Chun Can Capital 10QSB/A 2006 Q2 Quarterly report (small business) (amended)

		Page
PART I - FINANCIAL INFORMATION

Item 1. Financial Statements		1
Item 2. Management’s Discussion and Analysis or Plan of Operation		22
Item 3. Controls and Procedures		25

PART II - OTHER INFORMATION

Item 1. Legal Proceedings		25
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		25
Item 3. Defaults Upon Senior Securities		25
Item 4. Submission of Matters to a Vote of Security Holders		26
Item 5. Other Information		26
Item 6. Exhibits		26

SIGNATURES		28

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

Cintel Corp. and Subsidiary

We have reviewed the accompanying consolidated balance sheets of Cintel Corp. and Subsidiary (the "Company") as of June 30, 2006 and 2005 and the related consolidated statements of operations and comprehensive loss, stockholders' equity and cash flows for the six-month periods ended June 30, 2006 and 2005. These interim financial statements are the responsibility of the Company's management.

We conducted our reviews in accordance with standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with standards of the Public Company Accounting Oversight Board (United States), the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our reviews, we are not aware of any material modifications that should be made to such consolidated interim financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.

	"SF PARTNERSHIP, LLP"

Toronto, Canada	CHARTERED ACCOUNTANTS

August 1, 2006 except as to note 15a

which is as of November 13, 2006, and note 16

which is as of February 2, 2007 and note 15b

which is as of June 7, 2007

CINTEL CORP. AND SUBSIDIARY

Consolidated Balance Sheets

June 30, 2006 and 2005

(Unaudited)

	Restated (note 15)			Restated (note 16)
	2006			2005
ASSETS
Current
Cash and cash equivalents (note 3)	$	1,395,406		$	373,982
Investments in trading securities (fair market value $192,812)		175,051			-

Accounts receivable (net of allowance for doubtful accounts of $1,114,358; 2005 - $965,246)		1,636,762			290,083
Inventories (note 4)		557,326			267,433
Prepaid and other assets		813,401			225,429
Loans receivable (note 5)		158,100			-

		4,736,046			1,156,927
Deferred Financing Fees		-			30,000
Investments (note 7)		1,920,936			-
Investments in available for sale securities (note 8)		16,977			48,752
Equipment (note 9)		509,893			466,422

	$	7,183,852		$	1,702,101

LIABILITIES
Current
Accounts payable	$	1,368,723		$	781,088
Shareholder loan		-			161,779
Deferred revenue (note 14b)		136,412			57,639
Loans payable - current (note 10)		43,076			1,493,511
Promissory note (note 11)		-			180,000

		1,548,211			2,674,017
Accrued Severance		83,314			104,469
Loans Payable (note 10)		39,051			515,274
Convertible Debenture (note 12)		-			30,000

		1,670,576			3,323,760

Contingent Liabilities and Commitments (note 14)

STOCKHOLDERS' EQUITY (Deficit)
Capital Stock (note 13)
Authorized 300,000,000 common shares, par value $0.001 per share
Issued 87,179,896 common shares (42,379,354 - 2005)		87,179			40,629
Additional Paid-in Capital		14,249,448			5,243,316
Treasury Stock		(5,630	)		(105,185	)
Cumulative Other Comprehensive Loss		(322,346	)		(47,154	)
Accumulated Deficit		(8,495,375	)		(6,753,265	)

		5,513,276			(1,621,659	)

	$	7,183,852		$	1,702,101

(The accompanying notes are an integral part of these consolidated financial statements)

CINTEL CORP. AND SUBSIDIARY

Consolidated Statement of Operations and Comprehensive Loss

Six Months Ended June 30, 2006 and 2005

(Unaudited)

	Restated (note 15)			Restated (note 16)
	2006			2005
Revenue
Merchandise (note 15)	$	3,681,954		$	326,626
Finished goods (note 15)		88,049			101,701
Services		49,150			21,644

		3,819,153			449,971

Cost of Sales
Merchandise (note 15)		3,531,625			277,399
Finished goods (note 15)		61,985			39,200

		3,593,610			316,599

Gross Profit		225,543			133,372

Expenses
Salaries and employee benefits		342,662			285,360
Professional fees		313,027			195,376
Office and general		187,579			208,150
Depreciation		108,916			112,637
Travel		100,282			152,270
Research and development		18,891			-
Taxes and dues		273			49,595
Amortization of deferred financing fees		60,000			90,000

		1,131,630			1,093,388

Loss from Operations		(906,087	)		(960,016	)

Other Income (Expense)
Interest and other income		143,215			6,258
Foreign exchange		(10,532	)		-
Interest expense		(22,487	)		(166,783	)
Share of income from equity investment		16,260			-

		126,456			(160,525	)

Loss Before Income Taxes		(779,631	)		(1,120,541	)

Current		44,057			-

Net Loss		(823,688	)		(1,120,541	)
Foreign Currency Translation Adjustment		389,239			20,186

Total Comprehensive Loss	$	(434,449	)	$	(1,100,355	)

Basic Loss per Share	$	(0.01	)	$	(0.03	)

Diluted Loss per Share	$	(0.01	)	$	(0.03	)

Weighted Average Number of Shares (note 13)		49,971,111			32,364,447
Diluted Weighted Average Number of Shares (note 13)		49,971,111			32,364,447

(The accompanying notes are an integral part of these consolidated financial statements)

CINTEL CORP. AND SUBSIDIARY

Consolidated Statement of Operations and Comprehensive Loss

Three Months Ended June 30, 2006 and 2005

(Unaudited)

	Restated (note 15)			Restated (note 16)
	2006			2005
Revenue
Merchandise (note 15)	$	1,332,523		$	214,622
Finished goods (note 15)		57,660			101,701
Services		21,118			7,130
		1,411,301			323,453

Cost of Sales
Merchandise (note 15)		1,267,195			165,721
Finished goods (note 15)		24,492			39,200

		1,291,687			204,921

Gross Profit		119,614			118,532

Expenses
Salaries and employee benefits		159,751			137,108
Professional fees		212,360			71,025
Office and general		91,665			109,500
Depreciation		57,502			56,887
Travel		68,857			106,876
Research and development		250			-
Amortization of deferred financing fees		30,000			30,000
Taxes and dues		152			16,813

		620,537			528,209

Loss from Operations		(500,923	)		(409,677	)

Other Income (Expense)
Interest and other income		33,799			4,799
Foreign exchange		(13,876	)		-
Interest expense		(10,414	)		(91,934	)
Share of income from equity investment		16,260			-

		25,769			(87,135	)

Loss Before Income Taxes		(475,154	)		(496,812	)

Current		20,625			-

Net Loss		(495,779	)		(496,812	)

Foreign Currency Translation Adjustment		148,073			18,679

Total Comprehensive Loss	$	(347,706	)	$	(478,133	)

Basic Loss per Share	$	(0.01	)	$	(0.01	)

Diluted Loss per Share	$	(0.01	)	$	(0.01	)

Weighted Average Number of Shares (note 13)		57,562,868			37,036,394

Diluted Weighted Average Number of Shares (note 13)		57,562,868			37,036,394

(The accompanying notes are an integral part of these consolidated financial statements)

CINTEL CORP. AND SUBSIDIARY

Consolidated Statement of Stockholders' Equity (Deficit)

Six Months Ended June 30, 2006 and 2005

(Unaudited)

										Cumulative						Total
	Number				Additional					Other			Restated			Stockholders'
	of		Capital		Paid-in		Treasury			Comprehensive			Accumulated			Equity
	Shares		Stock		Capital		Stock			Loss			Deficit			(Deficit)

Balance, January 1, 2005	23,409,800	$	23,409	$	4,573,535	$	-		$	23,826		$	(4,789,132	)	$	(168,362	)
Adjustment due to restatement (note 16)	-		-		-		-			(91,166	)		(843,591	)		(934,757	)

	23,409,800		23,409		4,573,535		-			(67,340	)		(5,632,723	)		(1,103,119	)
Common shares issued for consulting services	1,990,000		1,990		115,011		-			-			-			117,001
Common shares issued as repayment of promissory note	11,283,095		11,283		348,717		-			-			-			360,000
Conversion of convertible debentures into common stock	3,946,982		3,947		206,053		-			-			-			210,000
Repurchase of employees' stock	-		-		-		(105,185	)		-			-			(105,185	)
Foreign exchange on translation	-		-		-		-			20,186			-			20,186
Net loss	-		-		-		-			-			(891,835	)		(891,835	)
Adjustment due to restatement (note 15a)	-		-		-		-			-			(169,873	)		(169,873	)
Adjustment due to restatement (note 15b)	-		-		-		-			-			(58,834	)		(58,834	)
Balance, June 30, 2005 - restated (note 16)	40,629,877	$	40,629	$	5,243,316	$	(105,185	)	$	(47,154	)	$	(6,753,265	)	$	(1,621,659	)

Balance, January 1, 2006	42,379,354	$	42,378	$	5,351,058	$	(5,630	)	$	121,739		$	(7,269,855	)	$	(1,760,310	)
Adjustment due to restatement (note 15)	-		-		-		-			(110,755	)		(267,801	)		(378,556	)
Adjustment due to restatement (note 15)	-		-		-		-			(2,032	)		(134,026	)		(136,058	)

Restated balance, January 1, 2006	42,379,354		42,378		5,351,058		(5,630	)		8,952			(7,671,682	)		(2,274,924	)
Unrealized loss on investment (note 7)	-		-		-		-			(720,536	)		-			(720,536	)
Common shares issued for consulting services (note 13)	500,000		500		89,500		-			-			-			90,000
Conversion of convertible debenture into common stock (note 13)	44,300,542		44,301		8,808,890		-			-			-			8,853,191
Foreign exchange on translation	-		-		-		-			389,238			-			389,238
Net loss	-		-		-		-			-			(587,154	)		(587,154	)
Adjustment due to restatement (note15a)	-		-		-		-			-			(244,667	)		(244,667	)
Adjustment due to restatement (note 15b)	-		-		-		-			-			8,128			8,128

Balance, June 30, 2006 - restated (note 15)	87,179,896	$	87,179	$	14,249,448	$	(5,630	)	$	(322,346	)	$	(8,495,375	)	$	5,513,276

(The accompanying notes are an integral part of these consolidated financial statements)

CINTEL CORP. AND SUBSIDIARY

Consolidated Statement of Cash Flows

Six Months Ended June 30, 2006 and 2005

(Unaudited)

	Restated (note 15)			Restated (note 16)
	2006			2005
Cash Flows from Operating Activities
Net loss	$	(823,688	)	$	(1,120,541	)
Adjustments for working capital and non-cash items:
Depreciation		108,916			112,637
Amortization of financing fees		60,000			90,000
Common stock issued for consulting services		45,000			117,001
Share of income from equity investment		(16,260	)		-
Net Changes in Assets & Liabilities
Accounts receivable		(502,992	)		311,060
Inventories		(81,026	)		28,418
Prepaid and other assets		(384,841	)		60,092
Accounts payable		353,173			(43,259	)
Deferred revenue		355			57,639
Accrued severance		9,645			(18,019	)

Net Cash Provided by Operating Activities		(1,231,718	)		(404,972	)

Cash Flows from Investing Activities
Investments in trading securities		(184,367	)		-
Loans receivable		(159,375	)		-
Acquisition of equipment		(2,428	)		(356	)
Proceeds from disposal of securities held for investment		36,000			-

Net Cash (Used in) Investing Activities		(310,170	)		(356	)

Cash Flows from Financing Activities
Payments of deferred financing fees		-			(240,000	)
Proceeds from loans payable		-			273,270
Proceeds from convertible debenture		-			240,000
Repayment of convertible debenture by issuance of capital stock		-			(210,000	)
Proceeds from promissory note		-			200,000
Common shares issued for repayment of convertible debenture		8,853,191			-
Repayment of convertible debt		(8,853,191	)		-
Repayment of promissory note by issuance of capital stock		-			(360,000	)
Repurchase of employees' stocks		-			(105,185	)
Advances from shareholder loan		-			131,472
Loans payable		(650,516	)		-
Proceeds from common shares issued for repayment of promissory note		-			360,000
Proceeds from common shares issued for repayment of convertible debenture		-			210,000

Net Cash (Used in) Financing Activities		(650,516	)		499,557

Foreign Exchange on Cash and Cash Equivalents		98,361			(1,634	)

Net (Decrease) Increase in Cash and Cash Equivalents		(2,094,043	)		92,595

Cash and Cash Equivalents - Beginning of Period		3,489,449			281,387

Cash and Cash Equivalents - End of Period	$	1,395,406		$	373,982

Supplemental Information
During the year, the company had cash flows arising from interest and income taxes paid as follows:
Interest paid	$	22,487		$	107,084

Income taxes paid	$	42,403		$	-

(The accompanying notes are an integral part of these consolidated financial statements)

CINTEL CORP. AND SUBSIDIARY

Notes to Consolidated Financial Statements

June 30, 2006 and 2005

(Unaudited)

1.	Operations and Business

Cintel Corp. and Subsidiary, formerly Link2 Technologies, Inc. ("the Company"), was incorporated in the State of Nevada on August 16, 1996 and on April 24, 2001 changed its name from "Great Energy Corporation International" to Link2 Technologies, Inc. On September 30, 2003 the Company changed its name to Cintel Corp.

On September 30, 2003, the Company entered into a definitive Share Exchange Agreement (the "Agreement") with Cintel Co., Ltd., ("Cintel Korea") a Korean corporation and its shareholders. The Agreement provided for the acquisition by the Company from the shareholders of 100% of the issued and outstanding capital stock of Cintel Korea. In exchange, the shareholders of Cintel Korea received 16,683,300 shares of the Company. As a result, the shareholders of Cintel Korea controlled 82% of the Company. While the Company is the legal parent, as a result of the reverse-takeover, Cintel Korea became the parent company for accounting purposes.

Upon completion of the share exchange, the business operations of Cintel Korea constituted virtually all of the business operations of the Company. Cintel Korea develops network solutions to address technical limitations to the Internet. Cintel Korea has developed what it believes is the first Korean server load balancing technology. Cintel Korea is now focused on the development of advanced solutions for Internet traffic management. The business operations of Cintel Korea are located in Seoul, Korea.

2.	Summary of Significant Accounting Policies

The accounting policies of the Company are in accordance with generally accepted accounting principles of the United States of America, and their basis of application is consistent. Outlined below are those policies considered particularly significant:

Basis of Financial Statement Presentation

These financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America with the assumption that the Company will be able to realize its assets and discharge its liabilities in the normal course of business.

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the requirement of item 310(b) of Regulation S-B. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete consolidated financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Interim results are not necessarily indicative of the results that may be expected for a full year. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-KSB for the fiscal year ended December 31, 2006, as filed with the Securities and Exchange Commission ("SEC").

CINTEL CORP. AND SUBSIDIARY

Notes to Consolidated Financial Statements

June 30, 2006 and 2005

(Unaudited)

2.	Summary of Significant Accounting Policies (cont'd)

Basis of Consolidation

The consolidated financial statements of the Company included the financial results of Cintel Corp. and Cintel Korea. The merger of the Company and Cintel Korea has been recorded as the recapitalization of the Company, with the net assets of the Company brought forward at their historical basis. The intention of the management of Cintel Korea was to acquire the Company as a shell company listed on NASDAQ. Management does not intend to pursue the business of the Company. As such, accounting for the merger as the recapitalization of the Company is deemed appropriate.

Unit of Measurement

The US Dollar has been used as the unit of measurement in these financial statements.

Use of Estimates

Preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and related notes to financial statements. These estimates are based on management's best knowledge of current events and actions the Company may undertake in the future. Actual results may ultimately differ from estimates, although management does not believe such changes will materially affect the financial statements in any individual year.

Revenue Recognition

For sale of finished goods, the Company recognizes revenue when there is a definitive sales agreement, and upon shipment of products when title is passed and the amount collectible can reasonably be determined.

For merchandise sales, the Company recognizes revenue upon shipment of products when title is passed and the amount collectible can reasonably be determined.

For the service sales, the Company recognizes revenue when services are rendered.

Cash and Cash Equivalents

Cash includes currency, cheques issued by others, other currency equivalents, current deposits and passbook deposits. Cash equivalents include securities and short-term money market instruments that can be easily converted into cash. The investments that mature within three months from the investment date, are also included as cash equivalents.

CINTEL CORP. AND SUBSIDIARY

Notes to Consolidated Financial Statements

June 30, 2006 and 2005

(Unaudited)

2.	Summary of Significant Accounting Policies (cont'd)

Investments

Investments in securities are recorded in accordance with FAS-115 "Accounting for Certain Investments in Debt and Equity Securities". Investments in available for sale securities that are not held principally for the purpose of selling in the near term are reported at fair market value when it is readily determinable. Investments in trading securities are recorded at fair value. Unrealized holding gains and losses from investments are excluded from earnings and reported as a separate component of stockholders' equity.

Investments subject to significant influence have been recorded using the equity method.

Inventories

Raw material is stated at the lower of cost or market value, using the first in first out weighted average cost method.

Merchandise inventory is stated at the lower of cost or net realizable value. Net realizable value is determined by deducting selling expenses from selling price.

Equipment

Equipment is stated at cost. Major renewals and betterments are capitalized and expenditures for repairs and maintenance are charged to expense as incurred. Depreciation is computed using the straight-line method over a period of 5 years.

Government Grants

Government grants are recognized as income over the periods necessary to match them with the related costs that they are intended to compensate.

Currency Translation

The Company's functional currency is Korean won. Adjustments to translate those statements into U.S. dollars at the balance sheet date are recorded in other comprehensive income.

Foreign currency transactions of the Korean operation have been translated to Korean Won at the rate prevailing at the time of the transaction. Realized foreign exchange gains and losses have been charged to income in the year.

Financial Instruments

Fair values of cash equivalents, short-term and long-term investments and short-term debt approximate cost. The estimated fair values of other financial instruments, including debt, equity and risk management instruments, have been determined using market information and valuation methodologies, primarily discounted cash flow analysis. These estimates require considerable judgment in interpreting market data, and changes in assumptions or estimation methods could significantly affect the fair value estimates.

CINTEL CORP. AND SUBSIDIARY

Notes to Consolidated Financial Statements

June 30, 2006 and 2005

(Unaudited)

2.	Summary of Significant Accounting Policies (cont'd)

Comprehensive Income (Loss)

The Company adopted SFAS No. 130, “Reporting Comprehensive Income (“SFAS No. 130”).” SFAS No. 130 establishes standards for reporting and presentation of comprehensive income (loss) and its components in a full set of financial statements. Comprehensive income (loss) is presented in the statements of stockholders' (deficit) equity, and consists of net earnings (loss) and foreign currency translation adjustments. SFAS No. 130 requires only additional disclosures in the financial statements and does not affect the Company's financial position or results of operations.

Income Tax

The Company accounts for income taxes pursuant to SFAS No. 109, "Accounting for Income Taxes". Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

Earnings or Loss per Share

The Company adopted FAS No.128, "Earnings per Share" which requires disclosure on the financial statements of "basic" and "diluted" earnings (loss) per share. Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the year. Diluted earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding plus common stock equivalents (if dilutive) related to stock options and warrants for each year.

Concentration of Credit Risk

SFAS No. 105, "Disclosure of Information About Financial Instruments with Off-Balance Sheet Risk and Financial Instruments with Concentration of Credit Risk", requires disclosure of any significant off-balance sheet risk and credit risk concentration. The Company does not have significant off-balance sheet risk or credit concentration. The Company maintains cash and cash equivalents with major Korean financial institutions.

The Company's provides credit to its clients in the normal course of its operations. It carries out, on a continuing basis, credit checks on its clients and maintains provisions for contingent credit losses which, once they materialize, are consistent with management's forecasts.

For other debts, the Company determines, on a continuing basis, the probable losses and sets up a provision for losses based on the estimated realizable value.

Concentration of credit risk arises when a group of clients having a similar characteristic such that their ability to meet their obligations is expected to be affected similarly by changes in economic conditions. The Company does not have any significant risk with respect to a single client.

CINTEL CORP. AND SUBSIDIARY

Notes to Consolidated Financial Statements

June 30, 2006 and 2005

(Unaudited)

2.	Summary of Significant Accounting Policies (cont'd)

Long-lived Asset Impairment

The company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Recoverability is assessed based on the carrying amount of a long-lived asset compared to the sum of the future undiscounted cash flows expected to result from the use and the eventual disposal of the asset. An impairment loss is recognized when the carrying amount is not recoverable and exceeds the total undiscounted cash flows expected from its use and disposition.

Recent Accounting Pronouncements

In December 2004, the FASB issued a revision to SFAS No. 123, "Share-Based Payment" (Statement 123). This Statement requires a public entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost will be recognized over the period during which the employee is required to provide service in exchange for the award requisite service period (usually the vesting period). No compensation cost is recognized for equity instruments for which employees do not render the requisite service. Employee share purchase plans will not result in recognition of compensation cost if certain conditions are met; those conditions are much the same as the related conditions in Statement 123. This Statement is effective for public entities that do not file as a small business issuers as of the beginning of the first interim or annual reporting period that begins after June 15, 2005. This Statement applies to all awards granted after the required effective date and to awards modified, repurchased, or cancelled after that date. The cumulative effect of initially applying this Statement, if any, is recognized as of the required effective date and is not expected to have a material impact on the Company's consolidated financial statements.

In May 2005, the FASB issued Statement No. 154, Accounting Changes and Error Corrections - A Replacement of APB Opinion No. 20 and FASB Statement No. 3 (Statement No. 154). Statement No. 154 changes the requirements for the accounting for and reporting of a change in accounting principle. Statement No. 154 requires retrospective application of any change in accounting principle to prior periods' financial statements. Statement No. 154 is effective for the first fiscal period beginning after December 15, 2005. We do not expect the implementation of Statement No. 154 to have a significant impact on our consolidated financial statements.

CINTEL CORP. AND SUBSIDIARY

Notes to Consolidated Financial Statements

June 30, 2006 and 2005

(Unaudited)

3.	Cash and Cash Equivalents

In 2005, the company provided $135,786 as security for one of the bank loans as described in note 10. As at June 30, 2005, the amount of loan outstanding was $543,144. In 2006, the bank loan was repaid.

4.	Inventories

Inventory includes $399,272 (2005 - $10,419) of merchandise and $158,054 (2005 - $257,014) of raw materials.

5.	Loans Receivable

Loans receivable are comprised of the following;

	2006		2005
Loan receivable #1	$	52,700	$	-
Loan receivable #2		105,400		-

	$	158,100	$	-

Loan receivable #1 to a private Korean company is non-interest bearing and the maturity date has been extended to August of 2006. The loan is due on demand and secured by a personal guarantee and the shares of the chief executive officer of the indebted company.

Loan receivable #2 to the chief executive officer of the indebted company per loan receivable #1 bears interest at 6% per annum, and is due on demand. The loan is secured by 100% of the shares of a new private company incorporated in March 2006.

CINTEL CORP. AND SUBSIDIARY

Notes to Consolidated Financial Statements

June 30, 2006 and 2005

(Unaudited)

6.	Income Taxes

The Company accounts for income taxes pursuant to SFAS No. 109, "Accounting for Income Taxes". This Standard prescribes the use of the liability method whereby deferred tax asset and liability account balances are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates. The effects of future changes in tax laws or rates are not anticipated. Corporate income tax rates applicable to the Korean subsidiary in 2006 and 2005 are 16.5 percent of the first 100 million Korean Won ($84,000) of taxable income and 29.7 percent on the excess. For the United States operation, the corporate tax rate is approximately 34%. The company provided a valuation allowance equal to the deferred tax amounts resulting from the tax losses in the United States, as it is not more likely than not that they will be realized. Tax losses from the Korean subsidiary can be carried forward for five years to offset future taxable income. The U.S. tax losses can be carried forward for fifteen years to offset future taxable income. The company has accumulated approximately $7,366,728 of taxable losses, which can be used to offset future taxable income. The utilization of the losses expires in years 2008 to 2010.

Under SFAS No. 109 income taxes are recognized for the following: a) amount of tax payable for the current year, and b) deferred tax liabilities and assets for future tax consequences of events that have been recognized differently in the financial statements than for tax purposes. The Company has deferred income tax assets arising from research and development expenses. For accounting purposes, these amounts are expenses when incurred. Under Korean tax laws, these amounts are deferred and amortized on a straight-line basis over 5 years.

The Company has deferred income tax assets as follows:

	Restated
	2006			2005
Deferred income tax assets
Research and development expenses amortized over 5 years for tax purposes	$	258,646			214,829
Other timing differences		(53,810	)		154,439
Net operating loss carryforwards		1,999,849			726,928

		2,204,685			1,096,196
Valuation Allowance (note 15 and note 16)		(2,204,685	)		(1,096,196	)

	$	-			-

CINTEL CORP. AND SUBSIDIARY

Notes to Consolidated Financial Statements

June 30, 2006 and 2005

(Unaudited)

7.	Investments

Investments represent 500,000 shares, 20% ownership in a private Korean company. The investment has been accounted for by the equity method. Carrying cost of the investment has been written off to the net equity balance of the investee. Unrealized holding loss in investment has been excluded from earnings and reported as a separate component of stockholders' equity.

8.	Investments in Available for Sale Securities

	2006		2005

Stock #1		15,843		48,495
Other miscellaneous		1,134		257

	$	16,977	$	48,752

Stock #1 represents a minority interest in a private Korean company which is carried at cost.

9.	Equipment

Equipment is comprised as follows:

	2006				2005
			Accumulated				Accumulated
	Cost		Depreciation		Cost		Depreciation


Furniture and fixtures		71,416		36,941		44,768		26,538
Equipment		906,424		680,337		637,418		538,891
Vehicles		17,700		1,770		15,012		15,010
Software		732,205		498,804		710,830		361,167

	$	1,727,745	$	1,217,852	$	1,408,028	$	941,606

Net carrying amount			$	509,893			$	466,422

CINTEL CORP. AND SUBSIDIARY

Notes to Consolidated Financial Statements

June 30, 2006 and 2005

(Unaudited)

10.

Loans Payable

						2006			2005
	Current		Long-term			Total			Total

Bank loan	$	-	$	-		$	-		$	1,878,870
Promissory Note		39,000		-			39,000			39,000
Government loans		-		38,019			38,019			100,188
Discount of interest-free government
loans		-		(8,619	)		(8,619	)		(9,273	)
Vehicle Loan		4,076		9,651			13,727			-

	$	43,076	$	39,051		$	82,127		$	2,008,785

Promissory Note

The promissory note is non-interest bearing, unsecured, and due on demand.

Government Loan

The loan is non-interest bearing, unsecured, repayable in annual payments of $10,143 and matures in October 2009.

Vehicle Loan

The loan is interest bearing, secured by the vehicle as disclosed in note 9, and is repayable in 36 monthly installments of $331. The loan matures in December 2008.

Principal repayments consist of the following:

2007	$	43,076
2008		10,667
2009		10,667
2010		17,717
Thereafter		-
	$	82,127

CINTEL CORP. AND SUBSIDIARY

Notes to Consolidated Financial Statements

June 30, 2006 and 2005

(Unaudited)

11.

Promissory Note

The promissory note has an annual coupon rate of 12%. Commencing November 15, 2004, the promissory note and interest are repayable in one installment of $29,266 followed by 39 installments of $10,000 every seven calendar days. An additional $150,000 has been advanced under an agreement in April 2005 at the same interest rate. The new advance is repayable in installments of $10,000 every seven calendar days.

As security, 25,000,000 shares have been held in escrow by the lawyer who shall provide the shares for repayment of the debt. The conversion price of said shares issued will be equal to 98% of the lowest closing bid price of the common stock on the listed market for the five days immediately following the notice date for the advance.

Under the agreement, the debenture holder has committed to provide financing of up to $5,000,000 over a two year period. The maximum amount of financing per month is $400,000.

The promissory note has been repaid in the year 2005.

12.

Convertible Debentures

Pursuant to SFAS No. 150, "Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity" the Company accounts for the convertible debentures as a liability at face value and no formal accounting recognition is assigned to the value inherent in the conversion feature.

The convertible debentures outstanding during the year were unsecured and non-interest bearing. The debenture holders had sixteen months from the date of their agreements (the conversion date) to convert their debentures into common stock of the company. Any balances outstanding after the conversion date are repayable twenty months after the conversion date (or thirty six months after the date of the agreements).

	Conversion		Conversion
	Price		Date		Maturity date		Amount
Convertible note #1	$	0.35		6/15/2007		12/15/2008	$	492,800
Convertible notes #2		0.04		4/17/2007		10/17/2008		440,000
Convertible notes #3		0.14		4/17/2007		10/17/2008		2,161,334
Convertible note #4		0.35		5/17/2007		11/17/2008		5,759,057

								8,853,191
Less: conversions as at June 30, 2006								8,853,191

Total outstanding at June 30, 2006							$	-

The two convertible debentures outstanding at June 30, 2005 had an annual coupon rate of 12% and 5%. The convertible debentures were repaid in 2005.

CINTEL CORP. AND SUBSIDIARY

Notes to Consolidated Financial Statements

June 30, 2006 and 2005

(Unaudited)

13.

Capital Stock

Authorized
300,000,000 common shares, par value $0.001 per share
	2006		2005
Issued
87,179,896 common shares (2005 - 40,629,877)	$	87,180	$	40,630

In January 2005, the Company issued 240,000 common shares for consulting service at the value of $20,500.

In January 2005, the Company issued 2,262,424 common shares from escrow upon the repayment of $40,000 of the convertible debenture.

In February 2005, the Company issued 622,200 common shares from escrow upon the repayment of $50,000 of the convertible debentures.

In February 2005, 400,000 common shares were issued for consulting services at the value of $44,000.

In March 2005, the Company issued 1,485,120 common shares from escrow upon the repayment of $80,000 of the convertible debenture.

In March 2005, the Company repurchased 93,830 common shares for $105,259. The excess of repurchase price over fair market value was recorded as an employee benefit.

In March 2005, 1,905,136 common shares were issued upon the conversion of $140,000 of convertible debenture.

In April 2005, the Company issued 1,311,769 common shares from escrow upon the repayment of $40,000 of the convertible debenture.

In April 2005, 1,200,000 common shares were issued for consulting services at the value of $48,000.

In April 2005, 712,500 common shares were issued upon the conversion of $20,000 of convertible debenture.

In May 2005, 1,329,346 common shares were issued upon the conversion of $50,000 of convertible debenture.

In May 2005, the Company issued 2,333,551 common shares from escrow upon the repayment of $70,000 of the convertible debenture.

CINTEL CORP. AND SUBSIDIARY

Notes to Consolidated Financial Statements

June 30, 2006 and 2005

(Unaudited)

13.

Capital Stock (cont'd)

In June 2005, 150,000 common shares were issued for consulting services at the value of $4,500.

In June 2005, the Company issued 3,268,031 common shares from escrow upon the repayment of $80,000 of the convertible debenture.

In July 2005, the Company issued 704,225 common shares from escrow upon the repayment of $20,000 of the convertible debenture.

In September 2005, 500,000 common shares were issued for consulting services at the value of $15,000.

In October 2005, 400,000 common shares were issued for consulting services at the value of $36,000.

In December 2005, the Company issued 145,252 common shares for the repayment of $38,492 of the convertible debenture including interest.

In April 2006, 500,000 common shares were issued for consulting services at the value of $90,000.

In May 2006, the Company issued 44,300,542 common shares for the repayment of $8,853,191 of the convertible debenture including interest.

The balance of shares held in escrow in March 2006 of 10,837,180 was returned to the company.

Stock Warrants and Options

The Company has accounted for its stock options and warrants in accordance with SFAS 123 "Accounting for Stock - Based Compensation" and SFAS 148 "Accounting for Stock - Based compensation - Transition and Disclosure." Value of options granted has been estimated by the Black Scholes option pricing model. The assumptions are evaluated annually and revised as necessary to reflect market conditions and additional experience. The following assumptions were used:

	2006			2005
Interest rate		6.5	%		6.5	%
Expected volatility		70	%		70	%
Expected life in years		6			6

In 1999 the Board of Directors of Cintel Korea adopted an option plan to allow employees to purchase ordinary shares of the Cintel Korea.

CINTEL CORP. AND SUBSIDIARY

Notes to Consolidated Financial Statements

June 30, 2006 and 2005

(Unaudited)

13.

Capital Stock (cont'd)

In August 1999, the share option plan granted 96,000 stock options for the common stock of Cintel Korea having a $0.425 nominal par value each and an exercise price of $0.425. In 2002, 53,000 stock options were cancelled. In 2003, an additional 30,000 stock options were cancelled.

In March 2000, 225,000 stock options were granted having a $0.425 nominal par value each and an exercise price of $0.68. In 2002, 135,000 and in 2003, an additional 47,000 of these stock options were cancelled.

In February 2001, 30,000 stock options were granted having a $0.425 nominal par value each and an exercise price of $0.72. In 2003, all of these stock options were cancelled.

In March 2003, 65,000 stock options were granted having a $0.425 nominal par value each and an exercise price of $0.71. In the same year, 15,000 of these stock options were cancelled.

The options vest gradually over a period of 3 years from the date of grant. The term of each option shall not be more than 8 years from the date of grant. No options have vested during the year ended December 31, 2005 and 2004.

The stock options have not been included in the calculation of the diluted earnings per share as their inclusion would be antidilutive.

The following table summarizes the stock option activity during 2006 and 2005:

	2006		2005
Outstanding, beginning of year		106,000		106,000
Exercised		-		-
Cancelled		-		-

Outstanding, end of year		106,000		106,000

Weighted average fair value of options granted during
the year	$	-	$	-

Weighted average exercise price of common stock
options, beginning of year	$	0.62	$	0.62

Weighted average exercise price of common stock
options granted in the year	$	-	$	-

Weighted average exercise price of common stock
options, end of year	$	0.67	$	0.67

Weighted average remaining contractual life of common
stock options		1 years		2 years

CINTEL CORP. AND SUBSIDIARY

Notes to Consolidated Financial Statements

June 30, 2006 and 2005

(Unaudited)

14.

Contingent Liabilities and Commitments

The Company has entered into a contract with iMimic Networking, Inc. for the use of the iMimic solution within Korea starting November 17, 2000. For the use of this solution, the Company paid $70,000 as an upfront payment and pays a $640 royalty for each product sold that uses the iMimic solution. The Company is also required to pay an annual royalty fee of $10,000. The contract has no fixed termination date.

The Company is committed to office spaces' leases obligations which expires in December 2006 and February 2007. Future minimum annual payments (exclusive of taxes and insurance) under the leases are as follows:

2006	$	48,628
2007		2,000
	$	50,628

Rent expenses paid in 2006 and 2005 were $ 73,367 and $47,560 respectively.

On September 14, 2004, the Company entered into a Standby Equity Distribution Agreement with US-based investment fund Cornell Capital Partners LP. Under the terms of the agreement, Cornell has committed to provide up to $5 million of funding to the Company over a 24 month period, to be drawn down at the Company's discretion through the sale of the Company's common stock to Cornell. No amount was outstanding as at June 30, 2006 ($550,000-2005).

15.

Restatement of the Previously Issued Consolidated Financial Statements

Restatement dated November 13, 2006

On further consideration, the Company determined that at June 30, 2006 it was not more likely than not that deferred tax benefits would be realized, therefore, the Company provided a 100% valuation allowance against the deferred tax assets.

The effects of this restatement for June 30, 2006 are to increase the valuation allowance from the consolidated financial statements dated August 1, 2006 to $2,204,685 from $657,039 (note 6); to decrease the deferred tax assets on the consolidated balance sheets to nil from $1,547,646 (comprised of $11,114 current and $1,536,532 long term); and to decrease the deferred income taxes recoverable to nil from $244,667 on the consolidated statement of operations and comprehensive loss.

CINTEL CORP. AND SUBSIDIARY

Notes to Consolidated Financial Statements

June 30, 2006 and 2005

(Unaudited)

15.

Restatement of the Previously Issued Consolidated Financial Statements (cont'd)

Restatement dated June 7, 2007

On further consideration, the Company decided to defer recognition of revenue for all sale arrangements that include the credit terms "condition of clearing from original buyer", when distributors who used the Company's products in network installation projects were allowed to pay when their final end-users paid them, until such time as the underlying payment condition has been met.

The affects of this restatement for June 30, 2006 are to increase the deferred revenue from the consolidated financial statements dated February 2, 2007 to $136,412 from $Nil on the consolidated balance sheet; and to increase revenue from merchandise from $3,455,083 to $3,681,954, increase revenue from finished goods from $76,481 to $88,049, increase cost of sales for merchandise from $3,311,900 to $3,531,625 and to increase cost of sales for finished goods from $51,404 to $61,985 on the consolidated statement of operations and comprehensive loss.

16.

Restatement of Comparative Figures

Restatement dated February 2, 2007

On further consideration, the Company determined that at June 30, 2005 it was not more likely than not that deferred tax benefits would be realized, therefore, the Company provided a 100% valuation allowance against the deferred tax assets.

The effects of this restatement for June 30, 2005 are to increase the valuation allowance from consolidated financial statements dated August 1, 2006 to $1,096,196 from nil (note 6); to decrease the deferred tax assets on the 2005 comparative consolidated balance sheets to nil from $1,096,196 (comprised of $208,146 current and $888,050 long term); and to decrease the deferred income taxes recoverable from $169,873 to an expense of nil on the 2005 comparative consolidated statements of operations and comprehensive loss.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

FORWARD-LOOKING STATEMENTS

The information in this quarterly report on Form 10-QSB contains forward-looking statements. All statements other than statements of historical fact made in this report are forward looking. In particular, the statements herein regarding industry prospects and future results of operations or financial position are forward-looking statements. Forward-looking statements reflect management's current expectations and are inherently uncertain. Our actual results may differ significantly from management's expectations.

The following discussion and analysis should be read in conjunction with the consolidated financial statements of Cintel Corp. (referred to herein as the "Company," "we," "us," and "our") included herewith. This discussion should not be construed to imply that the results discussed herein will necessarily continue into the future, or that any conclusion reached herein will necessarily be indicative of actual operating results in the future. Such discussion represents only the best present assessment of our management.

OVERVIEW

Management believes the Internet Traffic Management ("ITM") market continues to expand globally in the near future due to an increase in Web-based applications, server based applications and more process intensive applications in Web-based interfaces in the market. The Company can expect to show additional revenue in the coming quarters with the strong relationships it has established with its enterprise level customers. In accordance with the directive of the Company's Board of Directors, management will use the balance of fiscal year 2006 to expand its products and markets. In the Korean market, the Company plans to leverage its alliance with Hyundai HDS and expand the solution portfolio from the single ITM solutions to include more enterprise IT solutions, including security products with Hyundai HDS. We believe this partnership with HDS will continue to enable growth for the Company in the current IT environment. The Company is also taking steps to establish several business partnerships in the United States. Additionally, the Company plans to study other markets to enter where management believes the Company will be able to leverage its distribution channels and product strengths.

The Company has selected "digital content with ITM" as a new target market and plans to launch an online game business in 2006 to help boost sales and secure growth within the Company. In December 2005 we applied for a game server patent that will be used to manage traffic of online game servers. Our strategy for online gaming is not to develop online games but to enter the online game market by a potential acquisition of an online Korean game company. As CinTel positions itself as an online game publisher CinTel plans to expand into China, Japan, other Asian countries, Europe and North America with additional licensing of qualified Korean online games.

RESULTS OF OPERATIONS

Six months period ended June 30, 2006 compared to the six months ended June 30, 2005.

2005
				(Unit: USD)

	6/30/2006			6/30/2005

Revenue		3,819,153			449,971

Cost of sales		3,593,610			316,599

Gross Profit		225,543			133,372

Expenses		1,131,630			1,093,388

Operating (Loss)		(906,087	)		(960,016	)

Loss Before Income Taxes		(779,631	)		(1,120,541	)

The first six months of 2006 and 2005 revenues totaled approximately $3.82 million and approximately $0.45 million, respectively, which reflects an increase of approximately of $3.36 million. The main reason for the increase in revenue for the first six months of 2006, as compared to the six months of 2005, was primarily attributed to the work with the Republic of Korea Air Force for the supply of network equipment. The company generated revenue of approximately $1.95 million from such work with the Republic of Korea Air Force during the first six months of 2006. In addition approximately $0.25 million of the revenue generated during the first six months of 2006 is derived from the global system integration project in Hyundai Heavy Industries plants located in Kuwait, in consortium with KT Corp. Another primary generator of revenue of approximately $ 0.70 million during the second quarter of 2006 is derived from Shinhan Bank for the supply of a Proxy Server solution. In the future, the company expects significant new revenues by opening up new markets with a strong strategic alliance with Hyundai HDS and KT Corp.

The increase in cost of sales and gross margins for the first six months of 2006 compared to the same period in 2005 was primarily attributable to the relative increase in revenue.

Total expenses for the first six months of 2006 and 2005 totaled approximately $1.13 million and approximately $1.09 million, respectively, resulting in an increase of 3.5%. The increase in expenses was primarily due to the increasing costs of consulting service in order to establish company's new vision and strategies and find a new business model for the most profitable future business model such as digital contents, component material, semiconductor industries and other business opportunities.

The operating loss for the first six months of 2006 and 2005 totaled $0.91 million and $0.96 million respectively. Total loss before income taxes the first six months of 2006 and 2005 totaled $0.78 million and $1.12 million respectively.

Three months period ended June 30, 2006 compared to the three months ended June 30, 2005

30, 2005

				(Unit: USD)

	6/30/2006			6/30/2005

Revenue		1,411,301			323,453

Cost of sales		1,291,687			204,921

Gross Profit		119,614			118,532

Expenses		620,537			528,209

Operating (Loss)		(500,923	)		(409,677	)

Loss Before Income Taxes		(475,154	)		(496,812	)

For the three months period ended June 30, 2006 and 2005 revenues totaled approximately $1.41 million and approximately $0.32 million, respectively, which reflects an increase of approximately of $1.01 million. The main reason for the increase in revenue was primarily attributed to the work with the Shinhan Bank for the supply of a Proxy Server solution.

The increase in cost of sales for the three months period ended June 30 of 2006 compared to the same period in 2005 was primarily attributable to the relative increase in merchandise sales.

Total expenses for the three months period ended June 30, 2006 and 2005 totaled approximately $0.62 million and approximately $0.52 million, respectively, resulting in an increase of 17.5%. The increase in expenses was primarily due to the increasing costs of consulting service in order to establish the company's new vision and strategies and find a new business model.

The operating loss for the three months period ended June 30, 2006 and 2005 totaled $0.50 million and $0.41 million respectively. Total loss before income taxes for the three months period ended June 30, 2006 and 2005 totaled $0.47 million and $0.49 million respectively.

Management believes the Internet Traffic Management ("ITM") market continues to expand globally in the near future due to an increase in Web-based applications, server based applications and more process intensive processes in Web-based interfaces in the market. The company can expect to show additional revenue and profits in the coming quarters with the strong relationships it has with its enterprise level customers. In accordance with the directive of the board of directors, management will use the balance of fiscal year 2006 to expand its products and markets. In the Korea, CinTel plans to leverage its alliance with Hyundai HDS and expand the solution portfolio from the single ITM solutions to include more enterprise IT solutions, including security products with Hyundai HDS. We believe this partnership with HDS will continue to enable growth for CinTel in the current IT environment. CinTel is also taking steps to establish several business partnerships in the United States. We have not yet entered into any agreements to provide your solutions in the United States. Additionally, CinTel plan to study other markets to enter where we believe we will be able to leverage our distribution channels and product strengths.

CinTel has selected "digital content with ITM" as a new target market and plans to launch an online game business in 2006 to help boost sales and secure growth within the company. In December 2005 we applied for a game server patent that will be used to manage traffic of online game servers. Our strategy for online gaming is not to develop online games but to enter the online game market by a potential acquisition of an online Korean game company. As CinTel positions itself as an Online game publisher CinTel plans to expand into China, Japan, other Asian countries, Europe and North America with additional licensing of qualified Korean online games.

LIQUIDITY AND CAPITAL RESOURCES

As of June 30, 2006, CinTel had cash and cash equivalents including short term investment totaling $1.39 million. Management believes it has the resources necessary to maintain its current business operations for at least twelve months from the date this report was filed.

BUSINESS TRENDS

The ITM market is currently undergoing rapid transformation from a pure caching appliance environment to a convergence of more enterprise network traffic and application management features such as SSL VPN, Application Acceleration (Web-enabled), WAN optimization, Firewall and Content Security. CinTel must incorporate these functions into its current product line to better compete in the marketplace.

Wireless ISP market access penetration is rapidly increasing in North America as wireless and broadband technologies are being deployed. As the standards are agreed upon, and as the new business models begin to surface broadband access penetration will become ubiquitous and will open up new business opportunities for companies like CinTel and others in this space.

The Korean game industry is quit unique in the world market. According to our research the market share of Korean video games, which are strong in USA and Japan, is just 3.8% and ranked as 8th in the world. But the global market share of Korean online games is almost 70% (including exports to oversea markets like Japan and China) and 100 million users in over 33 countries are enjoying Korean online games. (Source: News clipping of Daily Sports ("Ilgan Sports"), 10-25-2005)

Online gaming is strong in Asian countries like Korea, Taiwan and China, but the online game market in the USA and Japan is expected to grow gradually as broadband services are becoming affordable and available. Current online game market in USA relies on business model of advertisement, sponsor and e-commerce through casual gaming portal site. (Source: A Study On Global Digital Contents - game by KIPA (Korea IT Industry Promotion Agency 2003). According to our research it is expected that the USA online game market will grow to as much as $2.6 billion by the year 2007. (Source: 10/2003: Datamonitor, `Global Online games' 7/2002, IDC, Online game forecast 2002-2007). And the online game market in Europe is also expected to grow gradually as broadband is becomes more popular.

Component material or Semiconductor along with digital contents such as online game might be new business item. Semiconductors are the basic blocks used to create an increasing variety of electronic products and system Improvements in semiconductor process and design technologies continue to result in ever smaller, more complex and more reliable devices at a lower cost per function. As performance has increased and size and costs have decreased, semiconductors have become common components in products used in everyday life, including personal computers, telecommunications systems, wireless handheld devices, automotive products, industrial automation and control systems and security applications.

According to IC Insights, the percentage of semiconductor content in electronic equipment increased from approximately 11 percent in 1989 to approximately 21 percent in 2004. Nevertheless, the market for semiconductors has historically been volatile. Supply and demand have fluctuated cyclically and have caused pronounced fluctuations in prices and margins. Following a severe downturn in 2001, the industry experienced a further period of low demand and ongoing worldwide overcapacity during 2002. In 2003 and in particular in 2004, the semiconductor market showed stronger performance. During our 2005 financial year, global semiconductor market growth slowed significantly.

OFF-BALANCE SHEET ARRANGEMENTS

We do not have any off balance sheet arrangements that are reasonably likely to have a current or future effect on our financial condition, revenues, results of operations, liquidity or capital expenditures.

SIGNIFICANT ACCOUNTING POLICIES

Currency Translation - The Company's functional currency is Korean won. Adjustments to translate those statements into U.S. dollars at the balance sheet date are recorded in other comprehensive income. Foreign currency transactions of the Korean operation have been translated to Korean Won at the rate prevailing at the time of the transaction. Realized foreign exchange gains and losses have been charged to income in the year.

Concentration of Credit Risk - SFAS No. 105, "Disclosure of Information About Financial Instruments with Off-Balance Sheet Risk and Financial Instruments with Concentration of Credit Risk", requires disclosure of any significant off-balance sheet risk and credit risk concentration. The Company does not have significant off-balance sheet risk or credit concentration. The Company maintains cash and cash equivalents with major Korean financial institutions. The Company's provides credit to its clients in the normal course of its operations. It carries out, on a continuing basis, credit checks on its clients and maintains provisions for contingent credit losses which, once they materialize, are consistent with management's forecasts. For other debts, the Company determines, on a continuing basis, the probable losses and sets up a provision for losses based on the estimated realizable value. Concentration of credit risk arises when a group of clients having a similar characteristic such that their ability to meet their obligations is expected to be affected similarly by changes in economic conditions. The Company does not have any significant risk with respect to a single client.

RECENT ACCOUNTING PRONOUNCEMENTS

Allowance for Credit Loss - The allowance for credit losses is management's estimate of incurred losses in our customer and commercial accounts receivables. Management performs detailed review of individual portfolios to determine if an impairment has occurred and to assess the adequacy of the allowance for credit losses, based on historical and current trends and other factors affecting credit losses. When receivables are past due for a period exceeding 2 years, a 100% allowance for credit losses is established without an individual analysis of the customer. A 100% allowance for credit losses is established, in an amount determined to be uncollectible, for the customer whom is not discontinuing operations or is facing financial issues that could result in discontinuance of business based on the assumptions management believes are reasonably likely to occur in future.

On December 31, 2005, the allowance for credit losses was $1,048,068 of $2,071,528 in accounts receivables and on December 31, 2004, the allowance for credit losses was $970,421 of $1,565,712 of accounts receivables. The allowance for credit losses in 2005 saw an increase of $77,647 (8%) compared to 2004. The $970.421 allowance was established for credit losses as of December 31, 2004, for 100% credit losses of more than 2 years. The increasing of allowances for credit losses as of December 31, 2005 was primarily due to receivables which occurred in 2003. We established a 100% allowance for credit losses for the receivables of more than 2 years and for customers who have an impairment of capital assets, are discontinuing business operations or are suffering from bad cash flow and liquidity issues. The accounts receivables older than 2 years were incurred because of national economic issues in the Korean market with changing many management situations, with bankrupt companies and bad cash flow of many companies in Korea beginning in 2000. Our credit losses ratio is moderately high but we expect a decrease of credit losses ratio in future as most Korean companies have restructured to establish more stable organizations.

ITEM 3. CONTROLS AND PROCEDURES.

As of the end of the period covered by this report, we conducted an evaluation, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act). Based upon this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is: (1) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure; and (2) recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms. There was no change to our internal controls or in other factors that could affect these controls during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II

Item 1. Legal Proceedings.

We are not a party to any pending legal proceeding, nor is our property the subject of a pending legal proceeding, that is not in the ordinary course of business or otherwise material to the financial condition of our business. None of our directors, officers or affiliates is involved in a proceeding adverse to our business or has a material interest adverse to our business.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Not applicable.

Item 3. Defaults Upon Senior Securities.

Not applicable.

Item 4. Submission of Matters to a Vote of Security Holders.

Not applicable.

Item 5. Other Information.

Not applicable.

Item 6. Exhibits.

Exhibit Number		Description

4.1		Standby Equity Distribution Agreement, dated August 4, 2004, between Cornell Capital Partners, L.P. and the Company (Incorporated by reference to the Company’s registration statement on Form SB-2 (File No. 333-119002), filed with the Securities and Exchange Commission on September 15, 2004)

4.2		$240,000 principal amount Compensation Debenture, due August 4, 2007, issued to Cornell Capital Partners, L.P., in connection with the Standby Equity Distribution Agreement (Incorporated by reference to the Company’s registration statement on Form SB-2 (File No. 333-119002), filed with the Securities and Exchange Commission on September 15, 2004)

4.3		Convertible Note in the principal amount of $40,000 issued to Sang Yong Oh (Incorporated by reference to the Company’s Form 8-K filed with the Securities and Exchange Commission on October 21, 2005)

4.4		Convertible Note in the principal amount of $400,000 issued to Tai Bok Kim (Incorporated by reference to the Company’s Form 8-K filed with the Securities and Exchange Commission on October 21, 2005)

4.5		Convertible Note in the principal amount of $9,640 issued to Meung Jun Lee (Incorporated by reference to the Company’s Form 8-K filed with the Securities and Exchange Commission on November 21, 2005)

4.6		Convertible Note in the principal amount of $28,930 issued to Jin Yong Kim (Incorporated by reference to the Company’s Form 8-K filed with the Securities and Exchange Commission on November 21, 2005)

4.7		Convertible Note in the principal amount of $48,300 issued to Su Jung Jun (Incorporated by reference to the Company’s Form 8-K filed with the Securities and Exchange Commission on November 21, 2005)

4.8		Convertible Note in the principal amount of $48,300 issued to Se Jung Oh (Incorporated by reference to the Company’s Form 8-K filed with the Securities and Exchange Commission on November 21, 2005)

4.9		Convertible Note in the principal amount of $48,300 issued to Sun Kug Hwang (Incorporated by reference to the Company’s Form 8-K filed with the Securities and Exchange Commission on November 21, 2005)

4.10		Convertible Note in the principal amount of $192,864 issued to Woo Young Moon (Incorporated by reference to the Company’s Form 8-K filed with the Securities and Exchange Commission on November 21, 2005)

4.11		Convertible Note in the principal amount of $336,000 issued to Joo Chan Lee (Incorporated by reference to the Company’s Form 8-K filed with the Securities and Exchange Commission on November 21, 2005)

4.12		Convertible Note in the principal amount of $483,000 issued to Sang Ho Han (Incorporated by reference to the Company’s Form 8-K filed with the Securities and Exchange Commission on November 21, 2005)

4.13		Convertible Note in the principal amount of $483,000 issued to Jun Ro Kim (Incorporated by reference to the Company’s Form 8-K filed with the Securities and Exchange Commission on November 21, 2005)

4.14		Convertible Note in the principal amount of $483,000 issued to Tai Bok Kim (Incorporated by reference to the Company’s Form 8-K filed with the Securities and Exchange Commission on November 21, 2005)

4.15		Convertible Note in the principal amount of $2,082,500 issued to Tai Bok Kim (Incorporated by reference to the Company’s Form 8-K filed with the Securities and Exchange Commission on December 20, 2005)

4.16		Convertible Note in the principal amount of $280,000 issued to Joo Chan Lee (Incorporated by reference to the Company’s Form 8-K filed with the Securities and Exchange Commission on December 20, 2005)

4.17		Convertible Note in the principal amount of $281,065 issued to Sang Yong Oh (Incorporated by reference to the Company’s Form 8-K filed with the Securities and Exchange Commission on December 20, 2005)

4.18		Convertible Note in the principal amount of $246,400 issued to JungMi Lee (Incorporated by reference to the Company’s Form 8-K filed with the Securities and Exchange Commission on December 20, 2005)

4.19		Convertible Note in the principal amount of $59,172 issued to Sung Min Chang (Incorporated by reference to the Company’s Form 8-K filed with the Securities and Exchange Commission on December 20, 2005)

4.20		Convertible Note in the principal amount of $246,400 issued to Eun Suk Shin (Incorporated by reference to the Company’s Form 8-K filed with the Securities and Exchange Commission on December 20, 2005)

4.21		Convertible Note in the principal amount of $492,800 issued to Overnet Co., Ltd. (Incorporated by reference to the Company’s Form 8-K filed with the Securities and Exchange Commission on December 20, 2005)

4.22		Convertible Note in the principal amount of $98,620 issued to Yeun Jae Jo (Incorporated by reference to the Company’s Form 8-K filed with the Securities and Exchange Commission on December 20, 2005)

4.23		Convertible Note in the principal amount of $985,950 issued to Equinox Partners Inc. (Incorporated by reference to the Company’s Form 8-K filed with the Securities and Exchange Commission on December 20, 2005)

4.24		Convertible Note in the principal amount of $788,950 issued to Kei Wook Lee (Incorporated by reference to the Company’s Form 8-K filed with the Securities and Exchange Commission on December 20, 2005)

4.25		Convertible Note in the principal amount of $492,800 issued to Seok Kyu Hong (Incorporated by reference to the Company’s Form 8-K filed with the Securities and Exchange Commission on December 30, 2005)

4.26		Convertible Note in the principal amount of $197,200 issued to Moon Soo Park (Incorporated by reference to the Company’s Form 8-K filed with the Securities and Exchange Commission on December 30, 2005)

10.1		Distribution Agreement dated March 15, 2006 among Cintel Corp. and InterSpace Computers, Inc. (Incorporated by reference to the Company’s Form 8-K filed with the Securities and Exchange Commission on May 3, 2006)

31.1		Certification by Chief Executive Officer, required by Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act

31.2		Certification by Chief Financial Officer, required by Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act

32.1		Certification by Chief Executive Officer, required by Rule 13a-14(b) or Rule 15d-14(b) of the Exchange Act and Section 1350 of Chapter 63 of Title 18 of the United States Code

32.2		Certification by Chief Financial Officer, required by Rule 13a-14(b) or Rule 15d-14(b) of the Exchange Act and Section 1350 of Chapter 63 of Title 18 of the United States Code

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: June 18, 2007

			CINTEL CORP.


			By: /s/ Sang Don Kim
			Name: Sang Don Kim
			Title: Chief Executive Officer


			By: /s/ Kyo Jin Kang
			Name: Kyo Jin Kang
			Title: Principal Financial Officer Principal Accounting Officer

Chun Can Capital (CNCN) 10QSB/A2006 Q2 Quarterly report (small business) (amended)