within the communications industry, and an innovative marking approach will result in steady revenue growth and increased net profit over time.

5.1. Competitive Edge

The Carrier Division’s competitive edge comes from management’s combined 30 years of experience working with key international vendors – vendors that only offer the most competitive and profitable routes to those with whom they’ve developed long-term relationships. In addition, management’s important relationships extend to important buyers like AT&T that are always seeking the kinds of routes that QT can deliver.

The QT-Talk Division’s competitive edge is the sum of the following factors:

1. QT-Talk is not a pioneer in VoIP services, and can therefore take advantage of the hundreds of millions of marketing dollars that the pioneers have already spent to create a consumer demand for VoIP services.

2. Not only does QT-Talk’s technology offer the largest menu of features available, but its flexible design will allow QT-Talk to continually add features quickly and at low cost.

3. Through the Carrier Division, QT-Talk can offer customers wholesale international calling rates – the same rates that the likes of AT&T are buying and selling to the same customers at a mark-up. No other player in the VoIP arena can offer this to customers. By nature, customers switching to VoIP are looking for low rates. No competitors will be able to match or undercut QT-Talk’s rates.

4. Because QT-Talk alone can offer VoIP and low-rate international rates, it can build a targeted and cost-effecting marketing campaign to reach the most likely prospects. It will implement cost-effective, focused campaigns with high conversion rates.

5.2. Marketing Strategy

QT-Talk will build a powerful presence in the marketplace by leveraging the industry’s existing customer demand, and then undercutting those companies with international rates they could never match. Simultaneously, it will outpace competitors by making enhanced features available to the consumer.

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Currently, the venture has five principal marketing plans designed to bring its enhanced products and services to the attention of the consumer.

CALLING CARDS – ETHNIC MARKET

Major U.S. metropolitan areas have attracted vast numbers of immigrants1, who have developed myriad ethnic communities with strong ties to their countries of origin. Many of them keep in touch by using prepaid international calling cards.

Prepaid international calling cards are a vibrant business2 that connects ethnic communities to other countries at lower calling rates than those available through traditional carriers. QT-Talk will soon be bringing a better card to this market.

QT-Talk’s prepaid card will offer customers the guaranteed lowest rates available, and will provide calling card buyers with a unique phone number that is “local” for friends, relatives and business contacts. This unique number will belong to the user only for as long as his or her subscription lasts – giving QT-Talk yet another advantage over competition: not only does it offer the lowest rates, but it has a built-in incentive for customers to renew their calling cards before they expire rather than throw them away and purchase another brand.

Further, customers can take advantage of additional services (as described in the Products and Services section of this document) for reasonable upgrading fees.

QT-Talk’s calling card will arguably be the best on the market, and the venture intends to roll it out in six urban markets with strong ethic communities: New York, Miami, Los Angeles, San Francisco, Seattle and Chicago. It will reach prospective customers directly through targeted email campaigns and through distributors like Touch-N-Buy, which operates more than 5,000 calling card vending machines.

CALLING CARDS – TOURISTS

Travelers and tourists have the same demand for low international calling rates and local phone numbers as members of ethic communities – and can benefit from QT-Talk features like voicemail and voicemail-to-email. Imagine getting on a plane knowing that friends, family and business associates can still dial a local number to get in touch or leave a message. QT-Talk will make this possible, and will reach prospective customers through an aggressive marketing campaign designed to reach the traveler. Management is already pursuing media and retail venues at airports, hotels and with tour operators for a six-city roll-out. They will partner with existing frequent flier websites so that overseas travelers will be exposed to the product and special offers and purchasing incentives when booking or confirming reservations online.

INTERNET CAFÉ AND WI-FI

Internet Cafes and any venue with a Wi-Fi hotspot can offer all the advantages of QT-Talk's products and services to their customers. The venture will offer these buyers and resellers (or revenue share partners) attractive co-branding and private label opportunities.

1 The U.S. Census Bureau estimates the net number of new foreign-born coming just to New York City each year since 2000 is about 104,300. 2 A recent study by ATLANTIC-ACM projects that pre-paid calling card sales in the U.S. should reach US$6.4 billion by 2008.

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QT-Talk is building synergistic relationships with a number of Internet cafes located in New York City. Once such partner is EasyInternet Café, which has locations around the globe3. Negotiations have also started with Burger King, which will partner with QT-Talk in select locations. If trials are successful, this profitable program will be expanded to other locations4.

QT-Talk will be offering a free international call to customers of Internet Cafes. To redeem the free call, a customer will have to register with QT-Talk or a co-brander’s website. This step will build a valuable database of prospective customers.

The venture believes that this cost-effective promotional campaign will be successful in trials and quickly rolled out to various cities and chains, resulting in a worldwide network of QT-Talk customers.

SMALL OFFICE/HOME OFFICE – PACKAGED

Competitors are running after general residential and large corporate clientele, so QT-Talk will position itself as the best deal available to the population in between: The small office and home office customer.

The venture will offer QT-Talk customers in this category the entire VoIP package, which includes a CPE that customers will use in conjunction with their existing broadband service. It will employ a Net to Zero attachment program as an incentive for prospective customers.

QT-Talk intends to offer the packaged product through physical catalogues (including Tiger Direct, PC Connection, PC Mall, Dell and Gateway), online catalogues (including Amazon, Buy, BestBuy, Staples, Office Max and Office Depot), and small-business oriented and discounter retail outlets ranging from CompUSA to Costco.

Rather than invest hundreds of millions of dollars in advertising to reach small office and home office prospects, QT-Talk has developed an affiliate marketing commission and ongoing back-end revenue share for the catalogue and retail resellers. These companies will be motivated to position the product favorably and drive sales because their revenue stream will continue even after they make a sale.

In addition, QT-Talk has engaged a telemarketing team that’s experienced in dealing with business owners, and will focus on closing sales in the Small Office / Home Office categories.

SMALL OFFICE/HOME OFFICE – NOT PACKAGED

QT-Talk’s universe of prospective clients is not limited to first-time VoIP and alternative telephony customers. Many VoIP users already have a CPE device or set-up through the likes of Skype and BroadVoice.

QT-Talk will use alternative services to market its own VoIP programs, drilling home to customers that – while Vonage may have great domestic rates and many Skype calls are entirely free – their customers can add QT-Talk to their current setups and take advantage of the lowest international rates.

3 Including the U.S., U.K, Europe, Greece and Cyprus. 4 Burger King has more than 11,200 locations in 55 countries.

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To spread the word, QT-Talk will employ active user chat campaigns, SEO and public relations.

US MARKET – CLUB MODEL

Major retailers like Costco and Sam’s Club owe their success to an ingenious relationship with consumers: sell goods virtually at cost, but only to customers who pay a membership free for the privilege.

QT-Talk will be the first international and VoIP carrier to bring this successful model to communications. It will often provide customers with at-cost rates and profit immensely from annual membership fees. Additional revenue will be realized from upselling customers with a range of enhanced features.

The venture will use online and public relations campaigns to reach prospects in this category.

US MARKET – NETWORK MARKETING

Various companies have benefited from what’s known as Network or Multilevel Marketing. The basic model rewards individuals for referring friends to a product or service, and these referrals (and the resulting customer base) grow exponentially in a short period of time.

QT-Talk will institute this kind of program, with incentives that include free months of telephone service, cash for referrals and telephone rates that go down based on the number of referrals in a person’s network.

QT-Talk will cost-effectively launch this marketing strategy by first going out to existing networks and seeding them in order to take advantage of their built-in viral effect. It will penetrate the likes of Friendster and Zanga, which are online networking sites with more than 20 million combined members.

5.3. Sales Strategy

For both the Carrier and QT-Talk divisions, QT’s primary sales strategy is rooted in its unique ability to offer the lowest possible VoIP and international rates to consumers and B2C carriers.

It should be noted that QT-Talk will acquire customers by operating on a very small margin with regard to pre-paid minutes. Where it stands to profit is not from the actual minutes as much as through the following:

MEMBERSHIPS: Customers subscribing to the lowest rates can only access them through membership fees that will drive the venture’s profitability.

UPSELLING: While the cost of minutes remains low for customers, a range of useful features must be purchased as add-ons.

BREAKAGE: Breakage refers to unused minutes that have been prepaid.

SLIPPAGE: Slippage refers to unused minutes or fraction of minutes that are prepaid but not actually used because of rounding up.

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5.3.1. Sales Forecast

QT’s sales forecast delineates three revenue streams: two for the Carrier Division (Standard and Specialized routes) and one for QT-Talk. Important notes on these revenue streams include:

QT-TALK

Projections for the QT-Talk Division are derived from the estimated number of customers acquired through each marketing plan delineated above. Financial modeling projects 24,000 customers in 2007, 74,000 in 2008 and 118,000 in 2009. This number is a conservative estimate, since published material and industry research indicates that more than 780,000 consumers are switching to VoIP on an annual basis, and that VoIP is only now beginning to penetrate the corporate market.

Upselling, membership fees, setup fees and allotments for breakage and slippage are included in this line item.

STANDARD CARRIER ROUTES

"Standard Routes" is the long list of destinations that comprise the rest of the world not covered in the Specialized routes. The complete "A to Z' world coverage of the Standard routes is essential for QT to maintain in order to provide the QT-Talk brand with total world access and multiple route choice for quality. Although not as profitable on a per minute basis as the Specialized routes, QT can procure Standard routes from the vendor side at a much lower cost than its competition because QT is in a good leverage position. It will sell the Specialized Routes to the same carriers that are, in turn, selling the Standard Routes back to QT. The price points QT actually realizes make it possible for QT to end up profiting significantly when reselling Standard routes.

Projected revenue for the Standard Routes in Year One translates into approximately 366,000 daily minutes. Because QT has procured an Agreement for Tier 1 grade carrier switching facilities at 25 Broadway Street in New York City, and has a commitment on the cost of switching at well below market, it will be able to easily support this additional volume and be profitable.

In addition to having the capacity to carry these minutes, QT's management collectively brings to the table a successful track record of working with the global network of vendors who sell these minutes.

SPECIALIZED ROUTES

These routes are distinguished from Standard Routes for two reasons. First, the gross margin on these routes is substantially higher and are therefore broken-out for analysis. Second, the venture will be required to place security deposits to “switch on” these routes. Management intends to use a portion of investment capital for deposits.

QT’s founders have negotiated with 22 vendors in this category. Security deposits for each of the routes that the vendors represent is equivalent to one week of anticipated minutes purchased, which comes to an average of approximately $64,000 per route. These security deposits are not drawn down – they remain in effect during the lifetime of the association with the vendor.

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While these international vendors require weekly payments from QT, QT’s customers – Baby Bells, etc. – only pay on a Net 30 basis. To a great extent, this “cash flow gap” is the reason that a company like QT can exist: an intermediary is required to bridge the payment terms between international vendors and long-distance carriers. The venture’s financial model therefore indicates that, in addition to the average security deposit stated above, it will require a cash reserve to bridge the cash flow gap. This is valued at $275,200 per vendor.

Sales Forecast Sales 2007 2008 2009 Carrier Service: Standard Routes $5,603,463 $8,237,412 $11,366,909Carrier Service: Specialty Routes $7,066,212 $13,004,555 $17,254,385VoIP/Broadband Services $900,000 $1,721,281 $3,440,000Total Sales $13,569,675 $22,963,248 $32,061,294 Direct Cost of Sales 2007 2008 2009Carrier Service: Standard Routes $4,998,993 $6,284,174 $9,769,858Carrier Service: Specialty Routes $5,218,268 $10,732,008 $11,063,859Commissions/Selling $379,512 $578,867 $1,004,958Network Expenses $175,140 $328,815 $857,160VoIP/Broadband Costs $700,000 $1,000,000 $2,400,000Subtotal Direct Cost of Sales $11,471,913 $18,923,864 $25,095,835

Sales by Year

$0$2,000,000$4,000,000$6,000,000$8,000,000

$10,000,000$12,000,000$14,000,000$16,000,000$18,000,000

2007 2008 2009

Carrier Service:Standard Routes

Carrier Service:Specialty Routes

VoIP/BroadbandServices

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Direct Cost of Sales

$0

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

$12,000,000

2007 2008 2009

Carrier Service: StandardRoutes

Carrier Service: SpecialtyRoutes

Commissions/Selling

Network Expenses

VoIP/Broadband Costs

6. Personnel

Management has calculated payroll costs based on its collective experience in running similar operations at a commensurate level of volume and revenue. It should be noted that customer service will be outsourced, and therefore appears as a line item in the Profit & Loss.

Personnel Plan 2007 2008 2009Carrier Division Personnel $1,320,000 $1,420,000 $1,500,000VoIP/Broadband Personnel $80,000 $260,000 $300,000 Total Payroll $1,462,500 $1,680,000 $1,800,000

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7. Financial Plan

The venture’s projected Balance Sheet, P&L and Cash Flow appear in this section. These yearly pro formas summarize a more detailed financial model prepared by management and based on management’s experience in the industry.

7.1. Start-up Funding

The following table records the venture’s required capital investment, in the amount of $10 million, to execute the goals set forth in this business plan. It also shows that the venture’s founders have contributed to QT Globe their share of the proprietary VoIP technology that will run the QT-Talk division.

Start-up Funding Start-up Expenses to Fund $10,000,000Start-up Assets to Fund $0Total Funding Required $10,000,000 Assets Non-cash Assets from Start-up $0Cash Requirements from Start-up $0Required Technology (IP) $1,200,000Total Assets $1,200,000 Liabilities and Capital Liabilities Current Borrowing $0Long-term Liabilities $0Accounts Payable (Outstanding Bills) $0Other Current Liabilities $0Total Liabilities $0 Capital Planned Investment Investor $10,000,000Founder’s Technological Contribution $1,200,000Additional Investment Requirement $0Total Planned Investment $11,200,000 Loss at Start-up (Start-up Expenses) ($10,000,000)Total Capital $1,200,000 Total Capital and Liabilities $1,200,000 Total Funding $11,200,000

7.2. Important Assumptions

REVENUE

Projected revenue from the Carrier Division is based on actual Specialty Routes that management has negotiated and can “switch on” when the venture is capitalized. Standard Route projections are based on management’s previous experience in the industry and the vendors with whom management has established relationships. Projected revenue for the QT-Talk Division is derived

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from financial modeling wherein conservative conversation rates (sales) are assumed for each of the marketing plans described in section 5.2 (above).

EXPENSES

Notes to expense line items in the following P&L include:

MARKETING & PROMOTION: The marketing and promotion line item refers exclusively to funding the QT-Talk marketing strategy.

DEPRECIATION: Depreciation refers to capital expenditures related to creating the infrastructure that will carry QT Network’s telecom traffic.

OUTSOURCED CUSTOMER SERVICE: The QT-Talk Division will outsource customer service. Customer service is based on a cumulative subscriber headcount.

G&A: General and Administrative expenses are calculated as a percentage of revenue, based on management’s experience in the operations of similarly-situated organizations. The majority of the expenses in this category are accounted for by Rent, Utilities and Profession Fees. Other categories include Leased Equipment, Office Expenses, Bank Charges, Postage, General Insurance, Repair and Maintenance and Training Expenses.

7.3. Projected Profit and Loss

The following P&L demonstrates how QT Network’s business strategy translates into revenue in the tens of million of dollars, and shows a corporate venture whose net profit rises from 1% to nearly 10% in the period of only three years.

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Pro Forma Profit and Loss 2007 2008 2009Sales $13,569,675 $22,963,248 $32,061,294Direct Cost of Sales $11,471,913 $18,923,864 $23,095,835Other Costs of Sales $0 $0 $0 ------------ ------------ ------------Total Cost of Sales $11,471,913 $18,923,864 $25,095,835 Gross Margin $2,097,762 $4,039,384 $6,965,459Gross Margin % 15.45% 17.59% 21.72% Expenses Payroll $1,200,000 $1,395,000 $1,500,000Marketing/Promotion $18,000 $40,000 $117,000Depreciation $0 $58,000 $98,500G&A $45,211 $96,115 $131,360Pension Expense $74,746 $76,241 $77,766Outsourced Customer Service $48,000 $98,000 $136,000Payroll Taxes $262,500 $285,000 $300,000Travel & Entertainment $22,839 $25,414 $26,430Bad Debt $50,000 $50,000 $50,000Benefits $0 $0 $0Other $0 $0 $0 ------------ ------------ ------------Total Operating Expenses $1,721,296 $2,123,770 $2,301,056 Profit Before Interest and Taxes $376,466 $1,915,614 $4,664,403Interest Expense $0 $0 $0Taxes Incurred $0 $0 $0 Net Profit $376,466 $1,915,614 $4,664,403Net Profit/Sales 2.77% 8.34% 14.54%

7.4. Projected Cash Flow

The venture shows a positive cash flow throughout the projected period due to both investment capital and a quick ramp up in annual net profits. This cash flow shows an interest-free Other Liability, which reflects additional technological expenditures that are only applicable in the post-startup phase of development.

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Pro Forma Cash Flow 2007 2008 2009Cash Received Cash from Operations Cash Sales $13,569,675 $22,963,248 $32,061,294Subtotal Cash from Operations $13,569,675 $22,963,248 $32,061,294 Additional Cash Received Sales Tax, VAT, HST/GST Received $0 $0 $0New Current Borrowing $0 $0 $0New Other Liabilities (interest-free) $150,000 $0 $0New Long-term Liabilities $0 $0 $0Sales of Other Current Assets $0 $0 $0Sales of Long-term Assets $0 $0 $0New Investment Received $0 $0 $0Subtotal Cash Received $13,719,675 $22,963,248 $32,061,294 Expenditures 2007 2008 2008 Expenditures from Operations Cash spending $1,200,000 $1,395,000 $1,500,000Bill Payments $11,821,913 $15,633,611 $19,624,792Subtotal Spent on Operations $13,021,913 $17,028,611 $21,124,792 Additional Cash Spent Sales Tax, VAT, HST/GST Paid Out $0 $0 $0Principal Repayment of Current Borrowing $0 $0 $0Other Liabilities Principal Repayment $0 $0 $0Long-term Liabilities Principal Repayment $0 $0 $0Purchase Other Current Assets $0 $0 $0Purchase Long-term Assets $180,000 $275,000 $800,000Dividends $0 $0 $0Subtotal Cash Spent $13,201,913 $17,303,611 $21,924,729 Net Cash Flow $517,762 $5,659,637 $10,136,565Cash Balance $1,717,762 $6,859,637 $11,336,565

7.5. Projected Balance Sheet

The following Balance Sheet demonstrates that the venture’s yearly increase in sales and profitability – although conservatively estimated – will build a net worth in excess of initial investment funding in as few as three years.

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Pro Forma Balance Sheet 2007 2008 2009Assets Current Assets Cash $1,717,762 $6,859,637 $11,336,565Other Current Assets $0 $0 $0Total Current Assets $1,717,762 $6,859,637 $11,336,565 Long-term Assets Long-term Assets $180,000 $275,000 $800,000Accumulated Depreciation $0 $58,000 $98,500Total Long-term Assets $180,000 $217,000 $701,500Total Assets $1,897,762 $7,076,637 $12,038,065 Liabilities and Capital 2007 2008 2009 Current Liabilities Accounts Payable $171,296 $3,961,023 $4,173,599Current Borrowing $0 $0 $0Other Current Liabilities $150,000 $150,000 $150,000Subtotal Current Liabilities $321,296 $4,111,023 $4,323,599 Long-term Liabilities $0 $0 $0Total Liabilities $321,296 $4,111,023 $4,323,599 Paid-in Capital $11,200,000 $11,200,000 $11,200,000Retained Earnings ($10,000,000) ($9,623,534) ($6,304,201)Earnings $376,466 $1,915,614 $4,664,403Total Capital $1,576,466 $2,965,614 $7,7144,66Total Liabilities and Capital $321,296 $4,111,023 $4,323,599 Net Worth $1,576,466 $2,965,614 $5,864,403