The information in this report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. This Act provides a "safe harbor" for forward-looking statements to encourage companies to provide prospective information about themselves so long as they identify these statements as forward looking and provide meaningful cautionary statements identifying important factors that could cause actual results to differ from the projected results. 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 financial statements and notes thereto included elsewhere in this report and with our annual report on Form 10-K for the fiscal year ended December 31, 2007. 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

CinTel Corp and its subsidiaries ("we," "us," or "our") are global providers of semiconductor packaging; display/semiconductor/factory automation related manufacturing equipment and facilities, and CRM/DBM services. Founded in 1997, we evolved from being an internet traffic management ("ITM") solution provider to a semiconductor-focused company in 2006. We manufacture and supply a broad range of semiconductor packaging products that address the needs of advanced electronic devices and products. We also produce standardized equipment that are utilized for display and semiconductor industries. Our factory automation related manufacturing facilities provide customized in-line distribution systems. Our CRM/DBM operation services provide solutions and consulting service for customer relationship management.

We have established relationships with our customers worldwide such as Samsung Electronics, Hynix Semiconductor, and Fairchild Semiconductor in the semiconductor industry. Our customers in factory automation and display industry include Samsung Electronics, Samsung SDI, Samsung Techwin, and Samsung Corning Precision Glass. Our major customer in the CRM sector includes Pizza Hut Korea.

We currently have major operations in China and Korea with a production capacity increase planned with several expansions of current operations. In the first half of 2008, we commenced with a major production expansion project in China to become a more rounded total semiconductor solution provider through the transfer of new high-end products and product diversification. In addition, we are currently building a new expanded manufacturing plant in Korea due to the current expansion of the semiconductor/display equipment and facility industry, especially in the automated in-line distribution facility sector.

Our subsidiaries include:

¨ Phoenix Semiconductor Telecommunication (Suzhou) located in Suzhou, China , provides semiconductor package products in different groups of Dual, Quad and
BGA.

¨ Phoenix Digital Tech located in Kyungki-Do, Korea, provides manufacturing facilities and equipments for LCD, PDP (Plasma Display Panel) and semiconductor production. UB Precision, a subsidiary of Phoenix Digital Tech provides testing products such as LCD/OLED probe stations for display and probe card for semiconductor.

¨ Bluecomm located in Daejeon, Korea, provides solutions for Customer Relationship Management (CRM) and related total solutions for call center outsourcing and Home Service Center hosting.

¨ CinTel Korea located in Seoul, Korea produces and distributes our traditional base products in the Internet Traffic Management (ITM) sector.

Results of Operations

The company is in the early stage of operations with its subsidiaries, as a
result, much of the cost of revenue and operating expenses reflected in its
consolidated financial statements are costs based on the integration of the
acquired companies and assets that comprise its operations. Accordingly, the
Company believes that, at the Company's current stage of operations,
period-to-period comparisons of results of operations are not meaningful.

Nine months period ended September 30, 2008 compared to the nine months ended
September 30, 2007
(Unit: USD)
                         9/30/2008       9/30/2007
Revenue                    161,587,938     133,655,285
Cost of sales              154,183,801     121,971,586
Gross Profit                 7,404,137      11,683,699
Expenses                    11,878,667      10,938,970
Operating Income(Loss)      (4,474,530 )       744,729
Net Income (Loss)           (5,128,471 )    (1,369,555 )

The company generated revenues of approximately $161.5 million and approximately $133.6 million for the first nine months of 2008 and 2007, respectively, which reflects an increase of approximately $27.9 million or 20.9%. The majority of this increase, as compared to the previous period, resulted from the consolidating of the revenue of Phoenix Digital Tech Co., Ltd ("PDT") our newly acquired subsidiary, which was acquired during the quarter ended September 30, 2007.

The gross revenue of PSTS for the first nine months of 2008 was $60.2 million. PSTS' revenue is derived from its two business divisions: Semiconductor Packaging ("PKG") $17.7 million and Wafer $42.5 million. PSTS's main products are semiconductor packaging, NAND flash memory and printed board assembly.

The gross revenue of PDT for the first nine months of 2008, including its two subsidiaries, is $96.8 million. PDT's main customer is Samsung Electronics Corporation, one the largest display product manufacturers in the world. It specializes in manufacturing facilities, such as automated facilities for LCD module assembly line, scriber and break in-line system and automated distribution line facilities.

Bluecomm's gross revenue for the first nine months of 2008 was $4.5 million. Bluecomm provides customer relationship management services for Pizza Hut Korea, which includes call center operation for customer support. Effective September 30, 2008, PizzaHut Korea has ended its service agreement with Bluecomm.

The cost of sales for the first nine months of 2008 and 2007 was $154.1 million and $121.9 million, respectively, an increase of 26.4%, which is primarily attributable to the increase in revenues. Our gross margins for the first nine months of 2008 and 2007 decreased from 8.7% to 4.58%.

Total expenses for the first nine months of 2008 and 2007 totaled approximately $11.8 million and approximately $10.9 million, respectively, resulting in an increase of $ 0.9million.

The operating loss for the first nine months of 2008 is $4.4 million and the operating gain for the first nine months of 2007 is $0.7 million.

The net loss for the first nine months of 2008 and 2007 totaled $5.1 million and $1.4 million, respectively. The main reason for the increase in the net loss for the first quarter of 2008, and subsequent yearly totals is due to the interest expense borne by CinTel for its convertible debenture issuance, the interest expense borne by PDT for its bank loan regarding its plant expansion and the impairment loss on investment.

Three months period ended September 30, 2008 compared to the three months ended

September 30, 2007
(Unit: USD)
                   9/30/2008      9/30/2007
Revenue              55,373,925     85,826,133
Cost of sales        54,413,987     76,339,829
Gross Profit            959,938      9,486,304
Expenses              3,147,461      8,596,619
Operating Profit     (2,187,523 )      889,685
Net (Loss)             (712,718 )      360,813

For the three months period ended September 30, 2008 and 2007 revenues totaled approximately $55.3 million and approximately $85.8 million, respectively, which reflects a decrease of approximately of $30.5 million.

The cost of sales for the three months period ended September 30, 2008 and 2007 were $54.4 million and $76.3 million, respectively, a decrease of approximately of 21.9 million. Our gross margins for the three months period ended September 30, 2008 and 2007 decreased from 11.0% to 1.7%.

Total expenses for the three months period ended September 30, 2008 and 2007 totaled approximately $3.1 million and approximately $8.6 million, respectively, resulting in a decrease of $5.5 million.

The operating loss for the three months period ended September 30, 2008 was $2.1 million and the operating gain for the three months period ended September 30, 2007 was $0.8 million. The net loss for the three months period ended June 30, 2008 was $0.7 million and the net gain for the three months ended September 30, 2007 totaled $0.3 million.

LIQUIDITY AND CAPITAL RESOURCES

As of September 30, 2008 our cash balance was $24,065,311 compared to $29,946,476 at September 30, 2007. Total current assets at September 30, 2008 were $122,968,088 compared to $108,610,024 at September 30, 2007.

For the nine months ended September 30, 2008, net cash used in operating activities was $(31,996,045) as compared to $(15,964,969) for the nine months ended September 30, 2007. The decrease in cash used in operating activities can be attributed to the increase in the accounts receivable and inventories, and the increase of net loss.

For the nine months ended September 30, 2008, net cash used in investing activities was $4.279.306, compared to net cash used in investing activities of $(74,931,563) for the nine months ended September 30, 2007. The main reason for the increase in cash used in investing activities was primarily attributed to decrease the acquisition of investments in securities.

For the nine months ended September 30, 2008, net cash provided by Financing Activities was $22,144,099 compared to $,108,804,532 for the nine months ended September 30, 2007.

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

Basis of Consolidation - 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.

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.

Investments - Investments in available-for-sale securities are being recorded in accordance with FAS-115 "Accounting for Certain Investments in Debt and Equity Securities". Equity 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, with unrealized holding gains and losses excluded from earnings and reported as a separate component of stockholders' equity.

Allowance for Losses - 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 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.

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.

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

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.