UNITED STATES
 SECURITIES
AND EXCHANGE COMMISSION
 Washington,
D.C. 20549
 
  Form
10-K
 Amandment No. 1
  
 (Mark
One)
  
 x
                ANNUAL REPORT UNDER SECTION 13
      OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
  1934
  For
the fiscal year ended December 31, 2007
  o
                TRANSITION REPORT UNDER SECTION
      13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
  1934
  For
the transition period from 
to
  Commission
File Number: 001-10559
  
 China International Tourism
Holdings Ltd.
 F/K/ADARK DYNAMITE
INC.
 (Exact name of small business issuer as
specified in its charter)
  
 Nevada
                  (State
      of other jurisdiction of
                  incorporation
      or organization)
                65-1021346
                  (I.R.S.
      Employer Identification No.)E
      Pang Gong Site, 44 Hong Guang Road,
                  Xi
      An, P. R. China
                  (Address
      of principal executive offices)
                710068
                  (Zip
      Code)(
      8629 ) 8436-8561
                  (Registrant’s
      telephone number including area
code)
  
 Securities
registered under Section 12(b) of the Act:
 Title of each
      class
                
                Name
      of each exchange
                  on which
      registeredNone
                
                Not
      Applicable
  Securities
registered under Section 12(g) of the Exchange Act:
  Common
Stock, $.0001 par value
 (Title
of Class)
  
 1
 Table of Contents
  Check
whether the issuer is not required to file reports pursuant to Section 13 or
15(d) of the Exchange Act. o
  Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act.):    Yes  o   No  x
  Check
whether the issuer (1) filed all reports required to be filed by
Section 13 or 15 (d) of the Exchange Act during the past 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
    YesxNoo
  Check if
there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of the registrant’s knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. x
  The
Registrant’s revenues for its fiscal year ended December 31, 2007 were
$516,218.
 
 As of April 14, 2008, there were 48,591,809 common shares
outstanding and the aggregate market value of the common shares (based upon the
close price of $.011 reported by brokers) held by non-affiliates was
approximately $507,219.
  Transitional
Small Business Disclosure Format (check one):    oYesxNo
 
 Number of
shares of common stock outstanding as of April 14, 2008: 
48,591,809
  Number of
shares of preferred stock outstanding as of April 14,
2008:   3,295,000
  CAUTIONARY
STATEMENT REGARDING FORWARD LOOKING INFORMATION
 
 The
discussion contained in this 10-KSB under the Securities Exchange Act of 1934,
as amended, (the "Exchange Act") contains forward-looking statements that
involve risks and uncertainties. The issuer's actual results could differ
significantly from those discussed herein. These include statements about our
expectations, beliefs, intentions or strategies for the future, which we
indicate by words or phrases such as "anticipate," "expect," "intend," "plan,"
"will," "we believe," "the Company believes," "management believes" and similar
language, including those set forth in the discussion under "Description of
Business," including the "Risk Factors" described in that section, and
"Management's Discussion and Analysis or Plan of Operation" as well as those
discussed elsewhere in this Form 10-KSB. We base our forward-looking statements
on information currently available to us, and we assume no obligation to update
them. Statements contained in this Form 10-KSB that are not historical facts are
forward-looking statements that are subject to the "safe harbor" created by the
Private Securities Litigation Reform Act of 1995.
 
 2
 
 TABLE OF CONTENTS
 
 PART IItem 1
                
                Description of Business
                
                4Item 2
                
                Description of Property
                
                6Item 3
                
                Legal Proceedings
                
                6Item 4
                
                Submissions of Matters to a Vote of Security
      Holders
                
                6PART IIItem 5
                
                Market for Common Equity, Related Stockholder Matters And Small
      Business Issuer Purchases of Equity Securities
                
                7Item 6
                
                Management’s Discussion and Analysis or Plan of
      Operation
                
                8Item 7
                
                Financial Statements
                
                10Item 8
                
                Changes in and Disagreements with Accountants on Accounting and
      Financial Disclosure
                
                18Item 8A
                
                Controls and Procedures
                
                18Item
      8B
                
                Other
      Information
                
                18PART IIIItem 9
                
                Directors, Executive Officers, Promoters, Control Persons and
      Corporate Governance; Compliance With Section 16(a) of the Exchange
      Act
                
                19Item 10
                
                Executive Compensation
                
                20Item 11
                
                Security Ownership of Certain Beneficial Owners and Management
      and Related Stockholder Matters
                
                20Item 12
                
                Certain Relationships and Related Transaction, and Director
      Independence
                
                20Item 13
                
                Exhibits
                
                21Item 14
                
                Principal Accountant Fees and
    Services
                
                21
  3
 Table of Contents
  PART
I
 
 ITEM 1.   DESCRIPTION OF BUSINESS
 
 History
 
 As used
in this Annual Report, the terms "we", "us", "our," the “Registrant,” “CIHS” and
the "Company" means, China International Tourism Holdings, Ltd., a Nevada
corporation, formerly known as Dark Dynamite, Inc., NCI Holdings, Inc., Vector
Holding, Inc., and prior to June 26, 2002, Vector Aeromotive Corporation. These
terms also refer to our subsidiary corporation, Shanxi Kai Da Lv You Gu Wen You
Xian Gong Si ("Kai Da"), a corporation organized under the laws of the Peoples’
Republic of China (“Kai Da”) acquired in August 2005.
 
 On April
8, 2003, the Company, under prior management, retroactively approved the sale of
its 100% interest in Bestfoodonline.com, Inc. (Bestfood) to Miami Venture
Capital for $10, effective as of December 30, 2002. The purpose of the
disposition was to further streamline us by eliminating any lingering management
issues, liabilities and other complications which may have involved Bestfood.
The sale of Bestfood to MVC also provides further separation from our former
president. Bestfood was considered by new management to be a burden on us and
was not considered a viable operating company with any substantive beneficial
future prospects for us. We were thus without significant operations for the
year ended December 31, 2003.
 
 On March
15, 2004, Jared Gold assumed the role of president, director, and C.E.O. Gold
gained a controlling interest in us as a result of exchanging his 100% interest
in Black Chandelier, Inc., for 70,000,000 shares (35 post-reverse split shares)
of our restricted common stock, which constituted approximately 96% of the
issued and outstanding shares of common stock at the time of
issuance.
 
 The
acquisition of Black Chandelier was the first in a series of planned
transactions designed to grow us into a multifaceted lifestyles company.
Commensurate with this goal, we underwent a series of changes including the name
change from NCI Holdings, Inc., to Dark Dynamite, Inc.
 
 On
October 3, 2005, we transferred a total of 4,990,000 shares of convertible
preferred stock to Kai Da and/or the Kai Da shareholders for $495,000, less
related expenses, and issued 100,000 new shares of common stock to Kai Da and/or
the Kai Da shareholders in exchange for all of their shares of registered
capital of Kai Da, which then became a wholly-owned subsidiary. After the
closing, Kai Da and/or the Kai Da shareholders converted 1,600,000 of the
4,990,000 shares of Convertible Preferred Stock purchased into 40,000,000 shares
of common stock, and transferred all of the 40,100,000 shares of common stock
issued to them at the closing, pursuant to trust arrangements established under
Chinese law, on a pro rata basis and in a Regulation S offering, to
approximately 3,601 shareholders of Shanxi E Pang Gong Tourism Development Co.,
Ltd. (“E Pang Gong”), a limited liability company organized under the laws of
the Peoples’ Republic of China. E Pang Gong controls the leasehold interest and
certain improvements associated with the E Pang Gong Theme Park in Xi’An, China.
The E Pang Gong Theme Park and related improvements is the subject of a
management contract with Kai Da, pursuant to which Kai Da manages the Theme Park
assets and earns most of its revenues.
 
 Mr.
Richard Surber transferred approximately 4.9 million shares of convertible
preferred stock, we issued 100,000 common shares to Kai Da and Mr. Surber
received the $495,000 in cash. Mr. Surber did not contribute a portion of this
consideration to us.
 On March
17, 2005, we approved and submitted for filing with the Nevada Secretary of
State’s Office a Certificate of Change Pursuant to NRS 78.209 to carry out a
reverse stock split of our common stock on a one (1) for one thousand (1,000)
basis. This action reduced the number of authorized shares of common stock from
Five Billion (5,000,000,000) to Five Million (5,000,000), par value $0.0001 per
share. All fractional shares that resulted from the reverse split are rounded up
to the next whole share. The effective date of the stock split was March 28,
2005.
 
 On August
29, 2005, we filed an Amendment to its articles of incorporation increasing the
number of authorized shares of our Common Stock from 5,000,000 to 1,000,000,000,
with a $0.0001 par value per share. The number of preferred shares authorized
will remain at 5,000,000, with a $0.01 par value per share. Upon the filing of
the Amended Articles of Incorporation, we were authorized to issue 1,000,000,000
shares of common stock, $0.0001 par value per share.
 
 On
November 21, 2005, we approved and submitted for filing with the Nevada
Secretary of State’s Office a Certificate of Change Pursuant to NRS 78.209 to
carry out a reverse stock split of our common stock on a one (1) for four (4)
basis. This action reduced the number of authorized shares of common stock from
One Billion (1,000,000,000) to Two Hundred Fifty Million (250,000,000), par
value $0.0001 per share. All fractional shares that resulted from the reverse
split were rounded up to the next whole share.
 
 On April
1, 2006, we executed an agreement between us and Diversified Holdings X, Inc.
("DHX"), a Nevada corporation, pursuant to which we agreed to sell our ownership
of Black Chandelier, Inc. to DHX.
  Pursuant
to and at the closing of the agreement, which occurred as of April 1, 2006, DHX
tendered a cash purchase price of $100 as well as assumption of certain
liabilities in exchange for all outstanding shares of Black Chandelier, Inc.
held by us. As a result of the transactions consummated at the closing, the
purchase and issuance gave DHX a 'controlling interest' in Black Chandelier,
Inc., and Black Chandelier was no longer our wholly-owned
subsidiary.
 
 Black
Chandelier retained the obligation for all liabilities to third parties and held
all rights to receivables as of the date thereof, the parties expressly agreed
that all liabilities and receivables between us and Black Chandelier were
extinguished by the parties through this agreement and Black Chandelier hereby
released us from any third party liabilities arising out of Black Chandelier’s
operations. DHX assumed any liabilities that may arise after
closing.
 
 Business Description of the
Issuer
  After the
acquisition of Kai Da, management changed our primary business into theme park
management and travel related services. Accordingly, we changed our name to
China International Tourism Holdings Ltd. We contract and operate the Theme Park
of Qin E Pang Gong (“Theme Park”) through Shanxi Kai Da Lv You Gu Wen You
Xian Gong Si (“Kai Da”), our wholly owned subsidiary in China. The Theme Park
was built up next to the historical address of E Pang Gong, the most prestigious
and largest palace in Chinese history built for Qin Shi Huang, the first emperor
in the Qin dynasty over 2,200 years ago. E Pang Gong was burned down during the
war and became a legend as well as the subject of numerous historical books. In
1994, the historical address of E Pang Gong was appraised by United Nations
Educational, Scientific and Cultural Organization ("UNESCO") as one of the
wonders in the ancient world due to the size of the palace and the degree of
preservation. The current theme park was built imitating the original palace
based on historical records and legends, covering approximately 5.59 million
square feet consisting of several building structure, including the Front
Palace, Qihe River, Magnetic Gate, Heaven Tower, Earth Temple, Lan-Chi Palace
and the Shang-Lin Garden. Management believes it’s a significant achievement to
be able to display such a famous and grand palace to the domestic and
international communities. It is believed to be one of the more important
historical sites in China.
 
 In
addition to our Theme Park management, we also manage Six-state Hot Spring
Resort, one of the components of Theme Park business, which is located inside
the Theme Park and built in an ancient Chinese style to match the Theme
Park.
 
 More
information about our business can be found on the corporate website at http://www.qinepanggong.com.
 
 4
 Table of Contents
  THEME PARK
BUSINESS
  The Theme
Park is located in a suburban area of Xi'an city, approximately 30 minutes away
from downtown Xi'an. The city recently completed an upgrade of the road
infrastructure called 'the Western 3 rd Beltway'
which enables our customers to travel a more direct and convenient route from
the city. Xi'an has been the capital (under various names) of 13 dynasties in
ancient China, including the Zhou, Qin, Han, the Sui dynasty, and the Tang.
Xi'an is also renowned for being the eastern terminus of the Silk Road and for
the location of the Terracotta Warriors, made during the Qin Dynasty. The city
has more than 3,100 years of history. The abundant cultural heritage is an
attraction to a large number of domestic residents and international visitors.
In 2007, there were approximately 1,000,000 people from oversea visiting Xi'an,
increased by 15.31% compared to 2006.
  As
an important component to show China's culture in the Qin Dynasty, the Theme
Park is popular to tourists, similar to the famous Qin Shi Huang’s Terra-cotta
Warriors and Horses Museum, the Mausoleum of Qin Shi Huang. The Theme Park hosts
a different atmosphere from a museum in that it is interactive and engaging for
our customers. We utilize music and dance as a means to deliver the history of
the site. The theme park was built as a 'to-scale' replica of the original
palace based on the most reliable historical records and written legends,
covering approximately 5.59 million square feet and consisting of several
different structures such as the Front Palace, Qihe River, Magnetic Gate, Heaven
Tower, Earth Temple, Lan-Chi Palace and Shang-Lin Garden. Each part has its own
significance, which is interpreted by a series of dancing shows, such as the
Ceremony for Qin Shi Huang’s Coronation, Departure of the Warriors, Battle of
Unification, Assassination of JingKe, etc.
 
 In
addition, we are developing another brand new large-scale outdoor Dinner Show
Program for the culture of Qin Dynasty, which will be performed in the Front
Palace area of the Theme Park. The Dinner Show will be designed as an opera and
will reintroduce the Qin Dynasty dancing and songs from over 2,200 years ago.
All the songs will be conducted by music professional familiar with the history
of the site. During the show, we will provide tourists with a dinner of
traditional Chinese cuisine. As of December 31, 2007, the music and the story
book for the dinner show were done. We hope to transform the Theme Park beyond
the educational and historical aspects to also include a multi-function
entertainment center.
  RESORTS
BUSINESS
  The
Six-state Hot Spring Resort (the “Resort”) is located inside the Theme Park and
built in an ancient Chinese style to match the Theme Park. The Resort includes
six sections, with approximately 187 suites, 1 conference room with the capacity
to hold more than 600 persons, 7 middle-size conference rooms, 7 two-story
buildings, 1 ballroom for 800 persons and 15 small-size banquet rooms. All the
buildings are surrounded by gardens and some of them are connected by covered
corridors.
 As is the
case in many theme parks, it’s convenient for tourists to take a rest following
their visit. In addition, the unique style and elegant surroundings give the
Resort a special allure for meetings and events that leave a lasting impression.
From small meeting rooms to grand-scale conference centers, we bring to every
event a dedicated focus and unbridled enthusiasm. Whether our clients are
planning a company strategy session, an intimate cocktail party or a celebratory
banquet, they can enjoy the facilities of the Resort and always have our
undivided attention.
 
 Government
Regulation
 
 Since the
historical address of E Pang Gong was appraised as culture heritage, its
preservation needs to comply with the corresponding laws, rules, regulations and
ordinance to preserve the cultural heritage in the People’s Republic of China.
Although we do not foresee any change in existing regulations, if changes should
occur, we believe that it can adapt to such new regulations and that those
changes would not have any significant effect on our revenues or current
operations. However, no assurance can be made that compliance or failure to
comply with future regulations will not have a materially adverse effect on the
business, our operating results or financial condition. However, in certain
circumstances, such as in a new or start-up business activity, it may not be
possible to predict with any degree of accuracy the impact of governmental
regulations. The inability to ascertain the effect of government regulations on
prospective business activities will make our business a higher risk
enterprise.
 
 Competition
 
 The Theme
Parks and resorts compete with all other forms of entertainment, lodging,
tourism and recreational activities, many of which will have a competitive edge
over us by virtue of their stronger financial resources and prior experience in
business. The profitability of the leisure-time industry is influenced by
various factors which are not directly controllable, such as economic
conditions, amount of available leisure time, oil and transportation prices and
weather patterns. We believe our theme parks and resorts benefit substantially
from our reputation in the tourism industry for excellent quality and E Pang
Gong’s special position in Chinese history. In addition, the status as a
reporting public entity could give us a competitive advantage over privately
held entities having a similar business objective in forming strategic
partnerships with Chinese companies which have significant growth
potential.
 
 Employees
  We have
hired approximately 210 full-time employees to operate the Theme Park and the
Resort, of which 35 persons are on the management team. The other positions
include waiters, waitresses, landscapers, maids, securities, cleaners, and so
on. All the artists for the shows are subject to their respective performance
contracts.
  Reports to Security
Holders
  We are
not required to deliver an annual report to security holders and will not
voluntarily deliver a copy of the annual report to security holders. If we
should choose to create an annual report, it will contain audited financial
statements. We intend to file all of its required information with the SEC. We
plan to file our 10-KSB, 10-QSB, and all other forms that are or may become
applicable with the SEC.
  The
public may read and copy any materials that are filed by us with the SEC at the
SEC’s Public Reference Room at 100 F Street, NE, Washington, D.C. 20549. The
Public may obtain information on the operation of the Public Reference Room by
calling the SEC at 1-800-SEC-0330. The statements and forms filed by us with the
SEC have been filed electronically and are available for viewing or copy on the
SEC maintained Internet site that contains reports, proxy and information
statements, as well as other information regarding issuers that file
electronically with the SEC. The Internet address for this site can be found
at http://www.sec.gov.
 
 5
 Table of Contents
  ITEM 2.   DESCRIPTION OF PROPERTY
 
 We are
currently occupying an office of approximately 22,000 square feet inside the
Theme Park. As of today’s date, we do not need to pay for such occupation since
it is considered in partial compensation for the management services that we
provide to the Theme Park.
 
 ITEM 3.   LEGAL PROCEEDINGS
 
 Securities and Exchange
Commission v. David M. Wolfson, et al. On October 16, 2003 a civil
complaint was filed by the Securities and Exchange Commission in which NCI
Holdings, Inc. (n/k/a China International Tourism Holdings Ltd.) was named as a
respondent. Our former president Gino Carlucci was also named as a respondent.
The suit was filed in the United States District Court for the District of Utah
and bears the docket number 2:03CV00914DAK and the style of the case
is: A Securities and Exchange Commission v. David M. Wolfson; NuWay
Holdings, Inc., a Nevada corporation; Momentous Group, LLC, a Utah limited
liability company; Leeward Consulting Group, LLC, a Utah limited liability
company; Sukumo Limited, a company incorporated in the British Virgin Islands
(a.k.a. Sukumo Group, Ltd., Fujiwara Group, First Chartered Capital Corporation,
First Colonial Trust, First China Capital and International Investment Holding);
Michael Sydney Newman (A.K.A. Marcus Wiseman); Stem Genetics, Inc., a Utah
corporation; Howard H. Robertson; Gino Carlucci; G & G Capital, LLC an
Arizona and Utah limited liability company; F10 Oil and Gas Properties, Inc.;
Jon H. Marple; Mary E. Blake; Jon R. Marple; Grateful Internet Associates, LLC,
a Colorado limited liability company; Diversified Financial Resources
Corporation, a Delaware corporation; John Chapman; Valesc Holdings, Inc., a New
Jersey corporation; Jeremy D. Kraus; Samuel Cohen; NCI Holdings, Inc., a Nevada
corporation. The complaint alleges that NCI failed to accurately and fully
disclose the nature of NCI's relationship to The Sukumo Group, Inc., including
the failure of Sukumo to complete the purchase of the shares and alleges that
Sukumo acted as a selling agent for NCI. The complaint also faults The Sukumo
Group Inc.'s actions with regard to the sale of common stock to off shore
purchasers for failing to disclose the interest that Sukumo had in each sale,
reporting that it was taking a 1-2% commission on the sale rather than keeping
70% or more of the proceeds of each transaction. A tentative settlement
agreement has been reached in this case and we expect the Final Judgment will be
entered sometime in the second quarter of 2008.  Pursuant to the terms
of the proposed Final Judgment, the Defendant is liable for disgorgement of
$107,000, representing profits gained  as a result of the conduct
alleged in the Complaint, together with prejudgment interest thereon in the
amount of $35,426.39, for a total of $142,426.39, however, the Court is not
ordering Defendant to pay a civil penalty and payment of all but $30,000, of the
disgorgement and pre-judgment interest thereon is waived.  Defendant
shall satisfy this obligation by paying $30,000.00 within ten business days to
the Court, together with a cover letter identifying NCI Holdings, Inc. as a
defendant in this action; setting forth the title and civil action number of
this action and the name of the Court; and specifying that final payment is made
pursuant to the Final Judgment.  Defendant shall simultaneously
transmit photocopies of such payments and letters to the Commission’s counsel in
this action.  By making these payments, Defendant relinquishes all
legal and equitable right, title, and interest in such funds, and no part of the
funds shall be returned to Defendant.  Defendant shall also pay post-judgment
interest on any delinquent amounts pursuant to 28 USC
§ 1961.The determination not to impose a civil penalty
and to waive payment of all but $30,000 of the disgorgement and pre-judgment
interest is contingent upon the accuracy and completeness of Defendant's
Statement of Financial Condition.  If at any time following the entry
of the Final Judgment the Commission obtains information indicating that
Defendant’s representations to the Commission concerning his assets, income,
liabilities, or net worth were fraudulent, misleading, inaccurate, or incomplete
in any material respect as of the time such representations were made, the
Commission may, at its sole discretion and without prior notice to Defendant,
petition the Court for an order requiring Defendant to pay the unpaid portion of
the disgorgement, pre-judgment and post-judgment interest thereon, and the
maximum civil penalty allowable under the law.  In connection with any
such petition, the only issue shall be whether the financial information
provided by Defendant was fraudulent, misleading, inaccurate, or incomplete in
any material respect as of the time such representations were
made.  In its petition, the Commission may move the Court to consider
all available remedies, including, but not limited to, ordering Defendant to pay
funds or assets, directing the forfeiture of any assets, or sanctions for
contempt of the Final Judgment.  The Commission may also request
additional discovery.  Defendant may not, by way of defense to such
petition:  (1) challenge the validity of the Consent or the Final
Judgment; (2) contest the allegations in the Complaint filed by the Commission;
(3) assert that payment of disgorgement, pre-judgment and post-judgment interest
or a civil penalty should not be ordered; (4) contest the amount of disgorgement
and pre-judgment and post-judgment interest; (5) contest the imposition of the
maximum civil penalty allowable under the law; or (6) assert any defense to
liability or remedy, including, but not limited to, any statute of limitations
defense.
  Dark Dynamite, Inc. and Diversified Holdings
X, Inc. v. Allen E. Weintraub and Miami Venture Capital,
Inc. Civil complaint filed in the Third District Court of the
State of Utah, Salt Lake County, Civil No. 050905249. A default judgment was
entered against the defendants on March 15, 2006 after a hearing before the
court, the judgment awarded damages in the sums of $267,892, and an award for
costs and attorneys fees has not yet been calculated.  On January 16,
2008, the Court issued an Order to Show Cause why this case should not be
dismissed for failure to prosecute.  The Court issued this Order
because nothing had been filed with the Court since January 16,
2007.  Plaintiff was ordered to inform the Court of the status of the
case and his intentions to proceed within fifteen (15) days of the date the
Order was issued.  Plaintiff has failed to respond to the Court’s
Order.  Accordingly, the Court dismissed the case without prejudice on
February 19th,
2008.
  ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF
SECURITY HOLDERS
 
 None.
 
 6
 Table of Contents
  PART II
  ITEM 5.  MARKET FOR COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS
  Our
common stock is quoted on the Electronic Over-the-Counter Bulletin Board under
the symbol, “CIHS.OB”. Trading in the common stock in the over-the-counter
market has been limited and sporadic and the quotations set forth below are not
necessarily indicative of actual market conditions. Furthermore, these prices
reflect inter-dealer prices without retail mark-up, mark-down, or commission,
and may not necessarily reflect actual transactions. The high and low bid prices
for the common stock for each quarter of the years ended December 31, 2007 and
2006 are as follows:
 
 QUARTER
      ENDING
                
                LOW
                
                
                HIGHMarch
      31, 2007
                
                $
                0.11
                
                
                $
                0.11June
      30, 2007
                
                $
                0.070
                
                
                $
                0.075September
      30, 2007
                
                $
                0.016
                
                
                $
                0.016December
      31, 2007
                
                $
                0.016
                
                
                $
                0.016March
      31, 2006
                
                $
                0.65
                
                
                $
                2.10June
      30, 2006
                
                $
                0.26
                
                
                $
                0.66September
      30, 2006
                
                $
                0.23
                
                
                $
                0.32December
      31, 2006
                
                $
                0.15
                
                
                $
                0.26
 
 Record
Holders
 
 The
holders of the Common Stock are entitled to one vote for each share held of
record on all matters submitted to a vote of stockholders. Holders of the Common
Stock have no preemptive rights and no right to convert their Common Stock into
any other securities. There are no redemption or sinking fund provisions
applicable to the Common Stock. We are authorized to issue 250,000,000 shares of
common stock, and 5,000,000 shares of preferred stock. There are currently
approximately 4,492 record holders of our common stock.
 
 Dividends
 
 We have
not declared any dividends since our inception and do not anticipate paying any
dividends in the foreseeable future. The payment of dividends is within the
discretion of the Board of Directors, and will depend on our earnings, capital
requirements, financial condition, and other relevant factors. There are no
restrictions that currently limit our ability to pay dividends on our Common
Stock, other than those generally imposed by applicable state law.
 
 2006 Non-Qualified Stock
Compensation Plan
 
 In the
4th Quarter of 2006, the Board of Directors and a Majority of the voting rights
held by shareholders approved a 2006 Non-Qualified Stock Compensation Plan for
our employees, directors, officers, consultants, advisors, and other persons who
provide valuable services to the Company, with equity-based compensation
incentives. Under the Plan, we may issue up to 5,000,000 shares of $.001 par
value common stock. We also filed a related Form S-8 with the SEC. There are
currently 2,370,000 common shares issued under the plan.
  Equity
Compensation Plan Information
  (a)
                (b)
                (c)Plan
      category
                Number
      of securities to be issued upon exercise of outstanding options, warrants
      and rights
                Weighted-average
      exercise price of outstanding options, warrants and rights
                Number
      of securities remaining available for future issuance under equity
      compensation plans (excluding securities reflected in column
      (a))Equity
      compensation plans approved by security holders
                2,370,000
                $.16
                2,630,000Equity
      compensation plans not approved by security holders
                -
                $ 
      -
                -Total
                2,370,000
                
                2,630,000
  Limited Market for Common
Stock.
 
 There is
currently a limited trading market for our shares of common stock, and there can
be no assurance that a more substantial market will ever develop or be
maintained. Any market price for shares of common stock of China International
Tourism Holdings Ltd. is likely to be very volatile, and numerous factors beyond
our control may have a significant adverse effect on that market price. In
addition, the stock markets generally have experienced, and continue to
experience, extreme price and volume fluctuations which have affected the market
price of many small capital companies, and which have often been unrelated to
the operating performance of these companies. These broad market fluctuations,
as well as general economic and political conditions, may also adversely affect
the market price of our common stock. Further, there is no correlation between
the present limited market price of our common stock and our revenues, book
value, assets or other established criteria of value. The present limited
quotations of our common stock should not be considered indicative of the actual
value of China International Tourism Holdings Ltd., or our common
stock.
 
 Risks of "Penny
Stock”
 
 China
International Tourism Holdings Ltd.'s common stock (OTC BB: CIHS) may be deemed
to be "penny stock," as that term is defined in Rule 3a51-1 of the Securities
and Exchange Commission. Penny stocks are stocks (i) with a price of less than
$5.00 per share; (ii) that are not traded on a "recognized" national exchange;
(iii) whose prices are not quoted on the NASDAQ automated quotation system
(NASDAQ-listed stocks must still meet requirement (i) above); or (iv) in issuers
with net tangible assets less than $2,000,000 (if the issuer has been in
continuous operation for at least three years) or $5,000,000 (if in continuous
operation for less than three years), or with average sales of less than
$6,000,000 for the last three years. Until recently, there had been no
"established public market" for our common stock during the last five years.
While our stock has traded between $0.0001 and $14.00 per share over the past
several years, there is no assurance that this price level will continue.
Section 15(g) of the Securities Exchange Act of 1934, as amended, and Rule 15g-2
of the Securities and Exchange Commission require broker/dealers dealing in
penny stocks to provide potential investors with a document disclosing the risks
of penny stocks and to obtain a manually signed and dated written receipt of the
document before effecting any transaction in a penny stock for the investor's
account. Potential investors in our common stock are urged to obtain and read
this disclosure carefully before purchasing any shares that are deemed to be a
"penny stock."
 
 Moreover,
Rule 15g-9 of the Securities and Exchange Commission requires broker/dealers in
penny stocks to approve the account of any investor for transactions in such
stocks before selling any penny stocks to that investor. This procedure requires
the broker/dealer to (i) obtain from the investor information concerning his or
her financial situation, investment experience and investment objectives; (ii)
reasonably determine, based on that information, that transactions in penny
stocks are suitable for the investor and that the investor has sufficient
knowledge and experience as to be reasonably capable of evaluating the risks of
penny stock transactions; (iii) provide the investor with a written statement
setting forth the basis on which the broker/dealer made the determination in
(iv) above; and (v) receive a signed and dated copy of such statement from the
investor, confirming that it accurately reflects the investor's financial
situation, investment experience and investment objectives. Compliance with
these requirements may make it more difficult for investors in our common stock
to resell their shares to third parties or to otherwise dispose of
them.
 
 7
 Table of Contents
  ITEM
6.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
 
 FORWARD
LOOKING STATEMENTS
  Certain statements in this report,
including statements of our expectations, intentions, plans and beliefs,
including those contained in or implied by "Management's Discussion and
Analysis" and the Notes to Consolidated Financial Statements, are
"forward-looking statements", within the meaning of Section 21E of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), that are
subject to certain events, risks and uncertainties that may be outside our
control. The words “believe”, “expect”, “anticipate”, “optimistic”, “intend”,
“will”, and similar expressions identify forward-looking statements. Readers are
cautioned not to place undue reliance on these forward-looking statements, which
speak only as of the date on which they are made. We undertake no obligation to
update or revise any forward-looking statements. These forward-looking
statements include statements of management's plans and objectives for our
future operations and statements of future economic performance, information
regarding our expansion and possible results from expansion, our expected
growth, our capital budget and future capital requirements, the availability of
funds and our ability to meet future capital needs, the realization of our
deferred tax assets, and the assumptions described in this report underlying
such forward-looking statements. Actual results and developments could differ
materially from those expressed in or implied by such statements due to a number
of factors, including, without limitation, those described in the context of
such forward-looking statements, our expansion and acquisition strategy, our
ability to achieve operating efficiencies, our dependence on network
infrastructure, capacity, telecommunications carriers and other suppliers,
industry pricing and technology trends, evolving industry standards, domestic
and international regulatory matters, general economic and business conditions,
the strength and financial resources of our competitors, our ability to find and
retain skilled personnel, the political and economic climate in which we conduct
operations and the risk factors described from time to time in our other
documents and reports filed with the Securities and Exchange Commission (the
"Commission"). Additional factors that could cause actual results to differ
materially from the forward-looking statements include, but are not limited to:
1) our ability to successfully manage the theme park on a timely basis and in
the prescribed condition; 2) our ability to compete effectively with other
companies in the same industry; 3) our ability to raise sufficient capital in
order to effectuate our business plan; and 4) our ability to retain our key
executives.
 
 CRITICAL
ACCOUNTING POLICIES
 
 Revenue
recognition
 
 Our policy is to recognize income when
it is earned.Ourrevenue is derived from ticket
sales,and hotel and
restaurant income. Revenues are booked net of any cash discounts. If any
material contingencies are present, revenue recognition is delayed until all
material contingencies are eliminated. Material contingencies are circumstances
in which there are any potential uncertainties as to the completion of the
revenue process being complete. Further, no revenue is recognized unless
collection of the applicable consideration is probable. Probable collection is
determined at the time collection occurs or is more than reasonably possible it
will be collected. Retail store sales - revenue is recognized when sales are
made. They are paid by cash or credit card.
 
 Property, Plant, and
Equipment
 
 Property, plant, and equipment are
recorded at cost less accumulated depreciation and impairment. Repairs and
maintenance expenditures, which are not considered improvements and do not
extend the useful life of property, plant, and equipment, are expensed as
incurred. The cost and related accumulated depreciation applicable to property,
plant, and equipment sold or no longer in service are eliminated from the
accounts and any gain or loss is included in the statement of
operations.
  Depreciation is calculated to write-off
the cost or basis of the property, plant, and equipment over their estimated
useful lives for the date on which they become fully operational and after
taking into account their estimated residual values (salvage value), using the
straight-line method, at the following rates per year:
  Equipment Straight-line for 5 to 20
years with a 5% salvage value
  Furniture Straight-line for 5 to 10
years with a 5% salvage value
  Autos Straight-line for 5 to 10
years with a 5% salvage value
 
 When assets are sold or retired, their
costs and accumulated depreciation are eliminated from the accounts and any gain
or loss resulting from their disposal is included in theStatement ofOperations.
  The Company recognizes an impairment
loss on property, plant, and equipment when evidence, such as the sum of
expected future cash flows (undiscounted and without interest charges),
indicates that future operations will not produce sufficient revenue to cover
the related future costs, including depreciation, and when the carrying amount
of the asset cannot be realized through sale. Measurement of the impairment loss
is based on the fair value of the assets.
 
 Stock-Based
Compensation
 
 We
account for stock-based compensation using the fair value method of Financial
Accounting Standard No. 123R. Common shares issued for services rendered by a
third party (both employees and non-employees) are recorded at the fair value of
the shares issued or services rendered, whichever is more readily
determinable.
  RESULTS
OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2007 AND 2006.
 
 Revenues
 
 Gross
revenues for the years ended December 31, 2007 and 2006 were $516,218 and
$834,554, respectively, derived from ticket sales, and hotel and restaurant
income. The decrease by $318,336 was due primarily to the consummation of the
contracts with some travel agents in February 2007, pursuant to which the travel
agents brought tourists to our theme park for the discounted price. We did not
have new contracts signed with the travel agents in 2007.
 
 Due to
the different peak season timing for the theme park and most of our tours are a
one-day trip to the theme park, the revenue appears to be diversified. The theme
park is not the only resource of revenue. The peak season for the theme park
tickets is from March to October, compared to the peak season for the resorts in
the first quarter. We expect to generate new revenues in 2008 from the launch of
our dinner show project.
 
 Income /
Loss
 
 Net
losses for the years ended December 31, 2007 and 2006 were $332,876 and
$356,048, respectively. The net loss during 2007 was due primarily to the
decease in sales revenue. As a result, the gross profit was insufficient to
cover the operating expenses. The net loss during 2006 was due primarily to the
high operating expenses resulting from the issuance of 2,370,000 shares of
common stock for services in connection with stage construction and maintenance,
general management consulting and advisory services, including but not limited
to, the following:
  -
                Design andinstallation of stagelighting, including butnot limited to,theinstallationand maintenancefor the lamps and lanterns, the
      lamp box,andthe control
      electricity cabinet;-
                Our
      corporate image design and website construction;-
                Advertisements
 
 -
                Advise
      on procedures, regulations, and compliance of a public listed
      company;
 
 -
                Assistance
      with preparation of applicable filings with the
  SEC;
 
 -
                Assistance
      with preparation of financial statements;-
                EDGAR
      services
 
 The
shares were valued based on the market price on the date of the stock grant or
the specific terms of the applicable consulting agreements and booked pro rata
due to the service periods, which was completed as of December 31, 2006 and
2007, respectively.
 
 We expect
to incur losses or keep breakeven in fiscal year 2007 until traffic is increased
to the Theme Park and product sales increase. There can be no assurance that we
will achieve or maintain profitability, or that any revenue growth will take
place in the future.
  8
 Table of Contents
  Expenses
 
 Selling,
general and administrative expenses for the years ended December 31, 2007 and
2006 were $737,406 and $1,053,496, respectively. We had the following notable
expenses during 2007 and 2006:
 
 ·
                In
      2006, we issued a total of 2,370,000 shares to several consultants for
      services rendered, including design andinstallation of stagelighting,corporate image design and
      website construction, advertisement, SEC compliance and general
      corporate consulting. The shares were valued at the market price on the
      date of issuance, or $.17 per share, yielding an aggregate market value of
      $428,500. These expenses were included in the accompanying statement of
      operations for both years ended December 31, 2006 and 2007.·
                Auditing
      expenses were $37,000 and $28,000, respectively.·
                Salaries
      and related expenses were $136,278 and $117,576,
respectively.·
                Maintenance
      expenses were $11,277 and $21,483,
respectively.
 
 Cost of
Sales
 
 Cost of
sales included expenses directly related to delivering our product or services
Travel agents' commissions and direct labor would be examples of cost of sales
items. During the years ended December 31, 2007 and 2006, we had $115,951 and
$129,873, respectively, in cost of sales. Cost of sales as a percentage of sales
was 22% and 16%, respectively. The increase in percentage during 2007 was
attributable to the decease in sales revenue, but the cost of sales remaining in
the same level due to the feature of theme park business.
 
 Impact of
Inflation
 
 We
believe that inflation has had a negligible effect on operations during this
period. We believe that we can offset inflationary increases in the cost of
sales by increasing sales and improving operating efficiencies.
 
 Liquidity and Capital
Resources
 
 Cash
flows used in operating activities were $2,821 and $46,446 for the years ended
December 31, 2007 and 2006, respectively. Negative cash flows from operation in
2007 were primarily due to the net loss of $332,876, partially offset by
depreciation of $128,437 and increase in accounts payable of $142,537. Negative
cash flows from operations in 2006 were primarily due to the net loss of
$328,725, decrease in accounts payable of $284,596, partially offset by the
stock issued for services.
 
 Cash
flows used in investing activities were $46,719 for the year ended December 31,
2007, compared to cash flows of $82,167 provided by investing activities for the
year ended December 31, 2006. The cash flows used in investment during 2007 were
attributable to the purchase of fixed assets consisting of leasehold
improvements, machinery and equipment.  Most of the disbursements
refurbished the theme park.
 
 Cash
flows provided by financing activities were $17,154 for the year ended December
31, 2007, compared to cash flows of $21,421 used in financing activities for the
year ended December 31, 2006. The cash flows from financing activities during
2007 were due to the proceeds from shareholder loan. We had an outstanding note
payable which relates to the financing / lease contract for the acquisition of
fixed assets and this was paid off in 2006. Additionally, we received total
monetary capital contributions of $402,987 in 2006.
 
 Furthermore,
we received the $402,987 equally from Ke Xianyan, President and shareholder of
Kai Da and Chen Bing, shareholder of Kai Da. These capital contributions were in
the form of monetary cash consideration received during 2006. The capital
contributions were recorded as credits to our equity section of the balance
sheet in the form of additional paid in capital with debits to the cash
account.
 
 We have
funded our cash needs for the year ended December 31, 2007 with a series of debt
and equity transactions.
 
 We
project that we will need additional capital to fund operations over the next 12
months. We anticipate we will need an additional $100,000 in working capital
during 2008 and $50,000 for the two years thereafter.
 
 On a
long-term basis, liquidity is dependent on continuation and expansion of
operations, receipt of revenues, additional infusions of capital and debt
financing. However, there can be no assurance that we will be able to obtain
additional equity or debt financing in the future, if at all. If we are unable
to raise additional capital, our growth potential will be adversely affected.
Additionally, we will have to significantly modify our business
plan.
  Trends, Events, and
Uncertainties
 
 The
success of our business depends in large part on our ability to identify tourist
trends as well as to react to changing customer demand in a timely manner.
Consequently, we depend in part upon the continuing favorable market response to
the creative efforts of our purchasing, design and marketing team’s ability to
anticipate products and services that appeal to our consumer base. Failure on
our part to anticipate, identify and respond effectively to changing consumer
demands and trends will adversely affect our sales.
  9
 Table of Contents
  ITEM
7.   FINANCIAL STATEMENTS
  The
consolidated financial statements include the accounts of Kai Da, our wholly
owned subsidiary. The following selected financial data for the years ended
December 31, 2007 and 2006 is derived from our consolidated financial
statements, and should be read in conjunction with the consolidated financial
statements and related notes presented as a separate section commencing on page
F-1.
  December 31,2007
                
                
                2006Balance
      SheetTotal
      Assets
                
                $
                472,130
                
                
                $
                627,109Total
      Liabilities
                
                
                385,487
                
                
                
                225,794Total
      Stockholders’ Equity
                
                
                53,693
                
                
                
                368,364Total
      Liabilities and Stockholders’ Equity
                
                
                472,130
                
                
                
                627,108Statements
      of OperationsFor
      years endedDecember 31,2007
                
                
                2006Revenue
                
                $
                516,218
                
                
                $
                834,554Operating
      Expenses
                
                
                737,406
                
                
                
                1,053,496Other
      Income
                
                
                4,263
                
                
                
                1,320Net
      Loss
                
                
                (332,876
                )
                
                
                (356,048
                )Net
      Loss per Common Share
                
                
                **
                
                
                
                **Weighted
      Average Common Shares Outstanding
                
                
                48,591,809
                
                
                
                45,337,314
  ** Less than $.01
  10
 Table of Contents
 REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
  To the
Board of Directors and
 Stockholders
of China International Tourism
Holdings, Ltd.
  We have
audited the accompanying balance sheet of China International Tourism Holdings,
Ltd. (FKA Dark Dynamite, Inc.) and Subsidiary.(a Nevada corporation). as of
December 31, 2007 and related statements of operations, stockholders’ deficit,
and cash flows for the years ending December 31, 2007 and 2006. These financial
statements are the responsibility of the company’s management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
  We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the company’s internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
  In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of China International Tourism
Holdings, Ltd. and Subsidiary (a Nevada corporation). as of December 31, 2007
and the results of its operations and its cash flows for year ended December 31,
2007 and 2006 in conformity with accounting principles generally accepted in the
United States of America.
  The
accompanying financial statements have been prepared assuming the Company will
continue as a going concern. The Company has suffered recurring losses and has
yet to generate an internal cash flow that raises substantial doubt about its
ability to continue as a going concern. Management's plans in regard to these
matters are described in Note K. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
 
  /s/
Lake & Associates CPA’s LLC
 LAKE
& ASSOCIATES CPA’S LLC
 BOCA
RATON FLORIDA
 April
14, 2008
 11
 Table of Contents
  CHINA INTERNATIONAL TOURISM
      HOLDINGS, LTD. AND SUBSIDIARYConsolidated Balance
      SheetsAs of December 31, 2007 and
      20062007
                    
                    
                    2006ASSETSCURRENT
    ASSETSCash and Cash
      Equivalents
                    
                    $
                    7,152
                    
                    
                    $
                    21,333Accounts
      Receivable
                    
                    
                    19,338
                    
                    
                    
                    3,621Inventory
                    
                    
                    14,515
                    
                    
                    
                    16,546Prepaid
      Expenses
                    
                    
                    9,523
                    
                    
                    
                    82,290TOTAL CURRENT
      ASSETS
                    
                    
                    50,528
                    
                    
                    
                    123,789FIXED
ASSETSProperty, Plant, and
      Equipment
                    
                    
                    691,110
                    
                    
                    
                    644,390Accumulated
      Depreciation
                    
                    
                    (269,508
                    )
                    
                    
                    (141,071
                    )TOTAL FIXED
      ASSETS
                    
                    
                    421,602
                    
                    
                    
                    503,319TOTAL
ASSETS
                    
                    $
                    472,130
                    
                    
                    $
                    627,109LIABILITIES AND STOCKHOLDERS'
      EQUITYCURRENT
      LIABILITIESAccounts Payable and Accrued
      Liabilities
                    
                    $
                    360,867
                    
                    
                    $
                    218,328Due to
      Shareholder
                    
                    
                    24,620
                    
                    
                    
                    7,466TOTAL CURRENT
      LIABILITIES
                    
                    
                    385,487
                    
                    
                    
                    225,794TOTAL
      LIABILITIES
                    
                    
                    385,487
                    
                    
                    
                    225,794COMMITMENTS AND
      CONTINGENCIESRedeemable Preferred Stock (par
      value $.01,
                    
                    
                    32,950
                    
                    
                    
                    32,9505,000,000 Shares Authorized,
      3,295,000 SharesIssued and
      OutstandingSTOCKHOLDERS'
      EQUITYCommon Stock (par $.0001,
      250,000,000
                    
                    
                    4,860
                    
                    
                    
                    4,860Authorized, 48,596,568 Issued and
      OutstandingPaid in
    Capital
                    
                    
                    3,617,895
                    
                    
                    
                    3,617,895Accumulated Other Comprehensive
      Income
                    
                    
                    21,063
                    
                    
                    
                    2,858Retained Earnings
      (Deficit)
                    
                    
                    (3,590,125
                    )
                    
                    
                    (3,257,249
                    )TOTAL STOCKHOLDERS'
      EQUITY
                    
                    
                    53,693
                    
                    
                    
                    368,364TOTAL LIABILITIES AND
      STOCKHOLDERS' EQUITY
                    
                    $
                    472,130
                    
                    
                    $
                    627,108The accompanying notes are an
      integral part of these financial
  statements.
  12
 Table of Contents
  CHINA INTERNATIONAL TOURISM
      HOLDINGS, LTD. AND SUBSIDIARYConsolidated Statement of
      OperationsFor the years ended December 31,
      2007 and 20062007
                    
                    
                    2006REVENUESales
                    
                    $
                    516,218
                    
                    
                    $
                    834,554Cost of
    Sales
                    
                    
                    115,951
                    
                    
                    
                    129,873GROSS
PROFIT
                    
                    
                    400,267
                    
                    
                    
                    704,681OPERATING
      EXPENSESSelling, General , and
      Administrative
                    
                    
                    737,406
                    
                    
                    
                    1,053,496INCOME (LOSS) FROM
      OPERATIONS
                    
                    
                    (337,139
                    )
                    
                    
                    (348,815
                    )OTHER INCOME /
      (EXPENSES):Finance
    Costs
                    
                    
                    -
                    
                    
                    
                    (807
                    )Non-Operating
      Income
                    
                    
                    4,263
                    
                    
                    
                    2,127Total Other Income
      (Expense)
                    
                    
                    4,263
                    
                    
                    
                    1,320NET INCOME (LOSS) BEFORE
      TAXES
                    
                    
                    (332,876
                    )
                    
                    
                    (347,495
                    )INCOME TAX
      EXPENSE
                    
                    
                    -
                    
                    
                    
                    (8,553
                    )NET INCOME (LOSS) FROM CONTINUED
      OPERATIONS
                    
                    $
                    (332,876
                    )
                    
                    $
                    (356,048
                    )GAIN ON  DISPOSAL OF
      SUBSIDIARY
                    
                    
                    -
                    
                    
                    
                    27,322NET INCOME
      (LOSS)
                    
                    
                    (332,876
                    )
                    
                    
                    (328,726
                    )OTHER COMPREHENSIVE INCOME
      (LOSS)Foreign Currency Translation
      (Loss) Gain
                    
                    
                    18,205
                    
                    
                    
                    1,727COMPREHENSIVE INCOME
      (LOSS)
                    
                    $
                    (314,671
                    )
                    
                    $
                    (326,999
                    )NET LOSS PER COMMON
      SHAREBasically and Fully
      Dilluted
                    
                    
                    **
                    
                    
                    
                    ****Less the
    .01WEIGHTED AVERAGE COMMON SHARES
      OUTSTANDING
                    
                    
                    48,591,809
                    
                    
                    
                    45,337,314The accompanying notes are an
      integral part of these financial
  statements.
  13
 Table of Contents
  CHINA INTERNATIONAL TOURISM
      HOLDINGS, LTD. AND SUBSIDIARYConsolidated Statement of Cash
      FlowsFor the years ended December 31,
      2007 and 20062007
                    
                    
                    2006CASH FLOWS FROM OPERATING
      ACTIVITIES:Net Income(loss) after income
      tax
                    
                    $
                    (332,876
                    )
                    
                    $
                    (328,725
                    )Adjustments to reconcile net
      income tonet cash provided by (used in)
      operating activities:Depreciation
                    
                    
                    128,437
                    
                    
                    
                    95,055Stock for
      Services
                    
                    
                    -
                    
                    
                    
                    428,500Accounts Receivable and Other
      Receivables
                    
                    
                    (15,716
                    )
                    
                    
                    55,966Prepaid and Other
      Assets
                    
                    
                    72,766
                    
                    
                    
                    (78,687
                    )Inventory
                    
                    
                    2,031
                    
                    
                    
                    72,800Accounts
      Payable
                    
                    
                    142,537
                    
                    
                    
                    (284,596
                    )Tax Payable
                    
                    
                    .
                    
                    
                    
                    (6,759
                    )NET CASH PROVIDED BY (USED IN)
      OPERATING ACTIVITIES
                    
                    
                    (2,821
                    )
                    
                    
                    (46,446
                    )CASH FLOWS FROM INVESTING
      ACTIVITIES:Disposal of property, plant, and
      equipment
                    
                    
                    -
                    
                    
                    
                    102,227Capital loss due to preferred
      stock conversion
                    
                    
                    -
                    
                    
                    
                    (1,050
                    )Purchase of property, plant, and
      equipment
                    
                    
                    (46,719
                    )
                    
                    
                    (19,010
                    )NET CASH PROVIDED BY (USED IN)
      INVESTING ACTIVITIES
                    
                    
                    (46,719
                    )
                    
                    
                    82,167CASH FLOWS FROM FINANCING
      ACTIVITIES:Payments on notes
      payable
                    
                    
                    -
                    
                    
                    
                    (431,874
                    )Proceeds from shareholder
      loan
                    
                    
                    17,154
                    
                    
                    
                    79,841Payment on shareholder
      loan
                    
                    
                    -
                    
                    
                    
                    (72,375
                    )Capital
      contribution
                    
                    
                    -
                    
                    
                    
                    402,987NET CASH PROVIDED BY FINANCING
      ACTIVITIES
                    
                    
                    17,154
                    
                    
                    
                    (21,421
                    )FOREIGN CURRENCY TRANSLATION
      ADJUSTMENT
                    
                    
                    18,205
                    
                    
                    
                    1,726NET INCREASE IN CASH AND CASH
      EQUIVALENTS
                    
                    
                    (14,181
                    )
                    
                    
                    16,026CASH AND CASH
      EQUIVALENTS:Beginning of
      period
                    
                    
                    21,333
                    
                    
                    
                    5,307End of
    period
                    
                    
                    7,152
                    
                    
                    
                    21,333SUPPLEMENTARY CASH FLOW
      INFORMATION OFCommon stock issued for
      services
                    
                    $
                    -
                    
                    
                    $
                    428,500The accompanying notes are an
      integral part of these financial
  statements.
  14
 Table of Contents
  CHINA INTERNATIONAL TOURISM
      HOLDINGS, LTD. AND SUBSIDIARYConsolidated Statement of
      EquityFor the years ended December 31,
      2007 and 2006AccumulatedCommon Stock ($.0001
      par)
                    
                    
                    Additional
                    
                    
                    
                    
                    
                    OtherPaid-in
                    
                    
                    Retained
                    
                    
                    ComprehensiveShares
                    
                    
                    Amount
                    
                    
                    Capital
                    
                    
                    (Deficit)
                    
                    
                    Income
                    
                    
                    TotalBalances, December 31,
      2005
                    
                    
                    43,601,568
                    
                    
                    $
                    4,360
                    
                    
                    $
                    2,785,858
                    
                    
                    $
                    (2,928,523
                    )
                    
                    $
                    1,132
                    
                    
                    $
                    (137,173
                    )Preferred stock
      conversion
                    
                    
                    1,237,500
                    
                    
                    
                    124
                    
                    
                    
                    371
                    
                    
                    
                    -
                    
                    
                    
                    
                    
                    
                    
                    495Preferred stock
      conversion
                    
                    
                    250,000
                    
                    
                    
                    25
                    
                    
                    
                    75
                    
                    
                    
                    -
                    
                    
                    
                    
                    
                    
                    
                    100Contributed
      Capital
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    402,987
                    
                    
                    
                    -
                    
                    
                    
                    
                    
                    
                    
                    402,987Preferred stock
      conversion
                    
                    
                    1,137,500
                    
                    
                    
                    114
                    
                    
                    
                    341
                    
                    
                    
                    -
                    
                    
                    
                    
                    
                    
                    
                    455Issuance of stock for
      services
                    
                    
                    2,370,000
                    
                    
                    
                    237
                    
                    
                    
                    428,263
                    
                    
                    
                    -
                    
                    
                    
                    
                    
                    
                    
                    428,500Other Comprehensive
      Income
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    1,726
                    
                    
                    
                    1,726Net Income(Loss) for the
      year
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (328,726
                    )
                    
                    
                    -
                    
                    
                    
                    (328,726
                    )Balances, December 31,
      2006
                    
                    
                    48,596,568
                    
                    
                    $
                    4,860
                    
                    
                    $
                    3,617,895
                    
                    
                    $
                    (3,257,249
                    )
                    
                    $
                    2,858
                    
                    
                    $
                    368,364Shares
      cancelled
                    
                    
                    (4,759
                    )
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -Other Comprehensive
      Income
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    18,205
                    
                    
                    
                    18,205Net Income(Loss) for the
      year
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (332,876
                    )
                    
                    
                    -
                    
                    
                    
                    (332,876
                    )Balances, December 31,
      2007
                    
                    
                    48,591,809
                    
                    
                    $
                    4,860
                    
                    
                    $
                    3,617,895
                    
                    
                    $
                    (3,590,125
                    )
                    
                    $
                    21,063
                    
                    
                    $
                    53,693The accompanying notes are an
      integral part of these financial
  statements.
  15
 Table of Contents
  CHINA
INTERNATIONAL TOURISM HOLDINGS, LTD. AND SUBSIDIARY
 NOTES TO
THE FINANCIAL STATEMENTS
 FOR THE
YEARS ENDED DECEMBER 31, 2007 AND 2006
  NOTE A – SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES
 
 Business
OrganizationChina International Tourism
Holdings, Limited. (the “Company” or “CIHS”) was incorporated in the State
of Nevada on December 23, 1988, formerly known as Dark Dynamite, Inc., NCI
Holdings, Inc., Vector Holding, Inc., and prior to June 26, 2002, Vector
Aeromotive Corporation. On September 9, 2007, the Board of Directors of CIHS
approved a name change from Dark Dynamite, Inc to China International Tourism
Holdings, Limited. This change went into legal effect in the third quarter of
2007.
 
 On August
29, 2005, CIHS (acquiree) executed a Plan of Exchange with Shanxi Kai Da Lv You
Gu Wen You Xian Gong Si, a corporation organized under the laws of the Peoples'
Republic of China (“Kai Da” or "acquirer"), the Shareholders of Kai Da,
Diversified Holdings X, Inc., a Nevada corporation (“Diversified Holdings”), and
the majority shareholder of CIHS, pursuant to which, and the First Amendment of
Plan of Exchange signed on September 29, 2005, the majority shareholder of CIHS
and Diversified Holdings transferred a total of 4,990,000 shares of convertible
preferred stock to Kai Da and/or the Kai Da shareholders for $495,000, less
related expenses. Each share of convertible preferred stock is convertible into
twenty-five (25) shares of common stock, and each share votes together with the
common stock on all matters presented for a vote on an “as converted” basis. In
addition, the Company issued 100,000 new shares of common stock to Kai Da and/or
the Kai Da shareholders in exchange for all of their shares of registered
capital of Kai Da, which then became a wholly-owned subsidiary of the
Registrant. On October 3, 2005, CIHS consummated the Plan of Exchange with Kai
Da. As a result of the Plan of Exchange, Kai Na will become a wholly-owned
subsidiary of CIHS. The transaction was treated for accounting purposes as a
capital transaction and recapitalization by the accounting acquirer and as a
re-organization by the accounting acquiree.
 
 Accordingly,
the consolidated financial statements include the following:
 
 (1)
                    The
      balance sheet consists of the net assets of the acquirer at historical
      cost and the net assets of the acquiree at historical
  cost.
 (2)
                    The
      statement of operations includes the operations of the acquirer for the
      periods presented and the operations of the acquiree from the date of the
      merger.
 
 Kai Da is
principally engaged in the theme park management in the PRC.
 
 CIHS and
its wholly-owned subsidiary Kai Da are hereafter referred to as (the
“Company”).
 
 Basis of Presentation
- The financial statements included herein were prepared under the accrual basis
of accounting.
 
 Cash and Cash
Equivalents - For purposes of the Statement of Cash Flows, the Company
considers liquid investments with an original maturity of three months or less
to be cash equivalents.
 
 Management’s Use of
Estimates - The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosures of contingent assets and
liabilities at the date of financial statements and the reported amounts of
revenues and expenses during the reporting period.  Such estimates
include but are not limited to depreciation, taxes, and
contingencies.  Actual results could differ from those
estimates.  The financial statements above reflect all of the costs of
doing business.
  Revenue
Recognition-The Company's policy is to recognize
income when it is earned. Kai Da's revenue is derived from ticket sales, and
hotel and restaurant income. Revenues are booked net of any cash
discounts. If any material contingencies are present, revenue recognition
is delayed until all material contingencies are eliminated. Material
contingencies are circumstances in which there are any potential uncertainties
as to the completion of the revenue process being complete. Further, no revenue
is recognized unless collection of the applicable consideration is probable.
Probable collection is determined at the time collection occurs or is more than
reasonably possible it will be collected. Retail store sales - revenue is
recognized when sales are made. They are paid by cash or credit
card.
 
 Comprehensive Income (Loss)- The Company adopted Financial Accounting Standards Board Statement of
Financial Accounting Standards (SFAS) No. 130, “Reporting Comprehensive
Income”, which establishes standards for the reporting and display of
comprehensive income and its components in the financial
statements.  There were no items of comprehensive income (loss)
applicable to the Company during the period covered in the financial
statements.
 
 Loss Per
Share-Loss per share is reported in accordance
with Statement of Financial Accounting Standard (SFAS) No. 128. This statement
required dual presentation of basic and diluted earnings (loss) with a
reconciliation of the numerator and denominator of the loss per share
computations. Basic earnings per share amounts are based on the weighted average
shares of common stock outstanding. If applicable, diluted earnings per share
would assume the conversion, exercise or issuance of all potential common stock
instruments such as options, warrants and convertible securities, unless the
effect is to reduce a loss or increase earnings per share. There were no
adjustments required to net loss for the period presented in the computation of
diluted loss per share.
 
 Inventory- Inventories are stated at the lower of
cost(first-in, first-out basis) or market (net realizable
value)
  Foreign
Currencies (KAI DA-Foreign Subsidiary)-The assets and liabilities denominated
in respective functional currencies are translated into United States Dollars at
the exchange rate as of the balance sheet date. The share capital and retained
earnings are translated at exchange rates prevailing at the time of the
transactions. Revenues,costs, and expenses denominated in
respective functional currencies are translated into United States Dollars at
the weighted average exchange rate for the period. The effects of foreign
currencies translation adjustments are included as a separate component of
accumulated other comprehensive income.
 
 Company’s Future Operations
Are Dependent on Foreign Operations -The Company’s future operations and
earnings will depend on the results of the Company’s operations in China. There
can be no assurance that the Company will be able to successfully conduct such
operations, and a failure to do so would have a material adverse effect on the
Company’s financial position, results of operations, and cash flows. Also, the
success of the Company’s operations will be subject to numerous contingencies,
some of which are beyond management’s control. These contingencies include
general and regional economic conditions, prices for the Company’s products,
competition, and changes in regulation. Since the Company is dependent on
international operations, specifically those in China, the Company will be
subject to various additional political, economic, and other uncertainties.
Among other risks, the Company’s operations will be subject to the risks of
restrictions on transfer of funds; export duties, quotas, and embargoes;
domestic and international customs and tariffs; changing taxation policies;
foreign exchange restrictions; and political conditions and governmental
regulations.
 
 Property,
Plant, and Equipment-Property, plant, and
equipment are recorded at cost less accumulated depreciation and impairment.
Repairs and maintenance expenditures, which are not considered improvements
and do not extend the useful life of
property, plant, and equipment, are expensed as incurred. The cost and related
accumulated depreciation applicable to property, plant, and equipment sold or no
longer in service are eliminated from the accounts and any gain or loss is
included in the statement of operations.
  Depreciation is calculated to write-off
the cost or basis of the property, plant, and equipment over their estimated
useful lives for the date on which they become fully operational and after
taking into account their estimated residual values (salvage value), using the
straight-line method, at the following rates per year:
  Equipment Straight-line for 5 to 20
years with a 5% salvage value
  Furniture Straight-line for 5 to 10
years with a 5% salvage value
  Autos Straight-line for 5 to 10
years with a 5% salvage value
 
 When assets are sold or retired, their
costs and accumulated depreciation are eliminated from the accounts and any gain
or loss resulting from their disposal is included in theStatement ofOperations.
  The Company recognizes an impairment
loss on property, plant, and equipment when evidence, such as the sum of
expected future cash flows (undiscounted and without interest charges),
indicates that future operations will not produce sufficient revenue to cover
the related future costs, including depreciation, and when the carrying amount
of the asset cannot be realized through sale. Measurement of the impairment loss
is based on the fair value of the assets.
 
 Deferred
Taxes
  Income
taxes are provided in accordance with Statement of Financial Accounting
Standards No. 109 (SFAS No. 109), “Accounting for Income
Taxes.” A deferred tax asset or liability is recorded for all temporary
differences between financial and tax reporting and net operating loss-carry
forwards.
 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 asset will not be realized. Deferred tax assets and liabilities are adjusted
for the effect of changes in tax laws and rates on the date of
enactment.
 
 Fair Value of Financial
Instruments - The carrying amounts reported in the balance sheet for
cash, accounts receivable and payable approximate fair value based on the
short-term maturity of these instruments.
 
 Accounts Receivable -
Accounts deemed uncollectible are written off in the year they become
uncollectible.  No receivables were deemed uncollectible as of
December 31, 2007 or 2006.
 
 Impairment of Long-Lived
Assets - The Company evaluates the recoverability of its fixed assets and
other assets in accordance with Statement of Financial Accounting Standards No.
144, “Accounting for the
Impairment or Disposal of Long-Lived Assets” (“SFAS 144’). SFAS 144
requires recognition of impairment of long-lived assets in the event the net
book value of such assets exceeds its expected cash flows, it is considered to
be impaired and is written down to fair value, which is determined based on
either discounted future cash flows or appraised values. The Company adopted the
statement on inception. No impairments of these types of assets were recognized
during the period ended December 31, 2006 based upon a management review of such
assets.
 
 Stock-Based
Compensation - The Company accounts for stock-based compensation using
the fair value method of Financial Accounting Standard No. 123R. Common shares
issued for services rendered by a third party (both employees and non-employees)
are recorded at the fair value of the shares issued or services rendered,
whichever is more readily determinable.
 
 Recently Issued Accounting
Pronouncements- In February 2007, the FASB issued Statement of Financial
Accounting Standard No. 159, “The Fair Value Option for Financial
Assets and Financial Liabilities” (“SFAS No. 159”). This statement
permits entities to choose to measure many financial instruments and certain
other items at fair value. Companies should report unrealized gains and losses
on items for which the fair value option has been elected in earnings at each
subsequent reporting date. This statement is effective as of the beginning of an
entity’s first fiscal year that begins after November 15, 2007. The Company is
currently assessing the potential impact, if any, for the adoption of SFAS
No.159 on its consolidated financial statements.
 
 In
December 2007, the FASB issued two new statements: (a.) SFAS No. 141(revised
2007), Business
Combinations, and (b.) No. 160, Noncontrolling Interests in
Consolidated Financial Statements. These statements are effective for
fiscal years beginning after December 15, 2008 and the application of these
standards will improve, simplify and converge internationally the accounting for
business combinations and the reporting of noncontrolling interests in
consolidated financial statements. The Company is in the process of evaluating
the impact, if any, on SFAS 141 (R) and SFAS 160 and does not anticipate that
the adoption of these standards will have any impact on its consolidated
financial statements.
 
 (a.)  SFAS
No. 141 (R) requires an acquiring entity in a business combination to: (i)
recognize all (and only) the assets acquired and the liabilities assumed in the
transaction, (ii) establish an acquisition-date fair value as the measurement
objective for all assets acquired and the liabilities assumed, and (iii)
disclose to investors and other users all of the information they will need to
evaluate and understand the nature of, and the financial effect of, the business
combination, and, (iv) recognize and measure the goodwill acquired in the
business combination or a gain from a bargain purchase.
 
 (b.) SFAS
No. 160 will improve the relevance, comparability and transparency of financial
information provided to investors by requiring all entities to: (i) report
noncontrolling (minority) interests in subsidiaries in the same manner, as
equity but separate from the parent’s equity, in consolidated financial
statements, (ii) net income attributable to the parent and to the
non-controlling interest must be clearly identified and presented on the face of
the consolidated statement of income, and (iii) any changes in the parent’s
ownership interest while the parent retains the controlling financial interest
in its subsidiary be accounted for consistently.
  16
 Table of Contents
 CHINA
INTERNATIONAL TOURISM HOLDINGS, LTD. AND SUBSIDIARY
 NOTES TO
THE FINANCIAL STATEMENTS
 FOR THE
YEARS ENDED DECEMBER 31, 2007 AND 2006
  NOTE B – SUPPLEMENTAL CASH
FLOW INFORMATION
 
 Supplemental
disclosures of cash flow information for the period ended December 31, 2007 and
2006 are summarized as follows:
  Cash paid
during the period ended December 31, 2007 and 2006 for interest and income
taxes:
 
 2007                      
2006
 Income
Taxes                          
$-0-                      
$ -0-
 Interest                                   
$-0-           
            $
-0-
 
 NOTE C – SEGMENT
REPORTING
 
 In June
1997, the Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 131, “Disclosures about Segments of an
Enterprise and Related Information.”  This statement requires
companies to report information about operating segments in interim and annual
financial statements.  It also requires segment disclosures about
products and services, geographic areas and major customers.  The
Company determined that it did not have any separately reportable operating
segments as of December 31, 2007 or 2006.
  NOTE D – INCOME
TAXES
  The
Company has approximately $3,590,000 of federal and state net operating losses
available that expire in various years through the year 2027.
 
 Due to
operating losses, there was no provision for current federal or state income
taxes for the year ended December 31, 2007.
 
 Deferred
income taxes reflect the net tax effects of temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes and
the amount used for federal and state income tax purposes.
 
 The
Company’s deferred tax asset at December 31, 2007 consists of net operating loss
carry-forward calculated using federal and state effective tax rates equating to
approximately $1,125,000 less a valuation allowance in the amount of $1,125,000.
Because of the Company’s lack of earnings history, the deferred tax asset has
been fully offset by a valuation allowance. The valuation allowance increased
(decreased) by approximately $35,000 for the year ended December 31,
2007.
 
 Utilization
of the net operating losses may be subject to certain annual limitations due to
changes in control. This may result in the expiration of net operating losses
before full utilization.
 
 The
Company’s total deferred tax asset as of December 31, 2007 and 2006 is as
follows:
 2007
                      
                      
                      2006Net
      operating loss carry-forwards
                      
                      $
                      1,125,000
                      
                      $
                      1,090,000Valuation
      Allowance
                      
                      
                      (1,125,000)
                      
                      
                      (1,090,000)$
                      -0-
                      
                      $
                      -0-
  NOTE E -
INVENTORY
 
 Inventory of supplies are carried at the
lower of cost or market:
 
 2007                      
2006
 Inventory-supplies                 
$14,515                   
$ 16,546
  NOTE F – PAYABLES,
COMMITMENTS AND CONTIGENCIES
 
 As of
December 31, 2007, the Company had a payable outstanding in the amount of
$360,867, of which $136,500 in connection with the litigation (see note
L).
  NOTE G –
PREFERRED STOCK
 
 During the quarter ended March 31, 2006, 59,500 shares of preferred stock
were converted into 1,487,500 common shares by the Company's consultants and
former owner, resulting in a balance of 3,340,500 preferred shares as of March 31, 2006.
 
 During the quarter ended December 31, 2006,
45,500 shares of
preferredstock were
converted into 1,137,500
common shares by the Company's consultants and former owner, resulting in a
balance of
3,295,000 preferred shares as of December
31, 2006and 2007.
 
 NOTE H – COMMON
STOCK
  During
the quarter ended December 31, 2006, the Company issued 428,500 shares of post
reverse split common stock as payment for services to companies and
individuals.
  NOTE K –
GOING CONCERN
 
 As shown in the accompanying audited
financial statements, the Company has a deficit book value and a negative cash
flow from operations that have placed substantial doubt as to whether the
Company can continue as a going concern. The ability of the Company to continue
as a going concern is dependent on developing operations, increasing revenues,
and obtaining new capital. Management has enacted a plan to raise capitaland increase
profitability.
  NOTE L –
LITIGATION
 
 Securities
and Exchange Commission v. David M. Wolfson, et al.On October 16, 2004 a civil complaint
was filed by the Securities and Exchange Commission in which Dark Dynamite, Inc.
was named as a respondent. The Company's former president Gino Carlucci was also
named as a respondent. The suit was filed in the United States District Court
for the District of Utah and bears the docket number 2:03CV00914DAK and the
style of the case is: “Securities and Exchange Commission v. David M. Wolfson;
NuWay Holdings, Inc., a Nevada corporation; Momentous Group, LLC, a Utah limited
liability company; Leeward Consulting Group, LLC, a Utah limited liability
company; Sukumo Limited, a company incorporated in the British Virgin Islands
(a.k.a. Sukumo Group, Ltd., Fujiwara Group, First Chartered Capital Corporation,
First Colonial Trust, First China Capital and International Investment Holding);
Michael Sydney Newman (A.K.A. Marcus Wiseman); Stem Genetics, Inc., a Utah
corporation; Howard H. Robertson; Gino Carlucci; G & G Capital, LLC an
Arizona and Utah limited liability company; F10 Oil and Gas Properties, Inc.;
Jon H. Marple; Mary E. Blake; Jon R. Marple; Grateful Internet Associates, LLC,
a Colorado limited liability company; Diversified Financial Resources
Corporation, a Delaware corporation; John Chapman; Valesc Holdings, Inc., a New
Jersey corporation; Jeremy D. Kraus; Samuel Cohen; Dark Dynamite, Inc., (The
Company) a Nevada corporation. The complaint alleges that the Company failed to
accurately and fully disclose the nature of its relationship to The Sukumo
Group, Inc., including the failure of Sukumo to complete the purchase of the
shares and alleges that Sukumo acted as a selling agent for the Company. The
complaint also faults The Sukumo Group Inc.'s actions with regard to the sale of
common stock to off shore purchasers for failing to disclose the interest that
Sukumo had in each sale, reporting that it was taking a 1-2% commission on the
sale rather than keeping 70% or more of the proceeds of each transaction. The
Company filed a motion to dismiss the complaint based upon a lack of
jurisdiction and the failure of the complaint to adequately set forth the
actions of the Company which form the basis of a cause of action against the
Company that was denied by the Court. The Company filed an answer disputing the
allegations of the complaint and has participated in some pre-trial discovery.
The Company and the Government have agreed uponNOTE
L – LITIGATION -Continued
 
 the terms of a settlement, the terms of
which provide for the Company to pay the sum of $30,000 to the SEC.While no final judgment has been entered
in this case we have reached a tentative agreement with the SEC for settlement
of this matter and we believe there is a high likelihood that the court will
approve the settlement and the proposed judgment will be entered in the near
future.
  The Company believes that adequate
provision has been made for all other judgments that may be awarded against the
Company. None of the other lawsuits have yet been resolved.
 
 NOTE M –
RELATED PARTY TRANSACTIONS
 
 The Company's subsidiary Kai Da signed a
management contract with Shanxi Qin E'Pang Tourism Development Co., Ltd.
According to the contract, the Company will manage the A'Pang palace tourist,
hotel, and restaurant from August 1, 2005 to July 31, 2010 and hold 90% of the
net profits. The remaining 10% of the net profit will be returned to Shanxi Qin
E'Pang Tourism Development Co., Ltd. In September 2005, the Company purchased
the fixed assets from Shanxi Qin E'Pang Tourism Development Co., Ltd. by
executing a financial
leasing contract.
 
 The
shareholder paid all necessary overseas consulting and advising fees, lawyer
fees, and accounting fees from period to period out of his own personal bank
accounts in the United States due to the strict laws and regulations imposed by
the Chinese government on out-going foreign currency wire transfers. The amount
outstanding as of December 31, 2007 was $24,620. The shareholder loan is not
evidenced by a promissory note, but rather is an oral agreement between the
shareholder and the Company.
  NOTE N –
DISPOSAL OF SUBSIDIARY
 
 On April 1, 2006, the Company executed
an Agreement (the “Agreement”) between the Company and Diversified Holdings X,
Inc. ("DHX"), aNevadacorporation, pursuant to which the
Company agreed to sell its ownership of Black Chandelier, Inc. (“BCI”) to DHX.
The gains on disposal of subsidiary are as follows:
 
 December
      31, 2006(Loss)
      from investment in BCI
                    
                    $
                    (9,900)Write
      off the liabilities due from subsidiary to parent
                    
                    
                    37,222Gains
      on disposal of subsidiary
                    
                    $
                    27,322
 17
 Table of Contents
  ITEM 8.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
 
 None.
 
 ITEM
8A. CONTROLS AND PROCEDURES
 
 We
maintain disclosure controls and procedures designed to ensure that information
required to be disclosed in reports filed under the Securities Exchange Act of
1934 (“Exchange Act”) is recorded, processed, summarized and reported within the
specified time periods. Our Chief Executive Officer and our Chief Financial
Officer (collectively, the “Certifying Officers”) are responsible for
maintaining our disclosure controls and procedures. The controls and procedures
established by us are designed to provide reasonable assurance that information
required to be disclosed by the issuer in the reports that it files or submits
under the Exchange Act is recorded, processed, summarized and reported within
the time periods specified in the Commission’s rules and forms.
  To evaluate the effectiveness of our
internal controls over financial reporting, we have adopted the framework
prescribed by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO).  We believe that this framework will
assist in the provision of reasonable assurance of the effectiveness and
efficiency of operations, the reliability of financial reporting, and compliance
with applicable laws and regulations.  In adopting theCOSOframework, we maintain a control environment,
perform risk assessments, carry out control activities, emphasize quality
information and effective communication, and perform monitoring.  In
the maintenance of a control environment, we are committed to integrity and
ethical values as well as to competence.  We strive to assign
authority and responsibility in a manner that supports our internal controls,
and we also maintain human resources policies and procedures designed to support
our internal controls.  Our risk assessments are designed to ensure
the achievement of company-wide and process-level objectives as well as to
identify and analyze risks while managing change.  We believe that all
of these components together form a foundation for sound internal control
through directed leadership, shared values and a culture that emphasizes
accountability for control.
 
 As of the
end of the period covered by this report, the Certifying Officers evaluated the
effectiveness of our disclosure controls and procedures. Based on the
evaluation, the Certifying Officers concluded that our disclosure controls and
procedures were effective to provide reasonable assurance that information
required to be disclosed by us in the reports that we file or submit under the
Exchange Act is recorded, processed, summarized and reported, within the time
periods specified in the applicable rules and forms, and that it is accumulated
and communicated to our management, including the Certifying Officers, as
appropriate to allow timely decisions regarding required
disclosure.
  The
Certifying Officers have also concluded, based on our evaluation of our controls
and procedures that as of December 31, 2007, our internal controls over
financial reporting are effective and provide a reasonable assurance of
achieving their objective.
  Due to
its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements under all potential conditions. Therefore,
effective internal control over financial reporting provides only reasonable,
and not absolute, assurance that a restatement of our financial statements would
be prevented or detected.
 
 This
annual report does not include an attestation report of our registered
public accounting firm regarding internal control over financial reporting.
Management's report was not subject to attestation by our registered public
accounting firm pursuant to temporary rules of the Securities and Exchange
Commission that permit us to provide only management's report in this
annual report.
 
 Changes
in Internal Control Over Financial Reporting
  There
were no changes in the our internal control over financial reporting that
occurred during the period covered by this report that have materially affected,
or are reasonably likely to materially affect, our internal control over
financial reporting.
 18
 Table of Contents
  PART
III
 
 ITEM
9.   DIRECTORS AND EXECUTIVE OFFICERS OF
THE REGISTRANT
 
 Identification of Directors
and Executive Officers and Significant Employees
  The
following table identifies all of our current executive officers, directors and
significant employees. The officers and directors will serve until the next
annual meeting of the stockholders, or until their successors are elected or
appointed and qualified, or they resign or are terminated.
  Name
                Age
                Position
                CommencedLei,
      Ming
                42
                CEO,
      President,
                10/13/2005*Wang,
      Xiao Jun
                42
                CFO
                10/13/2005
  All
executive officers are elected by the Board and hold office until the next
Annual Meeting of stockholders and until their successors are elected and
qualify.
 
 * Mr. Lei
was appointed to the board effective as of October 13, 2005, the effective date
of the resignation of Mr. Jared Gold as former President and CEO.
 
 Business Experience and
Personal Background
 
 Mr. Lei
is 42 years of age, majored in Economics and Management with a bachelor’s
degree. He started his career in the tourism industry in 1990, acting as the
General Manager of Shanxi Qian Ling Travel Service Ltd., a corporation organized
and existing under the laws of the Peoples’ Republic of China. In 1998, he began
working at the E Pang Gong Theme Park, located in Xi’an, China, and he was
responsible for operations and management of the theme park. Beginning in 2002,
he served as the General Manager of Qin Epanggong Lv You Gong Si, the corporate
entity which holds the lease and owns certain leasehold improvements at the
theme park. Mr. Lei has a great deal of experience in theme park management and
marketing. He was responsible for consistent growth in E Pang Gong’s business
while the theme park was under his management.
 
 Mr. Wang,
Xiaojun is 42 years of age, graduated from Shenzhen Radio and TV University in
1991. During the period from 1987 to 1992, Mr. Wang worked as the manager of the
Accounting Department of Shenzhen Huajun Industrial Co, Ltd. From 1992 to 1993,
he was the accounting officer for Liquan Commerce and Trade Company. From 1993
to 1998, he was the Accounting manager in the Liquan Outtrade Company. In 1998,
Mr. Xiaojun was retained by Shannxi Qin Epanggong Tourism Development Co, Ltd as
the Chief Financial Officer.
 
 Significant
Employees
  The
Company has no significant employees in the United States.
 
 Legal
Proceedings
  No
officer, director, or persons nominated for such positions and no promoter or
significant employee of us has been involved in legal proceedings that would be
material to an evaluation of the management.
  There are
no arrangements or understandings pursuant to which any were elected as
officers.
 
 Audit Committee Financial
Expert
  We do not
have a separately designated standing audit committee. Pursuant to Section
3(a)(58)(B) of the Exchange Act, the entire Board of Directors acts as an audit
committee for the purpose of overseeing the accounting and financial reporting
processes, and audits of our financial statements. The Commission recently
adopted new regulations relating to audit committee composition and functions,
including disclosure requirements relating to the presence of an "audit
committee financial expert" serving on its audit committee. In connection with
these new requirements, our Board of Directors examined the Commission's
definition of "audit committee financial expert" and concluded that the Company
does not currently have a person that qualifies as such an expert. We have had
minimal operations for the past two (2) years. Presently, there are only two (2)
directors serving on our Board, and we are not in a position at this time to
attract, retain and compensate additional directors in order to acquire a
director who qualifies as an "audit committee financial expert", but we intend
to retain an additional director who will qualify as such an expert, as soon as
reasonably practicable. While neither of our current directors meets the
qualifications of an "audit committee financial expert", each of our directors,
by virtue of his past employment experience, has considerable knowledge of
financial statements, finance, and accounting, and has significant employment
experience involving financial oversight responsibilities. Accordingly, we
believe that its current directors capably fulfill the duties and
responsibilities of an audit committee in the absence of such an
expert.
 
 Code of
Ethics
  We are
presently working with its legal counsel to prepare and adopt a code of ethics
that applies to our principal chief executive officer, principal financial
officer, and principal accounting officer or controller, or persons performing
similar functions (the Code of Ethics"). The Code of Ethics is being designed
with the intent to deter wrongdoing, and to promote the following:
 
 ·
                Honest
      and ethical conduct, including the ethical handling of actual or apparent
      conflicts of interest between personal and professional
      relationships
  ·
                Full,
      fair, accurate, timely and understandable disclosure in reports and
      documents that a small business issuer files with, or submits to, the
      Commission and in other public communications made by the small business
      issuer
  ·
                Compliance
      with applicable governmental laws, rules and
  regulations
  ·
                The
      prompt internal reporting of violations of the code to an appropriate
      person or persons identified in the
code
  ·
                Accountability
      for adherence to the code
 
 Section
16(a) Beneficial Ownership Reporting Compliance
 
 Under
Section 16(a) of the Exchange Act, all executive officers, directors, and each
person who is the beneficial owner of more than 10% of the common stock of a
company that files reports pursuant to Section 12 of the Exchange Act, are
required to report the ownership of such common stock, options, and stock
appreciation rights (other than certain cash-only rights) and any changes in
that ownership with the Commission. Specific due dates for these reports have
been established, and the Company is required to report, in this Form 10-KSB,
any failure to comply therewith during the fiscal year ended December 2007. The
Company believes that all of these filing requirements were satisfied by its
executive officers, directors and by the beneficial owners of more than 10% of
our common stock. In making this statement, we have relied solely on copies of
any reporting forms received by it, and upon any written representations
received from reporting persons that no Form 5 (Annual Statement of Changes in
Beneficial Ownership) was required to be filed under applicable rules of the
Commission.
 
 19
 Table of Contents
  ITEM
10. EXECUTIVE COMPENSAT ION
  The
following table sets forth certain information regarding the annual and
long-term compensation for services in all capacities to us for the prior fiscal
years ended December 31, 2007, 2006 and 2005, of those persons who were
either the chief executive officer during the last completed fiscal year or any
other compensated executive officers as of the end of the last completed fiscal
year, and whose compensation exceeded $100,000 for those fiscal
periods.
  Summary
      Compensation TableAnnual
      Compensation
                
                
                Long
      Term CompensationName
      and Principal
                  Position
                Year
                Salary
      ($)
                
                
                Bonus
      ($)
                
                
                Other
      Annual Compensation ($)
                
                
                Restricted
                  Stock
      Award(s) ($)
                
                
                Securities
      Underlying
                  Options
      (#)
                
                
                LTIP
      Payouts ($)
                
                
                Other
      ($)Lei,
      Ming
                  President,
      Chief Executive Officer and Director
                2007
                
                0
                
                
                
                0
                
                
                
                0
                
                
                
                0
                
                
                
                0
                
                
                
                0
                
                
                
                02006
                
                0
                
                
                
                0
                
                
                
                0
                
                
                
                0
                
                
                
                0
                
                
                
                0
                
                
                
                02005
                
                0
                
                
                
                0
                
                
                
                0
                
                
                
                0
                
                
                
                0
                
                
                
                0
                
                
                
                0Wang,
      Xiao Jun
                  Chief
      Financial Officer
                2007
                
                0
                
                
                
                0
                
                
                
                0
                
                
                
                0
                
                
                
                0
                
                
                
                0
                
                
                
                02006
                
                0
                
                
                
                0
                
                
                
                0
                
                
                
                0
                
                
                
                0
                
                
                
                0
                
                
                
                02005
                
                0
                
                
                
                0
                
                
                
                0
                
                
                
                0
                
                
                
                0
                
                
                
                0
                
                
                
                0
 
 We have
not entered into any other employment agreements with their employees, Officers
or Directors. We have no standard arrangements under which we will compensate
their directors for their services provided to them.
 
 ITEM
11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
  As of
December 31, 2007, we had 4,495 stockholders of record, 48,591,809 shares of our
Common Stock, and 3,295,000 shares of our Preferred Stock issued and
outstanding.
  As of April 14, 2008, we had 4,492
stockholders of record, 48,591,809 shares of our Common Stock, and 3,295,000
shares of our Preferred Stock issued and outstanding. The following table sets
forth as of April 14, 2008, certain information with respect to the beneficial
ownership of Common Stock by (i) each of our Director, nominee and executive
officer; (i) each person who owns beneficially more than 5% of the common stock;
and (iii) all Directors, nominees and executive officers as a group. The
percentage of shares beneficially owned is based on there having been 48,591,809
shares of our Common Stock, and 3,295,000 shares of our Preferred Stock issued
and outstanding as of April 14, 2008. To the best of our knowledge, all persons
named have sole voting and investment power with respect to such shares, except
as otherwise noted.
 
 OFFICERS,
DIRECTORS AND BENEFICIAL OWNERS, AS OF APRIL 14, 2008
  Title
      of Class
                Name
      and Address (1)
                #
      of Shares
                Percentage
      of ClassCommon
                Lei,
      Ming, President
                  Pang
      Gong Site, 44 Hong Guang Road, Xi An, P.R.China
                2,480,994
                5.11%Common
                Chen,
      Xiaohu
                  Pang
      Gong Site, 44 Hong Guang Road, Xi An, P.R.China
                4,761,904
                9.80%Preferred
                Lei,
      Ming
                  Pang
      Gong Site, 44 Hong Guang Road, Xi An, P.R.China
                3,295,000
                100%
  Security
Ownership of Officers and Directors (2)
 
 Title
      of Class
                Name
      and Address
                #
      of Shares
                Percentage
      of ClassCommon
                Lei,
      Ming, President
                  Pang
      Gong Site, 44 Hong Guang Road, Xi An, P.R.China
                2,480,994
                5.11%Common
                All
      Officers and Directors as a Group (2)
                2,480,994
                5.11%Preferred
                Lei,
      Ming, President
                  Pang
      Gong Site, 44 Hong Guang Road, Xi An, P.R.China
                3,295,000
                100%Preferred
                All
      Officers and Directors as a Group(2)
                3,295,000
                100%
  (1)  Unless
stated otherwise, the business address for each person named is c/o China Fruits
Corp.
 
 (2)  Calculated
pursuant to Rule 13d-3(d) (1) of the Securities Exchange Act of 1934. Under Rule
13d-3(d), shares not outstanding which are subject to options, warrants, rights
or conversion privileges exercisable within 60 days are deemed outstanding for
the purpose of calculating the number and percentage owned by a person, but not
deemed outstanding for the purpose of calculating the percentage owned by each
other person listed. We believe that each individual or entity named has sole
investment and voting power with respect to the shares of common stock indicated
as beneficially owned by them (subject to community property laws where
applicable) and except where otherwise noted.
 
 Changes
in Control.
  None.
  ITEM
12.   CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS
 
 Oursubsidiary Kai Da signed a management
contract with Shanxi Qin E'Pang Tourism Development Co., Ltd. According to the
contract, the Company will manage the A'Pang palace tourist, hotel, and
restaurant fromAugust 1,
2005toJuly 31, 2010and hold 90% of the net profits. The
remaining 10% of the net profit will be returned to Shanxi Qin E'Pang Tourism
Development Co., Ltd. In September 2005, the Company purchased the fixed assets
from Shanxi Qin E'Pang Tourism Development Co., Ltd. by executing a
financial leasing
contract.
 
 The
shareholder paid all necessary overseas consulting and advising fees, lawyer
fees, and accounting fees from period to period out of his own personal bank
accounts in the United States due to the strict laws and regulations imposed by
the Chinese government on out-going foreign currency wire transfers. The amount
outstanding as of December 31, 2007 was $24,620. The shareholder loan is not
evidenced by a promissory note, but rather is an oral agreement between the
shareholder and the Company.
  20
 Table of Contents
  ITEM 13.
EXHIBITS, LIST AND REPORTS ON FORM 8-K
 
 (a)
Exhibits.
 
 3.1   
       Articles of incorporation, as amended are hereby incorporated by
      reference info Form 10-SB3.2   
       Bylaws are hereby incorporated by reference into Form
      10-SB10.1 
        Plan of Exchange, dated August 29, 2005 , filed as an
      Exhibit to our Form 8-K, as filed with the Commission on August 30,
      200510.2 
       First Amendment to Plan of Exchange, dated September 29, 2005, filed
      as an Exhibit  to our Form 8-K, as filed with the Commission on
      September 30, 200510.3   Letter
      Agreement dated April 1, 2006, filed as an Exhibit to our Form 8-K, as
      filed with the Commission on April 18, 2006.10.4   Letter
      from Traci J. Anderson dated February 2, 2007, filed as an Exhibit to our
      Form 8-K, as filed with the Commission on February 5,
  2007.14.1   Code
      of Ethics, as filed with the Commission on June 21,
200731.1Rule
      13a-14(a)/15d-14(a) Certifications of Chief Executive
      Officer *31.2Rule
      13a-14(a)/15d-14(a) Certifications of Chief Financial
      Officer *32.1Section 1350
      Certifications of Chief Executive
Officer *32.2Section 1350
      Certifications of Chief Financial
Officer *
 
 * Filed
herewith.
 
 (b) Reports on Form
8-K.
 
 1.
                On
      February 2, 2007, our Board of Directors approved to dismiss Traci J.
      Anderson, CPA as its independent auditor, and engage Lake & Associates
      CPA’s LLC as our independent auditor to audit our financial statements for
      the year ended December 31, 2006 and to review our three quarterly reports
      in 2007. The decision to make the change was approved by our Board of
      Directors.
 
 2.
                On
      March 13, 2007, we filed an amendment to Form 8-K, dated October 12, 2005,
      regarding the correction of the financial
  statements
 
 3.
                On
      June 20, 2007, we filed an amendment to Form 8-K, dated October 12, 2005,
      regarding the full disclosure about the reverse merger with Kai Da and the
      revised financial statements
 
 4.
                On
      August 24, 2007, we filed a current report on Form 8-K to announce a
      cooperation agreement signed by Shaanxi Tourism Press and Shanxi Qin Afang
      Palace Tourism Development, Inc., the owner of E Pang Gong theme
      park.
 
 ITEM 14. PRINCIPAL ACCOUNTANT FEES
AND SERVICES
  The
following table represents the aggregate fees billed for professional audit
services rendered to the independent auditor, Lake & Associates (“Lake”) for
our audit of the annual financial statements for the years ended December 31,
2007 and 2006, respectively. Audit fees and other fees of auditors are listed as
follows:
 
 Year Ended December 31
                2007
                2006Lake
                LakeAudit
      Fees (1)
                $37,000
                $28,000Audit-Related
      Fees (2)
                --
                --Tax
      Fees (3)
                --
                --All
      Other Fees (4)
                --
                --Total
      Accounting Fees and Services
                $37,000
                $28,000
 
 (1)
                Audit Fees . These
      are fees for professional services for our audit of the annual financial
      statements, and for the review of the financial statements included in our
      filings on Form 10-QSB, and for services that are normally provided in
      connection with statutory and regulatory filings or
      engagements.
  (2)
                Audit-Related
      Fees . These are fees for the assurance and related services
      reasonably related to the performance of the audit or the review of our
      financial statements.
  (3)
                Tax Fees . These
      are fees for professional services with respect to tax compliance, tax
      advice, and tax planning.
  (4)
                All Other Fees .
      These are fees for permissible work that does not fall within any of the
      other fee categories, i.e., Audit Fees, Audit-Related Fees, or Tax
      Fees.
 
 Pre-approved Policy for
Audit and Non-Audit Services
 
 We not
have a standing audit committee and the full board of directors performs all
functions of an audit committee, including the pre-approval of all audit and
non-audit services prior to the Company engaging an accountant. All of the
services rendered for us by the auditors were pre-approved by our board of
directors.
 
 21
  SIGNATURES
 
 In
accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, we
caused this Annual Report and any subsequent amendments thereto to be signed on
its behalf by the undersigned, there unto duly authorized.
  China International Tourism
      Holdings Ltd. (Registrant)Date: August
      18, 2008
                By:
                /s/ Lei,
      MingLei,
      Ming
                  President
      and Chief Executive Officer
 
 Pursuant
to the requirements of the Securities Act of 1934, this Annual Report has been
signed below by the following persons in their respective capacities with us and
on the dates indicated.
 
 SIGNATURE
                TITLE
                DATE/s/ Lei,
      Ming
                President,
      Director
                August
      18, 2008Lei,
      Ming/s/ Wang,
      Xiaojun
                Chief
      Financial Officer, Director
                August
      18, 2008Wang,
      Xiaojun